READINESS CENTER Transformation Master Plan

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1 ARMY NATIONAL GUARD READINESS CENTER Transformation Master Plan Final Report to Congress December 19, 2014 PROTECTING THE HOMELAND FIGHTING AMERICA S WARS BUILDING GLOBAL PARTNERSHIPS TRUSTED AT HOME, PROVEN ABROAD

2 Acknowledgements The National Guard Bureau would like to acknowledge and thank the following participants for support and contributions to the Readiness Center Transformation Master Plan (RCTMP): Federal Oversight provided by: Army National Guard Installation Division (ARNG-ILI) LTC (Ret) Sherrell Crow, Federal Program Manager Government Support Team: Messrs. Terry Anderson; Kirit Jhaveri; Tibor Lanczy; Dwight Mickelson; David O Mara; Arthur Pulket; Billy Robison; Jeff Turner; Christopher Williams; and D. Michael Windham Criteria review and help with documentation provided by: Facility Engineer Advisory Council (FEAC) Joint Force Headquarters Staff and Leadership and Construction and Facilities Management Offices of all 54 States, Territories, and the District of Columbia Program Management and Analysis provided by: Data Collection and Analysis provided by: AECOM Atkins Burns & McDonnell Engineering Company, Inc. CH2M Hill, Inc. Frankfurt-Short-Bruza HDR, Inc. Leidos Engineering, LLC Mead & Hunt/Tetra Tech Pond & Company

3 Table of Contents Preface 1 Value to the Nation Executive Summary 7 Key Tasks and Findings Portfolio Modernization Operational Readiness A Risk-Based Return on Mission ARNG Nationwide Capital Investment Strategy Implementation Plan Affordable Readiness Investment and Conclusion I. Introduction 19 Congressional Directive Objectives Analytical Construct Operational Readiness: Return on Mission Impact of Not Transforming Funding Constructs II. Congressional Directive Findings 33 Review of Existing Space Standards Assessment of RC Condition, Capability for Authorized Manpower, and Support Functions Examination of RC Placement and Alignment to Mission and Population Centers Family Readiness Program Shared Use Summary of Congressional Directive Findings III. Shaping the Footprint 51 A Nationwide Roadmap Collective State Input The Plan for Shaping the Footprint Optimize Mission-Alignment Optimize Stewardship Benefits IV. ARNG Nationwide Capital Investment Strategy 61 Defining the Operational Readiness Index Investment Strategy Funding Scenarios V. Recommendations 75 Affordable Readiness

4 Appendix A. Planning Parameters 79 General Parameters ARNG Nationwide CIS Drivers Project Cost Estimating Facility Modeling Scenario Parameters B. State Summaries 81 C. Alternative Financing Opportunities (Public Private Partnerships) 84 Overall Findings Pilot States and Findings Overall Assessment & Recommendations Next Steps Conclusion D. Methodology 103 General Data Collection 1. Facility Condition Assessment 2. Tabulation of Existing and Required Space 3. Location and Demographics Analysis 4. Shared Use Analysis 5. Family Readiness Program 6. COA Analysis 7. Mission Dependency Index 8. State Level Capital Investment Strategy 9. Operational Readiness Analysis

5 List of Figures Figure 1: Functions of a Readiness Center 3 Figure 2: ARNG Nationwide CIS scenario summary 15 Figure 3: National recommendation process diagram 20 Figure 4: State ARNG input process diagram 22 Figure 5: Operational Readiness Index diagram 26 Figure 6: Degradation impacts of current nationwide footprint over 15 years 28 Figure 7: National average facility condition index 35 Figure 8: National average of RC space requirements met 37 Figure 9: National average of RC functionality 41 Figure 10: Mission dependency tiers 42 Figure 11: Nationwide breakdown of mission dependency rating (percent of RCs) 43 Figure 12: Current status of national RC portfolio 47 Figure 13: Shaping the footprint to optimize mission alignment and stewardship 53 Figure 14: Range of optimal ORI 63 Figure 15: ARNG Nationwide CIS scenario summary 66 Figure 16: Impacts of the Current Funding scenario over 15 years 67 Figure 17: Condition index of ARNG mission critical facilities at year 15 of the Current Funding scenario 67 Figure 18: Impacts of the Baseline scenario over 15 years 68 Figure 19: Condition index of ARNG mission critical facilities at year 15 of the Baseline scenario 68 Figure 20: Impacts of the Affordable Readiness scenario over 15 years 69 Figure 21: Condition index of ARNG mission critical facilities at year 15 of the Affordable Readiness scenario 69 Figure 22: Impacts of the Get to Green scenario over 15 years 70 Figure 23: Condition index of ARNG mission critical facilities at year 15 of the Get to Green scenario 70 Figure 24: Scenario comparison at year Figure 25: Improvement in mission dependency and stewardship indices of the transformed portfolio at year Figure 26: State Data Analysis Methodology 103 Figure 27: National average facility condition index 107 Figure 28: Key Components of Space Requirements Analysis 112 Figure 29: State ARNG Input Process Diagram 117 Figure 30: MDI tiers of criticality 122 Figure 31: MDI score matrix 123 Figure 32: Operational Readiness Index diagram 126 Figure 33: ORI SI targets 129 Figure 34: SI cost targets 130 Figure 35: Deferred maintenance degradation curve 131

6 List of Tables Key Acronyms and Terms Table 1: Key tasks and findings 9-11 Table 2: Mission essential component performance 38 Table 3: Modernization actions by mission dependency tier 55 Table 4: Mission dependency rating of RC portfolio before and after modernization 55 Table 5: Congressional directive performance measures 57 Table 6: Key metrics in Scenario 3 versus Scenario 4 at year Table 7: Funding Scenario Parameters 80 Table 8: State/Territory summaries Table 9: Data Collected and Analyzed for RCTMP 104 Table 10: Building Components Assessed during FCA 105 Table 11: Building Components Inspected during ISR Validation 109 Table 12: Space Requirements Assumptions / Allowances Table 13: Sample COA Scorecard 120 Table 14: MDI Analysis: Questions and Possible Answers 121 Table 15: ORI calculation sample: current state 127 Table 16: ORI calculation sample: future years ARNG ARNG-ILI ARRA BRAC CI CIS COA CST DA DA FIS DoD DOT FAC FCA FSM FEAC FY GIS ISR JFHQ MAP-21 MDI MILCON NG PAM NGB ORI POM PRV RC RCTMP SASC SF SI SRM SUI TAG Army National Guard Army National Guard Installation Division American Recovery and Reinvestment Act Base Realignment and Closure Condition Index Capital Investment Strategy Course of Action Civil Support Team Department of the Army Department of the Army Facilities Investment Strategy Department of Defense Department of Transportation Family Assistance Centers Facility Condition Assessment Facilities Sustainment Model Facility Engineer Advisory Council Fiscal Year Geographic Information System Installation Status Report Joint Forces Headquarters Department of Transportation s Moving Ahead for Progress in the 21st Century Act Mission Dependency Index Military Construction National Guard Pamphlet National Guard Bureau Operational Readiness Index Program Objective Memorandum Plant Replacement Value Readiness Center Readiness Center Transformation Master Plan Senate Armed Services Committee Square Feet Stewardship Index Sustainment, Restoration, and Modernization Space Utilization Index The Adjutant General

7 HOW TO READ THE RATINGS: The Readiness Center Transformation Master Plan (RCTMP) study assesses space and condition of Readiness Center (RC) facilities using industry standard ratings that are in alignment with the following Department of Defense Installation Status Report (ISR) ratings: Assessment Scale - Condition FACILITY CONDITION INDEX (CI) GOOD FAIR POOR FAILING UNINHABITABLE Q1 Q2 Q3 Q4 Q4 Assessment Scale - Space SPACE REQUIREMENTS MET % GD FAIR POOR FAILING UNINHABITABLE C1 C2 C3 C4 C4 Facility Condition Index (CI): The CI is a measure of the physical condition of an asset on a point scale. The CI can be interpreted to represent the inverse of the percentage of Plant Replacement Value that is lost to system distress; the higher the CI, the better the condition of the building. The CI data are categorized using the ISR Quality Q-Ratings scale. Q-Ratings refer to the quality of facilities and infrastructure based on a ratio of improvement costs to replacement value as a percentage of dollars. Space requirements met: The percentage of existing space in relation to required space for the planned Soldier strength. Space requirement is calculated based on the National Guard Pamphlet (NG PAM) The percent of space data are categorized using the ISR Quantity C-Ratings scale. C-Ratings refer to the amount of facility square footage present versus required. Mission Support and Functionality of Portfolio GOOD FAIR POOR FAILING NA F1 F2 F3 F4 F5 F-Ratings refer to the facilities functional capability based on quantity of space, deficiency, configuration and quality of life issues F1 F2 F3 F4 F5 Negligible or no impact on the capability to support the tenant organizations required missions. Moderate deficiencies that have limited impact on the capability to support the tenant organizations required missions. All essential/critical functional elements exist. Significant deficiencies that impair the capability to support some of the tenant organizations required missions. Some essential/critical functional elements may be missing. Major facility deficiencies that present considerable obstacles to the tenant organizations required mission. Asset is non-functional and cannot be occupied.

8 As the National Guard fights America s wars, protects the homeland and builds partnerships, it does so affordably and with accountability National Guard Bureau Posture Statement

9 Preface Value to the Nation The Army National Guard (ARNG) is a community-based operational force providing ready units to meet its dual mission of domestic and federal service. As the core for community outreach, the ARNG has over 2,500 Readiness Centers (RCs) in more than 2,100 locations nationwide, each a tangible pillar of local pride and national loyalty in the eyes of the American people. The public visits RCs for educational events, family farewells when Soldiers mobilize, and yellow ribbon welcome home celebrations when the mission is accomplished. RCs symbolize the citizen Soldier serving his or her community and Nation. But RCs provide more than symbolism; they are vital to the security of the Nation and are the backbone to the ARNG force structure, allowing the ARNG to stand ready to serve this Nation with a wide range of capabilities, from operational missions and domestic response to global engagements. State Mission Ready at home in the United States, the ARNG is the homeland defense force tasked with providing civil support at the federal, State, and local level. The ARNG is normally the first military uniformed responder at the local and State level. Under the Governor s command as a State military force, the ARNG has the advantage of proximity for prompt responsiveness, knowledge of local conditions, tactical flexibility, and close association with State and local officials. FINAL REPORT TO CONGRESS Preface 1

10 As stated in the 2014 U.S. Army Posture Statement, Soldiers from the active and reserve components are engaged in the Homeland on a daily basis, in capacities ranging from personnel service as defense coordinating officers in support of the Federal Emergency Management Agency to U.S. Army North leading and coordinating Army missions in support of civil authorities. America s Governors can count on the ARNG s essential capabilities for domestic operations: command and control, medical, communications, logistics, transportation, engineering, civil support teams, maintenance, security, and aviation, as well as cyber threats. All of these essential capabilities require a brick and mortar facility as the focal point for staging the operation; these facilities must be viewed as critical. While activated for State missions, the ARNG is the only military force allowed to respond due to the Posse Comitatus Act, which limits the federal government s power to use federal military personnel to enforce State laws. The ARNG, under State authority, can also be assigned to provide law enforcement assistance within its home State or in an adjacent State through the Emergency Management Assistance Compact. Federal Mission Ready for federal missions and global engagement, the ARNG units answer to the Combatant Commander when mobilized to the theater in which they are operating and, ultimately, to the President of the United States. As a component of the U.S. Army the ARNG and Army Reserve provide predictable, recurring and sustainable capabilities and strategic depth to the Active Army when land power is necessary for global response, according to the 2014 U.S. Army Posture Statement. With training and capabilities that mirror the active component, the ARNG provides 39 percent of the total Army force, and Soldiers are currently serving throughout the world in Afghanistan, Kuwait, Qatar, Djibouti, Honduras, Guantanamo, the Sinai, the Philippines, and the Balkans. Under Title 10, U.S. Code, the ARNG has a federal obligation to maintain properly trained and equipped units that are ready for active duty, for prompt mobilization of war, national emergency, or as otherwise needed, when the needs of the armed forces exceed the number of Active components. A global engagement program for over 20 years, the ARNG s State Partnership Program brings together goals of both the Department of Defense (DoD) and the Department of State by building mutually beneficial relationships. 2 Preface ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

11 Readiness Centers positioned in key areas throughout the State act as our hubs, providing support to our communities in times of need, sorrow and celebration. The Readiness Center is at the very heart of domestic operations and the State Emergency Response. Brigadier General Robbie Asher, Chief of Staff of the Oklahoma National Guard Colonel Donnie Quintana, Chief of Staff of the New Mexico National Guard Training Each RC is a hub for... Domes c Response Base of Opera ons Supply Distribu on Emergency Communica on Community Support Equipment Staging Figure 1: Functions of a Readiness Center Reten on The program has bridged foreign policy and security goals in 74 countries through the ARNG s ideal position to interact with foreign nation active and reserve military forces. The ARNG currently supports 68 military-to-military partnerships with foreign nations, upholding U.S. national security objectives through military exercises, rotational presence, and advisory services. A key focus area in coming years for new partnerships will be cooperation in cyber security to protect government, business and individual information. RCs are central to developing, training and delivering a combat ready force; to this end, the RC must be viewed as critical to the Combatant Commander. FINAL REPORT TO CONGRESS Preface 3

12 Critical Infrastructure The ARNG RCs are essential components in the basic functioning of our society. The Patriot Act of 2001 defined critical infrastructure as those systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters. RCs serve as this critical infrastructure to protect our communities from the full spectrum of man-made threat and severe weather events. A crisis of any type requires immediate and effective response from our ARNG s forces. Functional facilities in strategic locations is not only the expected norm, it is the essential standard. RC components supporting the training, administrative, and logistical requirements of the ARNG include assembly space, classrooms and distance learning centers, locker rooms, weapons and protective masks storage, and general purpose training space. As the foundation for operations and response, RCs act as training grounds, distribution points, command and control hubs, and staging bases for first responders as well as platforms for energy security providing sources of renewable energy and during emergencies, providing energy self-sustainability. Integrated into the communities they serve, these facilities also provide shelter and vital services for displaced civilians during emergency events. Whether during no-notice emergencies or anticipated events, the ARNG fills a unique and critical role responding to major events that overwhelm local resources. The fact that we are community-based and regionally dispersed across the State makes our Readiness Centers important to the State response in support of the Incident Commander. No matter where the incident is in the State, we have a base of operations in close proximity to the affected area, said Brigadier 4 Preface ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

13 General James Grant, Director of the Joint Staff for New Jersey and the Dual Status Commander during 2012 s Super-Storm Sandy. As a conduit to State and local governments during an emergency, the ARNG gets critical supplies and aid to victims and those who are suffering, using RCs as hubs and distribution points to provide direct care. During a manmade incident in January 2014, a chemical spill in the Elk River near West Virginia s State capital, Charleston, contaminated the water supply for as many as 300,000 people. The Governor declared a State of Emergency for nine counties and President Obama also declared an emergency and sent federal assistance. The same day the WVARNG activated its Joint Operations Center at its Joint Force Headquarters (JFHQ) RC to respond to the crisis. Within days, the WVARNG was running 24 hour response efforts as successive ARNG civil support teams (CST) from four States and the District of Columbia arrived to assist the WVARNG with water sample collection, data entry for tracking purposes, transportation of samples to testing labs, and transportation of more than ten million bottles of water to distribution points throughout the nine counties. Their support shows us how important the National Guard is to a State and community, or even a private enterprise that can t do everything it needs for the people of West Virginia. said Jeff McIntyre, President of West Virginia American Water. Over 1,500 water samples across a span of more than 3,000 square miles were collected in about 10 days. Army Lt. Col. Greg Grant, 35th CST Commander, said he was pleased with the coordinated, multi-state response. The professionalism and skill sets of the National Guard and CSTs are really remarkable, and we know we can count on each other. He said he called the Commander of the Tennessee CST at 10:30 a.m. and the team was on a plane by 3:30 p.m. the same day. Just like transportation systems, water and food supply systems, energygenerating facilities, telecommunications, and public health facilities, RCs are federal assets that are critical infrastructure. As such, this study parallels the approach used by the U.S. Department of Transportation s Moving Ahead for Progress in the 21st Century Act (MAP-21), a grant method used to fund a nationwide critical infrastructure program at the State and local level, and the American Recovery and Reinvestment Act (ARRA), another large program to fund nationwide critical infrastructure via State and local investment. As with ARRA, the authorization to fund this transformation plan can be provided with Congressional approval and no reductions to the Total Obligational Authority of the Army. Congressional mechanisms that provide funding for key construction or renovation projects directly at the State and local level have been proven to benefit communities by stimulating the local economy. FINAL REPORT TO CONGRESS Preface 5

14 The citizen-military duality of the National Guard takes center stage in the homeland. When it comes to responding to domestic emergencies, the Guard, operating under the command of the Governors, provide unique time-tested expertise. In nearly every ZIP code, the National Guard is positioned for immediate response and close collaboration throughout the U.S National Guard Bureau Posture Statement

15 Executive Summary Today s ARNG is versatile and highly skilled, equipped for a wide range of operations such as supporting America s communities during natural and manmade disasters, bolstering border security and counterdrug efforts, mitigating cyber-attacks, combating terrorism and addressing other threats to our Nation s complex infrastructure. The ARNG rapidly and competently expands the operational capacity of the U.S. Army by providing ready Soldiers to serve in critical combat and humanitarian operations across the globe. The ARNG s federal mission is to maintain properly trained and equipped units that are available for prompt mobilization for war, national emergencies, or other purposes as needed. Alongside the federal mission, the ARNG is the first military uniformed responder at the local and State level. Serving in every major conflict since the 1630s, the ARNG has always met its call to duty both on U.S. soil and in foreign lands. The fundamental obligation to its citizens of defending America s interest at home and abroad has stayed the same; meanwhile the tools and types of missions have modernized to keep pace with an ever more global, interconnected, and technologically advanced world. Preparing ARNG Soldiers to respond to complex civilian and military challenges is mission critical. To respond to the continuous critical demands placed on them, the ARNG today faces the challenge of maintaining readiness by maximizing the value of each mission to U.S. citizens and taxpayers while minimizing strain and stress on individual Soldiers and their families. Making simple enhancements to a Soldier s capacity to perform can be done locally, beginning with the RCs where they base operations, train, and stage emergency response. A modern RC FINAL REPORT TO CONGRESS Executive Summary 7

16 comes equipped with flexible training classroom(s) that support online training, critical equipment depots, secure and conditioned storage areas for sensitive equipment, family and community support areas, physical training areas, male and female bathroom areas, and adequate administrative areas, all to support Soldiers in achieving their highest performance capacity. Whether in key metropolitan areas or small towns across the U.S., not all RCs were built to meet the demands of the twenty-first century. In recognition of the value of the ARNG to the Nation, and its view that RCs are keystones of critical infrastructure to keep Soldiers operationally ready, Congress directed a study on the health of the nationwide portfolio of ARNG RCs. The Readiness Center Transformation Master Plan (RCTMP) responds to this directive, outlining the strategic direction needed to implement a new paradigm for State level master planning. In addition, the RCTMP includes recommendations to create a nationwide RC portfolio that will enhance overall Soldier readiness and mission support capabilities in a cost effective manner for the government. The RCTMP is a comprehensive facility strategy that is both dynamic and adaptive allowing the ARNG to be always ready, always there. FL Ft Lauderdale RC - Water ponding on roof WI Kenosha RC - Severe settling and cracking on sidewalk DC Armory - Wall crack due to foundation settlement 8 Executive Summary NC Elizabeth City RC - Inoperable HVAC controls NC Durham RC - Severe roof leak causing heavy damage to roof framing ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

17 Key Tasks and Findings During the RCTMP effort, extensive information was collected from comprehensive State leadership and staff charrettes, objective and independent facility assessments, thousands of individual Soldier surveys, and numerous nationwide ARNG databases and Army models of record to derive key findings. Most findings point to an outmoded RC portfolio due to obsolete designs, degrading conditions, obsolete space configurations, lower square footage than what is authorized by Congress, insufficient infrastructure for emergency communications and information technology (IT), non-code compliancy, and poor energy efficiency. Findings from other criteria studied, such as optimally siting RCs and ensuring their shared use with the community, highlighted ongoing well-established nationwide practices. Collectively, the findings justify a modernization of the RC portfolio to meet 21st century mission demands. Congressional Directive directed the Secretary of the Army to complete a study and report on ARNG RCs. The Senate directed six tasks to be reviewed and analyzed while the seventh task directed a presentation of a capital investment strategy. Table 1 briefing summarizes each task and finding: TASK FINDING Criteria Review TASK 1 Review standards for facility size, configuration, and equipment for the range of missions and training supported by the RCs. The ARNG reviewed the National Guard Pamphlet (NG PAM) , which is the space criteria, and made the following changes to support its modern missions: 1. Assembly halls were revised to optimize this requirement in each location. 2. Library, Classrooms and Information Technology standards were revised to increase flexibility in classrooms and bring leaning centers up-to-date. 3. Kitchen authorizations were changed to optimize space. 4. Multi-Purpose training spaces were redefined to allow for more flexibility for modern weapons and vehicle systems trainers. 5. Expanded the capacity of family programs space to allow for better storage and privacy for family counseling and consulting. 6. Revisions of arms storage and supply spaces are larger to accommodate new larger weapons systems. 7. Administrative spaces were revised which provides flexibility and efficiency. Table 1: Key tasks and findings FINAL REPORT TO CONGRESS Executive Summary 9

18 TASK FINDING Condition TASK 2 & 3 An independent assessment of each RC to objectively measure and determine the current facility condition. While there are facilities that are poor or failing, the average nationwide RC condition is fair, but bordering on poor condition. Based on in-depth degradation analysis, 65 percent of RC facilities are expected to deteriorate to the lower rating of poor by fiscal year (FY) The degradation analysis also predicts that over one quarter of RCs will deteriorate to failing condition based on current funding levels. Space Requirements and Utilization TASK 2 & 3 An independent assessment of each RC to objectively measure and determine capability to support authorized manpower, unit training, and operations as well as functionality to provide necessary equipment storage, classrooms, force protection, utilities, maintenance, administration. Less than two-thirds, or 64 percent of the required space for RCs is met nationwide. Unique space components which are expensive to replicate due to their distinct function such as maintenance support space, training classrooms and storage for critical equipment have the most significant shortage by square feet (SF). This significant finding affects the direct readiness of the ARNG meeting its mission. Optimally Sited Task 4 Recommendations for the placement of new RCs, the relocation of existing RCs, or a change in the mission of units assigned to RCs to ideally position the ARNG in current or projected population centers. Balancing demographic patterns, recruitment and retention capabilities, and geographic coverage, 74 percent of nationwide RCs are considered to be in their proper location. Family Readiness Program Task 5 Recommendations for enhanced use of RCs to facilitate ARNG Family Readiness Program during deployments. Separate spaces dedicated solely as family support areas have not been designated in many RCs. In the RCs that do have dedicated Family Assistance Centers (FACs) or spaces, these areas are often used for multiple purposes or do not offer adequate privacy to properly serve their intended function. Shared Use Task 6 An analysis of the feasibility, potential costs and benefits of shared use of ARNG RCs with other local, State, or federal agencies to improve response to local emergencies as well as the community support provided by RCs. Most ARNG units and RCs do not have space collocated with other DoD or State agencies. Further, it was observed RC spaces are utilized nationwide for many community events. This shared use with the community produces a positive public image for the ARNG. Table 1: Key tasks and findings (continued) 10 Executive Summary ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

19 TASK FINDING Mission Ready Task 7 Provide an investment strategy and proposed funding amounts in a prioritized project list to correct the most critical facility shortfalls across the inventory of RCs. In shaping a unified ARNG Nationwide Capital Investment Strategy (CIS), the ARNG evaluated and grouped all RCs in the portfolio on mission criticality. Facilities were split into three levels of importance to mission: mission critical; mission dependent; and mission support. This prioritization supports the unique concept of operations that governs each State domestic and mission support strategy. State JFHQs stakeholders defined what each tier represented based upon State specific requirements, stationing, and operations. The vast majority of RCs recommended for divestiture by the States were in the lowest tier of mission dependency. Balance of Military Construction (MILCON) and Sustainment, Restoration and Modernization (SRM) Investment Task 7 Balance funding types to support investment in modernizing and maintaining the entire RC portfolio. The investment strategy needs to include a coordinated MILCON/SRM strategy. Utilizing MILCON and SRM funding at current levels will continue to compound facility degradation, space shortfalls, and other risks to mission readiness. The risks to the ARNG of not conducting modernization of the RCs immediately include decreased readiness and training time for the Soldiers, degradation of government equipment, and deterioration of mission critical facilities. Investments in new construction or significant renovation are needed to mitigate the space shortfall nationwide while relocating some critical facilities to better support the full range of missions. An estimated $18.7 B of MILCON funds will fully modernize the nationwide portfolio. This funding will meet the mission requirements, but additional SRM funding must be paired with the MILCON funding to maintain the RC portfolio at an acceptable level. Investment Structures Task 7 Investment strategy structure should include best practices, transparency and accountability to provide the highest value to the ARNG and the American public. The ARNG plans to monitor implementation and performance measures. The strategy includes monitoring a nationwide facility investment program modeled after recent laws, publications, initiatives, and international standards established by the Department of Transportation (DOT) and ARRA of Transparency metrics coupled with investment allows the public to see the measured benefit of each dollar invested. Table 1: Key tasks and findings (continued) FINAL REPORT TO CONGRESS Executive Summary 11

20 Portfolio Modernization The review of key tasks and findings show that RCs are not currently as efficient and effective as they could be in supporting the ARNG as an operational force. The RCTMP outlines a defensible plan that modernizes the RC footprint and enhances overall Soldier readiness and mission support capabilities through sound investment in the underlying infrastructure, technology, and State and national force structure planning. What makes this RCTMP unique from other master planning efforts is the extensive dialogue and planning that occurred between the National Guard Bureau (NGB) and the State level JFHQ and the revolutionary combination of asset management (facility stewardship) and mission dependency principles advising sound investment. After the modernization process, this RC portfolio will be aligned with both State and national operational requirements, enhancing the ARNG s ability to perform its dual mission mandate. Operational Readiness A Risk-Based Return on Mission To comprehensively review the RC portfolio, key measures of performance as well as levels of investment were evaluated as to their return on mission. It is important to understand and recognize that a pure facilities centric approach was not used in this study. In fact, the concomitant factors were best analyzed as a two-factored equation; facility stewardship on the one-side while mission dependency served to advise the other factor. Facility stewardship identifies the traditional facility metrics, for example, shortfalls in space utilization, facility condition, and mission functionality standards, while the mission dependency function stands to represent how the senior mission commanders viewed the specific benefits to, or affects on, mission of each individual facility, 12 Executive Summary ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

21 given the dynamics of operations. Mission dependency analysis uses the rankings provided by JFHQ senior staff to define each RC as either mission critical, mission dependent, or mission support based on the level of risk posed by interrupting or relocating RC operations. Mission critical RCs are ARNG assets that are considered the most critical to operations, carrying the highest risk to the organization s mission and the highest operational impact to the command, if the circumstances of some event required relocation or interruption. Further, mission dependent facilities are those that are viewed as less critical, but must be maintained at a moderately higher level of readiness due to their need for mutually supporting benefits of the most critical RCs. The mission support RCs are the lowest-tiered facilities and viewed as the least critical, but still are required for the ARNG mission. Mission support RCs, however, have a lesser impact on the broader organization s mission should an event or loss of use occur. To measure operational readiness, the RCTMP team created the Operational Readiness Index (ORI), which was formulated with an equation that combined facility stewardship, measured as a percentage of one-hundred, and mission dependency, also measured in a percentage of one-hundred. The outcome of the equation renders a numerical score that is used to establish prioritization bands of investment, which in turn identifies the most critical facility shortfalls and investments across the full portfolio of infrastructure. The numerical score falls into a range of ORI values where the optimal ORI range retains the most efficient and effective facility operations of a portfolio with the least risk. ORI scores that are too high represent a system with limited redundancy and resiliency which would put the ARNG at risk for interruption of operations; whereas ORI scores that are too low indicate that mission critical facilities are in unacceptable condition, and the risk to operations is high. The optimal ORI range strikes a balance between mission dependency and stewardship, and represents an effective portfolio while eliminating most areas of risk. ORI is used to achieve a nationwide return on mission through its prioritization of MILCON projects and ongoing SRM projects in the RC portfolio. Such prioritization is essential to not only maintaining the existing portfolio but to modernizing the current portfolio. Once prioritization has been established, levels of investment modeled through four funding scenarios as part of the ARNG Nationwide CIS can be applied to the portfolio to establish the best value to the organization or a return on mission. RCs are critical infrastructure for supporting our Nation s defense as well as dynamic and sophisticated missions around the world; therefore a risk-based, mission-informed investment proposition should be viewed in the overall milieu of national security and defense. FINAL REPORT TO CONGRESS Executive Summary 13

22 ARNG Nationwide Capital Investment Strategy The ARNG recognizes that Congress has a choice in how they spend taxpayer dollars and that is why the RCTMP is presenting a plan and investment strategy that provides the best value proposition. The plan incorporates the best solutions for modernizing RCs to enhance mission readiness, including putting dollars first toward facilities with the most critical and specialized missions, divesting locations that are no longer demographically viable or have skyrocketing maintenance costs to decrease the overall number of RC locations from 2,170 to 1,680 over a 15 year period, and renovating and reconfiguring other RCs to better meet mission requirements. These actions will increase mission capabilities gained from operational efficiencies associated with having facilities in the correct locations with the correct types of functional spaces for both Soldiers and equipment meanwhile enhancing energy security and sustainability through implementation of modern construction, systems, and equipment. This national investment strategy focuses on a 15-year timeframe with prudent goals of aligning facilities to their intended missions and modernizing the portfolio for the least cost to generate the highest value. Four scenarios are presented in Figure 2, with varying levels of MILCON and SRM funding to demonstrate the effects each level of funding has on the RC portfolio over the 15 year period. Impacts to the condition index (CI), space utilization index (SUI), and ORI are illustrated. Scenarios were developed with an asset management modeling tool and represent different programming choices and are each tied to a projected outcome. Scenario 1, Current Funding, represents the current portfolio funding levels to demonstrate the short-term ARNG program challenges and the major long-term risks the ARNG faces by continuing the investment at current levels. Scenario 2, Baseline, roughly doubles the current annual MILCON funding amounts in order the meet immediate critical requirements. Scenario 3, Affordable Readiness, balances an increase in mission readiness over the 15 year timeframe with cost. Scenario 4, the final scenario, is a reflection of the complete transformation and modernization of the ARNG RC portfolio implemented within 15 years in a Get to Green scenario. The ARNG Nationwide CIS that most efficiently and effectively improves facilities and increases mission readiness requires both MILCON and SRM funding. SRM funding must be used strategically in order to maintain facilities and sustain the mission of the ARNG until MILCON projects are executed. It is important to note that the Army s Facilities Sustainment Model (FSM) provides a sustainment baseline of funding. This investment construct recognizes this model and constrains the sustainment funding treatment in all four scenarios to these recognized levels. The strategy also acknowledges that Restoration and Modernization funding is the chief source to remedy the facility deficiencies (in locations not meant for divestiture) derived from data collection, while the MILCON dollars are applied to modernize and provide the optimized footprint through relocations and new construction. The objective of the ARNG Nationwide CIS is to proportion funding types to maximize the greatest benefit to ARNG mission readiness with the main goal to fund mission critical facilities projects, while balancing funding distribution to the two other mission dependency tiers to keep those facilities at a reasonable readiness level. Of the scenarios outlined above, the projected outcomes for Scenarios 1 and 2 do not improve the overall state of the RC portfolio, only Scenarios 3 and 4 provide sustainability to the overarching ARNG organization s ability to continue its mandated missions. Scenario 4 is the optimal outcome for the ARNG RC portfolio following a comprehensive review of each State s full requirements resulting in the greatest investment 14 Executive Summary ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

23 Total Annual Costs Program Total*** (15 Yr) Results (Year 15) Scenario 1 Current Funding MILCON $143 M MILCON $2.14 B (65%) Sustainment* $ M Sustainment $3.30 B R&M $42-55 M R&M $0.72 B Annual Total $377 M Program Total $6.17 B CI (Q-Ra ng) Current Metrics >> 82 (Q2) 64 (C3) Q4 SUI (C-Ra ng) C4 ORI Summary (Return on mission) 68 (current) -8 Decline Increase 60 Scenario 2 Baseline MILCON** $ M MILCON $4.79 B (75%) Sustainment* $ M Sustainment $3.76 B R&M $ M R&M $1.45 B Annual Total $596 M Program Total $10.00 B Furniture, NEPA, Env. $ M $10.33 B Q3 C Scenario 3 Affordable Readiness MILCON $ M MILCON $11.98 B (90%) Sustainment* $ M Sustainment $4.84 B R&M $ M R&M $3.12 B Annual Total $1163 M Program Total $19.94 B Furniture, NEPA, Env. $ M $20.72 B Q2 C Scenario 4 Get to Green MILCON $ M MILCON $18.71 B (90%) Sustainment* $ M Sustainment $5.17 B R&M $ M R&M $3.29 B Annual Total $1687 M Program Total $27.17 B Furniture, NEPA, Env. $ 1.31 B $28.48 B Q1 C * Sustainment funding is based on the Total RC por olio requirement from the FSM projec on. RC por on of the full ARNG funding is 40%. ** Includes Scenario 1 MILCON ($143 M) plus $2.2 B addi onal MILCON ($147 M/yr for 15 years). Total of $290 M/yr. ***Es mate 2 December 2014, 12% Army force structure reduc on. Figure 2: ARNG Nationwide CIS scenario summary Condition Index (CI) Scale Space Utilization Index (SUI) Scale GOOD Q1 FAIR POOR FAILING UNINHABITABLE Q2 Q3 Q4 Q GD FAIR POOR FAILING UNINHABITABLE C1 C2 C3 C4 C4 0 requirement as noted in Figure 2. At the end of the 15-year plan, Scenario 3, Affordable Readiness, achieves a modernized footprint that meets 80 percent of the space requirements and an overall CI of 82, generally maintaining the current state of the existing RC facilities and reversing the degradation patterns projected by the RCTMP. The targeted investment of MILCON monies to first fund mission critical assets increases the ORI by 7 points to 75 (on a point scale). In these times of fiscal constraints and limited resources, Affordable Readiness may be the solution that defines the best value for investment in ARNG RC facilities. While the ARNG RC portfolio is not completely modernized under the plan, 53 percent of required projects are executed. Benefits associated with the Affordable Readiness scenario are evident: a reasonable level of funding to increase operational readiness, enhance domestic response operations, align facilities with the correct tier of mission criticality, strengthen the RC network by relocating RCs in areas FINAL REPORT TO CONGRESS Executive Summary 15

24 16 with changing demographics, close facility space utilization and functional capability gaps, eliminate facility-related workarounds, and enhance energy security, among many other benefits. The projects that are implemented under Affordable Readiness will address the most critical shortfalls across the nationwide portfolio, with mission critical facility projects at the top of the list. The dollars invested in this critical infrastructure are directly linked to an increase in ORI which translates into an efficiency gained towards a continuity of operations; a return on mission. Implementation Plan Affordable Readiness is executed through the national implementation plan that links the planning stages and proposed national modernized footprint with the practical steps of implementing this master plan nationwide, which includes managing priority of projects across all States, distributing federal funding locally to the States, and maintaining a disciplined program execution strategy during the process. All CIS recommendations are based on neutral decisions for force structure and State prioritizations to maximize the flexibility of the plan. For an RC to be strategically located, sized, configured, and maintained, a variety of factors must be considered including geographic coverage, demographic density, strategic and tactical requirements, space requirements, functionality and efficiency. The ARNG Nationwide CIS is a dynamic and flexible plan that is adaptable over time as requirements and/or needs change at the State level. Since project implementation does not begin until at least five years after the development of State courses of action (COAs), State capital investment strategies, and State project designation, it is critical that this plan allow for versatility. Changes to force structure and mission during the 15 year plan that continue to re-shape and modernize the footprint are allowed in the strategy of this plan. Executive Summary A critical component is managing the execution and distribution of the ARNG Nationwide CIS. ARNG has proven record of managing this level of construction with the number of State level projects executed during calendar year This program intends to be scalable depending upon the size of the investment afforded. Affordable Readiness Investment and Conclusion A national portfolio of RCs has been created, reviewed, analyzed through this effort, and the resulting master plan considers the transformed end state as one portfolio versus 54 individual portfolios. As one portfolio, the national implementation plan for the RCTMP considers each State s CIS equally but views investment across bands of priorities based on readiness. Each State s CIS prioritizes its own individual projects while the ARNG Nationwide CIS prioritizes projects based on the best value provided to the ARNG and the Nation. The national implementation plan distributes an equal amount of funds each year for 15 years. Each State s senior leadership will remain engaged and involved in all decisions that pertain to projects and funding distributed to their State since they are the chief proponent of stationing. The plan will provide a set of measurable and transparent metrics similar to programs such as MAP-21 (P.L ), which as a grant mechanism provides auditable and transparent results reporting so the public can realize the benefit of their investment. The ARNG intends to monitor implementation and performance measures associated with this RCTMP report. The RCTMP team recommends creating a baseline of performances measures in Year 1, followed by monitoring performance measures every three years. It is expected that in the early years of the plan the ARNG will perform according to the baseline. Midway through implementation of the plan, performance ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

25 levels are expected to increase as space requirements align with authorized amounts, space consolidations occur, and new facilities are built to ease current operational constraints and increase functional efficiencies. Monitoring performance measures creates a level of openness to ensure public trust and establish a system of transparency and collaboration to promote efficiency and effectiveness at the ARNG. Transparency also promotes accountability by providing information to the Congress and American public in a similar manner as ARRA in Using operational readiness, the ARNG can easily communicate the value that each investment dollar is providing toward achieving mission readiness. The dimensions of time, money, and scope are considered to evaluate the return on mission that is attained by making consistent, auditable, and accountable investments; these measurements are in turn reportable back to Congress. Implementation of this initiative will rebuild the ARNG critical RC infrastructure to give the organization strategic agility in the future and maximize the value that the ARNG and its Soldiers, equipment and RCs offer in terms of protecting life and property, underpinning our country s security, and contributing to resiliency of the ARNG. FINAL REPORT TO CONGRESS Executive Summary 17

26 The National Guard provides ready forces for the defense of our Nation and its interests, and to States for missions directed by the Governors. General Frank J. Grass, Chief, National Guard Bureau, Joint Chiefs of Staff, Strategic Direction, 17 June xviii ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

27 I. Introduction The ARNG s mission is to defend America at home and abroad. The citizen Soldiers that make up the ARNG serve both the President of the United States and the Governors in all 54 States, Territories, and the District of Columbia (hereafter referred to as States ). The ARNG Soldiers help maintain peace and security in missions overseas, protect our Nation by supporting war efforts, support global partnerships, respond to domestic crises at a moment s notice, and assist civilian first responders. The ARNG relies on its inventory of RCs to launch these missions. Formerly known as armories, these centers are critical infrastructure with locations spread regionally across all States with close connections to the communities they serve. RCs are a critical component in the execution of the State and local missions by providing a place to train the ARNG Soldiers, prepare for deployment domestically and internationally, and offer valuable support for Soldiers families. These facilities also provide a hub for emergency responders, providing shelter and supply distribution during natural disaster events. In short, RCs provide vital operational readiness to the ARNG, the Soldier s communities, and all entities across the U.S. and abroad that rely on their services. The ARNG is routinely and effectively engaged in a comprehensive range of missions. Army forces are tailorable and scalable, prepared to respond rapidly to any global contingency mission. The Army maintains a responsive force posture through an effective mix of Total Army capabilities and network of installations at home and abroad, to include Army prepositioned stocks. As a combat reserve of the Army, the ARNG is an accessible, seamlessly integrated, cost-effective, on demand force for fighting the Nation s wars, according to the 2015 NGB Posture Statement. FINAL REPORT TO CONGRESS I. Introduction 19

28 Congressional Directive In recognition of the value that the ARNG provides to the Nation, the Senate Armed Services Committee (SASC) issued Congressional Directive which directs the Secretary of the Army, through NGB, to prepare a report to Congress examining the current state of the Nation s ARNG RC portfolio by reviewing the following: 1 [A review of the current] standards for facility size, configuration, and equipment for the range of missions and training supported by RCs; 2 An assessment of each RC to objectively measure and determine the current facility condition and capability to support authorized manpower, unit training, and operations; 3 An assessment of supporting facilities and functions to include equipment storage, classrooms, force protection, utilities, maintenance, administration, and proximity of support and training facilities; 4 Recommendations for the placement of new RCs, the relocation of existing RCs, or a change in the mission of units assigned to RCs to ideally position the ARNG in current or projected population centers; 5 Recommendations for enhanced use of RCs to facilitate the ARNG family support programs during deployments; 6 An analysis of the feasibility, potential costs and benefits of shared use of the ARNG RCs with other local, State, or federal agencies to improve response to local emergencies as well as the community support provided by RCs; and 7 An investment strategy and proposed funding amounts in a prioritized project list to correct the most critical facility shortfalls across the inventory of the ARNG RCs. Readiness Center Transforma on Master Plan Congressional Direc ve 1 Facility Size & Configura on 2 Facility Condi on & Capability 3 Facility Func onality 4 Loca on & Demographics 5 Family Readiness 6 Shared Use & Partnership Transformed Footprint Investment Strategy ARNG Na onwide Capital Investment Strategy Stewardship Mission Dependency Opera onal Readiness Na onal Recommenda ons Figure 3: National recommendation process diagram 20 I. Introduction ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

29 The Department of the Army Facility Investment Strategy (DA FIS) recognizes the ARNG RCs as a priority focus area. The DA FIS contains detailed guidance on Army direction in resourcing the ARNG facility requirements using a holistic approach which includes SRM, MILCON, and Unspecified Minor Military Construction programs. The approach was developed to apply scarce resources to sustain needed facilities, dispose of unneeded facilities, improve the quality of retained facilities and build-out the most critical facility shortfalls. The RCTMP nests into the ARNG s MILCON Programming Guidance, which supports the DA FIS. The RCTMP builds a solid basis to support these strategies through the use of operational readiness to build out the most critical facility shortfalls. Objectives This RCTMP proposes a path toward 21st Century improvements and a viable investment strategy for the ARNG RCs. Transformed and modernized RCs must provide mission essential components, as well as support components to provide the foundation for a full range of the ARNG required capabilities. These facility attributes will enhance Soldier readiness and support citizens on a regional basis. Thus, this report has overarching objectives to: Provide a transformation plan to support and maintain an operational force with a high level of readiness; Protect and expand critical capabilities for overseas missions; Provide positive quality of life for Soldiers, their families, and their communities; Improve homeland and disaster response capabilities; Reduce risk to mission execution; Increase energy security through optimization of sustainability efforts and renewable energy sources; Modernize the force through advanced technology, training and innovation; Focus on maintaining community presence and regional response coverage; Utilize opportunities to leverage operational partnerships to maximize effectiveness of first response; and Execute RC transformation with a thoughtful, planned and affordable investment recommendation. FINAL REPORT TO CONGRESS I. Introduction 21

30 Analytical Construct The ARNG response to Congressional Directive was to commission a nationwide analysis built on a consistent, yet adaptable, methodology to engage each State. The RCTMP framework could be tailored to each State s individual priorities, culture, and vision while providing information that could be compiled nationally in response to the Congressional Directive. This construct allows the RCTMP to combine each State s unique concept of operations and requirements into a comprehensive set of analysis, findings, conclusions, and recommendation which can be linked to the value each RC provides to the Nation Obtain & Analyze Iden fy Conduct Review & Select Develop & Analyze Compare COAs TAG vision & objec ves State planning drivers exis ng analysis for the State based on State planning drivers & exis ng condi ons Establish from menu of COA op ons COA op ons using evalua on criteria RC Moderniza on Plan State ARNG Input The RCTMP approach required the State ARNG leadership input at critical decision points delivered in the form of in-progress reviews, on-site Charrettes, leadership briefings, and a series of discussions to develop each State s modernization plan, and operational input. Participants included representatives of NGB and the State ARNG leadership from the entire joint staff. The process shown in Figure 4 was replicated for each of the 54 ARNG entities. Charrette #1 Review Findings and Establish Drivers The first work session s goal was to understand The Adjutant General s (TAG) vision and objectives for each State and determine the planning drivers which created the framework for the State s modernization plan. This charrette also served as the beginning of quantitative data collection, starting with interviews of senior leadership staff to refine planning drivers. These senior leaders explicitly understand their State s missions and concept of operations, helping to shape strategic information into facilityrelated imperatives. 8 Mission Dependency Analysis RC contribu on to the ARNG mission ARNG Na onwide Capital Investment Strategy from collec ve State input Figure 4: State ARNG input process diagram Charrette #2 Transformation Analysis and Development The second work session leveraged the TAG vision and planning drivers, defined the facility stewardship for each RC, and began mapping the State s optimal RC portfolio or proposed end state. This task merged the elements of location and space together. The State ARNG leadership worked with NGB and the architecture and engineering firm contractors to define what the necessary space and location for their State s RCs would look like. 22 I. Introduction ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

31 The possible transformation solutions, advised by federal and domestic mission requirements, are referred to as COAs. A national menu of COAs was provided; each State could also develop hybrid versions based on their unique requirements. Each COA promotes sustainable, adaptable solutions, distinguished by mission, operations, demographics, existing facility condition, space surplus or shortfall, and site expansion capacity. The COA project choices include a range of RC real property alternatives that include alteration, addition, new construction, or divestiture. Discussions and criteria evaluation of the COAs resulted in a proposed modernization plan for each State. FINAL REPORT TO CONGRESS I. Introduction 23

32 Leadership Briefing and State Report The leadership briefing was the forum used to present the potential recommendations to the State ARNG senior leadership for approval. Once the proposed end state was selected, State leadership helped develop a CIS to prioritize the short and long-term projects for their State. Both the end state locations and the State level CIS were presented in a State report summarizing the proposed plan. Mission Dependency Index Analysis and Findings Report After the end state was solidified, State input was gathered through Mission Dependency Index (MDI) analysis. This analysis was conducted with the various ARNG staff and focused on location-based metrics during two different points in time to pinpoint the mission dependency at each RC in the current and end state portfolio. This process revealed which locations are critical to the State s concept of operations and how well current RC locations are aligned with mission readiness. After completion of the analysis, a summary report was produced outlining each State s concept of operations as presented through an MDI lens. This State-directed input provided the mission dependency construct included in operational readiness. 24 I. Introduction ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

33 Congressional Directive Analysis While development of individual modernization solutions was occurring at the State level, analysis work was ongoing to respond to the Congressional Directive. The first six tenets of the Congressional Directive are focused on identifying the gap between the current conditions and the total requirements necessary to support the ARNG operations. The approach taken was an extensive data collection effort over a three year period using assessments, site visits, interviews, surveys, NG PAM ARNG Facilities Allowances requirements for authorized space, floor plan square footage calculations, and other collection methods to document the existing condition of Tenets 1, 2 and 3: facility condition, existing space versus authorized space, and functional components of facilities. This data was independently collected and quantified, and then translated to the Installation Status Report (ISR) ratings for CI or Q quality rating and space requirements met or quantity C rating for ease of interpretation. The mission support functional capability or F rating was directly used from ISR. For purposes of the RCTMP, these three components will be considered facility stewardship throughout the rest of the report. Tenets 4, 5 and 6 also focused on identifying the gap between current conditions and the total requirements necessary to support the ARNG operations as it pertains to location, family support and shared use of RCs. To determine the proper siting of locations for Tenet 4, Geographic Information System (GIS) data collection and modeling projected target population demographics and geographic regions in each State that either had an existing RC location or were available for a potential new location. Each location was then analyzed by the RCTMP team or State leadership for its criticality to mission and whether not it should be part of the ARNG transformed RC portfolio. Data collection for Tenet 5 for improvement of the ARNG Family Readiness Program included gathering information about how State and unit level Family Readiness Program space was used and how this impacted the program s mission. For Tenet 6, existing and potential shared use and partnership opportunities were reviewed with each State. In addition, a national review of the feasibility of Public-Private Partnership opportunities supplemented the State level information. Data collection and analysis on the first six Tenets and State leadership stakeholder input at critical decision points generated each State s preferred end state. A modernization plan reflecting the optimal RC portfolio for each State was generated and approved by each State s TAG. A detailed methodology of the analysis can be found in the Appendix. FINAL REPORT TO CONGRESS I. Introduction 25

34 National Investment Strategy Using a consistent methodology to develop each State s modernization plan allows the information to advise a national investment strategy. This includes the end state locations, facility stewardship, and mission dependency metrics. With the collective State input, the national investment strategy and a set of national recommendations could be developed. The collection of these 54 modernization plans represent the beginning of a paradigm shift in the ARNG master planning. This shift avoids States competing against each other for investment funding but instead, complementing each other to respond to the RC modernization need at a national level. Thus, the investment strategy response to Tenet 7 requires a national value proposition to prioritize RC portfolio investments versus a listing of each State s required facility projects. Congressional recognition of the importance of the ARNG critical infrastructure dictated comprehensive analysis that unveiled an undeniable link between facilities and operational readiness. The RCTMP approach defines not only what is necessary to transform the RCs but to quantify the connection between investments and mission readiness. CONDITION INDEX ARNG Na onwide Capital Investment Strategy MISSION CRITICAL FUNCTIONAL RATING Stewardship Mission Dependency MISSION DEPENDENT SPACE UTILIZATION Opera onal Readiness MISSION SUPPORT Stewardship reflects the opera onal capability of the RC which condi on, configura on, and space can impact Figure 5: Operational Readiness Index diagram Opera onal Readness provides an index to priori ze RC projects for the CIS and to shape the modernized footprint Mission Dependency reflects the contribu on each RC makes to the ARNG concept of opera ons. Each RC is ranked into one of the three ers 26 I. Introduction ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

35 Operational Readiness: Return on Mission To quantify this value proposition and identify the most critical nationwide facility shortfalls requires two key elements: the facility stewardship shortfall and the mission dependency of each RC, as illustrated in Figure 5. Facility stewardship points to the capability measures of a RC, and mission dependency to the contribution of a RC to the ARNG mission based on level of criticality. For purposes of the RCTMP, the concept that is derived from combining facility stewardship and mission dependency is called operational readiness. Operational readiness couples asset management principles with mission dependency to inform investment prioritization. In order to help quantify this prioritization, an index was developed by combining facility stewardship with the mission dependency index to formulate the ORI. The RCTMP compiles facility data for each location in an asset management modeling tool, which calculates an ORI score for each location. Locations are categorized based on their level of mission criticality with the most critical prioritized first, then the model layers in the highest ORI valued locations to calculate a final prioritized list, quantifying the connection between capital investments and mission readiness. Within the framework of the ARNG Nationwide CIS, the ORI score is a three dimensional metric that considers time, money, and scope. The time component of the CIS is 15 years. The money component is the amount of MILCON and SRM dollars budgeted each year the CIS is implemented. The scope component is the amount of ORI gained or risk to mission mitigated through the transformation of the RCs. The ORI positions the outcome of the RCTMP study to be based on a project prioritization built on a return on mission. Each location has the ability to increase or decrease the overall ORI score based on each dollar spent. By measuring the change in the ORI, the value of the project to the ARNG Nationwide CIS program can be evaluated to ensure that every dollar invested is linked to the project s measurable contribution to the ARNG mission readiness, providing value to the American public. FINAL REPORT TO CONGRESS I. Introduction 27

36 Year Average CI Average SUI AVERAGE CI FALLS TO FAILING IN FY Condition Index (CI) Scale Space Utilization Index (SUI) Scale GOOD FAIR POOR FAILING UNINHABITABLE Q1 Q2 Q3 Q4 Q GD FAIR POOR FAILING UNINHABITABLE C1 C2 C3 C4 C4 Figure 6: Degradation impacts of current nationwide footprint over 15 years Impact of Not Transforming By initiating this study, Congress acknowledged that transformation is necessary. Transformation of the ARNG RC portfolio is vital to minimize risk to mission and maximize readiness. While a full-scale modernization is crucial for the longevity of the organization, short term solutions are necessary to keep the existing RC portfolio functioning at a level sufficient to maintain mission capabilities and in a condition that is safe for occupants. In order to objectively study the current state of the RC portfolio, a facility degradation factor was added to the asset management model during the 15 year timeframe starting in Year 2016 to determine where and when points of concern exist in maintaining the RCs. The degradation analysis in Figure 6 shows the impact of time on condition and space shortfalls and the compounded effect of degradation. The model validates that the current, constrained funding level will not sustain the current conditions of RCs. As shown in Figure 6, within the Program Objectives Memorandum (POM) cycle of five years, the national average CI will degrade to poor condition (Q3) in the short term and then failing condition (Q4) with some facilities possibly being uninhabitable just 10 years later. Significant space shortfalls are validated across all years in the model with the SUI score falling in the poor range. Continuing the current levels of funding for RCs signifies a rise in uninhabitable facilities and an increase in risk to individual Soldiers and their missions and, ultimately, the ARNG itself. 28 I. Introduction ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

37 Time Lost Due to Parking Shortfalls. Due to limited parking at the Washington, DC RC, assigned military vehicles are located at the Anacostia site in Maryland, 5 miles away. Due to this separation, the Soldiers are required to make two stops prior to mobilization. After reporting to the Washington DC RC, they are then required to drive to Anacostia (travel time is extended in times of emergency due to dense population and constricted roadways within DC) to draw the rest of their equipment, assigned weapons, and vehicles. The added travel time postpones mobilization and creates further challenges to meet the response timelines. Having 90 percent of military vehicles serving DC parked on the east side of the Potomac river poses a risk to mobilization of high value areas (Capitol Hill, Mall, Downtown) on the west side of the river during a crisis. Impacts of not transforming are many, from time lost due to workarounds or inadequate space for the entire unit to train at the same time. Just as degradation to the facilities, indirect impacts compound over time posing an increased risk to mission. Additional impacts identified in this study are space and functional deficiencies. The causal effects of these deficiencies are: Time lost to attain readiness and training due to workarounds or circumventing issues related to space deficiencies, Inadequate training capacity due to classroom space shortfalls and inadequate infrastructure for modern technology and equipment, and Risk to government equipment due storing equipment or vehicles at off-site locations or in unsecured spaces due to space shortfalls. Without timely transformation and modernization, these and other risks will continue to negatively impact the mission of the ARNG. All facets of the strength of the ARNG will be affected including: people, equipment, facilities and ultimately mission readiness. FINAL REPORT TO CONGRESS I. Introduction 29

38 Funding Constructs Reliance is made on clear and documented methods and criteria for decision making and prioritizing to reflect stakeholder needs and define value, and which are then applied consistently to determine the best balance in achieving conflicting objectives. com/resources/ ISO55000+introduction+v1.1.pdf The basis for funding the RCTMP is modeled on grant mechanisms that have been appropriated by Congressional authority in recent years to include ARRA, enacted in 2009, and MAP-21 signed into law in Both programs obtained Congressional authorization, but much of the federal funding was channeled directly to programs at the State level, bypassing federal agencies and exclusive from other DoD or DOT program or initiative funding. The objective for ARRA funding was to provide direct spending for infrastructure, education, health, and renewable energy to help stimulate the economy. The objective for MAP- 21 was to provide direct spending for federal highways, public transportation programs, transportation safety and research, and rail programs with 90 percent of the highway program distributed by formula to the State DOTs, all free of project earmarking. Both programs provide investment and long-term economic benefits at the community level by infusing dollars directly into State and local revenue streams. The RCTMP will seek this supplemental funding approach to parallel both ARRA and MAP-21 with a performance-based course of action to measure progress. MAP-21, ARRA and the RCTMP all follow a nationwide risk-based approach. Critical elements of this paradigm are transparency, efficiency, and accountability. The need to monitor nationwide critical infrastructure investment programs is becoming the standard, as evident in recent laws, publications, initiatives, and international standards from the DOT, the Government Accountability Office, DoD, and the International Organization for Standardization. 30 I. Introduction ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

39 MAP-21 s highway program transformation and ARRA s infrastructure program both focus on performance and outcome-based management. MAP- 21 s individual State projects work toward targets that collectively help attain national goals and its accountability measures ensure timely reporting of nonperforming projects and corrective actions to be taken. This approach allows for multiple levels of reporting at the national, State and project level to ensure consistency, accuracy, and timeliness. ARRA required quarterly reporting by category by recipients at the State and local level to include quarterly jobs created or retained, tax increases averted, project completion status, rationale for the project, and other criteria with the main national goal of immediate economic stimulus and long term economic growth. The State data was further synthesized into overall economic activity at the national level as quantified by growth in Gross Domestic Product during the course of the program. The RCTMP proposes the best practices and insights from both programs to create its own goals and measures for transparency and accountability: Multiple reporting levels Transparency on investments based on economic stimulus and sustainability objectives such as project completion and local job creation Attaining national goals through individual components Defined measures of success to provide the highest value to the ARNG and the American public Using the ORI as one measure, the ARNG plans to report on multiple levels how the investment in RCs is providing a return on mission. This reporting will communicate the value that each dollar provides to mission readiness and protection of the American people, bolstering the consistency and transparency of proposed investments. Performance management will transform the Federal-aid highway program and provide a means to the most efficient investment of Federal transportation funds by refocusing on national transportation goals, increasing the accountability and transparency of the Federalaid highway program, and improving project decision-making... FINAL REPORT TO CONGRESS I. Introduction 31

40 The Army National Guard allows the Nation to rapidly expand the Army though mobilization with trained and ready units. The only way you can do this is if the Army Guard has sufficient capacity with the same training, organization and equipment maintained at appropriate readiness levels. General Frank J. Grass, Chief, National Guard Bureau, 8 April 2014 xxxii ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

41 AK JBER RC - Overcrowding DC Armory - Pavement deterioration NJ Jersey City RC - Deteriorated archway framing overhead door II. Congressional Directive Findings In recent years, Congress has heavily invested in the ARNG s people and equipment. Now it is time to focus on RC modernization by alleviating the existing space shortfall, providing appropriate mission critical spaces (storage, classrooms, and assembly halls), aligning facilities with current mission and future population trends, and upgrading the quality of RC facilities. The inadequate and outdated condition of RCs nationwide threatens the ARNG s response capabilities. The SASC request for a nationwide study on the state of the ARNG s RCs and their ability to support the mission requirements of today s force, recognizes the disparity between current funding and full requirements. Several inadequacies were discovered across the spectrum of facility functions that are core to supporting the ARNG operations. The ARNG has exercised all possible measures to address gaps regarding space, condition, and location through the Base Realignment and Closure (BRAC) Act of 2005, recent MILCON and additions and alterations, and over 600 RC closures in the last 10 years. This study responds to six critical deficit areas related to space, condition, location, mission readiness, family support, and shared use as outlined in the Congressional Directive and quantifies the existing gap between the current RC footprint and total requirements necessary to support the ARNG operations nationwide. FINAL REPORT TO CONGRESS II. Congressional Directive Findings 33

42 Review of Existing Space Standards Existing space standards in RCs are set based on the total required strength of all assigned units and their assigned equipment. Additional allowances are added to the base allowance depending on the types of units and any special equipment. The ARNG RC space standards are regularly reviewed and updated to ensure RCs support their designated missions and training requirements. The Facility Engineer Advisory Council (FEAC) is assisted and advised by the ARNG Installations Division (ARNG-ILI) personnel, other ARNG Divisional staff proponents, and representatives from the States in these reviews. Their recommendations for changes to criteria or functional layout are provided to the ARNG-ILI Division Chief for final approval. This review strategy is a routine function of the process of continuous improvement exercised by the ARNG. The latest review focused on the unique needs that the ARNG RCs must fulfill based on dual mission requirements to provide domestic and federal service. Improving the flexibility and the functional layout of authorized spaces were the driving factors behind this review. Finding: Shifts in Mission and Training Have Established a Need for Adjustments to Facility Standards, Configuration, and Size. With recent reviews and edits, the ARNG has calculated overall minor space reductions and has recognized 2 to 8 percent of calculated capital costs savings on sample prototypical projects. These assessments have resulted in changes to classrooms, administrative spaces, storage areas, and the assembly hall. The team also recommended infrastructure changes throughout the building to better support increasing reliance on digital technology. These revised criteria have been implemented in the latest NG PAM update as well as in ProjDoc, the automated program that generates the scope and cost of MILCON projects and produces project programming documentation (DD Forms 1390/1391). Below is a list of the most recent criteria revisions: Assembly halls changed from 6 sizes (5,400 SF 9,990 SF) to 2 sizes (5,400 SF and 6,300 SF). Libraries were removed as a separate space due to lack of need in today s digital age. Learning Centers, Distance Learning Centers, and Audio/Video storage spaces were combined into one space. IT/Electrical infrastructure for distance learning are to be incorporated into all designs to allow the State to shift distance learning equipment among RCs as needed for training purposes. Indoor Firing Range (no longer authorized) and Training Device Simulation spaces were combined into one Multi-purpose Training Area for use in accordance with training needs. Kitchen with cooking equipment is only authorized for those RCs that have units with assigned cooks or that are designated as mission critical for domestic operations by the State. Locations without cooks are authorized a small serving-only kitchen with a concrete pad for a Mobile Kitchen Trailer. Family readiness office recommended to be moved to more accessible locations with the addition of private counseling and lactation rooms. Physical fitness areas only authorized if facility is not located near an existing fitness area. Special function areas are itemized and authorized as appropriate (for example: Joint Operations Center for State Headquarters. Arms Vault size increased to accommodate larger and additional weapons. Unit Storage space reviewed and clearer guidance provided for more accurate determination of authorizations. Administrative spaces recommended to be more open (fewer walls) to allow for more natural daylighting and more adaptable to unit re-organizations. Also adopted Army office space authorizations (AR ) as the ARNG standard. 34 II. Congressional Directive Findings ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

43 Assessment of RC Condition, Capability for Authorized Manpower, and Support Functions Congressional Directive had two tenets that focused on the RC and its supporting functions condition and capability to support the ARNG mission. These facility attributes are strongly interconnected and the findings are addressed jointly. The RCTMP analyzed the current RC capability with a threepronged assessment: Facility Condition Assessment of all RCs to determine the extent of physical deterioration and the facilities overall condition compared to industry standards Authorized Space Requirement Assessment of all RCs to determine the extent of the space shortfall or surplus for the existing RC portfolio and mission essential space components Mission Support Assessment of all RCs to determine the capability to support mission including deficiency, configuration, and quality of life issues Assessment of Facility Condition Q4 UNINHABITABLE Q4 FAILING pt Q GOOD Q3 Q2 Q1 Figure 7: National average facility condition index POOR FAIR More than half the RCs in use today were built between World War II and the Vietnam War, with almost one out of every three built in the 1950s. The average facility age across the Nation is 39 years old with an overall CI of 82, which translates to a low fair condition or Q2-. A CI at this level signifies that nearly 20 percent of the facility s value has been lost to distress and/or deterioration. Finding: Nationwide Condition verging on Poor Risking Mission and Readiness Many Soldiers work and train in RCs with failed window and roofing systems, non-operable or non-existent fire alarm systems, and aged or obsolete electrical systems. Even when a facility has been well-maintained, many building systems reach the end of their expected useful life of 15 to 30 years. This results in diminished operating reliability and increased maintenance needs, scheduled outages and repairs, emergency repairs, and equipment replacements just to keep the facility in working order. FINAL REPORT TO CONGRESS II. Congressional Directive Findings 35

44 Where Today s Soldier is Working and Training to Serve Our Nation As the pictures illustrate, a poor or failing facility not only compromises readiness, operations and retention, but also demonstrates that the current MILCON/SRM funding level is unsustainable. Clockwise from top right: A deteriorating window at the DC Armory compromises energy efficiency. The damaged ceiling in the Portsmouth, NH RC poses a risk of falling debris. A damaged gate in Bellemont, AZ decreases the ability to secure vehicles and equipment. Failing foundation at the Woodstock, VA RC. Exterior settling in Lexington, MA. Facilities at Ft. Juan Muna in Guam constructed as housing for construction workers in the 1960s, buildings like these serve as training administrative and storage space for hundreds of Soldiers. Original and outdated piping at the Armory of Mounted Commands in RI. 36 II. Congressional Directive Findings ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

45 While the overall condition of the RC footprint is a low fair condition, degradation will force the portfolio average into a poor condition in the next few years and failing condition in 10 years, assuming the continuation of current funding levels. This means current funding levels are not enough to maintain RCs or the building systems. More than one-third of the Soldiers currently working and training in poor or failing facilities create a significant risk to mission and readiness. Assessment of RC Space Requirement C4 40 UNINHABITABLE C4 FAILING 64% C3 GD C POOR FAIR C2 C3 Figure 8: National average of RC space requirements met Space requirements are based on currently assigned unit strength as well as any confirmed unit changes through the FY17 planning horizon. The authorized space requirements for the existing portfolio were assessed based on NG PAM Details on the calculation assumptions are found in the Appendix. To understand the magnitude that space could impact readiness, the RCTMP not only measured the amount of space required but also reviewed the functionality of the space to support mission requirements. Finding: Current Facilities are Roughly One Third Too Small The nationwide average is 64 percent of the space requirements met or a low poor C3 rating, signifying a dramatic space shortfall of 36 percent in the current RC footprint. Extreme deficits occur as in the case of South Carolina where it meets just 38 percent of its authorized space requirements. Approximately 9,200 Soldiers are stationed in South Carolina, yet the current facilities support only 3,500. Finding: Mission Essential Spaces have Failing Space Requirements While the total RC footprint may have 64 percent of the required space, outdated configuration of the existing RC footprint means that mission essential space components may not have the space required under modern standards, thus creating an even more severe space shortfall. For example, an assembly hall space may be considered oversized based on current criteria (whereas when the RC was built, the assembly hall was the correct size), meanwhile remaining mission essential spaces under current criteria are too small or non-existent to meet the modern footprint. FINAL REPORT TO CONGRESS II. Congressional Directive Findings 37

46 Breakouts of space requirements into mission essential space components highlight key areas of concern. As Table 3 illustrates, classroom and maintenance work bays at 55 percent and 35 percent of space requirements met, respectively, receive a failing score of below 60 percent. Administrative and Storage space receive a poor rating. Finding: Failing Functionality Creates Capability Gaps In addition to the outdated RC space configuration, functionality of the spaces needs modernization. Today s force requires flexible, modern spaces that can accommodate force structure changes. Older buildings are often inflexible and do not fully meet today s workplace arrangements. This failing functionality leads to gaps in the ARNG s capability and mission readiness, for example: IT and electrical infrastructure cannot support computers, online simulators, and/or other equipment limiting classroom functionality and a Soldier s ability to complete training impacting readiness New equipment can be exposed to outdoor elements if large storage areas are not available to house them and sensitive equipment may be damaged if air conditioned storage is unavailable Weapons stored in vaults are double stacked/triple stacked due to space constraints creating safety concerns Lack of storage for Soldier individual mission equipment often resulting in off-site storage Insufficient toilets and showers for both genders. The RCTMP assessment documented locations where single units (approximately 75 Soldiers each) were operating with only one shower. Most RCs also lack female latrines and showers. The issue will be further exacerbated as the ARNG moves forward with broader gender integration. Function Average Space Requirement Met Impact of Insufficient Spaces Classroom Educational Training and Simulator Space Admin Work area, office support, and conference rooms Maintenance Work Bay / Support Training work bay for routine maintenance of military vehicles and equipment Storage 55% 67% 35% 72% Lack of inadequate classrooms and training spaces results in off-site training, increasing the number of training days. Table 2: Mission essential component performance Inadequate space leads to overcrowded and/or shared offices with limited privacy. Vehicles need to be maintained at another facility. Time is lost to transport vehicles and equipment to maintenance facilities. Storage for unit equipment and locker space for individual gear In recent years, the ARNG has acquired new equipment, but RC space has not been expanded to accommodate it. 38 II. Congressional Directive Findings ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

47 Functional Space Survey Responses Time spent each month moving equipment (vehicles, tools, weapons) between locations [main and detachment] reduces time and man power available for training. NYARNG Soldier An online Functional Space Survey was distributed to Soldiers to gather input on the performance and importance of RCs. Over 29,000 Soldiers from 39 States participated in this survey. Similar to the items above, their responses indicated several specific negative consequences that space issues and lack of functioning spaces had on their training and unit operations: Readiness and training time lost. Space deficiencies in a facility often create workarounds and time expended on workarounds decreases time spent on training and operations. Survey responses indicated that 25 percent more time was expended to attain the same level of training and readiness as a result of circumnavigating issues related to each space deficiency. This average could be greater as many respondents indicated an unknown burden of time. Insufficient training support spaces. Effective training to prepare for the myriad of the ARNG missions means facilities must provide adequate space and infrastructure for all equipment and necessary training activities. In some States, as many as 60 percent of all RCs have only one classroom (two or more are required to perform mandatory training) and up to 33 percent had no dedicated classroom space to perform all mandatory training and other activities. The impact is worsened in RCs with larger force strengths, all competing for critical training space. Increased risks of accountability of government property. Storage of equipment or vehicles at an off-site location or a Soldier s home reduces accountability and increases the risk of damaged or lost property. In addition, traveling further distances to retrieve equipment or get to training activities places the Soldier at risk, especially during inclement weather. FINAL REPORT TO CONGRESS II. Congressional Directive Findings 39

48 Functional Space Survey Responses The women s showers in this building do not meet the needs for all the females on a regular Army Physical Fitness Test day. Washington, NC RC Female Latrine Shortages. A severe shortage of female latrines is a significant problem. The survey indicated that there are no female latrines in one-third of the RCs in North Carolina. One Soldier in the Appleton, Wisconsin RC indicated that there is no locker room space for female Soldiers and that they were currently using a classroom as locker room. The female bathroom has one shower which forces the unit to close male showers in the morning for female use. These capability gaps stem from facilities being undersized, with outdated configurations and failing functionality to meet the modern requirements and force structure changes that have occurred over time. 40 NY Ithaca RC - Black mold on ceiling finishes II. Congressional Directive Findings NY Patriot Way RC - Leaking water supply MI Detroit Light Guard RC - Original restroom fixtures are aged and beyond useful life ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

49 Assessment of Mission Support RCs in low fair condition that have poor space requirements met and failing functionality are insufficient to meet the mission requirements expected of them. The mission support functional capability, or F-Rating, which incorporates quantity of space, deficiency, configuration, and quality of life issues in its rating, confirms this finding. Conducted by each State for its RCs, the F rating evaluates the real property inventory s capability to support mission. A compilation of nationwide results indicate that the RC portfolio average (for category code 17180) is a poor F3 rating according to an extract of the ISR in November F5 NA F4 FAILING F3 POOR F3 GOOD F1 FAIR F2 Finding: Two-thirds of RCs are Poor or Failing Functionally A building with an F2 rating is defined as displaying moderate deficiencies while a F3 rating is defined as displaying significant functional and configuration deficiencies that impair the capability to fully support the tenant s required mission. More than two-thirds of the facilities are rated F3, F4, or F5 and exhibit substantial deficiencies that encumber the force. Figure 9: National average of RC functionality FL Arcadia RC - Disconnected gas heater exhaust MI Ishpeming RC - Aged wallmounted baseboard heaters throughout building VA Emporia RC - Severe water intrusion NC Benson RC - Severe water ponding on roof OR Grants Pass RC - Expired and outdated kitchen exhaust hood fire suppression system FINAL REPORT TO CONGRESS II. Congressional Directive Findings 41

50 Examination of RC Placement and Alignment to Mission and Population Centers The majority of the existing RC locations were planned and built based on operational requirements and demographics from previous decades. To assess how the RC footprint supports the current the ARNG mission, each RC was evaluated based on whether the location helps the ARNG effectively respond to domestic and overseas operations, execute training, provide opportunities to relocate and/or consolidate units from other RCs, and optimize retention. To be clear, stationing the militia is recognized as a state and territory prerogative, under the Governor. Neither this study nor this plan directs the stationing of ARNG force structure, rather it provided a comprehensive analysis only to advise such. The evaluation of the RC locations used a combination of demographic data based on census 2000/2010, population projections for 2020/2030, historical recruitment and retention counts, current Soldiers data, facility related data, and State s input. These data points were gathered through charrettes, Census data files, MDI analysis, and the ARNG databases to determine the optimally sited RC locations for a State. MISSION CRITICAL MISSION DEPENDENT MISSION SUPPORT Strong Mission Alignment RCs are extremely difficult to replicate or relocate. Commonly JFHQ, BDE HQ, or loca ons with unique unit requirements such as avia on components. Moderate Mission Alignment RCs provide a variety of func onal roles and may store significant quan es of equipment, which would be challenging to relocate. Low Mission Alignment Commonly single unit loca ons, or located away from target popula on centers. Some loca ons are maintained to provide geographic coverage and response to natural disasters. Figure 10: Mission dependency tiers Mission dependency analysis was conducted with each State s ARNG JFHQ. The analysis revealed which locations are critical to operations and how well current RC locations are aligned with mission readiness. Locations are prioritized in terms of operational criticality providing critical asset protection to meet the Governor s mission. Each RC fell into one of three mission tiers, mission critical, mission dependent or mission support. An optimally functioning ARNG needs RCs in all three levels, creating a network of RCs to maintain a strong and balanced presence across the U.S. 42 II. Congressional Directive Findings ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

51 Each State approached the analysis based on their own unique specific mission, background, and geographic input that shaped their responses and scores. Below are several factors that contributed to each State s response: Recent consolidation to streamline the current RC footprint and therefore diminish reductions to RCs in the end state. Unique geography including coastal States, a small geographic footprint with close proximity between RCs, or a large geographic footprint with RCs in isolated areas. Proximity to areas prone to natural disasters such as hurricanes, floods, fires, earthquakes, and tornados. Specialized mission including distinct unit types such as aviation RCs or units that require proximity to other facility types. drill, training or other purposes. Most RCs are able to support these objectives reasonably well. However, approximately one in four existing RCs are considered to be misaligned due to State demographics having undergone a significant shift, often leaving RCs in isolated areas too rural to maintain a manned unit or provide rapid response to more densely populated communities. Mission Dependency analysis with the State validated the RC location alignment from an operations perspective. Of the current RCs, 28 percent were mission critical, 36 percent were mission dependent, and 36 percent were mission support facilities. A large portion of RCs in the mission support tier were selected to be divested since they were located away from target demographics centers and/or domestic operations staging areas and are were no longer critical to mission. Mission Cri cal Facili es 28% Mission Dependent Facili es 36% 36% Mission Support Facili es Figure 11: Nationwide breakdown of mission dependency rating (percent of RCs) Finding: Misaligned Locations Impact Mission, Response, and Retention The ARNG needs RCs located where they can effectively respond to domestic operations, execute training, maintain a strong and balanced presence throughout the State, and optimize retention. The most ideal locations would align with critical operations and be situated close enough to target demographics to provide an immediate response for emergencies or disasters and to eliminate Soldiers having to commute to their RC a distance beyond safety standards for Analysis also uncovered over 130 potential new locations for adding a RC. These communities currently lack a RC presence but are in key areas 59 percent of the new locations were deemed mission critical by the State and 36 percent mission dependent. These locations were identified as opportunities to establish sustainable hubs of the ARNG, provide improved coverage for a State s population and domestic response, and increase mission support. A RC in a misaligned location can adversely impact response, increase Soldier travel distances, isolate facilities from shifting population centers, and impact retention. These new locations and maintained existing locations offer an opportunity for relocation and consolidation of RCs into optimally sited locations. Increasing the ARNG s presence in critical areas that do not currently have a RC and optimally siting the RCs increases the ARNG s capability to maintain manned units for domestic missions or community aid during natural disasters, while providing for opportunities to build in sustainable and energy security features. FINAL REPORT TO CONGRESS II. Congressional Directive Findings 43

52 Family Readiness Program Taking care of our families is just as important as buying the latest fighter jet, tank, or weapons system. Maj. Gen. Thomas G. Cutler, former Adjutant General, Michigan National Guard The Family Readiness Program enhances the quality of life and morale for Soldiers and their unit, while bolstering commitment and support from families and communities. The Family Readiness Program provides counseling and health screenings and distributes information on support agencies and organizations and government benefits. An analysis of the existing Family Readiness Program at the State and unit level was conducted to determine the adequacy of the space provided and its condition. This analysis was accomplished by reviewing the existing facilities criteria and through a series of interviews with Family Readiness Program directors, administrators, JFHQ staff, and leadership at the unit and State level. Finding: Increased Family Support Needs Have Warranted a Change to Current Facilities The transformation of the ARNG has increased deployments and time spent away from a Soldier s family, thus amplifying the need for family services and support. The Family Readiness Program has become a key factor in enhancing the quality of life for Soldiers, their families, and their communities. However, space shortfalls within RCs impact functions at both the State and local unit level. Creating family support space within an existing facility footprint does not always provide the privacy necessary for accommodating the sensitive nature of the activities provided by the Family Readiness Program. Facility needs include private rooms for meetings and counseling, increased administrative/office space, secure file and equipment storage, and secondary entrances. Additionally, some locations lack adequate provisions for disabled Soldiers or visitors, such as automatic doors and wheelchair ramps. Family support also relies on partnerships with community agencies such as the Department of Labor or Training, Veterans Administration, local healthcare organizations, and corporate partners. If a RC is not located close to these affiliates or is poorly configured, the connection between the ARNG and their services can be fractured. Recent criteria revisions create flexibility in RC footprint to accommodate improving family support. 44 II. Congressional Directive Findings ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

53 Shared Use In hundreds of communities across the country, the only communal assembly area is the RC. This opens the door for local organizations and governments to utilize the RC. The ARNG has a formal and informal process of considering partnerships with other government entities, which can be mutually beneficial to both the ARNG and others. The catalyst behind joint RCs and other similar reserve component structures is to save tax dollars for construction, maintenance and operations, and general use. The RCTMP was tasked to review partnership opportunities, outline shortcomings, and identify ways to improve opportunities. Current shared use examples were documented nationwide, as well as impediments to existing and potential partnerships. To supplement the analysis of the existing RCs, alternative capital funding sources were explored with a pilot study of public-private partnerships. Two pilot States, Michigan and North Carolina, were selected for this initial study. These two States were chosen based on support for and existing opportunities for public-private partnership engagement. Further information on pilot State selection criteria is in the Appendix. Key goals of the public-private partnership analysis were: Analyze current operations for potential improvements to enable publicprivate partnership opportunities Assess comparable joint State/federal methods Identify possible replicable constructs The North Carolina National Guard has entered into a unique partnership at their recently completed state-of-the-art Joint Force Headquarters complex located in Raleigh. Focusing on partnerships with other State Agencies rather than federal components, the NCARNG is teamed with both the Department of Emergency Management, and the State of North Carolina Emergency Operations Center (EOC). In addition to the additional State construction funding provided by North Carolina for its share of the JFHQ which is normally 100 percent federally-funded, this partnership provides SRM funding and annual recurring operations and maintenance funding through a Memorandum of Agreement. In addition, the collocation of the NCARNG with the EOC aids in domestic response and operations and strengthens first response capabilities. FINAL REPORT TO CONGRESS II. Congressional Directive Findings 45

54 Finding: Innovation Strengthens the Platform for Shared Use The National Guard provides ready forces for the defense of our Nation and its interests, and to States for missions directed by the Governors. General Frank J. Grass, Chief, National Guard Bureau, Joint Chiefs of Staff, Strategic Direction, 17 June 2013 The most common example of successful joint use is the National Guard Reserve Center. Nationwide, numerous centers share parking, classrooms, kitchens, restrooms and assembly areas to defer costs in construction and provide better economic support than a single unit or single component facility. This is also advantageous for the ARNG in that the State share (25 percent) is waived where the partner is another DoD component. This example is replicated in partnerships and shared use agreements with other federal agencies and local governments. The following improvements could remedy the challenges that shared use ventures currently face. The ARNG should: Formulate temporary advisory teams (comprised of Congressional and MILCON staff) to fully document joint use and the benefits and develop a series of incentives within their capability. Provide recommendations on incentivizing joint use, not only within the reserve components but with Active Duty installations. Negative incentives should be considered. Consider Congressional funding for local government entities for deferment and matching of non-synchronized local and State funding. States indicated strong leadership support for shared use and partnerships at their RCs and recognize the advantages such ventures offer to share facility construction efforts and maintenance costs. However, this needs to be done within the parameters of State legislation and funding. The Oregon National Guard and Oregon Military Department constructed a new Armed Forces Reserve Center (AFRC) in Springfield, Oregon as part of the BRAC Act of This new state-of-the-art military facility is approximately 165,000 SF on 22.5 acres and was constructed at a cost of $39 M. At this new facility the Oregon National Guard shares space and costs with the US Navy and Marine Corps Reserves, the Bureau of Land Management, and the U.S. Forest Service. Through this unique relationship between military branches, federal agencies and the State of Oregon, it is expected that taxpayers will save over $15.5 M in reduced operations and maintenance costs from previous facilities. These partners contributed close to $9 M in construction funding towards this new AFRC, allowing for the consolidation of numerous federal activities, and divestment opportunities for several other federal and State properties and locations. The Oregon National Guard at the Fort Dalles, OR RC and Columbia Gorge Community College created a unique partnership. There is no other facility anywhere in the country like this representing the collaboration between being a community center, a college facility, and a National Guard armory, said U.S. Senator Jeff Merkley (D-OR). The HVAC maintenance is performed on the RC by students at the college. They earn college credit for their work and the ARNG is able to reduce its maintenance costs. 46 II. Congressional Directive Findings ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

55 Q4 UNINHABITABLE FAILING Q4 C4 F4 F Q3 C3 82 pt 64% Q2-80 C3 80 C Q C2 GOOD POOR FAIR Q1 C1 UNINHABITABLE FAILING Facility Condition Index Space Requirement Met Functionality of Portfolio GD POOR FAIR F5 NA FAILING F3 POOR GOOD F1 FAIR F2 Figure 12: Current status of national RC portfolio Summary of Congressional Directive Findings Comprehensive RCTMP analysis and findings bring to the forefront varied aspects of the vitality of the RC portfolio. Findings that the facility condition barely ranks in the fair condition and that both the space requirements and mission support/functionality rank poor speak to the severity of health issues of the existing ARNG RC portfolio and concern that should be given to the RCs in the future. These findings indicate a warning signal that current funding constraints aid in the accumulation of a deferred maintenance backlog; thereby expediting deterioration of buildings and their systems, which in turn add to the potential for system failures that disrupt operations and encumber the long term sustainability of the RC portfolio. Average annual SRM project funding for the State of Arizona is approximately $1.5 M. That is 0.54 percent of the current Plant Replacement Value (PRV) of AZARNG s existing portfolio. Standard industry practice is to allocate budget dollars for routine maintenance and capital renewal at a range of 2 to 4 percent of the current facility value. Current funding provides less than one-fourth of the necessary costs to deliver adequate facility maintenance and is not sufficient to offset natural deterioration associated with facility aging. This maintenance backlog does not begin to address the current space deficits and RC locations no longer aligned with mission or in close proximity to citizens in time of need. FINAL REPORT TO CONGRESS II. Congressional Directive Findings 47

56 Findings support that domestic response is being obstructed due to locations misaligned by mission criticality, inadequate IT and mechanical infrastructure that do not support emergency communications or training, and insufficient storage space that impedes the protection of government-issued equipment. All of these facility shortfalls related to space, condition, location, mission readiness, family support, and shared use jeopardize the organization s ability to respond, train, and retain. The cumulative RCTMP analysis, in response to the first six tenets, defines the inadequacies threatening the ARNG critical infrastructure and diagnoses the requirements for a nationwide solution. Existing facilities require transformation to support 21 st Century operations and to maintain a strong and agile force that provides life-saving capabilities and immediate homeland response. Every dollar invested in the dual-capable National Guard provides Governors and the President capabilities to meet demands both within and beyond U.S. borders NGB Posture Statement Clockwise from top: Buffalo, NY, NYARNG vehicles lined up ready to be used to aid civil authorities at the Masten Avenue Armory here on Wednesday, June 8, following a snow storm which hit the Buffalo area on January 7 at the same time intense cold affected the northeastern United States. The New York National Guard mobilized more than 260 Army and Air National Guard service members to be prepared to help at the direction of New York Governor Andrew Cuomo (U.S. National Guard Photo by Senior Master Sgt. Raymond Lloyd, 107th Airlift Wing/ Released). Ft. Juan Muna RC, Guam. Workers barracks from the 1960s are being repurposed to support GUARNG Soldiers. In addition to being in poor condition, the buildings are grossly undersized to support training, storage and administrative needs. Daytona RC, Florida. Due to lack of space, an exterior trailer is utilized for showers. Portsmouth RC, New Hampshire. This RC was built in 1958 and the outdated and crowded kitchen is still being utilized to serve Soldiers. Lack of military vehicle parking at a Florida RC creates this parking workaround. 48 II. Congressional Directive Findings ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

57 Where Today s Soldier is Working and Training to Serve Our Nation FINAL REPORT TO CONGRESS II. Congressional Directive Findings 49

58 During this period of uncertainty in the fiscal and strategic environment, our goal has been to maintain the proper balance between end strength, readiness and modernization across the Total Army Army Posture Statement

59 III. Shaping the Footprint A Nationwide Roadmap Collectively, the findings justify a modernization of the RC portfolio to meet federal and homeland missions while supporting local communities, Soldiers, and their families. The current RC portfolio poses challenges to readiness due to RCs with obsolete designs, degrading conditions, inadequate space configurations, lower square footage than what is authorized by Congress, less than optimal siting across the portfolio, insufficient infrastructure for emergency communications and IT, non-code compliancy, and poor energy efficiency, among other items. To respond to these various challenges, the RCTMP team has developed this transformation plan to address over 2,100 RC locations that are used on a daily basis to prepare and train the ARNG citizen Soldiers to be ready to respond to complex civilian and military challenges. NGB, working closely with the ARNG State leadership, cultivated this RC modernization plan which is synchronized with the DA FIS to apply scarce resources to sustain critical facilities, dispose obsolete buildings, improve the quality of retained facilities and build-out the most critical facility shortfalls. This comprehensive outlook of the future RC portfolio serves as a roadmap that allows the ARNG to continue its implementation of the Department of the Army (DA) guiding principles and transform the nationwide RC portfolio to enhance readiness in alignment with the Army force structure reduction. FINAL REPORT TO CONGRESS III. Shaping the Footprint 51

60 Collective State Input In collaboration with NGB, 54 State modernization plans were created, each one specific to an individual State s priorities and circumstances. These statewide plans, inclusive of a transformation proposal and associated CIS, were approved by each State s TAG and ARNG leadership. The overall trends in the leadership guidance that formed the basis of statewide RC modernization plans are: Ensure RCs have the capability to support the readiness, resiliency and well-being of our Soldiers and families; Locate RC facilities to regionalize coverage over the majority of the State to ensure and enhance capabilities for rapid homeland and disaster response; Maximize command and control effectiveness and major subordinate command relationships; Remain a community-based entity providing lifesaving capabilities and hometown services to local communities; Create efficiency through practical consolidation while maximizing existing facilities; Maximize retention by optimally siting RCs based on historical data, demographic trends, and consideration for drive time from a Soldier s residence to an RC; Maintain and acquire sites that provide future mission scalability/ flexibility and proximity/access to major highways and training areas; Optimize sustainability efforts and energy resources to provide sound environmental stewardship; and Leverage operational partnerships to maximize effectiveness of first responders and continue to promote partnerships with community, State, and/or federal government agencies. The collective input from these statewide modernization plans, inclusive of the proposed end state locations, facility stewardship, and mission dependency metrics advise this nationwide footprint transformation plan and the ARNG Nationwide CIS. $2.5 B Savings created through efficient space realignment and consolidation: A space efficiency savings of 10 percent is realized by reducing space requirements for common support spaces (such as the assembly hall) and by providing a more flexible facility configuration. Multi-unit RCs can accommodate more Soldiers with less overall square footage when compared to the single unit RC. This savings translates into a total space requirement reduction of over 10 M SF (including the 12 percent Army force structure reduction) and divestiture of 600 locations. The reduction effort results in $2.5 B savings in military construction costs (design & construction costs represent only 5 to 10 percent of the total life cycle costs) and $22 B savings in operation costs over the life cycle of the asset. 52 III. Shaping the Footprint ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

61 Retain & Improve 1,030 RC locations Divest 600 RC locations Consolidate 650 RC locations Current State 2,170 RC locations 73 million SF existing RC space 36% space deficit 28% RC locations in Mission-Critical Tier RC Transforma on 1,680 RC locations 90 million SF RC space 0% space deficit 39% RC locations in Mission-Critical Tier Notes: 1) Statistical data is approximate. 2) Some RC locations have multiple RC buildings. 3) The 90 million SF reflects a 12 percent Army force structure reduction. 4) Consolidations cannot occur without the requisite new construction and the additions to the facilities identified to retain. Figure 13: Shaping the footprint to optimize mission alignment and stewardship The Plan for Shaping the Footprint Optimizing mission alignment and facility stewardship are the facility-related objectives of the nationwide transformation plan. As Figure 13 shows, the plan s many attributes include eliminating space deficits, realigning RCs to their optimal mission dependency tiers, and consolidating and divesting non-performing assets to fortify the portfolio. The plan concentrates on the following six key areas: 1 Strengthen the RC network by centralizing locations aligned with changing demographics to enhance domestic response operation, energy security, and shared-use with first responders; 2 Resolve the mission-essential space deficit and RC functionality gap through MILCON. Consolidate to provide fewer, but larger, RCs that enhance command and control effectiveness and concentrate financial resources; 3 Retain and improve the existing RCs through SRM funding to increase stewardship and counter the effects of facility degradation and a deferred maintenance backlog; 4 Divest obsolete facilities that are no longer necessary after consolidations; 5 Increase dedicated space to support the Family Readiness Program; and 6 Leverage shared-use and partnerships. FINAL REPORT TO CONGRESS III. Shaping the Footprint 53

62 To achieve the mission and stewardship objectives, facility alteration, addition, new construction, or divestiture is required. The transformed footprint includes incorporating the 12 percent Army Force Structure reduction into the following actions: Retain and improve over 1,030 RC locations. Representing 60 percent of the fully modernized footprint, these existing RCs plus future additions will have an average size of 54,000 SF (including an average addition of around 10,000 SF). The average age across these existing RCs is 37 years old with an overall CI of 83, which translates to fair condition/q2. The retained footprint includes approximately 190 RC locations with near term capital projects that have already been funded through Consolidate approximately 650 RC locations. Representing 40 percent of the fully modernized footprint, these consolidations provide fewer, but larger, RCs that average approximately 57,000 SF. These consolidated RCs are on existing sites or new sites in current communities. New construction provides an opportunity to align the RC with the latest design criteria and provide a flexible, energy efficient facility tailored to today s mission. More than 130 RC locations or 20 percent are in new communities aligned with changing demographics or partnership opportunities. Divest approximately 600 RC locations. Representing nearly 20 percent of the current footprint, these RCs are drastically undersized and struggling to support manpower and operations. The average size across these 600 facilities is just 20,500 SF, while a typical single unit RC calls for 35,000-40,000 SF. At an average age of 46 years old, many facilities were built to design criteria that are now considered obsolete, are in poor condition with an overall CI of 76, and are no longer in optimal locations. 54 III. Shaping the Footprint ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

63 As part of the process of consolidation, divestiture and improvement of existing RCs, mission dependency trends emerge as illustrated in Table 3. Locations that are divested most often, or 54 percent of the total fall into the mission support tier, while locations that are most often retained, or 39 percent of the total, are in the mission critical tier. New communities that receive new RCs are most likely to receive a mission critical facility versus a mission dependent or mission support facility. Mission Dependency Tier Divest Over 600 RC Locations Retain & Improve Over 1,030 RC Locations Consolidate Over 650 RC Locations Existing Communities New Communities Mission Critical 13% 39% 19% 13% Mission Dependent 33% 33% 33% 8% Mission Support 54% 28% 26% 1% Total 100% 100% 100% Table 3: Modernization actions by mission dependency tier Optimize Mission-Alignment Despite previous consolidations and State-specific transformation efforts, the current nationwide RC portfolio is in need of major transformation to resolve a key facility issue that hinders readiness - RC locations misaligned with operational criticality. 1 Strengthen the RC network by centralizing locations aligned with changing demographics to enhance domestic response operation, energy security, and shared-use with first responders. The modernization plan aligns RC locations with changing demographics to ensure domestic response coverage within the State borders and across population centers. The proposed portfolio includes over 130 new RC locations in emerging population centers where the ARNG does not currently provide an RC presence. Through consolidation of small and outdated RCs, the proposed footprint will expand the number of command and control centers, regional hubs, and specialized capabilities and infrastructures to strengthen mission response. The RC network will consist of 39 percent of facilities in the mission critical or top tier of mission dependency (an increase of 11 percent). All three tiers are vital to maintain statewide concept of operations and response, retention support, and community presence. Through the recommended implementation, the current RC portfolio will be modernized and positioned to meet mission obligation as shown in Table 4. Mission Dependency Tier Current Full Modernization Mission Critical 28% 39% Mission Dependent 36% 38% Mission Support 36% 23% Total 100% 100% Table 4: Mission dependency rating of RC portfolio before and after modernization FINAL REPORT TO CONGRESS III. Shaping the Footprint 55

64 As critical infrastructure, a nationwide RC network has the potential to strengthen national energy security through energy sustainability programs. Proximity to first responders and emergency service entities can be leveraged at strategic locations. Expanding the ARNG to emerging population locations provides additional partnership opportunities and increased mission support. Optimal placement of RCs provides an appropriate travel distance for Soldiers to reach their assigned RC for training as well as units going from an RC to a training site. Aligning the RCs in optimally sited locations would reduce the number of RC locations without increasing the average Soldier s commute to his or her assigned RC. This modernization plan takes in account demographics, strong retention bases, historical properties, and unit lineage to increase the probability of retaining current Soldiers. Optimize Stewardship Facility portfolios require consistent capital and SRM investments to sustain mission capabilities. Through annual MILCON and SRM funding, the ARNG has always made the best use of its funds for current RCs, despite operating in less than two thirds of the required square footage. The current RC portfolio must transform to achieve an optimized state. Stewardship and sustainability are requirements championed by the ARNG and the DA and this modernization plan maximizes the possibilities for integrating guidance for both into transformation effort. 1 Resolve mission-essential space deficits and the RC functionality gap through MILCON. Consolidation provides fewer, but larger, RCs that enhance command and control effectiveness and concentrate financial resources. RCs recently constructed or renovated are more likely to have sufficient training areas and IT infrastructure, allowing Soldiers to complete training in a timely or efficient manner, thus increasing retention and morale. Alterations and additions to existing RCs will provide functional space and capability for classrooms, individual and unit equipment storage and staging areas, female Soldier latrines and showers, general purpose training bay and support space, and IT and electrical infrastructure necessary for online training, simulators, and equipment. New Construction of multi-unit RCs, consolidating dispersed unit personnel from neighboring locations, will improve command and control effectiveness and offer more Military Occupational Specialties which aids in occupational flexibility and retention. New construction to replace aging infrastructure and buildings that are not able to accommodate mission requirements will be required to meet environmental compliance and sustainability guidelines. 2 Retain and improve the existing RCs through SRM to increase stewardship and counter the effects of facility degradation and a deferred maintenance backlog. The RC modernization plan will continue to improve and maintain space in over 1,000 RC locations to meet the requirements for Soldiers to work, train, and store vehicles and equipment. Many locations have site expansion capacity; minimizing site acquisitions, and optimizing construction dollars. While improvements must be made considering existing building and environmental constraints, these renovations could accomplish sustainable building upgrades to major engineering systems and accessibility. This modernization plan will create operating efficiencies and cost effectiveness, such as energy conservation systems, alternative energy options and sustainable features or pertinent equipment such as stand-by generators with automatic transfer switches to ensure continuous RC operation. 3 Divest obsolete facilities that are no longer necessary after consolidations. In concert with the consolidation effort, approximately 12 M SF of outdated RC facilities will be disposed in 600 locations no longer vital to stationing. No longer serving as RCs, these facilities will be returned to the State, repurposed to support other ARNG functions, or slated for demolition if no longer inhabitable. Soldiers will be relocated and consolidated into the nearest facility that is optimally sited and efficient to operate. 56 III. Shaping the Footprint ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

65 4 Increase dedicated spaces to support Family Readiness Program. Through RC construction projects, the proposed footprint will provide adequate spaces to support the Family Readiness Program at two levels: Unit-Level Family Readiness Program. Assign dedicated space within RCs. Family readiness facility criteria at the unit level is adequate; however it must be identified, assigned, and protected from other competing interests for facility space within the RC. State-Level Family Readiness Program. On a case by case basis, provide FACs with adequate, dedicated facility space with secondary secluded entrances, office space for staff, and private meeting rooms to ensure confidentiality for visitors. 5 Leverage shared use and partnerships. The ARNG will continue to leverage partnerships to advance collaboration with other service components and improve the chances of obtaining funding and achieving cost savings. As new RC locations for the transformed footprint are brought online, local ARNG leaders can identify and recruit potential partners as well as negotiate details with these new alliances. The modernized RCs will foster partnerships with federal, State, and local agencies. Construction of Joint Facilities with other DoD components and local governments is cost effective to the taxpayer. Additional benefits of joint use are accessibility to land, collaboration with first responders, and additional exposure in the community. Benefits If fully implemented, the modernized footprint will close the missionthreatening gap by optimally locating RCs; improving facility condition and functionality, space requirements, and standards for facility size; enhancing readiness through increase family support areas and first responder and other partnerships; and leveraging assets through shared use. Table 5 compares performance measures and indicators, aligned with the Congressional Directive, in the current state versus the end state when full modernization has occurred. Congressional Tenet Measures / Indicators Current Full Modernization 1. Standards for Facility Size Space Efficiency and Flexibility Obsolete design with limited flexibility 2&3. Facility Condition & Functional Capability Condition Index 82 pt (Q2) Q1 Mission Support Functional Capability Rating F3 F1 Space Requirement Met 64% (C3) C1 4. Location & Demographics Percent of Optimally Sited RC Locations 74% 100% 5. Family Readiness Support Space RC's Ability to Accommodate Family Readiness Program Minimal Accommodation Opportunity to employ revised standards and achieve efficiency through consolidation Expanded Accommodation 6. Shared Use & Partnership Potential Opportunity Limited Opportunities Expanded Opportunities Table 5: Congressional directive performance measures FINAL REPORT TO CONGRESS III. Shaping the Footprint 57

66 The modernization plan offers a full transformation all stewardship measures move from fair or poor into the good category, all sites perform to their full mission capability based on their mission criticality tier, and Family Readiness Program support space, partnerships and shared use are all expanded. The transformed footprint represents a blend of tangible and intangible benefits that will support the federal and State missions of the force, enhance readiness, and modernize facilities in a cost effective manner for the U.S. government, including the following additional benefits: Enhanced Readiness - Providing the required space within the RCs in mission essential areas and throughout the State in operationally critical locations gives the ARNG strategic agility to remain always ready for the defense our Nation and its interests. Efficient Footprint - Consolidating smaller RCs reduces the overall square footage required, which translates to lower construction, maintenance and operation costs for existing RCs. New construction and major renovations integrating sustainable design principles into site selection, design and construction will also result in efficient footprint for new RCs. Maximization of Resources - Reducing the number of RC locations while meeting functionality and space standards optimizes the RC portfolio. This results in concentrated financial resources that can be dispersed more efficiently for greater impact. Establishing partnerships with local, regional and State organizations will further stretch resources and utilize cost sharing. Measurable Results - When viewed as an investment, these financial resources are spent with an expected return on mission. That is, investing in RC facilities should improve the mission readiness or decrease the risk to mission success. Local Economy Stimulus - As recipients of the transformed footprint, communities across the Nation will convert capital investments into local/regional construction labor and materials. Local labor accounts for approximately 40 to 50 percent of the total construction project cost and local/ regional materials accounts for 30 percent or more of the total materials cost (depending on geographical location). This potential local economic stimulus metric can promote transparency and accountability during the course of the implementation. 58 III. Shaping the Footprint ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

67 The road to national transformation provides the ARNG an opportunity to efficiently strengthen the RC network by aligning facilities with operations and population, mitigating mission essential space deficits, and eradicating deteriorating and obsolete facilities. Modernization requires investment in the ARNG RCs and yields increased capabilities to protect our Nation s security and citizens. As we draw down from these wars, we need to keep the National Guard operational This is the best investment we ve made in the past 10 years. Former Secretary of Defense Leon Panetta FINAL REPORT TO CONGRESS III. Shaping the Footprint 59

68 Every dollar invested in the dual-capable National Guard provides Governors and the President capabilities to meet demands both within and beyond U.S. borders National Guard Bureau Posture Statement

69 IV. ARNG Nationwide Capital Investment Strategy To increase mission readiness, it is imperative to develop an effective and efficient investment strategy with reasonable goals over an established timeframe that generates a high value for the ARNG and the Nation. In the master planning process to address the ARNG infrastructure, the ARNG Nationwide CIS bridges the gap between concept development and implementation. Each State developed a CIS during the course of the RCTMP to prioritize the short and long-term projects for their State. From that, projects identified by each of the 54 State investment strategies were combined to form a complete transformed nationwide RC portfolio. The result is a ARNG Nationwide CIS that not only considers the goals and priorities of each individual State, but also aligns with the federal objective to mitigate risk to mission. The ARNG Nationwide CIS is based on a value driven transformation solution that optimizes the return on facility and mission investment, while also supporting strategies outlined by the DA FIS. This strategy involves MILCON and SRM investments to modernize the RC portfolio through new construction and major renovation projects, meet authorized space requirements through consolidations and renovations, and maximize the lifecycle of the existing RC portfolio through sustainment and restoration projects. Commitment, leadership and a consistent investment strategy is necessary to ensure the success of the transformation program. FINAL REPORT TO CONGRESS IV. ARNG Nationwide Capital Investment Strategy 61

70 Defining the Operational Readiness Index Compiling the 54 State CISs to build the ARNG Nationwide CIS, begins with a metric to quantify priority based on the factors of facility stewardship and mission dependency. As previously introduced in the RCTMP report, these two elements are combined to calculate the ORI which is used to establish prioritization bands of investment, and in turn identify the most critical facility shortfalls and investments across the RC portfolio. National ORI scoring was developed using two measures. The first measure combines traditional facility factors of CI, SUI, and functionality (ISR F-scores) to rank the operational and organizational health of the RC. These facility metrics were combined to compute the Stewardship Index (SI) for each RC. The SI reports how well RCs comply with the ARNG physical and functional requirements for the mission. Higher scores represent better compliance with ARNG standards. The second contributing measure for ORI is the MDI. MDI scores reflect the Operational Commander s perspective regarding the interruptability and relocateability of the functions at each RC. The MDI represents the risk component of the facility to the ARNG mission. Based on their MDI scores, facilities are grouped into three categories: mission critical, mission dependent, and mission support. Higher scores report greater mission dependency on the RC based on the State s concept of operations. RCs with MDI scores that are too high likewise indicate potential single points of failure or risk, which is something each State tries to mitigate through its network of RCs. Analysis of the MDI helps discern the under and overreliance on individual facilities to manage risk and inform targeted strategies for operational improvement. The ORI is a composite measure of the SI and the MDI. Each RC receives an ORI score, which is then rolledup to the national level. ORI reports a measure of operational capability balancing compliance with static ARNG facility standards and dynamic operational requirements and risk. 62 IV. ARNG Nationwide Capital Investment Strategy ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

71 Mission Dependency Index (MDI) MISSION CRITICAL MISSION DEPENDENT MISSION SUPPORT Optimal ORI Range Stewardship Index (SI) Figure 14: Range of optimal ORI An optimal ORI score falls within a range that represents the most efficient and effective facility operations of a portfolio of integrated facilities as shown by the optimal block shown in Figure 14. Figure 14 shows a range of ORI values and describes the possible attributes of a portfolio that fall within those various ORI ranges. An ORI score that is too high represents a system with limited redundancy and resiliency which would put the ARNG at risk for interruption of operations. An ORI score that falls outside of the optimal range calculated by high SI and low MDI scores indicates that the portfolio is being maintained at a high level, but facilities are not being optimally used to support the ARNG mission. Conversely, a low ORI score calculated by low SI scores and high MDI indicates that mission critical facilities are in unacceptable condition, and the risk to operations is high. ORI analysis enables the ARNG to both identify an optimal investment strategy and establish a method of accountability to ensure appropriated dollars are effectively achieving mission readiness objectives. By evaluating the ORI for each facility, each capital project in the program has direct, reliable program measures for verifiable and auditable results. By measuring the change in the ORI, the value of the project to the ARNG Nationwide CIS program can be evaluated to ensure that every dollar invested is linked to the project s measurable contribution to ARNG mission readiness and high value projects are prioritized. ORI is an innovative approach to asset management that uses a risk-based, mission-oriented approach from the analysis of the nationwide RC portfolio to first, ensure expenditures directly contribute to the ARNG mission and second, improve the traditional facilities metrics in the most efficient manner. FINAL REPORT TO CONGRESS IV. ARNG Nationwide Capital Investment Strategy 63

72 Investment Strategy For a successful national RC transformation program, it is critical to develop a strong investment program which provides measurable and attainable benefits, while recognizing the risks associated with various investment choices. The cornerstone of the RCTMP strategy is a direct relationship between proposed investments and ARNG mission readiness over a 15 year period. Core Principles The ARNG Nationwide CIS structure is framed using two core principles that reflect the logic incorporated in building the strategy: 1 Meeting and Maintaining Mission Requirements 2 Achieving Optimal Mission Readiness Both core principles complement each other and are key in transforming the RC portfolio. The principles involve protection of the ARNG existing and future missions through sustainment and modernization of the RC portfolio. Through data collection and analysis the RCTMP has established a baseline for facility condition, space requirements, functionality and has recognized that these criteria affect mission readiness as measured by ORI ranking. This baseline is the minimum standard that the first core principle focuses on. The RCTMP has shown that the RC portfolio requires modernization to support both current and future missions. It has also been established that an RC portfolio that achieves optimal mission dependency as measured by ORI ranking is best able to perform its full range of capabilities with limited risk to mission. This measure of an increase in mission readiness is what the second core principle focuses on. The core principles are incorporated into an investment strategy through a balance between MILCON and SRM funding. MILCON dollars fund new construction and major renovation projects, while SRM dollars are 64 IV. ARNG Nationwide Capital Investment Strategy ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

73 invested to restore, modernize and sustain facilities. Together, the MILCON and SRM funding support the degradation and prioritization strategies that make up the ARNG Nationwide CIS. Degradation Strategy Physical degradation is a factor in the asset management plan of any real estate portfolio. RCs that are in better condition and have either zero or a low maintenance backlog have a slower rate of deterioration than RCs that are in worse condition or have a high maintenance backlog. Deterioration follows an S-curve and occurs faster as condition worsens. For investment to be sustainable, a strategy must be developed that stabilizes this loss of performance. The RCTMP has identified points along a timeline of when the ARNG portfolio will succumb to significant losses in performance. Based on the current rate of investment and degradation, the first major point of degradation occurs in 2018 when the portfolio drops into the poor condition category and again in 2027 when the portfolio drops into the failing condition category. These threshold measures were used to develop an SRM strategy. The RCTMP team applied SRM funding to the portfolio through its asset management modeling tool to determine optimal rates of funding that offset degradation penalties. This degradation strategy embodies the predicated first core principle. Prioritization Strategy Prioritization of projects based on need and limited resources is a reality of managing any real estate portfolio. For investment to be sustainable, projects must be selected to maximize benefit to operations and performance and mitigate risk to mission. The prioritization strategy recognizes the autonomy of each State and the significant work undertaken to develop a preferred RC modernization plan by balancing the recommended State-developed CISs with a nationwide prioritization based on the ORI calculated value of each project and its contribution to national goals. As such, this strategy prioritizes mission critical assets based on the 54 State CISs, followed by critical infrastructure with demonstrated need and greatest mission improvement as measured by the increase in ORI scoring. The premise of this strategy is that large capital investment is the solution to retain organizational value through protection of mission critical assets as well as assets that provide the most improvement to mission by raising the standards for condition, configuration, and function. The selection process is a data-driven, repeatable method that seeks to obtain an ORI in the optimal range for the portfolio. The RCTMP team applied MILCON funding to the portfolio through its asset management modeling tool to determine optimal rates of funding that increased the RC portfolio performance metrics, including condition, space and ORI. This prioritization strategy embodies the predicated second core principle. Unified Strategy The ARNG Nationwide CIS is a unified strategy that combines the degradation and prioritization strategies through SRM and MILCON investments in RCs to not only maintain the ARNG s mission readiness, but to reach an optimal mission readiness range. MILCON investments concentrate on larger projects and new construction in a prioritized order correcting the most significant organizational shortfalls, meanwhile SRM investments concentrate on offsetting degradation to the portion of the RC portfolio that is either awaiting a MILCON project or is already a viable attribute to the footprint, but requires some level of regular maintenance to continue efficient operations. This unified strategy of funding projects focuses on selecting projects that create the most financial, organizational, and mission return on investment to the RC portfolio. By measuring each project s incremental cost versus its incremental value to the organization, the ARNG Nationwide CIS creates value to the ARNG in terms of operational readiness; therefore, a return on mission. FINAL REPORT TO CONGRESS IV. ARNG Nationwide Capital Investment Strategy 65

74 Funding Scenarios A range of scenarios were developed at the national level to analyze program benefits and risks balanced against the funding level and modernization timeline necessary to complete the program. Each scenario reflects a specific budget request over a 15 year time period. Scenarios were modeled using various annual expenditure levels for each scenario, which are then offset by a degradation factor incorporated into the model to simulate the risk impacts of different MILCON and SRM funding levels on the operational performance of the RC portfolio. The impacts of each annual funding amount on mission readiness are reflected in the change in ORI score as well as the weighted portfolio averages for condition and space utilization. The results of each scenario are analyzed to determine their relative risks and benefits to the ARNG. Figure 15 is a summary of the scenarios reflecting funding levels that range from the current funding to a funding level required to implement the entire RCTMP. Total Annual Costs Program Total*** (15 Yr) Results (Year 15) Scenario 1 Current Funding MILCON $143 M MILCON $2.14 B (65%) Sustainment* $ M Sustainment $3.30 B R&M $42-55 M R&M $0.72 B Annual Total $377 M Program Total $6.17 B CI (Q-Ra ng) Current Metrics >> 82 (Q2) 64 (C3) Q4 SUI (C-Ra ng) C4 ORI Summary (Return on mission) 68 (current) -8 Decline Increase 60 Scenario 2 Baseline MILCON** $ M MILCON $4.79 B (75%) Sustainment* $ M Sustainment $3.76 B R&M $ M R&M $1.45 B Annual Total $596 M Program Total $10.00 B Furniture, NEPA, Env. $ M $10.33 B Q3 C Scenario 3 Affordable Readiness MILCON $ M MILCON $11.98 B (90%) Sustainment* $ M Sustainment $4.84 B R&M $ M R&M $3.12 B Annual Total $1163 M Program Total $19.94 B Furniture, NEPA, Env. $ M $20.72 B Q2 C Scenario 4 Get to Green MILCON $ M MILCON $18.71 B (90%) Sustainment* $ M Sustainment $5.17 B R&M $ M R&M $3.29 B Annual Total $1687 M Program Total $27.17 B Furniture, NEPA, Env. $ 1.31 B $28.48 B Q1 C * Sustainment funding is based on the Total RC por olio requirement from the FSM projec on. RC por on of the full ARNG funding is 40%. ** Includes Scenario 1 MILCON ($143 M) plus $2.2 B addi onal MILCON ($147 M/yr for 15 years). Total of $290 M/yr. ***Es mate 2 December 2014, 12% Army force structure reduc on. Figure 15: ARNG Nationwide CIS scenario summary 66 IV. ARNG Nationwide Capital Investment Strategy ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

75 Scenario 1: Current Funding Description: Scenario 1 - Current Funding, represents the current portfolio funding levels to demonstrate the short-term ARNG program challenges and the major long-term risks the ARNG faces by continuing the investment at current levels. In Scenario 1, the sustainment funding level is 65 percent of the total sustainment funding for ARNG RCs provided by the DoD FSM. Impact: The current annual funding levels for MILCON and SRM do not address the current and anticipated deferred maintenance backlog within the ARNG RC portfolio. As a result, ORI is expected to decrease as facilities deteriorate as the current MILCON investment levels do not offset the degradation of the existing facilities. In the current funding scenario, all performance metrics decline. Risk & Benefit: In Scenario 1, a significant level of risk exists for the operational readiness of the ARNG from a facility shortfall, financial and organizational perspective. The current level of SRM funding does not keep pace for the general maintenance of existing buildings. As Figure 16 demonstrates in Year 2027, existing facilities are expected to continue the historical trend of deterioration to a condition where the facility will reach a rate of failing, posing risk of health and life safety issues because the space is considered uninhabitable. Figure 17: Condition index of ARNG mission critical facilities at year 15 of the Current Funding scenario Mission Critical Facility Condition: In analyzing the mission critical facilities over the 15 year investment period as shown in Figure 17, the expected performance results for this tier of assets will decline. The current average CI of the mission critical facilities is 84, in the middle of the fair condition. At the end of the 15 year timeframe, the condition of the complete portfolio is expected to decrease to a failing score of 49 and the condition of the mission critical facilities is expected to decrease to 57, a failing score that creates a significant risk to the most critical operational assets of the ARNG. Year CI SUI ORI Figure 16: Impacts of the Current Funding scenario over 15 years FINAL REPORT TO CONGRESS IV. ARNG Nationwide Capital Investment Strategy 67

76 Scenario 2: Baseline Description: Scenario 2 - Baseline, supplements the current annual MILCON with an additional $2.2 B investment ($147 M/year for 15 years) over the 15 year period. This equates to an annual total MILCON investment of $316 M/year. The required SRM funding level increases from 65 percent to 75 percent of the DoD FSM funded in order to supplement the critical funding requirements based on the ARNG/DoD FSM projections. Scenario 2 is the funding level currently recognized by the Army as the ARNG Critical Unfunded Requirements. Impact: Scenario 2 slows the degradation of existing facilities and begins the process of improving the required space utilization. However, ORI declines from the current level, since MILCON coupled with the SRM funding levels does not offset degradation rates at a high enough rate. The condition of the portfolio is expected to decline to a 63, low in the poor category, and on the verge of failing (failing is CI 60). Risk & Benefit: In Scenario 2, as Figure 18 demonstrates, the SRM funding is not increased significantly enough from the current funding scenario to maintain existing buildings and just as in Scenario 1, CI continues to deteriorate almost to failing by Year 15. The risk of Scenario 2 is the combination of adding square footage through MILCON to improve the space utilization without increasing the SRM funding to a level that maintains the portfolio over time. Increasing space without the capacity to maintain it further constrains the ARNG s efforts to improve operational Figure 19: Condition index of ARNG mission critical facilities at year 15 of the Baseline scenario readiness and the model results in a decline to both the CI and ORI over the 15 year investment period. Mission Critical Facility Condition: In analyzing the mission critical facilities over the 15 year investment period as shown in Figure 19, the expected performance results for this tier of assets will decline. The current average CI of the mission critical facilities is 84, in the middle of the fair condition. At the end of the 15 year timeframe, the condition of the complete portfolio is expected to decrease to a low poor score of 63 and the condition of the mission critical facilities is expected to decrease to 74, a poor score, increasing the risk beyond an acceptable level. Year CI SUI ORI Figure 18: Impacts of the Baseline scenario over 15 years 68 IV. ARNG Nationwide Capital Investment Strategy ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

77 Scenario 3: Affordable Readiness Description: Scenario 3 - Affordable Readiness, is a strategic balance of MILCON and SRM funding to significantly transform the RC footprint to meet future mission requirements. The logic of this scenario recognizes that sustainment is necessary to support the long-term goal of maintaining the condition and improving the overall ORI of the existing ARNG mission critical locations. The sustainment funding level is increased to 90 percent of the FSM total to meet the sustainment funding goals set by the ARNG. Impact: Scenario 3 begins the process of reversing the degradation of existing facilities and improves the required space utilization. The balance between MILCON and fully funding the SRM, slows the degradation of the existing facilities. The targeted investment of MILCON first on mission critical assets increases ORI within an optimal range. At the end of 15 years, the modernized footprint meets 80 percent of the space requirements and attains a portfolio CI average of 82 at year 15. Risk & Benefit: In Scenario 3, the increase in the SRM funding level is expected avoid the long-term risk of backlog accrual and as Figure 20 demonstrates, the CI is maintained in fair condition. MILCON is expected to transform the RCs to benefit future mission requirements. Stable and adequate funding levels are critical for the long-term success of the transformation program. The stability in funding will afford the ARNG the ability to design an efficient tactical transformation program. Figure 21: Condition index of ARNG mission critical facilities at year 15 of the Affordable Readiness scenario Mission Critical Facility Condition: In analyzing the mission critical facilities over the 15 year investment period as shown in Figure 21, the expected performance results for this tier of assets will increase. The current average CI of the mission critical facilities is 84, in the middle of the fair condition. The condition of the complete portfolio decreases slightly at the beginning of this scenario, however, by the end of the 15 year timeframe, the portfolio condition returns to the current average of 82. While the complete portfolio maintains a fair condition, the condition of the mission critical facilities is expected to increase to 94. This represents a good score, lowering the risk to the most critical operational assets of the ARNG. Year CI SUI ORI Figure 20: Impacts of the Affordable Readiness scenario over 15 years FINAL REPORT TO CONGRESS IV. ARNG Nationwide Capital Investment Strategy 69

78 Scenario 4: Get to Green Description: Scenario 4 Get to Green, is the realization of the complete transformation and modernization of the ARNG nationwide RC portfolio within 15 years. The balance between MILCON and SRM will fully transform the RC portfolio and operate/ maintain the portfolio at the most efficient level possible. The sustainment funding level is shown at 90 percent of the FSM total reflecting the funding goals set by the ARNG. Figure 23: Condition index of ARNG mission critical facilities at year 15 of the Get to Green scenario Impact: Scenario 4 completes the RC transformation of the ARNG within a planning timeframe that is long enough to complete the effort with reasonable certainty of planning accuracy. It allows the ARNG to address critical facility shortfalls, first targeting the mission critical assets but also addressing the operational need to have a balance of facilities in the portfolio that operate as a system to maximize the operational and financial efficiency of the ARNG RC portfolio. The full requirement rating of good for both space and condition would be met in optimally sited locations. The Get to Green scenario shows a significant increase in all performance metrics and reaches an optimal ORI range. Risk & Benefit: The benefit for Scenario 4 Get to Green is a transformation of the ARNG RC footprint with significant measurable success in the near term planning horizon, with performance metrics increasing to good within the 15 year period as illustrated in Figure 22. This creates a solid RC portfolio and extends the strategic value of these facilities to the immediate communities the ARNG supports, improving the State s ability to respond to local needs and improving the Army s resiliency and strategic operational use of the ARNG. The risks are appreciably less than Scenario 3, however, there is some risk in being able to manage the level of funding while efficiently executing the transformation program. The ARNG will exercise significant program controls to help mitigate such risks. Long-term, there is risk that the assets within the portfolio will degrade at similar rates. To mitigate the risk, appropriate funding levels for SRM are required. With appropriate funding levels, it may not be necessary for a second transformation program. Mission Critical Facility Condition: In analyzing the mission critical facilities over the 15 year investment period as shown in Figure 23, the expected performance results for this tier of assets will increase. The current average CI of the mission critical facilities is 84, in the middle of the fair condition. At the end of the 15 year timeframe, the condition of the complete portfolio is expected to increase to a score of 95 and the condition of the mission critical facilities is expected to increase to 93, a good score lowering the risk to the most critical operational assets of the ARNG. Year CI SUI ORI Figure 22: Impacts of the Get to Green scenario over 15 years 70 IV. ARNG Nationwide Capital Investment Strategy ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

79 $30.0 B 85 $25.0 B Total Program Cost ($B) $20.0 B $15.0 B $10.0 B (current) ORI $5.0 B $0.0 B Scenario 1 Current Funding Scenario 2 Baseline Scenario 3 Affordable Readiness Scenario 4 Get to Green 55 R&M $0.7 B $1.4 B $3.1 B $3.3 B Sustainment $3.3 B $3.8 B $4.8 B $5.2 B 68 MILCON $2.1 B $4.8 B $12.0 B $18.7 B ORI Figure 24: Scenario comparison at year 15 Scenario Comparison A comparison of the four scenarios shows a mix in types and levels of funding. Sustainment funding is at 65 percent and 75 percent, respectively, in Scenarios 1 and 2 and at 90 percent in Scenarios 3 and 4. R&M funding is approximately doubled from Scenario 1 to Scenario 2 and then doubled again from Scenario 2 to Scenarios 3 and 4. MILCON funding roughly is doubled from Scenario 1 to Scenario 2, tripled from Scenario 2 to Scenario 3 and more than quadrupled from Scenario 2 to Scenario 4. A brief analysis of the relationship between RC portfolio ORI metrics and funding levels reveals that Scenarios 1 and 2 do not provide enough funding to even maintain the RC facilities at their current condition. The Scenario 1 and 2 investment levels are not enough to offset the maintenance backlog, degradation of the facilities, or decline in ORI, which indicates a loss of operational readiness and a risk to the ARNG mission. As such, Scenarios 1 and 2 will not be evaluated further. In Scenarios 3 and 4, the space and condition goals identified by ARNG are met, degradation is offset, and the portfolio ORI falls within the optimal ORI range. Scenarios 3 and 4 provide sustainability to the overarching ARNG organization s ability to continue its mandated missions. While Scenario 4 executes 100 percent of RC projects, Scenario 3 only executes 53 percent of FINAL REPORT TO CONGRESS IV. ARNG Nationwide Capital Investment Strategy 71

80 projects. Table 6 shows the outcome of key metrics at Year 15 when Scenario 3 funding is applied to the investment strategy versus Scenario 4 funding: Item Scenario 3 Scenario 4 CI and SUI Rating Fair Good CI Rating and Mission Critical (Tier 1) Facilities Good Good Meets Optimal ORI Range Yes Yes Table 6: Key metrics in Scenario 3 versus Scenario 4 at year 15 The main difference between Scenarios 3 and 4 are the CI and SUI ratings, fair for Scenario 3 and good for Scenario 4. Total cost for Scenario 3 is $20.7 B versus the total cost of $28.5 B for Scenario 4. When you combine the S and R&M funding for Scenarios 3 and 4, the amounts are approximately the same at around $8.0 B for each scenario, so both scenarios fund sustainment and maintenance repairs at about the same rate. This means that the cost differential falls into the MILCON category for new construction, modernization and major renovation projects at approximately $12.0 B for Scenario 3 and $18.7 B for Scenario 4, a delta of approximately $6.7 B. The difference in the portfolio between Scenarios 3 and 4 is illustrated in Figure 25 which indicates where each facility falls at the end of the 15 year planning timeframe based on its MDI and SI. The larger circles shown in the graphs indicated a higher number of facilities that achieve the corresponding MDI and SI scores. With 100 percent of the RC transformation complete in Scenario 4, all facility SI scores are high indicating that all facilities are in good condition and meet space requirements. The result of Scenario 4 is a drastic improvement in ORI, and an RC portfolio that meets the ARNG requirements and mission needs in 15 years. However, the risk of maintaining a large portfolio at such a high level of stewardship is that all facilities degrade at a similar rate and the amount of SRM investment needed will increase exponentially as facilities age and degradation occurs. While this level of investment in facilities that are not considered mission critical improves the overall performance of the portfolio, the high cost is neither feasible nor strategic. As shown in Scenario 3, the 53 percent of projects completed improve the SI scores of all mission critical facilities that remain in the transformed end state. The majority of projects completed in Scenario 3 focus on the mission critical facilities indicating a prioritized investment that ensures operational stability at mission critical locations. The few mission critical facilities that do not reach a high level of SI within the 15 year planning timeframe are ultimately divested if RC transformation continues after 15 years and states continue to balance their network of RCs. 72 IV. ARNG Nationwide Capital Investment Strategy ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

81 In addition to mitigating shortfalls at mission critical locations, Scenario 3 also addresses critical needs at mission dependent and mission support facilities in order to maintain a balanced portfolio that can continue to support the operational needs of the ARNG. There is risk associated with not funding the complete transformation of the RC portfolio, however, the operational risks associated with the 47 percent, or $6.7 B, of projects that are not completed are minimized by the prioritized investment strategy. The Scenario 3 investment levels combined with an investment strategy that addresses both the degradation of facilities and prioritization of critical assets, not only maintains the ARNG s mission readiness, but reaches an optimal mission readiness range. Affordable Readiness Funding Scenario Get to Green Funding Scenario Mission Dependency Index (MDI) MISSION SUPPORT MISSION DEPENDENT MISSION CRITICAL Mission Dependency Index (MDI) MISSION SUPPORT MISSION DEPENDENT MISSION CRITICAL Stewardship Index (SI) Stewardship Index (SI) Figure 25: Improvement in mission dependency and stewardship indices of the transformed portfolio at year 15 This comparison between Scenario 3 and 4 reveals that the benefits for both scenarios are similar and the risk of choosing Affordable Readiness is limited. Therefore, in these times of fiscal constraints and limited resources, Affordable Readiness may be the solution that defines the best value for investment in ARNG RC facilities. The projects that are implemented under Affordable Readiness will address the most critical shortfalls across the nationwide portfolio, with mission critical facility projects at the top of the list. Affordable Readiness will also maintain the overall RC portfolio in a fair condition similar to the current condition. And finally, Affordable Readiness will increase the overall ORI, moving the ORI ranking into the optimal range meaning that dollars invested in this critical infrastructure translate into an efficiency gain or increase in operational readiness; a return on mission. FINAL REPORT TO CONGRESS IV. ARNG Nationwide Capital Investment Strategy 73

82 The National Guard s and Reserve s future is critical to the interests of this country. National Guard and Reserve units will remain a vibrant part of our national defense. Honorable Chuck Hagel, Secretary of Defense

83 V. Recommendations Extensive assessments, research and analysis over a 3 year timeframe of condition, space, mission, stewardship, life-cycle, location, partnerships, and other RC criteria as well as ORI, MDI and SI scoring ranking and a proposed nationwide end state, has led the RCTMP team to a list of conclusions to achieve the transformed and modernized RC footprint, as follows: 1 RCs are critical infrastructure. 2 The ARNG mission depends on the operational readiness of its RCs. 3 A gap exists between the current state of the RC footprint and full requirements. The footprint needs to be shaped with a coordinated MILCON and SRM investment strategy. 4 Opportunities exist to maximize shared use with first responders and leverage partnerships with communities. 5 The Affordable Readiness level of funding achieves an optimal balance between operational readiness and cost by addressing the most critical issues first. 6 The Current Funding and Baseline scenarios expose too much risk to critical RCs given the current threat environment. 7 The RC critical infrastructure parallels MAP-21 grant constructs and ARRA appropriations, both of which provide investment at the State and local level. Based on the above conclusions, the RCTMP study recommends funding Affordable Readiness over 15 years beginning with design funds as early as FY16 via a federal grant mechanism or special act. FINAL REPORT TO CONGRESS V. Recommendations 75

84 Congress, working on behalf of the American people, recognizes that RCs are not currently as efficient and effective as they could be in supporting the ARNG as an operational force. The RCTMP outlines a defensible plan that enhances overall Soldier readiness and mission support capabilities through sound investment in the underlying infrastructure, technology and interactive, ongoing State and national force structure planning. This holistic plan is Affordable Readiness and contains components for nationwide return on mission through prioritization of larger MILCON projects as well as ongoing restoration, modernization and sustainment projects in the RC portfolio to not only maintain the existing portfolio but to begin to modernize and transform the existing portfolio into one that is markedly ready for dual and sophisticated missions of the future. The ARNG recognizes that Congress has a choice in how they spend taxpayer dollars and that is why the RCTMP presents a plan and investment strategy that provides the best value for the dollars spent. The plan incorporates the best solutions for transforming RCs to enhance mission readiness: Putting dollars first toward facilities with the most critical missions; Divesting locations that no longer meet mission standards or have skyrocketing maintenance costs to decrease the number of RC locations from 2,170 to 1,680 over a 15 year period to achieve the cost savings associated with a more consolidated portfolio; Renovating and reconfiguring RCs to more fully meet authorized space requirements meanwhile increasing mission capabilities gained from operational efficiencies associated with having the correct types of spaces for Soldiers, equipment and families; and Realigning RC locations to match changing demographics and mission criticality requirements. 76 V. Recommendations ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

85 Affordable Readiness Affordable Readiness is a 15 year plan that modernizes and transforms the real estate portfolio of the ARNG to synchronize its RCs with its modern missions and equipment already in place. Affordable Readiness means that a majority of mission critical facilities are fully funded, increasing the current condition of the most critical asset tier from fair to good condition and retaining a fair condition for the overall RC portfolio after the RCTMP is implemented. Under Affordable Readiness the Nation s ARNG achieves the optimal ORI range for the RC portfolio, which is the same range as implementing the full requirement, but at approximately 70 percent of the cost of funding a more extensive modernization to its real estate portfolio. The RCTMP team believes that in this fiscally constrained environment, the portion of the portfolio under Affordable Readiness that does not receive funding under this program is an acceptable risk to the American public. The Affordable Readiness investment model applies both MILCON and SRM dollars in tandem to strategically maintain facilities that are awaiting larger MILCON funding in subsequent years meanwhile in the early years beginning to plan, develop and design the new facilities that will replace some of the facilities no longer needed. Affordable Readiness uses a unique asset management tool to assist in the prioritization of projects and monitors the RCTMP implementation to account for an ongoing need to prioritize shovel ready projects to maximize use of funds in the early years to keep the transformation process on target for completion by One of the best returns on America s defense investment: the National Guard s highly skilled people and dual-use equipment enable us to seamlessly respond to natural or manmade disasters at home and to fight adversaries overseas NGB Posture Statement FINAL REPORT TO CONGRESS V. Recommendations 77

86 Always Ready, Always There. Motto of the Army National Guard of the United States

87 Appendix A. Planning Parameters The following planning parameters guide the RCTMP. These factors define the items under analysis and also provide planning horizons. General Parameters Timeframe: FY12-13 as analysis years and planning force structure was five years out from these years. AZ, DC, MI, NC, ND, OR, RI and VA analyzed FY12. Subsequent States and Territories studied analyzed FY13. Facility Type: Category Codes 17180, and associated support facilities. Force Structure: Only soldiers assigned to facility types under review (Category Codes 17180, 17142). Based on the planning horizon/timeframe of FY12/13, the force structure projections used FY16/17. Geography: 54 National Guard Components are covered. ARNG Nationwide CIS Drivers Over the course of several meetings with the ARNG, the following additional planning parameters were developed to shape the scenarios presented in the ARNG Nationwide CIS section of this report. Timeframe: Planning window for facilities portfolio transformation is 15 years, but also projects out years until the capital program is complete. Project Data Scope: Data inputs into model are the RCTMP COAs and include current and future states. Projects that have already been funded through are included in the data set but MILCON cost estimates have been excluded from the funding request. Excluded RC sites include lifecycle estimates for SRM. Force Structure Reduction: To reflect the impacts of potential force reduction, the end state square footage of the State submitted COAs was reduced by 12 percent for all scenarios. Inflation Rate: Set at 1.74 percent annually, based on DoD pricing guide (2014 PAX Newsletter Inflation Guidance). Deterioration Rate: Based on the US Marine Corp Facility Degradation Rate of 9.98 percent for Reserve Training Type Facility. Modeled scenarios average penalty rate range between 3.00 to 6.50 percent. Maximum deterioration rate is 9 to 11 percent annually based on an S-Curve for CI. Project Cost Estimating New Construction: Estimated at $295/SF for new construction on a new site. Site-related costs are included in the built up SF cost. ($211/ft (PAX Newsletter pricing guide) site prep 10 percent, Parking 10 percent, Commissioning 0.6 percent, Design Contingency 5 percent, Supervision, Inspection and Overhead (SIOH) 3 percent). Renovation: The renovation estimate factors in facility condition at the time of project selection and is estimated to factor in degradation over time. Planning & Design (P&D): Assumed to be 9 percent of MILCON project cost. FF&E, NEPA, Program Development: Assumed to be 6 percent of MILCON project cost. FINAL REPORT TO CONGRESS Appendix 79

88 Facility Modeling Facility Condition: Facility condition deteriorates/ improves on an annual basis based on SRM Funding. Facilities are allowed to deteriorate to 0 CI. At a CI of 0, the SUI is reduced to 0 and is considered unusable space increasing the portfolio space deficit. Backlog: In the year that MILCON occurs at a location, backlog is reduced to $0. Deficit Reduction: Deficit reduction is assumed to be handled by MILCON projects. Project Selection: Projects prioritized by the State are combined in the pool for consideration. Projects are grouped by MDI category and selected based on highest increase in performance metrics divided by capital cost. Scenario Parameters Sustainment Requirement: Sustainment requirement modeled is 2 percent of PRV. Sustainment Funding: Sustainment funding is based on the DoD FSM. Restoration and Modernization Requirement (R&M): Restoration and Modernization requirement modeled is 3 percent of PRV. Restoration and Modernization Funding (R&M): Based on POM planning numbers. Scenario Estimates: The basis of estimate for each scenario is shown in Table 7. Scenario 1: Current Funding Reflects the current funding for the ARNG MILCON: ($250 M - $30 M (P&D+UMMC) = $220 M) x 65% (RC MILCON) = $143 M Sustainment: ($740 M (100% from FSM) x 40% (RC Sustainment) = $296 M) x 65% (Percent Funded) = $192 M R&M: $105 M (Total POM Amount Provided by NGB) x 40%(RC) = $42 M Scenario 2: Baseline Reflects the current funding for the ARNG plus additional $2.2 B Critical Requirement from DA FIS divided over 15 years plus additional Sustainment and R&M funding MILCON: $143 M (Current MILCON Funding) + $146 M ($2.2B/15 years) = $290 M +$26 M(P&D)= $316 M $290 M x 9% (P&D) = $26 M $290 M x 6% (FF&E, NEPA, Program Development) = $17 M Sustainment: ($740 M (100% from FSM) x 40% (RC Sustainment) = $296 M) x 75% (Percent Funded) = $222 M R&M: $210 M (POM Amount Provided by NGB) x 40% (RC) = $84 M Scenario 3: Affordable Readiness Portfolio reaches AMBER within the 15 year planning period MILCON: $725 M MILCON + $65 M (P&D) = $790 M $725 M x 9% (P&D) = $65 M $725 M x 6% (FF&E, NEPA, Program Development) = $44 M Sustainment: ($740 M (100% from FSM) x 40% (RC Sustainment) = $296 M) x 90% (Percent Funded) = $266 M R&M: Amount needed to get to AMBER based on the Sustainment numbers provided = $172 M Scenario 4: Get to Green All capital projects done within a 15 year period, and portfolio reaches GREEN MILCON: $1,250 M MILCON + $112 M (P&D) = $1,362 M $1,250 M * 9% (P&D) = $112 M $1,250 M * 6% (FF&E, NEPA, Program Development) = $75 M Sustainment: ($740 M (100% from FSM) x 40% (RC Sustainment) = $296 M) x 90% (Percent Funded) = $266 M R&M: Amount needed to get to GREEN based on the Sustainment numbers provided = $172 M No increase in R&M. MILCON cost increases to complete all projects. Table 7: Funding Scenario Parameters 80 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

89 B. State Summaries State summary reports were developed to document the gap between current RC realities and the total requirements for each State. State level data collection produced statistics and scoring for key criteria for each of the 54 command components analyzed. The State dashboards in Table 8 summarize the status of each State s current RC portfolio. Questions or requests regarding each State s modernization plan should be directed to the State JFHQ and leadership. State # of Current RC Loca ons % Mission Cri cal RC Loca ons Statewide RC Strength Exis ng SF Average Facility Age Average CI % Space Requirement Met % Op mally Sited RC Loca ons Table 8: State/Territory summaries FINAL REPORT TO CONGRESS Appendix 81

90 82 Table 8: State/Territory summaries (continued) Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

91 Table 8: State/Territory summaries (continued) FINAL REPORT TO CONGRESS Appendix 83

92 C. Alternative Financing Opportunities (Public Private Partnerships) As part of the RCTMP efforts, NGB and Jacobs engaged Jones Lang LaSalle (JLL) to assess the feasibility of Public- Private Partnership opportunities that may be readily available to NGB and what, if any, legislative changes or additions are necessary to allow for the implementation of such partnerships and programs. As a result of current funding conditions, opportunities must be pursued to identify alternative financing and partnership strategies to enable the improvement of existing facilities and new or in-kind construction. This study aimed to identify these strategies as well as to analyze current legislation and areas for change or improvement to allow such partnership opportunities. Key goals of the analysis were to: Analyze current operational, strategic and programmatic goals to enable public-private partnership opportunities. Assess the successes and failures of comparable joint State / federal methods for alternative financing and partnership strategies. Identify possible replicable constructs, if any, to provide RCs other than direct appropriation and ownership by the States and federal Government. Overall Findings Revenue Stream: Sources of revenue and lack of a self-sustaining revenue stream provide limitations for modernization efforts. Monetization: Many RCs are subject to reversionary clauses and many States require that proceeds be deposited into the General Fund, limiting the benefit of sale to the Military Department. Strategic Planning: Many State Military entities have not fully explored strategies for relocation and consolidation / expansion of National Guard assets. Joint-Funding: Comparable federal programs with joint-funding strategies have delivered results that are applicable to NGB. Multiple Approaches: A single approach toward asset management will not achieve optimal overall results, but rather multiple approaches must be evaluated based on State-specific needs and requirements. JLL developed a recommended process that addresses limited revenue streams and provides a roadmap for identifying reuse opportunities; augmented by an alternative financing program. Pilot States and Findings Two States, Michigan and North Carolina, were utilized as pilots for the study. Criteria for selection included the States restrictions on leasing versus owning space for military facilities, level of capital investment in existing facilities, interest from private and other government entities for shared services, State climate for approving public-private partnership opportunities and current identification of facility acquisition or divestiture. Specifically Michigan law allows the MIARNG through an Armory Facilities Board to divest, sell, and purchase the ARNG properties with the process going directly into a checking account for the Guard. North Carolina law directs proceeds from the divestiture or sale of a ARNG property into the General Fund of the State of North Carolina. Michigan Existing strategies and plans identified by TAG and senior leaders establish opportunities for alternative financing. Current alternative energy initiatives have the potential to provide significant sources of revenue; however, further discussion must occur regarding feasibility as the State s current approaches are not likely to be replicable to other State Guard Bureaus. 84 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

93 North Carolina Current cross-agency dialogue has proven to be beneficial to alternative financing initiatives. The development of a strategic approach / plan has enabled the NCNG to evaluate and prioritize initiatives through a methodically approach contrary to previous efforts of situational-based evaluation. Overall Assessment & Recommendations NGB should implement a robust asset management program that provides appropriate vehicles for alternative financing pursuits and creates a platform for continual evaluation and assessment of existing and future RCs. Unlike other privatization initiatives, NGB has no clear revenue stream, aside from direct appropriations, to fund State-specific RC modernization initiatives. As such, strategic and cost-saving efforts should be focused equally on alternative financing programs and initiatives, driving value from creative methods aimed at enabling State autonomy in strategic planning, while facilitated through federal efforts. A bifurcated funding approach should be utilized when considering modernization efforts, with traditional funding mechanisms augmented by grantlike allocations for viable alternative financing strategies identified on an opportunistic basis. In general, current efforts do not sufficiently vet potential alternative opportunities for financing. To facilitate alternative financing, sufficient effort on a federal level must be taken to drive legislative changes to enable State National Guard entities to focus resources on identifying creative approaches to traditional methods of facility modernization on an opportunistic basis. Potential partnerships at the State level must be continually assessed on a case-by-case basis using a systemic approach based on space configuration and location analysis of current and future needs. Additionally, State National Guard entities must make strides in the implementation of asset management programs to identify and track capital expenditures and maintenance efforts by way of prioritizing capital project improvements throughout a statewide portfolio. Driving State Participation and Proactive Measures As a result of variations in State Guard organization and situational-based partnership opportunities, NGB must make strides in the development and fostering of the following: State Capital Budget Planning: NGB must convey to State entities ownership and commitment of initiatives and modernization efforts. Through this strategy, State Guards can utilize local resources and entities to drive as-needed growth and consolidation. Opportunistic Strategies: State Guards must capitalize on opportunities unique to their situation and constraints and/or identify potential partnerships that are able to be driven through federal guidance and legislation. Framework: NGB must enable a framework for evaluating and streamlining approval of potential partnership strategies through participation and feedback at the State-level. An efficient approach will include timely approval and funding mechanisms. Next Steps Based on the analysis, JLL identified the following recommended next steps: Immediate Identify potential legislative changes to enable alternative financing opportunities on both State and National platforms, such as: Credit Financing Public Conveyance Enhanced Use Leasing Grant Funding Land Transfer Energy Agreements Partnering Strategies (P3, P4, IGSA) FINAL REPORT TO CONGRESS Appendix 85

94 Identify State demands and constraints and potential remediation efforts to prioritize projects based on feasibility and current progress. Engage in continued research to assess joint State/federal funding programs such as those currently utilized in the DoT and Department of Veterans Affairs. Short-term Implement a systematic approach for assessing case-bycase modernization opportunities across State National Guard Portfolios. Long-term Implement a portfolio-level asset management approach for monitoring performance and capital expenditures. Conclusion While opportunistic strategies for public-private and public-public partnerships should be developed, a largescale privatization-based program is not the optimal approach to addressing the current condition and modernization requirements of NGB s RCs. Additional details of the JLL study are found in the following briefing presentation titled, Alternative Financing Opportunities dated June 26, This presentation is based on preliminary data collected and analyzed. 86 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

95 Alternative Financing Opportunities National Guard Bureau Michigan and North Carolina National Guard Bureau June 26, 2014 Table of Contents National Guard Bureau RC TMP Alternative Financing Opportunities 1. Executive Summary 1. Objectives 2. Summary of Existing Readiness Centers 3. Summary of Findings 4. Next Steps 5. Current State Initiatives 2. Background 1. RC TMP Scope & Assessment 2. Selection of Pilot States Michigan & North Carolina 6. Recommendations & Next Steps 1. Overall Assessment & Recommendation 2. Driving State Participation and Proactive Measures 3. Key Findings 4. Next Steps Appendix A: Evaluation of Current Facilities Flow Chart 3. Project Scope & Methodology 1. Scope of Work 2. Methodology 3. Key Considerations 4. Analysis of Existing Public-Private Case Studies 1. Assessment of Existing Case Studies 2. Analysis of Public-Private Partnerships / Alternative Financing Programs 3. Analysis Matrix 5. Assessment of ARNG Legislative Requirements 1. Existing Legislation 2. Case Study Legislative Comparison FINAL REPORT TO CONGRESS Appendix 87

96 Executive Summary National Guard Bureau RC TMP Alternative Financing Opportunities 1.1 Objectives 1.2 Summary of Existing Readiness Centers Jones Lang LaSalle (JLL) was engaged by Jacobs Engineering and the National Guard Bureau (NGB) to conduct an analysis of two pilot states, Michigan and North Carolina, to assess the feasibility of Public-Private Partnership opportunities that may be readily available to the National Guard Bureau and what, if any, legislative changes or additions are necessary to allow for the implementation of such partnerships and programs. As a result of current conditions, opportunities must be sought and pursued to identify alternative financing and partnership strategies to enable the improvement of existing facilities and areas for new or in-kind construction. This study aims to identify such strategies as well as to analyze current legislation and areas for change or improvement to allow such partnerships. Two states, Michigan and North Carolina were identified as pilot states, for this initial study and analysis. Key goals of the analysis were: 1. Analyze current operational, strategic and programmatic goals for potential improvements to enable public-private partnership opportunities. 2. Assess the successes and failures of comparable joint State / Federal methods for alternative financing and partnership strategies. 3. Identify possible replicable constructs, if any, to provide Readiness Centers other than direct appropriation and ownership by the States and Federal Government. The analysis includes the evaluation of two pilot states, Michigan and North Carolina. Below outlines the principal characteristics of the Readiness Center Transformation Master Plan (RC TMP). Pilot State RC TMP Principal Characteristics Michigan North Carolina Existing State Inventory (Number of Readiness Centers) Number of Facilities to be Divested (Planned) Number of Facilities to be Acquired 3 0 (Planned) End-State Inventory Total RC SF (000) 1,570 1,920 Total RC SF Shortfall (000) 1,264 2,018 Total Need (000) 2,834 3,938 Average Condition Index FCA Cost to Bring Facilities to Q1 $99,800 $96,100 Rating (000) Milcon Investment (000) $586,000 $730,000 Sustainment/Restoration/Moderniz $57,000 $50,000 ation (SRM) (000) Annual SRM (Range of Values) $2.6 million to $3.7 million $1.6 million to $3.9 million Executive Summary National Guard Bureau RC TMP Alternative Financing Opportunities 1.3 Summary of Findings Overall Findings 1. Revenue Stream: Sources of revenue and lack of a self-sustaining revenue stream provides limitations for modernization efforts. 2. Monetization: Many Readiness Centers are subject to reversionary clauses and many States require that proceeds be deposited into the General Fund, limiting the benefit of sale to the Military Department. 3. Strategic Planning: Many State Military entities have not fully explored overall strategies for relocation and consolidation / expansion of National Guard Assets. 4. Joint-Funding: Comparable Federal programs with joint-funding strategies have delivered results that are applicable to NGB. 5. Multiple Approaches: A single approach toward asset management will not achieve optimal overall results, but rather multiple approaches must be evaluated based on State-specific needs and requirements. 6. JLL developed a recommended process that addresses limited revenue streams and provides a roadmap for identifying reuse opportunities; augmented by an alternative financing program. (Reference: Appendix A) State-Specific Findings North Carolina 1. Current cross-agency dialogue has proven to be beneficial to alternative financing initiatives. 2. The development of a strategic approach / plan has enabled the NCNG to evaluate and prioritize initiatives through a methodically approach contrary to previous efforts of situational-based evaluation. 1.4 Next Steps 1. Analyze processes for evaluating and prioritizing traditional funding mechanisms on a State level. 2. Identify a potential framework for evaluating public-private opportunities based on the following criteria: a. Enabling legislation b. Funding source and funding amount(s) c. Development and project timeline d. Framework for templates and tools. 3. Based on potential evaluation framework, identify opportunistic publicprivate initiatives and other alternative financing opportunities for pursuit. Michigan 1. Existing strategies and plans identified by TAG and senior leaders establish opportunities for alternative financing. 2. Current alternative energy initiatives have the potential to provide significant sources of revenue; however, further discussion must be had regarding feasibility as the State s current approaches are not likely to be replicable to other State Guard Bureaus. 1.5 Current State Initiatives 1. State-specific Readiness Center Asset Funds 2. Creation of State-specific Strategic Plans 3. Energy Initiatives to drive cost-savings and alternative financing 4. Cross-agency discussion of space constraints and co-location opportunities. 88 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

97 Background National Guard Bureau RC TMP Alternative Financing Opportunities 2.1 Readiness Center Transformation Master Plan Scope & Assessment The Readiness Center Transformation Master Plan (RC TMP), conducted by Jacobs Engineering and tasked by the Senate Armed Services Committee and the Secretary of the Army, identified the need for significant military construction, both new construction and renovation projects, across 53 States and Territories. For each State analyzed during the analysis, Jacobs evaluated current conditions, existing and required space, possible courses of action and capital investment requirements and strategy. The Jacobs analysis and plan served as the basis for this report, as a means to evaluate alternative methods to facilitate implementation of current and potential strategies to address the modernization of existing facilities in the National Guard Bureau portfolio. 2.2 Selection of Pilot States Michigan & North Carolina Two pilot states, Michigan and North Carolina, were selected based on the current State climate and existing opportunities for public-private partnership engagement. These two States were chosen amongst the eight analyzed during the Extended Beta (Phase I) effort of the RC TMP. Such criteria for selection included the States restrictions on leasing versus owning space for military facilities, level of capital investment in existing facilities, interest from private and other government entities for shared services, State climate for pursuing public-private partnership opportunities and current identification of facility acquisition or divestiture. An initial Request for Information Survey was distributed among the initial States analyzed by Jacobs and evaluated based on responses received. Pilot State Request for Information Survey Questions 1. What is your state s level of interest in pursuing capitalization divesture in renovation / construction of RC s through conventional and alternative financing methods in collaboration with NGB? 2. How are discretionary funds handled in your state (outside of federal reimbursement)? Do the funds go to a general fund or to the military department? Have there been or are there pending exceptions to the rules that currently exist? 3. Are there any restrictions or challenges related to leasing vs. owning Facilities? 4. What is the appetite in your state for legislative and policy to changes to accommodate National Guard strategies related to real estate? 5. Does your military department have any outstanding bonds? Have you recently issued or are you planning to issue military department related bonds? 6. Have you acquired any properties or are you planning to acquire any property related to your military department? If so, what was/is the source of funding? 7. What level of state provided capital investment has been obtained by your military department in the past 5 years? 8. What level of interest have you seen from private and other government entities for shared services? Please cite examples. Do you have any state level restrictions on co-locating with private entities? Project Scope & Methodology National Guard Bureau RC TMP Alternative Financing Opportunities 3.1 Scope of Work Anticipating that current Federal and State legislative changes may occur, the partnership study required a survey of opportunities for the establishment of both capital asset management and partnership strategies. The scope of study is strategic in nature and does not focus on individual project bases for each of the two pilot states. As such, the study identified opportunities for further investigation and pursuit based on current and potential State legislative changes; aligning with correlating State National Guard strengths, weaknesses and opportunities identified. Preliminary Opportunities for further analysis included: Sponsorships Intergovernmental Service Agreements (IGSA) Enhanced-Use Leasing (EUL) Capital Investment Strategies Facilities Management Strategies Land Swap / Exchange Other Partnership Strategies Power Purchase Agreements (PPA) Energy Services Company Agreements (ESCO) Scope of Work Objectives: 1. Attend up to two strategy meetings with Jacobs and NGB, in Arlington, VA, to identify a Pilot State with the most likelihood to generate Public-Private Partnerships from among the eight analyzed during the Extended Beta (Phase I) effort of the RC TMP. 2. Research and identify a possible construct (if any) to identify other methods of providing Readiness Centers other than direct appropriation and ownership by the States and Federal Government, e.g. are there Public-Private Partnerships potential for the ARNG. 3. Explore the successes and failures of other federal entities and make recommendations how those might be used by the ARNG and what Policy or Law changes might be needed to address by Congress to facilitate provision of RC s in other manners. 4. Identify risks, pros and cons to Public and Private Partnership potentials. 5. Make recommendations to the NGB on what type of follow on work might be needed to pursue building this construct should initial research, coordination with NGB-ILI and reporting might indicate potential. 6. Prepare a summary report that documents all analysis and findings described herein. FINAL REPORT TO CONGRESS Appendix 89

98 Project Scope & Methodology National Guard Bureau RC TMP Alternative Financing Opportunities 3.2 Methodology 3.3 Key Considerations Jones Lang LaSalle developed a methodology to assess current goals and objectives of both Federal and State level National Guard entities to analyze opportunities that may exist for alternative financing for readiness center modernization efforts. The following strategy was utilized: 1. Define current goals and initiatives a. Federal National Guard Bureau b. State National Guard(s) c. Federal and State governance initiatives 2. Analyze current documentation a. RC TMP (Jacobs) b. Existing legislation c. State-specific master plans / facilities goals 3. Assess existing public-private programs a. Federal / State b. Alternative financing c. Existing State-level NGB initiatives 4. Develop a framework for evaluating current facilities a. Configuration b. Location c. Strategic goals 5. Recommend Next Steps a. Potential legislative changes b. Asset management initiatives During the analysis and development of recommendations, JLL was particularly cognizant of the following key considerations: 1. The ability of alternative financing methods to be replicated on various scales and within differing State fiscal constraints. 2. The lack of a specified revenue stream for which to drive modernization efforts for NGB. 3. Any potential partnership / co-location opportunities that may already exist or be readily available. 4. Ideal State fiscal climate / initiatives and military department structures that are currently in place. 5. Asset-specific considerations such as, existing colocation, reversionary clauses and market value constraints. 6. Any project-specific information provided to JLL be either State National Guards. Analysis of Existing Public-Private Programs National Guard Bureau RC TMP Alternative Financing Opportunities 4.1 Assessment of Existing Case Studies Based on the current organization, construction and operational mandates of the National Guard Bureau, JLL reviewed the real estate and infrastructure funding programs and respective enabling legislation of the following four agencies: Department of Defense Housing Privatization (Department of Defense) Energy Initiatives Task Force (U.S. Army) Enhanced Use Lease (Department of Defense) North Carolina Joint-Forces Headquarters, Raleigh U.S. Army Reserve Land Transfer Intergovernmental Support Agreements (Department of Defense) Department of Veterans Affairs Strategic Capital Investment Planning Process (SCIP) Building Utilization Review and Repurposing Initiative (BURR) Department of Transportation Infrastructure Financing (TIFIA) Infrastructure Funding (MAP-21) Department of Wildlife and Resource Management Public Benefit Conveyance These four State and Federal entities serve as case studies for the establishment of a long-term and sustainable approach to portfolio management through the facilitation of both public and private initiatives. Based on the facilitated discussions with both the Michigan and North Carolina Guard, an emphasis was placed on the potential of establishing an asset management approach to public and private initiatives, as opposed to isolated instances of partnership that are situational in nature and unable to be duplicated within a portfolio. JLL has provided case studies that represent a holistic view toward alternative financing methods and management on a portfolio-level to better assist future discussions with the National Guard Bureau. 4.2 Analysis of Public-Private Partnerships Level of Revenue Level of Federal Relevance Case Study State Legislation Requirement Partnership Funding to NGB Participation NGB RC High Low High Low Low N/A Army Housing Privatization High High Low Detailed Moderate Low Army EITF Moderate Moderate Low Detailed Moderate Moderate Air Force EUL Low Moderate Low Moderate Low High NCNG Shared- Partnership Low High High Moderate Low High Army Reserve Land Transfer Low Moderate Low Low Low Moderate DoD IGSA Low High Moderate Low Low High VA SCIP Low Low Low Moderate High High VA BURR Low Moderate Low Moderate Low High DoT TIFIA High High High Detailed High Moderate DoT MAP-21 High Low High Low High Moderate NWRS Public Conveyance Low High High Detailed Low Moderate 90 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

99 Analysis of Existing Public-Private Programs National Guard Bureau RC TMP Alternative Financing Opportunities 4.3 Analysis Matrix High / Detailed Moderate Revenue Requirement Requires a high level source of revenue or funding, either initially or continually. Revenue and funding sources fluctuate in demand and/or require a moderate amount of need. Level of Partnership Requires a high level of partnership, either through public or private entities. Requires a moderate level of partnership or varying levels of collaboration, either with public or private entities. Level of State Participation Legislation Federal Funding Relevance to NGB High level of Extensive enabling Requires a high relevance to NGB. legislation required degree of funding Recommendation for and/or multiple from Federal further investigation legislative changes sources. for potential required. applicability. Requires a high level of State involvement and/or participation. High level of State autonomy and decision-making. Moderate level of State involvement and/or alternating State and Federal participation. Moderate level of enabling legislation or legislative changes required. Moderate level of funding required from Federal sources. Moderate level of applicability to NGB and/or applicability on an opportunistic basis. Low Revenue and funding sources are minimal. Minimal partnership requirements, either with public or private entities. Minimal Stateparticipation. Predominantly Federal action required. Minimal enabling legislation changes required and / or applicable under current legislation. Minimal funding required from Federal sources. Low relevance or applicability to NGB in current context. Housing Privatization U.S. Army Various Locations Nationwide 1. Scope of Work The Army, similar to the other military Services, lacked sufficient resources to adequately recapitalize and replenish its aging military Family Housing (FH), unaccompanied personnel housing (UPH) and transient lodging assets across the U.S. To address concerns, the U.S. Army entered into a partnership with the private sector to privatize on-post military housing. 2. Enabling Legislation In 1996, Congress passed legislation that provided the military Services with authorities to leverage funds and assets to attract private sector capital and expertise to privatize (operate, maintain, construct and sustain) military FH and UPH called the Military Housing Privatization Initiative (MHPI) Act. - Leveraging private sector capital at a rate of 6 to 1 - Achieving U.S. Army mission - Cost avoidance and savings of $7B+ Housing Privatization: U.S. Army Successes Challenges Financial Scope Stakeholders - Implementation of a - U.S. Army national program and - U.S. Congress asset management - Private platform Developer(s) - Developer selection process - FH had an unfinanced $7B shortfall in construction and revitalization. - Through privatization, the Army will invest $2B and receive $12.6B in initial development 3. Applicability & Lessons Learned Through privatization, 44 installations (>85,500 homes) have transferred to the private sector. The Army will invest $2.0B and receive $12.6B in initial development, a leverage of over 6 to 1. Cost avoidance and savings to the Army from FH RCI is estimated at $7B and the time to complete the backlog has been reduced to a third. One of the primary drivers for the initial success of the residential communities initiative (RCI) was the Army s ability to capitalize on a steady revenue stream at each installation privatized. The Army s Basic Allowance for Housing (BAH) allowed for each privatization initiative to rely on a securitized cash flow, and as a result drive investor interest and private sector involvement. RCI s ability to drive a national program for asset management and monitoring is applicable to the National Guard Bureau; however, poses challenges as a result of the Guard s lack of a steady revenue stream, aside from direct appropriation, for continued development and maintenance. FINAL REPORT TO CONGRESS Appendix 91

100 US Army Residential Communities Initiative: Typical Project Legal Structure Private Lender LOAN Managing Member Private Partner EQUITY INVESTMENTS Owners: Partners and Army Lockbox Trustee Municipal Services Agreement LOCKBOX AGREEMENT INFRASTRUCT. ULTILITIES/ PAYMENTS Project Partnership Operating Agreement Partner / Army LLC OR LP CONTRACTS Developer General Contractor BAH FOR RENT Ground Lease and Deed CONVEYANCE OF ASSETS Tenants Resident Occupancy Agreement Property Manager Energy Initiatives Task Force U.S. Army Various Locations Nationwide 1. Scope of Work Rising energy security challenges, increasing efficiency standards and concerns on energy operating expenses led the U.S. Army to establish the creation of renewable energy programs as a crucial initiative with their current framework. To address these concerns the Army established the Energy Initiatives Task Force (EITF) to execute a largescale energy management strategy by leveraging private sector financing. 2. Enabling Legislation The U.S. Army established EITF to serve as the central management office for the planning and execution of large scale energy project leveraging; functioning as a central office for all energy related initiatives from project feasibility and assessment to management of operations and continued support and implementation. Energy Initiatives Task Force Successes Challenges Financial Scope Stakeholders - Released five - Implementation of a - N/A - U.S. Army solicitations for projects representing 14% of national program and asset management platform - Dept. of Public Works (installation level) the Army s goal to - Developing project - Dept. of Energy deploy 1 GW of renewable energy selection process criteria - Private Developer(s) by State Agencies - Installation Leadership 3. Applicability & Lessons Learned Through the establishment of the Task Force, EITF has screened over 180 Army, Army Reserve and Army National Guard installations to identify sites that have the most potential for large-scale renewable energy development of 10 megawatts (MW) or greater. To date, EITF has evaluated more than 150 renewable energy opportunities at 60 installations. The National Guard Bureau retains a number of existing assets that have the potential to serve as prime candidates for renewable energy projects through facilitation through power-purchase agreements, energy services company agreements or other vehicles. The EITF serves as an existing model for public-private engagement through existing means of facilitation. Evaluating pre-existing sites on the State-level for the National Guard Bureau is needed to bring more projects to the task force for initiation. 92 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

101 U.S. Air Force Eglin Air Force Base Valparaiso, FL 1. Scope of Work The U.S. Air Force and Eglin AFB sought to competitively select a private sector developer to lease a parcel of land (17-acres) and develop a project compatible with Eglin AFB's mission, goals and objectives. The successful private sector developer will propose to develop, operate and maintain the facilities and provide cash or in-kind consideration to Eglin AFB equal to at least the fair market value of the leased asset. 2. Enabling Legislation An analysis was conducted identifying the highest and best use and fair market value of the asset and presenting the business, economic and technical arguments in support of the Enhanced Use Lease (EUL) project. A Request for Qualifications (RFP) was distributed to developers and contract negotiations were held to identify the maximum benefit for the Air Force s retention of the land throughout the life of the lease. - Development of a Enhanced Use Lease for development - Minimizing U.S. Air Force development risk United States Air Force Successes Challenges Financial Scope Stakeholders - Developer solicitation - U.S. Air Force and selection - Eglin AFB - Project oversight and - Private sector development developer - Phase I Development Cost of $25.2M - Phase II Development Cost of $18.5M 3. Applicability & Lessons Learned The Air Force s intended use of the parcel is a hotel/resort development that may provide services to a combination of active duty and reserve military service members and their guests, and the general population. The Air Force looked to the development community to determine a means of satisfying the intended use and maximizing payment to the Air Force, either in cash or in-kind consideration. Current negotiations are ongoing. NGB must explore opportunities that maximize development potential for current land parcels, while minimizing NGB risk through such means as an Enhanced Use Lease. In both Michigan and North Carolina, there are potential high-value parcels that may be of value to private sector entities and do not contribute to the overall mission to the NGB. North Carolina Army National Guard Raleigh, North Carolina 1. Scope of Work The North Carolina Army National Guard (NC ARNG) sought to reduce costs associated with building maintenance and facilities without reducing services provided and general reserve readiness at its Joint Forces Headquarters in Raleigh. With limited funding from direct appropriation, the NC ARNG utilized a shared-partnership to generate the necessary funding for the facility. 2. Enabling Legislation A Memorandum of Agreement (MOA) was applied between the associated State agencies and the National Guard to apply a shared-services model and use of facilities through a contractual arrangement between the State and the National Guard. This agreement outlines clear divisions of common area operations and maintenance allocations and shared-use of facilities designations. North Carolina Army National Guard Successes Challenges Financial Scope Stakeholders - Cost-Savings - Scheduling - New Facility Total - National Guard - Risk Minimizing - Delineated Agency Cost: $41.5M Bureau - New Construction Obligations Federal Funding, - Secretary of Public - Agency - Security $16.5M State Safety Collaboration Funding - State Agencies 3. Applicability & Lessons Learned The NC ARNG, through its shared partnerships with State Agencies constructed a state-of-the-art facility by utilizing State financing through Agency requests, reduced utility and maintenance costs through shared-use and increased collaboration and discussion amongst State and Federal resources. In North Carolina, the National Guard is organized within the Secretary of Public Safety, as opposed to reporting directly to the Governor. Utilizing this framework, NC ARNG is able to formally utilize shared-service opportunities through collaboration with existing Agencies. As a result, there are a number of opportunities for collaboration through the ability to utilize both State and Federal funding vehicles. Through utilizing such an existing model, the National Guard Bureau must facilitate inter-agency collaboration and discussion to fully understand agency (s) need and requirements to facilitate shared-space and facility opportunities. FINAL REPORT TO CONGRESS Appendix 93

102 NC ARNG Shared-Services Partnership: Project Structure State Agency 1 Federal Appropriations NC Army National Guard (Building Owner) Utilized Facility State Agency 2 State Agency 3 Shared-Services Maintenance Utilities Security Forces New Construction State Appropriations U.S Army Reserve U.S. Army Reserve Dublin, California 1. Scope of Work The U.S. Army Reserve required the modernization and maintenance of significant reserve facilities in Dublin, CA with a shortfall of Federal funding for construction. The U.S. Army Reserve agreed to exchange 180-acreas of underutilized property in exchange for the construction of 4 new facilities and needed infrastructure work by a private entity, SunCal. 2. Enabling Legislation In 2011, a Reserve Property Exchange Agreement was created and established to usher a phased development SunCal will receive title to a designated land parcel as it completes each of the six projects with a total end-result of 180 acres over 6 years. U.S. Army Reserve: California Successes Challenges Financial Scope Stakeholders - Largest-ever - Securing new - SunCal is providing - U.S. Army Reserve Reserve Property property for over $66M of new - SunCal Exchange development construction and - Associated State Agreement. - Management of the infrastructure to the Agencies - Zero impact on Federal construction funding developer selection process Reserve - Modernization of facilities 3. Applicability & Lessons Learned The U.S. Army Reserve, through its exchange acquired over 150,000 SF of new construction funded through private sector capital; having zero impact on Federal construction budget availability and appropriation and reducing the Reserve s real estate footprint, all the while, achieving its goal of modernizing its real estate portfolio. The National Guard Bureau current maintains a number of assets in high-value areas the efficacy of the proximity and location of these facilities must be evaluated for potential exchange candidates as a method to modernize existing facilities through the disposition and monetization of non-essential or not ideally located facilities. The proceeds of the exchange or monetization have the ability to fund key and essential modernization efforts for the National Guard Bureau. 94 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

103 U.S. Army Reserve Land Exchange: Project Structure Federal Legislation National Guard Bureau CA ARNG Exchange Private Developer (SunCal) Dept. of Public Works Underutilized Asset Private Sector Capital & Investment Intergovernmental Support Agreement U.S. Army & U.S. Air Force Various Locations Nationwide 1. Scope of Work The U.S. Army and U.S. Air Force, acknowledging rising support costs and inabilities / deficiencies in providing installation-support services, established initiatives to identify and enact intergovernmental support agreements (IGSAs) with public-sector entities throughout the country at select military installations. 2. Enabling Legislation In 2013, the Department of Defense authorized H 4310 NDAA 2013; allowing for military installations to enter into Intergovernmental Support Agreements (IGSA) with State and Local Governments to provide, receive or share installation-support services if determined to be in the best interests of the Department. Intergovernmental Support Agreement Successes Challenges Financial Scope Stakeholders - Ability to solesource with entities - Lack of execution vehicle - Dependent on proposed - Federal Government - Creates efficiencies and economies of scale by reducing - Army or municipality must already provide the service specifications - Public Sector counterpart (State or Local) costs - Partnerships - May use wage grades normally paid by State or Local Government agreement not to exceed 5 years 3. Applicability & Lessons Learned The Army and Air Force established separate initiatives for evaluating and reviewing potential IGSAs submitted on the installation-level. Both initiatives serve as a framework through which installation and public /private sector community leaders can develop creative ways to leverage their capabilities and resources to reduce costs or reduce risks by identifying potential share-value propositions. Projects submitted must be collaborative in nature, reduce operations and services costs, reduce risk and/or provide mutual value to the government and local communities. The Army and Air Force has successfully implemented IGSA partnerships throughout a number of installations such as Tinker AFB (prisoner detention), Hill AFB (lodging), Robins AFB (firing range joint-use), Fort Huachuca (Shared Library); this process for evaluating and assessing potential agreements can serve as a basis for NGB partnerships. Each installation submits potential partnership opportunities to HQ and a review team assesses and evaluates proposals based on feasibility, financial scope and potential risk and mitigation and establishes recommendations for implementation or dismissal. Each proposal is evaluated on a case-by-case basis. FINAL REPORT TO CONGRESS Appendix 95

104 VA Strategic Capital Investment Planning Various Locations Nationwide 1. Scope of Work The Dept. of Veterans Affairs (VA) required an approach to continually manage changes in technology, health care delivery and demographics by way of prioritizing capital project improvements throughout its portfolio of hospitals, nursing homes support facilities. As a result, VA invested in the creation of the Strategic Capital Investment Planning Process (SCIP) to continually measure project prioritization and vet new capital requirements to drive cost savings. 2. Enabling Legislation In 2009, under Secretary Eric K. Shinseki, the VA entered into a Strategic Plan consisting of 16 initiatives, including the SCIP process to optimize its Capital portfolio. Department of Veterans Affairs: SCIP Successes Challenges Financial Scope Stakeholders - Portfolio-level asset management approach - Streamlining processes throughout portfolio - N/A - Department of Veterans Affairs - Cost-savings throughout portfolio - Management of program initiatives - Modernization of facilities and implementation 3. Applicability & Lessons Learned Using a distinct and adaptable gap analysis and projected utilization of services, SCIP has identified specific capital investment needs to close performance gaps in the areas of safety, security, utilization, access, facility condition assessments and energy. Driving cost-savings through project vetting and right-sizing budget estimations, SCIP utilized private sector best-practices toward a national portfolio of facilities. The National Guard Bureau does not currently utilize a streamlined approach for capital project vetting at the Federal-level, and as a result Readiness Center modernization efforts are pursued through State budget processes and mechanisms. Throughout its nationwide portfolio, the benefits of the SCIP program can be utilized in a similar approach through the continued maintenance of existing facilities through modernization, if adopted on a State-by-State basis. NGB must pursue a more robust State-level capital allocation process. VA Building Utilization Review and Repurposing Various Locations Nationwide 1. Scope of Work The Building Utilization Review and Repurposing (BURR) initiative is a VA strategic effort to identify and repurpose underutilized VA land and buildings nationwide in support of VA s goal to end Veteran homelessness. The BURR initiative is assessing existing real estate assets with the potential to develop new housing opportunities for homeless or Veterans and their families at-risk for homelessness through public-private partnerships and VA s enhanced-use lease (EUL) program. 2. Enabling Legislation VA s EUL authority was enacted in 1991 and codified in 8161 thru 8169 of title 38, United States Code. This authority allows VA to lease land or buildings to public, private and/or non-profit partners for up to 75 years, provided the use of the property is consistent with VA s mission. Leased property may be developed for non-va uses, and/or VA uses that improve the property. Department of Veterans Affairs: BURR Successes Challenges Financial Scope Stakeholders - Development of support facilities for - Developer selection process - Dependent on Scope of Work; - Department of Veterans Affairs VA mission - Maintaining Agency funds are retained - Private - Cost-savings transparency through by VA development throughout portfolio Congressional - U.S. Congress oversight - State and Local entities 3. Applicability & Lessons Learned VA s EUL authority allows VA to match supply (available buildings and land) and demand among Veterans for housing with third-party development, financing, and supportive services. This approach has multiple benefits: helping provide housing opportunities to Veterans while leveraging an underutilized asset, reducing the inventory of underutilized real estate, and transferring the operation and maintenance costs to a developer. Housing types that may be considered include: Transitional Housing, Permanent Housing, Assisted Living Housing, Non-Senior Assisted Living Housing, Independent Senior Housing, and/or a retail/office commercial space to help support the viability of one of the housing types. 96 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

105 Department of Transportation - TIFIA Various Locations Nationwide 1. Scope of Work The Dept. of Transportation required a national program to drive and attract new investment to projects capable of generating revenues through user charges or dedicated funding sources and to complement existing funding sources by filling necessary market gaps, therefore leveraging private capital for critical improvements to national infrastructure systems. 2. Enabling Legislation The Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA) established three forms of credit assistance for surface transportation projects deemed to be of regional or national significance: secured (direct) loans, loan guarantees and standby lines of credit. - Leveraging private and public sector investment through join-funding requirements - Modernization and creation of new facilities Department of Transportation: Infrastructure Financing Successes Challenges Financial Scope Stakeholders - Project selection and oversight throughout process - Market Conditions - Eligibility: minimum $50M total project cost and federal funding cannot exceed 33% of eligible costs or the amount of senior debt - Department of Transportation - Lender - Private Entity - State / Local Government Entity 3. Applicability & Lessons Learned TIFIA has provided $7.9 Billion in credit assistance for 22 projects since These projects represent $29.4 billion in infrastructure investment, nationwide. The National Guard Bureau current does not have a vehicle to attract private sector investment and interest. As a result, many projects require funding solely from direct appropriation and does not garner private sector financing. Through the utilization of a joint-funding mechanism, public entities have been able to leverage significant private sector capital to drive necessary capital projects and improvements. Such implementation would require changes to current legislation to create vehicles for public-private partnership strategies. Department of Transportation MAP-21 Various Locations Nationwide 1. Scope of Work The Dept. of Transportation required a national program to accelerate the development of highway and alternative transportation that did not delay development schedules due to lengthy grant positioning. The Dept. of Transportation enabled legislation, Moving Ahead for Progress in the 21 st Century Act (MAP-21) to enable an expedited process for transportation infrastructure. 2. Enabling Legislation The Moving Ahead for Progress in the 21 st Century Act (MAP-21) enabled an expedited approach for grant position; allowing for grant funding to be allocated prior to final design and engineering studies being completed. Department of Transportation: Infrastructure Financing Successes Challenges Financial Scope Stakeholders - Project selection and oversight throughout process - Market Conditions - Leveraging State and private sector matching of funding - Expedited grant process and award - Maximum Federal contribution of 80% of total project costs - Total net capital cost of less than $250M - Department of Transportation - Lender - Private Entity - State / Local Government Entity 3. Applicability & Lessons Learned MAP-21 has allocated, to date, over $3.5 billion in infrastructure funding to the improvement and development of capital transportation infrastructure. Grants provide funding for a project throughout a single year or through an expedited grant agreement. The National Guard Bureau current does not have a vehicle to expedite funding for individual projects, but rather each project must undergo through direct appropriation through regular budget cycles; thus, being prohibitive to immediate needs and constraints that readily appear. FINAL REPORT TO CONGRESS Appendix 97

106 National Wildlife Refuge System U.S. Fish and Wildlife Service Various Locations Nationwide 1. Scope of Work Federal agencies, faced with real property management concerns over excess property, sought to dispose of critical real property deemed essential by the State and Federal Wildlife Conservation agencies. As a result, Congress enable legislation for excess Federal property to be transferred and become State-owned Wildlife Management Areas, in perpetuity. 2. Enabling Legislation In 1948, the U.S. Congress approved Public Law , allowing for the General Services Administration (GSA) to transfer, at no cost, excess parcels of Federally-owned real property suited for wildlife resources to the Department of the Interior or to associated State Agencies via Public Benefit Conveyance (PBC) procedures for management and administration. National Wildlife Refuge System Successes Challenges Financial Scope Stakeholders - Over 175,000 acres conveyed to State - Associated costs of property delineation - N/A - U.S. Fish and Wildlife Service and Federal entities and demarcation - U.S. Congress - Preservation of wildlife refuge areas - Environmental regulation and - Department of the Interior - Conveyance cost concerns - General Services avoidance through - Reversionary clauses Administration enabling legislation and concerns - State Entities - Federal Entities 3. Applicability & Lessons Learned To-date, approximately 134 wildlife conservation Public Benefit Conveyances totaling over 175,000 acres have been transferred since the programs inception in Associated legislation allows for Federal entities to dispose of excess properties without the necessity of going through standard procedure and reduce associated risk of maintaining property deemed necessary by the U.S. Fish and Wildlife Service. This method is applicable to the National Guard Bureau as a possible mechanism for acquiring and disposing of excess property for what is deemed public benefit. All entities associated in such transaction befit from the exchange and as a result, reduce associated risk and drive cost-avoidance. Assessment of ARNG Legislative Requirements National Guard Bureau RC TMP Alternative Financing Opportunities 5.1 Existing Federal Legislation 1. National Guard Bureau Military Construction Cooperative Agreement (MCCA) (CFDA ) 2. National Guard Grants and Cooperative Agreements (NGR 5-1) 3. USCODE 2011 Title 32, Chapter 1, Section 106 (Annual Appropriations) 4. USCODE 2011 Title 32, Chapter 1, Section 107 ( Availability of Appropriations) 5. National Guard Bureau Military Operations & Maintenance Projects (CFDA ) 5.2 Case Study Legislative Comparison Agency Program Enabling Legislation Type of Legislation Department of Defense Housing Privatization 1996 MHPI Act Public-Private Partnership Department of Defense Department of Defense Department of Defense Department of Defense Department of Defense Department of Veterans Affairs Department of Veterans Affairs Department of Transportation Department of Transportation Energy Initiatives Task Force Internal Organization Enhanced Use Lease Section 2667 of Title 10, US Code Shared-Partnership Memorandum of Understanding U.S. Army Reserve Reserve Property Exchange Agreement Intergovernmental Support Agreement H4310 NDAA 2013 Strategic Capital Investment Planning Internal Organization Building Utilization Section of Title Review and Repurposing 38, US Code N/A Enhance Use Lease Shared-Partnership Land Exchange Shared-Services Agreement N/A Enhanced Use Lease TIFIA TIFIA Act of 1998 Credit Financing MAP-21 MAP-21 Act of 2012 Grant Funding Department of Wildlife and Resource Management Public Conveyance Public Law Land Transfer 98 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

107 Recommendations & Next Steps National Guard Bureau RC TMP Alternative Financing Opportunities 6.1 Overall Assessment & Recommendations The National Guard Bureau must implement a robust asset management program that provides appropriate vehicles for alternative financing pursuits and creates a platform for continual evaluation and assessment of existing and future readiness centers through the use of a methodical approach. Unlike other privatization initiatives, NGB has no clear revenue stream, aside from direct appropriate, to fund State-specific readiness center modernization initiatives. As such, strategic and cost-saving efforts should be focused equally on alternative financing programs and initiatives, driving value from creative methods aimed at enabling State autonomy in strategic planning; however, overseen through federal NGB legislation and management. A bifurcated funding approach should be utilized when considering modernization efforts. Current efforts within the States analyzed do not sufficiently vet potential alternative opportunities for financing; relying on direct appropriation as a reactive measure, rather than utilizing the current state of a readiness center(s) to drive proactive measures. To facilitate this implementation, sufficient effort on a Federal level must be taken to drive legislative changes to enable State National Guard entities to focus resources on identifying creative approaches to traditional methods of facility modernization on an opportunistic basis. Individual partnerships within the State level must be continually assessed on a case-bycase basis using a systemic approach based on space configuration and location analysis of current and future needs. Additionally, State National Guard entities must make strides in the implementation of an asset management program to identify and track capital expenditures and maintenance efforts by way of prioritizing capital project improvements throughout a Statewide portfolio.. Traditional Approach 1. Direct Appropriation Bifurcated Funding Approach Traditional funding approaches should be paired with alternative funding methods to drive maximum value to the State Guard Bureaus. Readiness Center Need State Strategic Plan Financial Analysis Innovative Approach 1. Partnering Strategy 2. Credit Financing 3. EUL 4. Land Transfer 5. Energy Agreement 6. Conveyance 7. Other Strategy Recommendations & Next Steps National Guard Bureau RC TMP Alternative Financing Opportunities 6.2 Driving State Participation and Proactive Measures As a result of variations in State Guard organization and situational-based partnership opportunities, NGB must make strides in the development and fostering of the following: 1. State Capital Budget Planning: NGB must convey to State entities ownership and commitment of initiatives and modernization efforts. Through this strategy, State Guards can utilize local resources and entities to drive as-needed growth and consolidation. 2. Opportunistic Strategies: State Guards must capitalize on opportunities unique to their situation and constraints and/or identify potential partnerships that are able to be driven through Federal guidance and legislation. 3. Framework: NGB must enable a framework for evaluating and streamlining approval of potential partnership strategies through participation and feedback at the Statelevel. An efficient approach must be utilized to allow to timely approval and funding mechanisms. 6.3 Key Findings 1. Two primary general impediments were identified: a) lack of a revenue stream and b) recapture limitations resulting from reversionary clauses and legislation requiring that sales proceeds be deposited into the General Fund, thus, inhibiting the development of a large-scale program with limited resource requirements. 2. Public-public partnerships and public-private partnerships to provide joint-use as well as to facilitate innovative solutions to address facility conditions should be pursued on an opportunistic basis, as allowed under State statute(s). 3. Asset management approaches must be engaged for long-term viability. 4. JLL recommends that NGB develop a process to enable the bifurcation of funding availability aimed at fostering alternative modernization efforts. 6.4 Next Steps Immediate 1. Identify potential legislative changes to enable alternative financing opportunities on both State and National platforms, such as: a. Credit Financing b. Public Conveyance c. Enhanced Use Leasing d. Grant Funding e. Land Transfer f. Energy Agreements g. Partnering Strategies (P3, P4, IGSA) 2. Identify State demands and constraints and potential remediation efforts to prioritize projects based on feasibility and current progress. 3. Engage in continued research to assess joint State/Federal funding programs such as those currently utilized in the Department of Transportation and Department of Veterans Affairs. Short-term 1. Implement a systematic approach for assessing case-by-case modernization opportunities across State National Guard Portfolios. Long-term 1. Implement a portfolio-level asset management approach for monitoring performance and capital expenditures. FINAL REPORT TO CONGRESS Appendix 99

108 Appendix A Army National Guard Evaluation of Existing Facilities Flowchart Evaluation of Current Facilities Identify immediate needs based on Location and Size/Configuration Optimal Location Suboptimal Size / Configuration Optimal Identify: Ongoing Operations & Maintenance Requirement Capital Needs & investment Requirements Identify / Evaluate: Opportunities for reuse Opportunities for relocation Suboptimal Identify: Capital Requirements Opportunities for reconfiguration of existing space Evaluate: Opportunities for relocation through partnership, new construction and consolidation Identify Ideal Real Estate Strategy for Execution #1 Optimal Location Optimal Configuration Army National Guard What are the current requirements for Operations & Maintenance? What are the current requirements for Capital Investment? How do current requirements compare across the entire Portfolio? Is there a strategic approach to Capital Project Vetting and Budgeting? 1. Identify Asset Management Strategy for O&M and Capital Projects Plan, Prioritize, Budget and Execution Evaluate: Facilities Management Approaches Energy Usage and Consumption Current Space Utilization Best Practices Budgetary Constraints 100 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

109 #2 Suboptimal Location Optimal Configuration Army National Guard What are the current requirements for O&M and Capital Needs? What are the impediments to the current location? Do opportunities exist for a potential reuse strategy within the current NC ARNG portfolio? No Yes Do opportunities exist for a potential reuse strategy within the current State building portfolio? No Yes Identify strategy for disposition of existing facility / and associated relocation. 1. Identify immediate or potential opportunities readily available Evaluate: Excess land availability Suitability, proximity and environmental factors Shared resources with DPS Other State Agency needs Short-term vs. long-term requirements 2. Identify potential partnership opportunities associated with private or public entities Evaluate compatible use/colocation opportunities with: NC DPS NC DOA Federal Entities Colleges & Universities Civic Organizations Private Business Entities Other Entities Plan, Prioritize, Budget and Execution 3. Identify opportunities for new construction Evaluate: Opportunities for in-kind construction Legislative requirements and opportunities (ARNG and State) Alternative financing Sponsorship Land Swap / Exchange Intergovernmental Service Agreements (ISGA) #3 Optimal Location Suboptimal Configuration Army National Guard What constraints are being placed on current facilities? Evaluate: Current Space Utilization Deferred Maintenance Other Factors What requirements are needed to reach optimal configuration? 1. Identify immediate or potential opportunities readily available 2. Identify opportunities for redevelopment of existing land Evaluate: FTE requirements Demand on common areas Over utilized Areas Capital Project Requirements O&M Operations Evaluate: Facility Restack Changes to Space Utilization Capital Investment Short-term vs. long-term requirements Evaluate: Opportunities for in-kind construction Legislative requirements and opportunities (ARNG and State) Alternative financing Sponsorship Land Swap / Exchange Intergovernmental Service Agreements (ISGA) Plan, Prioritize, Budget and Execution FINAL REPORT TO CONGRESS Appendix 101

110 #4 Suboptimal Location Suboptimal Configuration Army National Guard What are the requirements for a new facility / what constraints are being placed on current facilities? Can defined requirements be fulfilled in current / existing space through restacking or changes to configuration within the NC ARNG portfolio? Yes Yes No Within the State Portfolio? No Identify: Underutilized facilities Consolidation Availability of funding Relocation & Movement Strategy Analyze Asset Management Principles 1. Identify immediate or potential opportunities readily available Evaluate: Excess land availability Suitability, proximity and environmental factors Shared resources with DPS Other State Agency needs Short-term vs. long-term requirements 2. Identify potential partnership opportunities associated with private or public entities Evaluate compatible use/colocation opportunities with: NC DPS NC DOA Federal Entities Colleges & Universities Civic Organizations Private Business Entities Other Entities Plan, Prioritize, Budget and Execution 3. Identify opportunities for new construction Evaluate: Opportunities for in-kind construction Legislative requirements and opportunities (ARNG and State) Alternative financing Sponsorship Land Swap / Exchange Intergovernmental Service Agreements (ISGA) 102 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

111 Facility Condi on Assessment Space Requirements Loca on & Demographics Shared Space Family Readiness Courses of Ac on Analysis Proposed Moderniza on Plan D. Methodology For each State analyzed within the RCTMP, the effort was organized into tasks that meet the Congressional Directive: 1 Facility Condition Assessment (FCA): Provides a real property analysis of the current condition of existing RCs. 2 Tabulation of Existing and Required Spaces (TAB): Calculates space surplus or shortfall by comparing existing assets to estimated space requirements for unit stationing and equipment. 3 Location and Demographics Analysis: Aligns RC locations with target demographics, strong retention potential, and other drivers identified by each State. 4 Shared Use Analysis: Evaluates the potential for the ARNG partnerships with local, State, and federal organizations. 5 Family Readiness Program Analysis: Validates Family Readiness Program requirements and necessities to enhance family support Mission Dependency Analysis Capital Investment Strategy Opera onal Readiness Analysis Figure 26: State Data Analysis Methodology 6 COA Analysis: Generates a master plan of optimally sited and sized facilities to shape each State s footprint (referred to as the modernization plan in the report). 7 Mission Dependency Analysis: Evaluates the operational criticality of a location and prioritizes RC locations from a mission perspective. 8 CIS: Develops a unified investment strategy based on prioritization and degradation for achieving the proposed end state. 9 Operational Readiness Analysis: Uses verifiable facts and mission-oriented, risk-based information to produce an ORI score for the entire RC inventory. FINAL REPORT TO CONGRESS Appendix 103

112 General Data Collection Data gathered through existing documents and background information was analyzed by Jacobs to define the current status of each State s RCs and provide the base for each task analysis. Table 9 highlights the type of data collected for the RCTMP process. EXISTING / BACKGROUND DOCUMENTS AND GIS DATA TAG) Vision/ State Mission (Real Property Development Plan) Long-Range Construction Project (LRCP) list SRM list MILCON / SRM project prioritization criteria Organization Chart with RC locations (Master Subordinate Command map/ command chart) Highlighted Modified Table of Organization and Equipment (MTOE) indicating administrative positions DD Forms 1390/91 (at minimum, RCs in Fiscal Year Defense Program (FYDP) Facility Inventory and Support Plan (FISP) report Mission critical sites, RC sites that support emergency operations Unit Identification Code (UIC) relation to site code List of closures and preferred locations for COAs Shared-use costs (if any), rent, utility, maintenance FACILITIES AND UNITS LOCATION/DEMOGRAPHICS Lease information 1-3 Year utilities/maintenance costs (and rent cost if applicable) Family Readiness Program GIS DATA: State Specific Facilities Data Set RC site boundary delineation Military Vehicle (MV)/Personal Owned Vehicles (POV) parking shapefiles or CAD Building boundaries shapefiles or CAD Utilities shapefiles or CAD Current shared use areas at RCs (SF and entities) MAPPS data entry for facility condition assessments Unit Data Capture Spreadsheet FY16/17, FY11/12 Survey participation and results Location & demographics criteria/planning drivers excel template Recruits information, current and historical data) Current soldier information Site expansion capacity tracking spreadsheet Site Capacity Assessment Analysis Maps Site aerials Available properties for consideration Table 9: Data Collected and Analyzed for RCTMP 1. Facility Condition Assessment FCA Approach Overview The purpose of the FCA is to identify the major systems and components in each building, assess their condition, identify projects required to correct system distresses, and calculate rough order of magnitude (ROM) costs required to bring the buildings back to like-new and/or good condition. The results will help prioritize each State s projects. Findings described in this report are the result of FCAs performed on all RCs in the 54 States /Territories. Jacobs began assessments on eight Beta States and Territories: Virginia, North Carolina, Arizona, Rhode Island, Oregon, North Dakota, Michigan and the District of Columbia. For the Beta States only, Jacobs utilized sub-consultant R&K Solutions Inc. to conduct ISR assessments at select RCs. The results of these studies would be used to compare third- 104 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

113 party ISR results from R&K Solutions to NGB ISR results and FCA results from the RCTMP. For subsequent States, NGB contracted architectural/engineering firms to conduct the data collection and assessments. FCA Methodology Assessments were accomplished using a two-person team, and RCs were evaluated either through interviews with facility maintenance staff (Level 2 assessment) or through a visual on-site assessment (Level 3 assessment), as determined in conjunction with State leadership. The building components and systems included in this FCA are listed in Table 10: Architectural/Structural Systems Mechanical/Electrical/Plumbing/ Fire Protection Systems Site/Civil Systems Foundations Exterior Walls Exterior Windows Exterior Doors Roof Coverings Roof Openings Partitions Interior Doors Stairways Interior Wall Finishes Interior Floor Finishes Interior Ceiling Finishes Elevators and Lifts Fixtures Domestic Water Piping Inside Building Sanitary/Vent Piping Energy Supply Primary Heating Source Primary Cooling Source Primary Air Systems (Equipment) Terminal and Package Units Building Controls Computer Room A/C Equipment Sprinkler System Standpipes Electrical Service and Distribution Lighting (includes exit signs) Security System Fire Alarm System Roadways Paved Roadways Unpaved Parking Lots Paved Parking Lots Unpaved Pedestrian Paving Site Development Water Service Storm Water Piping Natural Gas Piping Electrical Distribution Site Lighting Table 10: Building Components Assessed during FCA These assessments, whether Level 2 or Level 3, used a distress-based method to systematically and objectively evaluate all building systems and components, establishing consistency and accuracy in data collection and reporting amongst each assessed facility. System-level conditions were reported based on a five-tier condition scale of new/like new (less than 1 year old), good (routine maintenance or recommended improvements), fair (minor necessary repairs), poor (major potentially-critical repairs), and unsatisfactory (critical life safety concerns/system failure). Any building systems that received a condition rating of fair, poor or unsatisfactory include a listing of high-level project(s) required to correct the identified distresses. Items that are considered urgent (such as those that may endanger life or property) were immediately brought to the attention of NGB and the State. The condition rating assigned to a building system correlates to priorities for the projects associated with that system. Occupied buildings that lack fire detection and alarm system were rated Unsatisfactory with a project to install the missing system. In order to receive a new/like new rating, a building or system must have been new or replaced within one year of the assessment. FINAL REPORT TO CONGRESS Appendix 105

114 The five condition ratings and their associated priorities are described below. 1 Unsatisfactory (REPLACEMENT): Priority 1 Currently Critical (Immediate, Year 0) Conditions in this category require immediate action to: Correct a cited safety hazard Stop accelerated deterioration Return facility to an operational level 2 Poor: Priority 2 (MAJOR REPAIR) Potentially Critical (Year 1) Conditions in this category, if not corrected expeditiously, will become critical within a year. Projects within this category address: Intermittent operations Rapid deterioration Potential life safety hazards 3 Fair (MINOR REPAIR): Priority 3 Necessary/Not Yet Critical (Years 2-5) Conditions in this category require appropriate attention to: Preclude predictable deterioration Reduce potential downtime Address associated damage or higher costs if repairs are deferred further 4 Good (ROUTINE MAINTENANCE): Priority 4 Recommended (Years 6-10) Conditions in this category include items that represent a sensible improvement to existing conditions. These projects are not required for the most basic function of the facility; however, projects in this category will either: Improve overall usability Reduce long-term maintenance costs Improve energy conservation Reflect life cycle component renewal based on asset inventory, equipment age 5 New/Like New (ROUTINE MAINTENANCE): Priority 5 Life Cycle Component Renewal (Years 10+) Conditions in this category include recent construction or renovation and will consider the following: Reflect life-cycle component renewal based on asset inventory, equipment age Reserved for buildings or systems that are one year old or less. Level 3 Assessments Sites were initially selected for level 3 assessments based on the age of the RC. Level 3 assessments were performed on RCs greater than 10 years old and less than 40 years old. The final list was confirmed via discussions with the State Construction Facilities Management Office (CFMO) staff. Level 3 assessments consisted of a visual on-site assessment of architectural, structural, civil, mechanical, electrical, and plumbing components. This was accomplished by two-person teams, with one member specializing in architectural, structural, and civil systems, and the other specializing in mechanical, electrical, plumbing, and fire protection systems. The teams were escorted by facility managers responsible for RC maintenance and operations. Level 2 Assessments Level 2 assessments consisted of a face-to-face interview with the facility manager and others with specific knowledge of the building systems and their condition. Level 2 assessments were held on-site at a location chosen by State CFMO representatives typically the Joint Force Headquarters facility or wherever State maintenance records and drawings are stored and maintained. These meetings included a system-by-system review of the facility condition. Level 2 assessments were also accomplished using two-person teams. 106 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

115 Interviews While on-site, assessment teams made efforts to interview staff members with knowledge of building maintenance and utilities to gather data regarding the past performance of systems and components. Along with local facility staff, a CFMO facility manager was present for each assessment. Information obtained during the interviews is considered accurate unless on-site observations revealed otherwise. For sites that were not assessed during the FCA task timeframe, assumptions were made on the CI as show below. The objective was to account for needs of all facilities included in the study. For facilities with an ISR rating, the ISR rating was translated to a CI rating For facilities less than 1 year old: CI = 100 For facilities between 1 and 5 years old: CI = 95 For facilities older than 5 years old: CI = State average to replace the system compared to the cost to replace the entire facility, known as PRV. In instances where a building system did not exist, the inspector rated that system N/A, and the measures were recalibrated among existing systems. Based on the condition ratings assigned to each system during the FCA, each system is allotted a certain percentage of its total weight value, and the sum of weight values for all building systems at one RC result in a CI. The CI represents the percentage of the facility s PRV that remains, or the inverse of the percentage of the facility s value that has been lost to distress. Therefore, the higher the CI value indicates a better condition of the building. A roll-up CI was also calculated for each RC site by weighting the CI of each building based on the PRV of that building in relation to the total PRV for all buildings on the site. The CI scale is diagrammed in Figure 27. FCA Output Assessment output is provided in the form of CIs and building system costs. Condition Index The CI provides an objective measure of an asset s physical condition on a 0- to 100-point scale where the higher the CI, the better the condition. Each evaluated building system was assigned a score based on the estimated cost Q4 UNINHABITABLE Q4 FAILING pt Q GOOD Q3 Q2 Q1 Figure 27: National average facility condition index POOR FAIR FINAL REPORT TO CONGRESS Appendix 107

116 Basis of Costs The information collected during the site visits was used to generate a list of projects that should be completed to correct the distresses and shortcomings observed. Costs for projects related to building systems were estimated based on the weighted values assigned to each system and the condition of each respective system. These costs are intended to provide a reliable ROM and should not be misinterpreted as actual construction costs. As part of the cost analysis, Jacobs calculated a PRV for each building assessed based on current Unified Facilities Criteria (UFC). PRV is calculated from the Financial Management Regulations where: PRV = facility quantity x construction cost/replacement factor x location factor x planning and design factor x historical factor x contingency factor x supervision inspection and overhead factor (SIOH) x inflation. By yielding a PRV and a CI for each building, Jacobs determined the needed costs to replace failing systems. Costs = (100 CI)/100 x PRV Building system costs are broken down by system and priority across a period of 10 years based on the associated condition ratings. Because the site systems are not tied to the building PRV, site project costs are calculated using an alternative methodology. Site systems include roads (paved/unpaved), parking (paved/unpaved), POV and MV, lighting, water/ natural gas/storm/sewer piping, fencing, wash pads, flag poles, electrical lines, signs and pedestrian paving. Field Maintenance Shop (FMS) and Operational Maintenance Shop (OMS) support buildings/structures are not included in the site total. The baseline assumption in determining PRV for site systems is based on guidance from the Long Range Construction Plan workshop DD Form 1390/91 review checklist, which states that total cost for support facilities generally equal 15 to 25 percent of the costs for primary facilities. A comparison of site PRV values provided by NGB to the building PRV values calculated by Jacobs, determined that site systems should be valued at 18 percent of the site s cumulative building PRV. Once the total site percentage was determined, site systems were weighted based on unit replacement costs and quantities, and applied uniformly across all sites. ISR Validation (Beta States only) Sub-consultant R&K Solutions accompanied the Jacobs teams to perform ISR assessments at level 3 sites. As determined during the initial kick-off charrette, the ISR assessments were accomplished using the 2010 ISR-I inspection booklets. At each site, R&K visually evaluated each inspection component and the subordinate elements from a perspective of mission-function and quality and established a rating of Red, Amber, Green, or N/A for each. 108 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

117 Components inspected and rated at each site are listed below: Facility common components inspected include: Facility specific components inspected include: Site and Grounds Building Exterior General Building Exterior Roof Building Exterior Walls Building Exterior Windows Building Exterior Doors Foundation Loading Dock/Service Area Lobby Corridors Stairs Elevator(s) Administrative Areas Bathroom/Shower Rooms Heating/Ventilation/AC Security Systems Fire Protection Arms Room Kitchen Unit Supply/Equipment Storage Auditorium/Classrooms/Learning Center Assembly Hall Vehicle Maintenance (ARNG Only) General Purpose/Janitorial Storage Table 11: Building Components Inspected during ISR Validation The point ratings for each element were summed by color rating and transferred to the Component Rating Worksheet. In instances where the space requirement elements received a Red rating, the facility component automatically received the same rating. While on-site to validate ISR ratings, R&K assessed the mission support functional capability of select RCs (Category Code 17180) in AZ, MI, NC, ND, OR, RI, and VA. The building-level F ratings are a mission-weighted average of component ratings, in accordance with the ISR Implementing Instruction, Appendix E, with consideration of Mission Essential Components (MECs) 1. FCA Limits and Qualifications The FCA conclusions, recommendations, and financial implications presented in this report are based on a brief review of available drawings on-site, interviews of persons knowledgeable about the facility, Jacobs field observations, and Jacobs experience on similar projects. Materials testing of the building components and calculations were not performed to determine the adequacy of the facility s original design. It was not the intent of the 1 Mission Essential Components for ARNG RC facility include Sites and Grounds, Admin Area, Arms Room, Unit Supply/Storage, Classrooms/ Learning Center, and Assembly Hall. If the MEC is rated RED, the F Rating can be no better than F3. assessment to perform an exhaustive study to locate every existing defect. Walk-through observations were made by a trained professional, but the facility may have additional defects that were not readily accessible, not visible, or that were inadvertently overlooked. Other problems may develop over time that were not evident at the time of this assessment. The assessments performed as a part of this effort are distress-based, as opposed to a more detailed deficiencybased assessment. A distress-based assessment uses a top-down approach to ascertain the overall problems with building systems by calculating system costs as a percentage of the building/system s value lost to aging. A deficiency-based assessment uses a bottom-up approach by creating a record of each deficiency found in the facility and developing detailed cost estimates to correct the problems. This results in a complete record of backlog. Therefore, the projects and costs resulting from this effort are not intended to represent a comprehensive list of projects required to bring the facility to good condition, nor are the costs associated with each building system intended to represent an accurate cost estimate to perform the high-level projects listed. Projects are captured at the system-level and are not intended to comprehensively describe all projects required for the respective building system. Costs are intended to represent maintenance and FINAL REPORT TO CONGRESS Appendix 109

118 repair costs likely to be needed over a 10-year timeframe, and should be viewed as ROM budgetary costs, as opposed to project-level cost estimates. Opinions of cost are estimates only and should not be interpreted as bids or offers to perform work. Actual costs can be affected by the extent of work done as one project, the quality of contractors used, the quality of materials chosen, and specific work conditions. More detailed proposals or bids should be obtained for actual construction budgets. The FCA addresses condition of existing buildings and systems only, and does not address issues such as capital improvements, addition/alteration projects for right-sizing of facilities, and upgrades. As is common practice when assessing aged and damaged facilities, Jacobs seeks to provide NGB with sufficient data to enable decisions based on expected life cycle for the properties studied. It is Jacobs recommendation that NGB consider these facts in reaching its final decision for the utilization of the statewide RCs. 2. Tabulation of Existing and Required Space The TAB analysis measures the capability of existing RCs to support the authorized manpower, unit training, and operations through facility space analysis. The TAB analysis identifies overall surplus or shortfall of space by comparing the existing assets to calculated space requirements based on stationing and unit documentation provided by each State. Guidance from the current 2 NG PAM , dated 01 June 2011, served as the standard to develop the space requirements. In addition to the overall Gross Square Feet (GSF) surplus or shortfall, the TAB process evaluated surplus and 2 TAB requirements do not incorporate the criteria appended on 9 October 2014, currently under the formal agency staffing process. shortfall at the facility component level. RC elements evaluated include: Administrative Space Net Square Feet (NSF) totals for each unit Storage Space NSF totals for each unit Common Space NSF totals by RC location, as well as a breakout of key spaces: Assembly Hall Classrooms Family Readiness Program General Purpose Training Bays MV parking square yards (SY) POV parking - SY Data Collection To document the current RC portfolio, existing facility data was collected through on-site measurements, floor plan takeoffs and interviews during FCA for each location. (Refer to section D.1 for FCA Methodology). Existing square footage for each RC was captured by space component as well as existing square yards of MV and POV parking and square footage of Unheated Enclosed Vehicle Storage (UEVS). For cases of joint or shared use, the dedicated ARNG space was included in the analysis and any shared common space (classrooms, assembly hall etc.) were pro-rated. Parking was also pro-rated to reflect the ARNG portion. Force structure and unit data was also collected by Jacobs, contracted A/E firms and State representatives. Each State was asked to provide the unit information to reflect their plans for the near term (FY16/17), inclusive of confirmed unit transformation. In some cases, the unit strength or 2 TAB requirements do not incorporate the criteria appended on 9 October 2014, currently under the formal agency staffing process. 110 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

119 location assignments may vary from US Army Stationing and Installation Plan (ASIP) or Real Property Planning and Analysis System (RPLANS) of record. To accurately define each State s force structure, the following unit information was gathered: UIC Unit Name Major Subordinate Command Standard Requirements Code (SRC) and MTOE number Existing RC Location Unit Type Authorized Strength (current and projected) FY16 Strength for AZ, DC, MI, NC, ND, OR, RI, and VA, FY17 for subsequent States studied Administrative Positions (inclusive of non MTOE positions) Special Administrative and Special Function Space allowances Existing Exceptions to Criteria Maintenance Sections Cubage Cubage data was compiled by State for each unit using FMS WEB, existing internal databases, or MTOEs If cubage was not available for subsequent States it was assigned by SRC or unit type (based on collective cubes/ soldier dataset from 7 States previously studied) Authorized MV counts Units authorized space outside the RC such as the CSTs, Regional Training Institute (RTI), Training Site units, FMS and Combined Surface Maintenance Shop (CSMS) were excluded from this study. Space Requirements In conjunction with guidance from the 01 June 2011 NG PAM Facility Allowances, FY16/17 unit data was used to determine space requirements for each RC location. Authorizations for administrative space, storage and paving are determined at the unit level. Requirements for Assembly Hall, Classrooms, General Purpose Training Bay and support space, Family Readiness and Common Space are authorized based on total RC strength. In order to finalize the space requirements for the purposes of this study, some assumptions were made in the calculations. Table 12 provides assumptions and default allowances used to determine the RC space requirements: Category Input Comments Required Strength Total Strength Sum total strength of all units at RC Cubage TBD If cubage data for each unit was not available from the State, averages were compiled based on SRC or historical data based on unit type Classrooms Total Strength Units required to train simultaneously = total strength of all units Distance Learning Center TBD Program based on discussion with G3 of authorized stations and locations Training Device/Simulation Center 1840 NSF Program 15 lane EST, RC housing BN or higher. (Less than BN would be authorized 10 lane, 1225 NSF) Indoor Firing Range 0 Not standard item Table 12: Space Requirements Assumptions / Allowances FINAL REPORT TO CONGRESS Appendix 111

120 Category Input Comments Break Area 400 NSF Basic allowance for up to 8 FT support personnel. Program (1) 400 NSF Break Area for each RC RAPIDS Office 150 NSF Program (1) for each RC Floors 2 Calculates 22% vs. 15% NSF for circulation, and additional 10% of basic Toilet/Shower allowance Barrels Stored 39 Program 300 NSF vs. 500 for CWHF Special Admin Allowance Appropriate allowance based on unit data info (Div HQ, State HQ, Troop Command) Special allowances identified by State POC with unit data collection Special Unit Storage Space 0 BN HQ with Organic Subunits, Supply/Transportation BN (Div), Support BN (separate BDE) Special Functions Appropriate allowance based on unit data info (JFHQ, Exams, Band) Special Functions allowances identified by State POC with unit data collection COMSEC 0 IT Support 0* * Program 7,175 NSF in JFHQ General Purpose Training Bay 3,168 NSF NSF/Unit with a Maint. Section Program (1) 2,048 NSF Bay + 1,120 SF egress aisles per RC. Additionally, 810 NSF supply/library space per unit with a maintenance section MV Parking Per unit data spreadsheet Allowance based on MV unit data provided by State POC POV Parking 90% of Total Strength of units Assume all units drill simultaneously Table 12: Space Requirements Assumptions / Allowances (continued) The TAB was computed by comparing the Existing SF and Authorized SF (Delta = Existing SF Authorized SF). The surplus and shortfall for each location was summarized and used in COA development. Additionally, key components of the overall RC requirements were also calculated and compared against the existing space identified during the FCA process. Mission Support Functional Capability Rating Assessment of mission support incorporated the F-Rating from the ISR Database. FY2013 scores and ratings were supplied at the site code level as well as the FY2014 national average for Category Code TAB Analysis Exis ng Square Footage COMPARE Authorized Square Footage Figure 28: Key Components of Space Requirements Analysis using Key Components Summary Delta Key Components Assembly Hall Administra ve Areas Classroom General Purpose Training Bay and Support Unit Storage MV Parking POV Parking 112 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

121 Trend Analysis Data from the TAB analysis supports further investigation of trends such as efficiencies of common space in single unit versus multi-unit RCs, average SF/soldier, average SY/ soldier, etc. During the course of this study, documented trends and findings supported the FEAC s latest revisions to the NG PAM Facilities Allowances criteria. Below is a list of observations made that have shaped the recent criteria updates. Assembly halls have various uses for the ARNG but in recent years, these spaces have been used to accommodate recovery efforts following disasters or domestic operations. With the ARNG s increasing role in these types of crises, assembly halls need to be important considerations in space and design criteria. Administrative spaces are being adapted to meet the needs of a full-time force. Revisions of organic unit administrative billets to be more flexible and to accommodate various force structures will determine administrative space requirements. This will likely reduce the overall admin footprint requirements. The review of classroom spaces suggests combining learning centers and libraries into the overall training space allowance, rather than as individual requirements. These training space requirements may need to be enlarged slightly to accommodate instructor preparation areas. Other areas, such as storage locker rooms, showers, and fitness facilities require special attention to adequately accommodate Soldiers of both genders. The increasing involvement of women in combat roles will demand more dedicated spaces for them. Provide flexible configuration of classroom, conference, and administrative space. With 52 percent overall shortfall in classrooms, three out of four facilities studied are short on classroom space. Expand the classroom technology and video teleconferencing capabilities. do support this function. Consideration should be given to provisions in the design standards that would increase the flexibility of assembly halls for classroom or other training purposes. Data collected indicates inadequate space for Family Readiness Program at both the State and local unit levels. Dedicated space for State-level FACs should include private offices and counseling rooms, storage, administration, and lobby areas and design standards should call for separate entrances. With numerous reports of crowded and insufficient vaults, consideration should be given to portable ones that could be added to existing facilities or incorporated in additions. Functional Space Analysis As part of the TAB analysis, the impact of facility deficiencies on unit operations and readiness was evaluated. A survey was conducted to better understand the link between RC facilities and operations. NGB and the States provided input during the survey design and aided in online distribution. The survey aimed to collect building users opinions on the following aspects of an RC facility. Important components of an ideal RC facility Performance of existing RC facilities Workarounds created by facility inadequacies and impact of workarounds on readiness Future RC facility requirements Soldier opinions on travel distance and commute times Additional questions specific to State needs Nationwide, more than 29,000 ARNG Soldiers from 39 States participated in the online survey. Distribution varied by State and ranged from a select sample group to Statewide distribution. Assembly halls have a high percentage of space requirements met, with indications that existing facilities FINAL REPORT TO CONGRESS Appendix 113

122 3. Location and Demographics Analysis The location and demographics analysis focuses on identifying optimally sited locations for the ARNG RCs. These locations align with target demographics and locations ideal for mission requirements, retention, improving mobility to respond to emergencies, and for being a force in local communities. In the process, current RCs are evaluated and potential locations for new RCs are identified. This task assumes a blank slate scenario in determining RC locations. As part of this task the following are addressed: Develop criteria for placement of a new RC Develop criteria for relocation/consolidation Location and its correlation to readiness Proximities to population centers, with target demographics The location and demographics analysis requires intense GIS and facility-related data collection exercises. Layers of information are used to conduct spatial analysis in GIS to help determine optimally sited RC locations. Census 2000/2010 data and population projections for 2020/2030 are used for demographics. Additional data, consisting of shortfall/surplus space, site expansion capacity, and facility condition assessment data, from other tasks is used in location analysis to determine consolidation and relocation opportunities. Determine Optimal Locations Data driven A GIS modeling technique called the Mean Centers method was used to determine demographically optimal Locations for RCs. This approach determines a geographic center within a cluster of points, zip code centroids. A zip code centroid is the geographic center within a zip code boundary. Each zip code centroid has relevant census data and key population counts which are used as model drivers. Drivers can be population counts (current and future projections: 2010/2012/2015/2017/2020/2030) for certain age groups, historical cumulative recruitment and retention counts, high school/college graduates, high school enrollment, or crime data. Drivers vary, and are selected by each State. A proximity buffer chosen by a State is applied on the current RC locations. If the optimal location determined by GIS model fall within a predetermined proximity buffer of a current RC that RC location is said to be in a demographically optimal location. If the optimal location determined by model falls outside the proximity buffer it is said to be not in optimal location. Identify Opportunities for Relocation, Consolidation, and New Locations Data driven Various factors are considered while determining options for relocation, consolidation, and new locations for RCs. Each of the analytical components is described below: Relocation: All RC locations determined to not be optimally sited are relocated to the nearest existing RC that is in an optimal setting. Training Site (TS) locations are factored to ensure shorter travel distances and drive times from an RC to the closest TS. Consolidation: Consolidation opportunities are identified within existing RC site locations that are found in demographically driven optimal locations and within close proximity to each other. New Location: New locations for RCs are determined by a combination of variables, including high school enrollment, historical recruitment and retention counts, current soldier counts, and other target demographics. If adding a new RC in an area can improve the coverage on State geography and population by 1 percent or more that location is presented to the State as a potential new location. A State would then weigh in on the proposed new location. 114 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

123 Identify Optimally Sited RC Locations Based on State s Input Driven by Unquantifiable Factors State input for optimally sited RC locations includes the following variables: Strategic location for Civil Support Operations Recently built RC (Less than years) Key location on transportation corridor Historically a successful retention area Land availability/federal property Proximity to training site Shared use with other federal agencies, AFRC, USAR Strong ties with local communities Site Expansion Capacity Analysis Using data collected during the FCAs, a cursory analysis of aerial imagery was conducted for existing ARNG properties within the scope of the RCTMP. The study produced an order of magnitude capacity assessment for future development at each location. The analysis was conducted per UFC guidelines for Installation Master Planning (UFC , Revised May 2012) and for Antiterrorism/Force Protection (AT/FP) standoff distance requirements. Formulation of basic development constraint categories include: Existing property boundaries Surrounding encroachment versus availability of open space AT/FP standoff distances per DoD - UFC guidelines ( ) Airfield restrictions on new construction per UFC guidelines ( ) Observed natural environment (e.g. site topography, wetlands) constraints Input from State-ARNG CFMO personnel 4. Shared Use Analysis Shared Use analysis answers the following questions: What spaces are currently shared? What benefits does that arrangement offer? Who are the most logical candidates for shared use? Analyze Existing Conditions Information from the FCA, Planned Resource for Infrastructure Development and Evaluation (PRIDE), ISR, geographic analysis, Real Property Development Plans (RPDP), State and ARNG emergency response plans, and facilities authorizations based on the NG PAM were analyzed to support shared use partnership potential. They are important to determine: Additional space or functionality that may be shared with another agency Existing space that is currently being occupied by another agency or community activity group Opportunities to repurpose space or site elements RC location within an acceptable radius to allow rapid, effective crisis response when paired with an emergency response partner, law enforcement, or other DoD component Identify Potential Shared Use Partners The CFMO provided a comprehensive list of potential partner agencies, as well as a list of current shared use associations that detailed the pros and cons of each relationship. TAG vision was provided to sync leadership drivers and perceptions of the best candidates for partnership. This information, combined with geospatial mapping of potential agency locations and an analysis of facilities were used to develop a list of candidates. Evaluate Shared Use Partnership Candidates After potential shared use partners were identified, each State s ARNG leadership considered the feasibility and benefits of partnership. Possible existing and future FINAL REPORT TO CONGRESS Appendix 115

124 locations that would align with the State ARNG needs and the potential candidate were discussed. This discussion provided the basis for development of a shared use driven COA, if selected by the State. Refer to Section 6 for more information on COA methodology and development. 5. Family Readiness Program Although each Family Readiness Program is unique in size, configuration and support, each is focused on ensuring that soldiers and their families are the top priority. The primary steps described in this section outline the methodology for analyzing a Family Readiness Program, focusing on the facilities and real property inventory assets necessary to support these programs. Collect Existing Information Existing information, data, and conditions of Family Readiness Program at both the unit and State levels were collected from each State. This information included facility and personnel data from many different sources, including: Organization Charts/Manning Rosters State and unitlevel programs Program at the State and unit level. The following questions guided the evaluation: Is the existing facility space in compliance with the facility authorizations outlined in NG PAM , Facilities Criteria? Is the existing space designated for the Family Readiness Program at the State and unit-level adequate for its intended use, and how does it impact the program s mission? Catalog Information Once the existing conditions of programs were properly collected, analyzed, and evaluated, the information was cataloged and packaged into one of the following data categories: State and unit-level Family Readiness Program locations Personnel supporting State and unit-level programs Physical conditions of assigned space at each location Space adequacy of Family Readiness activity at each location Shortfall/excess square footage of Family Readiness Program by location ISR PRIDE, FISP data Space utilization and authorization Master planning documentation As-built drawings State and unit-level interviews Physical inspections AutoCAD and/or GIS maps and databases Analyze and Evaluate Existing Conditions Information was analyzed to determine whether RCs were capable of properly supporting the Family Readiness 6. COA Analysis The COA development and analysis resulted in a recommended modernization plan, or end state, for each State to provide the right facilities in the right location. Stationing analysis, based purely on input from the State, was conducted to advise the TAG and JFHQ staff. All stationing solutions were viewed as a State prerogative, and NGB did not take a position to dictate or direct stationing. COA Methodology Seven steps contributing to the recommendation of a proposed COA or an RC modernization plan are illustrated in Figure Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

125 1 2 Obtain & Analyze Iden fy TAG vision & objec ves State planning drivers What missions are top priorities? What would be the ideal stationing arrangement to support these missions? Where should the RCs be located? 3 Conduct exis ng analysis for the State What locations are critical to support operations and readiness? 4 Review & Select based on State planning drivers & exis ng condi ons from menu of COA op ons What are the State s desirable strategies for maintaining sustainable RC facilities to meet growth or changing force structure? What types of SRM, and ARNG MILCON projects are most important? Develop & Analyze Compare COAs Establish COA op ons using evalua on criteria RC Moderniza on Plan Step 3: Conduct Existing Analysis for the State Prior to the COA development, the State reviewed and analyzed the existing RC stewardship in terms FCA, demographics, and TAB. This analysis laid the groundwork for detailing the baseline established by NGB and developing the options that the State will choose from the national menu of COAs. 8 Mission Dependency Analysis RC contribu on to the ARNG mission ARNG Na onwide Capital Investment Strategy from collec ve State input Figure 29: State ARNG Input Process Diagram Step 1: Obtain Vision from TAG TAG vision addresses long-term RC facility planning goals, such as philosophies of stationing, anticipated missions, desired RC facility capabilities, family support, and relationships with local communities and other agencies. Step 2: Identify State Planning Goals In accordance with the TAG vision, and interviews with senior ARNG leadership staff, each State established planning goals for the RC real property. Questions to consider include: Step 4: Review and Select from National Menu of COA Options The national menu of COA options consists of a range of RC real property alternatives to meet future force structure requirements. Each COA must provide operational improvement and better use of funds and resources in comparison to the baseline alternative. Each COA promotes sustainable, adaptable solutions, distinctive from one another by emphasizing, to varying degrees, mission and operations, demographics, existing facility condition, existing space surplus and shortfall, and site expansion capacity. The range of COA options are described below. Baseline: Given the overarching objective of meeting all future force structure requirements, NGB has chosen the alternative that entails the following solution: Retain all existing RCs and bring them to good condition, maximize site expansion capacity, and build new construction to address current shortfalls. Optimize existing conditions by addressing RC building systems issues primarily on sustainment and restoration projects. FINAL REPORT TO CONGRESS Appendix 117

126 Modernize desirable locations with building additions and pursue new construction at new sites to address space shortfalls. COA 1: Optimize Demographics: Locate RCs in the right locations based on demographics. Each State will determine its optimal demographics profile. COA 1-A: Determine desirable locations and the minimum number of sites needed to cover most of the State, including existing training sites. Continue to station the same units at appropriate existing sites, which should be retained, based on existing facility condition, space shortfall, and site capacity. Bring these retained facilities to good condition and maximize site expansion where possible. Dispose of unwanted sites and relocate units to desirable existing sites or new sites. Acquire new sites and build multi-unit RCs to fix the remaining space shortfall. COA 1-B: Maximize use of existing facilities at demographically optimal locations by relocating one or more units. Retain desirable existing sites based on facility condition, space shortfall, and site capacity. Bring these facilities to good condition, and maximize site expansion. Divest unwanted sites and relocate units to the desired existing sites or new sites. Acquire new sites and build multiunit RCs to fix the remaining space shortfall. COA 2: Optimize Stationing: Station the right units together according to mission and operation. COA 2-A: Determine the number of sites to accommodate stationing based on command-control relationships. Retain desirable existing sites based on existing facility condition, space shortfall, and site capacity. Bring these facilities to good condition and maximize site expansion. Dispose unwanted sites and relocate units to desirable existing sites or new sites. Acquire new sites and build multi-unit RCs to fix the remaining space shortfall. COA 2-B: Similar to the 2-A option, except that a number of sites and desirable locations are driven by State-specific operational needs to support the Defense Support of Civil Authorities (DSCA) mission. COA3: All New: Wipe the slate clean to achieve excellence and sustainability in all aspects. Dispose of most existing facilities, except for selected locations that meet certain criteria. Build all new RCs in accordance with NGB authorizations. Given State-specific planning goals and the existing situation, each State selects different COAs from the national menu for further analysis and evaluation. Documented State planning drivers are also factored into each COA. In addition to the pre-developed COAs, each State also had the option to create hybrid COAs by combining the desirable aspects of the different national COAs and defined specific concepts. Step 5: Develop and Analyze COAs Once the COA options were selected, various demographics and space requirement analyses were performed for comparing the COAs. The following key assumptions are pertinent to space requirement analyses: Baseline space requirement, based on the FY 16/17 force structure and stationing, is calculated in accordance with NG PAM This macro-level space requirement analysis does not include a unit move or re-stationing analysis. Each COA identifies potential planning capacity (number of soldiers) at each desirable location as supported by demographics and retention data. A COA-specific space requirement is established using the square feet per soldier and the parking square yards per soldier. These allowances are calculated based on the State s baseline SF/soldier space requirement and factor in State-specific authorizations. Common space efficiency is accounted for in accordance with NG Pam (a consolidation scenario requires less space than the baseline). Step 6: Compare Using Evaluation Criteria The comparison criteria provided a consistent, objective approach to evaluate various COAs. The primary evaluation measurements align with a band of priorities identified by Congress as critical to successful operations in an RC and are listed below. State input was received to select and define the specific evaluation metrics within each of the priorities. Space Adequacy. Indicates how well a COA meets RC building and parking requirements at the State level. For each site, it is assumed that meeting a minimum of 80 percent of space requirements is acceptable. Space Efficiency. Evaluates the outcome of the RC real property portfolio in comparison to the baseline. The reduction in the number of RCs and the amount of RC space requirements indicates the extent to which time 118 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

127 and resources are efficiently used to sustain the RC real property portfolio. Retention Potential. Identifies geographical areas with positive population growth in the State s target age group and areas that traditionally provide more recruits. Command-Control Adjacency. Conveys a potential benefit by consolidating and returning detachments back with their parent units, collocating or consolidating units from under the same Major Subordinate Command (MSC), or improving command and control capability in a specific geographical location for increased efficiencies or domestic response coverage as defined by the State. The degree of benefit is categorized as low, medium, and high. Readiness/Responsiveness. Measures the distance and time a soldier travels to get to his or her assigned RC, reflecting the potential disruption to personnel readiness. A greater distance and time indicates a higher chance for a soldier to request for another unit assignment that requires less commute time. Personnel readiness may be decreased if the individual needs training to qualify for another position and leaves another position vacant. Other important aspects of responsiveness include travel distance and time between RCs and training sites, and the response time for meeting DSCA mission. The latter is measured in terms of how close the RCs are to primary roads and designated, State-specific DSCA locations. Each State s specific mission and circumstances may call for different measures to assess readiness. Implementation. Evaluates at a high level the effort required for implementing each COA in terms of costs, site acquisition, and potential disruption to a unit s operation during renovation and modernization of retained RCs. Costs considered include SRM and MILCON costs, which require upfront capital outlay, as well as the Net Present Value (NPV), which shows the total costs to the federal and State governments over 30 years. Lower SRM and construction costs, NPV, and a reduced acreage acquisition indicate that the associated COA is more easily achievable. Total required funding for each COA consists of the following factors: Building Alterations costs, which equal 50 percent of PRV Building Addition and New Construction, with cost per SF based on the DoD Pricing Guide and typical ARNG military construction markups. Apply site cost at 18 percent of building cost (based on previous project experience) Net Present Value, applying a discount rate of 4.7 percent, (based on GSA standard) and an escalation rate of 1.8 percent, based on DoD pricing guide All retained RC facilities involve addition and alteration, including: Reconfiguring existing spaces to meet space requirements Bringing an existing RC facility to good condition Constructing an addition to the existing RC based on site capacity All occupants required to temporarily relocate from existing RCs to swing spaces For planning purposes, the following site sizes are assumed for constructing a new RC on a new site: 20 acres for an RC less than 200,000 GSF. This assumption is based on the site selection criteria stated in accordance with NG Pam , that the site should contain at least 15 acres to allow for buildings, utilities, roads, and parking while still meeting AT/FP standoff distances. 30 acres for an RC more than 200,000 GSF. A regional RC site should contain at least 20 to 30 acres. The scoring system consisted of two components: the raw scores and the weighted scores. First, each measure was scored using a three-point scale (the higher score being superior). Next, each raw score was multiplied by a weight point, representing a priority of evaluation criteria determined by each State, to get a weighted score. COAs with the highest total weighted scores are preferable. Multiple COAs could be recommended for a State, in which case the recommended COA could be a hybrid of two or more COA options. The hybrid COA captured additional State input regarding retained locations and project types. Deferred maintenance, with costs based on facility condition assessments FINAL REPORT TO CONGRESS Appendix 119

128 An example COA scorecard is below: Evaluation Criteria Weight Critical Measurements Scale (3-point) COA 1 COA 2 COA 2 COA 1 pt 2 pts 3 pts Baseline 1-A.1 1-A.2 1-B 2-A 2-B Hybrid 1 % space requirements met FY17 < 80% 80% - 90% > 90% Space Adequacy 9 2 % MV parking space requirements met FY17 < 80% 80% - 90% > 90% % change in no. of RCs < 15% Reduction 15% - 35% > 35% Reduction Space Efficiency 3 4 % change from baseline space requirements < 10% Reduction 10% - 25% > 25% Reduction % RCs in positive target population growth areas < 7% 7% - 15% > 15% Recruiting Potential 10 6 % historical recruitment counts within a 50-mile radius of all RCs < 90% 90% - 95% > 95% Command- Control Adjacency 5 7 Improvement in command control adjacency LOW MEDIUM HIGH Readiness 6 8 Avg. Soldier s travel distance to RC (miles) 9 Avg. travel distance from RC to equipment site > < > < Sustainment and construction costs > $805 M $720 M - $805 M < $720 M Net Present Value (NPV) - 30-year > $950 M $875 M - $950 M < $875 M Implementation 1 12 No. of retained RC facilities requiring swing space during renovation 13 Acres of sites to be acquired > < > < Table 13: Sample COA Scorecard TOTAL SCORE Step 7: Establish RC Modernization Plan Once a COA was identified for each State, a list of required project actions was established for each RC location included in the proposed end state. This was a collaborative process between the State and analysis teams to shape the State s RC footprint. Factors such as planned projects, joint/shared use opportunities, expansion capacity, recent land acquisitions, and land availability were evaluated. Project actions and corresponding ROM cost estimates approved by the State form the basis of a recommended implementation plan. The process of developing the implementation plan is described in section 8 CIS. 120 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

129 7. Mission Dependency Index The organizing principal behind the MDI is to understand the operational capabilities that are enabled by facilities. This understanding is derived from the MDI s application of probability and severity using the concepts of interruptability and relocateability. Interruptability assesses how quickly ARNG mission readiness is impacted if an RC s operations are disrupted. Relocateability evaluates how difficult it is to relocate, reconstitute, or replicate mission-enabling capabilities if an RC s operations are interrupted. When combined, these two perspectives provide a simple, objective, and credible way to associate mission readiness with facility operations. MDI scores were calculated by asking the State s ARNG leadership to choose a level of readiness impact based on questions of interruptability and relocateability for each RC. The senior Operational Commander s choices are listed in Table 14. INTERRUPTABILITY How fast would the response action be if the Readiness Center s operations were interrupted? (Assume complete unavailability). Immediate Brief Short Prolonged Response action would occur immediately. Any interruption would immediately impact mission readiness. This implies there are automatic measures that go into effect the moment operational or support functions enabled by the facility are interrupted. Response action would occur within minutes or less than 24 hours. This implies a response is based on the operational commander or resource manager who authorizes the response action. This also indicates that there are sufficient redundancies built into the system to absorb only brief interruptions before mission readiness is adversely impacted. Response action would occur within 7 days or less than a week. For example, if the facility is not operational for a period of days (i.e. closed for weekends on a regular basis), short interruptions are likely acceptable. This also means there are sufficient and effective redundancies built into the system to account for short interruptions. Response action may be delayed for a week or more without adverse impacts to mission readiness. This recognizes that there are risks to mission readiness, but there are well understood solutions and/or sufficient redundancies built into the system to avoid or mitigate adverse impacts to mission readiness. RELOCATEABILITY How difficult would it be to relocate or replicate the mission-enabling capabilities of the Readiness Center if they were interrupted? Impossible Extremely Difficult Difficult Possible An alternate location is not available. Mission readiness is severely impacted for the foreseeable future. An alternate location exists with minimally acceptable capabilities. A significant in-house effort in terms of money and man hours or the dislocation and/or disruption of another major mission-enabling capability would be required for relocation and/or replication of the mission capabilities that the RC provides. An alternate location exists with acceptable capabilities and capacity. Relocation would require a measurable and unbudgeted level of effort in terms of money and man hours, but mission readiness capabilities would not be compromised in the process. An alternate location is readily available with sufficient capabilities and capacity. The level of effort is budgeted for and/or may be easily absorbed. Table 14: MDI Analysis: Questions and Possible Answers FINAL REPORT TO CONGRESS Appendix 121

130 This information translated each State s concept of operations into three tiers of criticality. Interruptability Immediate Prolonged Relocatability Impossible Possible TIER 1 TIER 2 TIER 3 Figure 30: MDI tiers of criticality When applied within a given concept of operations, an RCs MDI score reports the relative importance different RCs provide to overall ARNG mission readiness. The analysis used to generate MDI scores applies an operational perspective. This is important because it reports information from the perspective of how a senior Operational Commander thinks as opposed to other ratings that score facilities based on their compliance with rigid standards such as F, Q, and C ratings. As a result, scores are sensitive to personal experience, resource capabilities, and operational risks while considering the strengths, weakness, threats, and opportunities specific to individual RCs. MDI Analysis Process The MDI analysis was conducted with senior Operational Commanders who have resource decision-making authority over the whole inventory of RCs for each State. Three phases of activity accompany the effort: pre-analysis, analysis, post-analysis. Pre-analysis activities completed by Jacobs Using the preferred RCTMP COA, RC inventories for the current and end states were detailed and preloaded into the MDI analysis tool. The following pre-reading materials were included in the notification: ARNG MDI White Paper, ARNG MDI Reference Sheet, and Preferred COA Summary that includes RC inventories for current and end states. The objective in providing COA Summary and RC inventories was to verify accuracy of current state and end state RC inventories contained in the MDI tool. Analysis Activities completed by Jacobs with the ARNG State leadership Reviewed how the MDI fits within the context of the RCTMP and how the COA and concept of operations are relevant. By generating MDI scores for the current and end states, the relative contribution of the preferred COA to ARNG mission readiness was determined. Defined the concept of operations, within the context of the MDI, as the thought process that senior Operational Commanders apply to determine how to best utilize their resources to achieve mission objectives. Conducted the MDI analysis to calculate scores for the preferred COA and current state and reviewed two quality control checks made during the analysis process. Performed a third MDI quality control check. Concluded MDI analysis and reviewed next steps. Quality assurance checks were explained and performed to ensure accuracy of analysis results. Pre-analysis notifications were sent to MDI analysis participants. 122 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

131 Post-analysis activities completed by Jacobs Further quality assurance checks were conducted. Analysis results were evaluated for completeness and identified any outliers. Jacobs also validated any proposed changes with the respondents. A summary report was created that provided an overview of the process, outcome, and application of the analysis results. The report was delivered electronically to the Operational Commander and/or representative(s) and was considered complete upon his/her final approval. MDI Score Normalization Each answer to the questions of interruptability and relocateability was given a score. Initial scores ranged from 40 to 100 with 100 indicating the highest mission criticality. By convention, the lowest MDI was 40 when a facility is used for ARNG purposes. To align these scores with the CI and SUI, the MDI scores were normalized using the following formula. Normalized MDI Score = 100 * (100 MDI score) / 60 Ques on 2: Relocatability Impossible Extremely Difficult Difficult Possible Immediate Response Ques on 1: Interruptability Brief (within hours < day) Short (days < week) Prolonged (> week) Figure 31: MDI score matrix 60 is the range of original MDI scores from 40 to 100. This process retained the original rankings by the States and then scaled to match the other indices. FINAL REPORT TO CONGRESS Appendix 123

132 8. State Level Capital Investment Strategy Overview The State CIS effort yields a prioritized project list with estimated funding amounts for each State, based on the recommendations from other tasks FCA, Location and Demographics, TAB analysis, shared use, and COA analysis. Projects identified by each of the 54 State/ Territory investment strategies later were combined to form a complete transformed nationwide RC portfolio in the ARNG Nationwide CIS effort. The State CIS is structured to facilitate both short- and long-range solutions by proposing and balancing two key components: MILCON. MILCON includes new construction, additions or alterations, and one-for-one demolitions of existing RCs in line with the COA s proposed end state real property portfolio. SRM. SRM opportunities at existing facilities were identified through the FCA effort. Completing these projects would bring the facilities to good condition. Together, MILCON and SRM address actions needed to improve the quality of each facility and provide the right number of RCs to support the end state portfolio requirements. Each State/Territory prioritized their MILCON and SRM projects to generate comprehensive, ranked lists using multiple criteria that best serve the needs of the RCs. The outcome of the CIS effort for each State was rolled up to a nationwide strategy. To ensure that resources and funds are allocated most effectively to support the ARNG s operation, the priorities and urgent needs of each State were further prioritized at the national level. Methodology for determining national-level priorities is discussed under Operational Readiness Analysis Methodology in Section 9. Data Collection State CIS analyses and recommendations were based on each State s data and other tasks performed in the study. State information for review is included in the following data sources: Annual TAG Narratives, Master Plan document, FISP, RPLANS, ASIP, ISR, FMS Locations, current project Lists (Long Range Construction Plan and Sustainment, Restoration, and Modernization spreadsheets) and/or demolition and divestment cost. Information obtained from other tasks of the study includes: SRM and cost estimates based on the identified facility deficiencies and costs from the FCA task Authorized units, unit strength and requirement shortfalls from the TAB analysis task Optimal site recommendations and expansion capacity from location and demographics analysis COA recommendations for RC locations included in the proposed end state & ROM cost estimates from the COA analysis State Project Prioritization The MILCON and SRM projects from the COA analysis and the FCA task were prioritized to generate a one-tomany (1-N) list for each State. The prioritization process begins using objective criteria for scoring the projects. The next step is to make adjustments to incorporate the subjective factors that consider special circumstances from each State to best meet specific needs. MILCON projects were evaluated to establish priority using the following criteria: 1 Force structure impact. Does this project enable or assist the State to obtain a new unit(s)? 2 Facility condition impact (ISR & FCA). What is the condition of the existing facility? How much would this project improve the overall condition of its existing portfolio? 3 Facility age factor. How old is the existing facility that will be affected by this project? 124 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

133 4 Master plan impact. Does this project align with the State s master plan? 5 Real estate impact. Are the project site and land identified and available? 6 Safety factor. What is the level of safety risks associated with the existing facility included in this project? 7 Environmental factor. What is the level of environmental risks associated with the project site? 8 Force structure impact. What is the authorized strength supported by the project? 9 Force structure impact. What is the number of units supported by the project? 10 Space impact. What is the existing space shortfall ratio to meet the requirement? 11 Demographic impact. Is the project location supported by demographic growth? 12 Real estate impact. Are there residual impacts to other facilities? Each criterion is associated with an objective set of classification and analysis points so that each project can obtain its priority score accordingly. In addition to scoring of projects, the following steps were taken to conclude MILCON analysis: Comparing the preliminary list to the State s LRCP to check for alignment Incorporating important subjective factors that allow for special situations not factored into the prioritization system Obtaining the State s buy-in on the preliminary prioritized list SRM projects were evaluated to establish priority using the following criteria: 1 System deficiency factor based on FCA. What level of system deficiency will be corrected? 2 Major system priority. What is the pertinent building system? 3 Health and Life Safety (HLS) factor. What is the associated level of HLS risks? 4 Energy improvement. What is the level of improvement in energy consumption and preservation? 5 Facility condition impact (ISR & FCA). What is the existing condition of the facility? 6 Optimal location factor. Is the facility in optimal location that will be retained in the long run? 7 Work criticality. How much does the work contribute to the overall facility condition? 8 Cost factor. How much of the capital resource is needed? Each criterion is associated with an objective set of classification and analysis points so that each SRM need can obtain its priority score accordingly. In addition to the scoring, following steps were taken to conclude SRM analysis: Incorporating key subjective factors that allow for special situations not factored into the prioritization system Obtaining the State s buy-in on the preliminary prioritized list Adjusting priority and regenerating projects list Key assumptions regarding MILCON and SRM projects and costs include: Project lists (MILCON and SRM 1-N lists) create a snapshot of needs at the time of the study Proposed MILCONs and SRM needs are not readily executable projects, but rather high-level guideline to achieve the end state; Scope and feasibility are to be developed by each State ROM construction costs are based on DoD pricing guide ( PAX Newsletter) MILCON costs are escalated at 1.8 percent per year to FY 2017 to account for the time required for funding approval. The inflation rate is based on DoD pricing guide (2012 PAX Newsletter Inflation Guidance) SRM costs are shown in the dollars at of the time of the FCA FINAL REPORT TO CONGRESS Appendix 125

134 9. Operational Readiness Analysis The operational readiness analysis uses verifiable facts and mission-oriented, risk-based information to produce an ORI score for the entire RC inventory. The ORI reports how well RCs are able to support ARNG mission readiness objectives. ORI scores were calculated as follows: CI, SUI, and functionality (FI) were obtained for each RC. These scores were combined to compute the SI for each RC. The SI is a composite score that reports how well a RC complies with ARNG facility standards. Higher scores represent better compliance with ARNG standards and objectives. A Mission Dependency Assessment was performed. This assessment obtains inputs through a facilitated survey to compute a MDI 3 for each RC. 4 MDI scores reflect the Operational Commander s evaluation of the interruptability and relocateability of the mission enabling functions garrisoned at each RC. Higher scores report greater mission dependency on the RC based on the State s concept of operations. RCs with too high of a MDI score likewise indicate potential single points of failure or risk, which is something that is actively considered and mitigated through the concept of operations used. ARNG Na onwide Capital Investment Strategy Stewardship Opera onal Readiness Mission Dependency The ORI is a compilation of the SI and the MDI. ORI scores were rolled-up to the State and the national level weighted by the square footage of RCs. At this level, ORI reports a measure of operational capability balancing compliance with static ARNG facility standards and dynamic operational considerations and risk. Higher ORI scores represent a more efficient and effective operating system, but too high of an ORI score represents a system with limited redundancy and resiliency. MDI )/ 2) Operational readiness levels are communicated via the ORI score of the entire RC portfolio. The ORI change between the current state and end state was determined by the number of CIS projects completed from each of the 54 RCTMPs in the investment timeframe. The ARNG planning timeline for the transformation program is 15 years. The ORI case analysis was evaluated as a three dimensional problem. Money was an input variable defined by the amount of MILCON and SRM budgeted each year. Time was fixed with the investment horizon set at 15 years. Scope was the output variable reporting the operational readiness of the entire RC portfolio communicated in terms of ORI. Comparing different investment strategies was further simplified by evaluating changes in ORI scores for given MILCON and SRM budget projections and the underlying traditional facility metrics. Figure 32: Operational Readiness Index diagram 3 Mission dependency is a critical key performance indicator identified by the Federal Real Property Council that establishes government-wide policy and reporting requirements for all federal real property assets. 4 Many agencies including the US Navy, US Air Force, US Coast Guard, and NASA use a mission dependency index calculated that same way used in this study to objectively report the relative contribution different real property assets make towards ARNG mission readiness objectives. ORI Calculation Example The following is a basic example that demonstrates how ORI was computed for the national RC inventory across different periods of CIS execution. The example includes five RCs. RC #1 represents a central headquarters. In the current state example, RC #2 represents a regional command and control hub and RCs #3, #4 and #5 are smaller, single unit facilities. The example RCTMP reduced the number of RCs from five to four, but increased 126 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

135 the capacity and material standards to 100 percent compliance with ARNG facility standard. The concept of operations in the example end state includes RC #3 becoming a regional command and control hub and RC #5 being divested from the inventory. Detailed metrics and information on RCs in the current state are as follows: Current State CI Actual ksf Required ksf SUI FI SI MDI ORI RC # RC # RC # RC # RC # Summary Table 15: ORI calculation sample: current state In the current state, the average CI, weighted by square footage, is 64.6 based on a scale where 100 is like new condition. The summary of other metrics likewise reports their weighted score for the portfolio. The SUI is a percentage of actual space (ksf refers to 1,000 s of square feet) divided by required SF expressed on a scale. The FI reports compliance with ARNG configuration standards akin to the ISR F-score. The SI is calculated using the condition, space utilization and functionality indices, and ORI is a compilation of the SI and MDI scores. MILCON projects are then executed in each of the next five years in order of the RC number. Each project fully corrects facility short falls found at each RC. This includes correcting all physical and functional discrepancies and increasing the actual size of the RC to meet its full space requirement. Changes at each RC are reflected through changes in the information highlighted for each RC in each successive year. Year 1 CI Actual ksf Required ksf SUI FI SI MDI ORI RC # RC # RC # RC # RC # Summary Table 16: ORI calculation sample: future years FINAL REPORT TO CONGRESS Appendix 127

136 Year 2 CI Actual ksf Required ksf SUI FI SI MDI ORI RC # RC # RC # RC # RC # Summary Year 3 CI Actual ksf Required ksf SUI FI SI MDI ORI RC # RC # RC # RC # RC # Summary Year 4 CI Actual ksf Required ksf SUI FI SI MDI ORI RC # RC # RC # RC # RC # Summary End State CI Actual ksf Required ksf SUI FI SI MDI ORI RC # RC # RC # RC # RC #5 Summary Table 16: ORI calculation sample: future years (continued) 128 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

137 In each year, the execution of MILCON projects improves the CI, SUI, FI, and thus the SI to 100 percent indicating compliance with ARNG facility standards. Likewise, with each MILCON project, the concept of operation is being modified by expanding capacity and moving capabilities around. The new concept of operations is represented by changes in the MDI score each year. The product of executing the CIS is the ORI for the RC inventory increases from 74.9 to 96.0 over the course of five years. This example represents a 28 percent increase in the operational readiness across this example RC portfolio. ORI Analysis Development The next step in the analysis was to evaluate the different ORI scores that were achieved by different investment strategies. This can be demonstrated by changing the target SI. In the ORI calculation example above, the target SI was 100. Figure 33 ORI SI Targets shows the effect on ORI achieved if the target SI objective is varied by 10 between 70 and 100. As the stewardship index increases, the overall operational readiness is expected to increase as a measurable output for the program over a measurable timeframe. By using different SI targets, different ORI scores were achieved for the inventory at the end of 5 years. Figure 34 SI Cost Targets shows how various SI target levels achieve different ORIs once the total CIS program has been completed. The ORI analysis used to develop and analyze different investment strategies in the ARNG independent study is complex considering the 1,400+ MILCON projects detailed in the 54 RCTMPs. The ARNG ORI analysis considered operational risks, the compounding effects of degradation, and the complex relationship between MILCON and SRM funding sources in addition to geographical and project specific variables. Change in ORI based on Different SI Targets Operational Readiness Index SI = 100 SI = 90 SI = 80 SI = Investment Horizon Years Figure 33: ORI SI targets FINAL REPORT TO CONGRESS Appendix 129

138 The ARNG developed a range of scenarios based on different funding levels to execute the RC transformation program. The time needed to complete the full program varied based on the funding level, so a 15 year planning timeframe was used to measure where the ARNG will be at the end of each scenario with respect to the 54 RTCMPs. The goal for each scenario is to demonstrate a change in ORI, and to convey the underlying metrics for improvement. Scenario 1 Current Funding demonstrates how the portfolio will decline under the existing levels of funding. Scenario 2 Baseline demonstrates a supplemental increase in the MILCON investment. Scenario 3 Affordable Readiness demonstrates a strategic balance between SRM and MILCON to improve the portfolio to a traditional fair level. Scenario 4 Get to Green demonstrates a significant investment into the portfolio to transform the portfolio to a traditional state of good repair. The ORI analysis provides targeted insight into the tradeoffs that must be made in funding a program as large and complex as the ARNG RC portfolio. Advantages to this analysis include simple, objective and verifiable performance metrics that predicatively model the effect different investment strategies will have on RC operational readiness. This method is mission-oriented and risk-based providing significant advantages over common and more traditional approaches. Traditional approaches are limited to evaluating RC compliance with static ARNG facility standards. The operational readiness analysis was driven by the Operational Commander s view of current and anticipated mission. The difference was the use of the MDI that translates operational risks into facility concerns and forward looking degradation algorithms that model facility performance by forecasting the complex relationship between MILCON and SRM funding sources. $20,000,000 Cost of CIS Programs based on Different SI Targets ORI = 96 $19,000,000 $18,000,000 $17,000,000 ORI = 91 $16,000,000 $15,000,000 ORI = 86 $14,000,000 $13,000,000 $12,000,000 ORI = 82 $11,000,000 $10,000, Figure 34: SI cost targets 130 Appendix ARNG READINESS CENTER TRANSFORMATION MASTER PLAN

139 Degradation Methodology The degradation methodology recognizes the interdependency between sustainment, condition and required MILCON to correct the facility deficiencies at the time of the project 5. The ARNG model degradation curve shown in Figure 35 was developed based on a US Marine Corp RC Facility. The degradation methodology assumed a penalty rate associated with underfunding sustainment for the portfolio. In the ARNG model, underfunding facility sustainment results in a penalty that is compounded into the CI of the facility. The rate was based on an S-curve recognizing that in the early years of a new or renewed facility, the impact is not significant. As the CI falls, the penalty rate increases to account for collateral damage that typically occurs (i.e. roof decking with flashing damage). The different amounts of sustainment and MILCON funding used in the ARNG scenarios demonstrate the impact of degradation to the facility metrics over time. When minimal MILCON funding is available to correct current deficiencies and minimal sustainment is available to reduce the backlog growth, the condition reaches poor and failing conditions more quickly. The degradation component of the model is dynamic and modeled for each RC for each year based on their funding. 5 National Academy of Sciences, Intelligent Sustainment and Renewal of DOE facilities and Infrastructure, Page 67; html Deferred Maintenance Penalty Rate Profile 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% Penalty Rate 2.00% 1.00% Condition Index % Figure 35: Deferred maintenance degradation curve 5 National Academy of Sciences, Intelligent Sustainment and Renewal of DOE facilities and Infrastructure, Page 67; FINAL REPORT TO CONGRESS Appendix 131

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