Transforming Facilities Management with a Business-Inspired Approach

Discussions about how to improve military readiness and maintain U.S. dominance typically center around providing warfighters with the most innovative technologies available. But what is often overlooked in these conversations is something more foundational: the military’s infrastructure itself. As Pentagon Chief Infrastructure Officer Lucian Niemeyer put it, “Our warfighters need access to unencumbered land, water and air space to hone their readiness and lethality without compromising health and safety.”

Despite the centrality of military infrastructure to its success, Department of Defense (DoD) facilities are poorly utilized and managed, with roughly one-third of all military facilities in either poor or failing condition, and an unfunded backlog of deferred maintenance and repair work exceeding $116 billion.  

Fortunately, uniformed and civilian defense officials alike have begun to appreciate the necessity of adequately supporting military infrastructure, and after years of neglect, the Pentagon finally asked Congress for a sizable facilities maintenance increase. But for the increase in funding to have a positive impact, the DoD must also transform its overall approach to facilities management. 

One way to do this is by looking to private sector best practices and adopting a more business-inspired approach with the goal of reshaping the relationship between the government entities that manage the DoD’s real property assets, and those that occupy them.

One such practice could be restructuring fiscal incentives by using Working Capital Funds to manage DoD facilities, which would offer flexibility not available under standard budget and spending arrangements. Among the advantages to this approach is the fact that working capital funds do not expire at the end of the fiscal year, which would take some of the pressure off facility managers and allow them to avoid the rush to obligate funds at the end of each fiscal year. A second strategy the DoD could adopt is establishing landlord organizations within the department to be the asset managers who would set rental costs that operating forces would pay, allowing them to procure facilities that best meet their military facility under a constrained budget. The idea behind this approach is that market forces would impact not only the quality of facilities, but the appetite for them, making everyone involved more savvy providers and buyers. 

By better aligning incentives, available funding, and facility supply and demand, the DoD can move toward a facility portfolio that is in better condition, better meets military requirements, and increases readiness.

Read the article to learn more about this topic.

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