Military construction costs on the rise

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The Base Realignment and Closing Commission estimated that construction costs to implement their most recent recommendations would be about $13 billion.

But, a Government Accountability Office report released today estimates those costs to reach nearly $20 billion.

Army Corps of Engineers officials said the actual rate of construction inflation for the last several years has exceeded the federal government’s inflation rate used for budgetary purposes on construction projects.

The difference was as high as 6.1 percentage points in 2004, said Ken Simonson, chief economist for the Associated General Contractors of America, but has decreased slightly since then.

“U.S. Army Corps of Engineers officials told us that if the extent to which the actual rate of inflation continues to exceed the budgeted rate as implementation proceeds,” he said. “And if construction material costs are higher than anticipated, they would either have to redirect funding from other sources to provide for construction projects or resort to a reduction in the scope of some construction projects.”