The US Department of the Navy (DoN) has launched a request for information (RFI) from interested parties on the potential privatization of substantially all its Navy and Marine Corps hotel lodging operations across the contiguous United States (CONUS), Hawaii and Guam in order to improve the quality of transient lodging for unaccompanied personnel and families on temporary duty (TDY) and permanent change of station (PCS) travel. This includes lodging at approximately 45 Navy and 14 Marine Corps Installations, encompassing nearly 600 buildings with over 21,000 rooms located both inside and outside a secure perimeter.

The DoN’s lodging portfolio is currently managed by four separate programs, which are anticipated to be consolidated through this privatization effort. Each program was established to primarily accommodate official travelers such as those on deployment and training (i.e. TDY) or movement to a new installation (i.e. PCS); however, all programs can accommodate both, as well as unofficial travelers, throughout the portfolio. The four programs are as follows:

• Navy Gateway Inns & Suites (TDY): manages over 15,500 guest rooms
• Marine Corps TDY Lodging (TDY): manages nearly 2,500 guest rooms
• Navy Lodge (PCS): manages approximately 2,500 guest rooms
• Inn of the Corps (PCS): manages nearly 900 guest rooms

For those installations considered for privatization, the average occupancy is 62% and the average 2019 lodging per diem is US$136 (though the rate to be charged will be a portion of that as discussed below). In addition, the portfolio requires improvements to eliminate backlog maintenance of approximately US$600M; however, it is anticipated that the scope of work will ultimately include additional renovation, demolition and new construction in order to ensure that the portfolio meets privatized lodging standards.

As part of this privatization effort, the DoN seeks to apply private sector expertise, resources, and market-based incentives to improve the quality of life for DoN military members and their families while in a transient status by providing quality, on-base hotel accommodations and services through improvements via renovations and/or new construction. The DoN envisions, pending future Congressional approval, privatizing its lodging in a minimum of two phases with each phase including installations within at least one major fleet concentration area as identified by the DoN. The DoN desires financing strategies that would maximize capital improvements while still providing an acceptable lodging product with room rates for official travelers that meet the requirement of an average daily rate below the lodging portion of per diem across the portfolio. Additional phases for the privatization of the remaining lodging facilities would not be guaranteed.

The DoN will host an Industry Forum to discuss the technical and financial aspects of the initiative to privatize Navy and Marine Corps lodging, including insights on requirements and program objectives from DoN leaders, as well as provide an opportunity for you to express private industry recommendations on the best approaches to achieving the DoN’s goals. The Industry Forum will include presentations and a question and answer session, followed by a site tour of four DoN lodging facilities. The site tour will only be available to interested parties that attended the Industry Forum.

At this time the DoN is not seeking proposals and will not accept unsolicited proposal. At a future date, the DoN expects to issue a single Request for Qualifications/Request for Proposals (RFQ/RFP) for the entire program for parties interested in entering into a Public/Private Venture (PPV) with the DoN. The DoN does not anticipate re-competing future phases and will likely complete future phases as a continuation of the initial lodging privatization.

The deadline for the submission of responses is on May 6, 2019.