Corps of Engineers Military Construction: Management Costs Below the Industry Average

Abstract : The United States Army Corps of Engineers (USACE) manages more than $3 billion of Federal Government construction each year. Its Federal customers include the Office of the Secretary of Defense (OSD), the Military Services, and Federal agencies. The construction management services that USACE provides are paid for through fees assessed against the placement value of the construction. Some USACE customers have voiced concerns that they are charged more for construction management services than they should be. We found such concerns to be unwarranted. Most USACE customers are unaware of the services that they receive and they do not realize what private sector construction management firms charge for equivalent services. We find that USACE is a full-service construction management organization and that the fees they charge are appropriate for the services rendered when compared with private sector fees. We recommend that the Director of Engineering and Construction promulgate the results of our analysis to USACE customers to demonstrate the validity of the Corps' rates and to show where the construction management dollars are spent. A brochure should be prepared to accomplish this purpose. Keywords: Military construction, Construction management cost.