Increasing Utilization of DoD Facilities Opportunities and Obstacles John Walker - Deloitte Consulting, LLP February 2016

2FooterCopyright © 2015 Deloitte Development LLC. All rights reserved. Installation Utilization & Infrastructure Support Key Drivers With the force drawdown underway, there will be a sudden and significant increase in the amount of underutilized defense infrastructure. DoD is already being forced to prioritize the expenditure of funds for infrastructure and facilities maintenance and improvements that is causing assets to deteriorate rapidly. Funding cuts are resulting in discontinuation of infrastructure upkeep and traditional facilities maintenance support. Communities will face the dual economic impact of losing DoD jobs and also being unable to leverage the unused infrastructure to support economic redevelopment. Funding constraints not only impact on-base personnel and assets, but support contractors and service providers within the surrounding communities. What are the tools and strategies communities and installation managers can use to leverage unused installation infrastructure to support the local economy?

3FooterCopyright © 2015 Deloitte Development LLC. All rights reserved. Current State Current DoD Authorities to move mission to sustaining Installations Mothballing Facilities Convergence and Co-location of Missions and Assets Military facilities get shorted as part of DoD's tough 2016 budget choices - Under the funding levels Congress passed for 2014, the Army said it would be able to pay for about 80 percent of its facility sustainment needs. That dropped to about 62 percent in the 2015 budget. DoD maintains BRAC fight, despite opposition from Congress - DoD officials almost universally have encountered a hostile reception to BRAC during the annual round of funding hearings on Capitol Hill

4FooterCopyright © 2015 Deloitte Development LLC. All rights reserved. Authorities (Tools) Available Section 331 Enhanced Use Leasing Public-Public and Public-Private Partnerships Asset Monetization Leveraging Intellectual Capital Collaborative training and education programs and facilities On-Base Intergovernmental Agency Agreements Utility Privatization / UESC / 2922a (PPA )

5FooterCopyright © 2015 Deloitte Development LLC. All rights reserved. Identifying Compatible Uses Other DoD Missions Consolidating National Guard Facilities operated by States Federal Law Enforcement Agencies (15) Other Federal Agencies State & Local Agencies Health Organizations (including VA) Universities/Educational Institutions Private Sector Users

Federal Law Agency and Building Host DoD Property Cross-Agency Use Real Estate Vehicle CBP Air and Marine Operations Center (AMOC) March Air Reserve Base  Combines FAA and DoD radars, OAM airborne systems and other sensors into a single facility to track individual targets  AMOC hosts personnel from throughout the DHS, other federal agencies and international partners with complementary and interdependent missions CBP became a tenant on the Air Force reserve installation after BRAC realignment effective April 1996, and reuse, planning and development of the base are overseen by the March Joint Powers Authority (JPA). Expansion and upgrade of systems and facilities at AMOC are submitted to Congress by CBP. FBI Academy and Laboratory Marine Corp Base Quantico  Law enforcement training and programs for FBI and external participants  Forensic analysis lab for local, state, and federal law enforcement without charge FBI-Marine Corps Base Quantico (MCBQ) Real Estate Land Use Agreement requires FBI to make submissions on all new construction and building additions to MCBQ. Academy and Laboratory were new construction on existing 547-acre FBI campus carved out of the Quantico Marine Corps base. FBI, ATF and JIEDDO Terrorist Explosive Device Analytical Center (TEDAC) Marine Corp Base Quantico (future relocation to Redstone Arsenal in Huntsville, AL)  Houses 13 government agency partners and 17 external partners  Hybrid leadership between FBI, ATF, DoD New construction by FBI, with cost- sharing agreement for partners Law Enforcement and Military Co- Location Naval Air Station Joint Reserve Base New Orleans, LA  Provides training environment for active duty and reserve components of all branches of armed services  Creates seamless functionality between host and tenant commands in base support and community service programs Military co-location construction on the naval air reserve base

7FooterCopyright © 2015 Deloitte Development LLC. All rights reserved. Utilization Momentum Up to now – little motivation on part of all parties - sequestration and OMB’s “Freeze” and now “Reduce” the Federal facility footprint has changed the motivations of stakeholders States and Local Governments must take a more active role in assisting the parties evaluate the possibilities and participate in funding required infrastructure investments Mapping the supply chain and associated economics and services that support missions can yield a detailed understanding of collaborative benefits Private Sector can assist in facility investment through PPP authority if no Federal Master Lease is contemplated