Transcript building strong

USACE Civil Works Infrastructure:
Lifecycle Portfolio Management &
Innovative Solutions such as
Alternative Financing
Pauline Thorndike
Alternative Financing Program Manager
Directorate of Civil Works
HQ, U.S. Army Corps of Engineers
July 15, 2016
US Army Corps of Engineers
BUILDING STRONG®
BUILDING STRONG®
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USACE Civil Works Programs
Recreation areas:
370 M Visitors/yr
Generate $18B in
economic activity,
500,000 jobs
25% of Nation’s
Hydropower:
$1.5B in power
sales
#1 Federal Provider
Of Outdoor Recreation
55,390 Miles Of Shoreline
at USACE Lakes
12,000 miles of
Commercial Inland
Waterways transport
goods at
½ the cost of rail or
1/10 the cost of trucks
926 Shallow &
Deep Draft
Harbors
~14,700 Miles of
Levees
Stewardship of
12 Million Acres
Public Lands
137 Major Environmental
Restoration Projects
US Ports & Waterways Convey > 2.2 billion Tons Commerce
Corps Maintained Ports Provide Strategic Deployment Capability
Harbor Maintenance Trust Fund collects $1.6 billion revenue
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Challenges and Opportunities
 Infrastructure Investment = Global Challenge
 Corps Civil Works Portfolio: 3,000+ Operational
Projects
 Corps Civil Works Asset Classes are Diverse:
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Flood & Coastal Storm Damage
Coastal and Inland Harbors
Inland Waterways
Hydropower
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Dam & Levee Safety Programs
Water Storage
Aquatic Ecosystems
Water-Based Recreation
 Demands for CW Infrastructure Maintenance,
Operations, and Capital Investment are
Expanding:
 Civil Works New Construction Backlog  $ 60B
 ASCE: Dams, Levees, IWWs = “D”
 $ 140B
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Civil Works Transformation
Infrastructure Strategy Components
Infrastructure
Strategy
•
Asset Management: Assets identification,
assessment of conditions/reliability,
categorization
•
Life Cycle Portfolio Management (LCM):
Ensure future systems’ viability through risk
assessment and management, funding
prioritization in a systems decision making
process
•
Alternative Financing: Identify alternative
financing mechanisms and options to
leverage funding to increase infrastructure
investments, transfer risk, accelerate delivery
and accrual of benefits, and achieve lower
lifecycle costs. It also focuses on divestiture
to lessen O&M costs.
Asset
Management
Alternative
Financing
Life Cycle
Management
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Lifecycle Asset Management
Modernization
performance
Rehab
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Lifecycle Portfolio Management Process
Assets
Maintenance Mgnt
Improvement
Plans
Condition
Mission
Operational
Condition
Assessments
Facilities & Equipment OCA Models &
Maintenance Asset
Condition (Nat’l
Visibility
QA/QC)
Age
Failures
Repairs
Cycles
Etc.
Risk
Value
Operational Risk
Budget
Assessments
Workbooks/
Utility
Budget
Budget
Model
Prioritization
Development
P(f)
Condition
Risk Buy-down
and
Investment
Consequences
Portfolio Analytics
&
Total Risk Exposure
Project Maintenance
Management Plan
• Full Maintenance
Requirements
• Work Management
& Communications
-Local
-Regional
-National
Benefits
6 information elements required
for effective Lifecycle Portfolio
Management:
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Inventory
Condition
Consequences
Requirements
Prioritization
Execution
BUILDING STRONG®
USACE P3/P4 Journey
 P3/P4 Can Help the Corps/Sponsors Address Two Critical National CW
Infrastructure Challenges
 Existing Infrastructure: Sustain Performance, Extend Service Life, and/or
Buy Down Risk for the Nation
 New Infrastructure: Accelerate Delivery, Reduce Life Cycle Costs and
Achieve Earlier Accrual of Project Benefits to the Nation
 Ongoing P3/P4 Demonstration Program (within existing Auth/Policy):
 Most Mature: Fargo-Moorhead Metro (FRM Construction)
 Most Complex: Illinois Waterway (Inland Navigation O&M)
 Administration Interest:
 OMB
 White House Build America Initiative  Water Infrastructure
 April 2015 Treasury Report  “….years of underinvestment in our public
infrastructure have imposed massive costs on our economy.”
 Congressional, Sponsor, and Stakeholder Interest
 Challenges Under Discussion
 Revenue Generation & Ring Fencing; Budget Ranking & Scoring
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Fargo Moorhead Metro Locally
Lead P3 Demonstration Project
BENEFITS
 Provides benefits to 230,000 people
 Demonstrates ability to use alternative financing for flood
risk management projects
 Significantly reduces the Federal share from $850M to
$450M.
 Provides a tool that can be utilized to implement large
projects.
 Demonstrates risk transfer from the Federal government
to the non-Federal sponsor and to the private contractor.
CHALLENGES
WAY AHEAD
 Clearly identifying the Corps role in design, construction,
and environmental compliance on the portion of the
project to be constructed by the non-Federal sponsors.
 Continue to work with partners to finalize the PPA and
MOU with the Corps.
 Federal appropriations will continue to be a challenge and
near capability funding will be necessary for the project
to function.
 Final development of the RFQ/RFP with numerous other
agreements under negotiation – local joint powers
agreement between 6 entities and the Project Partnership
Agreement and MOU with the Corps.
 Clearly document Corps roles and responsibilities as it
pertains to engineering and environmental items.
 Finalize development of project prescriptive and
performance specifications.
 Next immediate steps: Execute Project Partnership
Agreement/MOU, Joint Project Agreement, hold industry
day, issue RFQ, and Corps issue first construction
contract.
BUILDING STRONG®
Closing Thoughts
 Addressing the Nation’s infrastructure investment needs and
challenges is a shared Federal, state and local responsibility… Not just
about the current and future Corps’ “Portfolio.”
 P3: One tool in the toolbox… Not magic, not suitable for every
project, and not entirely new.
 P3 is not just about money… It’s about transferring risk that will
accelerate project delivery and accrual of benefits to achieve a lower
lifecycle cost
 The Corps doesn’t deliver anything by itself… It’s critical that we not
lose focus on traditional resourcing engines and our local Sponsors as
we leverage alternative financing
 Need some creative “Game Changers” to develop new ways to
address infrastructure needs (both existing and new systems)…
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US Army Corps of Engineers
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