Former Army Secretary Dan Driscoll championed a number of modernization initiatives during his term in an effort to transform the service into a modern force — President Donald Trump described Driscoll as a “disruptor and change agent.”
With Driscoll resigning from his position last month due to his concerns about the future of the service, questions have been swirling around the fate of some of the efforts the former secretary had launched during his tenure.
One of those efforts is the Army’s Strategic Capital Initiative, which was launched earlier this year to attract industry to co-invest in the service’s infrastructure, industrial base and supply chains. Army leadership recognized it could not solely rely on congressional appropriations – it needed creative solutions to address its funding, infrastructure and modernization bottlenecks.
Marc Andersen, who was handpicked by Driscoll to manage Army finances, said the Strategic Capital Initiative is “not slowing down” under new leadership. In fact, the service plans to expand the program across its installations over the next three to five years.
“To be clear to the market and to our partners and teammates, we are not slowing down. The roles that we are in, in an appointed role, by design, are very temporary. Much of what we are doing is we are trying to make things enduring,” Andersen, who serves as the Army’s assistant secretary for financial management and comptroller, said at the Association of the U.S. Army’s annual conference in Washington.
“Fundamentally, good news is there is no gap, no slow down, but really only consistent desire to move faster as we have transitioned,” he added.
In March, the service issued a request for information looking for ideas on “financial models, partnership frameworks and contracting strategies that can attract significant investment and de-risk projects for the private sector,” the Army said at the time.
“The vision is a ‘value for value’ partnership where the Army brings its unique assets — including secure land and a stable demand signal — to the table. In return, it seeks to gain resilient energy, re-shored supply chains, and modern facilities without relying solely on taxpayer dollars for new construction,” the Army said.
The service decided to organize the effort around six strategic pillars, including energy resilience and dominance, modernizing the organic industrial base, strengthening logistics and supply chains, advanced manufacturing and technology adoption, real assets and facilities utilization and critical minerals and resource development.
After releasing the initial request for information, the service announced it selected global investment management firm Carlyle and portfolio company CyrusOne to build massive data centers at Fort Bliss in Texas and at Dugway Proving Ground in Utah. The Army said the two companies would be “responsible for financing, building, operating, maintaining and decommissioning the data centers on underutilized land at no upfront cost to taxpayers.” The data center at Fort Bliss is expected to be operational in 2027, while the project at Dugway Proving Ground is expected to be completed by 2029.
As part of this effort, the Army also launched a collaboration with FedEx Dataworks to modernize the service’s domestic non-tactical logistics networks, supply chain procedures and organic industrial base sites.
In September, the service announced the conditional award of long-term leases to three companies that will “finance, build and operate commercial power generation” at six Army installations. Several Army installations could soon get a mix of battery energy storage, natural gas and nuclear electric generation capabilities.
Having learned from these efforts, the service now wants to expand the program.
“You can anticipate another round of RFIs, both targeting specific things that fit into the pillars that are underneath strategic capital, but also that are broad enough to allow for you to tell us good things that that we can do and things that we should be considering,” Jordan Gillis, assistant secretary of the Army for installations, energy and environment, said.
“If you don’t see an RFP or RFI that is broad enough to allow you to do that, let us know because that is key to us expanding that,” he added.
Lessons the Army has learned so far
Lt. Gen. Gavin Lawrence, deputy commanding general and acting commander of Army Materiel Command, said the success of these strategic capital initiatives depends on clearly defining the problem from the outset. The Army has a responsibility to clearly state the problem set and spell out its requirements, but industry needs to speak up when those requirements are unclear.
“I’ve seen a number of times where we’ve gone down the road and embarked on these strategic capital initiatives, and there wasn’t clear understanding, clear conversations, clear vision on what the problem we’re trying to get after and the associated requirements,” Lawrence said.
He also stressed the importance of understanding the legal limits governing public-private partnership and strategic capital initiatives.
“There is a difference between what the government can do and what is allowable and permissible in the private sector,” Lawrence said. “I’ll just use it as an example in our organic industrial base. We have core functions that are inherently governmental, and then there are things that are applicable under the 50/50 rule,” he said.
In addition, the Army and industry need to understand what each side stands to gain from the partnership.
“From a government perspective, you know we may be interested in things such as how do we increase production capacity, how do we lessen acquisition costs, how do we bring that capability faster to our warfighters, but we’ve also got to understand on the commercial side they have their own stakeholders, they have expectations for return on investment and for associated profits,” Lawrence said.
“Having that conversation up front, understanding on both sides what is the value proposition is critically important as we move forward with these strategic capital initiatives,” he added.
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