RD393 - Improving the Ability of the Department of Military Affairs to Respond to Opportunities to Utilize Federal Funding Available for Capital Projects – October 2017

Executive Summary:
The Department of Military Affairs (DMA) is often unable to take full advantage of federal funding for capital projects that becomes available late in the federal fiscal year in situations that would require some state matching funds. This situation, which primarily affects funding for renovations and additions to (the Virginia Army National Guard is at only 49% of Authorized/Required Space) readiness centers, formerly known as armories, is due to differences between state and federal definitions, capital thresholds, and procedures, and compliance with the Construction and Professional Services Manual (CPSM), as well as the inability of the agency, under current state policy and the Virginia Public Procurement Act, to have construction contracts and state matching funds available within the tight deadlines imposed by the federal government for federal funds that become available at the end of the fiscal year. To mitigate this situation, and put DMA in a better position to compete for this funding, the following steps are recommended:

1. Raise the threshold of a capital project for DMA from $1 million to $2 million total project costs for state supported projects. This would not affect other DMA projects that exceed this amount but do not require state funding.

2. For renovation projects, or renovation/addition projects where the added space is ancillary and does not add new program space, allow DMA to use job order contracting for capital, maintenance reserve, and operating expense projects costing up to $2 million; [with a maximum amount of $1.0 million in state-supported costs]. Examples of ancillary space are as follows: mechanical rooms, electrical rooms, well or pump houses, and vestibules.

3. Create an umbrella capital project with funding authorized to be used for planning and state matching construction funds, which include project management and soft costs, in order to compete for federal funds that become available unexpectedly; and

4. Allow DMA to advertise capital, maintenance reserve, and operational funded projects for bid in anticipation of potential receipt of federal matching funds. Project bid dates shall not be before July 1st, of that same year, so as to limit the bid bond duration to a maximum of three months.