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What the DoD Proposed Military Construction Budget Means for Contractors

In February, the Department of Defense released its budget request for the 2013 fiscal year. Of particular note was the allocation for Military Construction (MilCon).

According to the DoD, MIL-CON accounts "provide funds for new construction, construction improvements, planning and design, and host nation support."

Additionally, "projects funded by these accounts include facilities for operations, training, maintenance, research and development, supply, medical care and force protection, as well as unaccompanied housing, utilities infrastructure and land acquisition."

The DoD's proposed request for MilCon in the FY 2013 budget was approximately $11.2 billion, a decrease from the enacted FY 2012 budget of approximately $13.6 billion and the enacted FY 2011 budget of approximately $17.4 billion (see table 1). The comptroller stated that the FY 2013 MilCon investment is "less than investments in prior years until the Department reassesses its investment strategy next year, when the impacts of forced structure changes on infrastructure requirements has been assessed."

The DoD breaks down MilCon into three main components: General MilCon, Base Realignment and Closure (BRAC) and Family Housing. General MilCon (FY 2013 proposed $9.1 billion) consists of the "beddown" of weapons systems, providing operational and training facilities, and recapitalizing aging facilities and modernizing facilities. BRAC (FY 2013 proposed $0.5 billion) funds environmental and caretaker costs for properties not yet conveyed in prior rounds. Family Housing (FY 2013 proposed $1.7 billion) funds construction, improvements, operation and maintenance of government-owned family housing worldwide to provide quality, affordable housing to the U.S. military and their families.The top five states for MilCon and Family Housing per total obligational authority - as well as two of their main projects of note - for the DoD's FY 2013 budget are as follows:

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