Introduction

Well, it’s been a little while but I though now was as good a time as any to jump back into the blog-o-sphere.  Like everyone else I’m in a design office, the work isn’t too bad despite having to do all my calculations in strange units of measurement such as inch-kips and force-lbs; which means that I don’t really have any idea what answers I’m expecting to get.  No change there then!

I’m still working for USACE, but the commercial environment is like something halfway between a commercial company and a non-profit government organization [sic].  I’ll do my best to outline some of the budgeting and funding principles below:

The Military Design Branch (where I’m now based) is an arm of USACE that essentially carries out design work on behalf of the Baltimore District.  Despite being a Corps of the US Army, USACE are not entirely publicly funded, and are required to cover their own overheads (including wages) by charging a fee for their services on any projects undertaken.  Legislation prevents the military from making a profit; however this arrangement means that the organisation is run somewhat like a business, with Districts required to break-even within a 1% margin.  Performance (profit) is reported up the chain, with Divisional Commanders having the authority to support under-performing areas.  Commanders are therefore required to effectively manage income and expenditure whilst aiming to hit the 1% profit target, after which any profit achieved (over 1%) are returned to the US Treasury.

MILCON Program.

The MILCON program is funded directly by the Senate, with budgets set on an annual basis according to performance, budget, program progress and projected work.  All USACE costs associated with the planning, management and design of projects is taken directly from this source.  There is therefore only a finite amount of work that districts can pursue, and it is usually delegated to divisional chiefs to determine which work/projects they wish to undertake according to the resources available to them.  However, the final decision remains with the District Commander.  Any remaining MILCON program work will then be sub-contracted out to commercial Consulting Engineers (I did an outline design for a one-storey VCP before being told it had been put out to tender!).  The direct result of this arrangement is that clients operating within the MILCON framework have no direct say in who conducts the planning, design and management of their own projects, which is often determined by the capacity of the local USACE district office.

Construction Funding

The Senate annually funds the MILCON program, however these finances exclude the costs associated with new construction projects or renovations, instead clients apply directly to the Senate for these projects.  A formal bid process is initiated approximately two years prior to the anticipated project start date, whereby project scope and justifications are submitted and the bid is accessed against pre-determined government metrics.  If approved, funds are released directly to the client, and used to cover construction costs (e.g. the JOC project).  As previously, this means that the client generally has a choice as to which organisation will ultimately administer their own construction contract, however USACE are generally ‘chosen’ because of their reputation and specialist knowledge.  In order for USACE to then meet the overhead and wage liabilities of the project delivery team a ‘supervision and administration’ fee is then charged back to the client.  These fees are generally charged at a standard rate of 5.7%.  As a hedge against poor performance by the contractor or unforeseen events/variations USACE will also typically also apply a 5% contingency value to the overall construction cost, as per the diagram below.

Contract Relationships

A fixed price contract model is employed on all Government projects, and the client is legally obliged to compensate USACE for all work conducted.  However, at the outset of any project a one-off contract is negotiated which includes rates and fees for all design costs, management, profit and overheads.  Contract ‘variations’ however are always subject to inter-party negotiation, which due to their uniqueness and un-foreseeability are not agreed prior to the commencement of work.  Disputes or claims that arise from variations can and are still subject to legal proceedings and/or arbitration.  However, the Government’s policy of ‘fair and reasonable’ treatment generally ensures that most of the Principal Contractor’s disputes are settled prior to reaching court.  This policy can benefit both parties, however first-hand experience has demonstrated a willingness for the Government to concede positions to the Principal Contractor that they could reasonably have argued and won.  My observations were that the Contractor usually came off better because they threw the toys the furthest!

3-2-8-cc-defence-1604                       cc-other-sandbag-reinforcement-1604

I attended a presentation before Christmas from a company called concrete canvas.

“Concrete Canvas Ltd. manufacture a ground breaking material technology called Concrete Canvas that allows concrete to be used in a completely new way.  Concrete Canvas was originally developed for the award winning Concrete Canvas Shelters, a building in a bag that requires only water and air for construction.

Concrete Canvas is a flexible concrete impregnated fabric that hardens on hydration to form a thin, durable water proof and fire-resistant concrete layer.  Essentially, it’s concrete on a roll.

Concrete Canvas Shelters are rapidly deployable hardened shelters that require only water and air for construction.  A CCS25 variant can be deployed by 2 people without any training in under an hour and is ready to use in only 24 hours.  Essentially, CCS are inflatable concrete buildings.” (http://concretecanvas.com/).

I think they also featured on Dragons Den but didn’t get funding. I think it’s a great product.  The shelters could perhaps be beneficial in longer term displaced persons camps owing to the fire resistance, although the market has been a lot less interested in these potentially (I assume) down to the increased cost, logistics and complexity compared to canvas/plastic alternatives.

On the other hand, the canvas rolls have sold very well worldwide, as it is a much cheaper alternative to reinforced concrete for non-structural applications, and is cost effective even when the cost of shipping to Australia is included (although this reduces the environmental credentials). Costain have used a lot of this stuff for lining ditches, stormwater channels and ponds, and bunds. The EA have used it for flood defences, and they also report the military have used it in Afghanistan (I think for improving Hesco and ditches).

The company has secured compliance certificates for fire resistance, age testing, abrasion resistance, chemical resistance, and impact resistance (for pipeline coatings).  The use of the product in non-structural applications supports product development by allowing them to secure the accreditation above, provides funding and increases market awareness.  But their ultimate aim is to push the product as a structural application.  Due to the increased risk this poses, there are many more barriers, and more checks and balances required. It’s easy to get something into the non-structural market, essentially just prove that it won’t kill fish and newts.  Proving that something won’t fail and kill lots of people is much harder.  The future is also uncertain for manufacturers – will Brexit change the nature of BS EN accreditation, raising the bar or making investment in securing accreditation now irrelevant in the future?  The Institutions say not – but who knows for sure?

Blog 3 – the third and potentially final blog in the Tony Strachan innovation series will look at the Stavros Niarchos Foundation Cultural Centre and how innovation was achieved by Expedition (and others).  This featured in the January 17 issue of The Structural Engineer in case anyone wants a spoiler of the article I will be shamelessly presenting.

Update: I checked the info that concrete canvas sent through ref the previous military uses for their product.  The case studies are linked at the top (as it’s the only place wordpress will let me put it) for info – but don’t let them stifle your creativity!  I’m not aware if they’re working on military projects currently.