Recovery.gov - Track the Money

The Department of Defense is pursuing three broad goals with its Recovery Act funding:

1. Preserve and create American jobs
   
2. Care for U.S. Service members and their families
   
3. Improve the Department’s energy efficiency
   

Preserve and Create American Jobs:

Over four thousand projects total $4.26 billion for installations in all fifty states, two territories, and the District of Columbia. Another $2.18 billion is available for new facility construction, including $1.33 billion for the replacement of aging hospitals. Infrastructure investments in existing buildings, such as defense medical facilities and family housing, can rapidly employ local contractors.

Care for U.S. Service Members and their Families:

New and improved facilities will benefit the quality of life for our troops and their families. For instance, $1.33 billion is available for building new hospitals at Camp Pendleton, California; Fort Hood, Texas, and Naval Air Station Jacksonville, Florida. Another $115 million is for family housing construction. Other examples include $240 million for 21 Child Development Centers, $100 million for 2 Warrior in Transition facilities, and $555 million to reduce the impact of the down-turn in the housing market on Service members through the expansion of the Homeowners Assistance Program.

Improve the Department’s Energy Efficiency:

Environmental sustainability and energy conservation will be integrated into the design, development, and construction of projects in accordance with Executive Order 13423, the Energy Policy Act of 2005, the Energy Independence and Security Act of 2007, and local directives. This reduces energy demand at installations; encourages green jobs and construction; and sets the example of renewable energy production.

The Recovery Act funds $0.12 billion for energy efficiency improvements at 48 facilities, via the Energy Conservation Investment Program (ECIP), a program with a proven track record of financially beneficial savings from energy and water conservation.

In addition to facility improvements, the Recovery Act funds $0.3 billion for 51 energy research programs by the Military Services to reduce the Department’s energy demand via increasing fuel efficiency or advancing new technologies related to alternative energy sources. This research could directly benefit the Department and the nation by reducing the cost and security burden of fueling operational forces.

The following represents the historical competition achievements within the Department of Defense:

• FY 2007 - 63%, or $208B, of available dollars competed
  
• FY 2008 - 64%, or $252B, of available dollars competed
  

The Department of Defense continues to place an emphasis on meaningful and effective competition to get the best deal for the warfighters and the taxpayers. Given the importance of the Recovery Act dollars in stimulating the economy, the Department has taken extra steps, including frequent communications with Senior Procurement Executives (SPEs), regarding the expectations for contract implementation. SPEs in the Department are communicating more frequently with their respective acquisition workforce, including flash notices and reminders of Recovery Act regulations, specifically the importance of competition.

Competition is the preferred method for contract award. Consistent with law and OMB guidance, there may be limited situations where there is an authorized reason for not competing the requirement. Such cases require a determination by the contracting officer and higher level approvals in accordance with Part 6 of the Federal Acquisition Regulation, unless specifically exempted by law such as awards to 8(a) concerns under the Small Business Act.

At this time, the Department of Defense expects to award at least 80% of contract dollars on a competitive basis. This projection is based on acquisition plans that the Military Departments developed.

The following represents the historical record of total obligations as Fixed Price contract type, as recorded in FPDS-NG (January 15, 2009):

• FY 2007 - 62%, or $205B, of total obligations awarded as Fixed Price contracts
  
• FY 2008 - 63%, or $247B, of total obligations awarded as Fixed Price contracts
  

Firm Fixed Price is the preferred contract type for Federal procurements. The planned obligations align with the goals of the Recovery Act, the guidance from OMB to maximize use of Firm Fixed Price, and President Obama’s March 4 Government Contracting memorandum regarding the use of Fixed Price contract type. Based upon this emphasis on contract type, the Department forecasts 90-95% of anticipated Recovery Act funds obligated as Fixed Price. This projection is based on acquisition strategies developed by the Military Departments.

Since the signing of the Recovery Act, the Department of Defense has worked very closely with the Office of Management and Budget (OMB) and other White House offices to effectively implement its funding. The Secretary of Defense designated the Principal Deputy Under Secretary of Defense (Comptroller) as the Department’s primary Point of Contact to the White House. Within the Office of the Under Secretary of Defense (Comptroller) a senior steering committee oversees implementation, establishes polices and procedures, and reviews key metrics as the funds are obligated and executed.

Within the Department, a working group – which includes OMB and the Department of Defense Inspector General – has been meeting weekly to coordinate the implementation of Recovery Act funds. Also, the Military Services have established their own working groups to coordinate execution down to the installation level.

In accordance with legal and executive directives, Department staff makes weekly reports to OMB, Recovery.gov, and the Office of the Vice President. Daily phone calls occur between OMB and Department staff. Reports with project-level plans, including projected costs and deadlines, are submitted on a scheduled basis.
Review of the progress and performance of major programs, including risk-mitigation and corrective actions, is guided by the Risk Management Plan developed by the Department in accordance with OMB Circular A-123, Management’s Responsibility for Internal Control, Appendix A. The Department’s current Appendix A process has a Senior Assessment Team that is lead by PDUSD(C), who is also the Responsible Officer for the Department’s Recovery Act funding. As part of the Risk Management Plan, each program will be evaluated on a quarterly basis, with a Risk Profile being submitted to the Office of the Under Secretary of Defense, Comptroller and Chief Financial Officer. This process is further elaborated in the detailed program plans.

Due to the magnitude of normal budgeting for national defense, the Department, the Office of the Under Secretary of Defense (Comptroller) has established a centralized Business Enterprise Integration System (BEIS) for financial review and internal control. The Department will use BEIS to handle financial tracking, particularly obligation and execution data, at a project-level. This ensures compliance with general financial management policies pertaining to the Recovery Act.

On the department-level, the Department of Defense Inspector General will use additional funding to augment its staff for oversight of Recovery Act funds. A separate unified plan, tailored specifically to Inspector General activities and functions, is being prepared by the Department of Defense Inspector General for OMB.