David Pinson
The United States military construction budget grew by 20 percent this year, demonstrating that this sector continues to be strong. A significant portion of this money is going toward renovating and building new healthcare facilities that are over capacity and outdated for the estimated 9.2 million military personnel.
For those in the construction industry, these medical military projects offer a silver lining in an otherwise dark sky. However, breaking into this sector can be difficult. Experience in military and healthcare projects is required, since these projects offer a wealth of challenges unlike those of other construction projects.
THE RIGHT MEDICINE
The U.S. government has the funds to renovate and build these medical facilities due in large part to the Base Realignment and Closure Act (BRAC), which came from the Department of Defense’s (DOD) decision to restructure military bases following the Cold War. According to a Congressional Research Service Report, 35 percent of the medical facilities providing treatment in 1987 were closed by 1997, even though beneficiaries of medical care had only declined by 9 percent.
In 2005, the DOD decided again to realign and close bases, including several medical facilities, for economic reasons. This included closing and realigning two facilities in San Antonio and realigning the Walter Reed Medical Center in Washington, D.C. Funding was established for this restructuring in order to build up the bases that would remain open, including 63 hospitals and 413 clinics, while supporting and relocating the employees and patients of those that would be closing.
Bases such as Fort Bliss in El Paso, Texas, have been allocated $4 billion through 2012 to help manage the three additional brigades — 47,000 military personnel and their families — that are relocating from a base in Germany. At Fort Riley, Kansas, $400 million has been allocated for a new hospital to support a regiment that is being relocated from Korea. The current hospitals and medical clinics must have new facilities, as well as expanded and renovated existing structures, in order to handle this additional pressure.
The majority of these hospitals were constructed and opened during the Vietnam War, making them more than 30 years old. Combine this with BRAC, and the hospitals are nowhere near up-to-date with modern technologies.
As more of our soldiers return from overseas and the military population continues to age, more people are going to need medical care. The DOD requested $452 million this year to construct new medical facilities and update older ones, and it anticipates money will be allocated for this cause for several years to come.
THE CONSTRUCTION PROCEDURE
Constructing these types of facilities can be profitable, but it also offers more building challenges than other hospital facilities. The biggest differences involve the source of the funding, the numerous decision makers that are involved, and the additional construction requirements.
Unlike funding for private commercial real estate projects, funding for these projects are in place each year because it is funded by the government. MEDCOM, a division of the government, includes any military medical construction project under its budgetary items. However, the funds actually come from various organizations and pools of money. Meanwhile, the Corps of Engineers is the entity that pays those involved in the construction and supervises the building of these projects. Before a project can get to this step, it must be planned out and explained to Congress and the corresponding military branch’s medical department before the money will be allocated.
For example, at Fort Bliss, the project is funded by San Antonio’s MEDCOM division, which contracted the management of the project to the Fort Worth Corps of Engineers, even though the project is in El Paso.
If that is not complicated enough, add in the fact that the project teams are often not local or even located in the same town. For the Fort Bliss project, the Fort Worth Corps of Engineers subcontracted a design firm out of Arkansas and a construction team from Dallas and Kansas City. The user’s representative, the Health Facility Planning Administration, which is the voice for the doctors and nurses who will use the facility, has six representatives from Washington, D.C., Alabama and Texas that must be included in every decision. Finally, the Department of Public Works, Base Fire Department, and current hospital commander are vital to any decisions made about the project, making any prospect of a local or regular meeting impossible.
Military hospital projects require a sophisticated communication system to keep everyone on the same page. The same number of decision makers will be included on any project from $250,000 to $250 million, which makes strong leadership and communication skills a necessity.
During construction, military medical facilities must adhere to the same infectious control, phasing and Joint Commission requirements as a regular hospital. However, military hospitals take it one step further by requiring a standard room design known as guide plates. This means that an exam room in Seattle will be the same as one in Fort Riley. This allows military doctors to go into any exam room across the country and know exactly where everything is in that room.
Finally, on top of all these requirements, the government has mandated that all government buildings be LEED Silver Certified. The number of contractors, architects and engineers with all these necessary qualifications is small, making this a profitable and dependable industry for those who are qualified.
FUTURE TREATMENT
Construction for military medical facilities will continue for several years due to the abundance of work currently needed. Unlike the ailing public hospitals, military hospitals do not have to rely on insurance companies to stay afloat since the government is their insurer — guaranteeing a healthy future. Add to that the latest stimulus plan, which has allocated more than $7.8 billion to medical construction upgrades, modernization, and restoration, and there is nearly unprecedented funding for this sector.
For those wanting to break into this construction niche, be prepared. The government has begun getting bids from numerous new contractors, engineers and architects that are all qualified, making this industry much more competitive.
David Pinson is the president of the Dallas division of Walton
Construction Company LLC.