Tangible Benefits There are approximately 37,000 individuals serving in the U.S.

Army Corps of Engineers, both Civilians and Soldiers, responsible for providing engineering services to over 90 countries throughout the world.1 Primarily, the Corps of Engineers (COEs) is responsible for the construction and maintenance of both military and civilian facilities that provide needed infrastructure. They are also responsible for dredging waterways; providing proactive storm reduction infrastructure; restoring and maintaining national parks and waterways; and removing toxic waste materials from environmentally sensitive areas.2 The COE strives to accomplish their above listed responsibilities according to the highest possible standards within their capabilities. For example, every construction project they complete either meets or exceeds the minimum standards for design in the U.S., a requirement of the COE. LEED certification is obtained on all construction projects in the U.S. as of 2011. In projects involving waterways, the COE meets the water standards set forth by the EPA in accordance with the Clean Water Act. They also monitor the water quality to ensure that others are in compliance with safe water standards as well. Perceived Benefits Lets begin by discussing the customer perception of the actual product provided by the COE. Customers of the COE, both direct and indirect tend to view the construction and maintenance of military and civilian infrastructure as providing immeasurable safety and functionality. Without infrastructure such as barracks, operations buildings, dams, ports, or facilities used for maintenance, ranges, logistics, storage, health care, and installation specific structures that support both military and families the military would not be able to operate its missions effectively and civilians would not have the infrastructure they need. Dredging the waterways is also seen as providing incalculable benefits to the economy, as the amount of goods transferred through sea traffic is greatly increased due to the COEs efforts. Proactive work on storm reduction infrastructure ensures the increased safety of civilian cities, and work on parks and recreational areas including the removal of toxic waste and shoreline erosion control is thought to provide important protection for the use of wildlife and humans. In regards to service, most passive customers tend to perceive the COEs efforts as highly successful, so long as their water is clean, their lands are safe from hazardous materials, and they have the needed infrastructure within their communities such as levys, dikes, and other natural disaster control structures. Several touch points as
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http://www.usace.army.mil/ Id.

stated by Roger Best that have had a positive impact on customers are: the COEs ability to provide excellent customer service with regards to contract proposals, the involvement of the COEs employees working hand-in-hand with customers and contractors on projects, the involvement of district commanders working with local partners to solve problems, and the COEs presence and interaction with community during Industry days. The COEs brand tends to be rated very highly among both active and passive customers, partially because of the high standards of excellence the Government sets for itself. West Point originally began as an engineering school to provide the Army and the COEs with engineering officers. Today, West Point is considered one of the top engineering schools in the nation, which gives an insight into the standard of excellence sought after by COE.3 The COE has played historically and continues to play a major role in all military engagements of this country, and is perceived to be an honorable and professional group due to its military nature. Projects of the COE such as work on the Panama Canal, the Kennedy Space Center, the Washington Monument, the Bonneville Dam, the Pentagon, and the Alaska Canada highway during WWII are a testament to the quality of its brand. Intangible Benefits On a psychological and emotional level, the COE is thought to fit a number of different brand personalities as a result of its professional nature and standards of excellence, such as: responsible, secure, competent, and sophisticated.4 Individuals tend to perceive COEs services as making them more safe, secure, and at peace, while not having to worry about who is going to ensure that the necessary infrastructure is in place, who is going to manage large environmental projects in a responsible and socially conscious way, and who is going to ensure that the water is clean and safe to use. The COEs is also perceived as ensuring safety by providing the military with the services they need in order for them to accomplish their missions. The COEs also gives some Americans a sense of pride on a national level due to the work they provide both to the United Sates and to other countries. Tangible Costs Generally, the COE will charge anywhere from 6 to 10% of a project for work to be done, this varies by the type of funding appropriated and the type of work to be done. The remainder of a projects cost goes towards the contractor building the project and a reserve fund in order to capture delays or change that will increase costs of a project. Profit varies by the amount of work that a contractor will be completing, the higher the risk to the
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http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/engineering-nodoctorate
Best

contractor the higher the profit they will likely receive. 5 However, profit must be reasonable and a Contracting Officer (KO) will make the final determination on whether or not a contractors proposal and bid are acceptable. If not the COE and the KO will conduct negotiations to gain the best possible cost for each project. The COE is mainly project funded organization. That is in order for the COE to exist and conduct work must have projects to work on. Funding from Congress is appropriated towards specific programs; however that is not the only funding stream for the COE. Military construction (MILCON) and Civil Works are the two major program areas that fund work for the COEs. 6 Without these programs there would be not a COE s. Additional work that the COE conducts is for other National agencies that are non-military, State, local government, tribal, and foreign countries. Although all the employees of the COE s are US Army civilians, they do not receive a paycheck if there is no work, their pay does not come from the US government, but it comes directly from the projects that each employee is working on. Generally each COE district must determine the costs to charge for work performed. This varies amongst the personnel that conduct the work. Perceived Costs Given the large number of employees and the vast landscape of operations alone, the COEs spends billions in tax dollars on projects. Waste of resources is also seen as an enormous cost. Given the enormity and complexity of COEs operation and the incredible amount of resources to keep track of, from appropriation to payment, it is highly likely that there is a large amount of wasted tax dollars being spent on COEs projects. Waste comes in the form of poorly completed surveys of particular construction sites, therefore costs balloon due to costs that were not predicted prior to construction. In order to provide lower costs there is some competition that comes from a few sources within the military and a few from outside. The Naval Facilities Engineering Command (NAVFAC) and the Air Force Civil Engineering Center are the two internal military competing entities. However, the COE s is charged with providing all of the MILCON for the Air Force. The COE does compete for work with other national, state, and local agencies. Other agencies are not directed to go with any particular construction agent. However, these agencies are aware of the great value that the COE s can provide to their projects. Intangible Costs
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http://www.usace.army.mil/Portals/2/docs/MILCON/FY13_Presidents_Budget_Military_Programs.p df

Certainly one of the psychological or emotional costs is the classic conundrum of not knowing how ones tax dollars are being spent, yet the COEs budget is available for public access.7 With large funding for COEs projects it is difficult not to wonder how ones tax dollars are being spent in ways that taxpayers do not agree with, or simply being wasted altogether. The perceived cost of not having traditional forms of competition to drive down prices and increase quality also carries with it the psychological cost of not knowing whether the COEs is truly providing the best service at the best value, and not being able to choose to do business with another company if the COEs services prove unsatisfactory. In addition, since government agencies have the stigma of being inefficient bureaucracies that are difficult to do business with, this stigma whether true or not in this case might be considered to have a negative emotional impact on companies who contract with the COEs. The difficult part is again that the public likely sees the COE employee as someone just making a paycheck for going to work. However, the truth is that as government spending cuts continue, many employees will lose their jobs because they do not have projects to work on. The Alaska District is undergoing these changes. An intangible cost that will come with fewer projects is that young talented engineers and other talented employees will lose their jobs to those with a tenure status. The problem with this is that many of the older workers provide less value than the younger generation. They are less motivated to work hard as they know their job is secure and thus provide less value. Tenured employees are also on a higher pay scale, driving up costs, and causing more strain, thus taking away more funds from a project, or providing fewer hours to dedicate to building a quality project for a customer. Tangible Value (within the context of benefits costs). All things considered, its time to discuss the overall value created by COE. Because COE does not operate on an open market and its actual costs are difficult to know, it isnt possible to communicate COEs economic value relative to competitors. This also makes it difficult to determine how much COEs services should cost. Thus, without this information, most of COEs actual created value can only be calculated through perceived and intangible lenses. Tangible values are difficult to measure in the COE but a few areas that can be measured are the amount of people that visit and use the COE recreational facilities nationwide. 8 More people use COE recreational facilities than visit national parks in one year, 350 million compared to 275 million respectively.9 The volunteers that help to

http://www.usace.army.mil/Portals/2/docs/civilworks/press_book/budget2013.pdf http://www.usace.army.mil/Missions/CivilWorks/Recreation.aspx 9 http://www.nps.gov/aboutus/index.htm

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make COE recreational facilities run provide over $37.5 million in value. 10 The amount of lakes, waterways, and shoreline available to the public is amazing. These are all tangible values that are hard to recognize, but the numbers are pretty astounding once you are able to put your finger on them. Perceived Value Fortunately, because certain benefits of COE are immeasurable, we do not need to know the tangible costs of operations in order to discover value created. For example, the primary value created by COE is the safety and functionality their services provide. Regardless of the untold billions spent annually on COEs projects, there is no price too high to pay for safe water, a clean environment, and a functional military. Additionally, although large amounts of waste almost certainly occur and are often incalculable, the economic value from providing dredging services to allow for more effective commerce through waterways is also incalculable. Surveying land, water, and providing shoreline erosion control in order to ensure the protection of recreational locations for both animals and humans is also an invaluable benefit of the COE. Even though competition doesnt play a role major role driving down prices and increasing the quality and efficiency of the COEs operations, they are still providing services to the community and to the military, most of which are needed, and some of which would not be provided at all if the government didnt shoulder the responsibility itself. The COE uses federal regulations from construction, contracting, and regulatory laws in order to provide the best value to the country. If private industry were to perform the job that the COE does there would be a great deal of lost value. Especially in the sense that it would be difficult to monitor each entity to ensure they are following the proper rules and regulations. In addition, because the COEs does not have a large pool of competitors they do not necessarily have to make their brand or service quality a high priority. The fact that they do however is a huge value to customers. For example, they contract with numerous private companies in order to complete their projects. In working with these companies, the COE provides fast, professional service on contract proposals, project supervision, and the communication of necessary information in order to give these private companies everything they need to complete their projects. The COE also strives to maintain a standard of excellence, as written in their vision statement which reads A great engineering force of highly disciplined people working with our partners through disciplined thought and action to deliver innovative and sustainable solutions to the Nation's engineering challenges.11 The fact that they do not have to provide such a high level of service and brand excellence, yet they do anyway, is an enormous
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http://www.usace.army.mil/Missions/CivilWorks/Recreation.aspx www.usace.army.mil

value to the customer who doesnt really have any other choices. Intangible Value A great deal of the COEs intangible value is derived from the psychological and emotional benefits pertaining to safety and functionality. It is one thing for water to actually be safe to use, but the emotional and psychological benefit that one gets from knowing that their water is safe is invaluable. Similarly, the knowledge that infrastructure improvements are taking place to support our military and our communities is also an invaluable psychological benefit. And though there are many intangible costs attributed to COEs, the ultimate value it provides is peace of mind which essentially outweighs the other costs. Additional Value The COEs has a long tradition of providing additional value to its customers, yet there are further improvements that they can potentially work on to provide even more benefit worldwide. First, looking at value that could be provide on the benefits side of the value creation equation the COE s could continue to improve its ability in the US to expand its disaster reduction efforts. This also applies internationally with the cooperation of foreign governments. Another benefit the COE s could expand on is their humanitarian assistance work. The COEs is currently providing new schools, clinics, hospitals and cyclone shelters in various countries in southeast-Asia, however they could expand their efforts worldwide to benefit the millions in need of better access to education, healthcare, and protection for natural disasters. The COEs should seek to increase its partnering with local, state, national, and international agencies. This will provide benefits that include value engineering savings, increased effectiveness, lack of litigation, and improved safety and less loss of working accidents both nationally and internationally. The COEs could use its great safety knowledge base to improve the safety practices in developing and third world countries, potentially saving an untold amount of lives form injury or even death. Second, in trying to improve their costs, the COEs could provide even more transparency to the public about what they are spending on projects and within each district. FedBizOps is where contract awards are posted, but additional effort to put information in the hands of the media and on social media outlets might help for the public to see what costs the COEs really are incurring. In order to improve value the COEs needs to look at divesting assets that are wasting precious resources, and if possible provide their LEED services to agencies nationwide so that they become the LEED market expert and preferred choice for a in the US. Additionally, the COE s could look to streamline their internal operations to reduce the amount of wasted efforts that are not providing value to the customer and to the

public. Finally, the COEs can try to improve overall value by ensuring that customer preferences and customer value are a top priority. In improving customer value the COE s could create partnerships with other countries engineering experts. This would help to improve engineering capabilities and capacities worldwide, thus creating a drastic increase in value for people across the planet. They would have more sound and safe structures. The COEs can also continue to improve its overall value by continuing to build beautiful and functional modern structures such as the new Seattle District headquarters which is LEED platinum certified. Social Media Use and Improvements The COEs is doing a good job of using social media to put out information and to also touch those that it serves. For instance, the Alaska District puts out contract proposal requirements on Facebook so that contractors can be immediately updated of an upcoming requirement. There are required sources such as FedBizOps for putting out this information, but a contractor has to go and look for it. However, if you are a contractor and you Like the Alaska Districts Facebook page, you can get an immediate notific ation of potential work. One way that the COE s could improve their value is to use the Facebook, Twitter, or some form of crowdsourcing method to gather information on past, current, and future projects that they will be working on. This will help the COEs to better understand the local environment they will be working in to better meet the needs of a customer and the public. The COEs could create blogs that can gather feedback from public recreation facilities and how to improve or make facilities better. I think the COEs could also do more national campaigns to promote how the military construction projects improve the nations military readiness.