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AETC housing privatization on-track

RANDOLPH AIR FORCE BASE, Texas (AETCNS) -- Despite delays caused by Hurricane Katrina, Air Education and Training Command is still on track to meet its goal of privatizing 100 percent of military family housing.

The Housing Privatization Initiative was approved by the Department of Defense in 1996 as a more timely and cost-effective way to provide military families with quality housing than the traditional military construction funding process.

Lackland AFB became the first military installation to privatize a portion of its housing in 1998. The first phase of this project provided 420 homes for military families in fall 2001.

AETC is working to privatize the remainder of Lackland's housing requirement under a sole-source initiative with the existing privatized owner, and the real estate transaction for Lackland's Phase II is expected to close in summer 2006.

Little Rock AFB was AETC's second installation to implement a housing privatization program in 2004. This project has already delivered a new community center, and three model homes are expected to be completed by summer 2006.

Before Hurricane Katrina, AETC intended to convey the rest of the command's military family housing to private developers by dividing the remaining installations into two major groups.

Group I included Altus, Luke, Sheppard and Tyndall AFBs. Group II included Columbus, Goodfellow, Keesler, Laughlin, Maxwell, Randolph and Vance AFBs.

However, due to the impacts Hurricane Katrina had on the construction industry, such as nationwide cost increases generated by material shortages and limited labor resources, the command encountered delays in both Group I and Group II projects, according to Mr. Garrett Smith, AETC Civil Engineering Housing Branch project manager.

"Because proposals were based on pre-Katrina market conditions, we have to take time to resolve the economic disparities Katrina produced in order to ensure the highest quality housing is provided," said Mr. Smith. "Regional construction costs have risen 15 to 20 percent, utility rates increased 20 to 173 percent and fuel costs are now extremely high. All these factors have driven project development costs beyond normal contingency allowances."

The command and the Group I apparent successful offeror are working to resolve the financial gaps caused by Hurricane Katrina, said Mr. Smith. The transaction closure date for Group I is now delayed until August 2006, approximately 8 months from its originally scheduled close date.

But Katrina hit Keesler's privatization plans the hardest, said Mr. Smith.

Originally one of the seven bases in Group II, Keesler has been removed from the housing privatization group, and instead AETC is planning to replace all of its housing with a military construction project. According to Mr. Smith the use of MILCON, in this instance, will enable a faster delivery of homes to the base.

The MILCON project scope is to build 1,067 new homes. The request for proposals (RFP) for the Keesler MILCON project was released in February 2006, and the proposals received are currently under evaluation. All of Keesler's new homes are anticipated to be complete in late summer 2008.

The original RFP for Group II housing was scheduled for release in September 2005. That date coincided with Hurricane Katrina's arrival on the Gulf Coast. With Keesler removed from the list, Group II's new RFP is scheduled to be released this June, with an estimated transaction closure scheduled for June 2007.

While Hurricane Katrina may have altered the command's timeline, the command remains constant in its efforts to see the housing privatization plans through to fruition.

"The command has shown that privatization is an efficient way to provide our military families with higher quality homes quicker than traditional military construction allows," said Col. Leonard Patrick, The AETC Civil Engineer. "Even though the timeline for AETC housing privatization has changed, our commitment to reaching our goal of providing access to safe, quality, well maintained housing remains the same."

"AETC initiated these ambitious and aggressive projects to improve the housing for our Airmen and their families through long-term partnerships with private developers," said Lt. Col. Sue Grumbach, AETC Housing Branch chief. "We'll continue working to make those partnerships happen and to give our military families the quality housing they deserve."
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