1. 2012 Fall TBWG CBP Washington Updates

2. Field Operations Facilities Program Management Office 2 TBWG: CBP Washington Updates Agenda LPOE Magnitude of Need and Historic NB Appropriations Additional Constraints to LPOE Modernization Alternative Financing Initiative Alternative Financing Legislative Proposal Alternative Financing Demonstration Projects Alternative Financing Program

3. Field Operations Facilities Program Management Office Through its FY06 Strategic Resource Assessments, CBP identified a $6B need to recapitalize its LPOE portfolio, which consists of 122 northern border ports and 46 southern border ports Since FY07, Congress has appropriated $1.4B to LPOE modernization, $668M of which has been allocated towards northern border ports 3 TBWG: CBP Washington Updates LPOE Magnitude of Need & Historic NB Appropriations The gap between annual appropriations and resource needs continues to grow as unmet LPOE construction, sustainment, and technology costs rise

4. Field Operations Facilities Program Management Office TBWG: CBP Washington Updates Additional Constraints to LPOE Modernization OMB Controls May 2012 OMB Memo and subsequent Freeze the Footprint implementation guidance instructing that CBP adopt a policy of no net new Additions to CBP’s real property inventory require an equal or greater space offset CBP Controls Capital Facilities Investment Plan (CFIP) implemented to centralize CBP’s project prioritization process and ensure that CBP’s limited resources are allocated towards the areas of greatest need Rent Requirements Control Board (RRCB) leading efforts to reduce CBP facility rent costs by targeting incremental savings and identifying measures to improve rent and space usage

5. Field Operations Facilities Program Management Office TBWG: CBP Washington Updates Alternative Financing Initiative In the absence of a reliable LPOE modernization budget, CBP has turned towards alternative financing as an opportunity to leverage the innovation, cost efficiencies, and streamlined solutions gained through partnership with private, State, or local entities Comports with the CBP Commissioner’s FY 2012 priority to cut operating and overhead expenses through engagement in cost savings initiatives Alternative financing arrangements have already proved largely successful Blue Water Bridge stacked/staggered booth Existing authorities lack sufficient project cost coverage to fund CBP’s furniture, fixtures, equipment, technology, and post-construction operations and sustainment costs

6. Field Operations Facilities Program Management Office TBWG: CBP Washington Updates Alternative Financing Legislative Proposal CBP alternative financing legislation submitted for consideration in the FY 2014 budget submission Addresses the limitations of CBP’s existing authorities by broadly encompassing all LPOE related project lifecycle costs Mitigates the Government cost-burden of LPOE modernization by enabling CBP to accept donations of real and personal property (including monetary donations) and non-personal services from private, State, or local entities Complements existing Reimbursement Authority for Outlier Services proposal that seeks to enable reimbursement from corporations, non-federal government agencies and other interested parties for inspection services in the air, land and sea environments at both domestic and foreign locations Focus to shift towards proactive communications to build awareness and support as the proposal moves through review

7. Field Operations Facilities Program Management Office TBWG: CBP Washington Updates Alternative Financing Demonstration Projects  Three crossings selected, two of which are located along the U.S.-Canadian Border  Plaza reconfiguration and renovations project targeting main building, secondary processing, and primary inspection booth improvements at Lewiston, NY  Commercial inspection warehouse renovations and expansion projects at Peace Bridge, NY  Bridge owners have agreed to fund project design and construction at no cost to the Government  CBP responsible for tail-end and out-year operations and maintenance costs  Aside from netting clear operational gains, both projects present an opportunity to demonstrate the tangible benefits of using outside funds to modernize CBP’s LPOE portfolio  CBP evaluating tail-end/out-year rent budget needs as a prerequisite to further design activities

8. Field Operations Facilities Program Management Office TBWG: CBP Washington Updates Alternative Financing Program  As a vehicle in which to institutionalize alternative financing as a viable and cost effective LPOE modernization opportunity, CBP is evaluating the merit of an in- house program dedicated to the implementation and on-going execution of CBP’s long-term alternative financing strategy  Will house the support mechanisms, program infrastructure, and resources necessary to identify, plan, and execute alternative financing opportunities of varying scope, size, and complexity  Program Management Plan in the works to help initiate, plan, execute, and monitor and control alternative financing program

9. Field Operations Facilities Program Management Office TBWG: CBP Washington Updates Questions