Army nears project award

Officials to select housing developer later this month

$2 billion undertaking

March 04, 2001|By Rona Kobell | Rona Kobell,SUN STAFF

After a nearly two-year process hobbled in recent months by bidding protests and delays, the Army is preparing to announce its developer of choice for the coveted $2 billion pilot program to privatize Fort Meade's housing.

Last month, the Army narrowed its list of applicants and is now in the final stages of the approval process, said Lt. Col. Marian R. Hansen, an Army public affairs officer. She said the Army will make its announcement later this month.

"We're working the system and following the rules," Hansen said of the process. "When we're talking about a big program like this, it takes an enormous amount of time to go through the system."

Fort Meade is badly in need of a housing overhaul, with an estimated 85 percent to 90 percent of its almost 2,900 units classified as substandard. About 2,500 units will be demolished under the program. Exacerbating the problem are high rents in the area. According to the Army, even the substandard homes have waiting lists of up to six months because the Army's monthly stipend cannot cover outside rents.

But the scope of the program isn't the only reason for the delay. Built into the system are arduous procedures that allow developers to protest the Army's method of whittling candidates.

Initially, hundreds of developers expressed interest in the Fort Meade project, which is part of the Army's Residential Communities Initiative passed by Congress in 1996. Fort Meade is one of four pilot sites for RCI - the Army has already awarded contracts to developers for Fort Lewis, Wash.; Fort Hood, Texas; and Fort Carson, Colo.

The program calls for overhauling substandard housing at military bases nationwide through the lease of Army land to residential developers, who design, build and manage the units. Military personnel use their housing allowances for rent.

17 bids submitted

More than 300 developers attended a forum on the Fort Meade project last spring. But afterward, many backed off, fearing the project's size and scope would overpower their companies. Even some of the largest developers bidding had to partner with property management companies. By the July submission deadline, only 17 developers bid on the project.

An Army selection panel determined that three of the bidders did not meet the qualifications to be considered, Hansen said. All three were entitled to protest the panel's decision, and all three did.

In the first case, the Army changed its mind and let the bidder back into the process. In the second, it stood by its decision. The Army has not revealed the names of either of those bidders.

The third protester, the Community Partnership LLC, took its case all the way to the General Accounting Office, where those who believe a federal government contract is about to be awarded in violation of law can seek a remedy.

Three principal members

Community Partnership is a development team composed of three principal members: the Housing Commission of Anne Arundel County, Archstone Communities and Keating Development Co. Under the bid proposal, Colorado-based Archstone would handle leasing, management and real estate development. Keating, based in Bala Cynwyd, Pa., would handle construction. The housing commission was to provide overall leadership and arrange funding.

The Army identified 37 weaknesses in Community Partnership's proposal, according to the GAO report. Among them were concerns that the outfit had little experience with residential properties or historic preservation, and concerns about whether it had the financial wherewithal to tackle the project.

The Army noted the housing commission would likely have a long-term interest in the project, but it was only "one leg to the three-legged stool" and expressed doubts about Archstone's and Keating's commitment, according to the GAO report.

"The Army states it was concerned that if the project became a financial failure, the local government entity incentive to remain in for the long term would not hold true for Archstone and Keating," the GAO report read.

Last month, the GAO upheld the Army's decision, and the partnership remains sidelined. But the investigation into the claim took 100 days, further stretching out a protracted process.

Lengthy process

Several bidders contacted last week said they weren't given a reason for the delay. But in the world of government contracts and construction projects, where a schedule can be akin to a wish list, the delays are not that alarming.

"I am accustomed to any and all snafus that occur in the construction industry," said Milt Pajak, business development manager for Harkins Builders Inc. of Silver Spring, one of the project's bidders.

But, he added, "I would say these delays are above normal, more than we've been accustomed to."

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