AETC housing privatization on track

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RANDOLPH AIR FORCE BASE, Texas (AFPN) --  Despite delays caused by Hurricane Katrina, Air Education and Training Command is still on track to meet its goal of privatizing 100 percent of military family housing.

The Housing Privatization Initiative was approved by the Department of Defense in 1996 as a more timely and cost-effective way to provide military families with quality housing than the traditional military construction funding process.

Lackland Air Force Base, Texas, was the first military installation to privatize a portion of its housing. The first phase of this project provided 420 homes for military families in fall 2001.

AETC is working to privatize the remainder of Lackland's housing requirement under a sole-source initiative with the existing privatized owner; the real estate transaction for Lackland's Phase II is expected to close this summer.

Little Rock AFB, Ark., was AETC's second installation to implement a housing privatization program. Initiated in 2004, this project has already delivered a new community center, and three model homes are expected to be completed this summer.

Before Hurricane Katrina, AETC intended to convey the rest of the command's military family housing to private developers by dividing the remaining installations into two major groups.

Group I included Altus AFB, Okla.; Luke AFB, Ariz.; Sheppard AFB, Texas; and Tyndall AFB, Fla. Group II included Columbus and Keesler AFBs in Mississippi; Goodfellow, Laughlin and Randolph AFBs in Texas; Maxwell AFB, Ala., and Vance AFB, Okla.

However, due to the impacts Hurricane Katrina had on the construction industry, such as nationwide cost increases generated by material shortages and limited labor resources, the command encountered delays in both groups, said Garrett Smith, AETC Civil Engineering Housing Branch project manager.

"Because proposals were based on pre-Katrina market conditions, we have to take time to resolve the economic disparities Katrina produced in order to ensure the highest quality housing is provided," Mr. Smith said.

"Regional construction costs have risen 15 to 20 percent, utility rates increased 20 to 173 percent and fuel costs are now extremely high," Mr. Smith said. "All these factors have driven project development costs beyond normal contingency allowances."

The command and the Group I apparent successful offeror are working to resolve the financial gaps caused by Hurricane Katrina, Mr. Smith said. The transaction closure date for Group I is now delayed until August, approximately eight months from its originally scheduled close date.

But Katrina hit Keesler's privatization plans the hardest, Mr. Smith said.

Originally one of the seven bases in Group II, Keesler has been removed from the housing privatization group, and instead AETC is planning to replace all of its housing with a military construction, or MILCON, project. Mr. Smith said the use of MILCON will enable a faster delivery of homes to the base.

The MILCON project scope is to build 1,067 new homes. The request for proposals (RFP) for the Keesler MILCON project was released in February, and the proposals received are currently under evaluation. All of Keesler's new homes are anticipated to be complete in late summer 2008.

The original RFP for Group II housing was scheduled for release in September 2005. That date coincided with Hurricane Katrina's arrival on the Gulf Coast. With Keesler removed from the list, Group II's new RFP is scheduled to be released this June, with an estimated transaction closure scheduled for June 2007.

While Hurricane Katrina may have altered the command's timeline, the command remains constant in its efforts to see the housing privatization plans through to fruition.

"The command has shown that privatization is an efficient way to provide our military families with higher quality homes quicker than traditional military construction allows," said Col. Leonard Patrick, AETC Civil Engineer.

"Even though the timeline for AETC housing privatization has changed, our commitment to reaching our goal of providing access to safe, quality, well maintained housing remains the same," he said.

(Courtesy Air Education and Training Command News Service)