Volpe Center: Transportation Strategic Plans

V. Challenges and Opportunities

"As the births of living creatures at first are ill-shapen, so are all innovations, which are the births of time. Yet notwithstanding, as those that first bring honor into their family are commonly more worthy than most that succeed, so the first precedent (if it be good) is seldom attained by imitation." - Francis Bacon (1561-1626). Essays, Civil and Moral. XXIV. Of Innovations

Partnerships may satisfy many diverse functions and present innovative opportunities that might otherwise go unfilled. Panelists in this session presented examples of such opportunities, which together give an encouraging picture of the PPP environment going forward. Russ Freeman (EG&G Technical Services, Inc.) provided strong evidence of how PPPs can address options for support infrastructure under the Base Realignment and Closure (BRAC '95) program, designing and managing alternative and innovative uses for a former military facility. Maria Pirone (WSI), speaking for the commercial meteorology sector, discussed emergent opportunities for the management and response to specific regional weather problems such as Northeast United States winter storms. Jack Sheehan (AGATE) articulated efficient, new methods of air passenger travel that capitalize on high technology, high bandwidth applications in general aviation aircraft.

Kelly Air Force Base Redevelopment Partnerships

Russ Freeman, Director of Strategic Planning of EG&G Technical Management Services, Inc. in an arresting presentation, described the events leading up to what is now acknowledged as the most successful military base conversion through all rounds of base closures. Arising from the BRAC, the initial idea was for a partnership between the Air Force, the City of San Antonio, and private industry.

The Air Force was to divide aircraft and aircraft engine maintenance work at Kelly into three bundles. The aircraft and engine maintenance bundles would be competitively awarded to private sector contractors.
The City would form a local redevelopment authority and that authority would receive the closing base property. Portions of the property would then be leased by the authority to the contractor that won the competitive bids for Air Force work.
Private businesses that were the winners of Air Force contracts would continue to do work that had previously been done by the Air Force in the facilities that had previously been used by the Air Force to do such work. It was expected that the contractor would also use many of the former Air Force employees.

To fulfill their role in the partnership, the City of San Antonio created the Greater Kelly Development Corporation (which later became the Greater Kelly Development Authority or GKDA). GKDA then competitively selected a team to serve as their operating staff. EG&G led the team that won the contract to support GKDA, and thus effectively became the GKDA staff.

Describing a unique series of events that characterized the Kelly closure, Freeman related how the Air Force role in the partnership changed, so that what was to be "privatization in place" became simply "privatization." This in turn became a "public/private competition," and finally, the team had to "survive a lost competition." In new agreements with the Union Pacific Railroad (UP) and the Port of Corpus Christi (PCC), GKDA and EG&G are now preparing to move beyond aircraft and aircraft engine maintenance to the establishment of an inland port. Plans call for this port to serve as a multi-modal distribution facility for trade with Mexico, Asia, and Europe as well as domestic shipments.

Kelly Air Force Base Background

Kelly Air Force Base was formerly an Air Force logistics center run by the Air Force Logistics Command. The base housed an industrial complex of 400 buildings located on 4,000 acres. It mostly provided maintenance functions, such as work on C-5 aircraft and the F-100 engines. The C-5 is a very large, heavy-lift aircraft, and the F-100 engine is one of the most widely used fighter aircraft engines the world. To appreciate the physical extent of Kelly's facilities, Freeman noted that one of the buildings in which C-5 maintenance took place was one of the largest buildings in the world, a hangar with over 1 million square feet. Essentially, this hanger could handle six Boeing 747 aircraft at one time.

Freeman explained that the Air Force had no real desire to close Kelly, taking a position that it wanted to maintain excess capacity in order to spool-up its weapons maintenance capabilities in case of hostilities. Without having the authority to remove Kelly from the BRAC list, the Administration instead expressed support for privatizing the base rather than closing it down.

Conceptual Basis of the Kelly Partnership - Trying a New Paradigm

".we were going to
demonstrate the idea of
privatization and
commercialization.the
private part.would do the
Air Force work, but reduce
Air Force costs.it would
bring additional work to the
facility."