The single-story concrete addition to the Department of Defense headquarters addressed the need to move large delivery vehicles farther away from the perimeter of the Pentagon. By confining the arrival of mail and other incoming goodsto a zone hundreds of feet away, the RDF creates a secure, consolidated receiving area for the thousands of packages delivered daily to the Pentagon.

The blast-resistant building houses 38 loading docks, along with postal and maintenance facilities, security functions, and supplemental infrastructure. K-9 units search all vehicles before they are unloaded, and incoming material undergoes x-ray screening before being routed to its destination.

The new facility greatly expands the capacity of the Pentagon's receiving and inspection process implemented in the wake of Oklahoma City, in which arriving mail and supplies were diverted to an off-site warehouse that had only four bays.

"Improving the flow of vehicles and materials improves security, minimizing screening time and enhancing our control over arriving vehicles," says the Pentagon project manager Wendy Thompson.

A Contracting Innovation

As a design-build project ancillary to the long-term Pentagon Renovation Program (PenRen) launched in the early 1990s, the RDF represents a major departure from the Pentagon's traditional lump-sum contracting methods.

"We experienced a lot of cost and schedule overruns on past projects," says Thompson. "We were eager for the opportunity to try out a different contracting vehicle. This is the first project where we implemented a multiple-incentive contract structure, with an award fee plus a shared savings provision, similar to GMP contracts."

Schedule pressure was another factor driving the adoption of the design-build approach. With first occupancy slated for August 2000, there simply wasn't enough time to go through the conventional design-bid-build process when the project got the official green light in August 1998.

"In the short period from August 1998 to April 1999, we developed all the requirements for the facility, issued solicitation packages, down-selected to the most highly qualified contractors, held a design competition, and reviewed some excellent creative designs," says Thompson.

Landmark Design Considerations

Completed in January 1943, the Pentagon sprawls over 29 acres of a 583-acre site that was once swamp and wasteland. A universally recognized symbol of American military might, the 6.6 million-sf building is also a national historic landmark, a status that imposes strict controls over and multiple levels of approval for exterior alterations.

"You don't just add to a five-sided building without raising eyebrows," comments Jim Draheim, of HDR Architecture, which partnered with the Chantilly, Va., office of contractor Hensel Phelps Construction to submit the design that won the competition.

In developing its proposal for the addition, HDR had to create a structure that would blend with, not overshadow, the existing building. The site, triangular in shape, was challenging, with a wedge of the Pentagon on one side and highways on the other two.

"There was not a lot of room to maneuver," Thompson remarks.

The result is a triangular-shaped building pushed down low into the ground. Elevations have been used to mask the structure, making it essentially invisible from the western approach. Landscaping and stone and wrought iron fences keep unsightly functional areas hidden from view.

"Truck bays and trash docks are not a beautiful thing to look at," says Draheim.

The external feature that is most visible—and attractive—is the landscaped parade ground serving as the building roof, at the same elevation as the existing Mall Terrace, one of two ceremonial entrances to the Pentagon.

"One of the neatest features of the design is the way HDR masked the intake and exhaust within the roof landscaping," says Thompson. "Our requirements prohibited any large protrusions from the roof. HDR created a two-tiered landscape concept, with the center section higher than sides, which allows the intake and exhaust areas to blend right in."

Two rows of trees and walkways in this middle section not only camouflage the ventilation equipment; they also separate the intake area from the exhaust so fumes from arriving trucks are not drawn into the building.

Overcoming Customer Apprehension

In the early stages of planning, Thompson faced the obstacle of overcoming user skepticism toward the design-build approach. One of the primary customers, the Pentagon's facilities maintenance group, was accustomed to working directly with an architect to develop a building design.

"The prospective occupants were very nervous that the new facility would not meet their requirements or would be substandard," says Thompson.

The anxiety dissipated, however, with their participation in the project.

"After they looked over some of the designs coming in, they started to get more comfortable," Thompson says. "We involved them in the source selection process, including down-selecting to the three finalists. As the project progressed they saw we were getting good value for our money."

Contract Incentives

Given its lack of experience with the design-build process, Thompson's team relied on advice from the Design Build Institute of America, along with acquisition practices modeled after those used for major weapons systems, to establish contract guidelines.

"We did not reinvent the wheel, but some techniques were new to government," says Thompson.

An unusual aspect of the contract was its zero target profit. Two mechanisms were available for the contractor to make money: a 10 percent award fee, and a provision for shared savings. The award fee criteria were custom-tailored to the project, taking into account factors like design and construction performance, change management and cost control, system commissioning, socio-economic programs compliance, and warranty period performance.

Observing that it was in everyone's best interest to do the job well and within budget, Draheim points out that all parties pulled together to foster a spirit of cooperation.

"We spent a lot of time taking each other's temperature," he says. "A few months into the project, we started holding 'lessons learned' meetings to talk about what was going well and what could be improved. This input refined the process even more."

Following a formal plan ranking the factors, a specially constituted board reviewed contractor performance and determined award amounts every quarter.

"We didn't want to wait until the project was completed," says Thompson. "We were relying on the award fee to motivate performance, and it's not much of a motivator if you wait until the end."

The other incentive was a shared savings/overrun provision. If the final project audit concluded that the RDF's actual price tag was higher than the target, the government would share in that overrun, up to a specified ceiling. If the building were constructed for less than the target, the owner and the contractor would split the savings equally.

"This arrangement was fairly intricate, but it was extremely successful and has become the model for the way we do things now," Thompson says.

While the final audit is still in progress, Thompson says that the overall project came in about $2 million under the target price. The total cost was around $99 million, including the contractor's award fee.

Lessons Learned

One sticking point in the design-build approach was the project team's attempt to use performance specifications instead of traditional prescriptive specifications to reach design goals.

"We had some difficulty with this," says Thompson. "We were trying to go to performance specs as much as possible, but in moving so quickly and trying to keep our customers satisfied, we ended up spelling certain things out."

In retrospect, Thompson says it would have been better to avoid these prescriptions and let the project designer and contractor find their own ways to meet the requirements. Nevertheless, it did not detract from the triumph of the Pentagon's first design-build effort.

"Once the RDF appeared to be successful, we were able to go ahead with the rest of the $3 billion PenRen program using the same contracting practices," Thompson says.

The RDF was built in three phases, with completion of Phase 3 in the summer of 2001. In addition to Defense Protective Service and Dockmaster personnel, the other occupants of the facility manage postal operations and maintenance shops.

By Nicole Zaro Stahl