Global Transformation of the Naval 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

Today’s Brief NAVFAC Overview Major program initiatives that may affect you Our Partnership Challenges September 2004

Our Business…Facilities Engineering BRAC AT-FP Ashore Community/Gov’t Liaison AICUZ Range Mgmt 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 Facilities Contracting / Privatization Tech Liaison Contractors, Engrs Financial Management Recapitalization Restoration Modernization Sustainment Operate and Maintain Venture Acquisition PPV / EUL / Lease - Construct Environmental Planning, Compliance, Conservation & Cleanup September 2004 6 3 2 3

Structural Alignment Mis Fragmented facilities support to Regional Commanders Split accountability Duplication, redundancy, and too much overhead September 2004

Structural Alignment End State Commander Navy Installations CFFC PRIDU ADDU CFFC PACFLT NAVSUP NAVFAC 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 September 2004

Facilities Engineering Commands Transformation 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) EFA = Engineering Field Activity OICC = Officer in Charge of Construction PWC = Public Works Center IPT = Integrated Product Team September 2004

Functional Alignment “The Ultimate Force-Multiplier” Business/Support Lines NAVFAC HQ Commands NAVFAC LANT NAVFAC PAC Spec. Ctrs. Cont. Engineering (CE) Vertical: Mission Accountability Client Interface for Workload Execution Performance Assessment Environmental (ENV) Real Estate (RE) NAVFAC LANT NAVFAC PAC Base Development (BD) Navy Crane Center NAVFAC Midwest NAVFAC Europe NAVFAC Hawaii NAVFAC Northeast NAVFAC Southeast NAVFAC Northwest NAVFAC Southwest NAVFAC Marianas NAVFAC Far East Capital Improvements (CI) NAVFAC Mid-Atlantic NAVFAC Washington NAVFAC Engineering Service Center Public Works (PW) NAVFAC Expeditionary Logistics Center Horizontal: Common Business Processes Workload Analysis and Shaping Metrics Acquisition (ACQ) Financial Mgmt (FM) Cmd Info Officer (CIO) Chief Engineer (CHENG) Counsel (CNSL) September 2004

NAVFAC FY04 Macro Funding Flow PRIVATE INDUSTRY $6 Billion Construction and Service Contracting FACILITIES ACQ $7.8 Billion Plng/Design/Const $4.9 B 20% 76% HQ $.04 Billion 1% Public Works Operations $0.9 B 3% PRIVATE INDUSTRY $6 Billion 84% Seabee Logistics Support $.16 B September 2004

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 September 2004

Military Construction Program $ Billions $ Billions 0.0 0.5 1.0 1.5 2.0 2.5 2000 2001 2002 2003 2004 2005 0.0 0.5 1.0 1.5 2.0 2.5 2000 2001 2002 2003 2004 2005 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 September 2004

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 September 2004

Number of Projects in FY 2004 and FY 2005 MILCON Program Number of Projects in FY 2004 and FY 2005 Estimated $ Value NAVFAC Atlantic NAVFAC Pacific Southwest Division Southern Division Total Design Build FY 2004 Less than $5 M 9 5 1 4 $5 M - $10 M 3 2 6 Greater than $10 M 18 11 14 12 FY 2005 16 7 September 2004

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 September 2004

Project Work Projections 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 September 2004

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 September 2004

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 September 2004

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. September 2004

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 September 2004

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 September 2004

Partnership Counting on your Help, Talent, and Partnership Together, committed to become the best value provider of Facilities Engineering, Construction, Maintenance & Acquisition Fleet Focused Surge Enabler Interdependent Global Team Innovative Ever Faster Continuous Cost Reduction Counting on your Help, Talent, and Partnership RIGHT FORCE----RIGHT READINESS----RIGHT COST September 2004

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