Global Transformation of the Naval Facilities Engineering Command --- Presentation to the Washington SAME DC Post

1. Global Transformation of theNaval Facilities Engineering Command---Presentation to the Washington SAME DC Post RADM Mike Loose Commander, Naval Facilities Engineering Command & Chief of Civil Engineers 23 September 2004

2. Today’s Brief • NAVFAC Overview • Major program initiatives that may affect you • Our Partnership Challenges

3. Community/Gov’t Liaison Range Mgmt AICUZ Tech Liaison Contractors, Engrs Facilities Contracting / Privatization Our Business…Facilities Engineering AT-FP Ashore BRAC • Planning • Strategic • Global • Contingency • Regional Utilities Contracting Energy Real Estate Contracting NWCF Mgmt Renewables • Disposal • Demolition • Excess Facilities • Outleasing CEC Officer/ NAVFAC • Construction • Acquisition Process • MILCON SRM MILCON Financial Management • Recapitalization • Restoration • Modernization • Sustainment • Operate and Maintain Venture Acquisition PPV / EUL / Lease - Construct Environmental Planning, Compliance, Conservation & Cleanup

4. Mis Structural Alignment Structural • Fragmented facilities support to Regional Commanders • Split accountability • Duplication, redundancy, and too much overhead

5. Structural Alignment End State Commander Navy Installations PRIDU ADDU CFFC PACFLT NAVFAC NAVSUP NAVFAC LANT NAVFAC PAC COMFISC FAC Engr Commands/ Reg Engr Regional Commanders FISCs • Established clear accountability to Regional Commanders • Focused/aligned to drive efficiency, effectiveness, and savings • Reduce NAVFAC from 25 to 16 commands

6. Facilities Engineering CommandsTransformation Timeline • FY 2004 • Name Change –Atlantic Division, NAVFAC to NAVFAC Atlantic = Complete • Name Change – Pacific Division, NAVFAC to NAVFAC Pacific = Complete • Establish NAVFAC Midwest (EFA Midwest+PWC Great Lakes) = Complete • Establish NAVFAC Washington (EFA Chesapeake+PWC Washington) = Complete • Establish NAVFAC Mid-LANT (NAVFAC Atlantic Hampton Roads IPT+PWC Norfolk) = Complete • Establish NAVFAC Far East (OICC Far East+PWC Yokosuka) = Complete • Decommission EFA West (Daly City, CA) = 30 Sep • FY 2005 • Establish NAVFAC Marianas (OICC Marianas+PWC Guam) = 1 Nov • Establish NAVFAC Hawaii (NAVFAC Pacific Pearl IPT+PWC Pearl Harbor) = 1 Mar • Establish NAVFAC Southwest (SW Division EFD+PWC San Diego) = 1 Aug • FY 2006 • Establish NAVFAC Southeast (SOUTHDIV, EFA Southeast and PWC Jax) PWC = Public Works Center IPT = Integrated Product Team EFA = Engineering Field Activity OICC = Officer in Charge of Construction

7. Functional Alignment“The Ultimate Force-Multiplier” Business/Support Lines NAVFAC HQ Commands Spec. Ctrs. NAVFAC LANT NAVFAC PAC Cont. Engineering (CE) • Vertical: • Mission Accountability • Client Interface for Workload Execution • Performance Assessment Environmental (ENV) Real Estate (RE) NAVFAC PAC NAVFAC LANT Navy Crane Center Base Development (BD) NAVFAC Hawaii NAVFAC Europe NAVFAC Midwest NAVFAC Far East NAVFAC Marianas NAVFAC Northeast NAVFAC Southeast NAVFAC Southwest NAVFAC Northwest NAVFAC Washington NAVFAC Mid-Atlantic Capital Improvements (CI) NAVFAC Engineering Service Center NAVFAC Expeditionary Logistics Center Public Works (PW) • Horizontal: • Common Business Processes • Workload Analysis and Shaping • Metrics Acquisition (ACQ) Financial Mgmt (FM) Cmd Info Officer (CIO) Chief Engineer (CHENG) Counsel (CNSL)

8. 20% NAVFAC FY04 Macro Funding Flow Construction and Service Contracting $7.2B FACILITIES ACQ $7.8 Billion Plng/Design/Const $4.9 B 76% HQ $.04 Billion 1% Public Works Operations $0.9 B 3% PRIVATE INDUSTRY $6 Billion 84% Seabee Logistics Support $.16 B

9. NAVFAC Products & Services By Business Line Capital Improvements Construction Design A&E Design In-House Specialized Technical Services Ocean Engineering Environmental Environmental Planning/NEPA Environmental Compliance & Conservation Environmental Restoration Base Development Facility Planning Project Development Public Works CESE Mgt/WHE Services Utilities/Energy Facility Mgt and Engineering Services FSC Technical/Program Mgt Real Estate Contingency Engineering Contingency Engineering/Mil Ops AT/FP Program ATFP Products & Services in Capital Imps, Base Dev, and Contingency Engineering Full range of Facilities Engineering Services for USN/USMC Support 351 Deliverables

10. 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 Military Construction Program $ Billions $ Billions COMPLIANCE COMPLIANCE QUALITY OF LIFE OTHER OTHER NEW MISSION EXISTING MISSION REPLACEMENT/MODERN. WATERFRONT/AIRFIELDS BACHELOR HOUSING COMBAT TERRORISM FISCAL YEAR FISCAL YEAR Source: President’s Budget, FY05 Source: President’s Budget, FY05 Program Funding Program Funding

11. Special Items of Interest • Design-Build drives down change orders & claims and enables/leverages innovation and cost savings initiatives by our D/B contractors • Best Value Source Selection incentivizes innovative proposals and reduces cost/construction durations • Changes for our ROICC organizations • Engineering Techs - increased focus on Quality Assurance • Expect top-notch Quality Control from you • Will not tolerate poor safety performance • Past performance evaluated in consideration of contract award

12. MILCON Program Number of Projects in FY 2004 and FY 2005

13. Environmental Restoration, Navy (ER,N) Program • Business Efficiencies/Acceptable Risk • Cost to Complete for Cleanup at Active Bases is $3 Billion. Remedy in Place at all sites by 2014. • Significant opportunity exists in areas of Long Term operations and maintenance for Remedies in place. We want your ideas on how to be more cost effective in this area. • Our acquisition strategy will be focused on performance based contracts and a larger percentage will be fixed price. Project Work Projections

14. ATFP Program • Goals- new program • Quickly shifting from Risk-Adverse to Risk-based strategy • Invest in capabilities with higher risk reduction • Leverage industry developments and NAS North Island test-bed operations • Leverage joint DoD applications Project Work Projections

15. Facility Support Contracts Program • Business Efficiencies • Regional acquisitions, larger and fewer contracts • Standardization of “performance-based” contract templates, linked to service levels • Direct electronic ordering Project Work Projections

16. Sustainable Development FY04 Program Initiatives • Training – Classroom & online • Unified Facilities Guide Specifications • Unified Facilities Criteria - Adding SD requirements/language • Data Collection - Develop case study template - Metering and LEED metrics of projects • Teamed with other Government agencies and private industry to develop “Whole Building Design Guide” URL: www.wbdg.org

17. Transformation – Bottom Line NAVFAC’s transformation is a bold global reshaping to improve our effectiveness and efficiency, significantly reduce costs, and provide our Clients the best products and services.

18. Transformation – What does it mean to You • Enterprise-wide business practices across NAVFAC • Eliminated duplication/redundancy • Easier for you to get the assistance and answers you need whenever and wherever you work with NAVFAC • Optimize technology to leverage our people, our processes, and your capabilities

19. Transformation – What does it mean to You (continued) • Enabled us to sharpen our focus on best value, cradle-to-grave acquisition/engineering • Safety • Superior quality • Responsive/Speed of project completion • Continuous cost reduction • Sustainable development • Commissioning • Timely close-out • Genuine partnering

20. Partnership Together, committed to become the best value provider of Facilities Engineering, Construction, Maintenance & Acquisition • Innovative • Ever Faster • Continuous Cost Reduction • Fleet Focused • Surge Enabler • Interdependent Global Team Counting on your Help, Talent, and Partnership RIGHT FORCE----RIGHT READINESS----RIGHT COST

21. Questions