Army seeks business expertise

Private companies expected to run utilities at Va. bases by 2003

March 28, 2002|By R.W. Rogers | R.W. Rogers,KNIGHT RIDDER/TRIBUNE

FORT EUSTIS, Va. - Not long ago, military officials looked at their bases and didn't like what they saw. Decrepit housing and failing electric grids, storm drains and sewage plants were the rule.

Years of robbing utilities to pay for readiness had reduced the bases to tatters. Improvement was not on the horizon.

The Defense Department decided in 1998 that the status quo needed an overhaul. The solution turned out to be what the military had defended for more than 200 years: free enterprise. Fifty-year contracts for construction and maintenance are being sought with renegotiations every two years.

"The Army decided that it was going to concentrate on what it does well and let private industry concentrate on what it does well," said Col. Doug Earle, Fort Eustis garrison commander.

"What has driven them to do this is that it is common knowledge that utilities are in bad shape and were not getting any better," Earle said. "We've tended to mortgage infrastructure for readiness to the point that infrastructure is now failing."

Not quick fixes

These are not quick fixes. Dan Goure, a spokesman for the Lexington Institute, a Washington think tank, said Army bases are the worst in the military and have the most to gain from what he called an experiment.

"It's believed that this a good idea, but we don't have the evidence to prove it," Goure said. "Privatization works very well in the business world and it is believed it should work here."

The depth to which some Army bases have sunk is illustrated by a rumor Goure related: An entire company of soldiers - about 150 troops - had to use a single urinal because the rest were broken.

The story doesn't seem like an exaggeration at Fort Eustis, where an Army noncommissioned officer reached into a hole in a barracks wall and was bitten by a snake. Sewage has been known to back up in the latrines.

"Most Army bases have critical infrastructure deficiencies that impact their ability to meet their military obligation and most have more than one critical problem," Goure said. "It is a disaster. All the services are bad, but the Army is the worst."

By 2003, private companies are expected to run the utilities at Virginia bases Fort Eustis and Fort Monroe as well as Fort Story, Fort Lee and throughout the Army. The amount the government pays to own, operate and maintain the utilities at the forts is estimated at $5 million to $15 million a year.

Businesses interested

The Virginia bases banded together to solicit bids for electric, water, waste water and gas services to get a better price. The utility contracts went to bid nearly a year ago.

Quite a few businesses are interested in filling that contract, Earle said. Because the bids are still being considered, he wouldn't discuss specifics or if local companies are in the running.

The bids are being evaluated. Local boards will make a recommendation to the Pentagon, which will have the last word.

The main benefit to privatization, Earle said, is "we will have reliable infrastructure. We don't have reliable infrastructure now."

Housing at Eustis, Monroe and Story is also on the block. The single contract to build and then manage and maintain more than 1,300 quarters will surely reach into the tens of millions of dollars.

In late January, prospective housing contractors toured the bases. Bids were accepted March 1 and a decision is expected in November. "The Army is looking for world-class developers," Earle said.

Private enterprise took root at Fort Carson in Colorado about a year ago. So far, 300 homes have been built and another 400 renovated. Goure said replacing the housing stock should help keep soldiers, especially married ones, in the Army. Retaining soldiers is becoming increasingly crucial as the population ages and the pool of recruits dwindles.

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