|Student Name:||Capt Daniel Blomberg|
|Thesis:||An Analysis of Cost Premiums and Losses Associated with USAF Military Construction (MILCON)|
|Location:||Bldg 643 Rm 306|
|Date & Time:||02/20/2013 at 1200|
|Abstract:|| MILCON represents 40% of the federal government’s $30 billion construction budget. The federal budget is fixed; therefore, any cost overages likely come out of project scope or requirements. This study investigated if MILCON procurement costs more than private industry construction and, if so, what causes the cost premiums. An in-depth literature review, expert interviews, unique case study, expert surveys, and geospatial statistical analysis answered the research question. This case study evaluated two nearly identical projects to determine how internal factors affect MILCON cost premiums. This study validated the existence of MILCON cost premiums. Additionally, 11 major cost premium themes emerged: overly restrictive requirement statements, failing to balance risk, stifling or not applying innovation, unique MILCON requirements, parameterization of the execution process, selection of construction specifications, schedule and submittal policies, perception of MILCON construction agents, anti-terrorism/force protection requirements, Federal Acquisition Regulations, and socioeconomic policies. Also, in spite of the contract requirement similarities the studied projects differed by over a year of construction time and $7 million. Research frequently cites federal laws and policies as the primary cost premium driver; however, this research demonstrated internal construction policies, which the USAF or DoD can control, also cause cost premiums.