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Department Seeks to Expand Infrastructure Privatization

WASHINGTON, Oct. 19, 2016 — The Defense Department is pulling out of the landlord business and is looking at areas beyond housing where public-private partnerships could shore up defense infrastructure, according to a senior defense official.

Peter Potochney, acting assistant secretary of defense for energy, installations and environment, took part in a panel discussion about such partnerships yesterday at the Center for Strategic and International Studies here.

Learning from Experience

Given the success of privatizing military housing, Potochney said, “We’re looking at other functions … [and asking] what did we learn from that?”

Military family housing privatization has been under way since 1996. The defense acquisitions website reports that at the beginning of the program, the department had an inventory of approximately 257,000 family housing units. Current plans are to privatize about 75 percent of existing family housing units worldwide.

“Why did it take us so long to implement housing privatization?” Potochney asked. “I don’t think there’s anybody who doesn’t think it’s a great thing, and it’s worked well, and it’s saved us money, and it’s gotten soldiers, sailors, airmen and Marines better housing than they had before.”

Expanding the Role of the Private Sector

Resistance to privatization, Potochney said, comes primarily from what he called “the war fighters.”

Potochney said he thinks the view of these detractors has been, “We can’t give up our housing because it’s a core element of the department, and … if we turn it over to the private sector we’ve lost something here.”

“What we have to learn from that,” he said, “is how do we look at new opportunities in ways that our leadership, our war fighting leadership, will understand, so that they will accept new private-sector ventures?”

Privatization has proven itself in the housing area, he said, and to a limited extent in utilities, with the private sector supplying about 20 percent of the department’s utility demand.

A fresh approach to privatization should focus on understanding leaders’ perspectives, he said, “Otherwise we’re just fighting about why this is goodness.”

He added, “If we do that in the way we’ve done it in the past, we’re not understanding how the war fighter is looking at it, and we need to do a better job.”

Follow Karen Parrish on Twitter: @dodnewskparrish

Distribution channels: Military Industry