Todd Jacobson
NS&D Monitor
6/6/2014
Kansas City Plant officials are expecting to wrap up the long move to a new facility about a month earlier than expected, and the highly-scripted move that began in January 2013 is expected to cost about $10 million less than projections, the plant’s top federal official said this week. Kansas City Field Office Manager Mark Holecek said the last piece of production equipment at the plant’s old home in the Bannister Federal Complex—a lathe used to produce parts for gas transfer systems—will be moved June 25 and the project is targeted to be completed July 10. A dedication ceremony is scheduled for Aug. 22.
The initial budget for the move, including equipment installation, was $324.9 million, and Holecek said the move will cost about $314.9 million. "Going into this project if you would’ve told me we would have the largest industrial relocation in America, under budget, ahead of schedule, without any significant safety or security issues, I would’ve told you that you were nuts, but at the end of the day that’s what we did, so we’re very proud of that," Holecek said.
Build-Ahead Strategy Key to Move
In all, about 40,000 moving crates took up about 2,600 semi-truck loads during the move. Because of a build-ahead strategy employed by plant contractor Honeywell Federal Manufacturing & Technologies that stockpiled parts for the move, Holecek said the plant maintained a 99.9 percent on-time delivery record of parts. About 275 unique parts covering about 20,000 components were part of the build-ahead strategy, he said. "We did a lot of upfront planning on this activity and really understood what we needed to do to make sure this happens," Holecek said. "And we allowed enough time to get ourselves ready from a shutting down machines perspective, shutting down production, into the relocation phase, and then back up and operational on the other end. Things have gone very well."
Could Approach Work Elsewhere?
The 1.5 million-square-foot facility, located eight miles south of the plant’s existing Bannister Federal Complex home, was built by developer CenterPoint-Zimmer, financed by the Kansas City Council through the sale of $815 million in bonds, leased to the General Services Administration and sub-leased to the NNSA for $61.6 million in annual rent. The unique third-party financing strategy has drawn criticism from some activist groups for being too expensive and for using funds backed by the local government to support the deal, though the House-passed Fiscal Year 2015 Defense Authorization Act earlier this year tasked the NNSA to look at more opportunities to utilize third-party financing for infrastructure projects with budget belt-tightening ongoing around the nation.
Over the 20-year life of the lease, the NNSA is expected to pay $1.23 billion, which is more than the $687 million estimated cost of the facility, but officials involved in the project have pointed out that the annual rent payments are significantly less than the $140 million a year the agency was paying to run the facility at the Bannister Federal Complex. In all, the NNSA said it expects to save about $100 million a year through the move, which includes savings on energy consumption as well as cost reductions enabled by new business practices.
‘It Worked Well For Us’
Holecek noted that the strategy could be applicable elsewhere around the weapons complex, depending on the nature of the project. "It worked well for us. We were able to complete both the construction activities and the relocation activities on schedule and under budget partially based on the strategy that we took. It was successful here. It has the potential to be successful elsewhere," he said.
He said Kansas City Plant officials would put together a lessons learned package for NNSA headquarters when the move is complete. The package will talk about the "pluses and minuses, because there are pluses and minuses to everything … and it really comes down to the merits of the individual projects. There are some requirements around using this kind of an approach which may not work well for certain projects within our business but then in others it may be a valuable tool," he said.
