- MILITARY CONSTRUCTION APPROPRIATIONS FOR 1999

[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]

MILITARY CONSTRUCTION APPROPRIATIONS
FOR 1999

========================================================================

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

SECOND SESSION
________

SUBCOMMITTEE ON MILITARY CONSTRUCTION APPROPRIATIONS

RON PACKARD, California, Chairman

JOHN EDWARD PORTER, Illinois W. G. (BILL) HEFNER, North Carolina
DAVID L. HOBSON, Ohio JOHN W. OLVER, Massachusetts
ROGER F. WICKER, Mississippi CHET EDWARDS, Texas
JACK KINGSTON, Georgia ROBERT E. (BUD) CRAMER, Jr., Alabama
MIKE PARKER, Mississippi NORMAN D. DICKS, Washington
TODD TIAHRT, Kansas
ZACH WAMP, Tennessee

NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full
Committee, and Mr. Obey, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.

Elizabeth C. Dawson, Henry E. Moore, and Mary C. Arnold, Subcommittee
Staff
________

PART 5
Page
Overview......................................................... 1
Defense-Wide Questions for the Record........................ 98
Housing Privatization............................................ 311
Quality of Life.................................................. 437
Army............................................................. 535
Navy............................................................. 723
Air Force........................................................ 807
Outside Witnesses................................................ 921

________

U.S. GOVERNMENT PRINTING OFFICE
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COMMITTEE ON APPROPRIATIONS

BOB LIVINGSTON, Louisiana, Chairman

JOSEPH M. McDADE, Pennsylvania DAVID R. OBEY, Wisconsin
C. W. BILL YOUNG, Florida SIDNEY R. YATES, Illinois
RALPH REGULA, Ohio LOUIS STOKES, Ohio
JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania
JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington
HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota
JOE SKEEN, New Mexico JULIAN C. DIXON, California
FRANK R. WOLF, Virginia VIC FAZIO, California
TOM DeLAY, Texas W. G. (BILL) HEFNER, North Carolina
JIM KOLBE, Arizona STENY H. HOYER, Maryland
RON PACKARD, California ALAN B. MOLLOHAN, West Virginia
SONNY CALLAHAN, Alabama MARCY KAPTUR, Ohio
JAMES T. WALSH, New York DAVID E. SKAGGS, Colorado
CHARLES H. TAYLOR, North Carolina NANCY PELOSI, California
DAVID L. HOBSON, Ohio PETER J. VISCLOSKY, Indiana
ERNEST J. ISTOOK, Jr., Oklahoma ESTEBAN EDWARD TORRES, California
HENRY BONILLA, Texas NITA M. LOWEY, New York
JOE KNOLLENBERG, Michigan JOSE E. SERRANO, New York
DAN MILLER, Florida ROSA L. DeLAURO, Connecticut
JAY DICKEY, Arkansas JAMES P. MORAN, Virginia
JACK KINGSTON, Georgia JOHN W. OLVER, Massachusetts
MIKE PARKER, Mississippi ED PASTOR, Arizona
RODNEY P. FRELINGHUYSEN, New Jersey CARRIE P. MEEK, Florida
ROGER F. WICKER, Mississippi DAVID E. PRICE, North Carolina
MICHAEL P. FORBES, New York CHET EDWARDS, Texas
GEORGE R. NETHERCUTT, Jr., Washington ROBERT E. (BUD) CRAMER, Jr., Alabama
MARK W. NEUMANN, Wisconsin
RANDY ``DUKE'' CUNNINGHAM, California
TODD TIAHRT, Kansas
ZACH WAMP, Tennessee
TOM LATHAM, Iowa
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama

James W. Dyer, Clerk and Staff Director

MILITARY CONSTRUCTION APPROPRIATIONS FOR 1999

----------

Thursday, February 12, 1998.

DEPARTMENT OF DEFENSE

WITNESSES

WILLIAM J. LYNN, UNDER SECRETARY OF DEFENSE (COMPTROLLER), ACCOMPANIED
BY HENRY SODANO, DIRECTOR OF CONSTRUCTION

Statement of the Chairman

Mr. Packard. We are a couple of minutes early but let's go
ahead and get started. The main man is here. I am grateful to
have Mr. Hefner with us early because I wanted to make a
comment or two.
In all my career here in the Congress, which is now in its
16th year, much longer than I anticipated, I have never worked
with a person that I have been more grateful to have that
opportunity than Bill Hefner. He has been truly a marvelous
person to work with. We have been a good team on this
subcommittee. His experience as chairman of the subcommittee
for some time certainly has helped me and helped this
subcommittee and I am extremely grateful.
As most of you know, he has announced that he would be
retiring at the end of this term and the loss to the country,
the loss to the Congress and the loss to this subcommittee and
to me personally is going to be huge. Bill, it has been a
pleasure, a real pleasure working with you.
Mr. Hefner. I appreciate it.
Mr. Packard. We have done some things together outside of
congressional work that we have enjoyed, too, and that has
always been a pleasure. He and I have played some golf
together. So Bill has been a real good friend. Sometimes that
is getting to be more and more of a rare thing, to have members
from the two sides of the aisle become dear friends but Bill
and I have. I think it has been helpful to this subcommittee.
It is a pleasure now to call this subcommittee to order. We
are very pleased to have the Honorable William Lynn, the Under
Secretary of Defense (Comptroller) as our first witness.
This is the beginning of our hearings. We will conclude
them in March, I believe, except for the break that we will be
having in mid-February. We will be holding hearings regularly.
We have a new member of this subcommittee, Mr. Bud Cramer
from Alabama. He is also a good friend and will make, I think,
a significant contribution to this subcommittee. He has
recently been appointed to the Appropriations Committee and has
been given this as one of his subcommittees. We will look
forward to working with Mr. Cramer.
Let me begin with some housekeeping comments and hopefully
each member will get this message, even though they are not
here now.
We will try to start on time. We have done that in the
past. We will try to do that in the future.
We will recognize members for questioning after the
statements are made, but we will try to hold to the five-minute
rule. If it is necessary, we will go into a second or even a
third round of questioning. We will not shut the members down
from questions. They will have all the time they need, but we
would like to hold it in some orderly way. So we will try to
adhere to the five-minute rule, the ranking member, of course,
being excluded from that. I would never cut him off at any
time.
We also will welcome any member of the subcommittee to
submit questions for the record and ask the witnesses, of
course, to respond to that in writing and send it to the
subcommittee. They are welcome to do that.
With those few comments, let me then comment now on the
substance of this hearing.
We are a subcommittee that has been pinched for monies for
years and the pinch is getting more and more severe. The
President's budget this year is, I think--I will say it very
bluntly--abominable. It really is. It shortchanges us far more
than we ever expected.
The President has made a strong commitment that he would
certainly take care of our men and women in the services, their
quality of life issues, and so forth. But we are being asked in
this budget submission from the President, to absorb a 15
percent cut from last year's appropriated levels of $9.2
billion down to $7.8 billion. That is a cut that I just can't
see how we can accept or live with. And frankly, I think the
subcommittee will find ways to strengthen that budget because
that is deeper than what we can absorb and still do what we
think we are charged to do, particularly on top of two previous
years that I am familiar. I think it goes back maybe even
further than that, but certainly the last two previous years we
have absorbed a $2 billion cut. And out of an $11 billion
budget, you are talking about a 15, 16, 17, and 18 percent cut
over those two years.
So if the President's budget prevails, we will have
absorbed close to a 30 percent cut in the last three years, and
that simply is not acceptable for any subcommittee, much less
one of our Defense Subcommittees.
So this is the lowest budget request since 1982 and I don't
see a way that we can absorb it and still do what we have to
do. This cuts into our commitment to take care of the quality
of life and work issues for our men and women in the services;
namely family housing, single member housing, barracks, day
care centers, hospitals, dental centers, and all of the other
quality of life areas.
But there are also many quality of work areas at military
bases that we have visited and we have seen the deplorable
conditions that many of our men and women have to work in.
Those accumulate to where, as Bill Hefner has been pointing out
very strongly for several years now, that affects retention. We
are losing good men and women in the services becauseof the
quality of work or the quality of their living quarters and their other
benefits for their families.
We have tried to strengthen that area, but this budget will
not only limit but also actually decrease our ability to
address these life and quality of work issues. And I believe we
are reaching the point, in this budget, where we are dealing
with readiness. We don't believe that we can provide the
physical facilities that will allow our men and women in the
services to be ready for any military action and certainly
right now we are facing the very strong possibility of military
action that will test our ability for our men and women to
fight and to be ready for such military action.
And when we reach the point where not only quality of life
is being deteriorated but also our readiness is being
threatened, I think we have reached a point where we are below
any budget level that is acceptable.
Those are strong comments and I am really concerned. We
have before us the man that can address that concern, the
Comptroller of our Defense Department, the Under Secretary, the
Honorable William Lynn.
Before I turn it over to you, Mr. Lynn, let me again add
what I said earlier, how grateful we are to have Bud Cramer
join us on this subcommittee. He is going to make a wonderful
addition. He has good experience on military issues. He has a
significant amount of military concerns and Defense concerns in
his district and certainly in his state and we are extremely
grateful to have you with us, Mr. Cramer, and hope that you
will make a contribution to this committee. We fully expect
that.
Mr. Cramer. Thank you, Mr. Chairman.
Mr. Packard. Again I add some preliminary comments. We will
hold to the five-minute rule when we reach the question and
answer period, but we will have a second and a third round of
questions, if necessary. We will not cut anybody off from a
chance to ask all the questions that they need to ask. But we
will try to have some order to it.
We would invite you to submit questions for the record if
you choose to do so. We will be as flexible, as we can in the
way we operate.
Again, thank you for being here, Mr. Lynn. We will now turn
to you.
Oh, I apologize. I should have a statement from my
colleague.
Mr. Hefner. I will be very brief. I just left a hearing
upstairs with the Defense Subcommittee. General Rodeman made
the statement that our most important and most critical weapon
is the soldier or the marine or the sailor. That is what we
have said in this subcommittee for many, many years.
We are asking people to go out and operate the most
sophisticated weapons that man could ever imagine and then we
are asking them to go back to their families and themselves and
live in facilities that were not very adequate during the
Korean and Vietnam War. Some of these facilities are World War
II vintage. We are asking these men to go back and live in
those facilities and go out the next day and be gung-ho about
their jobs and operate the most sophisticated weapons in the
world.
Now, this just flies in the face of what is reasonable.
Over the years, we have found here and all the administrations
that they're all guilty of it. When they put together a budget,
it seems that the military construction budget is not a high
priority because it is not real sexy to go to North Carolina or
Alabama or Mississippi and cut the ribbon for some new
barracks. Nobody comes except the people that built the
barracks and some other folks. If you unveil a B-2 or a B-1 or
a new tank or what have you, people come and they cheer and
they carry on.
But this is, in my view, the most nonpartisan committee. It
is the best committee in this House. It has the best staff. I
believe we do the best work with what dollars we have to do the
job for the men and women in the service.
This budget is not adequate. It hasn't been adequate for
the past several years. During that time we have had a total
``pause''. We didn't do anything. I believe in the budget cycle
last year, we didn't do anything for the Marines to speak of--
did we?
This is an inadequate budget and we are called on year
after year because they know that this committee is made up of
people who have bases. They say, ``Well, the guys over there
can do the weapons stuff and they'll take care of the military
guys'' and then they give us a pittance.
So it kind of gets frustrating but I think we have done a
remarkable job under different leadership and under the
excellent leadership of Mr. Packard to use the scarce dollars
that we have to do the best that we can, especially now that we
are in a situation where retention could get to be a problem
for us in the years to come, and especially when people are
seeing that commitments are not kept or being honored as far as
health care that men have signed up for.
So it is a real tough chore and I commend Mr. Packard, who
will be fighting this battle hopefully for years to come. We
hope that you will be able to take our message back and be our
voice when they make these decisions. With that, I want to
thank you for being here.
I also want to thank you for those kind words, Mr.
Chairman. It has been a joy to serve on this committee. I will
be able to look back with some pride on things we have been
able to do. I wish all the committee Godspeed and good luck in
doing what is right for our men and women in the services.
Thank you, Mr. Chairman.
Mr. Packard. Thank you very much.
We don't normally have opening statements but if any member
of the subcommittee would like to make an opening statement, we
certainly would make room for you. We like to hold short
hearings and I think that is better than opening statements
usually, so we will turn now to Mr. Lynn.

statement of the honorable william j. lynn

Mr. Lynn. Thank you very much, Mr. Chairman. I appreciate
the opportunity to appear before you in your first hearing of
the year. This is indeed my first hearing, as well, as the
Comptroller. I have testified with the Secretary but this is
the first time that I have been the principal witness and I
appreciate the opportunity.
In the interest of preserving your time for the questions,
which I think you would like to concentrate on, I ask that the
full statement that I have submitted be included in the record.
What I would like to do is just highlight four points out of
that statement and then turn it over to you for questions.
Mr. Packard. That will be fine, without objection.
Mr. Lynn. The first point I wanted to make is one that
comes from the hearing you had last year with my predecessor,
John Hamre. Mr. Chairman, as I understand it from reviewing the
transcript, an important point you made therewas the question
of how the Department does its planning. We weren't focussed at that
point on the budget year but on how we do long-term planning for
military construction and family housing. I think you cited
deficiencies there. I think that was fair and I think Dr. Hamre took
that to heart. We have tried to do some things to address those
deficiencies. Let me just name a few.
We have started to set planning goals within these
accounts. Dr. Hamre set a goal to eliminate all inadequate
housing in the Department of Defense by the year 2010. With
345,000 family housing units--that is an ambitious goal. We
hope to use some techniques out of the private sector, leverage
private funding, and some other things to accomplish that goal
because we are not going to be able to do it purely within our
budget. We think we have a goal and we are developing the plans
to accomplish that goal.
Similarly, there is a goal to eliminate permanent party
gang latrines and open bay berthing by 2008. There I think we
are even a little further along. All of the services have plans
that will do that--the Air Force by 1999 and the other services
will hit their goal by 2008.
Finally, as a consequence of the Defense Reform Initiative,
the Secretary's initiatives to try and take infrastructure
overhead out of the Department, be able to put funding against
the highest priorities, and move money from tail to tooth. We
are also looking towards privatization of utilities. We have
set a goal to try to privatize all the utilities, where it is
appropriate, by the year 2000. You obviously make national
security exceptions or other exceptions, but the general goal
in the system would be to privatize all those except where
there were unique security needs or privatization was
uneconomical.
Those, I think, are the things we are trying to address in
response to your request and your direction to do more planning
in this area. I think that is a foundation on which we can
build, but I wouldn't say that we are done in that area. I
think there are going to be other things that we are going to
try and address.
The second issue that came up in last year's hearing, and
has certainly come up throughout the year, is the question of
the integration of the guard and reserve. A number of issues
came up as we did the Quadrennial Defense Review about the
adequacy of how we review the guard and reserve funding
requests, funding needs in the budget, and I think we have
recognized that there have been problems in this area. We took
steps this summer and fall to try to address those issues.
As a consequence, you will find that the National Guard and
reserve component leadership are now members of the Defense
Resource Board where all the major long-term program decisions
are made. They are in the major budget issue meetings, the
MBIs, which is where the final decisions are made on the budget
year, in this case the '99 budget. The Secretary, myself, and
John Hamre have been meeting directly with the guard and
reserve leadership to try to make sure we understand those
priorities and we have, in general, tried to take steps to have
a total force perspective on the budget priorities.
As a consequence of some of that, you will see in some of
the accounts the guard and reserve budgets have gone up over
what we expected to request in '99, in some cases what the
Military Departments had requested in '99. I would not say we
have addressed all the issues that the guard and reserve
leadership would raise. I can't frankly say that about any
community in a constrained budget environment, but I think as a
consequence of the improvements in the process, we have done
better. We have improved things from their perspective and
frankly, from the perspective of the whole Department by
addressing their priorities.
Third, let me comment on the issue that you focussed on,
Mr. Chairman. I understand your disappointment that this budget
frankly does not match the increases that the committee was
able to allocate and that Congress was able to allocate through
this committee to the military construction and family housing
areas. I understand that you do think more is needed here and I
think we agree. We do want to do more here.
We are working through, at this point, the first year of
the Quadrennial Defense Review. In that first year we developed
some savings that frankly went other places. We added $1
billion to $1.5 billion to the readiness accounts. In the
hearing Mr. Hefner said he just came from, I don't know whether
General Rodeman mentioned, but there was a $500 million
increase in the defense health program account to meet must-pay
bills. The account was underfunded and it was something that we
had to do and something we really had to do in '99. There was
no discretion.
You are all familiar with the Secretary's commitment to
getting on a modernization path up to $60 billion and we took
the first step in that with the $3.5 billion increase in the
procurement accounts this year.
All of those things put pressure on the budget. It meant
that this year we were not able to match the increases that you
set. I understand, as I said, your disappointment in that. I
think what I can offer you is that this is just the first year
of the QDR.
There will be additional savings. We are, over the course
of the next two to three or four years, going to reduce the end
strength by 60,000 people, with congressional approval. We are
going to reduce reserve end strength by a commensurate amount.
We are going to reduce civilian end strength, frankly, by even
more--80,000 right now is what is projected.
All of those reductions will yield savings. Those savings,
as I say, in the initial steps have gone into readiness,
health, and modernization accounts. We have programmed in the
out-years increases for family housing and military
construction.
Now, I understand programming them in the out-years is not
the same as carrying through in the budget year and we are
going to need to follow through and protect all or most of
those increases in order to satisfy the committee and the
Congress. And I would say to you now that I would hope to be
coming back to you next year with something that would be
improved.
What has changed, as I said, is the QDR. This is the first
year. We hope to do better into the second and the third year.
The fourth and last point I wanted to raise in the
testimony is one that I don't think is well received in
Congress but the Secretary believes, as well as I and the
Administration, is needed, is the question of additional base
closure rounds. We think that the case is clear. We have not
reduced the base structure commensurate with force structure
and budget reductions.
We need, we think, two additional rounds to get those in
line and into balance. We have proposed that be done with two
additional rounds. We have slightly shifted the proposal from
the one that you saw last year. In order to address some of the
concerns that were raised, we are proposing that it be done in
the first year of the next two Administrations, so there would
be one in 2001 and one in 2005.
That, of course, would mean that you would have different
Congresses and different Presidents that would propose those
rounds. We think that by doing it that far in advance and by
putting in place now, a base closure round that far in advance,
you will insulate it somewhat from the politics that I think
are a concern to some people.
The bottomline is, as the Secretary has said, that we need
this in order to provide the funds for the modernization, the
readiness, and the military construction and family housing
needs. We are going to have to bring the base structure into
line with the force structure.
With those four points, and other points in the testimony,
I am happy to explore whatever you would like in questioning. I
conclude my statement with that.
[Prepared Statement of William J. Lynn follows:]

[Pages 8 - 15--The official Committee record contains additional material here.]

Mr. Packard. Thank you, Mr. Lynn. We appreciate your
statement. Very well done. Just a comment that ties in with
what I mentioned earlier and what you commented on in regard to
a reduction in this year's budget.

overall funding

When there is a decrease in the overall DOD budget, then it
is our subcommittee that generally picks up most of that
decrease. In the past, about 75 percent of all decreases that
the President has submitted in terms of the Defense budget, the
MILCON Subcommittee has had to pick up about 75 percent of
those decreases.
When the DOD budget is increased, as it has this year, then
MILCON is usually looked upon as the offset because we are
required to offset any increases. And so our subcommittee gets
the short end of whichever way it goes. Whether we have a
decrease in our overall DOD budget or an increase in our DOD
budget, we seem to be the ones that have to pay for the cost of
those increases or decreases and it always hurts us.
I am not going to ask questions first. I am going to let
the members. And what we will do, as we have done in the past
years, is, we will recognize members in the order in which they
arrived, of course with the exception of the ranking member.
And the full committee chairman and ranking member, if they
attend our meetings, will be recognized first, of course.
Mr. Hefner, we would recognize you now for any questions.

housing privatization

Mr. Hefner. Well, I have already made my statement.
Are we moving ahead with the Secretary's recommendation
that we--I don't know what the exact name would be, like the
housing authority that would work with the military bases to
have people in the private sector go in and construct or keep
up. Are we still moving in that direction with an experimental
program?
Mr. Lynn. Yes, Mr. Hefner, we are. We are actually trying
to accelerate the move. We already have in progress two
projects with 2,000 units in this family housing privatization
initiative.
Mr. Hefner. And where is that?
Mr. Lynn. Those are in Corpus Christi, Texas and Everett,
Washington. We have two more. One at Fort Carson, Colorado has
just been notified to the committee. That alone will be nearly
3,000 units. And we have another six or seven projects in the
proposal stage which would have an additional 15,000 units
that, as we develop them, we will be notifying the committee.
So you will see a geometric increase, because we think
there is enormous promise in the leverage provided by this
initiative. We can leverage the dollars we have in order to try
and meet that goal of eliminating all inadequate housing by
2010.
Frankly, whatever the budget would be, if we don't go
outside our normal means, we would not be able to meet that
initiative. We need the three- to five-, even ten-to-one
leverage that we get out of the privatization to turn those
345,000 units over that fast.
Mr. Hefner. Thank you, Mr. Chairman.
Mr. Packard. If the gentleman would yield on that very
point, is our effort to move into privatization delaying the
execution of projects?
Mr. Lynn. I have to say honestly, Mr. Chairman, in some
cases, yes. Not long, I think weeks and months, but
particularly as we start this up, we have to review which
projects to privatize. We have to be careful. We have to pick
the right projects. We have to make sure that we have the right
relationship with the private sector to make this work. And in
some cases it has delayed a few months. While we screen for
this privatization it has delayed some projects by a few
months.
As you can see, we are moving faster on this. Part of that
reflects that the system is starting to come in place and I
think you will see less and less delay. But I should say we
think the delay is worth it. When we can get that kind of
three-to-one, five-to-one, seven-to-one leverage, additional
housing units for the troops and their families, it justifies
us taking some additional time to get that leverage. We,
however, hope to reduce that time to a minimum and start to do
this more in the budget bill as we move forward, and make this
part of the regular order.
Mr. Packard. Does that create any problem in terms of being
able to use your appropriated funds in a timely manner?
Mr. Lynn. I am not aware of any problem that has created. I
will look to Henry to see. I should introduce Henry Sodano, who
is the real expert in terms of our military construction
budget.
Mr. Sodano. The appropriations are available for five
years. Authorization is good for three years. By no stretch
would reviewing the project to see whether it was an acceptable
candidate for privatization, would affect the obligations.
Mr. Packard. Mr. Parker.

base-realignment and closure

Mr. Parker. Thank you, Mr. Chairman.
Mr. Lynn, I don't want to hurt your feelings or anything
and I appreciate the fact that you have guard and reserve, in
the meetings. How many decades did it take to get them in the
meetings?
Mr. Lynn. Too many.
Mr. Parker. You didn't give them any money but they are in
the room, so I will accept that.
I am very much concerned with this whole concept of what we
are doing. You are talking about having a BRAC-3 and a BRAC-4?
Mr. Lynn. We have already had four rounds so it would
actually be 5 and 6.
Mr. Parker. 5 and 6. Maybe I am missing something. We have
had all these recommendations to close and realign these bases
but I don't see us closing and realigning bases. And I know
that is disingenuous, coming from Mississippi, when I have a
majority leader on the Senate side who is saying we don't need
another BRAC. Well, I am of the opinion that we don't quite
need it if we do the first, second, third and fourth correctly.
This whole thing, it is kind of like--do you remember how
many times in the past we have spent lost food stamps? You know
that issue? Well, what we would do is we would say we have $20
billion of lost food stamps. Now, that was some figure out
there and we would spend it on something.
Somewhere along the way we have this base realignment and
closure as being some kind of thing out there that we can
utilize, but we never follow through with what we're doing. We
have not done BRAC correctly yet, and I know it is because of
political pressures. I know that in Mississippi it is
politically unpopular to say we need to realign some of the
bases in Mississippi because everybody from Mississippi that
represents the state is going to say we don't need any changes;
in fact, we need to expand the bases we have there. That is
true in every state that you deal with.
I am very much concerned about what we are doing in this
country. It is not very logical to me how we are approaching
it. And I may not be explaining my frustration too well to you
but when I hear you talk about this modernization and new
weapon systems and all and spending all this money, it is kind
of like putting a red light on a dirt road. You know, you have
it on this long, straight dirt road and there is not an
intersection there. This red light is just sitting there, a
traffic light. Well, people may come to look at it but it
doesn't serve any useful purpose.
And I see where we are not serving a very useful purpose in
going in these directions and not funding what is really
necessary.
And on the military construction side, if you believe that
with the guard and reserve, you get the biggest bang for the
buck there, we are not doing what is necessary from that
standpoint.
I read this thing and I don't think we are accomplishing a
whole lot with this, in what the Administration's proposal is.
I have real problems. And I don't know what the answer is. If I
could write it myself, I know exactly what I would do. But do
you feel--and I know you are here to defend the President's
budget but do you feel real comfortable in the direction we are
going?
Mr. Lynn. Yes, sir, I do. Let me take your points in order.
The Guard and Reserve point, I guess I disagree with your
characterization that we added no money. Actually we did
increase the optempo account by $100 million and the training
account by $50 million and the investment accounts by over $300
million.
Now, saying that, does that mean that we have addressed
every priority that either the National Guard leadership inside
the building or the various associations and your Adjutant
General would identify? No, we have not and I wouldn't claim
that.
I do think that the process has improved. The dialogue has
improved the trust and respect, and that is frankly where we
have to start. We need everybody inside working together and we
haven't always had that in the past. I think we have moved in
that direction.
It has also shifted some resources towards the guard and
reserve priorities, not as much as they would like to see, but
it is an improvement from where we were. I would amend your
statement there.
The second point you made was that we are not closing the
bases. I am not quite sure what data you are using. I am happy
to give you the overall data, to provide that for the record as
to where we stand in each of the four closure rounds.
[The information follows:]

[Page 20--The official Committee record contains additional material here.]

I can tell you from personal experience in the Department,
the Secretary had a base closed in Maine, Loring Air Force
Base, and that is now closed.
I worked on the Senate side for Senator Kennedy from
Massachusetts and Fort Devens, a major base in Massachusetts,
was identified as a closure candidate in the second round. It
was approved by the commission and that base is indeed closed.
Mr. Parker. Well, out of 152 major installations, how many
of them have actually been closed?
Mr. Lynn. I don't have that number in my head. We can
provide that for the record. Do you have it, Henry?
Mr. Sodano. Ninety-seven. Ninety-seven of the 152.
Mr. Parker. Have been totally closed?
Mr. Lynn. I don't know how to qualify the word ``totally''
so I would like to take that for the record and we will come
back to you with a description of what we mean by the 97.
[The information follows:]

When we say a base closes, we are referring to when the
flag is lowered, active operations cease and caretaker
operations start. There are some instances, however, where the
flag has been lowered and active operations have ceased at
closed sites that a reserve enclave and/or a Defense Financial
Accounting Service (DFAS) activity have been allowed to remain.
As of September 30, 1997, of the 77 bases closed, there were 22
sites where either a reserve enclave or DFAS activity remained.

Mr. Parker. The reason I bring that up is because every
time we turn around instead of closing it totally, what we do
as a Congress is we turn around and allow them to change the
mission or keep something at some of these places.
Mr. Lynn. There are procedures in the law. You go through
the McKinney Act. You go through other government departments
that have first claim. Those things have happened. I do not
think that they have undercut the basic thrust of the base
closure effort and I would cite that we think we will get on
the order of $5.6 billion in annual savings from the four
rounds of closure we have had.
We have been asked by the Congress to verify that number.
That is a fair question. As an early indication in response to
that, we asked the Inspector General of the Department, an
independent auditor within the Department, to go and look. They
have completed their review of the '93 round and they have
concluded that actually we underestimated the savings and we
overestimated the costs of implementation.
So they would suggest that there are actually more savings
out there and there was a little bit less investment up front.
So I think this suggests that the savings are there from
the actions that have been taken. As I said, our view is, when
you ask the final point, am I comfortable that are we going in
the right overall direction my answer is yes.
Before this job, I had the long-term planning job. When you
look at statistics where we have a budget that is down almost
40 percent, a force structure that is down almost 40 percent
and a base structure that is down somewhere between 21 and 28
percent (depending on how you count it, whether you count
foreign bases and so on) that gap is too large. You could
expect some gap and those statistics are not absolutely precise
and I wouldn't want to overuse them that way, but we can't only
have a one-quarter reduction in the base structure relative to
40 percent force and budget reductions. We will be spending too
much money on unnecessary bases if we do that.
Mr. Parker. Thank you.
Mr. Packard. Thank you, Mr. Parker.
Mr. Cramer.

privatization

Mr. Cramer. Thank you, Mr. Chairman. I will attempt to be
brief but I am a new member of this committee and am very
interested in the issues presented to this committee.
You are talking about a budget that commits funds for
family housing, a budget that commits funds for barracks, for
unaccompanied personnel, as well. I would assume that you have
a priority list already of housing that needs to be constructed
to replace old housing and housing that needs to be constructed
to provide for personnel, essentially new housing.
You also are experimenting, if that is the right word to
use, with private developers and have a couple of demonstration
projects. You have 50 additional family housing candidate
projects under review. How do you determine your priorities
there? Share with me some of the division of budget monies for
those housing needs.
Mr. Lynn. What we do is we try to do, on a case by case
basis, a review of the potential of each of those 50 candidates
for use of these privatization tools that we have been given by
the Congress. These involve loan guarantees, leasing of
property, guaranteeing some kinds of rent, and guaranteeing
some kind of occupancy. There are a variety of incentives we
can provide to the private sector that will cause them to
invest their resources in the housing.
We have to do this right. We have to go through and make
sure we have bond rating and we have protection against
foreclosure. We have to review base closure potential and it is
a complicated legal review. That is one of the reasons it has
taken some time, as the Chairman mentioned at the outset. So we
are trying to make sure we go through all of those hoops and
get this right.
When we have it right, as we think we have in Corpus
Christi and Fort Carson, we can invest a fraction of the
resources, sometimes a third, sometimes even as low as a tenth
of the government resources that are needed and do that through
loan guarantees and other devices rather than direct
appropriations and we get the housing for the troops and their
families.
Mr. Cramer. So with that issue you think that the time
delays offer you more benefits in the long run and that it is
worth going through?
Mr. Lynn. We are quite sure of that. And we think we can
compress that delay. Part of the delay is just that this is the
first time through. We want to be very careful that we do this
right and that we protect all the government's priorities as
well as that we are choosing.
Mr. Cramer. Are there any situations where the private
developers will actually own the housing?
Mr. Lynn. Yes.
Mr. Cramer. In all cases they will own the housing?
Mr. Lynn. Not in all cases but in some cases.
Mr. Cramer. In some cases they will. And the 50 that were
referred to in what I assume is your statement, family housing
candidate projects are under review; that is for private
development?
Mr. Lynn. That is right.
Mr. Cramer. But you are still proceeding with housing?
Mr. Lynn. Oh, absolutely.
Mr. Cramer. And have a priority list to accomplish that, as
well?
Mr. Lynn. Yes.
Mr. Cramer. Quickly back to your expectations of two rounds
of BRAC, and my colleague from Mississippi brought up some very
legitimate points with regard to the past rounds of BRAC. I
know my community there in Alabama at Redstone Arsenal, we
inherited a number of BRAC jobs from other commands and it was
very, very difficult to sort through the units that were
supposed to come, to cause those commands to be efficiently
located in one place. The resistance there--I would resist it,
too, if it were the other way. So it is bound to happen. I
would assume that you have a lot of loose ends left that would
motivate you to want two more rounds in a BRAC.
In other words, are your new rounds of BRAC motivated as
much because you didn't accomplish everything you felt like you
should have accomplished in the past rounds or because you just
need to extend the closing to more bases?
Mr. Lynn. Both. I think at one point both the '93 and the
'95 rounds were projected to be larger than they, in fact,
were. What we found, frankly, is that there is a limit to what
the Congress, the public, the Department can absorb in any one
round. You can't just load it up and have a massive round. You
need to do this in segments.
Mr. Cramer. Any time you are transferring thousands of
personnel from one location to another you have housing needs,
you have working area needs, you have all kinds of military
construction issues that would have to be a big domino into the
military construction budgets that we are reviewing.
Thank you, Mr. Chairman.
Mr. Packard. Thank you, Mr. Cramer. One of the reasons we
were anxious to pursue privatization as an alternative, a
secondary process, is that it would allow us to leverage
federal dollars with the private sector and thus try to catch
up with the backlog much quicker.
In some instances our hope is that they will also develop a
long-term maintenance agreement with the owner and they would
maintain the facilities, we hope, better than we have done in
the past with military money. That is our hope. We recognize
that not every project fits into that mold and they are sifting
through that now because again they haven't come up with the
mold. They are still developing that and I guess----
Mr. Cramer. But making progress, I hear.
Mr. Packard. That is what I understand.
Mr. Tiahrt.

overall funding

Mr. Tiahrt. Good morning, Mr. Lynn. I don't know you yet. I
am sure we will get to know each other better in the future.
I have to tell you I am very disappointed with this budget.
I think it falls short. There is not enough money to address
quality of life issues or the operational issues or
maintainability issues. I don't think it considered the five-
year plan (FYDP). It may have in part but certainly not in
whole.
And I want to take off a little bit on the BRAC because I
believe that there is not going to be support for a fifth or
sixth BRAC because we have not completed the first four. And I
believe this Administration politicized the process and will
not have any support on the House floor until we get beyond
that politicization and complete the first four BRACs.
I also believe your budget ignores the needs of our troops,
particularly in the quality of life. I come from Wichita,
Kansas, which is the air capital of the world. We have Boeing
and Beech and Cessna and Learjet with all large facilities
there. We also have McConnell Air Force Base. And we know of
the demand for pilots in the next decade, and that demand
exceeds the number of pilots we currently have in the military.
You know, it is very appealing to go fly for an airline and
we have to do something to hold these people in the military,
to make it at least appealing to them to stay and serve our
country. And those are all related to quality of life issues
and I am concerned that we don't address those quality of life
issues in the Administration's military construction budget.
And I see it sort of as starving our military and it is
really not acceptable. We have not budgeted for Bosnia in this
year's budget. And last year we were told that the
Administration would budget for Bosnia, but it is not there.
Now, is that extra money going to come out of military
construction?
We haven't budgeted for a military strike in Iraq. Where is
that money going to come from? Is it going to be coming out of
military construction? I think this committee is going to work
very hard to see that we do the right thing for our personnel.
And last year we fought very hard to do what we believed was
the right thing for our personnel, and yet we suffered the veto
pen.
So before the President writes the first letter with his
veto pen, I hope he will consider some things. First, let's
check the five-year plan, the FYDP. Make sure that we take that
into consideration. We believe that the people who are working
the hard work of freedom, where the rubber meets the road, know
what their needs are better than we do, so we listen to them.
And I would ask the Administration to do the same thing.
Second, let's complete the BRACs that we already have gone
through before we start another one. We have bases out there
that need to be closed, some that the process needs to be
completed on. When we get that done we will be in a better
financial state, and you will certainly have more support in
the House of Representatives to move on to another BRAC.
And last of all, I want you to consider the quality of life
issues related to keeping our personnel. It is a volunteer
service and if it is not appealing, they are going to go on.
And next year I hope that you will fulfill last year's promise
to budget for Iraq and for Haiti and for whatever else comes up
including Bosnia. We want to make sure that that is in the
budget that comes from the Administration so that we don't feel
like we are vulnerable to being robbed of the needed resources
to keep our military personnel in a good quality of life, with
the operation and maintainability that they need through
capital investment.
Mr. Lynn. Let me respond. I think we are more in agreement
on Bosnia than it appears. On Bosnia in the budget that is
before you, and let me come back to '98, but the FY 99 budget
that is before you, we have proposed that Bosnia and any
increased cost in Southwest Asia be paid for out of a $3
billion allowance that is outside the defense budget.
What we are proposing is along the lines of what you were
saying, that we cannot afford to divert resources from military
construction, from family housing, from readiness, from
modernization and from maintaining those things the way we
think we need to maintain them.
What we should do is pay for Bosnia within this allowance,
which is outside the defense topline. If the Congress approves
that, we would be able, as I say, to protect those defense
priorities, and that is indeed what we have proposed.
So I think we may be in agreement on that.
Mr. Tiahrt. That is encouraging.

base realignment and closure

Mr. Lynn. Now, let me come back to your first point on
BRAC. I take your point that you want to complete the first
four rounds before embarking on a fifth and a sixth round. That
is part of the reason that we have shifted the years. The first
four rounds will be completed by 2001, the time a fifth round
would begin. So you would have that kind of breathing space as
you proposed.
Mr. Tiahrt. There have been bases that we are currently
holding open that were scheduled for closure. So you're saying
that this has been stopped further down to the right or further
on in time?
Mr. Lynn. No, I am saying that the projection right now for
the closure of the last bases in the fourth BRAC round, the
1995 round, all of them would be closed by 2001 and that would
be the starting point for the next round, so there would be a
gap.
Similarly, you mentioned politics involved in this and I
understand the controversies that surrounded the last base
round. By moving it out a couple of years, you try and insulate
itInstead now of '99, you now have it in 2001 and you will be
able to, I think, start with a clean slate in that way.
So we think that we have taken on both of your points and
addressed them with the 2001 timing.
Mr. Tiahrt. Well, they got tangled up in the presidential
campaign last time and now we are setting ourselves up for the
same problem, and that is not the way BRAC was designed. It was
designed to be set aside from the political process. You set
the commission up, you designate the bases and they close.
Instead, we are seeing it caught up in the political
process and that is going to damage BRAC. Right now it has no
legs on the House floor because of that.
Mr. Lynn. I understand the concerns. As I say, that is why
we would propose that it be done after rather than before the
next presidential election, to try and get it out of those
politics. If you look at the detailed proposal, you will see
that we have changed the dates somewhat, just a couple of
months, but what we are trying to do is ensure that the
incoming administration will have the opportunity to appoint
the commissioners as well as review and submit the list.
Under the prior schedule, within a couple of months of
taking office the new administration would have had to move
forward on this. We are trying to build in a couple of extra
months so that there is time for that new administration to
review this. It will be that new administration, after the next
election, that will put forward the realignment and closure
list.
Mr. Tiahrt. Thank you, Mr. Chairman.
Mr. Packard. Thank you, Mr. Tiahrt.
Mr. Olver.

air guard and air reserve

Mr. Olver. Thank you, Mr. Chairman.
I want to ask you a question, Mr. Lynn. I can't imagine
that you would have the answer offhand but somebody around here
might have it and I will come back to it and maybe get the
answer after another couple of parts of my questioning.
Can you give me the number of people who are presently in
filled positions, not authorized positions but filled positions
in the Air Reserve, the Air Guard, the Army Reserve and the
Army Guard?
Mr. Lynn. The actual number of people on board is what you
are looking for?
Mr. Olver. Yes, the filled positions, the positions that
are people on board, as opposed to whatever the----
Mr. Lynn. The authorized spaces. I am not sure we are going
to have that here. We don't have the personnel people here but
we can provide that to you for the record.
Mr. Olver. Then since you won't have that during my time of
questions, whatever I may have, I would like to know what the
filled positions in those categories were at the end of fiscal
years '96, '97, '98 and your projection for 1999 because those
are--there may be more that are important but those are key to
this question of base structure in line with force structure,
which is driving your arguments in relation to base closure
grounds in the future, which, by the way, I think your timing
is very responsible, given the need for completion and cleaning
up loose ends and so forth and getting it away from the
political process, away from the political process that it had
been in the last time.
So I would like to see those data over several fiscal years
if you would, please.
Mr. Lynn. We will provide that.
[The information follows:]

END STRENGTHS AT FISCAL YEAR (FY) END
[As of 3/19/98]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Reserve component ---------------------------------------------------------------
1996 actual 1997 actual 1998 budgeted 1999 budgeted
----------------------------------------------------------------------------------------------------------------
Army National Guard............................. 369,975 370,044 361,516 375,000
Army Reserve.................................... 226,211 212,850 208,000 208,000
Air National Guard.............................. 110,484 110,022 108,002 106,991
Air Force Reserve............................... 73,668 71,986 73,447 74,242
----------------------------------------------------------------------------------------------------------------

Mr. Olver. If there is any question, whoever is going to do
this might talk with me later because I can obviously get more
sophisticated questioning out of it.

overall funding

My other comment, I want to just reiterate and support what
my ranking member has said about adequacy of budget, and others
have already alluded to that I have heard here today. I think
we are functioning under--the Chairman's comments are very much
in line there--I think we are operating under a kind of formula
which says to request 15 percent less than you had last year,
15 percent less, and so on.
Let me tell you that I think that that is rather tragic,
given that we are talking about housing and quality of life and
the training facilities for men and women up and down the line
through reserve and reserve components, as well as the active
components.
One year ago, and I have only been on this committee just
for the last year, one year ago the budget request was 15
percent of what had been enacted the previous year. This
committee added onto that and the final budget, the only one of
the 13 budgets going through this place that ended up being
below what had been the previous year's budget was 6 percent
below, ultimately, requested 15 percent below. We added on and
brought it up to only 6 percent below.
So the request this year, today, one year later, is 15
percent below last year's enacted budget. And I would hope
that, Mr. Chairman, that when we get done here, that we aren't
going to be a penny below last year's enacted budget because I
think that that is what in quality of life issues, in training
facilities and in housing and day care facilities and health
facilities, it seems to me that that is what we owe the people
who are serving us.
So let me go on, if I may, to a different issue. I probably
won't have time to really flesh this out but I may sit around
here until we have another round of questioning and finish
fleshing it out.

air guard and air reserve

You had spoken in part in your testimony about the review
of the assessment of how projects are coming forward,
construction projects are coming forward. I wonder if you would
review for me how those are assessed, particularly in the
reserve and guard components, the Air Reserve, the Air Guard,
the Army Reserve and the Army Guard components.
Do we have a common set of procedures by which those are
assessed, some sort of objective set of procedures or criteria
by which they are assessed or is it done in the Air Reserve and
Air Guard different ways from the Army Guard and Army Reserve,
each in their own way?
Mr. Lynn. The general process is a devolved one in the
sense that the initial responsibility for developing those
requests does lie with the military departments.
So the Army goes through its process and the Army Guard and
Army Reserve projects are considered against active duty
projects, as well as the other needs of the Army. The Army puts
together what they consider to be a balanced program. The Air
Force and the Navy Departments do the same.
Frankly, the Air Force, the Air Force and the Navy have
done a better job of integrating the guard and reserve
components and considering those needs.
We are aspiring to bring the Army up to that level. That is
what we would like to do. That involves actions by us and
actions by the Army.
As I indicated, we took the initial steps this year with
the defensewide process when those military department programs
were submitted. We have now pulled the guard and reserve in.
They are at the table. They are heard. The Secretary listens to
their criticisms, their priorities, how they would assess the
program before he makes his final decisions on what to submit
to Congress.
As a result of that, this year there were some changes,
increases in every case, made to the Guard and Reserve, not
just in military construction but operating tempo, personnel,
and equipment accounts as well.
I think we need to continue. I don't think we are done. I
think we need to continue that process and to try and get what
I suggested at the outset was a total force approach.
We are never going to have all the resources we think we
need to meet all of the priorities. We are going to have to
make choices. But the choices should be made from a total force
approach.
Mr. Olver. Is it made in an objective way? Is there some
set of criteria that all of these groups--the Army Reserve, the
Air Reserve--of course, Naval Reserve, they don't have guard
but the Air Guard and the Army Guard, they are all using the
same set of criteria for how you assess what is the need for
these particular projects?
Mr. Lynn. I wouldn't say they are all using the same
criteria. They are different kinds of units with different
kinds of missions. What we try to do, at a general level, we
fund the first-to-fight units, the units that are most likely
to go in the earliest stages, at a higher priority than units
that are, say, in strategic reserve. You will find that kind of
general priority across all of the services.
But when you get more specific, the Air Guard is integrated
into the Air Force in ways that are different from the way the
Army Guard is integrated into the Army. They get into more
specific kinds of metrics and criteria that are unique to those
missions and units.
Mr. Olver. Mr. Chairman, I will come back to it. I will
pick up right where we were.
Mr. Packard. That will be fine, if you can catch it on the
next cycle.
Mr. Wamp.
Mr. Wamp. Mr. Chairman, at the risk of sounding like Martha
Stewart, let me recommend that while we are gone next week that
we take those five seals and put them above these pictures
here, above the speaker's chair for our Department of Defense
and respective service academies. I keptwondering last year why
we didn't do that, so I am just going to recommend that we do it.
Second thing, I want to applaud Mr. Hefner for his career
and his service, his commitment. I grew up a Democrat and he
was my kind of Democrat. He is my kind of Democrat--good,
conservative----
Mr. Hefner. Would the gentleman yield?
Mr. Wamp. Yes, sir, I would be happy to yield to you.
Mr. Hefner. I was born in Tennessee. In fact, they are
going to build a log cabin where I was born. But I thank you
for that.
Mr. Parker. Would the gentleman yield? Bill is the reason I
left the Democratic Party.
Mr. Wamp. I didn't mean to open up a can of worms. I
reclaim my time. But I do applaud you, sir. This institution is
sorely going to miss you. I think you are a tribute to the
people of North Carolina and I wish you all the best.
And I welcome my good friend and neighbor, Congressman
Cramer, to the subcommittee. He and I adjoin, our districts,
and have worked together in a bipartisan way many, many times.

priorities

I also want to say I think this dilemma that we find with
the President's budget request and this subcommittee is a
perfect example of the problem that the House faces, that the
Congress faces in the shift of constitutional authority on
funding over the last generation, and it is a problem. I think
more and more the Congress is giving up its constitutional
responsibility for spending the taxpayer dollars to the
presidency.
This is a perfect example of why the Congress needs to be
the funding agent for the people and why we know the needs and
we are close to the ground and we have the hearings and you
can't just come through with some kind of magical pen every
year without the hearings, without knowing the needs, without
staying on top of the needs through these hearings for setting
these priorities up.
To me, it is like trying to save money in Medicare and
taking it out of beneficiaries instead of the providers. In
many ways here that is what happens when you are talking about
our troops.
I just want you to know I appreciate the work that you do,
sir, but I would like to know what the President's goals are
for the quality of life of our active duty troops. What are his
objectives? I.e., do his goals include resigning every troop
that is serving with honor and does this budget reflect the
commitment to carry that forward? I mean, what is the end game,
or is this just an annual process of we are going to try to get
what we can and meet the priorities elsewhere?
I really think if you are going to try to set those goals,
you have to have a stronger commitment than we are seeing. How
do you establish the priorities when you send this budget over,
for quality of life? That is the number one issue for me. I
hear it through all these hearings--quality of life, resign our
troops, safety, security, that spouse that is going to make
that decision.
You know, we have to increase their life and our ability to
maintain the quality force that, in the modern era, we have
become known for. When we deployed Desert Storm I think we were
at a peak and frankly, I think we have suffered ever since
then. I just want to know how you set the priorities, or is
there a process at the White House where those priorities are
actually analyzed?
Mr. Lynn. I think the President's priorities are what he
has received on advice from the uniformed military leadership
and those priorities are four: pay, retirement, medical and
housing. Those are the four highest priorities for quality of
life that General Shalikashvili first recommended, endorsed by
the Joint Chiefs of Staff. I know General Shelton and General
Ralston and the current chiefs endorse those four also.
Mr. Packard. Let me interrupt for just a moment. Before Mr.
Parker leaves I want to mention that he also is retiring and he
is going to be sorely missed by this subcommittee.
Mr. Parker. Mr. Chairman, I am not retiring. I am going to
the House.
Mr. Packard. I don't mean that he will be retiring today. I
mean at the end of this term and we certainly appreciate him.
Now please proceed.
Mr. Lynn. As I said, the four priorities, and these are the
strong recommendations of the current and immediate past Joint
Chiefs. Again, pay, retirement, medical care and housing. Those
are the four key ones. Let me say where we are.
On pay, there is a 3.1 percent pay raise funded in the
budget all the way through the FYDP. I don't want to say 3
percent is a huge amount of money but it is, given where
inflation is, a real increase in buying power this year. It is
higher than inflation. It is certainly well needed by the
troops and their families.
On retirement, there have been no changes but the
retirement program has been protected and is again fully
funded.
On the medical, I indicated in response to Mr. Hefner's
question that we found that the program was underfunded and we
added over $2 billion across the FYDP and about $500 million in
'99 alone to try and ensure that the defense health program is
fully funded, and that we don't run into the kinds of issues
that we have run into in past years.
Mr. Kingston. Would the gentleman yield a minute on that? I
would like to ask, is that for active and retiree? And if it is
for both, what is the split?
Mr. Lynn. It is for active and retirees, for the whole
defense health program, which is around $10 billion. The
split--I don't know what the split is in dollars. I believe
just over 50 percent of the care now goes to retirees. How that
tracks in dollars, I am not certain, although retiree care
would tend to be higher, just because of the demographics.
So those are the first three. Housing is indeed the fourth
priority and I think that is--I am sure the congressman would
agree--that that is where we need to continue to do the most
work. We think through the privatization initiatives, we are
going to be able to leverage the money we have. But as the
committee uniformly has noted, the resources don't match what
the committee provided last year and I think we need to address
that in the out-years.
And, as I indicated in my opening statement, we think that
the growing savings from the Quadrennial Defense Review will
allow us the opportunity to do that.
Mr. Packard. Mr. Wamp, would you yield for just a moment on
that?
Mr. Wamp. I would be happy to yield, Mr. Chairman.
Mr. Packard. You have pointed out, I think properly, that
in each of first three priorities--pay, retirement, medical--
that you either held the funding or increased the funding. It
is no priority when you make a 32 percent cut, and that is what
you have done in housing. That is not a priority. That has been
dropped off your list as a priority. You just can't consider
that a priority if you have made a 32 percent cut.
So even though you are trying to address it, we will look
at that very carefully but I would suspect that there is no way
in the out-years that you are going to be able to recapture
that 32 percent loss that we are sustaining this year.
Mr. Wamp. Reclaiming my time, if you had four children in
college and you told three of them that we are going to give
you the same budget you had last year or more and one of them
you are going to cut 32 percent, that child would be a
proverbial redheaded stepchild, and that is where we are. That
is the point the Chairman made.
Mr. Hefner. Would the gentleman yield?
Mr. Wamp. Yes, sir.
Mr. Hefner. The problem as I see it goes back to when I was
chairman for about 10 years before Mr. Packard. You talk about
priorities. The guys across the river get together and work
their special programs. This happens especially with the
defense bill that you are talking about. ``I instigated this
program,'' whether it is the B1, the M1 tank or whatever.
``This is my program,'' and they shepherd it through and they
get the money.
But they don't really get the money, when it gets down to
military construction and housing projects. They figure those
guys over there that have all these bases are going to look
after the military guys. This committee, is going to look after
that, so we won't put too much priority on it because they are
going to beef it up.
Then we come in here with reduced budgets compared to the
Reagan Administration and the Bush Administration, With these
reduced budgets it is hard for us to get a fair and equitable
allocation.
Last year or the year before last--I forget which year--we
had a rescission and we were responsible for the major part of
that rescission in this little committee, and this is,
moneywise, a small committee.
So I still maintain that President Clinton and previous
Presidents, Reagan, Bush or Carter don't really have any idea
what quality of life is all about. We didn't use to even talk
about quality of life until a few years ago. Now you have a
subcommittee on quality of life here in the House.
So I don't think the people down on Pennsylvania Avenue are
as concerned about military folks as they should be. I don't
think they even zero in on quality of life and housing for our
military. It is just something that is not real high on their
radar screen.
And we have fought it every year. We have talked to the
chiefs as they come in here and told them that you are going to
have to be a little bit more concerned about your troops. And
they all say, ``Well, we are working hard over there. We are
working hard.''
Then we come back with this budget and I am assuming that
the chiefs have all signed off on this.
Mr. Lynn. Yes.
Mr. Hefner. So where do we go? We don't have anyplace to go
except to the Budget Committee and say, ``Hey, we have to have
more allocation.'' Then the people in all the other committees
say, ``Hey, we can't give up any of our allocation.'' So we
wind up behind the you know what.
I thank the gentleman.
Mr. Wamp. I yield back, Mr. Chairman.
Mr. Packard. Thank you.
Mr. Kingston.

base realignment and closure

Mr. Kingston. Mr. Lynn, let me say a guy told me one time
you can fire somebody at the U.S. Post Office but you have to
have the stomach to do it. It takes a long time to get through
the process, and I think that is the process you all are in
with the BRAC. I realize that you are damned if you do and
damned if you don't but I don't know that you can really be
expected to fully implement all of BRAC. And I do think that a
lot of people use that as a shield to stop the fifth round.
So it is a horrible job but I don't know that you should
necessarily stop. I have military bases in my area that are
very important to us economically but no one is guaranteed a
military base. The point of the military is to fight and win
wars, not economic development for an area. I just want to say
that.
You know, deployability may be outside your realm but we do
talk about quality of life in today's military. You have a lot
more young moms and dads in it. As I understand it, during
Desert Storm there were a lot of popular bills that popped up
that nobody who was pregnant would be deployed and so forth.
You know, there is a good humanitarian argument for that but it
is a very lousy military situation.
Under your realm is there anybody looking under the
deployability of the United States armed services right now?
You know, the question that if we get involved in Iraq, Bosnia,
wherever, how many of the soldiers that we are counting on are
actually deployable? Do we know?
Mr. Lynn. We do know. I don't. You would want to talk to
Rudy de Leon, the Under Secretary for Personnel and Readiness.
We can get you the answer for the record but I can't provide it
to you at this minute.
[The information follows:]

As of September 30, 1997, the number of permanent non-
deployables is 3,817. Of that number, 3,265 are male and 552
are female. The number of temporary non-deployables is 59,316.
Of that number, 42,168 are male and 17,148 are female.
Figures on non-deployable personnel are provided each year
in the Secretary of Defense's Annual Report to Congress.

Mr. Kingston. It has been suggested that it is--you know,
we are sitting on a volcano here because we are not as
deployable as we think we are because of all the young moms and
dads and single moms and dads that are out there.

child care

Child care. I had one of the more respected members of my
military advisory community tell me that child care is a loser
for posts and bases, that we are pushing child care but it is a
loser. It takes a lot of money and we should privatize military
child care. How do you feel about that?
Mr. Lynn. It is certainly something we should look at as
far as the defense reform initiative. We are trying to look at
any functions that aren't core functions in terms of the
fighting forces. We ought to look at privatization of child
care. Certainly that is a candidate.
I think we have quite a strong system. You have seen the
President has actually been using DOD as an example in some of
his child care initiatives for how well we are doing.
So I think we want to make sure that as we look at
privatization in that area, we don't lose the quality that we
have obtained because, for exactly the reasons that you are
indicating, we have shifted to a very married force, a very
family-oriented force. If we are going to be able to deploy
people and have people ready, we have to provide them with the
kind of child care they need.
I think you can see a change in each of the military
department's attitude toward child care over the last decade.
It is a consequence of how the make-up of the force has
changed.
Mr. Kingston. I think we should certainly continue
providing child care but based on the military mission, it
really murks up the water, if you will, and I think we should
really move toward privatization of these child care
facilities, as I understand it, because it is taking money out
of other things, anything from quality of life, pay raises and
retirement, to maintenance of weapons.
One issue that comes up from time to time is when you have
a military post or base and they have housing there, and the
local community has entrepreneurs who have apartments and so
forth, they feel that they are competing and they should not be
competing.
And not only is it limited to housing but often to
restaurants who have to compete against an officers' club,
which is now open to the public and can advertise on the radio,
``Come eat at the officers' club.'' The price is about the same
but the officers' club really isn't there to compete against
other restaurants.
Are we addressing this or are we just kind of fighting
these on a case by case basis?
Mr. Lynn. There is no general policy in the Department, to
my knowledge, at this point. It is being worked on a base by
base basis.
Mr. Wamp. Would the gentleman yield?
Mr. Kingston. Yes.
Mr. Wamp. Last year I know when we addressed that issue
clearly troops would rather live on the base in most cities
because of security. So that frankly puts those private
developers off the base unless they are involved in one of our
privatization programs, at a competitive disadvantage because
the security on the base is much more amenable to the average
troop.
Mr. Packard. And usually, if you would yield, usually there
is a differential between the housing allowance and what it
costs them to live off-base.
Mr. Hefner. If the gentleman would yield, on the other
hand, the people who say, and I remember in King's Bay before
you came here they always brought the mayor up here from--what
little town is that near----
Mr. Kingston. St. Mary's.
Mr. Hefner. They would introduce the mayor and he would
give this story about how tough it is and all this stuff. So
one day we just said, ``Well, would it be satisfactory with you
if we closed the base?'' ``Oh, no, no, no.''
So the people that are working outside the base, they can
get the support people to come in, so they have not an
advantage but they have the possibility of renting their stuff
and they sure wouldn't want the base to close under any
circumstances.
And this program that they are embarking on, what amounts
to a housing authority, I think has some real merit to it.
Mr. Kingston. I think it does, too.
Mr. Hefner. It is going to let entrepreneurs go in and it
is going to guarantee them occupancy and it is going to be that
after a certain time it will be theirs. Of course, I can't see
them moving it off the base but I think that has some real
potential.
I thank the gentleman for yielding.
Mr. Packard. There is a vote on and I have several
questions that I wanted to ask and I know that Mr. Olver had
some questions.
Mr. Olver. I do. If you want to ask, I will go vote. If you
want to let me ask, you can go vote. Or we will come back.
Mr. Packard. You go ahead. I will run and vote and come
right back because I would like to spend just a little bit of
additional time. If you need to adjourn for just a few minutes,
do that.
Mr. Olver. I think I can probably filibuster until you get
back.

priorities

Mr. Lynn, to go back to where we were before, and this way
only the staff will have to endure this, rather than all the
members. The question I was asking, and now I will add a little
bit to the original question because it will be fairly easy for
you to give it, I think.
The question I was asking about the number of filled
positions was to get a sense of how fast the force structure is
changing over the last few years as we have gone through the
recent BRAC commissions and what your projections are for the
future in order to assess how your goals fit in with what is
actually happening on the ground. There also is another purpose
but that is the key purpose.
So I think I was saying give me, please, the Air Reserve
and Guard and the Army Reserve and Guard, but I think it is
probably just as well if you gave me the air active, army
active and the naval active and reserve. So there would be
eight--it is just a chart, eight groups. The army active
reserve and guard, air similar and naval active and reserve.
And then I think the chart ought to be a little bit longer.
Rather than just going to projections for fiscal '99, it ought
to include fiscal '00 and fiscal '01 because that would get us
really up to where the BRAC commissions are.
That would help me, at least, understand what has happened
to the force structures and what they are likely to look like
and see how this all makes some sense.
Now, to go back to the other question where I was asking
about how projects that come to the FYDPs were being reviewed,
I wasn't sure, and maybe the question as I put it forward is
not sufficiently precise so that you would know what I was
looking for but I have been following last year the procedure
by which Army Guard projects came up and in part, we all
discovered, I think, and maybe everybody else knew, I am sure--
I certainly discovered that the procedures in the Army, the
relationship between the Army Guard and the Army active and
reserve are different, say, from the procedures and the
relationships between the Air Force active, reserve and Air
Guard. They seem to be somewhat more coordinated in the case of
the air, rather than the army.
And I had then asked questions and was told that there was
a procedure being developed, in the case of Army Guard, for
assessing in an objective way, hopefully objective way, what
projects ought to be put forward. And the three criteria being
used there are what you called first-to-fight, which is how it
fits into the readiness needs of the whole force structure;
secondly, the adequacy of the facility as it sits in place; and
thirdly, the state priority. Well now, state priority only
relates to the Army Guard and the Air Guard.
So what I was wondering was whether this was a common set
of systems. I am told that the issue of first-to-fight
essentially represents 40 percent of the total determination,
that the issue of adequacy of the facility represents 35
percent of the determination and the priority, the state
priority represents 25 percent of the determination of what the
score is that projects get in the consideration of the Army
Guard Bureau.
I was wondering whether there was a similar sort of
situation, same or similar, that represents the criteria, the
objective criteria being used in looking at what Air Guard
projects are under consideration.
And then, of course, I am projecting backward. I am
wondering are we using, for instance, for considering Army
Reserve or Air Reserve projects and how they are to be
assessed, are we using only the first-to-fight and the facility
adequacy as issues under consideration or some other set? Maybe
you could tell me whether there is some set of criteria in each
of these categories that defines how those projects are being
put forward.
Mr. Lynn. I am afraid I can't. I think you will have before
you during your month of hearings the representatives from each
of the services who are, I think, doing what you have
suggested. They are the ones who are putting forward the MILCON
projects in their individual component and how the Air Force
system compares to the Army system, I'm afraid, is a question
that I can't answer at this point.
Mr. Olver. They are in deep trouble because that will mean
I will have to ask every one of them as they come in, what is
the procedure by which they are bringing forward those
projects. I think as one looks at what has happened in the case
of the guard, it is quite interesting what projects are coming
forward.
Mr. Lynn. I don't understand where you want an answer on
that.
Mr. Olver. Well, in relation to the Army Guard, my read of
the objective scoring system is I see all of the projects which
have the highest score are sitting out in '03 and beyond.
Mr. Lynn. As I said, I am not familiar with the scoring
system that you have described. The Army does that internally.
I think you would have to discuss that with them. I can try to
get smarter on this and come back to you but I just can't
answer your question.
Mr. Olver. I thought you might have some sense of whether
this was a procedure that was being implemented across the
eight, really. I have now discussed it in relation to four of
the eight categories, whether it was being done across all
those categories or only in those four or maybe it is only in
the one. Maybe it is only being done in the Army Guard, but I
will explore the answer to that over time.
Mr. Sodano. We review the requests that come in for
executability, pricing and whether they satisfy the most
critical requirements, but we review what the services normally
submit. We don't go out into the out-years.
So placement in the out-years is really dependent upon the
services' priority and whatever scheme they use to rank those.
That is pretty much up to the individual service.
So the Army may do it one way, whereas the Air Force may do
it a different way.
Mr. Olver. Maybe there ought to be a systemwide approach to
this because if you put forward a so-called objective scoring
system and all the projects with the highest score are sitting
out in '03 or beyond, then I would wonder how projects are
getting--what is the point of having an objective scoring
system if all the highest scoring projects are out there. If
you have right criteria, which it seems to me first-to-fight is
a perfectly reasonable criteria, and adequacy of facilities is
a perfectly reasonable criteria.
When you're talking about guard structures, priorities at
the state level ought to have a certain play in this. It seems
to me that those are reasonable criteria to consider.But if the
end result of that is a scoring system that puts all your highest
scoring projects out in the '03 and beyond, something is not playing
out.
Mr. Lynn. If the situation is as you describe it, obviously
there is a problem. I am not familiar with that scoring system
or the placement you describe in '03.
Mr. Olver. All right. So that is the rest of my comments
and I think we will have to recess until the Chairman comes
back.
[Recess.]
Mr. Packard. We will reconvene. Let me go into some of the
questions that I had.

line item veto

I was going to have a question on the line item veto. As
you know, we overrode rather overwhelmingly in the House and I
expect them to do the same in the Senate and I wanted to--I was
going to ask really--first of all, I was going to comment that
we would hope that we are never put in that position. We did
not want to be in that position. We felt that we did our work
and in this instance there were some things that we didn't
think the President did.
We would hope that on any line item veto that we would be
consulted before and at least brought in because we are not the
enemy. We are trying to accomplish the same goals.
But that all may be moot now. I just have an announcement
that was handed to me from the Associated Press that a federal
judge today declared the President's new line item veto
authority unconstitutional, so it may be a moot point.

advance appropriations

Let me cover a couple or three other items, though, that I
think are important. For the first time in over a decade, we
see where in your budget request you are requesting the
advanced appropriation opportunity. Would you explain why you
are seeking that and how you expect it would benefit in terms
of your budgeting?
Mr. Lynn. The answer to both questions is the same. We
thought that in a certain number of projects, longer ones that
take longer than 26 months, the advance appropriation would
allow us to get the most out of the individual year's
appropriations for construction projects.
Mr. Packard. Do you have any criteria that you use to
determine which projects you would use that procedure?
Mr. Lynn. They have to be longer than 26 months and the
contracts have to be separable.

family housing construction reductions

Mr. Packard. Okay. On the family housing construction
request, we have talked quite a bit about that, the fact that
we are concerned about how much of a reduction is being
requested. But in terms of privatizing, do you see privatizing
eventually replacing our traditional way of funding base and
family housing and other infrastructure, or do you feel that it
will be a supplement to our existing program?
Mr. Lynn. I don't think we know yet. At this point it is a
supplement. I think the Army in particular is interested in
being very aggressive and moving heavily in that direction. We
are still in the stage of reviewing the projects that we have
and seeing where this is applicable, and I don't think we can
see yet what the end point is.
There certainly are going to be some projects that are not
going to fit and we are going to have to retain the traditional
means to do that. What the proportion is going to be at the
end, I would hesitate to predict.
I should add that what we are going to do, I think, is try
and use the most effective means we have to replace the housing
on that 10-year schedule. So if that means going heavily in
this direction, we would be inclined to. If it means more of a
mix, we would do that.

privatization

Mr. Packard. Do you feel that you are aggressively pursing
the privatization?
Mr. Lynn. Oh, absolutely. I think that the numbers show
that.
Mr. Packard. And I was particularly pleased to hear your
comments early on regarding utilities, particularly underground
utilities, expensive replacement of utilities that you are
looking at the private sector in that area. I think that is a
good effort and obviously we hope that your review will help
you to determine what is the best course of action to take.
I am not saying which is the best course of action but I
have felt that one of the neglected areas for some time is the
very expensive and yet often antiquated underground utility
system that many of our bases have.
Many of our bases are World War II vintage, at least, and
that is when the water systems and the sewer lines and the
power systems and all of the other--your drainage systems and
so forth--were put in, and often they have outlived their life
and they are going to require huge amounts of money to replace.
Your utility companies and a variety of other private
sector opportunities are there and we hope that you will look
at it carefully but recognize that--and it's true in housing--
that at the present time it is a supplement. It doesn't
replace. It may eventually move in that direction but right now
I think we would hope that you would not throw all your eggs
into the private basket.
Do you have any comments on that?
Mr. Lynn. I think we are thinking along the same lines as
you, Mr. Chairman. We think that there is an enormous amount of
potential in the privatization of the utilities.
As you know, it is not without controversy and we need to
work through those issues as we do it, but the potential is
certainly there.

family housing improvement fund

Mr. Packard. It appears that you are going to be shifting
the costs of housing from construction and operation and
maintenance accounts to personnel accounts. I think your
comments indicated that. Do you anticipate any savings next
year?
Mr. Lynn. The impetus here is not really savings. It is
really trying to get the most out of the housing dollar. We
have a very large inventory, 345,000 family housing units. We
need to turn as many as two-thirds of those over, replace or
renovate two-thirds of those--by 2010. And what we are looking
for is to be able to leverage the dollars we have to achieve
that goal. We are not really looking to generate savings for
other priorities in that instance.

transfer authority

Mr. Packard. The transfer authority, your budget proposes a
provision that would allow you transfer up to $200 million
between accounts. Why do you seek that?
Mr. Lynn. Flexibility of management, to be able to meet the
needs of the Department. It's a fact of life that changes come
up.
Mr. Packard. $200 million is a lot. When you are looking
at, in your budget, a $7.8 billion budget, that is apretty
healthy percent. What percent would that be? About 1 or 2 or 3 percent.
You are not going to get that. I can almost assure you of
that because what you are doing is you are bypassing this
committee. We have a reprogramming process that allows us to
make those kinds of transfers and I think you are going to see
that probably continue.
Nevertheless, I was wondering what--of course, you would
like to have all the flexibility you could.
Mr. Lynn. There is clearly a tension between management
flexibility and committee oversight.
Mr. Packard. We have been pretty good at managing to grant
transfers. We will continue to do that, but I don't know that
you will see language in the bill that will reflect that kind
of transfer.
Lastly, it looks like they are still on the first vote so I
am glad I came back and we can wrap this up. I applaud what I
see happening in terms of your total force concept,
particularly with the Army, the way they are trying to
integrate the guard and reserve into their active duty
programs.
I went to a briefing. Were you there at that briefing?
Mr. Lynn. No.
Mr. Packard. I went to a briefing the other morning and
listened carefully to their plan and frankly, I liked what I
heard. But my concern is that as there is an effort to
integrate their functions, I will be very interested and
observant as to how they integrate the budgeting process,
whether, in fact, the guard and reserve's budgets will become
an integral part of the budgeting from the active duty Army.
That will be a very interesting thing.
If that happens, then I think you are definitely moving in
the right direction. But if the guard and reserve remain as a
stepchild in the budgeting process, as it has in the past, and
you go through the rhetoric of integration but if there is not
a true integration of budgeting for guard and reserve functions
as they are integrated into the Army, active duty Army
functions, then it is a sham and I would not be happy about
that.

army guard and reserve

But I think that it is moving in the right direction if the
budget of the Army Guard and Reserve is also integrated and
becomes an active part of the overall budgeting process for
Army activities and functions. If they truly become an integral
part, a total force part of the Army, then the budget will
reflect that all the way through. And if that happens, then I
think we have made a good move.
I will watch carefully to see how the budgeting aspect of
guard and reserve, Army Guard and Reserve, in light of what the
emphasis is and you have certainly been emphasizing this total
force and particularly the integration aspect of guard and
reserve with the Army itself.
Do you have a comment?
Mr. Lynn. I think you have well stated the goal. This has
to be more than rhetoric. But I would even go further. I think
we need to not only change the processes, like the budget
process; we need to change the fundamental relationship. I
think the integration has to be at the personal level between
the Guard leadership and the active Army leadership and then
down the chain, and that is what we are seeking to achieve. And
General Reimer, I think that is the briefing that you are
referring to, with General Reimer----
Mr. Packard. Right.
Mr. Lynn. I think General Reimer is stepping out to do
that. And I am hoping under his leadership we will be able to
make dramatic improvements. If we do, I think they will show up
in the budget process, but that will be the manifestation of a
more fundamental change.
Mr. Packard. If it doesn't show up in the budget process,
then I don't think it will ever show up in reality, in terms of
the integration effort. And that means that the guard and
reserve people need to be at the table--at the planning table,
at the development of the budget table. They need to be at the
table where their input is heard. Otherwise they will still
look upon themselves as a stepchild.
Well, I believe that that covers virtually all that I had
to talk about and bring up.

quadrennial defense review

I guess one further question would be you had indicated in
your Quadrennial Defense Review you intend to beef up MILCON in
the out-years. Has that been quantified? Do you know; are there
figures? Or is that simply an intent at this time?
Mr. Lynn. It is both. It is quantified. The Future Years
Defense Plan lags some of the other budget preparation material
a little bit. You will be getting that in the next few weeks
and you will see for yourselves.
In that you will see that the family housing program goes
up and the military construction, taking the BRAC costs out as
separate entity, also will go up. And that is what is in the
current program.
Now, I don't want to stop there though, because the key
point and where the rubber meets the road is when you take that
outyear program and you craft it into a budget that is
submitted to the Hill.
And I think the key test and the one that you should hold
us accountable on is how much of that outyear programmed
increase is actually held in as we present the budget to you
next year and in the following years.

line item veto

Mr. Packard. Let me conclude the hearing with picking back
up on the line item veto that we have been through. We would
hope that what took us to the point where we had to make the
effort to override would be resolved. In other words, it should
never have gotten to that point. We would hope--you see, we
have been set up for that. This committee has been set up for
that because you come in with a low budget request. We
automatically strengthen that. We are expected to do that in
some areas and we do. Then that sets us up for a line item
veto, and that is what happened this last time.
We scrubbed those projects very carefully and they were
good projects and I am not going to go through that, but the
President didn't do his homework adequately on many of those
projects. Thus, the line item veto took place and that is where
we got the bipartisan momentum to override.
We don't like to do that. That is a bad position for us to
be in. I don't relish the need to even challenge the President
on a line item veto, but we had to this time, we felt.
But even if the line item veto now is not constitutional,
and that could be challenged but we don't know, it still puts
us in a position that I don't like to be in, and that is where
the President has submitted what I consider a low budget; we
are going to strengthen that with add-ons. It is just going to
be an automatic part of our duty and oureffort. Then we run the
risk of having the President veto it. In this case it was line item
veto but the next time, if he doesn't have the line item veto, he may
feel inclined to actually veto our bill.
I really want to emphasize that the President's people, and
really that is you guys, ought to come to us and sit down and
say, ``Look, we have different views on this. Where do we go?
What can we do?'' rather than putting us in a position to
either override an outright veto of the entire bill or, if
something happens to the line item veto authority but it still
is challenged and delayed, and we are going to get into that
this year or next year, that we don't have to override a line
item veto, either.
Communication, sitting down and working and so forth
because the very issues that the President stated publicly for
his justification of lining out the 38 projects are the very
issues that we concentrated on on each project--making sure it
was executable, making sure that it addressed quality of life
issues. All of the things that he listed that we didn't do,
that gave him justification for lining out, are the very areas
that we really concentrated on doing our duty and our job on.
So he simply did not consult with us. He didn't consult
with the DOD adequately and we hope you will use your influence
to help us avoid those kinds of conflicts. We don't want to be
in those kinds of conflicts. We are willing to work but, at the
same time, we are not going to allow the President's authority
to veto or line item veto without us doing what we have to do.
So with that, I am going to conclude the hearing, unless
you have some further comments.
Mr. Lynn. No. Let me just say I agree with the Chairman
that we need to improve the communication. Last year was the
first year of the line item veto and this was the first bill,
and I think it suffered from that. I think we can improve.
Mr. Packard. I think you already did. I think on the
defense budget you made significant changes in the way you
approached the line item veto and, frankly, all the rest of the
appropriations bills.
So we were not harsh on the President. It is just simply
that we weren't going to allow mistakes to be made with this
kind of authority. So we felt that we were gentle with the
President and, at the same time, sending a message back that
this great power that we had entrusted to him had to be used
properly. And I think that because it was a bipartisan effort,
I think it is a message the President probably heard on the
other bills.
At any rate, we want to work with the Administration, not
in opposition. Frankly, that is my style and I want to
emphasize that.
Mr. Packard. With that, I will close the hearing.
[Clerk's note.--Questions for the record submitted by
Chairman Packard:]

Overall Funding

Question. The budget proposes a reduction of $1.4 billion, or 15
percent. This is on top of a $2 billion reduction in the past two
years. We continue to see a trend of decreased funding, with resources
taken away from badly needed facility and infrastructure improvements.
What do you attribute this to, and what can be done about the lack of
support and funding requested by the Department?
Answer. While it may appear that military construction is taking a
disproportionate share of the reduction between FY 1998 and FY 1999, in
reality the FY 1999 Military Construction program is returning to
planned program levels. The FY 1999 program reflects a level of funding
that is affordable, satisfies the highest priority requirements, and is
relatively constant with previous levels, less congressional adds which
account for $800 million of the reduction. In addition, the
requirements for Base Realignment and Closure (BRAC) have declined due
to the completion of BRAC II at the end of FY 1997, and reduced
requirements for BRAC III, primarily in the construction area, which
accounts for another $327 million of the reduction. The balance is
primarily attributable to a $276 million decrease in family housing
construction of which over $200 million is related to congressional
adds in FY 1998.

Advance Appropriations

Question. The request includes advance appropriations of
$569,000,000. Why are we seeing this change in policy?
Answer. This change in policy will enable us to manage our
resources more effectively by not budgeting resources in advance of
need.
Question. What criteria were applied in determining which projects
would receive advance appropriations?
Answer. The nine projects, eight Army and one Navy, were selected
based on the length of the construction schedules (more than twenty-six
months) and the Service's estimate of the amount of construction the
could be executed in each fiscal year.
Question. What benefit is expected from advance appropriations?
Answer. The Department hopes to make more efficient use of the
available funding and of existing authorities by not budgeting funding
for construction that cannot be executed in the budget year. For these
nine projects, the Department has requested full authorization up front
as well as advance appropriations in subsequent fiscal years for the
completion of the construction.

Line Item Veto

Question. What efforts will the Department take to correct the
inaccuracies which resulted in the line item veto of $287 million from
our bill?
Answer. The Department directed the Components to place any vetoed
projects back in the program year in which it was originally
identified. For example, if a project was programmed in FY 2001 and it
was accelerated into the FY 1998 program, but was vetoed, the project
should be placed back into the Components' FY 2001 program.
Question. We anticipate the Senate will vote to override for last
week of February. Can you ensure the Committee that, if the veto is
overridden, the appropriations for these projects will be allocated to
the various Components for execution?
Answer. Yes, if the veto is overridden, I can assure you that the
full amount associated with these projects would be provided to the
Components for execution.

Facility Strategic Plan

Question. Explain the Department's efforts to produce a Facility
Strategic Plan by 1999.
Answer. The Office of the Deputy Under Secretary of Defense
(Industrial Affairs and Installations) has sponsored a cross-department
working group with the purpose of defining and developing a Defense
Facilities Strategic Plan. The working group has created a framework,
which is pending formal approval, that includes vision, mission, goals,
strategies to achieve goals, tools to implement strategies, and metrics
to gauge performance. After formal approval, we implement the framework
by refining existing strategies, tools, and metrics and creating new
ones where needed. We will complete work on these strategies by the end
of Calendar Year 98, in time for their incorporation into the Defense
Planning Guidance for the 2001-2005 programs.

Facility Reductions

Question. What effort is DOD making to dispose of surplus real
property?
Answer. As part of the Defense Reform Initiative, each military
Service surveyed its building inventory to identify the obsolete and
excess buildings they could demolish or otherwise dispose of. The
survey identified 80 million square feet and about 8,000 specific
structures. If necessary, the Services increased funding in the Fiscal
Year 1999 budget for demolition so they could eliminate these
structures by the end of fiscal year 2003.

Base Realignment and Closure

Question. Why does the Department need authority in fiscal year
1999 for rounds of base realignment and closure that would not occur
until 2001 and 2005?
Answer. This summer the Department will make program decisions for
FY 2000 through FY 2005. Over the next 3 years, the Department will
make important decisions regarding the procurement of many systems
critical to our future military capabilities. Receiving authorization
now for new BRAC rounds in 2001 and 2005 allows the Department to plan
for a smaller base structure so that resources that would otherwise be
wasted on excess infrastructure can be devoted to modernization and
readiness. We also need additional time to plan for cross-Service and
cross-function issues largely unaddressed in past BRAC rounds that
could contribute significant savings in future rounds.
Question. Is it correct that the Future Years Defense Program has
``place-holders'' for FY 02 and FY 03 funding? If so, how much is set
aside in each year, and how would administrative expenses be financed
prior to FY 02?
Answer. Yes, the Future Years Defense Program contains funding for
additional rounds of base closures. We have set aside $830.0 million in
FY 2002 and $1,447.0 million in FY 2003 to initiate an additional round
in 2001. Funding for a second additional round for 2005 will be
programmed in 2006. All administrative expenses that are not directly
related to closing or realigning a base will be financed from the
Department's mission funding in the operation and maintenance account.

Family Housing Construction Reduction

Question. For the past two years we have seen funding levels for
family housing construction and improvement reduced from enacted levels
by 25 percent and 31 percent. Again, this year these accounts are
reduced by $221 million, or 32 percent. Explain the repeated decline in
this request in light of the importance of this issue.
Answer. Family Housing remains one of our top quality of life
issues; however we are never going to have all the resources we think
we need to meet all of the Department's priorities. The decreases
reflect the Services' prioritization of programs within available
resources. We hope that the privatization authorities will enable us to
leverage our housing funds and that growing savings from the
Quadrennial Defense Review will allow the Services to devote more
resources to Family Housing.

Family Housing Improvement Fund

Question. The Department is placing an emphasis on family housing
privatization, yet only requesting administrative expenses ($7 million)
for the Family Housing Improvement Fund. Instead, the Department will
rely on transfer authority. Please explain this rationale, and what
assurances can you give us that the normal construction programs are
not being slowed down due to this form of funding?
Answer. In most cases, consistent with the design of the
initiative, the Services will transfer appropriations for housing
construction projects into the Family Housing Improvement Fund (FHIF)
to finance privatization projects that leverage these traditional
construction funds into more housing more quickly. For projects with
high leverage potential without a transfer source, the remaining $20
million from the FY 1996 and FY 1997 FHIF appropriations will be used
to fund the government's contribution. Each year, the Department's
requested Family Housing projects are for locations with the highest
priority housing needs. However, we do not know at which locations
privatization is a viable alternative to construction. By requesting
appropriations for projects in the family housing construction accounts
we can proceed quickly with the construction projects if a
privatization deal cannot be worked. The transfer authority provides us
the flexibility to leverage the funds if the opportunity for
privatization exists. While projects may be delayed during the
assessment of privatization options, we believe the potential benefits
from leveraging are worth the wait. In no case would we delay a project
beyond the period for which funds are made available.
Question. Family housing construction requests are down. And, the
Department intends on privatizing 30,000 family housing units by the
year 2000. Is this program becoming a substitute for the traditional
housing program versus a supplement as it was originally intended?
Answer. No, privatization is only one of the tools we are using to
improve our inventory of approximately 200,000 inadequate family
housing units. We expect to privatize where it makes sense and continue
to use traditional military construction where it doesn't. The Military
Departments are currently preparing base by base plans to meet the
Department's goal of eliminating this inadequate housing inventory by
2010 using the combination of military construction, privatization and
demolition.
Question. It appears that we are going to shift the costs of
housing from the construction and operation and maintenance accounts to
the personnel accounts. Do you anticipate any savings with this shift?
Answer. First I would point out that the majority of our housing
costs are already in the military personnel accounts in the form of
housing allowances. The Department's policy is to rely first on local
communities to meet our housing needs and two-thirds of our military
families live off base and receive housing allowances. Secondly, while
our privatization efforts are aimed at leveraging housing funds and not
at generating savings, various studies have shown that paying housing
allowances is more cost effective than constructing, operating, and
maintaining our own housing.

Transfer Authority

Question. The budget proposes a general provision which would allow
the transfer of up to $200 million between any accounts in the bill,
and this could be accomplished at the determination of the Secretary
and upon the approval of OMB. Congress would be given an ``after the
fact'' notification. What is the need and rationale behind this
request?
Answer. Under the proposed transfer authority, the reprogramming
guidelines established by 10 U.S.C. would still apply. Therefore, the
Department would be required to provide congressional notification
prior to accomplishing any transfer between accounts. As is the case
with all reprogramming requests, the Department does not proceed with
the projects until both the House and Senate Appropriations Committees
have responded to our request.
This authority would be useful to the Department in solving urgent,
high priority funding problems within our available resources.

Chemical Demilitarization

Question. The Army Military Construction account shows an
11% increase. However, after taking into account $125 million
for chemical demilitarization, the Army's construction is
actually down 8%. Why is the Chemical Demilitarization program
being shifted from Defense-wide to the Army account?
Answer. As part of the Quadrennial Defense Review,
Secretary Cohen directed his staff to identify efficiencies and
downsize the Office of the Secretary of Defense staff. An
Integrated Product Team (IPT) was established to evaluate the
Chemical Demilitarization Program. Several program management
alternatives were evaluated by the team that recommended that
the funding and oversight of the program needed to be devolved
to the Department of the Army, thus streamlining management of
the program. This is also consistent with the conclusions of
the Defense Reform Initiative Study that the Department
Headquarters should be flexible enough to deal with future
challenges; the office of the Secretary of Defense should focus
on corporate-level tasks; and operational management tasks
should be pushed to the lowest appropriate level. The Chemical
Demilitarization program will be re-designated as ACAT IA with
the Milestone Decision Authority being transferred to the Army
Acquisition Executive.
Question. What precautions have been taken to make sure the
Army program is not reduced to fund chemical demilitarization?
Answer. A complete evaluation of the Chemical
Demilitarization program was accomplished as part of the
Quadrennial Defense Review. Consistent with this review, all
known Chemical Demilitarization program requirements were fully
funded at the time of the transfer to the Army. In addition,
due to future uncertainties and past history of the program,
additional funding was programmed in the out-years to cover
unanticipated requirements before transferring it to the Army.

Army National Guard

Question. The Army is briefing members of Congress about
the integration of active, guard, and reserve forces in the
total Army force structure. To what extent is there integration
in the planning and budgeting process, especially for
infrastructure, as is done in the Air Force?
Answer. In the installations funding arena, this is a
success story. All components have joined in the process on
equal footing or parity, with each component determining
requirements based on the same methodology; for construction
requirements, each component uses a 57-year revitalization
cycle plus buyout of the facilities deficit spread over 27
years. We believe the concept of parity is fully embodied in
the development process of the Army's installations programs.
Each component is represented on each of the main decision
making bodies involved in the planning and budget process:
Program Evaluation Group, Program Budget Committee, and the
Army Resource Board. Nevertheless, the Army has only been able
to fund its highest propriety programs--statutory requirements
(such as environment and Chem Demil); Barracks; and Strategic
Mobility. Beyond this, all components are funded equally, for
example, in revitalization military construction (Active--13%,
Guard--12%, Reserve--38%).

Troop Housing--``1 plus 1''

Question. What progress is the Department making in
upgrading barracks for our single members to meet the new
``1+1'' standard.
Answer. Each of the Services are making substantial
progress in achieving the 1+1 barracks standard. The Army will
achieve full implementation by 2012, the Navy by 2013, and the
Air Force by 2009. The Marine Corps (operating under a waiver
to the 1+1 standard) will achieve its two person per room
standard by 2025.
Question. What has the average cost per space been under the ``1
plus 1'' barracks standard?
Answer. For new 1+1 construction, the average cost per space is
approximately $54,000.

Barracks

Question. Submit for the record a chart that will show, by Service,
the timetable for completion of the barracks revitalization effort at
the time OSD approved the ``1 plus 1'' barracks standard, as compared
with the timetable for completion of this effort as a result of
Congressional initiatives to accelerate this effort.
Answer. The additional appropriations for quality of life programs
that Congress has added to the FY 97 and 98 budgets have contributed to
the acceleration to the 1+1 barracks standard in the Army and Air
Force, as indicated in the table below. These funds have also
contributed to improvements in other facilities that enhance service
members' quality of life as previously reported to Congress.

------------------------------------------------------------------------
Original Accelerated
timetable timetable
------------------------------------------------------------------------
Army.................................... 2020 2012
Navy.................................... 2013 2013
Air Force............................... 2019 2009
Marine Corps \1\........................ \2\ \2\
------------------------------------------------------------------------
\1\ The Marine Corps has been granted a waiver to proceed towards a two
person per room standard.
\2\ Standard waived.

Troop Housing: Deficit

Questions. By Service, what is the total current troop housing
deficit?
Answer. The following number of single service members are included
in the respective Services' deficit count either because there are too
few barracks spaces to house these members or the existing barracks
spaces need to be replaced or improved:

Army...................................................... 63,000
Navy...................................................... 29,000
Air Force................................................. 26,138
Marine Corps.............................................. 36,490

Question. Will the other Services be developing a ``Master Plan''
similar to the Air Force's in the near future?
Answer. Yes. The Navy/Marine Corps master plan is near completion
and the Army has embarked on a similar effort.

Troop Housing: Inadequacies

Question. Provide a breakout of how many barracks are considered
substandard, inadequate and facilities with central latrines/showers.
Answer: The following table indicates the number of bed spaces in
barracks considered substandard and the number with central latrines/
showers:

----------------------------------------------------------------------------------------------------------------
Substandard
---------------------------------------
Service/amenities Not Total Adequate
Upgradable Upgradable Substandard
----------------------------------------------------------------------------------------------------------------
Army:
Central Lartines/showers................................ 29,000 19,000 48,000 0
Adjacent latrines/Showers............................... 25,000 0 25,000 87,000
Navy:
Central latrines/showers................................ 10,534 1,697 12,231 3,560
Adjacent latrines/showers............................... 9,954 6,480 16,434 11,155
Air Force:
Central latrines/showers................................ 0 4,558 4,558 0
Adjacent latrines/showers............................... 60 4,520 4,580 63,791
Marine Corps:
Central latrines/showers................................ 0 12,438 12,438 36,117
Adjacent latrines/showers............................... 27,068 0 27,068 61,547
----------------------------------------------------------------------------------------------------------------

Troop Housing: Budget Request

Question. How many spaces are included in the budget request for
troop housing?
Answer. The FY 1999 Military Construction request will enable us to
construct or modernize 33 barracks and 8,339 living spaces, with the
majority of the new or modernized living units at the ``1+1'' standard,
which provides each unaccompanied service member more space and a
private sleeping area.
Question. What would it cost to buy-out the current troop housing
deficit?
Answer. To buy out the current housing deficit, the Army would need
$5.1 billion, the Navy $1.5 billion, the Air Force $1.3 billion and the
Marine Corps would require $0.775 billion.
The Army's figure uses an estimate of $86,000 per space to
eliminate deficits. This figure includes other buildings which are
incorporated into its Whole Barracks Complex Renewal projects such as
brigade headquarters, dining facilities, etc.

MUHIF

Question. The Program and Financing statement for the Military
Unaccompanied Housing Improvement Fund shows that the full $5,000,000
available in this account will be obligated during fiscal year 1998,
and that $1,000,000 will outlay during fiscal year 1998 and another
$1,000,000 will outlay during fiscal year 1999. What is the basis for
this projection?
Answer. The budget projected an obligation and outlay plan for the
FYs 1998 and 1999 Defense Unaccompanied Housing Investment
appropriation based on an assessment of anticipated program plans
supporting the privatization of barracks. The execution of those plans
is dependent upon stimulating private developers to build, operate and
maintain barracks. The extent to which market incentives materialize or
do not materialize for private development will determine the execution
of these funds during the FY 1998 and FY 1999 timeframe.

Child Development Centers

Question. The budget request seeks funding for five child
development centers. Will this enable all services to meet the goal of
providing for 80% of the total child care need? If not, how much
further construction by component is necessary?
Answer. We are not relying on construction alone to reach our goal.
Currently we meet 57 percent of the need through a system composed of
child development centers, family child care homes, and school-age care
programs. Over the next 5 years (1999-03) we hope to construct 22 child
development centers and have an additional 9 centers planned beyond
2003. We are also planning to establish off-base family child care
homes, contract for spaces in accredited civilian child care centers
and form partnerships with local elementary schools to expand school-
age care.
Question. Are all of the components programming to meet the goal of
80% of the potential need?
Answer. Our Military Service components are programmed to meet 65
percent of the need. The Army met the 65 percent goal this year. The
Marine Corps expects to reach the goal by 2002, and the Air Force and
Navy are programmed to be at 65 percent by 2003. The 80 percent goal is
a long-range goal we believe will optimally meet our Departmental need.
Question. What progress has been made in the pilot program to
review ways for providing child care services by using third party
contracting?
Answer. The Department of the Navy and the Defense Logistics Agency
(DLA) are serving as the DoD executive agents to study third party
contracting. The Navy is purchasing spaces in accredited child
development centers by buying down the cost for military families. The
Navy has awarded contracts in Jacksonville, Florida; Norfolk, Virginia;
San Diego, California; and Pearl Harbor, Hawaii. The much-needed and
more costly infant and toddler spaces have been difficult to find in
the civilian sector. DLA is testing the management and operation of a
military-constructed child development center by a private contractor
in Dayton, Ohio. The contract has been in effect a little over a year.
Unobligated Appropriations
Question. The fiscal year 1999 budget request proposes to finance a
total of $15,546,000 from unobligated prior year appropriations, as
follows:

Family Housing, Army.................................... $1,639,000
Family Housing, Navy and Marine Corps................... 6,323,000
Family Housing, Air Force............................... 7,584,000
--------------------------------------------------------
____________________________________________________
15,546,000

Identify the sources for this savings.
Answer. The sources for these savings are the unobligated balances
from awarded FY 1995 family housing new construction projects, less any
outstanding commitments, as follows:

[In thousands of dollars]

Project/Location
Ft. Richardson, AK................................................ 14
Ft. Stewart, GA................................................... 311
Schofield Barracks, HI............................................ 530
Ft. Riley, KS..................................................... 319
US Military Academy, NY........................................... 226
Ft. Bliss, TX..................................................... 239
--------------------------------------------------------
____________________________________________________
Total Army.................................................. 1,639
========================================================
____________________________________________________
Camp Pendleton, CA................................................ 5,204
PWC San Diego, CA................................................. 412
NATC Patuxent River, MD........................................... 80
CBC Gulfport, MS.................................................. 606
NS Puget Sound, WA................................................ 21
--------------------------------------------------------
____________________________________________________
Total Navy.................................................. 6,323
========================================================
____________________________________________________
Maxwell AFB, AL................................................... 3
Davis Monthan AFB, AZ............................................. 90
Edwards AFB, CA................................................... 357
Los Angeles AFB, CA............................................... 2,498
Vandenberg AFB, CA................................................ 7
Patrick AFB, FL................................................... 163
Mountain Home AFB, ID............................................. 39
McConnel AFB, KS.................................................. 1,225
Barksdale AFB, LA................................................. 445
Whiteman AFB, MO.................................................. 27
Holloman AFB, NM.................................................. 65
Pope AFB, NC...................................................... 954
Grand Forks AFB, ND............................................... 26
Shaw AFB, SC...................................................... 35
Dyess AFB, TX..................................................... 469
Hill AFB, UT...................................................... 40
Langley AFB, VA................................................... 392
Fairchild AFB, WA................................................. 5
F E Warren AFB, WY................................................ 744
--------------------------------------------------------
____________________________________________________
Total Air Force............................................. 7,584

Question. What is the average age of facilities and family
housing?
Answer. The average age for all facilities including family
housing, weighted by plant replacement value, is estimated to
be about 41 years as of fiscal year 1998.

Replacement Value

Question. What is the current housing replacement value for
the Department of Defense?
Answer. Based on a Department-wide average cost of $135,000
for construction of a new family housing unit, it would cost
about $42 billion to replace the 313,000 houses owned by DoD.

Family Housing: Deficit

Question. What is the current total family housing deficit
for the Department of Defense, both in units and in cost of
replacement, repair, or improvements?
Answer. The following table represents the Department's
estimate of family housing deficits for new construction,
replacement and improvements:

------------------------------------------------------------------------
Dollars in 000's
---------------------------------------
New
construction Replacement Improvement
------------------------------------------------------------------------
Army:
Units....................... 10,322 87,027 ...........
Costs....................... $1,300,000 $5,700,000 ...........
Navy:
Units....................... 15,000 4,500 22,800
Costs....................... \1\ $681,100 $695,800 $1,447,800
Air Force:
Units....................... 16,000 30,000 31,000
Costs....................... $2,016,000 $3,780,000 $2,480,000
Marine Corps:
Units....................... 10,008 511 11,972
Costs....................... $1,312,174 $114,639 $846,569
------------------------------------------------------------------------
\1\ Reflects estimated cost to build out military construction portion
of overall deficit. The Navy plans to rely on an overall strategy that
includes public/private venture initiatives, leasing, aggressive
housing referral programs, and improved housing allowances to address
the total deficit.

Family Housing: Average Age of Units

Question. What is the average age of on-base housing?
Answer. The Department's average age of on-base housing units is 36
years.

Family Housing: Annual Maintenance and Repair

Question. What is the annual maintenance and repair bill on average
for each unit?
Answer. The following chart depicts the actual maintenance and
repair cost per unit in FY 1997 and the estimated maintenance and
repair cost per unit for FY 1998 and FY 1999.

MAINTENANCE AND REPAIR COST PER UNIT
------------------------------------------------------------------------
Fiscal year--
--------------------------------------
1998 1999
1997 actual estimate estimate
------------------------------------------------------------------------
Army............................. 4,347 3,840 4,007
Navy............................. 5,449 5,091 4,792
Air Force........................ 3,687 3,736 3,539
Defense-Wide..................... 2,409 2,333 2,457
Total............................ 4,441 4,158 4,058
------------------------------------------------------------------------

Family Housing Maintenance Costs

Question. Provide for the record a chart which will show a five
year history, by Service, of the annual inventory of family housing
units, the annual maintenance amount, and the annual maintenance cost
per unit.
Answer. The average annual inventory, maintenance and unit costs
for each Service for the last five years are:

----------------------------------------------------------------------------------------------------------------
Fiscal year--
----------------------------------------------------------------
1995 1996 1997 1998 1999
----------------------------------------------------------------------------------------------------------------
Army:
Inventory.................................. 128,502 123,656 122,370 119,171 116,772
Maintenance (000).......................... 324,662 632,292 525,893 457,669 467,914
Unit cost.................................. 2,527 5,113 4,298 3,840 4,007
Navy:
Inventory.................................. 72,562 70,651 69,337 65,182 61,923
Maintenance (000).......................... 419,641 475,967 448,914 409,559 355,518
Unit cost.................................. 5,783 6,737 6,474 6,283 5,741
Marine Corps:
Inventory.................................. 25,573 25,365 25,350 25,651 24,664
Maintenance (000).......................... 52,363 89,098 77,239 63,131 69,752
Unit cost.................................. 2,048 3,513 3,047 2,461 2,828
Air Force:
Inventory.................................. 119,469 111,120 110,299 109,654 109,829
Maintenance (000).......................... 407,144 408,971 428,087 419,582 388,659
Unit cost.................................. 3,408 3,680 3,881 3,826 3,539
----------------------------------------------------------------------------------------------------------------

Family Housing Improvement Fund

Question. The budget includes $7,000,000 for the Family Housing
Improvement Fund. For the record, please provide an Object and sub-
object Classification listing of expected obligations of this sum.
Answer. Expected obligations are as follows:

Office Overhead (rent, utilities, etc.)....................... $300,000
Travel........................................................ 90,000
Consultant support............................................ 6,250,000
Contract administration....................................... 360,000

Housing Allowances

Question. Submit for the record a chart that will show, by
appropriations account, the amount expended during fiscal year 1997 and
the amounts budgeted for fiscal years 1998 and 1999 for housing
allowances, separately identifying accompanied and unaccompanied
allowances.
Answer. Requested information is provided in attached chart.
Offset Folio 123 Insert here

Inflation

Question. What inflation rate was used in formulating the budget
request?
Answer. The FY 1999 budget request for military construction and
family housing was formulated using an inflation rate of 1.6 percent,
which is a composite rate at the title level.

Non-Appropriated Funds

Question. Provide for the record the estimated costs (by State,
Service and project) of all nonappropriated funded construction over
$500,000 in fiscal years 1998 and 1999. Also include the lump sum total
of all projects between $200,000 and $500,000?
Answer. The Department of Defense Fiscal Year 1998 Commissary
Surcharge and Nonappropriated Fund Construction Program is attached.
The estimate total reflects design, equipment, and construction costs.
The Fiscal year 1998 nonappropriated fund minor construction
program is currently estimated at $23 million.
The FY 1999 Minor and Major Commissary Surcharge and
Nonappropriated Fund Construction Program is still being developed and
will be provided to Congress in July 1998.
Offset Folios 126 to 129 Insert here

Planning and Design--Navy

Question. Provide for the record a detailed project listing
by Service of all projects included in the fiscal year 1999
planning and design request. The listing should include project
scope, estimated cost, and estimated design cost.
Answer. Attached is a list of projects that are included in
the FY 1999 planning and design request.
Offset Folios 131 to 133 Insert here

Planning and Design--Air Force

Question. Provide for the record a detailed project listing by
Service of all projects included in the fiscal year 1999 planning and
design request. The listing should include project scope, estimated
cost and estimated design cost.
Answer. The fiscal year 1999 planning and design request is based
primarily on the attached list of projects. Additionally, the request
includes funds for value engineering and host-nation support programs.
The project list will change during the review process in preparation
for submission of the fiscal year 2000 President's Budget.
Offset Folios 135 to 141 Insert here

Foreign Currency Exchange Rates

Question. Provide for the record the exchange rates assumed in the
fiscal year 1999 budget request.
Answer. The following foreign currency rates were used in pricing
the fiscal year 1999 budget:

FOREIGN CURRENCY EXCHANGE RATES
[Units of Foreign Currency Per One U.S. Dollar]
------------------------------------------------------------------------
Country Monetary unit Exchange rate
------------------------------------------------------------------------
Belgium........................... Franc............... 35.8600
Denmark........................... Krone............... 6.7960
France............................ Franc............... 5.9863
Germany........................... Deutsche Mark....... 1.7893
Greece............................ Drachma............. 280.4000
Italy............................. Lira................ 1,752.0000
Japan............................. Yen................. 130.4500
Netherlands....................... Guilder............. 2.0107
Norway............................ Krone............... 7.2425
Portugal.......................... Escudo.............. 182.5800
Singapore......................... Dollar.............. 1.6135
South Korea....................... Won................. 1,342.4000
Spain............................. Peseta.............. 151.0000
Turkey............................ Lira................ 196,475.0000
United Kingdom.................... Pound............... 0.6185
------------------------------------------------------------------------

Question. What is the current balance in the Foreign Currency
Fluctuation Account?
Answer. There are no funds currently in the Foreign Currency
Fluctuation, Construction, Account. All funds have been transferred to
the Components' Centrally Managed Allotments to meet FY 1998 foreign
currency fluctuation requirements. However, the amounts currently held
in the Service CMAs are as follows:

[In thousands of dollars]

MILCON, Army.................................................. 9,036
Family Housing Construction, Army............................. 2,773
Family Housing Operations, Army............................... 37,943
MILCON, Family Housing Construction & Ops, Navy............... 3
MILCON, Air Force............................................. 4,404
Family Housing Construction, Air Force........................ 500
Family Housing Operations, Air Force.......................... 7,500
MILCON, Defense-Wide.......................................... 8,701
Family Housing Construction & Ops, Defense-Wide............... 10
NATO Infrastructure Account................................... 4,000
--------------------------------------------------------------
____________________________________________________

Total..................................................... 74,870

Question. How much additional cost has been incurred as a result of
foreign currency fluctuation over the last three years, in both
construction and family housing operations and maintenance?
Answer. The following table reflects the additional costs
associated with foreign currency fluctuation during the last three
years ($ in millions) based on accounting reports for the period ending
December 31, 1997:

----------------------------------------------------------------------------------------------------------------
Family Family
MILCON housing housing Total
construction operations
----------------------------------------------------------------------------------------------------------------
Fiscal year:
1995................................................... 5.4 1.1 63.2 69.7
1996................................................... 4.6 1.5 38.6 44.7
1997................................................... -3.6 -.6 -38.3 -42.5
----------------------------------------------------------------------------------------------------------------

Question. How much has been transferred into the Foreign Currency
Fluctuation Account at the end of the last five fiscal years?
Answer. The following amounts were transferred into the Foreign
Currency Fluctuation Account at the end of the fiscal year:

[In thousands of dollars]

1993.......................................................... 84,827
1994.......................................................... 95,004
1995.......................................................... 79,773
1996.......................................................... 79,045
1997.......................................................... 63,867

Lost Design

Question. How much in lost design occurred in fiscal year 1997 for
each service?
Answer. The following is the FY 1997 lost design (i.e., the cost of
scrapped design or the cost of design that must be redone) by service:

Service: [In thousands of dollars]
Lost design
Army...................................................... 8,298
Navy...................................................... 1,635
Air Force................................................. 2,541

Breakage and Design

Question. How much breakage and deferred design occurred in fiscal
year 1997 for each service?
Answer. The following is the FY 1997 breakage and deferred design
(i.e., design obligations against projects that will not be acquired)
by service:

Service: [In thousands of dollars]
Design breakage
Army...................................................... 4,950
Navy...................................................... 3,268
Air Force................................................. 83

Davis-Bacon: Costs

Question. What is your estimate of the amount within the budget
request for fiscal year 1999 that is attributable to the provisions of
Davis-Bacon?
Answer. The Department conservatively estimates that 5 to 8 percent
of project costs are attributable to Davis-Bacon provisions. Amounts
attributable to Davis-Bacon provisions for Military Construction are
$103 million at 5 percent and $165 million at 8 percent. Amounts for
Family Housing are $25 million and $40 million respectively.

Phase Funding

Question. Does the budget request include funding for any projects
at a level that exceeds the amount of construction that can be put in
place during fiscal year 1999?
Answer. No. All the funds we requested for FY99 are for
construction we can obligate in FY99.

DOD Environmental Project List

Question. Provide for the record a list of environmental compliance
projects requested in the budget, sorted by service, installation, and
by level of compliance.
Answer. Attached is a list of environmental compliance projects by
service and installation. All of the projects listed are Class I
projects.
Offset Folios 150 to Insert here

Environmental Levels

Question. For the record what is the definition of ``Level 1'',
``Level II'', and ``Level III'' projects?
Answer. To meet DoD's Environmental Security goals, the DoD
Components fund all requirements based on the Environmental Quality
Classes defined consistent with timely execution to meet future
deadlines. Determination of classes at overseas locations will be based
on the Final Governing Standards. DoD policy is to fund all Class I
projects, which are projects intended to address activities that are
frequently out of compliance (whether they have received an NOV or not)
and those activities that will be out of compliance if not funded in
the fiscal year requested. DoD policy also requires the Military
Departments to budget prudently to fund Class II projects to meet
future deadlines. Class II projects are those projects where a deadline
exists, but where project completion could possibly be delayed and the
Defense activity still not be in violation. The best example of Class
II projects is Underground Storage Tanks (USTs).
Class I--Projects and activities needed that are currently out of
compliance (have received an enforcement action from a duly authorized
Federal agency, state, or local authority; have signed a compliance
agreement or received a consent order; and/or have not met requirements
based on applicable compliance requirements). This class also includes
projects and activities needed that are not currently out of compliance
(deadlines or requirements have been established by applicable
requirements, but deadlines have not passed or requirements are not in
force) but will be if projects or activities are not implemented within
the current program year. These activities include the preparation of
plans (e.g., NEPA documentation, master plans, emergency response
plans, integrated natural and cultural resource management plans,
pollution prevention plans, etc.), opportunity assessments and
inventories. The preferred approach is to use pollution prevention
projects or activities, if cost effective, as the means of bringing a
facility into compliance. This class includes overseas projects and
activities necessary to alleviate the human health threats, threats to
ongoing operations, or necessary to comply with applicable treaties and
agreements.
Class II--Projects and activities needed that are not presently out
of compliance (deadlines or requirements have been established by
applicable compliance requirements, but deadlines have not passed or
requirements are not in force) but will be if projects or activities
are not implemented in time to meet an established deadline beyond the
current year. This class should also include requirements that
demonstrate a three year or less return or investment or that
significantly reduce environmental life cycle costs for facilities,
installations, and deployed weapons. Overseas this class includes
projects and activities identified using risk based prioritization
practices that meet the long term objective of full implementation by
FY03 of the Final Governing Standards for each foreign country where
DoD maintains substantial installations.
Class III--Includes projects and activities that are not explicitly
required by law but are needed to address overall environmental goals
and objectives.

DOD Life Safety/Health Project List

Question. Provide for the record a list of life safety/health
compliance projects requested in the budget, sorted by service,
installation, and by level of compliance.
Answer. DoD Component hazard abatement projects are prioritized for
funding using the DoD Risk Assessment Code (RAC) system instead of the
Environmental Quality classes defined in the answer to Question Number
52. Each installation is required to maintain a formal hazard abatement
plan listing projects with RAC funding priorities (RAC 1--critical, RAC
2--serious, RAC 3--moderate risk). However, there is no
institutionalized DoD requirement for the Components to report on the
status of these installation level projects. Nor is there a specific
line item in the DoD budget identifying all hazard abatement projects.
Although some projects may be funded by MILCON, many are funded in the
O&M accounts or in the Defense Health Program, without any visible
breakouts in the budget.
Commencing this year, however, the Deputy Under Secretary of
Defense (Environmental Security) asked the Military Services and DLA to
report the status of funding for their hazard abatement programs during
the first DoD Safety In Progress Reviews (IPR). The Air Force and Navy
identified RAC 1, 2 and 3 project requirements totaling over $524M,
with active plans to fund about $120M in the FY 1999 budget. The
remaining components need additional time to identify their
requirements. We anticipate better reporting in the status of hazard
abatement projects in successive IPRs. The Department plans to
formalize the collection of this data through a change to DoDI 6055.1,
``DoD Occupational Safety and Health Program.

Planning & Design--Army

Unspecified Minor Construction

Question. Provide for the record a chart which will show the budget
request for unspecified minor construction by component, compared to
the enacted fiscal year 1998 level.
Answer. The following table identifies the FY 1999 request and the
FY 1998 enacted level by component for unspecified minor construction.

[Dollars in thousands]
------------------------------------------------------------------------
FY 1999 FY 1998
Component request enacted
------------------------------------------------------------------------
Army.......................................... $10,000 $7,400
Navy.......................................... 8,900 11,460
Air Force..................................... 7,135 8,545
Defense Wide.................................. 16,094 26,075
Army National Guard........................... 546 7,498
Air National Guard............................ 3,462 8,800
Air Force Reserve............................. 2,903 4,464
Navy Reserve.................................. 877 650
-------------------------
Total 49,917 74,892
------------------------------------------------------------------------

Execution Rates

Question. What is the execution rate of each component for the past
three years for both the military construction and family housing?
Answer. The execution rate for the components military construction
in the first year of the appropriation is as follows:

[In percent]
------------------------------------------------------------------------
Fiscal Year--
--------------------------------
Component Fiscal Fiscal Fiscal
Year 1995 Year 1996 Year 1997
------------------------------------------------------------------------
Army................................... 85 81 85
Navy................................... 52 82 92
Air Force.............................. 68 74 86
Defense Wide........................... 68 65 67
------------------------------------------------------------------------

Answer. The execution rate for the components family housing in the
first year of the appropriation is as follows:

[In percent]
------------------------------------------------------------------------
Fiscal Year--
--------------------------------
Component Fiscal Fiscal Fiscal
Year 1995 Year 1996 Year 1997
------------------------------------------------------------------------
Army................................... 85 81 83
Navy................................... 52 82 58
Air Force.............................. 68 74 82
Defense Wide........................... 68 65 10
------------------------------------------------------------------------

Note.--The Family Housing, Defense-Wide program had only two
projects in FY 1997, one each for NSA and DLA. DLA did not execute the
project in FY 1997 due to higher than expected bid offers, and a
reprogramming request was required. The reprogramming request was
approved by the HAC on February 4, 1998, and the SAC on February 6,
1998.
Offset Folios 159 to 164 Insert here

Unspecified Minor Construction--Army

Question. Has this appropriation met the needs of the components
over the last two years. What shortfalls, if any, have been
encountered?
Answer. Over the last two years, the Unspecified Minor Military
Construction, Army, appropriation has been used to meet the Army's
needs. However, the Army Major Commands have recently been identifying
an increasing number of candidate projects for funding.

Unspecified Minor Construction--Navy

Question. Has this (Unspecified Minor Construction) appropriation
met the needs of the components over the last two years? What
shortfalls if ever have been encountered?
Answer. In Fiscal Year 1996, the Navy reprogrammed an additional
$2.85 million into the Fiscal Year 1995 and Fiscal Year 1996 UMC
account to provide the necessary funding to award three additional
urgent Unspecified Minor Construction projects. The Fiscal Year 1997
appropriation was adequate to meet requirements.

Unspecified Minor Construction--Air Force

Question. Has this appropriation met the needs of the components
over the last two years? What shortfalls, if any, have been
encountered?
Answer. The appropriation has not been sufficient to meet our most
urgent needs. Shortfalls have been accommodated through reprogramming
actions in three of the last four years: FY94 reprogrammed $1.711M;
FY95 reprogrammed $1.45M; FY96 no reprogramming to date; and FY97
reprogrammed $0.8M.

Unspecified Minor Construction--Air National Guard

Question. Has this appropriation met the needs of the components
over the last two years?
Answer. Over the last two years, the appropriation was sufficient
to meet the Air National Guard's (ANG) most urgent needs. Given the
number of short-notice mission conversions requiring facility projects,
the ANG historically has had to carefully balance these urgent
requirements against the limited availability of funds.
Question. What shortfalls, if any, have been encountered?
Answer. The Air Force continues to transfer numerous missions into
the ANG. Since inclusion in the military construction program is often
late-to-need, unspecified minor construction is used to satisfy the
most urgent facility needs. Despite the additional appropriations
received in fiscal year (FY) 1998, the following $4.66 million is
requirements will have to be deferred to FY 1999 and compete with other
requirements already anticipated to be more than the budget request:

[In thousands of dollars]
------------------------------------------------------------------------
State and base Project PA
------------------------------------------------------------------------
MT--Malmstrom AFB................... RED HORSE Storage 1,450
Facility.
GA--Robins AFB...................... Add to Medical Training 860
Facility.
AK--Kulis AGB....................... Add/Alter Avionics/ECM 1,350
Shop.
SC--McEntire AGB, SC................ HARM Missile Munitions 1,000
Igloos.
------------------------------------------------------------------------

Unspecified Minor Construction--Air Force Reserve

Question. Has This appropriation met the needs of the components
over the last two years? What shortfalls, if any, have been
encountered?
Answer. The unspecified minor construction appropriation has met
the needs of the Air Force Reserve over the last two years. However, we
foresee a shortfall in FY 1999 due to the following emergency
requirements

[In thousands of dollars]

Kelly AFB, TX: C-5 Simulator Facility............................. 850
Portland ANGB, OR: Teleconferencing-Network Facility.............. 500
Wright-Patterson AFB, OH: C-141 Simulator Facility................ 1,500
-----------------------------------------------------------------
________________________________________________
Total:............................................ 2,850

The urgency of these projects is based upon late notification of
simulator procurement at Kelly and Wright-Patterson AFBs, and the
requirement to remove temporary facilities (i.e., trailers) at Portland
ANGB.
The following urgent requirements were schedules for FY 1999 but
have slipped to FY 2000 due to the more urgent requirements listed
above:

[In thousands of dollars]

McChord AFB, WA: Add/Alter Aeromedical Facility................... 900
Portland ANGB, OR: Structural Maintenance Shop.................... 894
Davis Monthan AFB, AZ: Pararescue Facility........................ 1,350
Hickam AFB, HI: Medical Training Facility......................... 1,400
-----------------------------------------------------------------
________________________________________________
--------------------------------------------------------------
____________________________________________________

Total:...................................................... 4,544

Therefore, since the Air Force Reserve's total FY 1999 unspecified
minor construction requirement is $7,394K (i.e., $2,850K + $4,544K),
and our budget request is limited to $2,903K, our shortfall in FY 1999
unspecified minor construction totals $4,491K (i.e., $7,394K--$2,903K).

Planning and Design

Question. Does the budget request include sufficient planning and
design funds to execute the entire fiscal year 1999 program?
Answer. The Department's estimate for planning and design (P&D)
requirements for the budget year is based on the size of the two
succeeding fiscal year military construction programs. For example, the
amount requested for FY 1999 will be used to complete design on FY 2000
projects and to initiate design on the FY 2001 projects. Therefore, the
size of the FY 1999 request is a function of the size of the FY 2000
and FY 2001 construction programs. Consequently, the $200.4 million
requested in FY 1999 for planning and design is sufficient to complete
design on the FY 2000 military construction program, which will allow
for execution in FY 2000, and bring the FY 2001 program to the required
35% design level.
The $217.6 million enacted in FY 1998 for planning and design is
sufficient to complete design on the FY 1999 military construction
program, which will allow for execution in FY 1999.
Question. Are any projects in the budget request at less than 35
percent design? If so, list an justify such projects.
Answer. All of the projects in the FY 1999 request are at the
required 35 percent design level which will allow for execution in FY
1999.

Real Property Maintenance--Army

Question. What is the total fiscal year 1999 budget request for
real property maintenance (RPM)?
Answer. The total fiscal year 1999 budget request for real property
maintenance is $1,298 Million, which includes Panama Canal Treaty.
Question. How much is earmarked for barracks renovation?
Answer. The Barracks Upgrade Program earmarked $148 Million in FY
1999. (RPM funding only)

Real Property Maintenance--Navy

Question. What is the fiscal year 1999 budget request for real
property maintenance? How much is earmarked for barracks renovation?
Answer:
The Navy's total fiscal year 1999 budget request for real property
maintenance is $918 million ($877 million active and $41 million
reserve), of which $159 million ($156 million active and $3 million
reserve) is earmarked for barracks.
The Marine Corps total fiscal year 1999 budget request for real
property maintenance is $345 million ($388 million active, $7 million
reserve), of which $75 million (all active) is earmarked for barracks.

Real Property Maintenance--Air Force

Question. What is the total fiscal year 1999 budget request real
property maintenance? How much is earmarked for barrack renovation?
Answer. The Air Force real property maintenance budget request for
fiscal year 1999 is $1,414 (Total Force). The budget does not include
funding to support dormitory renovations. The 1999 budget continues to
fund real property maintenance at the Preventive Maintenance Level
which only provides resources to accomplish the periodic maintenance
required to sustain day-to-day real property facilities and
infrastructure. This funding level limits efforts for maintenance and
defers critical repair projects, including dormitory renovations. If
funding were made available, the Air Force could execute $160M in
quality-of-life projects in fiscal year 1999, which includes $91M in
dormitory repair and minor construction projects.

Reprogramming

Question. Submit for the record a table which will show, by fiscal
year, the total amount approved by Congress for reprogramming for
``Military Construction, Defense-Wide'' for the last five years.
Answer:

------------------------------------------------------------------------
Number of Amounts
reprogramming approved for
actions reprogramming
------------------------------------------------------------------------
Fiscal year:
1994................................ 4 $34,577,000
1995................................ 7 21,893,000
1996................................ 1 2,700,000
1997................................ 2 530,000
1998................................ 1 940,000
------------------------------------------------------------------------

Line Item Veto

Question. Provide for the record a description of how the amounts
line item vetoed from Public Law 105-45 are displayed in the 1998
column of the Program and Financing statements for the seven affected
accounts.
Answer. The Office of Management and Budget directed that
reductions pursuant to the line item veto displayed on line 40.79,
``Line item veto cancellation'', in the Program and Financing schedule
for the applicable accounts. The amounts on these lines are reflected
as a minus, indicating a reduction in appropriation.
Question. Is it correct that the following two projects
included in the budget request for fiscal year 1999 are no
longer required, if H.R. 2631 becomes law?

Utah: Salt Lake City: U.S. Army Reserve Center.......... $13,200,000
West Virginia: Camp Dawson (Kingwood): Readiness Center. $4,465,000

Answer. Yes, that is correct. The FY 1999 President's budget was
prepared on the assumption that the line item veto would not be
overturned. Therefore, if H.R. 2631 does become law, those two projects
would not need to be funded in FY 1999.

Revised Economic Assumptions

Question. Provide for the record a description of how the amounts
appropriated by account in Public Law 105-45 and subsequently reduced
by section 125 [due to revised economic assumptions] are displayed in
the 1998 column of the Program and Financing statements for the eleven
affected accounts.
Answer. Reductions pursuant to section 125 of Public Law 105-45
were account specific and are included in the amount on line 40.00,
Appropriation, in the Program and Financing schedule. The direct
program amounts in the ``Obligations by program activity'' portion of
the Program and Financing schedule were reduced accordingly.

Rossmoor Liquidating Trust Settlement Account

Question. Provide for the record the plan for work to be
accomplished with resources available under the Rossmoor Liquidating
Trust Settlement Account?
Answer. The Department of the Navy plans to purchase available
housing units in the San Diego area using the Rossmoor Liquidating
Trust Settlement funds. NAVFAC Southwest Division is currently
negotiating with contractor and plans should be finalized by early
April 1998. The Congressional notification, required by section 2208 of
Public Law 104-106, will be provided prior to the obligation of those
funds.

General Provisions--Section 101

Question. Why does the budget propose to delete the word ``work''
and substitute the word ``construction''? Also, in our action on the
fiscal year 1996 bill we inserted the proviso regarding BRAC
environmental restoration at the request of the Department. Why does
the budget propose to delete this proviso?
Answer. Section 101, which was enacted in 1951, is intended to
prevent the use of cost-plus-fixed fee contracts for construction;
however, because it does not say that it applies to ``construction''
but to ``work'', it has been viewed as applying to any work being
accomplished by contract, including work which is not construction.
Because of this, in the fiscal year 1996 Act, it was amended to
provide an exception to its provisions in the case of contracts for
environmental restoration at bases being closed when payments are being
made from a base realignment and closure (BRAC) account. These are not
``construction'' contracts, but they are contracts for ``work''
identified in this section.
The exception which was added in the fiscal year 1996 Act
recognized the fact that cost plus fixed fee contracts are virtually
the only ones which are used in the case of environmental restoration.
There are other contracts; however, funded from the BRAC accounts,
which are not for environmental restoration but involve general
operation and maintenance activities which also should be excepted. One
of the reasons for this is that a restriction such as that contained in
section 101 does not apply to similar operations and maintenance
contracts funded with appropriations in the DoD Appropriations Act.
Accordingly, in prior years requests have been made that this provision
be amended by expanding the BRAC-funded exception to include all
contracts ``other than those for construction.''
In connection with consideration of making the same request for the
FY 1999 budget which had been made in prior years, it was recognized
that, if the reference to ``work'' was changed to ``construction,'' not
only would the section accurately reflect its true intent to apply to
construction contracts but also it would eliminate the necessity for
the proviso.
For the foregoing reasons, the budget proposes that the word
``work'' be changed to ``construction'' and the proviso is proposed for
elimination because it would be unnecessary if the foregoing language
change were made. If the change is not made, however, then the proviso
should be retained. Additionally, it should be modified by deleting the
words ``for environmental restoration'' and inserting the parenthetical
``(other than contracts for construction)'' in their place.

General Provisions

Question. Why does the budget propose language permitting transfers
from the BRAC accounts to the Family Housing Improvement Fund, rather
than requesting direct appropriations to the Fund?
Answer. We do not know at which BRAC locations, if any,
privatization is a viable alternative to construction. By requesting
appropriations in the BRAC account we can proceed with construction
projects if a privatization deal cannot be worked. The transfer
authority provides us the flexibility to leverage the funds if the
opportunity for privatization exists.

General Provisions--Deletions

Question. Why does the budget propose to delete the following
sections: Section 111--American preference for A & E contracts; section
113--notification of exercises; section 119--annual burdensharing
report; section 121--compliance with ``Buy American Act'', and section
122--American-made equipment and products.
Answer. Sections 111, 113, and 119 are recommended for deletion
because they constitute unnecessary and undesirable restrictions on the
management of the Department of Defense. Their recommended deletion is
consistent with similar recommendations contained in each President's
budget request since the time each of them was enacted.
Sections 121 and 122 are proposed for deletion because their
retention is unnecessary.
Following is a more detailed discussion of each of these
provisions.
Section 111--American Preference for A&E Contracts (Japan and NATO
Architect and Engineer Contracts).
Section 111 constitutes a limitation on the Department's use of
appropriated funds. It was first enacted in the fiscal year 1985
Appropriations Act and prohibits the Department from obligating funds
for architect and engineer services of more than $500,000 for projects
to be accomplished in Japan or NATO countries unless United States
firms are in joint ventures with host nation firms. It is not cost
effective.
Section 113--Notification of exercise (Military Exercise
Construction).
Section 113 constitutes a limitation on the Department's use of
appropriated funds. It was first enacted in the fiscal year 1985
Appropriations Act and requires the Department to notify the Armed
Services and Appropriations Committees 30 days in advance of the plans
and scope of any military exercise involving United States personnel if
construction related to the exercise is anticipated to be more than
$100,000. The Department is opposed to limitations on the way it does
business and has requested deletion of this provision on that basis
each year since 1985.
Section 119--Annual Burdensharing report (NATO, Japan, and Korea
Host Nation Support Negotiations).
Section 119 is a requirement imposed on the Department of Defense
that unnecessarily interferes with the way that negotiations for host
nation support are conducted. It was first enacted in the fiscal year
1988 Appropriations Act and requires the Secretary of Defense provide
an annual report to the Committees on Appropriations of the specific
actions proposed to be taken to encourage NATO countries, Japan and
Korea to undertake a greater share of the defense burden of the United
States and those nations. While the Department is committed to
increasing host nation support in all cases, it does not consider that
it is necessary or appropriate to include all of the specific details
of the Department's negotiations in this area in annual reports to the
Congress. Not only could such reports compromise negotiating positions
but also they could interfere with the way the Executive branch
conducts those negotiations. The Department is, therefore, strongly
opposed to this provision.
Sections 121 and 122--Compliance with ``Buy American Act'' and
Statement of the Sense of the Congress regarding American Made
Equipment and Products.
Section 121 prohibits the expenditure of funds provided in the Act
``by an entity unless that entity agrees that in expending the
assistance the entity will comply with [the Buy American Act].'' The
only entity which expends funds provided by the Act is the Department
of Defense which must comply with the Act in any case. Therefore, the
section merely requires the Department to comply with a law that it is
already bound to follow.
Section 122, states the Sense of the Congress in subsection (a).
Subsection (b) requires the Secretary of the Treasury ``in providing
assistance under this Act'' to provide a notice describing the
Statement of the Sense of the Congress.
With respect to subsection (a), because it states the Sense of the
Congress, once it is stated, it does not need to be restated again. It
remains the Sense of the Congress even through the successor Congresses
that follow the one in which it is stated. For instance, the so-called
``User Charges'' statute is, in fact, a statement of the Sense of the
Congress which was made in 1951. It is still followed today and is
codified at section 9701 of title 31, United States Code. This is true
even though it has not been restated in a law in the 24 years since the
statement was made. Subsection (b) should not be included in the
Department's Military Construction Appropriations Act because it
applies to assistance provided by the Secretary of the Treasury, not by
the Department of Defense. Furthermore, the only assistance provided by
the Department of Defense with funds made available in the Military
Construction Appropriations Act is assistance under the Homeowner's
assistance program and this program does not involve the expenditure of
any funds for equipment or products.

General Provisions

new section 121
Question. Why does the budget propose a new section 121, providing
transfer authority from the BRAC accounts to the Homeowners Assistance
Fund, rather than requesting direct appropriations to the Fund?
Answer. We are only trying to regain the authority that was granted
in the FY 1996 and FY 1997 Military Construction Acts to transfer funds
from the Service BRAC accounts to the Homeowners Assistance Program
(HAP). The FY 1998 Military Construction Appropriation Act deleted the
general provisions this authority. The HAP program operates as a
revolving fund, partially sustaining its operations with proceeds
generated from the sale of acquired property and augmenting it by
direct appropriations. The Department estimates that it will only need
$12.8 million in direct appropriations in FY 1999. However, since HAP
expenditures are the direct result of base closures or realignments, to
cover any unforeseen HAP requirements that may arise during execution,
we are seeking this general provision that will authorize the transfer
of funds from the BRAC account to the HAP account.
new section 122
Question. Why does the budget propose a new section 122, providing
transfer authority not to exceed $200,000,000, rather than requesting
sufficient direct appropriations to contingency construction?
Answer. The Department requests approximately $10 million of direct
appropriations for contingency construction each year; however, for
three of the past four years, Congress has provided less than half of
the amount requested and a significant portion of these amounts has
been rescinded. Fiscal constraints do not make it prudent to increase
the Department's request for contingencies. The proposed transfer
authority would allow the Department to provide funding for high
priority MILCON requirements with costs exceeding available contingency
funds which surface during the budget year and are too urgent to defer
for inclusion in the next budget.

General Provision 123--Navy

Question. Provide for the record a detailed description of the work
to be accomplished (under section 123) at Everett, Washington,
including cost estimates, OMB scoring, and form 1391 justification. In
addition, please provide copies of the cited legislation for the
record.
Answer. The $6 million in proceeds from the sale of the land and
family housing units at Paine Field will be used to acquire additional
family housing units for Naval Station Everett, as part of the follow-
on PPV project at Everett. The project would involve the construction
of new homes on private land. The balance of funding necessary to
execute this PPV project would be provided via the Fiscal Year 1997
family housing project that provided $15.0 million to construct 100
homes at Everett. The new homes to be constructed will fully satisfy
the current and projected housing deficit at Naval Station Everett. Any
remaining funds (from the above-referenced Fiscal Year 1997 family
housing project) will be used for other PPV efforts in the Pacific
Northwest.
Originally, the Navy had planned to use the proceeds from the sale
of Paine Field to acquire land in the vicinity of Everett, in order to
construct the 100 units of family housing that were authorized and
appropriated in Fiscal Year 1997. Using the Paine Field proceeds in
conjunction with the Fiscal Year 1997 funds in a single PPV project
will provide four and one-half times as many new homes as could have
been provided under the Navy's original plan. Presently, the proceeds
received from the sale of Paine Field are being held in escrow, and the
Navy is leasing back seventy-four units from the purchaser of the
property at a cost of approximately $1 million per year.
The provision ``subject to the availability of appropriations'' in
the authorizing legislation for the sale of Paine Field (Section 2842
of Public Law 102-484) is precluding the Navy from using the funds for
their intended purpose. To our knowledge, there are only two means to
make the funds available:
Make an amendment to Section 2842 of the Public Law 102-484,
deleting the opening phrase ``Subject to the availability of
appropriations for this purpose''. We are unaware of any scoring
implications associated with this alternative, but we understand that
there are procedural rules that may impact upon this alternative.
Appropriate the funds received by the Secretary of the Navy making
the funds available for the purposes authorized in Public Law 102-484.
It is our understanding that the appropriation of these funds for these
purposes would be subject to scoring.
Since the intended use of the proceeds is for a PPV project, a DD
1391 is not applicable.

Advance Appropriations

Question. The budget request includes advance appropriations
totaling $569,000,000 as follows:

Military Construction, Navy (fy 2000):.................. 14,000,000
Military Construction, Army (fiscal year):
2000................................................ 293,000,000
2001................................................ 190,000,000
2002................................................ 72,000,000

What criteria were applied in determining which projects could be
phased?
Answer. The nine projects, eight Army and on Navy, were selected
based on the length of their construction schedules (more than twenty-
six months) and the Service's estimate of the amount of construction
that could be executed in each fiscal year.
Question. The President's budget states that requests for such
advance appropriations are required by 31 U.S.C. 1105(a)(17). Have
these specific advance appropriations been authorized in an enacted
authorization bill?
Is it correct that these specific advance appropriations are not
required under 31 U.S.C. 1105(a)(17) until such time as the related
authorizations for advance appropriations have been enacted into law?
Please submit for the record a copy of 31 U.S.C. 1105(a)(17),
together with the Department's interpretation of what this citation
requires.
Answer. The Department's requests for advance appropriations are
not required by the provisions of 31 U.S.C. 1105(a)(17) which requires
such requests only for programs for which there is an existing
authorization of appropriations. Rather, for the reasons indicated in
the previous question, the Department's request for advance
appropriations in the military construction accounts is based on the
length of the construction schedules involved and the Service's
estimates of the amount of construction that could be executed in each
fiscal year.
These specific appropriations have not yet been authorized in an
enacted authorization Act. A request for authorization for these
advance appropriations will be included in the Department's requests
for authorizations for Fiscal Year 1999.
A copy of the provisions of 31 U.S.C. 1105(a)(17) is attached.
Offset Folios 189 to 190 Insert here

Question. Is it correct that advance appropriations have not been
requested in the past for large construction projects such as
replacement hospitals and chemical demilitarization facilities? A
noteworthy example is the Portsmouth Naval Hospital, which received
``phase IX'' funding to complete construction in fiscal year 1998.
Answer. Yes, That is correct. With the FY 1999 President's budget
we have followed the lead of the congressional committees and attempted
to align the funding with the construction schedule.
Question. Is it correct that the only precedent for advance
appropriations in this Bill was for the construction of Fort Drum?
Answer. Yes, that is correct.
Question. If it is sound procedure to advance fund known
construction requirements, why is it not sound to advance fund known
requirements for family housing operations and maintenance?
Answer. The construction projects where we have requested advance
appropriations were selected based on the length of their construction
schedules (more than twenty-six months) and the Service's estimate of
the amount of construction that could be executed in each fiscal year.
Family housing operation and maintenance appropriations fund routine
on-going day-to-day costs such as housing management, trash and snow
removal services, utilities, and maintenance that do not lend
themselves to advance appropriations. Some major maintenance and repair
projects may extend beyond a single fiscal year, but are not readily
severable into distinct pieces that can be funded with advance
appropriations.
Question. What benefit is expected to be realized from advance
appropriations, and what is the basis for this expectation?
Answer. The Department expects to make more efficient use of our
available funding by not budgeting for construction that cannot be
execute din a timely manner.

Base Realignment and Closure

Question. Wouldn't time for advance preparation of future BRAC
rounds permit the Services to predetermine the installations that would
be closed, by deferring maintenance, within threshold transfers of
personnel and missions, and so forth?
Answer. No, only a BRAC analysis can determine which bases are
candidates for closure or realignment. The BRAC process, as defined in
law, precludes the Department from predetermining bases for closure or
realignment. That process requires the Department's conduct of an
exhaustive analysis, based upon published selection criteria and a six-
year force structure plan, followed by an independent commission's
review. The commission's recommendations must be approved or rejected
by the President in total and are subject to Congressional disapproval.
Question. For BRAC I and BRAC II, how much time elapsed between
authorization and the establishment of those commissions?
Answer. For BRAC I, the Defense Secretary chartered a Commission in
May 1988 followed by authorizing legislation in October 1988 (Public
Law 100-526). The authorizing legislation for BRACs II, III and IV was
enacted in November 1990 (Public Law 101-510). The Commissioners for
BRAC II were confirmed by the Senate in the March/April 1991 (about 5
months after authorization). For BRAC III, the Commissioners were
confirmed in March 1993 (28 months after authorization) and for BRAC
IV, the Commissioners were confirmed in March 1995 (52 months after
authorization).

Environmental Restoration at BRAC Locations

Question. How does the Department intend to budget for the
continuing environmental restoration efforts at BRAC I through IV
locations beyond fiscal year 01--will there be a continuing account in
this appropriations bill to fund these cost?
Answer. After FY 2001, the Dpeartment's current plans are to budget
for environmental cleanup requirements at closed bases in the
Components' Environmental Restoration accounts and Environmental
Quality requirements primarily in the Components' Operation and
Maintenance accounts.
Question. If not, why not?
Answer. The provision in the BRAC law making the Base Closure
Accounts the exclusive source of funds for environmental restoration at
closing or realigning bases will require in FY 2001 upon the
termination of the authority of the Secretary of Defense to carry out a
closure or realignment. As a consequence, we see no reason to establish
and appropriate funds in a separate account for environmental
restoration at bases that have closed or realigned when accounts
already exist for this purpose.
Question. Do you have an estimate of the annual level of funding
required for this effort for fiscal year 01 and beyond?
Answer. Yes, we estimate a funding requirement of $686.9 million in
FY 2001 and about $500.0 million annually thereafter until completion.

Summary and Reconciliation

Question. Please submit for the record the two-page chart titled
``Summary and Reconciliation of Authorization, Authorization of
Appropriations, and Appropriations Requested from Congress for FY
1999''.
Answer. The two page summary chart is attached as requested.
Offset Folios 199 to 200 Insert here

Y2K/Millenium Bug

Question. Is there any impact on programs funded in this bill--
particularly any budgetary impact--tied to the Department's efforts to
address the ``Y2K/Millenium Bug'' computer problems?
Answer. There are no discrete Y2K impacts on projects funded in the
FY99 Military Construction Bill. The federal government currently is
addressing the Y2K issue as a part of the federal acquisition process
for new construction or purchases. The thrust of the solution will be
to require manufacturers to certify and warrantee the Y2K compliance of
equipment installed in FY99 MilCon projects.

Public/Private Ventures--Administrative Overhead

Question. How do contracts for public/private ventures--
particularly contracts involving family housing--address administrative
overhead for federal expenses?
Answer. Contracts for privatized housing require analysis of life
cycle costs comparing privatization alternatives with the government
alternative. This analysis includes all government expenses.
Question. Do such contracts make any provision for reimbursement of
federal expenses in any way?
Answer. Housing privatization requires reimbursement of any
services provided by the government as part of the contracts, such as
utilities, fire protection and the like. There are no reimbursements
for administrative overhead in any projects currently under
consideration.
[Clerk's Note.--End of questions for the record submitted by
Chairman Packard.]
[Clerks Note.--Questions for the record submitted by Congressman
Porter.]

Impact Aid

Question. Mr. Secretary, I am extremely disappointed that, once
again, the DoD did not include any funding for Impact Aid in its FY99
budget, a program that military families deem critical to ensuring the
best possible education for their children. Fortunately, I was able to
include $808M in the FY98 Labor--HHS--Education appropriations bill.
Currently, Impact Aid is only funded by the DoE. However, I am greatly
disturbed by the apparent lack of concern for this program in the DoD,
particularly as it is a significant factor in the quality of life for
our military personnel. What plans does DoD have for becoming a
stronger advocate of this program?
Answer. Responsibility for funding and managing the Federal impact
aid program rests with the Department of Education (DoED). The
Department of Defense maintains a close relationship with DoED to help
ensure the DoD concerns about the impact aid program are known to DoED.
While DoD seeks to ensure that the children of DoD personnel receive
the highest quality of education possible, it recognizes the same
concern for all children. DoD is concerned regarding the provision of
Federal funds to local education agencies (LEA's) to help support the
education of Federally-connected children of Department employees and
servicemembers. However, DoD believes that the best solution lies in
managing impact aid through DoED and appropriating funds sufficient to
enable it to provide funding to all eligible LEA's to the fullest
extent allowed by law.
Question. As you know, recruitment and retention of military
personnel has been a major concern to DoD. It is my understanding that
a contributing factor to this problem is that military families feel
their children's needs are not valued as a result of Impact Aid
shortfalls. The morale of these families is degenerated further by
local citizens who feel that military families do not contribute their
fair share to the school district. The resentment and hostility created
by this situation permeates the community and causes division within
the classroom. For this reason, I believe that it would be in DoD's
best interest to adequately fund Impact Aid in order to eliminate
education as a concern to military families. How does access to
educational services affect recruitment, retention, and morale of
personnel?
Answer. The Department maintains a high level of interest in
programs that contribute to a high quality of life for servicemembers
and their families. Military members with children have the same or
higher expectations for the education of their children as do parents
in the general population. DoD's interests and the satisfaction of its
personnel are best served by funding the Federal impact aid program
managed by the Department of Education sufficiently to ensure that all
Federally-connected children receive a quality education.
[Clerk's Note.--End of questions submitted for the record by
Congressman Porter.]
[Clerk's Note.--Questions for the record submitted by Congressman
Hobson.]

Guard and Reserve

Question. Your statement says that the FY99 request of $180M for
Guard and Reserve is $7M above the amount in FY98. If I remember
correctly, the FY98 MilCon Appropriations conference provided
approximately $460M for these activities. Why are the Guard and Reserve
consistently shortchanged?
Answer. The Department consistently weighs competing interests
within available resources. The Active and Reserve components and
priorities consistent with mission requirements. The Department is
making progress in funding Milcon for the Guard and reserve as
evidenced by this year's increase of $7 million over last budget
request. Further, the Guard and Reserve now have representation on the
Defense Resources Board; and for the first time, during the FY 1999
program review, the Reserve components have been given unprecedented
consideration.
Question. Is this a sign that we really don't have a total force--
that it is all for the active component and little for the Guard and
Reserve stepchildren?
Answer. To ensure that the Department focuses on integration
throughout the force, Secretary Cohen issued a memorandum on September
4, 1997, emphasizing increased reliance on Reserve components. In this
memorandum, he outlined what needs to be achieved throughout the
Department before the Total Force integration can become a reality. The
goal is integration of the Reserve and Active components into a
seamless Total Force that provides the National Command Authorities the
flexibility and interoperability needed for a full range of military
operations.

NATO

Question. I understand that any expansion of NATO will require
increased military construction spending. In fact, the MilCon part may
be the largest part of any U.S. funding increase. While I know that you
are continuing to refine costs, could you briefly walk us through how
you derived your current cost estimates?
Answer. DoD has not refined its earlier NATO enlargement cost
estimate; however, DoD has assessed the December 1997 NATO cost
estimate for the common-funded costs of NATO enlargement. That NATO
report is directly based on initial enlargement requirements developed
by NATO Military Authorities in the areas of C3, air defense and air
C2, infrastructure for reinforcement, and training and exercises.
NATO's estimate to meet the initial common-funded requirements for
enlargement is around $1.5 billion, of which approximately $1.3 billion
will be capital costs paid from the NATO Security Investment Program
(NSIP). The U.S. portion of this figure, based on the current NATO
cost-sharing formula, is roughly $350 million.
NATO experts visited many of the sites in the invited countries
that may be provided for NATO's use, and their estimates reflect an
understanding of the condition of these facilities. In developing their
cost estimates, these experts applied their knowledge of NATO common-
funded eligibility criteria and of empirical costs of common-funded
projects similar to those needed for enlargement.
These estimates constitute the first step in a longer,
comprehensive process of integrating the new members into NATO's
defense planning, including detailed site surveys, preparation of
detailed operational plans, and implementation of specific capital
projects.
DoD has carefully evaluated the capital cost portion of the NATO
estimate, including conducting an independent assessment using the same
assumption as those used by NATO. The Department has concluded that the
NATO figures are sound and reliable--provided that the specific
facilities provided for NATO's use have essentially the same
characteristics as those visited by NATO experts in developing this
estimate.

Base Realignment and Closure

Question. At first, your statement euphemistically mentions DoD's
need to ``shed its excess infrastructure.'' Later you come right out
and utter the words: more ``base closure.''
As your statement notes, the Defense Authorization bill prohibits
further base closure until DoD reports on the cost savings.
Even if the cost savings are certified, I want a report on what you
are going to do to ensure that any future base closure round is fair to
our communities. How are you going to ensure that proposals are by the
numbers and by merit?
Answer. The legislation we have proposed for BRAC rounds in 2001
and 2005 includes the details of how the process will be conducted. The
legislation is modeled on the law authorizing BRACs II, III and IV,
which called for the use of published selection criteria, a plan for
force structure, certified data and an independent Commission to review
recommendations. The BRAC process offers the Department, the Congress
and local communities affected by realignments and closures substantial
advantages over alternative approaches. This process is also a fair,
open, and orderly process. No better approach has been found to reduce
DoD's excess base structure. Additionally, DoD has a strong track
record for helping communities affected by BRAC. The proposed
legislation also facilitates significant assistance to communities for
economic assistance, personnel transition, property disposal,
environmental cleanup, base reuse planning, and other challenging
aspects of the BRAC process. DoD has and will continue to take these
commitments to the communities very seriously.
[Clerk's Note.--End of questions for the record submitted by
Congressman Hobson.]
[Clerk's Note.--The following are questions for the record
regarding projects and activities under the ``Military Construction,
Defense-wide'' account.]

Base Closure and Realignment Schedules

Question. Submit for the record a copy of the most recent quarterly
report on Base Closure and Realignment Schedules, issued by the Office
of Economic Adjustment.
Answer. A copy of the requested report is attached.
Offset Folios 211 to 292 Insert here

Metric Conversion Charts

Question. Submit for the record tables that will facilitate
conversion between metric and customary measures.
Answer. A table providing area, length, and volume conversion
factors follows. In addition, a copy of Metric Guide for Federal
Construction is attached.

Area, Length, and Volume Conversion Factors
----------------------------------------------------------------------------------------------------------------
Quantity From Inch-Pound Units to Metric Units Multiply by
----------------------------------------------------------------------------------------------------------------
Length............................ mile................. km 1.609 344 \1\
yard................. m 0.914 4 \1\
foot................. m 0.304 8 \1\
................... mm 304.8 \1\
inch................. mm 25.4 \1\
Area.............................. square mile.......... km \2\ 2.590 00
acre................. m \2\ 4 046.856
................... ha (10 000 m \2\) 0.404 685 6
square yard.......... m \2\ 0.836 127 36 \1\
square foot.......... m \2\ 0.092 903 04 \1\
square inch.......... mm \2\ 645.16 \1\
Volume............................ acre foot............ m \3\ 1 233.49
cubic yard........... m \3\ 0.764 555
cubic foot........... m \3\ 0.028 316 8
cubic foot........... cm \3\ 28 316.85
cubic foot........... L (1000 cm \3\) 28.316 85
100 board feet....... m \3\ 0.235 974
gallon............... L (1000 cm \3\) 3.785 41
cubic inch........... cm \3\ 16.387 064 \1\
cubic inch........... mm \3\ 16 387.064 \1\
----------------------------------------------------------------------------------------------------------------
\1\ Denotes exact number.

Offset Folios 294 to 331 Insert here

BALLISTIC MISSILE DEFENSE ORGANIZATION

KWAJALEIN--MULTIPURPOSE MISSILE TEST FACILITIES ($4,600,000)

Question. On which island will this project be located?
Answer. Facilities will be located on Kwajalein Island and
Meck Island, about 20 miles northeast of Kwajalein.
Question. What options were studied for alteration and expansion of
existing facilities, rather than new construction?
Answer. The following options were studied:
1. On Meck Island, Building 5050, a large multi-purpose support
building, will be altered to meet project requirements. This facility
was available and more cost effective than new construction or
alteration of other facilities.
2. On Kwajalein Island, building 1500, a large building was studied
for expansion. A technical analysis showed the necessary alteration and
expansion of Building 1500 would interfere with testing the National
Missile Defense (NMD) Ground-Based Radar-Prototype (GBR-P). No other
facilities were available for alteration that could meet project
requirements. Consequently a new facility was designed for construction
to avoid interference with the NMD GBR-P tests.
3. Existing hardstands on Kwajalein cannot be used for high power
radar testing such as the THAAD tests without interfering with current
installation operations. Therefore construction of a new hardstand was
required.
Question. Under block 12 of the form 1391, will this project
include equipment to be provided from other appropriations?
Answer. The new and altered facilities will support mobile
tactically configured components of TMD systems. The first equipment
scheduled to use the facilities is the THAAD mobile equipment and tests
sets that are included in the FY92-99 RDT&E appropriations. No
installed equipment from other appropriations is planned.
DEFENSE MEDICAL FACILITIES
Question. Of the 27 medical projects included in the budget
request, identify which projects (if any) are justified primarily by
the need to correct accreditation deficiencies.
Answer. None of the projects in the FY 99 Medical MILCON Program
are justified primarily by the need to correct accreditation
deficiencies. Only the Pensacola Naval Hospital Addition/Alteration/LSU
project contains work to correct accreditation deficiencies. In this
project, $3,108,000 of the total cost of $25,400,000 will be utilized
for correcting life safety, fire protection, and electrical
deficiencies.

Beale Air Force Base, California--Physiological Support Facility

addition/alteration ($3,500,000)
Question. It appears that this project is justified primarily due
to the physiological training requirements of the U-2 aircraft. How
many U-2 aircraft are in the inventory, how old are they, and what is
the expected remaining service life of these aircraft?
Answer. There are 35 U-2s in the inventory. The fleet is relatively
new with an average airframe flying time of 5300 hours. The expected
service life of these aircraft is beyond 2035.
Question. How long has this function been performed in the current
facility, and why is this method of operations no longer acceptable?
Answer. The original facility was constructed in 1966 as a SR-71
alert facility. There have been several building additions over the
years as the mission gradually evolved to its present training and
support functions. In addition to supporting the worldwide U-2 mission,
the 9th Physiological Support Squadron provides physiological training
to aircrews in the Northwest Region. The facility has always been
significantly short of training and storage space, which negatively
impacts their mission. Lack of adequate classroom space continues to
hamper their pilot and technician training programs. Lack of
maintenance space has forced the staff to use two trailers adjacent to
their building for testing and calibration. Lack of storage space has
resulted in the use of metal shipping containers to store mobility
assets. Perhaps most importantly, current space constraints have forced
the staff to mix training equipment with operational assets. This is a
majority safety concern because U-2 pilot full pressure suits (valued
at $100K each) and seat kits (containing emergency oxygen system and
survival gear) keep the pilots alive at high altitude. If a training
suit or seat kit were to be inadvertently used in a mission, pilots'
lives would be placed at risk.
Camp Pendleton Marine Corps Base, California--Medical/Dental
cl repl (margarita) ($3,100,000)
cl repl (san mateo) ($3,200,000)
Question. Bring us up to date with the request for proposals that
was issued in mid-October 1997 for conversion of building 1377 in the
base headquarters area to establish in-house dental services for
retired and dependent personnel, using licensed professionals from
local communities.
Has final selection/award been made?
How will these two military construction projects in support of the
amphibious training mission affect that morale, welfare, and recreation
effort?
Answer. Alterations to Building 1377 is an MWR initiative. Navy MWR
reports that the renovations to building 1377 began on 26 January 1998.
The facility is expected to open for service in late July 1998. The
service contract was awarded on 20 February 1998. The Margarita and San
Mateo projects will have no effect on the morale, welfare, and
recreation project. The medical MILCON projects will provide treatment
to active duty only. The MWR facility will provide dental services for
family members and retirees on a fee for service basis.
Question. These two military construction projects will vacate
buildings 33305, 33306, 62305, and 62306, which are described as
``deteriorated beyond the point of economical repair ... dysfunctional
... (with) major mechanical and plumbing problems''. These buildings
will then be returned to the base for disposition. Why not demolish
these buildings, and include the cost of demolition in these projects?
Answer. Camp Pendleton Marine Corps Base is the property record
cardholder for these four buildings. The base has indicated they wish
to utilize these buildings for administrative purposes to alleviate
their shortage of administrative spaces. Administrative spaces have far
less utility requirements than those for the clinics.

Edwards AFB, California--Aerospace Medical Clinic

addition/alteration ($6,000,000)
Question. The current temporary modular facilities will be
demolished as part of this project. Are these facilities in the
footprint of this project? What is the cost of this demolition?
Answer. Yes. The cost of demolition is currently estimated at
$139,000 as shown on the DD Form 1391, block 9 under Support
Facilities.
Question. This project is justified, in part, due to ``growing
beneficiary populations''. What accounts for this growth?
Answer. ``Growing beneficiary populations'' is a result of evolving
mission requirements due to continual additions and conversions of
flight test squadrons. Current and projected missions include the F-22,
C-17, B-2, B-1, C-130, F-16, F-15, Aria, Speckled Trout, and X-33.
Flight medicine providers are assigned based on number of squadrons and
types of missions. In addition, the Bioenvironmental Engineering (BEE)
mission is growing due to increases in environmental regulations. This
is particularly true given the large number of industrial sites at
Edwards AFB, and the additional regulatory requirements in the state of
California.

San Diego Naval Hospital, California--Water Storage Tank ($1,350,000)

Question. The form 1390 for this project states that the estimated
cost to remedy the deficiencies in all existing medical facilities at
this installation is $10,978,000. Provide for the record a list of this
real property maintenance backlog, and describe the program to remedy
this backlog.
Answer. Current Real Property Maintenance (RPM) Backlog is as shown
below:
Naval Medical Center San Diego (NMCSD), Bldg. 1: $4,262,200.
NMCSD, All other Buildings: $3,710,000.
NMCSD, Branch Clinics: $1,400,000.
Total Current RPM Backlog: $9,372,200.
The total amount of RPM backlog fluctuates due to continuous
completion and addition of individual projects.
Real property maintenance requirements are identified through an
Annual Inspection Summary (AIS) at each facility. The Navy Bureau of
Medicine and Surgery (BUMED) programs approximately 3.0% of plant
replacement value in maintenance funds to correct identified
deficiencies and perform scheduled maintenance. Two thirds of the
programmed amount is provided to the activity facility manager to
perform small maintenance, repair, equipment installation, and repair
projects that are within the commanding officers funding authority. The
BUMED managed special projects program is the vehicle for accomplishing
maintenance, repair, equipment installation, and construction projects
when funded costs exceed the activity commanding officer's funding
authority but are less than Military Construction scope. The activity
prepares and submits special project documentation upon determination
of a major facility, safety, or environmental deficiency. The project
documentation is reviewed and validated by the responsible NAVFAC
engineering field division and forwarded to BUMED via the regional
Healthcare Support Office. BUMBED then spends the remaining one third
on projects that have been prioritized and programmed at its annual
special projects programming Board for that given fiscal year.
Question. What is the cost of landscaping that is included in this
project, separately identifying the portion that is functional as
opposed to aesthetic.
Answer. Landscaping costs for this project is estimated at $3,280.
The landscaping included in the project is primarily for erosion
control on the hillside, but will also function aesthetically.
Question. Is it correct that there is no current need for this
project, that the tank would provide fresh water that would be needed
only in the event of an earthquake?
Answer. Naval Medical Center San Diego (NMCSD) is located in an
area rated as seismic zone 4. NMCSD is considered an essential facility
and is part of the regional emergency preparedness response plan. DoD
technical criteria require a separate water storage facility, as a
source of supply for three days, at all essential facilities. This
water will be available in the event of an earthquake or any other
disaster disrupting city supply.

Travis Air Force Base, California--Patient Movement Items OPS and Dist
Ctr ($1,700,000)

Question. What are ``patient movement items'', and what will be the
total value of such items that will be stored in this facility?
Answer. Patient Movement Items (PMI) are crucial medical equipment
and supplies, such as ventilators, infusion pumps, litters, drugs and
dressings, necessary to support a patient through the Aeromedical
Evacuation (AE) System in both peace and wartime. At Travis AFB, there
will be over 1,500 individual pieces of medical equipment along with
10,000 durable assets (litters, restraints, blankets, etc), consumable
supplies for the equipment, spare parts, test equipment, and an
information management system. The aggregate value of the PMI Program
assets for Travis AFB will be $7.9 million.
Question. These items will be purchased beginning in fiscal year
1998. When will the construction of this project be completed, and
where will the items be stored until it is completed?
Answer. Items purchased prior to project completion will be
temporarily stored at Operating Location 2, Fort Worth, Texas. They
will be forwarded to Travis (Western Hub) when the project is completed
around March 2000.
Question. Why will this project be executed as a design-build
contract?
Answer. The design-build process is used for simple straightforward
projects that can be designed and executed in the year of their
appropriations. The PMI warehouse project meets that requirement.
Design-build projects tend to reduce design and construction costs,
time, risks and change orders.

Eglin Air Force Base, Florida--Central Energy Plant ($9,200,000)

Question. The form 1390 for this project states that the estimated
cost to remedy the deficiencies in all existing medical facilities at
this installation is $34,630,000. Provide for the record a list of this
real property maintenance backlog, and described the program to remedy
this backlog.
Answer. The following provides a list of the real property
maintenance backlog at this installation:
Life Safety Violations (firewalls, penetrations, doors, etc)
Handicapped Accessibility Violations (handrails, casework, signage,
etc)
Fire Protection/Sprinklers
Domestic Water System
Medical Gases
Sanitary Sewer
Heating, Ventilation, and Cooling System
Electric System
Asbestos Abatement
The backlog is dynamic and changes as projects are completed or
added to the Annual Inspection Summary. A facility master plan has been
established to correct all of these deficiencies over a period of five
years.
Question. The Services have robust programs to get out of the
utility business through privatization. What privatization and other
alternatives were studied before deciding to proceed with this central
energy plant project?
Answer. Privatization is concerned with utility suppliers and
primary power generation facilities. The CEP does not generate power or
water, and is, therefore, not a candidate for privatization. The CEP
project upgrades and relocates heating, cooling, and emergency power
equipment and provides a new building in which to house this equipment.
Question. How many parking spaces will be displaced by this
project, and what is the replacement cost that is included in this
project?
Answer. The project will displace 48 parking spots at a cost of
approximately $50K.
Question. How will the space occupied by the existing plant, which
is structurally sound but on the basement level, be reutilized?
Answer. The existing Energy Plant will continue to house pumps,
electrical distribution panels, primary mechanical piping, and spare
parts.

Pensacola Naval Air Station, Florida--Hospital

additional/alteration/lu ($25,400,000)
Question. This project is justified, in part, by the fact that
``demand for services is greater than the current facility limitations
can accommodate''. To what extent is this demand a BRAC-93 generated
workload, as a result of relocation of personnel from NAS Memphis? Why
is this project not requested under the BRAC-93 account, either for
exclusive BRAC funding, or for conjunctive funding?
Answer. Requirements for the addition, alteration and life safety
upgrades are due to the age of the facility, changes in criteria,
command organization, and the standard of practice. Facility
deficiencies existed prior to BRAC 93. Additional beneficiaries brought
about by BRAC migrations are not considered a significant impact to the
core medical facility. A BRAC funded project in FY 1996 ($4.2 million)
provided for an expansion of a branch clinic providing primary care to
active duty personnel.

Moody Air Force Base, Georgia--CMF Alteration/Dental Cl Add
($11,000,000)

Question. This project will convert existing hospital space to an
Ambulatory Health Care Center configuration. How much hospital space
will remain, and does this meet the requirement?
Answer. At the completion of this project, no inpatient capability
will remain. All current hospital space will be altered or converted to
meet required clinic missions. The facility will be redesignated for
outpatient care only.

Fort Stewart, Georgia--Medical/Dental Clinic Replacement ($10,400,000)

Question. This project is justified, in part, by the requirement to
provide medical and dental service to ``active duty personnel assigned
to Hunter Army Air Field, their dependents and other authorized
beneficiaries''. How are non-active duty beneficiaries factored into
sizing decisions for medical facilities?
Answer. Non-active duty beneficiaries are factored into sizing
decisions for medical facilities in a variety of combinations. Family
members of active duty beneficiaries are counted and provided care
identical to active duty beneficiaries in medical clinics but not in
the dental clinics. Retirees and their family members are provided care
on a space available basis in both medical facilities. These
beneficiaries are not included in the figures justifying staffing
requirements. National Guard and US Army Reserve personnel are counted
the same as Active Duty when working full time. Survivors of deceased
members are often very small in number and usually are included.
The beneficiary categories included as discussed above provide the
simple mathematics to obtain a figure. However, the figure is reviewed
in the Economic Analysis, and depending on cost of visits in different
clinical disciplines (e.g. Pediatrics, Psychiatry, Podiatry, etc.),
appropriate staffing levels are considered.
Sizing is a function of patients, staff, mission, and logistics
requirements. During the Economic Analysis, if it appears more
economical to outsource several specialities, none of the beneficiaries
would be considered except active duty and family members.
Question. When this project is completed, will the contract clinic
in Savannah cease to operate? If so, what is the estimate of recurring
annual savings?
Answer. Reference to the Savannah contract clinic is in error. The
Savannah PRIMUS clinic was in fact closed in December 1996 at the
direction of the Installation Commander. The PRIMUS clinic contract was
not renewed and the services were moved to Hunter Army Airfield for
better access and enhanced quality of service. Savings from closing the
PRIMUS clinic are estimated to be $1.6 million. However, the Fort
Steward MEDDAC budget was reduced accordingly, eliminating any local
reinvestment.
Question. Upon completion of this project, dental clinic 3 as well
as the Tuttle clinic will be turned over to the base. Are these
facilities structurally sound and reusable?
Answer. The installation Department of Public Works has determined
these buildings to be structurally sound and plans to reuse them for
non-medical functions.

Great Lakes Naval Station, Illinois--Hospitalman ``A'' School Addition
($7,100,000)

Question. This project is justified, in part, by the
``consolidation of Hospitalman schools at Great Lakes''. Is this a
consolidation of schools already located at Great Lakes or a relocation
of schools from elsewhere? If from elsewhere, was this a BRAC-generated
requirement?
Answer. No, it is not a BRAC-generated requirement but a self-
initiative. The Inter-service Training Review Organization examined the
possibility of consolidating service schools for all the services.
Service unique requirements proved this initiative too difficult to
carry out, but Navy Medicine realized the benefit through consolidation
of the two ``A'' schools (San Diego, CA and Great Lakes, IL) at Great
Lakes. The consolidation was completed in FY 96 with scattered on-base
locations. The MILCON project will satisfy space constraints, as a
result of the consolidation, and functional requirements that had not
previously existed (e.g. training labs).

Barksdale Air Force Base, Louisiana--Clinic Addition/Alteration
($3,450,000)

Question. This project will house pediatrics, immunizations, and
flight medicine. Roughly what percent of the cost of the project is for
each of the three functions?
Answer. The estimated cost breakdown is: Pediatric clinic
$1,380,000 (40%); Aerospace Medicine Squadron $1,380,000 (40%); and
Immunizations function $690,000 (20%) for a total of $3,450,000.

Keesler Air Force Base, Mississippi--Bioenvironmental Eng Fac Repl
($700,000)

Question. Why is this replacement facility more than twice as large
as the space currently occupied by the bioenvironmental engineering
function . . . 390 square meters versus 158 square meters?
Answer. The Bioenvironmental Engineering (BEE) function is shoe-
horned into an old dormitory building that is approximately 50%
undersized based on need and DoD space planning criteria. This
dormitory facility was intended to serve as temporary space to house
the BEE until a permanent facility of appropriate size could be
constructed. Lack of space has forced the BEE to inefficiently split
their operations and use the hospital laboratory for critical water lab
functions.

Holloman Air Force Base, New Mexico--War Readiness Material Warehouse
($1,300,000)

Question. This project is justified, in part, by the fact that the
existing warehouse lacks climate control, which causes ``the government
to replace materials early at an enormous cost''. What is the value of
the material to be stored, and how quickly will the new facility pay
for itself by avoiding such costs?
Answer. This warehouse is required for mission readiness. It will
store over $3.8 million in WRM assets, $200,000 of which are
expiration-dated items requiring temperature control that are located
in 50 storage containers and ISO-shelters. In as little as six months,
these items require replacement due to the extreme hot-cold
temperature or exposure to sun and precipitation. The same inadequate
storage conditions also severely affect the remaining assets, including
promoting untimely failure of sensitive medical equipment.
Manufacturers will not warranty material or equipment or efficacy of
drugs stored in conditions other than those recommended as safe for
preserving their reliability. Payback is estimated to be less than 3
years for expiration-dated items itself.

Fort Bragg, North Carolina--44th Medical Brigade WRM Warehouse
($6,500,000)

Question. This appears to be a straightforward warehouse project.
Why can't it be executed using a standard or definitive design, in
order to avoid most or all of the $490,000 total design cost?
Answer. This project has unique medical requirements that preclude
use of a standard or definitive warehouse design. These requirements
include optical fabrication and repair operations, medical maintenance
repair operations, blood storage and distribution, refrigerated medical
supply storage, vault storage for controlled substances, and humidity-
controlled areas for medical supplies with unique equipment storage
requirements.

Grand Forks Air Force Base, North Dakota--Medical Dental Clinic Add/Alt
($5,600,000)

Question. Is it correct that this project will vacate the existing
dental clinic, and that that space will be reutilized by the
bioenvironmental engineering and the military public health functions?
Answer. Yes.
Question. Will the existing utilities, which are encased in the
concrete slab on grade, be abandoned in place in order to avoid
malfunctions and maintenance problems?
Answer. Yes.

Carlisle Barracks, Pennsylvania--Health Clinic Addition ($4,678,000)

Question. There is a companion O&M project, budgeted at $3,500,000,
to bring the existing clinic up standards for ambulatory services. How
will the O&M work be divided from the military construction work? Will
these projects be executed as separate bids and separate contracts?
Will they be bundled into a single contract?
Answer. The project was separated between O&M and MILCON based on
definitions of work classification. The Military Construction portion
will be used to build an addition to the existing facility. Both O&M
and MILCON contracts will be bundled together for bidding and
contractual purposes but separate accounting will be maintained for
each type of work. To keep the clinic operational during construction,
the current project transition plan has identified a combined usage of
temporary facilities and the new addition as swing space during the O&M
renovation.

Fort Hood, Texas--Blood Donor Center ($3,100,000)

Fort Hood, Texas--Primary Care Clinic ($11,000,000)

Question. Why were these two efforts presented as separate
projects, rather than being combined into a single project?
Answer. The Primary Care Clinic and the Blood Donor Center
accommodate unique and separate missions with different staffs and
operating conditions and are, therefore, not combined.
Question. Will they be executed as separate bids and separate
contracts, or will they be bundled into a single contract?
Answer. These projects have different design and construction
awards schedules. Therefore, they will not be bundled into a single
contract.
Question. The blood donor center is currently housed in three
inadequate, aging buildings, two of which are World War II temporary
barracks infested with termites. Will these buildings be demolished
upon completion of this project?
Answer. Yes.

Cheatham Annex, Virginia--Fleet Hospital Support Operation Admin Ofc
($1,900,000)

Question. Is it correct that the requirement for this project was
created by the BRAC closures in Oakland and Alameda? Why is it not
completely or conjunctively funded under the BRAC account?
Answer. The requirement for replacement of these facilities was
pre-existing and originally programmed and approved by the Congress in
FY 92 ($22 million) at Stockton, CA. The project provided for a
temperature and humidity controlled warehouse with administrative space
and maintenance functions. DoD/IG recommended that the project be
deferred due to force restructuring at that time and the need for
future fleet hospital storage requirements. Office of the Assistant
Secretary of Defense (Health Affairs) agreed with this recommendation
and the Congress was duly notified. With the BRAC closure of Alameda
and Oakland, Navy decided to consolidate the Fleet Hospital Life
Extension Program at Cheatham Annex, VA. Two BRAC projects were
approved in FY98, Cargo Staging Area at a cost of $1,443,000 and a
building renovation in the amount of $2,837,000 to support this effort.
Remaining 3 projects (2 in FY99 and one in FY00 for construction of
hard stand) have also been pursued for BRAC funding unsuccessfully.
Question. This project is justified, in part, by the fact that
``ownership of the third site, Rough and Ready Island Stockton, could
transfer from Naval Communications Station Stockton to the Port of
Stockton under special land conveyance legislation''. Submit a copy of
this legislative proposal for the record, together with a justification
for the conveyance and the estimated value of the property.
Answer.

Naval Communication Station, Stockton, California, Special Legislation

SEC 2871, the National Defense Authorization Act for Fiscal Year
1996, Public Law 104-106 (10 February 1996)
Section. 2871, Land Conveyance
(a) Conveyance Authorized--Subject to subsection (b), the Secretary
of the Navy may convey to the Port of Stockton, California (In this
section referred to as the ``Port''), all right, title, and interest of
the United States in and to a parcel of real property, including any
improvements thereon, consisting of approximately 1,450 acres at the
Naval Communication Station, Stockton, California.
(b) Requirement for Federal Screening of Property--The Secretary
may not carry out the conveyance of property authorized by subsection
(a) unless the Secretary determines that no department or agency of the
Federal Government will accept the transfer of the property.
(c) Interim Lease--Until such time as the real property described
in subsection (a) is conveyed by deed, the Secretary may lease the
property, along with improvement thereon, to the Port under terms and
conditions satisfactory to the Secretary.
(d) Consideration--The conveyance may be made as a public benefit
conveyance for port development as defined in section 203 of the
Federal Property and Administrative Services Act of 1949 (40 U.S.C.
484) if the Port satisfies the criteria in such section and the
regulations prescribed to implement such section. If the Port fails to
qualify for a public benefit conveyance and still desires to acquire
the property, the Port shall pay to the United States an amount equal
to the fair market value of the property to be conveyed, as determined
by the Secretary.
(e) Federal Lease of Conveyed Property--As a condition for transfer
of this property under subparagraph (a), the Secretary may require that
the Port lease to the Department of Defense or any other Federal agency
all or any part of the property being used by the Federal Government at
the time of conveyance. Any such lease shall be made under the same
terms and conditions as in force at the time of the conveyance. Such
terms and conditions will continue to include payment to the Port for
maintenance of facilities leased to the Federal Government. Such
maintenance of the Federal premises shall be to the reasonable
satisfaction of the United States, or as required by all applicable
Federal, State, and local laws and ordinances.
(f) Description of Property--The exact acreage and legal
description of the property to be conveyed under subsection (a) shall
be determined by a survey satisfactory to the Secretary. The cost of
the survey shall be borne by the Port.
(g) Additional Terms--The Secretary may require such additional
terms and conditions in connection with the conveyance under subsection
(a) or the lease under subsection (c) as the Secretary considers
appropriate to protect the interests of the United States.
It is important to note that the decision for the relocation and
consolidation at Cheatham Annex was based on economic considerations as
explored in the Alternative Analysis/Site Evaluation Study of 15 Jul
96.

Cheatham Annex, Virginia--Fleet Hospital Sup Ops Operational Whse
($9,400,000)

Question. Is it correct that requirement for this project was
created by the BRAC closures in Oakland and Alameda? Why is it not
completely or conjunctively funded under the BRAC account?
Answer. The requirement for replacement of these facilities was
pre-existing and originally programmed and approved by the Congress in
FY 92 ($22 million) at Stockton, CA. The project provided for a
temperature and humidity controlled warehouse with administrative space
and maintenance functions. DoD/IG recommended that the project be
deferred due to force restructuring at that time and the need for
future fleet hospital storage requirements. Office of the Assistant
Secretary of Defense (Health Affairs) agreed with this recommendation
and the Congress was duly notified. With the BRAC closure of Alameda
and Oakland, Navy decided to consolidate the Fleet Hospital Life
Extension Program at Cheatham Annex, VA. Two BRAC projects were
approved in FY 98, Cargo Staging Area at a cost of $1,443,000 and a
building renovation in the amount of $2,837,000 to support this effort.
Remaining 3 projects (2 in FY99 and one in FY00 for construction of
hard stand) have also been pursued for BRAC funding unsuccessfully.
Question. Where are the ten prepositioned fleet hospitals located,
what is the value of a single hospital, and what is the cost to rebuild
a single hospital?
Answer. The ten prepositioned fleet hospitals are located as
follows: Norway--2; Sasebo, Japan--1; Okinawa, Japan--2; Guam--1; South
Korea--1; Maritime Squardron, Indian Ocean--1; Service Life Extension
Program (SLEP)--2 (at Cheatham Annex, VA).
The current replacement value of a Fleet Hospital is $37 million.
The cost to rebuild a Fleet Hospital is approximately $6.45 million. Of
this cost, approximately $450,000 is for contractor labor. Actual cost
varies with the extent of repair and maintenance required.
Question. Will the administrative office and the operational
warehouse be executed as a single contract?
Answer. Yes.

Portsmouth Naval Hospital, Virgina--Hospital Replacement Phase X
($17,954,000)

Question. The form 1390 for this project states that the estimated
cost to remedy the deficiencies in all existing medical facilities at
this installation is $11,873,000. Provide for the record a list of this
real property maintenance backlog, and described the program to remedy
this backlog. Does this estimate include deficiencies in building 215
that will be corrected by this project?
Answer. The requested list can be provided under separate cover.
The backlog is dynamic and changes as projects are completed or added
to the Annual Inspection Summary. Real property maintenance
requirements are identified through an Annual Inspection Summary (AIS)
at each facility. The Navy Bureau of Medicine and Surgery (BUMED)
programs approximately 3.0% of plant replacement value in maintenance
funds to correct identified deficiencies and perform scheduled
maintenance. Two thirds of the programmed amount is provided to the
activity facility manager to perform small maintenance, repair,
equipment installation, and repair projects that are within the
commanding officers funding authority. The BUMED managed special
projects program is the vehicle for accomplishing maintenance, repair,
equipment installation, and construction projects when funded costs
exceed the activity commanding officer's funding authority but are less
than Military Construction scope. The activity prepares and submits
special project documentation upon determination of a major facility,
safety, or environmental deficiency. The project documentation is
reviewed and validated by the responsible NAVFAC engineering field
division and forwarded to BUMED via the regional Healthcare Support
Office. BUMED then spends the remaining one third on projects that have
been prioritized and programmed at its annual special projects
programming Board for that given fiscal year.
This estimate includes Building 215 deficiencies. The Building 215
backlog will be eliminated upon completion of this project.
Question. What is the status of the GAO review of the proposed
renovation of building 215?
Answer. The GAO review was completed in June 1997 and results are
included in their ``Report to Congressional Requesters; MILITARY
CONSTRUCTION, Renovation Plans at the Portsmouth Naval Medical Center
(GAO/NSIAD-97-144).'' The Report concluded that fully renovating
Building 215 is a practical option. Based on the net present-value
analysis, a full renovation was determined to be more cost-effective
over a 30-year period.
Question. List, by phase, the total cost for the Portsmouth
hospital replacement.
Answer.--

------------------------------------------------------------------------
Fiscal
Phase year Appropriation
------------------------------------------------------------------------
I............................................ 90 $8,500,000
II........................................... 91 40,000,000
III.......................................... 92 40,000,000
IV........................................... 93 16,000,000
V............................................ 94 20,000,000
VI........................................... 95 120,000,000
VII.......................................... 96 47,900,000
VIII......................................... 97 24,000,000
IX........................................... 98 17,000,000
X............................................ 99 17,954,000
--------------------------
Total.................................... ......... 351,354,000
------------------------------------------------------------------------

Question. This tenth phase shows an estimated unit cost of $88.50
per square foot to renovate building 215. What would it cost per square
foot to simply demolish building 215? Is there an estimate for the
plant replacement value of building 215?
Answer. Complete demolition of Building 215 is estimated to cost
$9,847,540 or $19.79 per square foot--but the space must then be
replaced to meet the installation's medical program requirements.
Alternate scenarios were studied but found to be infeasible based on
economics.
The current plant value for building 215 is $95,957,168.
Question. If this alteration and modernization phase is completed,
what are the estimated annual savings that would result from all
sources, including consolidation of essential medical and medical
support function from five different locations in Hampton Roads, and
consolidation of TRICARE and the Healthcare Support Office in Norfolk?
Answer. Approximately 20% of Building 215 (105,000 of the 497,500
square feet) is designated for consolidation of the referenced
functions. The annual savings are estimated to be $1.6 million to
offset lease costs. Renovating space in Building 215 for these tenants
is estimated at $5,900,000 with a payback in less than 4 years.

Bangor Naval Submarine Base, Washington--Disease Vector Ecology and
Control Center ($5,700,000)

Question. Is it correct that the requirement for this project was
created by the BRAC-95 closure of NAS Alameda? Why is it not completely
or conjunctively funded under the BRAC account?
Answer. No. The requirement for this project was identified and a
MILCON project was developed prior to BRAC-95. Relocation of these
activities had begun to temporary locations and thus the project was
not eligible for BRAC funding.
Question. What is the annual cost of the two leased spaces at
Poulsbo and Keyport, Washington, in which the Center is currently
operating?
Answer. Poulsbo: $155,000 per year; Keyport: $66,760 per year.
Current facilities are inadequate and dysfunctional due their location
in the residential area and safety concern from the chemicals. Other
suitable facilities are not available to meet the mission requirements.

Bremerton Naval Hospital, Washington--Hospital Addition/ Alteration
($28,000,000)

Question. Roughly 11.5% of the cost of the primary facility to be
constructed under this project is for a parking structure. How many
spaces will be provided, at what cost per space? Why is it necessary to
include a parking structure, at a cost of $82.16 per square foot,
rather than surface parking?
Will this project complete all medical facilities construction
requirements in Bremerton?
Answer. The project provides 250 spaces in the parking structure at
a cost of $2,258,000. The Bremerton hospital site is of limited area
with sloping topography and environmentally sensitive. All land
available for surface parking is already being utilized. A vertical
structure is the only solution. The cost of the parking structure is
$24.11 per square foot. The $82.16 per square foot cost is for
alterations of the existing hospital. This project will meet all
current medical facilities construction requirements at Naval Hospital
Bremerton.

McChord Air Force Base, Washington--Clinic/WRM Warehouse Replacement
($20,000,000)

Question. Will this project construct a single facility? Why are
such dissimilar medical missions combined into a single project?
Answer. This project will construct two facilities connected by an
environmentally controlled hallway.
The project is a clinic and logistics support replacement project.
The logistics support facility will contain the critical support
functions for the clinic such as housekeeping, facility management,
central sterilization, medical supply, and biomedical equipment repair.
Medical WRM assets are also to be stored in the warehouse portion of
the logistics support facility, along with operating stocks of medical
supplies.
Question. Provide for the record a list and description of all
facilities that will be vacated upon completion of this project,
including the intended disposition of such facilities.
Answer.
Building 100, Base Headquarters Building (1940).--Small portion of
the building occupied by medical clinic will be returned to the base
for their use
Building 160, Main Clinic (1939).--This building will be returned
to the base. It is being nominated for inclusion on the Washington
State Historic Registry.
Building 161, Garage (1940).--3 bay storage garage, to be turned
over to the base for use with building 160.
Building 164, Outpatient Records (1987).--Pre-Engineered building,
to be demolished
Building 165, Radiology/Ambulance Service (1987).--Pre-Engineered
building, to be demolished
Building 168, Pharmacy/Lab (1988).--Pre-Engineered building, to be
demolished
Building 169, Family Medicine (1989).--Pre-Engineered building, to
be demolished
Building 170, Mental Health (1996).--Pre-Engineered building, to be
demolished
Building 173, Flight Medicine (1988).--Pre-Engineered building, to
be demolished
Building 435, Oxygen Storage (1943).--Wood structure, to be
demolished
Building 501, Warehouse (1942).--Storage warehouse, wood
construction, to be demolished
Building 507, Warehouse (1942).--Storage warehouse, wood
construction, to be demolished
Building 518, BEE Bldg (1951).--Shared with Civil Engineering (CE),
space vacated by Bioenvironmental Engineering will be absorbed by CE.

Sigonella Naval Air Station, Italy--Flight Line Dispensary ($5,300,000)

Question. How does a ``dispensary'' differ from a ``clinic?''
Answer. The host nation defines a clinic as a hospital. For this
reason, the term dispensary was selected as a more accurate description
of the proposed outpatient facility to avoid compliance with hospital
standards.
Question. What is the definition of ``category E equipment?''
Answer. Category E equipment is a reference to the equipment that
is government furnished and contractor installed from Military
Construction Appropriation funds such as X-ray equipment, sterilizers,
etc.
Question. Provide for the record a list of such equipment that is
included in the cost of this project, totaling $350,000.
Answer. This figure represents cost estimates for category E and F
equipment. Category F equipment is government furnished and government
installed from Military Construction Appropriation funds. The proposed
equipment is:

------------------------------------------------------------------------
Extended
CAT Nomenclature Quantity Unit cost cost
------------------------------------------------------------------------
E............ Processor, Film, 2 $10,000 $20,000
Dental.
F............ Rail, Mod......... 6 876 5,256
F............ Control Station... 2 1,500 3,000
F............ Holder, Cassette.. 1 8,614 8,614
F............ Radiographic Unit 1 6,419 6,419
Dental.
F............ Radiographic Unit 1 17,000 17,000
Panographic.
F............ Radiographic Unit. 1 289,711 289,711
------------------------------------------------------------------------

RAF Lakenheath, United Kingdom--Hospital Annex Replacement
($10,800,000)

Question. To what extent do British and U.S. forces share medical
facilities and services at RAF Lakenheath?
Will the existing hospital annex be demolished upon completion of
this project?
If so, why is the cost of demolition not included in this project?
If not, why not, and what is the intended reuse?
Answer. British forces do not ``share'' U.S. medical facilities.
British military personnel are treated as NATO military personnel. The
only time healthcare should be utilized at a U.S facility by a NATO
military member would be in an emergency situation.
The existing hospital annex will be demolished upon completion of
this project. The cost of demolition ($203,000) is included in the
project under Supporting Facilities, block 9 of the DD Form 1391. An
additional $250,000 is listed under Primary Facility for related
asbestos removal in the annex.

Management of Medical Projects

Question. As part of the Defense Reform Initiative, the Defense
Medical Program Activity has been disestablished and replaced with the
Tricare Management Activity. Who is now responsible for the
distribution of resources for medical construction, the Services or
OSD? Who is now responsible for sizing and engineering decisions
regarding medical construction? That is, do the Services have a free
hand or are they subject to OSD review and approval?
Answer. Tricare Management Activity (TMA) is responsible for the
distribution of medical construction funds and the program management
oversight in coordination with the Services.
The services develop requirements utilizing Tri-service standards
and criteria. TMA remains responsible for sizing and engineering
decisions based on the Services' recommendations.
DEFENSE LOGISTICS AGENCY

Defense Fuel Support Point Elmendorf AFB, Alaska Replace Hydrant Fuel
System ($19,500,000)

Question. The DD Form 1390 for this project indicates that a second
phase of this project will be included in the fiscal year 2000 program
at a cost of $29,500,000. Why were advance appropriations for this
second phase not requested in the President's budget for fiscal year
1999--as they were for a number of phased projects for the Army and the
Navy?
Answer. The FY 1999 project is a complete, stand-alone fueling
system of 12 hydrant outlets that replaces three failing, antiquated
fueling systems. Therefore, it was not necessary for the Department to
request advance appropriations in order to satisfy OMB's full funding
requirement.
The second phase of the project was not programmed in FY 1999
because planning for this phase was not far enough along to provide
reasonable assurance of a construction contract award in FY 1999.
Additionally, building these two systems in different fiscal years
minimizes the mission impact on the base's flight operations caused by
construction activities.
Question. How is the work divided between the two phases?
Answer. Each project provides a complete and usable hydrant fuel
system.
Question. What would happen if the first phase were funded and the
second phase were not?
Answer. If the second project were not funded, the base would have
one fully operational hydrant fuel system of 12 outlets and a failed or
failing 40-year-old system of 20 outlets.
Question. Does the authorization request include both phases, so
that they can be awarded as a single contract, subject to the
availability of funds in the second year?
Answer. No. Separate authorization and appropriation will be
requested for each project.
Question. Will the removal of 21 underground tanks be accomplished
in the first phase, and is this the $1,500,000 cost for demolition
shown on the DD Form 1391?
Answer. Yes, this project cost is for the demolition of 21
underground fuel storage thanks, 12 hydrant outlet pits, 3 pumphouses,
and an extensive network of underground fuel piping.

Defense Fuel Support Point Jacksonville-Mayport Annex, Florida Replace
Fuel Tanks ($11,020,000)

Question. The C-1 shows this project at ``Defense Fuel Support
Point JAX-ANX'', but the DD Forms 1390 and 1391 show it at ``Naval
Station Mayport''. Which is the correct location, or are they the same?
Answer. Defense Fuel Support Point (DFSP) Jacksonville-Mayport
Annex is the commonly referred name for the fuel point located at Naval
Station Mayport, FL. This fuel point receives jet and marine diesel
fuel by barge from the bulk storage facilities at DFSP Jacksonville,
approximately 15 miles northwest of Mayport. The DD Forms 1390 and 1391
for this project show the location as Naval Station Mayport to avoid
confusion with a DFSP Jacksonville project also programmed in the DLA
FY 1999 Military Construction program.
Question. Submit for the record a copy of the signed consent
agreement with the State of Florida regarding this project.
Answer. A copy of the signed Consent Agreement between the State of
Florida Department of Environmental Regulations and the United States
Department of Navy, dated June 3, 1993, is enclosed.
Offset Folios 366 to 386 Insert here

Defense Fuel Support Point (DFSP) Jacksonville, Florida Replace Fuel
Tanks ($11,000,000)

Question. This project will replace substandard storage of 44,500
kiloliters capacity with 33,300 kiloliters capacity, a reduction of
25%. Will this fully satisfy the requirement at this location?
Answer. Yes. The proposed construction of three 11,000-kiloliter
tanks will satisfy the storage requirement for marine diesel fuel for
this DFSP's area of responsibility.

Defense Fuel Support Point Camp Shelby, Mississippi Replace Bulk Fuel
Facility ($5,300,000)

Question. Is it correct that this project will be used almost
exclusively by Guard and Reserve forces?
Answer. No. Based on FY 97 figures, 195,388 service people trained
at Camp Shelby. Of this number, the breakdown by component was: 49%
Army National Guard, 12% U.S. Army Reserves, 3% Air National Guard, and
36% active forces from all three services. Guard and Reserve forces
from Mississippi, Tennessee, Alabama, North Carolina, Florida,
Louisiana, Puerto Rico, and the Virgin Islands use this training
facility.
Question. Summarize for the record the economic analysis that
determined new construction was more cost-effective than refurbishment
and expansion of existing facilities.
Answer. Initial nonrecurring investment costs are the primary cost
drivers in both alternatives. Investment costs for refurbishment of the
existing facilities is estimated at $8.9 million versus the proposed
new construction cost of $5.3 million. Other relevant considerations in
this analysis are as follows:
a. The existing bulk fuel site is too small to accommodate the
required fuel dispensing facilities without realigning two roads on
Camp Shelby. The realignment of these roads is a significant cost
driver in the refurbishment alternative. The new construction
alternative does not require any modification of the existing road
network.
b. Refurbishment of the existing facilities to repair only the
environmental compliance deficiencies does not address the additional
storage and dispensing requirements needed at this installation. These
dispensing facilities not only improve operational efficiency by
refueling a large number of vehicles quickly, but also provide
effective spill containment features not available in the present
operations to safeguard fuel transfers. The current site cannot be
expanded to add these facilities at a later time without a significant
higher overall cost to the government than the proposed project.
c. The refurbishment alternative will require extensive operating
workarounds at the existing site, or more likely, the construction of a
temporary off-site fuel point for storage and dispensing during the
construction period. Although the cost of this temporary facility has
not been quantified, it is a relevant factor in the decision-making
process since it impacts on the overall cost, safety, and environmental
consideration of this alternative.
Based on the relevant factors considered in the analysis, we
concluded the follow points and recommended the proposed MILCON
project:
a. New construction is the more cost-effective solution to meet the
objectives of this project in that it will cost $3.6 million less than
refurbishing the existing facility.
b. Repair of the existing facility to only correct environmental
compliance deficiencies fails to meet long-term storage and operating
objectives of this installation.
c. Providing a temporary fuel point to accommodate construction of
the more costly refurbishment alternative makes this alternative
impractical.

Defense Fuel Support Point Pope AFB, North Carolina Hydrant Fuel System
($4,100,000)

Question: This project is required in order to meet force-
generation schedules of Fort Bragg troops. Can you quantify the
improvement that is expected over the current truck refueling
operations?
Answer: Yes. The maximum aircraft ground time at this location for
en route loading of fuel and explosives for C-17s is 2 hours and 15
minutes and for C-5s, 3 hours and 15 minutes. Fuel and explosives may
not be loaded at the same time. Currently, the base uses refueler
trucks for fueling these types of aircraft, which may require up to
seven truckloads of fuel per aircraft and four-to-five hours, not
including the additional time to load ordnance. The refueler trucks
must travel across an active runway for each individual refueling trip.
Consequently, the base cannot meet U.S. Air Force requirements. In
contrast, the proposed hydrant fuel system will enable Pope AFB to fuel
two aircraft simultaneously in one hour, satisfying these requirements.
Question: What savings will be realized in equipment and personnel
upon completion of this project?
Answer: Truck refueling requires one person at the truck filing
station and one on each refueler truck. If available, two trucks are
assigned to each aircraft refueling operation. For the four aircraft
parking positions at this site, a total of nine people and eight
refueler trucks are needed. The proposed hydrant system uses just one
individual at each of the four hydrants, allowing five people and eight
refueler trucks to service fighters, transient aircraft and perform
other day to day operations.

Defense Fuel Support Point Fort Sill, Oklahoma Replace Fuel Storage
Facility ($3,500,000)

Question: The Fort Sill ground fuel facility was permanently shut
down in 1994 due to leaks and failures. Why has it taken four years to
program a project to correct this situation?
Answer: Given the lead times necessary to plan, design, and program
a military construction project, the timing of this funds request is
appropriate. From July 1994 to February 1995, Fort Sill evaluated
alternatives to closing the facility, and coordinated remediation plans
with the state. By the time a decision was made in February 1995 to
permanently shut down the fueling facility and build a new one, Fort
Sill had missed the deadline to submit this project for consideration
in the FY 1998 DLA MILCON program. We set this milestone to ensure
proposed projects are at the requisite 35-percent design stage for
consideration by Congress in a budget submission.
Question: What economies will be realized upon completion of this
project, when ``work-arounds'' can cease?
Answer: This project will provide a consolidated fuel storage and
dispensing facility, sized at the required storage volume and
dispensing rates to meet Fort Sill's mission as a Power Projection
Platform. It will eliminate the need for temporary, undersized fuel
tanks located at three separate sites on the installation, which cause
additional operating and manpower costs. In addition, the facility will
significantly reduce the lost training time tactical units incur
getting to these dispersed facilities and waiting in line to fuel their
vehicles from inadequate facilities. Of course, the greatest intangible
benefits to be achieved by this facility are the improved environmental
safeguards to avoid potentially costly fuel-spill cleanups and the
ability to meet mobilization/deployment timetables.

Defense Supply Center, Richmond, Virginia Convert Warehouse to Admin
Space ($10,500,000)

Question. This project will convert five sections of warehouse #31
to permanent administration space. How is this space currently used?
Answer. These sections of the warehouse are currently vacant. This
warehouse is located in the administrative area of the supply center.
Material previously stored in this space was consolidated in other
available warehouse space at the adjacent distribution depot.
Question. What is the remaining life expectancy of warehouse # 31
upon completion of this project?
Answer. We expect this facility to be in service for a minimum of
25 years based on its current condition and the installation of new
building systems during conversion. The warehouse is a sound masonry
structure, similar to other administrative structures on the supply
center. A new roof was installed in 1994. In addition, the proposed
project will provide for all new electrical, heating, ventilation, air
conditioning, and fire protection systems. When completed, this project
will provide modern, energy-efficient administrative offices.
Question. Is it correct that this administrative space will house
764 personnel?
Answer: Yes.
Question. This project will be equipped with modular furniture
provided from the DWCF appropriation at a cost of $5,473,000, or nearly
$7,200 per person. Describe this furniture in some detail.
Answer. Regretfully, we erred in stating the cost for systems
furniture shown on the DD Form 1391. The current estimated cost is
$3,500,000. We plan to install standard systems furniture components
typical of UNICOR's product line or their equivalent.

Defense Fuel Support Point Lajes Field, Azores, Portugal Fuel Pumphouse
and Tanks ($7,700,000)

Question. The primary mission for Lajes Field is to support
transient aircraft en route to Europe and beyond. The Government of
Portugal does not consider the base a NATO air field, and has excluded
the Azores from eligibility for NATO infrastructure improvements. Under
the terms of the bilateral agreement with the Government of Portugal,
the U.S. is responsible for funding this proposed project in support of
U.S. force projection. What would prevent the U.S. from financing this
project, and also submitting a precautionary prefinancing statement to
NATO for reimbursement of this cost, which supports European
reinforcement?
Answer. Nothing would prevent the U.S. from financing this project
and preparing a precautionary prefinancing statement to NATO for
reimbursement of the cost. However, before the U.S. Mission could
submit this prefinancing statement to NATO for Security Investment
Program reimbursement, they would have to obtain the concurrence of the
Government of Portugal. In the past, Portugal has not supported NATO
projects at Lajes Field, Azores, as stated in the DD Form 1391.
Question. Will this tankage serve U.S. military aircraft
exclusively?
Answer. These proposed tanks support a hydrant fueling system used
by U.S. aircraft. As defined in the bilateral agreement, other nations
must obtain the approval of the Government of Portugal to use this
airfield.

Moran AB Spain

Question. What is the current status of the hydrant fuel system
project at Moron Air Base, for which $12,958,000 was appropriated in
fiscal year 1997, and for which this subcommittee required a
precautionary prefinancing statement?
Answer: The project is currently 100 percent designed and ready to
advertise for a construction contract pending NATO's acceptance of the
Notice of Intent to Prefinance (NIP). The Government of Spain just
recently approved the submission of this statement to the NATO
Infrastructure Committee. The U.S. Mission to NATO will present this
notice to the committee shortly. We expect a contract to be awarded by
July 1998 for this work.

Various Locations--Worldwide Conforming Storage Facilities ($1,300,000)

Question. Last year's request and appropriation for conforming
storage facilities (CSF) totaled $11,275,000. What accounts for the
great decrease in this year's request?
Answer. Our Defense Reutilization and Marketing Service,
responsible for conforming storage facilities, is undergoing
significant restructuring to reduce operating costs. On December 3,
1997, DLA announced the closure of 49 Defense Reutilization and
Marketing Offices (DRMOs) to realize approximately $35-40 million in
annual savings, beginning in Fiscal Year 2000.
The decrease in our CSF-funding request this year is the result of
the uncertainty about which of these DRMOs would be closed. Until this
decision was made, planning and design of new CSF's was temporarily
suspended. The Camp Lejeune CSF, which was already designed, is the
only project ready for programming in Fiscal Year 1999.
Question. The attachment to the form 1391 lists a single location,
Camp Lejeune, North Carolina. Has this location received a RCRA permit
for conforming storage? If not, what is the timetable for its RCRA
permit?
Answer. Yes, the RCRA permit is in hand.
Question. Are other locations under consideration, or is the
$1,300,000 specific to Camp Lejeune?
Answer. With the $11.3 million appropriated in FY 1998 and the $1.3
million requested in FY 1999, DLA will construct three CSFs at
Elmendorf Air Force Base (AFB), AK; Oklahoma City, OK; and Camp
Lejeune, NC. The DRMOs at these sites will remain open based on the
December 3, 1997, decision.

DOD DEPENDENT EDUCATION

U.S. Military Academy, New York--School Addition ($2,840,000)

Question. Is it correct that this project is limited to
construction of a multipurpose physical education/therapy facility, and
conversation of the existing physical education facility into
classrooms?
Answer. Yes.
Question. Would this commonly be called a 13,629 square foot
elementary school gym?
Answer. Yes, though it will contain some features specifically
designed to aid in the occupational and physical therapy programs

Camp LeJeune, North Carolina--Brewster Middle School ($16,900,000)

Question. Is this project a complete replacement for the existing
middle school?
Answer. Yes.
Question. Will the existing school be demolished upon completion of
this project?
Answer. The existing facility is on the real property records of
the Marine Corps, and may continue to be used for some other function
after it is vacated by DDESS.

Elementary School, Guam ($8,600,000) High School, Guam ($4,500,000)

Question. Provide for the record a history of events in the past
several years that led to the request for these two school projects on
Guam.
Answer. Beginning in 1988, the Department of Defense contracted
with the Government of Guam to provide for the education of dependents
residing on military installations on the island. Through this
arrangement DoD compensated the Guam Department of Education based on
the number of allowable dependents attending the Guam public school
system, amounting to approximately $13 million per year dedicated to
personnel, education, facilities maintenance, and procurement.
Recent problems with this arrangement, including an on-going
lawsuit between the Governor of Guam and Guam's Department of Education
and the failure of the Department of Education to provide proper
accountability for expenditure of DoD funds, led to DoD withholding
payments beginning in 1996.
As a result of these on-going problems and in response to requests
from the military departments, a fact-finding team from DoDEA visited
Guam during May of 1997. This team concluded that no educational
infrastructure existed within the Guam Department of Education to
suggest that acceptable improvement was possible in the near future. In
July of 1997, the Department formally established DDESS schools on
Guam.
In September 1997, a central high school and two elementary schools
began operation in hastily renovated facilities on Andersen AFB and the
Naval Activity. The two military construction projects in the FY 1999
request are to construct additions to and complete renovations in the
facilities serving as the central high school and the elementary school
serving students from the southern end of the island.
Question. When did the existing elementary and high schools
commence operations?
Answer. DDESS elementary schools began operation on both Andersen
AFB and the Naval Activity, and the common high school on Nimitz Hill
on Sept 29, 1997.
Question. Will these two projects complete the construction
requirement for establishing Department of Defense Dependent Schools on
Guam?
Answer. No. A military construction project is programmed for FY
2000 to construct a new 1800 student elementary school on Andersen AFB,
estimated at $44.1 million. This will complete the construction
requirement for establishing DDESS schools on Guam.

Fort Buchanan, Puerto Rico--Elementary School ($8,805,000)

Question. To what extent is the requirement for this project driven
by the Army's decision to relocate the headquarters of the U.S. Army
South from Fort Clayton, Panama to Fort Buchanan, Puerto Rico, which
was announced on July 31, 1997?
Answer. This project was required prior to the Army's decision to
relocate US Army South to Ft. Buchanan, and will be required regardless
of that move. This project will replace an existing 35 year old
facility and substandard temporary facilities now in use.
Question. Is this project a complete replacement for the existing
elementary school?
Answer. Yes.
Question. Will the existing school be demolished upon completion of
this project?
Answer. The existing facility is on the real property records of
Ft. Buchanan, and may continue to be used for some other function after
it is vacated by DDESS.

NATIONAL SECURITY AGENCY

Fort Meade, Maryland--Fort Meade Perimeter Fence (West) ($668,000)

Question. Why is the perimeter fence divided into two small
projects, one in 1999 and one in 2000?
Answer. During an OSD data call for PBD 098, DoD Force Protection
and combating Terrorism, December 1996, NSA submitted an anti-terrorism
proposal based on a phased approach to security protection, spread over
a number of years, and with limited funding. NSA developed, and DoD
approved, what was considered a viable program, spread over the out-
years, at a ``reasonable'' cost. The fence projects are for separate
parts of the Ft Meade complex with priority given to providing
protection to activities not currently fenced. The PBD was submitted,
congressional approval obtained, and the out-year program approved.
Question. How close will the west campus fence come to the
cryptologic museum, and to the Baltimore-Washington Parkway?
Answer. The fence will be some distance from the Parkway and
Museum. The fence will be aligned on the ``outside'' (north side) of
Canine Road and parking lots N-8 and N-9, and on Connector Road at the
existing split in the roadway. The fence alignment will be 950 feet
from the Museum and 1,500 feet away from the Parkway.

U.S. SPECIAL OPERATIONS COMMAND

Naval Amphibious Base Coronado, California--SOF Amphibious Operations
Facility ($3,600,000)

Question. What alternatives were studied under the economic
analysis that has been prepared, and what were the findings?
Answer. The economic analysis considered various options including
taking no action, renovating and/or expanding existing facilities, and
constructing new facilities. The recommended course of action was to
renovate an existing building for storage of operational gear to
construct a new structure for boat storage.
Question. Will this project pay for itself in avoided maintenance
and repair to boats, and so forth?
Answer. The project is expected to recover its capital investment
cost over the 25-year life of the facility. This is based on
anticipated reduced maintenance and repair and extended life of the
assets such as the Rubber Hulled Inflatable Boats valued at $505,000
per craft.

Eglin Aux Field 3 (Duke Field), Florida--General Purpose ACFT
Maintenance Shop ($2,210,000)

Question. Describe in general terms the differences in maintenance
requirements between the previously assigned AC-130A aircraft and the
newly assigned MC-130 aircraft, to explain why the existing shops were
marginally adequate for the previous aircraft but are inadequate for
the new aircraft.
Answer. The existing aircraft maintenance shop fails to meet
current Air Force Occupational, Safety and Health (AFOSH 91-22 and 127-
12) standards for industrial facilities. Specifically, minimum
clearances cannot be maintained between equipment and machinery
creating unsafe working conditions. Some shop stock is stored outside
due to lack of storage space. The electronics shop, environmental shop
and battery testing area are located in three difference facilities,
causing span-of-work control problems. Industrial gas cylinders are not
collocated with the shop where they are used. Key work centers are
remote from other primary maintenance shops resulting in transportation
problems and loss of productivity. The increased equipment requirements
for the MC-130 Combat Talon's Avionics. Electronic warfare counter-
measures, and other advanced features aggravate an already crowded
situation.

Eglin Aux Field 9 (Hurlburt Field), Florida--Clear Water Aircraft Rinse
($2,400,000)

Question. The form 1391 states that this project will have an
investment payback period of approximately 2 years. Submit for the
record a summary of this analysis that is based on a comparison of
corrosion related aircraft maintenance requirements of rinsed and non-
rinsed aircraft.
Answer. The payback period was determined from extrapolated data
based on previously completed studies, i.e., the Draft Engineering
Report, ``Study to evaluate the Effectiveness of Fresh Water Rinsing of
Aircraft as an Aid in a program of Corrosion Prevention and Control at
Myrtle Beach, S.C., ``prepared by Systems Exploration, Inc., Dayton
Ohio, 31 August 1988, and Final Engineering Report, ``Effectiveness of
Regular Fresh Water Rinsing of Air Craft at RAF Bentwaters and RAF
Woodbridge, United Kingdom,'' Systems Exploration, Inc., Dayton, Ohio,
May 1990. These reports validate the effectiveness of fresh water
rinsing after each operation over salt water. Since Hurlburt field is
located less than one mile from the Gulf of Mexico, the proposed clear
water rinse facility will be especially effective in preventing
corrosion.

Macdill AFB, Florida--Renovate Command and Control Facility
($8,400,000)

Question. Will this project complete all headquarters construction
requirements for the United States Special Operations Command?
Answer. This project completes construction requirements for the
administrative headquarters and will result in terminating temporary
host base facility utilization and leasing. The Center for Acquisition
and Logistics still has minor military construction requirements for a
Development and Test Center and a Public Access Building.

Fort Campbell, Kentucky--Aircraft Maintenance Hangar ($15,000,000)

Question. Why will this project provide one aircraft maintenance
bay for contractor support, rather than including such space in the
cost of the support contract?
Answer. The Unit's highly specialized SOF instrument helicopters
require the logistics support contractor to provide maintenance
inspections, depot-level maintenance, and research, development and
testing on site, as well as to deploy with and support the aircraft
conducting special operations. The dynamic advanced technical nature of
the electronics work and the likelihood of contractor turnover in the
future make it impractical for the support contractor to furnish
facility workspace without adding considerable cost to the support
contract and significantly diminishing contractor responsiveness.
Question. What percent of the cost of this project is for such
contractor space?
Answer. Contractor space is estimated at 11 percent of the project
cost.

NS Roosevelt Roads, Puerto Rico--SOF Operations Facility ($9,600,000)

Question. What percent of the cost of this project is for space for
temporary additional duty personnel, and what is the anticipated
utilization rate of this space?
Answer. Approximately 10 percent of the project cost supports the
temporary additional duty personnel. One of the unit's primary missions
is to train these personnel who regularly deploy for short duration to
this location for specialized SOF training. Projected space utilization
is 80-85 percent.
Question. Should some or all of the cost of this project be tallied
as a cost of relocating SOUTHCOM from Panama?
Answer. This project is intended to support Naval Special Warfare
Unit FOUR's current mission at Naval Station Roosevelt Roads. None of
the project cost is attributable to relocating SOUTHCOM from Panama.

Contingency Construction Various ($9,350,000)

Question. The form 1390 for this program indicates the request for
future years will be $10,000,000 per year through fiscal year 2002. How
is this annual program level determined?
Answer. The Department has historically requested approximately
$10,000,000 per year.

Minor Construction Various ($16,094,000)

Question. The form 1390 for this program indicates the request for
future years will be a total of $90,000,000 for fiscal year 2002
through fiscal year 2002. How is this program level determined, and why
is it nearly double the fiscal year 1999 level?
Answer. Minor construction is budgeted based on historical
experience and should represent an amount considered prudent to satisfy
annual unforeseen minor construction requirements of a non-emergency
nature.
Based on historical experience, the Defense agencies projected
minor construction requirements of $29 million in FY 1999. The
Department's request of $16 million will be supplemented with $13
million of unobligated funds which are available for this purpose. The
FY 2000-2002 estimates assume that requirements will be approximately
the same as those anticipated for FY 1999, adjusted for inflation.
These estimates will be refined based on FY 1998/99 experience.

Planning and Design Various ($39,866,000)

Question. The form 1390 for this program indicates the request for
future years will be a total of $150,000,000 for fiscal year 2000
through fiscal year 2002. How is this program level determined, and why
is it twenty-five percent greater than the fiscal year 1999 level?
Answer: The Components estimate their Planning and Design (P&D)
requirements for the budget year based on the size of the two
succeeding fiscal year military construction programs. For example, the
amount requested for FY 1999 will be used to complete design on FY 2000
projects and to initiate design on FY 2001 projects. Therefore, the
size of the FY 1999 request is a function of the size of the FY 2000
and FY 2001 construction programs. The Components' requests for P&D in
FY 1999 equate to approximately 4.5 percent of the FY 2000 and 4.5
percent of the FY 2001 military construction programs. However, in FY
1999, some of the agencies had unobligated balances that will be used
to satisfy FY 1999 P&D requirements. As a result, their FY 2000-2002
P&D budgets appear to be larger because they assume that no unobligated
balances will be available to offset requirements for those years.
These estimates will continue to be refined.

Family Housing Construction Improvements

Question. The construction improvements account includes one small
project to provide carports in Richmond, Virginia ($245,000), and three
very small projects to provide: front doors in Menwith Hill, UK
($50,000); fencing in Lathrop, CA ($30,000); and shelters in Richmond,
VA ($20,000). Why couldn't these be accomplished as maintenance
projects rather than an improvement projects? What criteria are used
for identifying individual projects within the total budget request for
funding as improvements rather than as maintenance?
Answer. The projects are not considered maintenance projects
because they require installation, replacement and erection of new
nondwelling structures. These projects are best classified as
improvements projects as delineated in title 10 U.S.C. 2825.

OSD Guidance Regarding RPMA Definitions

Question. Submit for the record the current guidance issued by OSD
regarding the definition of work that is permissible under the Real
Property Maintenance Accounts, as opposed to work that must be funded
under the Military Construction appropriations bill.
Answer. The Components were reminded that Section 2811 of Title 10
provides authority for the Department to carry out repair projects
costing more than $5.0 million using operation and maintenance (O&M)
funds provided that they are approved in advance by the Secretary
concerned. In order to ensure that this authority is being applied in a
consistent manner throughout the Department, we provided them with the
following standard criteria for determining what constitutes a repair
project and directed that these criteria be applied to all future
projects.
criteria for a repair project
1. Repairs means ``to restore a real property facility, system or
component to such a condition that it may effectively be used for its
designated functional purpose.''
2. When repairing a facility, the components of the facility may be
repaired by replacement, and the replacement can be up to current
standards or codes. For example, Heating, Ventilation, and Air
Conditioning (HVAC) equipment can be repaired by replacement, can be
state-of-the-art, and provide for more capacity than the original unit
due to increased demand/standards. Interior rearrangements (except for
load-bearing walls) and restoration of an existing facility to allow
for effective use of existing space or to meet current building code
requirements (for example, accessibility, health, safety, or
environmental) may be included as repair.
3. Additions, new facilities and functional conversions must be
done as construction. Construction projects may be done concurrent with
repair projects as long as the projects are complete and useable.
Offset Folios 408 to Insert here

Question. For the rules issued by your agency between April 1,
1996, and December 31, 1997, please provide the amount of budgeted
resources (professional and support staff, travel, meetings,
conferences, etc.) dedicated to developing and issuing these rules,
from proposed through final (list rules for each fiscal year in
development with budget for that rule and a budget total for all rules
for that fiscal year).
Answer. No Military Construction, Family Housing, or Base
Realignment and Closure (BRAC) funds were used by DoD to develop and/or
issue any of the rules issued by the Department for the period April 1,
1996, through December 31, 1997.
Question. What, if any, procedural changes in the rule development
process were made in response to the passage of the Congressional
Review Act (CRA)?
Answer. Public Law 104-121 was signed on 03/29/96. Since that time,
the Defense Acquisition Regulations Council (DARC) has issued various
non-major rules pertaining to Military Construction, Family Housing, or
Base Realignment & Closure Accounts. Before any rule takes effect, the
DARC complies with 5 U.S.C. 801, as added by Section 251 of Public Law
104-121. A report is submitted to each Houses of Congress, and the
required information is submitted to the Comptroller General and made
available to each House of Congress.
Question. For which rules has the General Accounting Office
prepared a report(s)? Has the GAO highlighted any concerns about your
agency's compliance with the Congressional Review Act? If so, what
procedures have you put in place to ensure hour agency's compliance
with the CRA in the future?
Answer. The General Accounting Office provides a report to the
standing committees of jurisdiction of both Houses of Congress on major
rules proposed by Federal agencies. None of the rules proposed by DoD
effecting MILCON, Family Housing, or BRAC were classified as major
rules; therefore, GAO did not prepare a report on any of them.
We are unaware of any concerns by GAO about compliance with the
CRA.

Section 6 Schools

Question. Is it correct that the Department of Defense has resolved
the question of whether to continue to operate Section 6 schools,
rather than returning these schools to the states?
Answer. A final decision regarding the transfer of the Domestic
Dependent Elementary and Secondary Schools, formerly known as Section 6
Schools, to location education agencies has not been made at this time.
As you are aware, in 1986, Congress mandated that DoD develop a
plan for the orderly transition of all Section 6 Schools to the LEAs by
1990. As part of developing that plan, the DoD conducted (through
contract) detailed case studies of each DDESS district. In 1988, a
final report of the studies was issued. It concluded that none of the
existing DoD stateside schools could be transferred to the LEAs without
substantial, and in many instances, continuing costs to the federal
government. Impediments to transfers included the inability of the LEA
to provide an education of the same high quality as that being provided
by DoD, and the inability of the LEAs to financially support increased
student enrollments resulting from the enrollment of the military base
children. Additionally, the military communities perceived certain
drawbacks to the transfer, including the loss of schools specifically
geared to the needs of military children and the loss of their own
school boards, as established in the DoD requirements. Many of the LEAs
would not accept the existing facilities without significant
improvements being made, similar to the situations now being corrected
in the states of Alaska and Washington. The report noted that depending
upon the avenue used to transfer a school to the LEA, requirements for
facility improvements may, in fact, remain with the government. After
review of the report, both DoD and key elements of the Congress
concluded that transfer was inappropriate at that time.
In 1995, the Conference Report on the National Defense
Authorization Act for Fiscal Year 1995, Public Law 103-337, requested
that the Secretary of Defense collect information concerning the
possibility of transferring the schools to LEAs. Unlike the 1988
report, in 1995 Congress requested surveys of parents and students,
LEAs, and the leadership of affected military installations regarding
transfer of the schools and asked the LEAs what financial,
construction, and other support would be required to facilitate a
transfer. The report also requested a survey of local public school
districts in which over 30 percent of the students are military
dependents to determine the level and sources of funding for these
schools.
Although the report is currently being coordinated with the Office
of Management and Budget and other involved federal agencies,
preliminary reports with regard to the possibility of a transfer are
quite similar to those of the 1988 report. Specifically, it appears
that although several factors are cited, the primary impediment to
possible transfers is the inability of the LEAs to absorb additional
students without financial assistance.

[Clerk's Note.--During March of 1998, the Department of
Defense submitted the following Revised Executive Summary of
the Base Realignment and Closure Accounts. The revision was
necessary due to Navy revisions to ``Savings'' figures. These
are no changes to ``Implementation Costs'', to ``Estimated Land
Revenues'', or to any figures for components other than the
Navy.
The following Revised Executive Summary supersedes the
information appearing in Part 4, pages 1 through 46.]
Offset Folios 412 to 458/500 Insert here

Thursday, March 12, 1998.

DEPARTMENT OF DEFENSE, INDUSTRIAL AFFAIRS AND INSTALLATIONS

WITNESS

JOHN B. GOODMAN, DEPUTY UNDER SECRETARY OF DEFENSE

Statement of the Chairman

Mr. Packard. We understand that Mr. Hefner is on his way,
and I am sure other members of the committee will be arriving.
I think we will go ahead and begin, and they will certainly
have some comments and some questions as we reach that point.
I will call the hearing to order. We certainly are grateful
to have you back with us again, Mr. Goodman.
Mr. Goodman. Thank you, Mr. Chairman.
Mr. Packard. This is certainly not your first time before
this subcommittee, and hopefully it will not be your last.
We are looking forward to your testimony. I have read it
through. I was telling my clerk that it is kind of messed up in
terms of the way I have marked it up and asked questions,
because I was reading it while I was on the treadmill last
night. [Laughter.]
That is not easy, to make notes while you are on the
treadmill.
But I do appreciate your submitting it to us, and it is
well organized and well presented and we are looking forward to
having you present your testimony. I would appreciate you
summarizing perhaps and covering the highlights rather than
reading the testimony to us. Most of us have read it.
In our deliberations today, I hope that we will be able to
get into some discussions about some specifics relative to the
privatization program. We have been very strong advocates of
the privatization program. And it did not initiate with me as
chairman, but it has been an ongoing program to see how we can
better fill the need on quality of life issues.
And we think it is moving in the right direction, although
we do have some concerns and we may want to address those
concerns, and certainly they may come up in the question and
answer period.
Some of the concerns are we feel that we are quickly moving
into large, large, large projects before we have really had a
chance to test out the smaller projects that have been
underway. Two or three hundred homes--we feel comfortable that
that is a good test bed to determine if it is going to work.
Two or three thousand homes we have some concerns about, at
least this early. It may be that it will work out.
We are going in almost an irreversible direction. It
appears that in our efforts to move into privatization that we
are moving rapidly--so rapidly that we may be scuddling the
traditional way that we have built homes in the services in the
past.
And in every group that we have had before us in our
hearings this year, in answer to the question, ``Are we
replacing the traditional way of building housing and quality
of life facilities with the privatization?'' the answer has
been no. But it appears that that may be where we are headed. I
would be very anxious to hear your observations in that area.
We also are delaying the appropriations and the actual
funding or spending of monies, waiting for privatization to
really get going. That is of some concern. Perhaps thirdly, and
maybe more importantly of all of the other concerns, is that we
are--I am not sure we see a very well-defined evaluation and
analysis laid out to see if, in fact, this is the right way to
go.
I would much prefer to have to make changes in the program
early on than to wait until we have had some failures or some
real serious problems that arise. And it is very possible, in
the new direction that we are going. We simply cannot see all
of the eventualities. We do not know all of the nuances, and I
am not sure we have a performance system well identified that
will tell us if we are moving in the right direction, and tell
us that soon enough to where we could make some changes.
The construction industry, at best, is a precarious
industry, and there are all kinds of possibilities for
failures. Talk to any contractor, general contractor, and they
will certainly tell you that there can be unforeseen problems.
Financing may not work out always the way that it is planned.
Contracts may not always work out the way that they were
designed, and we would like to know if there has been some
thinking and some directions in terms of what if this happens
that does not make it all pencil out the way we have
anticipated, where do we go from there, and is it the right
direction.
Performance standards/performance evaluation I think is
something that we are concerned about. I am. But overall, I do
not want that to sound like we are negative on privatization
because we are not. We think that it is a very positive, new
approach to trying to close the gap.
One of the concerns I have is is that the primary purposes
of looking at privatization and moving in that direction was
that it would close the gap much quicker, and we may not be
closing it as quickly as we had hoped under current process.
Secondly, that we might save money, and are not sure that that
is happening. And, thirdly, that we would be able to transfer
to our service men and women some ability to develop an equity.
Those are three very fundamental purposes that we would
like to see and evaluate whether, in fact, those purposes are
going to be realized in this new approach. I have probably said
a lot more than I intended to, but I simply wanted to let you
know that even though this subcommittee, and certainly me as
the chairman, are very supportive of the privatization efforts,
I think there are some yellow lights out there that we would
like to at least determine if it is going to work out the way
we all hope that it will.
And so with those comments--do either of you, Mr. Cramer or
Mr. Olver, have any opening comments? If not, we will go ahead
and have him formally----
Mr. Cramer. No opening statement.
Mr. Packard [continuing]. Give his statement, and then we
will just open it up for questions.
We are looking forward to your testimony. Again, we have it
before us, and we have reviewed it, so if you would like to
summarize. Cover it any way you would like, frankly.

statement of the honorable john b. goodman

Mr. Goodman. Thank you, Mr. Chairman.
First of all, I would like to note that in our first
meeting together you strongly expressed your support for
privatization as a principle of government, that it was an
important way of reducing the size of government and improving
the quality of service that we can provide.
My testimony today is about housing. But as we discussed
last year, this year the Department is moving forward in other
areas, in utilities, which was a recommendation of yours.
I am pleased to be here today to talk about the housing
privatization program. With your permission, I would like to
submit my written statement for the record.
Mr. Packard. Absolutely.
Mr. Goodman. And in light of your comments, rather than
simply summarizing my testimony, I would really rather address
some of the questions and issues that you have raised, because
as I have been reviewed this program in preparation for my
testimony, I have also been looking into the kind of concerns
that you have expressed, and I would like to talk to you just a
little bit about them.
I do not need to tell anyone on this committee how
important housing is to the quality of life, nor do I need to
tell anyone on this committee how important good planning is to
management. For these combined reasons, Deputy Secretary Hamre
this last year established an important goal. Namely, he
directed that the military departments eliminate our inventory
of inadequate housing by the year 2010. That is a big job,
because we have 300,000 houses, two-thirds of which are in
desperate need of repair or replacement.
We also, frankly, still have a deficit out there and could
benefit from more houses. Using traditional procurement, it
would cost us at least $20 billion. And given even previous
years' funding levels, because I recognize the comment and your
concerns about current funding level, but even in previous
years' funding levels, that would take us about 30 years to
solve. As you have noted, that is simply unacceptable.
That is why this housing privatization initiative is so
important to Secretary Cohen. The tools that you have provided,
which we are now using in this five-year test period, provide
the means to leverage our resources. With these tools we can
get leverage of at least three to one. In some of our projects,
we have found that that leverage rate is 30 to one. That means
that we can get significant more housing for the dollars that
you are providing than we could through our traditional tools.
Now, I completely share and agree with earlier witnesses--I
know Bill Lynn was here--who noted that the Department's goal
is not to replace Milcon with privatization. It is an addition.
It is an additional tool, and, frankly, it is too early to
tell, as you have noted. But indications are that it certainly
does provide the possibility to put our young men and women in
uniform with more and better housing, cheaper and faster than
would otherwise be possible. That is why the initiative is so
important.
Now, we have made progress in our first two years, but it
is a little less than we hoped, and I would like to explain
why. First, the program was a new start. It required the
Department to learn how to deal with the realistic community,
with the financial community, to learn how to analyze the
viability of projects. Until the Housing Revitalization Support
Office gained experience, initial analyses were long.
Now, part of the reason why this was important--and I
testified to this last year--is that while we wanted to use
these tools as much as possible, we only wanted to ramp up
consistent with our ability to manage the program, with our
ability to ensure the government's long-term financial
interests, and with our ability to ensure the kind of
management issues, Mr. Chairman, that you raised in your
opening statement.
The second cause of delay is that one year into the program
we did not have approved scoring guidelines from the Office of
Management and Budget. I talked a little bit about this last
year. It was not until June last year that OMB established
appropriate rules to score obligations to the government
incurred by the use of these new authorities. That delay
essentially put our work on hold.
When the guidelines were established, they contained some
rules that were different than had been incorporated into our
initial analysis--how, for example, utilities should be treated
in the financial calculations. That meant that we had to go
back and redo the kind of detailed, pro forma analysis, the
detailed life cycle cost analysis, that we thought was
important to ensure that we were getting the most for our money
and that we were able to protect the government's interest.
Third, developing the loan and loan guarantee instruments
that you provided to us proved time consuming, because we
needed to work with the financial community to translate the
concept of loan guarantees into actual documents that would
receive favorable--and by favorable I mean investment grade--
financing.
The last thing we wanted, of course, was to have projects
that would only qualify for junk financing. Certainly, that was
not our intention in this kind of project. These had to be
projects. There had to be financial instruments that Standard
and Poor's and others would consider of investment grade. We
wanted their review. In some sense, we wanted their
underwriting of the project to supplement our own to ensure
that we are managing it well.
Finally, and this leads into a point, Mr. Chairman, that
you raised and that I want to address, there was some
uncertainty at different levels in the services as to whether
this initiative would work--uncertainty, frankly, that was
compounded by the long deliberations over scoring rules.
This uncertainty led the services to delay making decisions
about whether or not to propose a project to the Housing
Revitalization Support Office for privatization. The way we had
set up the program, and it was very important to the services,
is that the services would propose individual projects.
In essence, my rule and my office's rule was to ensure that
these projects were financially viable, to ensure that they
were sound, that the management plan was sound, and then the
implementation--the procurement process--was run by the
services. What I am noting is that the proposals for the
projects proved very slow in coming.
This goes to the third point I wanted to make, because the
slow decisionmaking on whether or not to proceed with the
projects on the part of the services delayed execution of
projects and delayed execution and transfer of the Milcon
authority.
In preparation for this hearing, Mr. Chairman, members of
this committee, I learned the extent of those delays. Some
extend back to 1996. I know that you and other members of this
committee are frustrated by this delay. I want to tell you, so
am I. I was, frankly, surprised to learn how large this backlog
was, and I appreciate the committee's highlighting this issue.
As I noted, I have seen the projects when the proposals
came forward, and that is the point at which I went to work.
But I realize that there is a significant backlog here, and we
need to do something about it. And I want to tell you what I am
going to do.
To correct this situation, next week I have called for a
summit meeting, to include all key personnel from the services
and from the Comptroller. I want to identify what money is
being held up and why it is being held up. For each project, I
will demand that the services, working with HRSO--that is the
Housing Revitalization Support Office--establish a schedule for
using the new authorities or for proceeding with Milcon.
I want to and will share these schedules with this
committee. Paralysis by analysis, or worse, indecision, simply
cannot continue.
Now, moving forward, Mr. Chairman, here is what we will do
to prevent this kind of problem from recurring. There are a few
actions that we are taking. First, it is important to note that
HRSO is getting ahead of the curve in their site review
process. Already, HRSO has conducted site analyses at more than
30 locations, and that number is growing steadily.
That means, unlike the past, we will not need to wait to
determine whether a privatization project will work or not.
Increasingly, we will have that information ahead of time.
Now, in the past, the HRSO team, as I noted, conducted a
site analysis and then awaited a service's decision to move
forward. As I noted, in many cases that decision simply did not
come. To prevent future delays, we are going to modify our
procedures and establish a deadline for an up or down decision
on the part of the services on how to proceed with that
project.
Finally, now that we are beginning to get ahead of the
curve in terms of the kind of analyses that are required to
figure out whether privatization projects will work, I think
the services can and need to begin making privatization
decisions in the budget planning process. In next year's budget
bill, I will, therefore, recommend that each of the services
specifically budget for these revitalization initiatives.
In short, we will clear out the execution backlog, we will
set procedures to prevent its recurrence, we will establish
schedules that we will share with you, and we will begin the
process of budgeting directly.
Now, fourth, one of the reasons that this information about
delayed execution is so frustrating to me is that I think in
many other respects the program is making real progress, and I
think that this committee and Congress should be very proud of
that progress because it provides significant improvements in
the quality of life for our young men and women in uniform and
their families. It provides the kind of housing that we all
know that they deserve and we all believe is absolutely
critical to retaining the kind of skilled, motivated young
folks that we have.
We have resolved the scoring issue. We have developed a
trained Housing Revitalization Office. We have obtained andhave
under contract now leading financial and real estate firms to advise us
and to do a lot of the--help us do a lot of the analysis and work with
the real estate community.
And I would note, Mr. Chairman, you had asked the question
about our evaluation and analytical process. I would be
delighted to share this approach and this material with the
committee, because, frankly, I think it is very, very rigorous.
We do detailed pro forma financial analysis. We do detailed
life cycle analysis, all before--life cycle cost analysis, all
before we decide to move ahead.
Before the project moves forward, there are a number of
things that I want to know. First, of course, is, does it meet
the needs of the installation and the men and women in uniform?
But from a financial perspective, is the project financially
feasible? Will it save us money over the long run? Is there a
management plan to ensure that we can take care of the needs of
this project over the long run? These are all things that we
look at.
RFPs are focusing not just on getting a project out on the
street, but ensuring that there is a good financial and
management plan to ensure that even once it is built that the
project is well managed and that we have procedures in place to
ensure that the Commander at the base is able to have a
significant influence over the direction and the upkeep of
these projects.
One of the great benefits of this program is that while I
think we have done a good job of building houses, we, frankly--
the Department, frankly, and services have not done a terribly
good job taking care of the houses that we have. With our
analysis in these projects and with what we are planning, we
are requiring the projects to maintain reserves to ensure that
the projects are kept up, to ensure that they are able to be
maintained in ways that, frankly, we just have not done a very
good job doing.
And I can come here every year and tell you it is a real
concern to us and we want to do a better job. But the
Department does not do as good a job as we should, you know,
keeping reserves, just like a private sector--a real estate
project would do to ensure that the project maintains value.
Well, that is what we have been working on on the
programmatic side. In terms of projects, we have completed two
projects. We have two projects that we hope we can soon award
at Fort Carson, Colorado, and Lackland Air Force Base, Texas.
And we are moving forward on seven other projects.
All together, these projects encompass 18,000 units. That
is real leverage. Those are 18,000 new, replaced, or
revitalized units that will provide the kind of housing, as I
noted, that we all want to give our young men and women and
their families.
Now, in keeping with my earlier commitment, Mr. Chairman, I
will provide this committee with copies of the specific
schedules mutually agreed upon by my office, the Comptroller,
and the services for these projects. And let me assure you, I
will monitor closely their performance to ensure that those
schedules are achieved, because I know you have a concern about
this and so do I.
The fifth point I want to raise is that I think it is
important to keep in mind that these projects are not just
collections of houses. They are communities. And that is
important to us both in how we design the project, in how we
prepare it, and in what we are asking for.
First, in the design of the projects, not only is the
commander closely involved in this, but so, too, are the
families now living on the base. Mr. Chairman, in our first
meeting, you raised this issue to me, that you believed that we
needed to have families involved in the decisionmaking process.
I agreed completely.
And in my approval at every project, I have made it a
requirement that the RFP process, that the development of the
concept of the project involve not just the top brass but
involve service members and their families.
And second, in the construction of the facilities, the
projects involve more than just houses. We are requiring
community centers, playgrounds, recreational facilities, and
parks. Those are the kind of facilities where families can get
together, where communities are built, all of which contribute
to the quality of life and enable our families to enjoy the
same both physical, cultural, and social amenities I think that
are such a valuable part of the culture of our uniformed
forces.
But, in closing, Mr. Chairman, I want to thank this
committee for its support. I share your frustration and have
outlined a series of steps that will clear out the backlog in
execution, and I believe will prevent its recurrence.
We need to do that because this initiative is critical. It
is critical to the Secretary, it is critical to all of the
military departments, and most of all it is critical to provide
quality housing to the young men and women in uniform and their
families.
Thank you very much.
[Prepared statement of the Honorable John B. Goodman
follows:]
Offset Folios 518 to 528 Insert here

Mr. Packard. Thank you very much, Mr. Secretary.
We appreciate Mr. Hefner being with us this morning. If you
have any opening statement or any comments that you would like
to make----
Mr. Hefner. Well, Mr. Chairman, I had an opening statement,
but what I would prefer to do is ask a couple of questions,
lengthy questions, I would like to just do that at the
appropriate time, and just welcome Mr. Goodman to the
committee.
Mr. Packard. This may be the appropriate time. [Laughter.]
I will recognize you first, and then we will go to Mr.
Cramer, and then to Mr. Olver.

delays in housing privatization

Mr. Hefner. Would you agree that housing projects that are
already funded should go forward as intended by Congress, and
they should not be held hostage while you work out the bugs in
privatization?
We have heard from witnesses that you are not going to save
money--but you are going to speed up the process. And, you
know, all the houses are not inadequate, and there are many
quality units that are being held up we think because of this.
Let me just follow on along those lines. There is one
housing project that was funded at Fort Bragg last year, and it
has been held up while you develop your privatization methods.
I was kind of surprised to hear this because the original
project was very badly needed and privatization is going to
delay relief for these families for several years.
In March 1997, you testified before this committee that 42
sites had been identified as privatization candidates. We have
got candidates, not necessarily that they will go, but they are
candidates. In February of 1997, the DOD issued a
revitalization of military housing report on the first year of
the housing privatization initiative.
Appendix C of that report is the site nomination list.
Forty-three sites are listed as nominated, and I am assuming
that 43--that is the list that you were referring to in your
testimony. Well, among the nominated sites, you list one at
Fort Bragg. Now, the report has no further details about the
nomination.
Next, I would like to call your attention to an FY1990
budget justification material submitted to the committee by the
DOD and printed by us as part of the hearing record. Now, could
you tell me how many of these projects that have been funded
and are scheduled to go that are being held up so that you
could work out the bugs on the privatization?
And that is not a parochial thing for me. I feel sure that
other members on this committee also would like to have that
information. I do not think this is what we understood when we
were funding these projects, that they were ready to go, and I
do not think they should be held hostage until you work the
bugs out of privatization.
Would you just set my mind at ease on that?
Mr. Goodman. My Hefner, you have raised a number of
questions. Let me try to address each one in turn. I think they
are important questions.
First, I just want to disagree with the characterization,
or rather want to explain the characterization when people say
we are not going to save money from these projects. We are
going to save money from these projects. One of the conditions
for approval, from my perspective, is that there is life cycle
savings, one, and, two, that----
Mr. Hefner. Would you just hold there just a minute? We may
have a vote here. That is a debate that is going to continue,
whether you are going to save money or not. You know, we have
gone through that argument on base closure.
Out in the future, there may be savings, and what have you,
but we understand the reason that we are doing privatization.
It speeds up construction but that is not the question that I
basically want answered. The question I want answered is: Are
projects being held up until you can work out the bugs, and
where are they, and how many of them are there?
Mr. Goodman. Let me answer your question in two parts. The
first part is that I think the view of the chiefs, the view of
the military departments, is that when and where we can
leverage our resources and get three to 30 times as much houses
for our young men and women, that that is something that we
ought to do.
Frankly, given the quality of life challenge we have, we
have to do everything we can to speed revitalization of houses.
Mr. Hefner. Well, I understand----
Mr. Goodman. Mr. Hefner, I am going to address the second
part of your question. I am not avoiding it.
Mr. Hefner. I know you are not avoiding it.
Mr. Goodman. I am not avoiding it.
Mr. Hefner. The point I am making is, it just does not make
any sense to hold these projects that are ready to go, that
people are waiting on. It is going to inconvenience them, until
you get the bugs worked out. That is the whole thing.
Mr. Goodman. The second point, and I may have passed this
point in my oral statement before you arrived, is that as I
prepared for this hearing, I became aware of the delays in the
execution of projects. Honestly, sir, I was not aware of the
extent of that because the services were the ones who were
proposing projects to me.
Let me clarify. Something was a proposed candidate, and
that meant that the service was interested in looking at it. At
that point, the HRSO team went out and actually did the kind of
detailed analysis that would demonstrate that privatization was
feasible. At that point, it went back to the military
department for decision.
What I have learned as I have prepared for this hearing is
the fact that there are '96 projects that are on hold, that
there are '97 projects that are on hold, and there is a
sizeable amount of money there. And that does concern me, sir.
So what I had stated is that next week--I do not have all of
the information on that, because that has not been part of my
role in the process.
Next week I have called a summit meeting with the
Comptroller and the services, because I think we owe you--
frankly, I think we owe it to ourselves and I think we owe
you--a clear schedule of how we are going to proceed, and that
we cannot continue simply to delay. We either have to be able
to demonstrate to you that there is a clear project here, a
clear privatization project with significant leverage that we
can obtain, or we need to cut bait and move forward.
I think it may be worth a short delay of the Milcon project
to determine whether three to 30 times the number of housing
units makes sense. It is not worth a long delay. In my oral
statement--it is not in my written statement, Mr. Hefner, and I
apologize for that. I prepared my oral statement last week and
my written statement. As I was preparing for this, I learned
new data that caused me great concern.
I think a short delay may be acceptable; a long delay is
not. And I have outlined in my oral statement a range of--a
number of new procedures to be able to ensure that those delays
are short rather than long.
I know how important the issues are in Fort Bragg. I have
traveled down there. I have gone running around the base. And
right before he left command, General Keane called me and asked
me for my support for the Fort Bragg privatization project,
because in his view it was the only way that he was going to be
able to ensure that we could take care of the needs of the
young soldiers and their families.
So I am not happy, Mr. Hefner, about the delay there, and I
will come back to you and this committee with a schedule about
how we are going to proceed.
[The information follows:]
See attached letters to Chairman Packard dated March 23,
1998, and April 6, 1998.
Offset Folios 535 to 542 Insert here

Mr. Hefner. Well, General Keane was in my office last week.
We work with him very closely. All we want you to do is shoot
straight with us, where we can know what we are doing. We have
enough problems on this committee with funding to do the things
that we need to do with limited funds.
I would just certainly appreciate that when you give your
testimony and we read the record that we find some
discrepancies. Whether they are overt or just something you
overlook, or what have you, but we need to have a good
relationship here, because this is something--this
privatization business I have real reservations about it, as I
did 801 housing. And we want to get the most for the buck for
our troops, but we do not want to give away too much and make
too much of a sacrifice just to experiment.
I would urge you to be very specific for this committee to
know where we are going and what the real situation is.
With that, Mr. Chairman, I yield back my time.
Mr. Packard. Thank you.
Mr. Olver? No questions at this time?
Let me go into a couple of things, then, as I read your
testimony, and then I will get into some of the prepared
questions.

LONG-TERM PRIVATIZATION AGREEMENTS

I am looking for information more than questioning what you
have said. On the projects that are in procurement--the Fort
Carson, Colorado, project--this will be our largest project----
Mr. Goodman. Yes, sir.
Mr. Packard [continuing]. To date, 2,600 units. And in both
of these projects that are in procurement now, Lackland and
Fort Carson, it is anticipated that the housing allowance will
cover the entire cost of the lease or rent?
Mr. Goodman. Yes.
Mr. Packard. And how have you projected that with some
accuracy for a 50-year contract?
Mr. Goodman. We have used the normal escalator clauses, and
the kind of cost-of-living adjustments in that, and we have
provided that information to the bidders.
Mr. Packard. Even builders that build or retain ownership
of Section 8 housing in HUD, they run into unforeseen gyrations
in the market, or it does not pencil out after, say, five
years, because there is a depression or an increase in
valuation or a variety of reasons why their projections did not
fulfill themselves. And for 50 years that is really a difficult
process.
What would happen if, say, the owner, the contractor, or
the owner if they sold it, came back to you 10 years from now,
and this only a fifth into the 50-year contract and our lease,
and said, ``The housing allowance is simply not covering the
cost of maintaining and ownership and servicing the debt, and
so forth. We cannot continue.'' What happens?
Mr. Goodman. Mr. Chairman, we are assured--I mean, our--one
of the things that we look at when we are doing our analysis is
what is the debt coverage ratio? Are we able to ensure, with
very conservative assumptions, that the debt is going to be
covered?
If the developer or the owner finds himself or herself
unable to proceed or in default, they have a problem with their
lender.
Mr. Packard. Well, they do, but the problem is, we are the
lender in some instances. In Lackland, of course, as you have
outlined, the government will have some form of limited loan
guarantee, but so we become the guarantee of the loan. And on
the second mortgage, we become the mortgagor.
Mr. Goodman. Well, actually, we are not, neither at
Lackland or at Fort Carson, are we guaranteeing the loan
against economic risk. But the critical point is that we are
projecting--we are certainly projecting forward what the
anticipated escalation could be in terms of their cost.
I mean, there are a couple of kinds of costs that can rise.
We are asking them to budget for their reserves, we are going
to be monitoring that process as they move forward, and we are
overseeing this process as part of a management committee.
Mr. Packard. I think the thing that I am hoping that we are
able to do--and I am not sure how well we can do it on a long-
term lease--as we have moved into this kind of an approach in a
big way, but with multiple, multiple contracts, dozens and
dozens of contracts, 30 or 40 contracts, and then find that for
some reason the owner walks away, simply says, ``It is not
working out for me, and I am going to walk away.''
Then, we not only have one project; we could have multiple
projects come back on us with some real dilemmas. And I am
trying to evaluate and look ahead and see what those kinds of
dilemmas are and what kind of problems would confront this
committee, having to come up with unexpected monies,
embarrassments at what we have planned and set up that simply
did not work out. I am looking to avoid those kinds of
problems.
Mr. Goodman. Mr. Chairman, absolutely. First, I should note
it is my understanding if there ever were a default it is not--
it comes out of the--I believe it comes out of the Treasury,
not out of the Defense budget, so I believe--I think you are
off the hook.
Mr. Packard. No, not entirely.
Mr. Goodman. But, Mr. Chairman----
Mr. Packard. That is not a good answer. [Laughter.]
Mr. Goodman. And, Mr. Chairman, that was not my complete
answer.
Frankly, I think the greater risk is during the
construction period rather than during the management period,
because where these projects for the developer will really pay
off is by managing the project over the long run. That is where
they are going to be getting their fees that justify the
initial investment that----
Mr. Packard. Is that where the loan guarantees are, in the
construction phase?
Mr. Goodman. The loan guarantees that we are providing are
as limited as possible, and they are focusing on what I would
characterize as political risk--namely, the risk that the base
might close. If it were the case that a base would close, in
certain communities then it might well be that there are not
other people, other civilians can move into those houses.
And that could trigger a default, and if it triggered a
default that is what we are providing coverage for, because
developers simply will not move into a community. The
developers, Standard and Poor's, their underwriters, the banks,
they can evaluate the economic risk. What they cannot evaluate,
however, is the political risk, and that is what the guarantee
is providing for.

HOUSING ALLOWANCES

Mr. Packard. Are you committing in your contracts all of
the housing allowance? Are you committing all of the airmen or
the soldiers' housing allowance in perpetuity, or at least for
the 50-year contract? If we increased here the housing
allowance 20 percent over the next five years, would that
automatically go to the contractor, or is there some adjustment
there? Is there some consideration?
We are committing to the housing allowance as it now
exists, but suppose that housing allowance varies either up or
down, how is that written into the contract?
Mr. Goodman. Mr. Chairman, that is a detail on which I am
going to need----
Mr. Packard. And I do not mean to micromanage.
Mr. Goodman. No, not at all, sir. I think it is a perfectly
reasonable question. Under our agreement, contract terms would
then be renegotiated.
Mr. Packard. So as the housing allowance changes, there is
an opportunity to----
Mr. Goodman. Yes.
Mr. Packard [continuing]. Renegotiate?
Mr. Goodman. Yes. And, Mr. Chairman, one of the things that
I have wanted to make sure that we have as well in our contract
terms is that if the projects--you talked about the downside
risk--I mean, obviously, the safe and conservative thing to
look at.
In addition, I think we need to look at the upside risk on
the developer's side, because we certainly do not want to be
creating huge windfall profits for the developer. And we want
to make sure that if they are making--for no fault of their own
are making a lot more money than was anticipated at signing,
that we get more for it.
Mr. Packard. I would hate to see us create a situation
where our deliberations on whether we ought to increase or
adjust the housing allowance is made on the basis of what kind
of multiple contract you have out there that would create a
windfall for a developer.
Mr. Goodman. Well, and that is----
Mr. Packard. And that would not be a good circumstance for
us to put upon ourselves. We ought to be able to make those
decisions based upon what is good for the servicemen and women,
not on what is good for the contractors that may be affected by
a housing allowance adjustment.
Mr. Goodman. You are absolutely right, because 70 percent
of our people are not living in government housing now--they
live on the economy--and we need to not lose sight of those
folks while we are just focusing on our housing project. I
agree with you, and we are including that in our contractual
terms.
Mr. Hefner. Would you yield for just one quick comment?.
Mr. Packard. Of course, Mr. Hefner.

50-YEAR CONTRACTS

Mr. Hefner. When you were putting together this 50-year
contract, did you use a program that showed a floor on the
monthly payments, or whatever? If you had a floor and it could
not go below that could the contractor make his determination
that it will not be less than this amount?
Mr. Goodman. Certainly.
Mr. Hefner. Was that figured into the model?
Mr. Goodman. Yes. Yes.
Mr. Hefner. Okay. I understand.
Mr. Goodman. I mean, certainly, if Congress were to
abolish, God forbid, housing allowances, that would be a
serious problem for the projects. But I certainly do not think
we anticipated that happening at all.
Mr. Hefner. Well, I have got to tell you that I have said
this before. I would like to be a contractor and do nothing but
build, if I was guaranteed full occupancy and I was guaranteed
that I was going to make a profit. If at a certain time I did
decide to go belly up, the lender is going to be responsible,
and the lender is going to come which is the government, and we
are going to pick up the tab. That is a pretty good deal. It is
sort of the only risk free business that I can think of right
now.
Mr. Goodman. Well, Mr. Hefner, let me just clarify that we
are not guaranteeing occupancy, and that was part of--that was
one of the rules that the Office of Management and Budget laid
forward. Our families have the right of first refusal on the
units, but we are not guaranteeing the developer that they will
live there.
Mr. Hefner. Yes, but let us be realistic about this. If you
are going to build 300 units on the base, as short as we are of
houses, that is pretty much a guarantee that you are going to
have full occupancy. I do not mean to be argumentative, but I
have just got some concerns about it.
Mr. Chairman, I do not want to belabor this.
Mr. Packard. I want to get to Mr. Edwards as quickly as I
can. Let me just finish up on this, though.

HOUSING ALLOWANCES

Not only do we not wish to create a disparity and
complicate the decisionmaking process of adjustments to the
housing allowance, but are we creating a disparity--a greater
disparity between families that have to live on the economy and
families that can qualify for these new housing arrangements
and have their allowances cover the entire cost? That is
already a disparity that is of concern to this committee--those
that have to live on the economy because we simply do not have
the adequate housing available for their--that their housing
allowance covers.
Are we creating a greater problem, or are we diminishing
the problem? That is the question.
Mr. Goodman. First, I share your view that that disparity
is--that the disparity is a problem. We have not in this
project--we have not seen privatization as the means to be able
to resolve that. I think it is a very complicated problem,
but----
Mr. Packard. But does it exacerbate that?
Mr. Goodman. No, sir, to the contrary. In fact, I think
what it does is it simply ensures that people who are living on
base housing or in government projects are living in adequate
and quality housing. You know, we have had this sort of strange
compromise in the past. You can either take your money and go
out on the economy, or you can live on base, no out-of-pocket
expense, but your house might be crumbling and not in very good
condition.
We certainly do not want that to happen. If anything, in a
number of these projects--and, frankly, in some of the larger
projects, we are able to significantly build down the deficit.
That is part of the plan at Fort Bragg, part of the plan at
Fort Carson, with 800 new houses, part at the plan of Food
Hood, part of the plan at Pendleton.
We could help more people who would like to live on base,
either because of cost reasons or because of the kind of
community reasons that motivate a number of members, especially
in those forces where the service member deploys. So, no, I
think this helps rather than hurts.
Mr. Packard. Thank you.
Mr. Edwards.

HOUSING PRIVATIZATION--REASONS FOR IMPLEMENTATION

Mr. Edwards. Thank you, Mr. Chairman. Personally, I want to
thank you for calling the hearing. I happen to be one who
strongly believes in trying this program, because I have seen
the frustration of how long it would take through the
traditional process to provide for adequate housing. People
that are babies now will be, you know, 30 years old by the time
housing is upgraded under the traditional process.
But as a believer in the program, I think the tough
questions you are asking, and Mr. Hefner, and the points he has
made are very important. And I hope our committee can work with
you, Mr. Secretary, to work out whatever problems might exist.
I assume that, just like any major procurement program, in
a way this is a new procurement program. Whether it is aircraft
carriers or Air Force planes, you know, there are always start-
up problems. My urging to you would be to encourage everybody
within the Department of Defense to take bureaucratic hats off
if necessary and be decisive, move, get some of the projects up
and going, because a lot of these hypothetical questions we
cannot--you cannot answer honestly until we have some projects
on the ground.
I also hope that where projects--traditional Milcon
projects have been unnecessarily delayed because of this that
you can work through that. And if you do not work through those
problems, this program may come tumbling down before it is ever
given a chance to succeed.
But because I was late--and I apologize for that; I had
another hearing--could I ask you again to go back to the basic
reason Congress put in place this program. Under traditional
Milcon, what is the cycle for upgrading the inadequate housing
at our military installations? And what will this system, if we
can get it up and going more quickly and effectively, what will
this do to that cycle?
Mr. Goodman. With an inventory of 200,000 inadequatehouses
that need repair or replacement, with any kind of reasonably funding
projection, it would cost at least $20 billion, current dollars, and
take about 30 years to resolve that problem, more in some services,
clearly more in some services, tougher for the Marine Corps, tougher
for the Army than for the Navy or the Air Force, but still very tough.
I think the reason Congress took this important and
innovative step is that it recognized that as much as we would
like to be able to solve--I am sure we all would have liked to
have been able to solve the problem using our traditional
procurement approach. We just were not going to get there.
Mr. Edwards. You know, I think everyone on this committee
would prefer to have more funding for this subcommittee, but it
is not there. One issue----
Mr. Goodman. Mr. Edwards, if I might. In some ways, I think
this helps achieve a number of the other objectives of this
committee, because I do believe that we are saving money. We
are getting more good housing up front. That means that we will
be able to devote more resources to barracks and the other kind
of operational facilities that are very important that affect
quality of life at the workplace, but where I am sure you all
would agree we need to do a better job, too.
Mr. Edwards. Mr. Secretary, could I ask--you know,
obviously, Fort Carson has taken longer than any of us,
including yourself, would have wanted to take. There is a
project at Fort Hood pending. I would have loved to have seen
that happen more quickly. Having dealt with the problems you
have dealt with now, for new projects starting today, you get
the authorization to develop the project at installation XYZ,
how long will it take from, you know, that initial approval to
actually having the military family move in?
Mr. Goodman. What we are working towards is having all of
our site visits complete, so we know ahead of time, before
money is authorized and appropriated, whether or not a
privatization project will work at that particular base.
If we have that done, what I stated in my oral statement is
that rather than leaving the military department to
prevaricate, and try to figure out whether or not they want to
move forward in this way or that, we need to set a fixed
deadline. I am not sure right now what that deadline is for a
decision. I would like it to be short. This is one of the
issues that I want to discuss next week with the services in
their meeting.
At the point where we then go ahead, an RFP needs to be
written. That has taken probably about six months. I think that
can be shortened. It certainly can be shortened with
experience. Procurement process then takes about eight to nine
months. So once the decision is made to move forward and to
write the RFP, I think the entire award process is in the order
of about 14--this is, please understand, off the top of my
head--about 14, 15 months to award.
Mr. Edwards, what I had committed to the Chairman before
you arrived is that--and I think Mr. Hefner emphasized this
point and requested, if you will, that there be truth in
advertising, and I think that is a very fair request. And what
I want to be able to provide to you are, first, the specific
schedules and dates of those projects that we have where we are
moving forward.
Frankly, in light of some of the delays that I have seen, I
want to go back and see those scrubbed with the services,
precisely, Mr. Hefner, because once we give them to you you
have a right to expect that that is what we are going to do.
And as I said, second, moving forward, I think we are
moving into a position so this whole process will move much
more rapidly.
But, Mr. Edwards, if I might, just to--I know you have a
special interest in Fort Hood. I just want to emphasize what
the benefits are, because this committee appropriated funds for
two Milcon projects that were worth about $40 million, and for
that money would be able to buy 284 units, which is important.
But using those funds, with the tools that you have
provided us, will enable Fort Hood to immediately replace 700
existing units--immediately replace them--construct an
additional 350 units, and a lot of those units are four-bedroom
units that do not exist and that our young E-1s to E-4s simply
cannot afford. They have large--I mean, they have large
families. We need to provide them a quality of life.
And in addition to those, there are a total of 1,000 new
units. The project will renovate over 4,000 existing units on
base. So for the same amount of funds that we could buy 285
units--our traditional tools--we will get 1,000 new units and
4,000 revitalized units.
And, moreover, we will have a budgeted process set up
whereby the developer is going to be maintaining reserves so
all of those units are going to be kept up over the life of the
project. I could not guarantee that we would be able to do that
for the 284 units that you have appropriated.
Mr. Edwards. And those are some of the reasons that caused
Commander Schwartz, General Schwartz, to become very
enthusiastic about the program. I appreciate your working, you
know, on not only that but this whole program. I would just
urge you to urge the respective services to take off their
bureaucratic hats, put on their entrepreneurial hats, and be
decisive, move quickly. Do not, you know, try to make every
project absolutely perfect before they agree to move on. Too
much delay is going to sink this program, and it will not
happen.
But for the very numbers you mentioned, I am still strongly
supportive of this, and hope with very fair and tough questions
that the Chairman, Mr. Hefner, and others have asked, we can
prove this program and not kill it.
Thank you, Mr. Secretary.
Thank you, Mr. Chairman.

CAMP PENDLETON, CALIFORNIA

Mr. Packard. Thank you, Mr. Edwards.
Let me get back to your written testimony. On the Camp
Pendleton thing, I simply for my own personal edification would
like you to provide me with details on that project, where the
284 units are, the 512 existing units are, and just I would
like some real detail on that because I am very personally
acquainted with Camp Pendleton and it would help me just to
have some details on that. There is no further question on
that, however.

OMB SCORING GUIDELINES

Mr. Goodman. Mr. Chairman, I would be delighted.
Mr. Packard. Thank you. I would like you to outline the
guidelines that you have addressed that OMB has approved in
terms of scoring guidelines. Would you outline what those
scoring guidelines are and what changes were made, if any, to
accommodate this whole process of privatization?
Mr. Goodman. Yes, sir. Most of our initial discussion with
OMB focused on determining--figuring out how to determine
whether there was enough private sector risk in the projects to
benefit from scoring under the Credit Reform Act, and we came
to an agreement on that.
Now, under the Credit Reform Act, any direct investment in
the project is scored as an upfront obligation. Any contractual
agreement or guarantee is also scored as an upfront investment,
or the net present value of the funds that are guaranteed. A
rental guarantee would be scored as an upfront investment.
Loans and loan guarantees are scored at the subsidy rate,
which seeks to estimate what the cost to the government would
be from default. And that is why the use of loans and loan
guarantee instruments gets us such greater leverage than we can
by the other tools.
One of the changes that I noted that has taken place is
that OMB's--which I do not disagree with--is that all costs to
the project ought to be included, one, in the analysis; and,
two, paid--there ought not to be any hidden indirect subsidies
by the Department of Defense. Or, to put it differently, a base
ought not to be providing additional services that are not
somehow paid for in the project.
That particularly affected utilities, because in our
initial two projects, in our initial projects we had not
planned--we had planned on providing utilities directly to the
project from the base. OMB rules say that those costshave to be
picked up as part of the costs to the project. That meant that we have
to go back and redo the numbers and make sure that that would work.
I think the guidelines that OMB has put forward are fair. I
think they ensure that the scoring are--that these projects are
going to be scored in a way that actually accounts for what we
are putting in or the risks that we are taking on.
Mr. Packard. Can it permit you the leverage far more than
what the guidelines before were?
Mr. Goodman. Well, the problem before is that the
guidelines kept moving, and we never had any agreement. You
know operating in an environment of ad hocery makes it very
hard to plan and hard to do the kind of detailed financial
analysis that you have outlined is so important, and we agree.
Mr. Packard. Would you also provide for the committee a
balanced plan--what your plan is in terms of balancing out your
programs? Milcon, privatization, variable housing allowance--we
would like to know if you have an actual plan that is including
all of these instruments to close the gap, or is all of your
energies and your efforts right now in the privatization area?

OVERALL FUNDING

Mr. Goodman. Deputy Secretary Hamre directed, as part of
his direction, that the services eliminate their inventory of
inadequate housing by 2010, directed that they develop detailed
installation-level plans on how they were going to achieve that
objective. The services are now working on those plans. They
are not complete.
Mr. Packard. They are not complete.
Mr. Goodman. When they are complete, Mr. Chairman, I would
be pleased to share those with this committee, but it will
not--I think----
Mr. Packard. No, I am not asking you to go down a different
track, then. If it is already underway, that is----
Mr. Goodman. We have done this in the area of barracks.
Mr. Packard. Do you have an idea of when they might be
completed, or when they will be available?
Mr. Goodman. The direction was that they would be finished
later this spring. As part of this meeting next week, I am
going to get a status update of where we are at. But we want to
know how they are planning to achieve that objective, or how at
least at this point they think that they will be able to
achieve that objective, and I want to share that with you, too.
Mr. Packard. That will be fine. I was a little concerned to
find that initially we had planned to have the backlog resolved
with current funding levels in 10 years, and it has now
stretched to 15. Why is that?
Mr. Goodman. Do you mean why the 2010 deadline?
Mr. Packard. It was originally, I think----
Mr. Goodman. Oh, I see.
Mr. Packard [continuing]. Earlier. I was wondering why we
have now extended that.
Mr. Goodman. Honestly, I do not think there is a strong
analytical basis for the change, to be honest. I think when we
had looked at the tools and looked at the kind of--we had said
it would take 20 years--excuse me, $20 billion and 30 years to
fix the problem. If you could get three to one leverage, you
could do it in 10 years.
When Deputy Secretary Hamre looked at this, I think he
liked the 2010 date. But, Mr. Chairman, I am sure your view--
and mine is, too--that we ought to do this as fast as we can
within the budget available to us.
Mr. Packard. As you well know, we are realizing rather
drastic cuts in these accounts, and that is a grave concern,
over a third within the last two years, and with the emphasis
on privatization. Why are we only requesting $7 million in
administrative expense for the housing--for family housing
improvement planning?
Mr. Goodman. That is $7 million of the funds that are
required for administration, undertaking the kind of detailed
analyses to ensure that we are protecting our interests. That
is the overhead costs of the program. The actual budgeting for
the program until now has come, first, from the funds that you
all provided, and, second, from the transfer of Milcon
projects.
But as I have noted, I think we are now at a point where we
come forward with our budget request next year. We ought to be
identifying specific projects for you that we believe are
amenable to privatization, so that you have that information up
front.
Mr. Packard. Will that reduce the reliance on transfer
authority?
Mr. Goodman. I think we will--I cannot tell you at this
point, since we have not worked this out with the Comptroller
or with the services how best to identify those projects. One
possibility might be to simply identify them. Another might be
to create a separate program--a program line item within each
service account for privatization. Another possibility would be
to put it in a central account.
I have not worked that issue, Mr. Chairman, within the
building. I do not know where we will come out, but I think we
want to be able to identify for you up front, as I have noted,
what projects we think should involve privatization and which
should not.
Mr. Packard. Who has any further questions?

HOUSING SHORTAGES

Mr. Hefner. I have just one. Previously at the
authorization subcommittee on installations and facilities this
week Mr. Paul Johnson and the Assistant Under Secretary of Army
for Installations and Facilities, testified that at each of the
bases where privatization occurs that this will eliminate the
housing shortages. Do you agree with that statement?
Mr. Goodman. Well, Mr. Hefner, I have only carefully looked
at four Army housing projects that are part of the 18,000 that
I mentioned--Fort Carson, Fort Hood, Fort Lewis, and Fort
Stewart. In each of these projects, we are revitalizing
existing housing and significantly buying down the deficit.
I will need to go back and check if it completely
eliminates the deficit in each of those cases. Clearly, one of
my objectives in each project is that we are working to
eliminate--to buy down that deficit to get more of our soldiers
and their families in good housing. Let me take a close look at
those projects for the record.
[The Information follows:]

The Army's strategy is to eliminate the deficit for four and five
bedroom rental requirements at each of its installations whenever
possible. Private industry does not normally build four and five
bedroom multi-family housing rental communities; however, it does build
two and three bedroom rental properties. The Army consults with the
local housing industry and local government housing authorities prior
to developing its privatization project. These consultations generally
result in an agreement that the privatization projects will concentrate
on four and five bedroom requirements deficit reductions while leaving
the two and three bedroom requirement to private developers. The Army
has its Army Audit Agency validate its requirements as part of the
privatization project approval process. The deficit may not be
completely eliminated, the proposed projects represent the Army's and
local communities' best approach to solving the installations' housing
deficits with the available resources.

Mr. Hefner. Thank you, Mr. Chairman. That is all.
Mr. Packard. Thank you.
Mr. Edwards.

privatization and impact aid

Mr. Edwards. Question. Mr. Secretary, this gets into other
areas like Department of Education, but has anyone that you
know of looked at the issue of the impact of this privatization
on the impact aid funding? Will those students that are
presently defined as type A students, therefore, getting much
higher level of compensation through the impact aid program,
will they continue to be defined as impact aid part A/type A
students, or will they go to B?
Mr. Goodman. Let me answer your question--I am a little--I
am not familiar enough with the program to--I understand type
A/type B, but I do know how these kind of projects treat and
will affect impact aid. Let me address that.
Mr. Edwards. Okay.
Mr. Goodman. When these projects are on base, if people are
moving on base onto a project, provided that these are not
DODIA schools, that will have an impact--that will affect
impact aid, because, in essence, we are bringing more families
onto government property and on the school system. If they are
off-base projects, such as the one in Everett, Washington, then
in instances it is neutral in that regard.
Mr. Edwards. The property will still--the actual land, for
example, is that still under the title of the United States
Government?
Mr. Goodman. Yes. We have the authority to actually
transfer the land. In almost all of the cases that I can think
of, the way in which we are dealing with that is to provide a
ground lease, but we are maintaining jurisdiction.
Mr. Edwards. One thing we might want to do is leave the
Department of Education code to just be sure inadvertently we
do not hurt bases. What you might end up doing in a number of
cases if you are building a much larger quantity of housing
units on post versus what has occurred in the past, then you
are going to--this will be a tremendous help for the school
districts----
Mr. Goodman. Local school districts.
Mr. Edwards [continuing]. Around military installations. We
might----
Mr. Goodman. Well, the representatives from the school
communities have come in to talk to us about that, because they
were initially concerned about this.
Mr. Edwards. Right.
Mr. Goodman. I think we have allayed their concerns, and
they believe the program is, if anything, beneficial.
Mr. Edwards. Thank you, Mr. Chairman.

long term plan

Mr. Packard. I think you detected a concern or perhaps a
lack--and maybe there is that lack--it is not real, but
certainly it is perceived by some of us on the committee--of a
long-term housing strategy, housing plan. That is probably the
thing that concerns me most right now.
I sense that we are moving into these whole new authorities
and the privatization effort on a project-by-project basis,
analyzing them as we go into them as best we can. But I have
not sensed a standardized methodology or a standardized long-
term plan that would evaluate as we go along to see if we are
going the right direction, and if we need to make some changes.
That I would appreciate your giving some thought. I would
appreciate maybe giving some response back to the committee on
if, in fact, you are developing or have developed a
standardized methodology for comparing, for instance, Milcon
projects versus privatized projects. I think we would have
several of our concerns allayed if we saw some of that planning
done.
And then the long-term plan, I would hope that you have a
long-term plan that would take all of your strategies for
closing the gap into consideration, not only privatization but
all of them--how many projects, how many homes you intend to
build through privatization versus how many under the standard
Milcon process.
I guess I am one that likes to see a well-planned strategy,
especially if we are moving into a whole new area. I just would
take some greater confidence in seeking how you have mapped it
out, how you plan to go back and evaluate the projects after
they are finished, not necessarily before you go into them but
after they are finished, to determine what we did wrong, what
do we change, what should we change, where we can profit and
learn from experience, even bad experience, because I do not
expect everything to go smoothly in this process.
I would be surprised if you expect that. There will be some
glitches. There will be some unforeseen and unplanned problems.
There will be some bankruptcy. There will be some poor
maintenance. There will be some non-performance by the
contractor that you are going to have to deal with.
I sense that it is not going to go all smooth, and I would
hope that we would do as best we can to plan for those
uneventualities in it beforehand, but certainly review each
project to determine where we can improve, where we can avoid
problems in the future.
I would hate to have as my legacy to this subcommittee
passing on to them 10 years from now a huge, humongous
financial problem of how to deal with correcting problems that
we did not foresee as we move into this process. And we are
moving into it big time, and we are talking about big-time real
estate ventures.
There are not very many real estate ventures that are
around this country that will be as big time into this kind of
activities as we are moving. And even well thought out, well-
planned, and well-legalized contracts can go belly up, can
reverse and do the wrong thing.
I would feel secure if you would provide the committee with
what you are doing, what you have done, what you plan on doing,
in terms of laying out a strategy and methodology, a review and
analysis program that would start at the beginning to the
aftermath. I am not sure we have done much since, if we have
not done enough in that that we are dealing--we are so
overwhelmed by the project-by-project approach that we may not
be looking at the big picture, the vision, that will keep us
out of trouble.
Mr. Goodman. Mr. Chairman, I think those are important
questions. They are important guidelines. I think we need to do
two things. First, I think we need to provide you--and I guess
I would--I like your characterization of projects and overall
housing, project-by-project and overall housing plan.
I agree with you that the Department has not done the kind
of job it needs to do in terms of laying out an overall housing
plan. That is one of the directions that Deputy Secretary Hamre
has made. The services are working on it. Because I know that a
combination--that Milcon and privatization will need to work in
conjunction.
The project, for example, at Robbins Air Force Base is one
where the initial project that came to me was one that did a
very good job of taking care of the senior grades and the young
officers. And the junior enlisted were left out in the cold,
and I said that is simply unacceptable.
What we worked out was a project where Milcon--we need to
present this probably a little ahead of the Department, because
we need to present this to you--but where Milcon was going to
ensure that the houses were going to be adequate and
appropriate for the junior enlisted, and that privatization
would then be able to address some of these other needs, so
that we would address the entire needs of the installationand
not leave the junior enlisted in the cold.
I think we are doing--as much as I think we need to do a
better job in our long- term planning, we have begun that in
barracks. We need to do it in houses. I would go even further,
Mr. Chairman. I think we need to do that for our overall
facilities and installations, and I have initiated a process to
do that. It is broader, and, therefore, it is harder, but it
makes it no less important.
Mr. Packard. I totally agree with you. Do you have any
underground facilities at----
Mr. Goodman. Yes, sir. But on the specific projects, I
think we have done a better job than we have thus far
demonstrated to you. If you will, I think we have a far better
analytical process, a far better--I think we have an
established analytical process. I think----
Mr. Packard. Then, you need to educate us.
Mr. Goodman. I will take that as a tasking, Mr. Chairman.
I think we have already instituted a lessons learned
process, both in terms of how we are writing the RFPs, what the
issues are. I think you are right there will be glitches along
the way. And just as you do not want to leave as a legacy any
enormous catastrophes for your successors, I do not want to
leave for my successor, or, worse yet, be the person here at
the table explaining why this occurred.
At the same point, I sure would not want to be the person
here from the Department in 2010 explaining to the chairman of
this subcommittee that, unfortunately, there just is not enough
money in our housing budget to take care of the housing needs
of our young men and women. And we really think quality of life
is important. Is not it a shame?
I think you have given us the tools that will enable us
both to feel better in 2010, and I think we need to work with
you to help ensure that together, as Congressman Edwards
mentioned, we can make this program very successful.
Mr. Packard. Thank you very much.
Do you have any further questions?
Mr. Edwards. No.
Mr. Packard. Mr. Hefner?
Mr. Hefner. No.
Mr. Packard. I think you have said it well. I would like to
leave the legacy where we solved the problem of housing in 10
to 15 years from now and not a legacy of heartache.
I do not want to close a hearing on a note of being overly
cautious. We encourage you to move forward. We are, frankly,
pleased that you are moving in the direction that you are
moving. But we simply feel that caution helps us do a better
job of what our goal is, and we certainly want to be informed
as to what changes you are making in your plans and in your
programs, how they are working, and we are not going to try and
micromanage, but at the same time we are certainly going to be
interested in how you proceed and how you progress, and where
your successes and your failures are.
Mr. Goodman. Mr. Chairman, I take that as a tasking. I have
told you the steps that we are going to undertake. We will
provide that information to you, and I am going to come back to
you to give you more information about the ways in which we
have addressed many of the concerns that you have laid out.
[The information follows:]
See attached letters to Chairman Packard dated March 23,
1998, and April 6, 1998.
Offset Folios 575 to 582 Insert here

Mr. Packard. The bells have given us the signal to close
this hearing.
[Clerk's Note.--Questions for the record submitted by Chairman
Packard.]
Overall Funding
Question. DOD is on record that its initial goal was to use the new
authorities to solve the services' housing problems with current
funding levels in 10 years. The goal is now 15 years. What has happened
to change the ``current funding'' scenario? Why is there a lack of
commitment on the Department's part toward the traditional construction
program?
Answer. When the Department initially sought these new
privatization authorities, we projected that use of these authorities
would allow us to leverage our funds at a ratio of at least 3:1.
Maintaining current funding levels would therefore allow us to solve a
30 year problem in 10 years. Our experience after the first two years
of testing these authorities confirms that we can achieve a 3:1
leverage and often much higher. However these authorities are not the
answer at all locations and must be combined with traditional Military
Construction to solve our total housing problem. The original timeline
would have presumed using all family housing construction funds for
privatization.
It is important to remember that housing privatization is still a
pilot program. Our traditional construction program remains an
important tool in providing quality housing for our military families
and the great majority of our housing projects are still implemented
using traditional military construction.
The Deputy Secretary of Defense established a goal for the Services
to fix their inventories of inadequate family housing by the year 2010,
hence the 15 year timeline. We expect to archive this goal through a
combination of privatization, traditional construction and, when
appropriate, demolition. As noted during my testimony, there have been
some delays in the Services' normal family housing construction
programs while they decided which method was most appropriate. We
remain committed to carefully investigating the opportunity to
significantly leverage our funds through our privatization authorities,
however, we will not let our existing family housing Milcon be
paralyzed by our privatization analysis. The winners will be our
service members and their families.
Question. With such drastic reductions to these accounts, one third
of prior year spending, and the emphasis put on privatization, why are
you only requesting $7 million in administrative expenses for the
Family Housing Improvement Fund and relying on transfer authority for
the program?
Answer. As we test our authorities and determine the best ways of
using them and which locations are appropriate for their application,
we continue to program for traditional family housing MilCon projects.
This method, in conjunction with our transfer authority, allows us to
do privatization where appropriate while preserving our ability to
continue using traditional military construction where necessary. As I
noted in my testimony, we expect to propose an improved method of
identifying and budgeting for privatization projects when we submit our
FY2000/2001 budget next year.
Question. At what point do you envision DOD will be ready to
properly budget for this program versus relying on transfer authority?
Answer. As I noted in my testimony, we are developing an improved
method of identifying and budgeting for privatization projects as part
of the Department's FY 2000/2001 budget preparation next year.
Savings From Privatization
Question. Does DOD expect that housing projects financed through
the privatization initiative will be less costly to the government, and
if so, why?
Answer. Yes. In order to be approved for privatization, projects
must leverage our initial investment at least 3:1 and also demonstrate
life cycle costs which do not exceed comparable military construction
alternatives. Our first projects indicate that privatization does save
the government money over the life of the project. The savings in
upfront privatization costs compared to building houses using
traditional Milcon normally outweighs any expenses incurred by
providing allowances as compared to the cost of operating and
maintaining the housing ourselves. In addition to life cycle savings,
privatization also enables the Department to solve its housing problem
much faster than it could through military construction.
Question. We have received testimony from each of the services that
they do not see privatization as being less costly. That it helps to
leverage additional housing, but is not saving money. To a large degree
we will see a shift in funding from housing constructions and
operations and maintenance accounts to military personnel accounts to
pay for increased housing allowances. Is this budgeted for and factored
into the Future Year Defense Plan?
Answer. Yes. As noted earlier, we also realize life cycle savings
from privatization projects.
Cost Comparison Methodology
Question. Has the Department developed a standardized methodology
for comparing the government's long-term costs for a housing project
financed with traditional military construction funds and with the
privatization authorities. Describe the methodology. If there is no
standardized methodology in place, why not?
Answer. No. The Department does not currently have a standardized
methodology. Part of the purpose of our being a pilot program is so
that we can test and learn the best ways of operating our program.
Currently, the Department requires all costs to the government, as
opposed to DOD only, to be compared in both military construction and
privatization options of comparable scope and term. The factors to be
compared are common and include housing allowances, residual personnel
costs, and budget scoring for the privatization option; and
construction, revitalization and operations/maintenance costs for the
military construction option. School impact fees are also considered
under both options. The HRSO is currently adapting Service procedures
to a standardized model.
Offset Folios 590 to--Insert here

Question. Where will the privatization take place and what will the
cost be?
Answer. The Services have nominated nearly 70 sites from housing
privatization. The following 11 sites totaling 24,149 housing units,
have approved concept plans and have either been procured or have
solicitations being developed. Their status is listed as follows:

------------------------------------------------------------------------
No. of
Installation units Project status
------------------------------------------------------------------------
NAS Corpus Christi, TX........... 404 Construction complete.
NAVSTA Everett, WA............... 185 Construction complete.
Fort Carson, CO.................. 2,600 Project in procurement.
Lackland AFB, TX................. 285 Project in procurement.
Camp Pendleton MCB, CA........... 716 RFP ready for use.
Albany MCLB, GA.................. 155 RFP issued.
Robins AFB, GA................... 760 RFP under development.
Fort Hood, TX.................... 5,825 RFP under development.
Elmendorf AFB, AK................ 828 RFP under development.
Fort Stewart, GA................. 3,282 RFP under development.
Fort Lewis, WA................... 3,956 RFP under development.
Fort Meade, MD................... 3,125 RFP under development.
Fort Irwin....................... 2,028 RFP under development.
-------------
Total........................ 24,149
------------------------------------------------------------------------

The costs of these projects will be determined by scoring.
Sufficient appropriations must be available to cover the amount
obligated for each contract. The Department, with OMB concurrence, will
determine the amount of funds to be obligated to cover future costs
that are associated with the use of the tools provided in the Military
Housing Privatization Initiative. These amounts are not finalized until
contract award.
Long Term Plan
Question. Has DOD prepared a written plan describing the key steps
and milestones of the privatization initiative that are envisioned to
solve the services' housing problems? If so, describe the plan and
submit the written plan for the record; and if not, why not?
Answer. Based on our experience and lessons learned, DOD hopes to
expand privatization to reach 24,149 by FY99, and at least 30,000 by FY
2000. Beginning in 2001, DOD expects to be able to privatize at a
steady level each year, as required to meet the Deputy Secretary's 2010
goal. The Military Departments are currently preparing detailed written
housing plans, to be used in the FY 2000/2001 program review. The
Department has set a goal of revitalizing, divesting through
privatization or demolishing inadequate family housing, consisting of
approximately 200,000 units, by 2010. The program review will determine
how much of that goal will be achieved by privatization.
Well Planned Overall Housing Strategy
Question. It is becoming obvious that DOD is lacking a well planned
strategy that integrates all available tools to address the housing
problem in an optimum manner. And, within the Department the tools are
managed separately--one dealing with allowances/compensation and the
other with housing policy. How does DOD ensure that all tools (existing
civilian housing, enhanced housing referral services, adequate housing
allowances, traditional construction, and, now privatization) are
optimally used in an integrated manner to solve the housing crisis?
Answer. DOD integrates these different housing tools through the
planning, programming and budgeting system, as it does all its many,
varied functions. Currently, as part of the upcoming program review,
the Services are preparing detailed plans to integrate use of DOD's
various construction tools in dealing with our inadequate housing by
2010. Additionally, outside the PPBS process, joint working groups
address issues such as how allowances, local market housing, and
improved referral interact in meeting the overall housing needs of our
military families. These working groups are comprised of members from
all segments of DOD.
Budget Tool
Question. It concerns me that the Department may be using housing
privatization as a budget tool as the expense of the service members
and their families, rather than as a program tool to provide suitable,
quality, affordable housing for them.
What assurances do you have for the Committee that the major goal of
providing better quality housing for our service members is still the
number one priority?
Answer. The Secretary of Defense is committed to improving the
quality of life for service members and their families. For this
reason, the Deputy Secretary directed that the Military Departments
eliminate inadequate housing by the year 2010. The goal of housing
privatization remains leveraging private capital to fix our inventory
of inadequate housing sooner than possible through traditional military
construction. Our military families deserve quality housing and DOD's
priority is to provide it as soon as possible. An example of this
commitment is contained in the notification letter for Fort Carson
(attached at Answer 57) which shows that, due to leveraging, more than
$6 million will be left over from the original family housing
appropriation. This amount will remain in the Family Housing
Improvement Fund to be used for other family housing privatization
projects. This is in addition to providing more than 2600 housing units
at Fort Carson.
Oversight
Question. What happens, as is the case of the Bridge Point Landing
Development in Texas, when families become frustrated if the developer
does not provide the promised level of quality housing and service? Who
will hold the developers accountable for fulfilling the provisions of
the contracts?
Answer. The base commander through the base housing office will
coordinate with the Southern Division of Naval Facilities Engineering
Command to determine whether the promised services are being performed.
Southern Division has the oversight/administrative responsibility to
ensure that the terms and conditions of the Limited Partnership
Agreement are adhered to and, if not, to take appropriate action. The
Navy receives quarterly operating reports which show how much of the
Operating Expense Budget has been expended during the reporting period
to provide services which the developer/operator/manager agreed to
provide. The scope of services is described in the Management Plan
which was incorporated into the Limited Partnership Agreement. The
reports are submitted to the Southern Division.
Success of Family Housing Privatization
Question. What standards will be used to measure the success of the
housing privatization program?
Answer. Success of the housing privatization program is measured on
a number of different levels. As a program DOD has set an interim goal
of privatizing 30,000 units by the year 2000, while determining how
much of its inadequate housing will be fixed with this important tool.
At a project level, privatization is successful when it meets our
leveraging criteria of 3:1 had has life cycle costs at least equal to
military construction alternatives. But most importantly, housing
privatization is successful when our service members can choose to live
in quality affordable housing provided through our new authorities.
Unaccompanied Personnel Housing Privatization
Question. What is the status of privitizing unaccompanied personnel
housing?
Answer. Current scoring guidelines from the Office of Management
and Budget (OMB) make it prohibitive. Under OMB scoring guidelines, if
DOD assigns service members to housing units, the rental payments for
the life of the contract are scored fully upfront. Military commanders
feel strongly that they must have the ability to assign junior enlisted
personnel to unaccompanied housing units.
Question. If privatization will not be used for barracks, is the $5
million appropriated into the fund needed?
Answer. We are continuing to discuss scoring issues with OMB and
still hope to be able to use these funds.
Implementation
Question. Two years have passed since the new authorities were
signed into law, yet no new agreements have been finalized to build or
renovate military housing (Fort Carson--units are pending). What are
the key reasons for the slow progress?
Answer. We have made progress in our first two years, but less than
we hoped. Primary reasons for the slow progress are:
DOD had to learn how to deal with the real estate and financial
communities, and how to analyze the viability of projects. Until the
HRSO gained experience, initial analyses took too long.
One year into the program we did not have approved scoring
guidelines from the Office of Management and Budget. That delay
essentially put our work on hold. Once guidelines were established, we
had to go back and redo the detailed pro forma analysis to account for
changes from the old rules.
We only wanted to ramp up consistent with our ability to manage the
program and ensure the government's long-term financial interests.
Developing loan and loan guarantee instruments was time consuming,
because we needed to work with the financial community to translate the
concept of loan guarantees into actual documents that would receive
favorable, investment grade, financing.
Long-Term Privatization Agreements
Question. How is the Department determining an installation's
future mission, military population and family housing requirement when
considering a 50-year privatization project?
Answer. While individual bases may gain or lose missions and
associated military units over a 50 year period, the essential core
mission of bases will remain essentially the same. Building housing
using traditional military construction faces essentially the same
challenge of predicting future requirements.
Contractor Performance
Question. How will DOD ensure that a contractor performs housing
management, repairs, maintenance, and improvements in accordance with
long-term (50 year) privatization agreements?
Answer. The structure of each deal determines the contract
mechanisms used to oversee contractor performance. Contract management
plans and ground leases provide for contract performance over time.
Depending on the financial structure of the deal we may also have loan
documents, loan guarantees and intercreditor agreements. Each deal will
specifically design these mechanisms to work together to provide
adequate DOD controls. Also, DOD will require the contractor to include
funding in contingency escrow accounts, and DOD will monitor on site
maintenance.
Finally, these are basically private housing developments and the
primary enforcement factor is the ability of the military members to
vote with their feet and leave.
Question. How will DOD enforce these agreements? Won't it be time
consuming and costly?
Answer. No. The structure of each deal determines the contract
mechanisms used to oversee contractor performance. Contract management
plans and ground leases provide for contract performance over time.
Depending on the financial structure of the deal we may also have loan
documents, loan guarantees and intercreditor agreements. Each deal will
specifically design these mechanisms to work together to provide
adequate DOD controls. Also, DOD will require the contractor to include
funding in contingency escrow accounts, and DOD will monitor on site
maintenance.
Finally, these are basically private housing developments and the
primary enforcement factor is the ability of the military members to
vote with their feet and leave.
50-Year Contracts
Question. Under current authorities, family housing privatization
involves government contribution of land, facilities, infrastructure,
mortgage guarantees, and differential lease payments to developers and
financiers. Wouldn't it be prudent to gain some experience with how
well this program works, before making such a large commitment to turn
over so many assets for a 50-year term?
Answer. The Services and OSD are working closely and cautiously to
find the best ways to implement these new privatization authorities. As
we test the authorities, we find that long term, large scale deals
offer some of the most powerful leveraging. We are bringing the best
private sector expertise to the table to help us apply the authorities
wisely as we test these deals. Balancing caution with expeditious
improvement of housing for our service members is the challenge we are
striving to meet.
Permanent Authorities
Question. The privatization authorities provide for a five-year
test of the initiative. Is it likely that DOD will have enough
experience by the end of the five years to recommend that the
authorities be made permanent; or, is it more likely that additional
time will be needed to continue to test the usefulness of the
authorities?
Answer. We expect to be able to make a recommendation regarding the
extension of the authorities next year.
Housing Allowances
Question. Explain the new housing allowances program DOD began
implementing in January 1998.
Answer. The Basic Allowance for Housing (BAH) is a single monthly
payment being phased in that replaces the Variable Housing Allowance
(VHA) and Basic Allowance for Quarters (BAQ). The intent is to provide
housing compensation based on comparable civilian housing costs that
considers both salary and location.
The BAH is designed so that all of the service members of a given
grade and family size will have the same monthly out-of-pocket for the
same level of housing as they do now. Lower pay grades will have lower
out-of-pocket cost than senior grades.
BAH is based on civilian standards, considering the housing choices
made by civilians of comparable income in each location.
Question. How will this program affect the need for on-base
housing, and what is the potential impact from the new allowance
program on the privatization initiative?
Answer. The intent of this program is to reduce the requirement for
on-base housing and the new allowance program should financially
improve our deals.
Separate Organizations
Question. DOD has separate organizations responsible for managing
the two key components of the military housing program--allowances and
government housing. How do these organizations work together and
coordinate on matters relating to housing strategy to ensure optimum
integration of all initiatives?
Answer. The DOD housing program is built from the Military Services
through the planning, programming and budgeting system, which
integrates the varied tools used to provide housing for our service
members. The Services are currently preparing detailed plans, for use
in the upcoming program review process, to integrate use of DOD's
various construction tools in dealing with our inadequate housing by
2010. Additionally, outside the PPBS process, joint working groups,
comprised of representatives from all segments of DOD, address the
interaction of allowances, local market housing and improved referral
in meeting our housing needs. The different DOD organizations
coordinate on a regular basis optimize integration of all initiatives.
Building Practices
Question. Under privatization, developers are allowed to use local
building practices and standards to construct or revitalize housing
available to military members. In what ways could privatized housing be
different from that housing built using military construction standards
and specifications? Also, how are such differences factored into a cost
analysis comparing privatization and military construction
alternatives?
Answer. Under privatization construction costs are born by the
developer with the government being responsible primarily for
allowances paid to the potential renters. Under military construction
alternatives, the government pays the entire construction cost and
operations and maintenance costs for the life of the housing. The
economic analysis compares costs to the government and, therefore, the
differences in construction costs are not directly compared. We require
a minimum quality standard in privatization although not the detailed
military specifications of military construction. The ability to get
more housing through privatization is the primary advantage of this
program.
Civilians
Question. One justification for on-base housing is to provide a
secure, military housing community available to members and their
families. How will this objective be affected if civilians begin to
live on-base?
Answer. We expect there is little likelihood of civilians living on
base is expected to be minimal, primarily because the privatization
projects are all targeted in areas that have a great need for housing
for military personnel. Our standard of security would be not different
no matter who lives there.
Question. What are the concerns associated with civilians renting
units located on a military installation, and how is DOD addressing
these concerns?
Answer. Our standards of security will not change. Secure areas for
military operations will remain secure.
Impact Aid
Question. If housing is not built on federal land, the local school
district will lose Impact Aid funding. Are leaders of surrounding
communities, especially school superintendents, being consulted early
enough in the process to provide input on the project's impact on the
entire community?
Answer. Leaders from surrounding communities are contacted about
the projects during the site visits which take place early in the
privatization process. Most of our on base projects envision long term
leases of government land, in which case the level of impact aid
remains the same.
Housing Referral Office
Question. The Navy has adopted an aggressive approach to help
families find housing in local communities. I have visited the housing
referral office in San Diego--it is quite impressive. What efforts are
the other services undertaking to implement enhanced referral service?
Answer. Each Service focuses improvements to referral services
where need is greatest. The Navy has emphasized its referral services
in San Diego and Norfolk primarily because of the high concentration of
service members and the presence of a robust private sector market.
Installation Reluctance
Question. Have there been any instances where an installation has
been told to do a privatization project when the base is reluctant to
do so?
Answer. I am not aware of any such instances.
House Revitalization Support Office
Question. What are the long range plans for the House
Revitalization Support Office?
Answer. The Department will reevaluate the role of HRSO at the
point when the authorities become permanent.
Use of Base Realignment and Closure Funds
Question. Why is the Department seeking authority to allow the
transfer of Base Closure funds into the Family Housing Improvement
Fund?
Answer. Privatization on receiving installations from BRAC may be
the most cost effective way of housing incoming servicemembers and
their families. The Department wants to have that option where it makes
sense.
Question. Is there any prohibition on using direct appropriations
to the Family Housing Improvement Fund at BRAC locations?
Answer. No.
Question. Have the services and DOD determined any specific
locations where the transfer of BRAC funds would be useful?
Answer. No.
OMB Scoring
Question. Provide for the record a detailed description of the
scoring guidelines approved for the Office of Management and Budget in
June of 1997.
Answer. See attached letter from OMB Director Franklin Raines
describing OMB Scoring Guidelines.
Offset Folios 619 to 635 Insert here

Family Housing Privatization

Initial Projects at Everett and Corpus Christi

Last year, the Navy executed two limited partnership
agreements under earlier statutory authorities, at Naval Air
Station Corpus Christi, Texas and at Naval Station Everett,
Washington.
Question. The project at Everett, Washington was designed
for occupancy by E-5 military personnel. Information available
to the Committee indicates that as of January, 1998, 39 percent
of the units were occupied by E-6 and above. Are you satisfied
with this performance?
Answer. The Navy is pleased with the performance of the
Public Private Venture project at Everett. Its first two Public
Private Venture projects at Everett and Corpus Christi/
Kingsville were a significant breakthrough in addressing our
housing problems within the financial constraints facing the
Navy and the Department of Defense. Enlisted Sailors occupy the
185 Country Manor homes at Smokey Point (Everett). A survey of
the Sailors and their families at Country Manor found that
residents liked the location, floor plan and amenities provided
in the homes.
Question. At Corpus Christi/Kingsville, Texas, 12 percent
of the units are occupied by civilians, and 67 percent of the
units are occupied by officers. At Corpus Christi/Portland, 20
percent of the units are occupied by civilians and 32 percent
are occupied by E-6 and above and by officers. Are you
satisfied with this performance?
Answer. The Navy is pleased with the overall performance of
the public private venture projects at Kingsville and Corpus
Christi. However, there are two concerns.
First is the preponderance of officers at the Kingsville
PPV, where junior officers occupy about 59 percent of the
homes. The project targeted rental homes to be affordable for
an E5 or E6 with dependents. Nearly all the officers who moved
into the Kingsville PPV homes are junior officers (0-1 and 0-2)
who earn a Basic Allowance for Housing virtually identical to
the E-5 and E-6 pay grades.
Second is the concern that some of the Portland homes at
Corpus Christi are still not filled, and that civilians fill 25
percent of those homes that are occupied. Obviously, Sailors
have not been as motivated to move in at this location as they
have been at Everett. The Navy believes this is due to a number
of factors. The adverse publicity generated during the
unfortunate flooding incident, and the fact that the homes at
Portland require a larger out-of-pocket expense than other
locations are two possible examples. In addition, the project
opened for occupancy when Permanent Change of Station moves
were minimal, which meant there were fewer sailors who could
easily move in. Since sailors cannot reasonably be expected to
be willing to get out of their leases and move children out of
one school district to another when the project was ready for
occupancy, the supply of sailors was insufficient at the
initial occupancy window. Therefore, civilians were given short
term, one year leases, and it is expected that the percentage
of military occupants will greatly increase in one to two
years. To avoid this situation in the future, the Navy is
considering coordinating the timing of Permanent Change of
Station orders with obtaining a building occupancy permit for
future PPV projects.
Question. If there is a misjudgment regarding the target
population for which a privatization project is designed,
compared with the actual occupants, what can be done to make it
right after the fact?
Answer. As we worked through this with the Navy at
locations where this has been a problem, there are generally
three ways we can adapt:
(1) Review referral priorities for ways to target the needs
of specific paygrades.
(2)If referral does not work, develop additional housing
units for paygrades which remain in need of affordable housing
for a given geographic area.
(3) Consider use of differential lease payments where
housing exists but is unaffordable.
Offset Folios 639 to 640 Insert here

Family Housing Improvement Fund
status of funds
Question. We have appropriated $47,000,000 to the Family Housing
Improvement Fund, and an additional $5,900,000 has been transferred
into the Fund, and no projects have been executed under the 1996
authorities. What has been accomplished to date with the funds that
have been provided for the Family Housing Improvement Funds?
Answer. The money has been used to fund project development, for
consultant support, and some has been committed to the two Navy limited
partnerships. Although NAS Corpus Christi, Texas and NAVSTA Everett,
Washington projects were both initiated under the 1995 authorities,
they were technically signed under the 1996 Act. A detailed account is
as follows:

NAS Corpus Christi...................................... $9,500,000
NAVSTA Everett, WA...................................... 5,900,000
Ft. Carson RFP Development.............................. 435,000
MCLB Albany RFP Development............................. 325,000
HRSO Overhead FY 96-98.................................. 16,000,000
--------------------------------------------------------
____________________________________________________
Total Expended.................................... 32,160,000

Question. Submit for the record a detailed history and the current
status of funds for the Family Housing Improvement Fund, showing the
amounts appropriated to date, amounts transferred into the Fund to
date, the amounts committed, obligated, and expended to date, and
cumulative obligations by object class and subobject class. This
detailed history should include, at a minimum, displays of how much has
been expended for facilities, equipment, travel, compensation of
federal employees, and consultant services.
Answer. A detailed account is as follows:

HRSO Overhead for FY 96-98:
Office Overhead (Rent, utilities, etc.)............. 800,000
Travel.............................................. 300,000
Consultant Support.................................. 14,150,000
Contract Administration............................. 750,000

No federal employee compensation is funded from the Family Housing
Improvement Fund.
Question. Provide for the record an object class and subobject
class display of planned expenditures of the $7,000,000 included in the
budget request for fiscal year 1999.
Answer. This is how we break down the funds we are requesting:

Office Overhead (Rent, utilities, etc.)................. $300,000
Travel.................................................. 90,000
Consultant Support...................................... 6,250,000
Contract administration................................. 360,000

Question. Provide for the record a table that will display the
full-time equivalent staff-years, as well as the personnel compensation
and benefits, for all Housing Revitalization Support Office personnel
for fiscal years 1998 and 1999.
Answer. HRSO Salaries for all civilian employees are as follows.
They are not paid from the Family Housing Improvement Fund.

------------------------------------------------------------------------

------------------------------------------------------------------------
1............... GS8................. Step 10............ $35,610
1............... GS11................ Step 1............. 36,609
1............... GS13................ Step 1............. 52,176
1............... GS13................ Step 5............. 59,132
1............... GS13................ Step 7............. 62,610
1............... GS14................ Step 7............. 73,986
1............... GS15................ Step 4............. 85,072
3............... GS15................ Step 10............ 94,287
1............... SES3................ ................. 108,600
Total................................................ 796,656
------------------------------------------------------------------------

Question. Provide for the record a table that will display the
full-time equivalent staff-years, as well as the personnel compensation
and benefits, for all personnel of the Military Services assigned to
the Housing Revitalization Support Office for fiscal year 1998 and
1999.
Answer. HRSO Salaries for all military servicemembers are as
follows. They are not paid from the Family Housing Improvement Fund.

------------------------------------------------------------------------

------------------------------------------------------------------------
1................ 03............... Navy................. $42,552
1................ 04............... Air Force............ 49,312
1................ 05............... Air Force............ 63,264
1................ 05............... Marine Corps......... 63,264
------------
Total................................................ 218,392
------------------------------------------------------------------------

Fort Carson, Colorado
background
The privatization proposal for Fort Carson calls for a whole-base
contract in which the developer will (1) revitalize the existing 1,824
on-base family housing units that are conveyed to the developer, (2)
construct 840 new family housing units on the installation, (3) own,
operate, and maintain all units for 50 years. The developer is expected
to invest about $220 million to initially construct and revitalize the
units and will recoup this cost, as well as the operating and
maintenance costs, from the rents paid by the occupants over the term
of the agreement. Military families have first preference in renting
the units and will pay rent equal to the member's housing allowance. If
military families do not rent the units, vacancies can be rented to
civilians. DOD is providing a loan guarantee to cover the risks of base
closure, deployment, and downsizing. In the event of a base closure
default, the government will be obligated to pay off the loan and
assume ownership of the project for disposal.
DOD prepared an economic analysis comparing the long term, or life
cycle, costs of the proposed privatization project at Fort Carson with
the costs to perform the same project using traditional military
construction (MilCon) financing. Under traditional MilCon financing of
military housing, DOD pays the initial housing construction or
renovation costs, as well as the annual costs to operate, maintain, and
manage the units. The Military does not pay monthly housing allowances
to the occupants, since occupants of government-owned housing forfeit
their allowances.
Under the proposed privatization alternative, DOD will convey the
existing housing units to the developer, set aside funds to cover the
value of a loan guarantee, and begin paying monthly housing allowance
to the service members who occupy the housing, since the housing is no
longer government-owned. DOD estimated that the value of the 1,824
units to be conveyed is $27.6 million and that the cost of the loan
guarantee is $9.6 million. In addition, under the proposed project, DOD
will continue to pay utilities for military families occupying the
housing, and some housing management costs for member referral services
and for contract oversight.
The DOD economic analysis estimated that the proposed privatization
alternative would cost the government $639 million (the net present
value of all costs over the 50-year term of the agreement). In
comparison, the analysis estimated that the government's costs over the
same period would be $861 million if traditional MilCon funds were used
to finance the project. Thus, the analysis reported that the
privatization alternative was about $223 million less costly than the
MilCon alternative.
economic analysis
Question. Under the MilCon alternative, the economic analysis
assumed that operation and maintenance costs would be $8,658 per unit.
Yet, the Army's fiscal year 1999 budget estimate for family housing
operations and maintenance costs is $6,073 per unit. Considering that
all housing at Fort Carson will be either newly constructed or newly
revitalized, what is the basis for the higher estimate for operations
and maintenance costs? Also, if the lower amount is more appropriate,
how would its use change the economic analysis?
Answer. The economic analysis is a comparison between military
ownership and operation and private ownership and operation as proposed
by the selected bidder. The Milcon maintenance calculation is based on
an engineering estimate of the government cost to maintain the units in
an appropriate manner to meet the bidder's construction and
revitalization plan. (The government's utilities costs were included in
the Milcon calculation but inadvertently not in the privatization
calculation. This error has been corrected.) The results of the revised
economic analysis do not change the least cost alternative,
privatization. The difference between the engineering estimate and the
FY 99 budget estimate occurs because the budget estimate does not fund
the cost of maintenance and repair to the standard the contract calls
for. Also the budget estimate is an average for all installations in
the United States, while the engineering estimate is specifically for
Ft. Carson. The Army's O&M estimate does not provide for the same level
of operations and maintenance at the level the contractor would. It
would take approximately 120% of the sustainment M&R plus major repair
and revitalization construction funds to raise the dwelling units to
contemporary standards and a 35 year life cycle. The contractor's
proposal obtains these goals.
Question. The economic analysis states that because utilities are
provided by the government in each alternative, utility costs are the
same in each alternative and are not included in the analysis. Yet,
under the MilCon alternative, operations and maintenance costs are
included as a cost to the government, and utility costs are included in
operations and maintenance costs. No estimate for the cost of utilities
is included under the privatization alternative. To be consistent,
should an estimate for utilities costs be added to the privatization
alternative? Also, if adding an estimate for utilities is appropriate,
what would be the impact on the economic analysis?
Answer. There was an error in the economic analysis by including
utilities costs in the Milcon alternative. The error has been corrected
and the results of the analysis have been corrected. Although savings
from privatization are less, it is still cheaper than MILCON.
Question. Under the privatization alternative, the economic
analysis assumes that housing management cost are $300,000 annually.
This amount is considerably less than the amount the Army budgets for
housing management. What is the basis for the $300,000 estimate for
annual housing management costs? More specifically, (1) what functions
currently performed by the local housing management office will be
eliminated, and (2) does the $300,000 estimate include costs for
monitoring contractor performance under the agreement and for providing
referral services for members living in the local community?
Answer. Under the contract, the contractor assumes ownership of the
housing transferred from the government and the newly constructed
units. The contractor is responsible for all costs of operating the
housing with the exception of the cost of utilities. This greatly
reduces the government cost of providing this housing to our service
members. The only family housing responsibilities that will remain at
Ft. Carson are the Community Housing Relocation and Referral Service
(CHRRS) and the administration of the proposed contract. There are no
operation and maintenance functions left once the property is
transferred to the contractor. The $300,000 is the estimated cost of
the installation housing portion of the cost to administer the contract
and perform the CHRRS function. The cost roughly equates to five person
years of effort.
Question. The economic analysis states that the value of the 1.824
family housing units conveyed to the developer is $27.6 million, or
about $15,132 per unit. What is the basis for this estimate?
Answer. The basis for the estimate was calculated from the
commercial rental market value estimation method. The method takes the
net cash flow of the project and projects its value from a multi-
housing rental market basis. Since the rents of the housing are
restricted to the value of military housing allowances and the housing
resides on Federal land, the property has limited commercial value as a
rental property with little or no resale value. Therefore the value of
the property being transferred to the private sector is limited to its
income potential. The $27.6 million is the estimate of that value using
a standard commercial rate of return.
Question. The existing units are valued at $15,132 per unit, and
the operations and maintenance cost per unit is calculated at an
optimum of $8,658 per unit or an actual of $6,073 per unit. Does that
mean that the Army is expecting the contractor to spend approximately
half of the value of an existing unit on annual operations and
maintenance for that unit?
Answer. No. These values are what it would cost the government to
maintain the standard. The estimated cost of operations and maintenance
for the contractor was based on actual costs for similar housing units
in the Colorado Springs rental market. The real value of the
transferred property lies in the project's net operating income. The
$27.6 million value is a book keeping way to value the transfer of the
government property to the contractor.
Question. If so, what is the breakout of the several components of
this operations and maintenance cost?
Answer. The breakout of the contractor's O&M costs remains
proprietary information at this time.
Question. In January 1998, DOD began implementing a new housing
allowance program. The new program, which will be phased in over six
years, is expected to better match the allowance amount with actual
housing costs in each geographic area. Under the new program, civilian
housing could become more affordable to military families, especially
in high-cost housing areas. How will the new allowance program affect
the proposed privatization project at Fort Carson, in particular in the
calculation of the housing deficit? Also, to what extent does the
economic analysis consider the impact from the new allowance program?
Answer. The BAH for Ft. Carson is 4.8% higher than the FY97 BAQ/VHA
costs which were used in the analysis. The difference does not alter
the outcome of the analysis. There will still remain a deficit at Fort
Carson.
50-year term of the proposal
Question. The Fort Carson privatization proposal involves a 50-year
agreement with an option to extend the agreement for an additional 25
years. However, most installation forecasts of family housing needs
over a period of only three to five years. In view of possible changes
over time to the installation's mission, its military population, and
the availability of civilian housing in the local community, please
describe in detail the process and the factors used to determine this
50 year housing requirement at Fort Carson.
Answer. The mix in the project housing between bedroom count and
income level generally reflects the current grade mix of the service
members assigned to Ft. Carson. There is a heavier weighting to the
junior enlisted. Ft. Carson could experience a significant reduction in
troop strength and grade mix without affecting the need for the project
housing. It is unlikely that such a radical change in the mix and need
of service member requirements would render the project housing
unsuitable to meet the needs of the military families. In addition the
Ft. Carson project allows other DOD military and DOD civilian personnel
in the Ft. Carson area to occupy the project housing in the event there
are insufficient military personnel assigned to the base. Lastly, on
the lowest priority basis, local civilians will be allowed to occupy
the project housing if there are no higher DOD priority personnel
available.
Question. Ensuring adequate contractor performance is a concern in
most housing agreements. DOD is attempting to ensure that the
contractor will perform needed housing repairs, maintenance, and
improvements by including maintenance standards, modernization
schedules, and required escrow accounts as part of the agreement.
However, it appears that enforcing these agreements could be difficult,
time consuming, and costly. Specifically, how does the agreement deal
with these issues?
Answer. The contract includes a number of mechanisms to ensure
contractor performance in maintaining quality housing. The contractor
must maintain reserves and must meet minimum requirements regarding
upkeep and repair response times. The Base engineer will monitor
housing and the remaining housing referral staff will provide the
ability for residents to register complaints not resolved by the
contractor. The Army has the ability to tap the reserves if necessary
to address legitimate problems in emergency situations. Lastly, this is
private housing and soldiers can vote with their feet if housing is not
maintained. Any default due to lack of performance puts developer at
risk, as government can remove the developer.
Question. Government-owned housing is provided at Fort Carson
because the local community cannot meet the military's family housing
needs. And, under the proposed agreement, military occupants of
privatized housing will pay rent equal to their housing allowance. In
this situation, it appears that the contractor is reasonably assured of
having full occupancy at fixed rental rates; and could increase profits
by skimping on maintenance and repairs and by cutting costs by hiring
less qualified managers and staff. Is DOD confident that repairs and
maintenance will be performed in a manner that does not erode the
quality of life of the military occupants?
Answer. Yes. The contractor is required to maintain adequate
reserves which can be tapped if he fails to maintain the property to
the standards of the contract.
Question. The proposed privatization agreement allows for civilians
to rent housing units not rented by military families. Over the 50-year
term of the agreement, it appears that the possibility of civilians
living on the installation could at some time become a reality. The
possibility of civilians living on the installation raises several
questions relating to property tax liability and jurisdiction over
domestic disputes. What are the concerns associated with civilians
living on the installation and how does DOD propose to deal with each
of these concerns?
Answer. It is the responsibility of the Developer to take into
account the tax consequences of the project and deal with the Federal
and local taxing authorities. The government has no liability for taxes
levied against the property or the income derived from the property.
The ground lease issued to the developer retains exclusive Federal
jurisdiction. Civilians occupying the housing subject to the ground
lease will be subject to Federal law and jurisdiction.
award cancellation
[Clerk's Note.--On April 22, 1998, the Department of the Army
canceled the proposed award of the whole-installation capitol venture
initiative project at Fort Carson, Colorado. This contract would have
been the first exercise of the authority sought by the Department of
Defense and enacted in the National Defense Authorization Act for
Fiscal Year 1996 on February 10, 1996 (section 2801 of Public Law 104-
106, 10 USC 2871). The Army's decision was based upon litigation
instituted in the U.S. Court of Federal Claims, and has resulted in a
re-examination of the acquisition process. The Army is now studying
corrective action alternatives, including a return to best and final
offers and re-solicitation.
Congressional Notifications
Question. Submit for the record the Congressional notifications
that have been submitted for the projects at Fort Carson, Colorado,
Lackland AFB, Texas, and Marine Corps Logistics Base Albany, Georgia.
Answer. See notification letters on pages immediately following:
Offset folios 660 to 688 insert here

Public-Private Ventures in Family Housing
Question. Under current law, can the Department transfer Family
Housing funds to the Military Personnel accounts?
Answer. No. We can not move money after appropriation.
Question. If not, what execution difficulties can you anticipate?
Answer. The Military Departments must estimate Family Housing O&M
requirements and military personnel allowances based on projected
contract award timelines, as part of their budget preparation
Predicting when privatization will occur is difficult and without
transfer authority, housing costs may be budgeted in the wrong account.
For instance, the Army anticipated privatization of Fort Carson would
occur near the end of FY 97 and moved $15 million of Family Housing O&M
funds to the Military Personnel account during formulation of their FY
98 budget. However, privatization of Fort Carson housing has not yet
occurred and the Department has no authority to transfer the funds back
to family housing, resulting in $15 million of housing requirements not
budgeted in the account bearing the cost. With authority to transfer
funds from family housing to military personnel accounts, funds can be
moved at the actual time privatization occurs, thus avoiding having
funds in the wrong account when budget assumptions for privatization
time lines are different from when privatization actually occurs.
Question. In the preparation of this year's budget materials, have
there been ``transfers in the estimates'' for fiscal year 1999, moving
funds out of the family housing accounts and into the military
personnel accounts?
Answer. Yes. As compared with 1999 column of the 1998 request, the
Navy moved $3.88 million from family housing O&M accounts to the
Military Personnel appropriation. The Army and Air Force did not move
any funds from Family Housing to Military Personnel.
Question. If so, what amounts from which accounts?
Answer. The $3.88 million was moved from the following Navy family
housing O&M accounts:

[Dollars in millions]
Management................................................. .5
Services................................................... .3
Furnishings................................................ .08
Utilities.................................................. .8
Maintenance................................................ 2.2
------------
Total................................................ 3.88

Question. Submit for the record the FY 99-03 Defense Planning
Guidance requirement with regard to using privatization as a tool to
meet family housing needs.
Answer. The Department established 2010 as its goal for
eliminating, as quickly as possible, DOD's inadequate family housing
units to provide better living conditions for our servicemembers and
their families. The available methods for attaining this goal are
revitalization, divestiture through privatization, or demolition.
Additionally, the savings realized from leveraging private sector
capital should be reinvested, in order to fully take advantage of its
potential.
Question. Current statutory authorities expire in February of 2001.
Are Departmental efforts being paced with this ``sunset'' date in mind?
Answer. Yes.
Family Housing Privatization
through the family housing improvement fund
[``public-private venture'' program, or ``ppv'']
[``capital venture initiative'' program, or cvi'']
Question. The Committee has received the notification for the
Army's family housing privatization project at Fort Carson, and it is
under review. The Navy has executed two projects in Texas and
Washington under somewhat different authorities. We have gone into
detail about the ongoing privatization efforts during each of our
hearings with the Services. I have several questions that I will ask
you to answer from the perspective of the Office of the Secretary of
Defense:
Does the Department anticipate that there will be any significant
financial savings from privatization as compared with the traditional
programs?
Answer: Yes.
Question. To what extent is privatization becoming a substitute for
the traditional family housing program, rather than the supplemental
program that Congress originally intended?
Answer. Privatization is still a supplemental program under the
test authorities provided by Congress.
Question. Is it correct that the cost of the family housing program
is being shifted from this bill to the housing allowances subaccounts
within the military personnel accounts in the National Security
appropriations bill?
Answer. Only in cases where existing base housing is privatized
must the Military Departments predict additional allowances in their
programming process. In these cases their programming would also
reflect the reduced requirement in the O&M accounts. In many cases
housing allowances which are already being paid are used to leverage
better housing for our military families, as in the example of the
first two Navy projects.
Question. Is this a ``zero-sum'' game, that is, will there be any
savings or is it just a shift of costs?
Answer. In order to be approved for privatization, projects must
leverage our initial investment at least 3:1 and also demonstrate life
cycle costs which do not exceed comparable military construction
alternatives. Since we can solve our housing problem through
privatization much sooner than through traditional military
construction, the primary advantage is speed rather than life cycle
savings. However, our first projects indicate that privatization also
saves the government money over the life of the project as well.
Question. Is there any assumption about the future funding levels
for housing allowances?
Answer. Yes. When we model a project, allowances are increased
along with inflation.
Question. Are the Services or the Department holding up the
execution of family housing projects for which funds have been
appropriated, pending privatization efforts?
Answer. Yes. (See attached letter of April 6, 1998 to Chairman
Packard on pages immediately following this one.)
Offset Folios 701 to 706 Insert here

Question. Are these funds being withheld to meet OMB scoring costs
on mortgage guarantees to developers against base closure, downsizing,
or extended deployments?
Answer. Funds are held to cover costs of executing privatization
projects. Depending on the terms of the proposed project, budget
scoring for loan guarantees could be one of those costs.
Question. Is it correct that funds in the Family Housing
Improvement Fund remain available until expended, and that any funds
set aside for the cost of guarantees will remain unobligated forever,
if there are no defaults?
Answer. Funds in the Family Housing Improvement Fund are available
until expended. It is no year money until 2001 when our test period is
over. The government's cost of a loan guarantee (a subsidy estimate) is
obligated from the Family Housing Improvement Fund at the time a loan
guarantee commitment is made. When the lending institution issues the
loan to a contractor, the amount obligated by the government is
disbursed into a financing account, where it is held, collecting
interest, pending any default. If no defaults occur, or no defaults are
anticipated, a downward subsidy re-estimate is made and the amount held
in the financing account is moved to a receipt account, where is
becomes available for appropriation.
Question. The Army is proceeding very aggressively to execute
``whole installation'' type projects. The Navy policy envisions a
``regional scope.'' What is the OSD policy with regard to privatizing
all family housing in a large geographic area?
Answer. Requirements determination should consider regional needs.
OSD's policy is to encourage the Services to use the authorities in
ways that best fit their needs.
Question. Under current authorities, family housing privatization
involves government contribution of land, facilities, infrastructure,
mortgage guarantees, and differential lease payments to developers and
financiers. Wouldn't it be prudent to gain some experience with how
well this program works, before making such a large commitment to turn
over so many assets for a fifty year term?
Answer. The Services and OSD are working closely and cautiously to
find the best ways to implement these new privatization authorities. As
we test the authorities, we find that long term, large scale deals
offer some of the most powerful leveraging. We are bringing the best
private sector expertise to the table to help us apply the authorities
wisely as we test these deals. Balancing caution with expeditious
improvement of housing for our servicemembers is the challenge we are
striving to meet.
Question. It took us many, many years to build up these housing
assets. Tell us about some of the steps OSD is taking to protect its
investments under this program.
Answer. The original genesis of this program was based on two
thirds of our family housing assets being in disrepair. Projects, such
as Fort Carson, under this program are allowing us to renovate and
replace those assets more quickly than can be done under traditional
methods. Providing good housing units, along with the bad, greatly
enhances our ability to accomplish this. When the contracts are put in
place, DOD retains numerous incentives to ensure contractor compliance.
Question. Provide for the record a list of all the locations that
are under consideration for such projects, including the number of
units in the current inventory at each location, as well as some
indication of the value of the total government contribution at each
location.
Answer. The Services have nominated nearly 70 sites for housing
privatization. The following 11 sites totaling 24,149 housing units,
have approved concept plans and have either been procured or have
solicitations being developed. Their status is listed as follows:

------------------------------------------------------------------------
No. of
Installation units Project status
------------------------------------------------------------------------
NAS Corpus Christi, TX........... 404 Construction complete.
NAVSTA Everett, WA............... 185 Construction complete.
Fort Carson, CO.................. 2,600 Project in procurement.
Lackland AFB, TX................. 285 Project in procurement.
Camp Pendleton MCB, CA........... 716 RFP ready for issue.
Albany MCLB, GA.................. 155 RFP issued.
Robins, AFB GA................... 760 RFP under development.
Fort Hood, TX.................... 5,825 RFP under development.
Elmendorf AFB, AK................ 828 RFP under development.
Fort Stweart, GA................. 3,282 RFP under development.
Fort Lewis, WA................... 3,956 RFP under development.
Fort Meade, MD................... 3,125 RFP under development.
Fort Irwin....................... 2,028 RFP under development.
-------------
Total........................ 24,149 ........................
------------------------------------------------------------------------

Question. Is it correct that the program and financing statement
for the Military Unaccompanied Housing Improvement Fund indicates that
all balances in the Fund ($5,000,000) will be obligated during fiscal
year 1998, that $1,000,000 will outlay during fiscal year 1998, and
that another $1,000,000 will outlay during fiscal year 1999?
Answer. Yes. However, the budget projections for obligations and
outlays from the Unaccompanied Housing Improvement Fund during FYs 1998
and 1999 are dependent upon stimulating private developers to build,
operate and maintain barracks. The extent to which market incentives
materialize or do not materialize for private development will
determine the execution of these funds during the FY 1998 and FY 1999
timeframe.
Question. Why does the President's Budget Request include a
proposal to broaden last year's General Provision Section 123, to allow
transfers into the Family Housing Improvement Fund from the Base
Realignment and Closure Accounts?
Answer. DOD wants to be able to use funds earmarked for military
family housing at receiving locations but budgeted in the BRAC account
to pursue privatization where it is cost effective. There are currently
no specific locations under active development, however.
[Clerk's Note.--End of questions for the record submitted by
chairman Packard.]
[Clerk's Note.--Questions for the record submitted by Congressman
Hobson.]
Energy Savings
As you remember, Mr. Goodman, I started out working with Assistant
Secretary of Defense (Economic Security) Josh Gotbaum on a bill to
establish a non-government, not-for-profit institute to assist
installations in upgrading energy infrastructure and expediting cost-
effective project contracts. That ``Forrestal initiative'' was put on
hold to see if DOD could achieve the same results without new
legislation. When we talked a year ago, you testified that DOD would be
willing to come back to Congress if legislation is needed.
Question. Have you been able to achieve energy savings and cost
reductions, and if so, how much?
Answer. The Department reduced energy consumption in our buildings
and facilities by 15.5 percent between FY 85 and the end of FY 96,
measured by British Thermal Units per square foot. We are on track with
the requirements of the Energy Policy Act and Executive Order 12902 to
achieve a 30 percent reduction by 2005.
The Department has also established Energy Savings Performance
Contracts (ESPCs) covering all fifty states, the District of Columbia
and Puerto Rico as another method of executing energy and water
conservation measures. ESPCs are indefinite delivery, indefinite
quantity service contracts that enable bases to contract more easily
with one or more energy services contractors. We are redoubling our
efforts to use ESPCs to partner with the private sector and enter into
mutually beneficial energy and water conservation projects. The
Department currently has seventeen active ESPCs with over $2 billion in
contract capacity. This includes the two Super Regional ESPC contracts
administered by the Army Corps of Engineers, Engineering and Support
Center, Huntsville, Alabama.
Federal Energy Management Program
Last year, I worked through the National Security Appropriations
Subcommittee to provide $15M for Budget Activity 18550, the ``Federal
Energy Management Program.'' The money survived the appropriations
conference and have been available to you.
Question. What have you done with these funds? Do you need more in
FY 99, and were they requested? Is there a dispute over where the work
is done--on the individual base vs. centrally managed? What is the
right answer and where is this work done now?
Answer. The DOD wide Federal Energy Management Program (FEMP) funds
will be used to leverage ESPC contracts and fund additional high
payback initiatives. To date, we have allocated FY98 DOD-wide FEMP
funds to the following categories:

Policy Development/Support.............................. $250,000
Energy Savings..........................................
Performance Contracting (to Army Corps of Engineers,
Hunstville in support of all DOD installations)..... 4,000,000
Technical Assistance (i.e. Civil Engineering Research
Laboratory)......................................... 2,860,000
Energy efficient equipment purchases (i.e. Direct
Digital Controls.................................... 4,000,000
Support Tri-Service Working Group to develop energy
efficient policy/criteria manual.................... 425,000
Execution of Specific Service Energy Projects........... 3,465,000
No DOD-wide FEMP funds were requested for Fiscal Year
1999.

[Clerk's Note.--End of questions for the record submitted by
Congressman Hobson.]
Thursday, March 5, 1998.

QUALITY OF LIFE IN THE MILITARY

WITNESSES

SMA ROBERT E. HALL, SERGEANT MAJOR OF THE ARMY
MCPON JOHN HAGAN, MASTER CHIEF PETTY OFFICER OF THE NAVY
SGTMAJ LEWIS LEE, SERGEANT MAJOR OF THE MARINE CORPS
CMSAF ERIC W. BENKEN, CHIEF MASTER SERGEANT OF THE AIR FORCE

Statement of the Chairman

Mr. Packard. Ladies and gentlemen, we would like to call
this hearing to order.
This hearing this morning will concentrate on the quality
of life issue as it relates to mostly our enlisted men and
women in the military, which, of course, is the heart and soul
of our services. We are extremely grateful to have with us the
chief enlisted men from each branch of the services. This
morning we have with us from the Army Sergeant Major Robert
Hall, the Sergeant Major of the Army; John Hagan, the Master
Chief Petty Officer of the Navy; and Mr. Lewis G. Lee, who is
Sergeant Major of the Marine Corps; and Mr. Eric Benken, who is
the Chief Master Sergeant of the Air Force.
Three of these brethren have been with us before, some of
them several times before this subcommittee. One is new. We
want to welcome Segeant Major Hall of the Army, who is new this
year.
This is a good hearing. This is one that I think most
members of the subcommittee look forward to because, again, we
are really hearing from those that represent the sailors and
the marines and the airmen and the soldiers that are in the
field, those that really are the heart and soul of our
services.
It is a different kind of testimony, and I have read their
testimony, and I am sure many of the committee members have.
We want to welcome a group of students from Los Angeles.
They are here just as observers. We welcome them here, and
anyone else that is here, we appreciate you all being with us.
I will simply make one or two introductory comments before
we hear from the ranking member, Mr. Hefner, and then hear from
each of the witnesses.
We have expressed concern and disappointment in the level
of budgeting this year for military construction. We feel that
we have taken--three years in a row, we have taken a hit in
terms of the level of funding. If the President's budget
submission this year was implemented, we would be somewhere
over a 35 percent reduction over the last 3 years, and that is
simply unacceptable. We can't live with that and continue to
provide the facilities that are necessary not only for a good
qualify of life for our men and women in the services, but that
reduces us to the point where we perhaps may be dipping into
readiness and into safety and a variety of other things that
are even more important than quality-of-life issues.
Retention is a major problem, and each of you has addressed
that in your testimonies. We have got probably the highest
level and quality of men and women in our services than we have
ever had in my lifetime, and yet that is being threatened, I
think, because we may lose some of these very fine, well-
trained people simply because the facilities that they have to
work with and the facilities they have to live in and those
auxiliary facilities that provide services to their families
are inadequate and sub-standard. And that is of great concern.
We have made a deliberate effort to try to catch up and
close the gap in these facilities, but the fact is if we don't
have the money, we can't do it. I know that that is of concern
to each of you.
I guess I also usually announce our next meeting, and our
next hearing will be the 12th of March, next Thursday. That
will be our final hearing before we start to write the bill.
And so the members of the committee ought to be aware of that.
It is at 9:30 in the morning.
With that, I am going to turn some time over to Mr. Hefner,
who has chaired this committee in the past and is certainly
well experienced on all of the issues that we deal with on
military construction, and so we are delighted to have you with
us, Mr. Hefner.
Mr. Hefner. Thank you, Mr. Chairman. And welcome,
gentlemen. It is good to see you again and again and again.
It is the same old story that we have every year and we
have worked so hard over the years to try to build quality of
life for our men and women in the service. It seems as the
budget gets squeezed, we get squeezed just a little bit harder.
I would imagine that we are the only budget in the House that
over the last few years in real dollars has seen a decrease in
our budget.
The need is still there, and, of course, retention is sort
of a double-edged sword. I would imagine that a very good
expanding economy puts more pressure to try to get people to
come into the armed forces. Of course, we may not be able to
offer the incentives that we did in the past simply because of
budgetary constraints. But we are happy to see you here today,
and we are anxious to hear what you have to say today, and you
are always welcome before this committee.
Thank you, Mr. Chairman.
Mr. Packard. Thank you very much, Mr. Hefner.
Mr. Wamp, do you have a statement you would like to make?
Mr. Wamp. No, sir.
Mr. Packard. Mr. Hobson?
Mr. Hobson. No, sir.
Mr. Packard. Thank you.
With that, then, we will proceed with the Army first, the
Navy, and then the Marines and then the Air Force, in that
order, if we could. Again, we have your testimony. Each of you
has written a very thorough and a very complete and a very well
organized written testimony. That will be entered into the
record in its completeness. We would prefer that you not read
it. Most of us have read it. We don't need to have you read it
to us again, so if you will summarize and hit the points that
you feel are most important for this subcommittee to be
reminded of, we would appreciate it.
We will move to you, Sergeant Major Hall. Inasmuch as you
are new on the committee, we hate to have you go first, but
that is the way we have got it set up, and so we will have you
speak first.

statement of sergeant major robert e. hall

Sergeant Major Hall. Sir, it is my honor to go first.
First of all, Mr. Chairman and distinguished members of the
subcommittee, good morning. I am honored and privileged to
speak before you today to discuss quality-of-life issues, and
to speak on behalf of our Army, our soldiers, and their
families. Before I talk about that, I think the first thing I
would like to do is thank you for the additional funds that you
have given us over the past two years for quality-of-life
improvements. We have used those funds to bring over 9,000
billet spaces to the DOD 1 plus 1 standard in more than 100
barracks worldwide. We do really appreciate everything you do
to help us to enhance the morale of our soldiers. They are very
busy. As you know, deployments haven't eased during the past
year, and today soldiers serve around the world in many
capacities. Over 100,000 are forward deployed, and on any given
day, we average 30,000 soldiers deployed away from home station
in over 70 countries. In May of last year, we hit a high
watermark with soldiers deployed in 100 countries.
I didn't know there were 100 countries in the world, sir,
so I had them pull up the list, and we really did have soldiers
in 100 countries in May of 1997. Those soldiers were keeping
the peace in Bosnia. They were deterring Iraqi aggression in
Southwest Asia. They also supported local authorities following
hurricanes, floods, wildfires, ice storms, and in numerous
other capacities.
Sir, as you said, I am only in my fifth month as the
Sergeant Major of the Army. I am the newest member of this
senior enlisted team before you today. But that doesn't make me
a rookie because I do bring over 30 years of Army experience to
this job, and I have been a noncommissioned leader for 29 of
those 30 years. So I do come from the soldiers in our Army.
During the past 4 months throughout my travels, I have
talked with soldiers who were preparing to deploy, who were
returning from deployments, and those who were doing their job
every day. I am proud to represent those young men and women.
They are great soldiers. They are trained. They are motivated.
They are dedicated to the country.
I think they understand that there is only so much money
that the American people can afford to provide for its men and
women in uniform. They do not expect to become wealthy. They
just want to serve. But, above all, they want to ensure an
adequate standard of living for themselves and for their
families.
We as leaders recognize that the strength of our Army lies
in the quality of our soldiers. They are first-class Americans,
and we absolutely need them.
I am heartened by the fact that they have not lost faith.
They have not lost faith in the Army. They have not lost faith
in the leadership. And they have not lost faith in themselves
to do what is right. But they do have concerns, and those
concerns run the full spectrum of quality-of-life issues.
If you would ask me to list the top four issues this
morning, sir, I would tell you that the top four things that
soldiers worry about are pay and entitlements, housing, medical
care for themselves, but especially for their families, and a
stable retirement system.
We know we have to take care of these soldiers if we hope
to recruit and retain the quality individuals that are coming
in today, because they are the key to ensuring us the best Army
in the world.
We know we have to take care of the families, also, because
they are tremendously important and have a tremendous influence
on a soldier's decision to leave or to stay in the Army. It is
really true that the Army enlists the soldier, but it re-
enlists the family.
I would just like to say that we very much appreciate your
help. I ask for your continued assistance to provide for our
Army, our Nation, our military, and our soldiers.
Sir, I don't have any profound statement to end this with,
so just let me say again that I consider myself very lucky to
represent my soldiers this morning, and I welcome any questions
that the subcommittee has.
[Prepared statement of Sergeant Major Robert E. Hall
follows:]
Offset Folios 734 to 740 Insert here

Mr. Packard. Thank you very much, Sergeant Major Hall.
We will have all of the testimony before we get into the
question-and-answer period, so we will come back to the Army.
Sergeant Major Hall. Yes, sir.
Mr. Packard. And all of you, with questions.
Mr. Hagan, we welcome you back to this subcommittee again.
You have served for a long time, and my understanding is that
this may be your last time, at least in this capacity, before
the subcommittee. So we welcome you and are looking forward to
your testimony. You may proceed as you wish.

statement of master chief petty officer john hagan

Chief Hagan. Chairman Packard and members of the committee,
thank you very much for the opportunity. It is true that today
represents my final opportunity to testify before this
committee. I am privileged to have an additional opportunity
before other committees throughout the rest of this month, and
then will be leaving the Navy after 33 years and nearly 6 years
in this job.
I have submitted written testimony which is possibly too
lengthy. In fact, some who chopped on my testimony within the
Department of the Navy indicated that I spent too much time
saying thank you and giving you proof or evidence of the good
potential that has been fulfilled by previous MILCON. I realize
that you probably get that information through a variety of
sources. It was important to me, though, for you to know from
me personally how grateful I am at how much improvement we have
made in our quality-of-life infrastructure over the 33 years I
have been in the Navy, but particularly over the 6 years that I
have been in this job and keeping track of it.
I express to you this morning the gratitude of all the
sailors I visit with regularly for your wisdom and foresight in
addressing our needs and for the continuing dramatic
improvement in our infrastructure. Like Sergeant Major Hall
said, the Navy is expeditionary forward deployed, and today,
generally speaking, 190-plus ships are underway today and over
half of those are forward deployed for 6 months or longer.
It may seem unusual that in my written testimony my
personal priorities for acceleration of programmed MILCON, if
at all possible, and my priorities for insertion of
unprogrammed MILCON lie in the training world, specifically at
our Recruit Training Command at Great Lakes, Illinois. But
within the charter I am authorized to speak to and within my
area of competence, I prioritize that as not only our number
one MILCON need but far ahead of whatever is number two.
As important as family housing, barracks, single-Sailor
construction, single-Sailor facilities for Sailors that live
aboard ships, child development centers, family service
centers, as important as any of those things are, we need a
quality training infrastructure where recruits enter the front
door of the Navy, and we don't have it.
Currently we operate without a live fire range because the
live fire range has been condemned environmentally, and
although one is programmed, I ask for your consideration for
accelerating that construction by one year so that we put fewer
Sailors into the fleet who have not received live fire training
during their initial recruit phase.
I would point out that at RTC Great Lakes we have basically
what is known in the Navy as heads and beds. We have berthing
and galley facilities and some training infrastructure, but not
enough. My own personal priority is to have a series of
obstacle/challenge competence courses that can be used as a
true training environment. We currently have one competence
course which can only be used as a diversion from training
rather than a training device because its capacity allows us to
put Sailors through the course a maximum of two times in their
entire 9 weeks of training. During the summer surge, recruits
only have one shot at that facility. Those are the sorts of
needs we have at our Recruit Training Command at Great Lakes,
and that is my true and genuine and passionate desire for
MILCOM priority.
I would only share with you one other concern related to
MILCON, and that is my personal concern, not shared by all ofmy
leaders within the Department of the Navy. I feel deeply that the
Private Project Venture initiatives, while good and offering us options
to provide more facilities more quickly, particularly in the area of
family housing, but as I leave the Navy I worry that PPVs, if used
exclusively, might lead to an environment which we would give away the
traditional family housing structure that I cherish and think is too
valuable to allow that to happen. And, again, I am grateful for what
the Private Project Venture has provided. I acknowledge that the
increased cost to the Sailor is offset often by the fact that we get
these facilities quicker, and I am willing to live with that,
gratefully, so long as PPVs don't become the exclusive way we provide
these facilities. And so I have pointed that out at some length as
articulately as I am able to in my written testimony.
I appreciate this opportunity, and I look forward to your
questions.
[The prepared statement of Master Chief Petty Officer John
Hagan follows:]
Offset Folios 745 to 754 Insert Here

Mr. Packard. Thank you very much, Mr. Hagan.
We will now have Mr. Lee from the Marine Corps.

sergeant major lewis g. lee

Sergeant Maj. Lee. Mr. Chairman and committee members, I
too am honored to be here today, and I want to report that our
Corps of Marines is in very good shape overall. And on behalf
of them, I want to thank you for your support, past and
present, and I ask on their behalf your continued support for
the future.
Our MILCON budget this year will be considerably less than
it was in 1998. However, 77 percent of the programs we have
planned for FY 1999 will positively impact the quality of life
of our marines and their families.
Our emphasis will be on bachelor housing and family
housing, with further emphasis on fixing what we already own.
After that, comes community and family programs and, finally,
infrastructure reinvestment.
Of the 97,000 bachelor spaces we have, over 10,000 are
considered inadequate, and we continue to have a backlog of
maintenance. However, we will eliminate by the year 2005 all
inadequate spaces, and our backlog of maintenance will be
corrected by the year 2004. That is attributable to your all
support and the commitments that we have made.
Again, this is the result of new BEQs that are coming on
line and that continuing commitment to fix our existing
problems.
We maintain approximately 25,000 family housing units. We
will in fiscal year 99 rehab some 600 existing units. But we
will not be able to build any new units.
Our programs to attack maintenance backlog will be
corrected by the year 2001. Since we cannot build additional
units, our ability to provide more families with housing will
not improve.
To find other ways to assist our families, we are pursuing
various programs to include set-aside housing, 801-type
housing, and public/private ventures. I too want you all to
know that while we are aggressive in our pursuits of such
programs, we remain very cautious and will ensure our assets
are spent in ways that not only improve the quality of life of
our families, but also meet with congressional and departmental
approval.
The BAH program seems to be a good step in the right
direction. We intend to monitor it very carefully and seek the
maximum support for monetary increases to our BAH in the
future--that is Basic Allowance for Housing--as well as the
total compensation for all Marines.
We will fund other QOL projects in FY 1999 such as a child
care center, a new mess hall, and a new fire station.
Additionally, the bachelor rooms continue to receive new
furniture, and we are on a course for replacing furniture every
seven years vice the current 13.6 year cycle, beginning in FY
2002.
In closing, adequate facilities in which to train, to work,
to live, and to recreate are crucial to morale and readiness.
Your marines appreciate everything they have, and they will
continue to make the most of it, and I assure you they will
take care of what they have.
Mr. Chairman, things are not perfect, and they are not near
perfect. But, in closing, I want to make sure you all
understand that your marines are ready, they are capable, and
they remain very relevant. And I will answer any questions you
have to the extent of my knowledge.
[The prepared statement of Lewis G. Lee follows:]
Offset Folios 758 to 765 Insert Here

Mr. Packard. Thank you very much, Sergeant Major.
Chief Master Sergeant of the Air Force, Mr. Benken, we are
pleased to hear from you again.

statement of chief master sergeant eric w. benken

Sergeant Benken. Good morning, Mr. Chairman and committee
members. Having submitted a written statement for the record, I
would just like to say that I certainly appreciate the
opportunity to speak to the Committee today on behalf of the
thousands of enlisted men and women serving around the world
and to thank the Members of Congress for all of the work that
you have done to take care of them and their families.
As you alluded to before, Mr. Chairman, our services have a
tough job these days balancing the needs of our people with
readiness and modernization to meet mission requirements of
today and of the future. For the people part of that equation,
there is no doubt that family housing, dormitories, child
development, and fitness centers play an extremely important
part in our effort to recruit and retain high-quality people in
this all-volunteer force that we have today.
The direct connection between Quality of Life and readiness
is indisputable. Taking care of our service members and their
families allows those who must deploy at ever-increasing rates
to do their job without distraction. It is essential, now more
than ever, that we continue to support Quality-of-Life efforts
for our troops.
Again, I would like to thank the Committee for the support
in the past, and I look forward to the hearing today. Thank
you.
[The prepared statement of Chief Master Sergeant Eric W.
Benken follows:]
Offset Folios 768 to 777 Insert Here

Mr. Packard. Thank you very much, Mr. Benken. I think we
will start with you, again, Mr. Hefner.

retention

Mr. Hefner. Thank you, Mr. Chairman.
I don't have any new questions. The same questions keep
popping up all the time. We know that we are short of money.
You mentioned the things that the soldiers marines and sailors
are concerned about is basically what all Americans are
concerned about, making an adequate living and health care and
one thing or another.
I was looking here and I remember back in, I guess, the
Reagan years when there were some surveys done why people were
going into the services. Of course, you know, on first blush,
you would have thought it was strictly patriotism. But we found
out through the survey that a majority of the people that were
going in the service were going in because of the educational
benefits. I would imagine that still holds true to a point. As
I mentioned earlier, we don't have the incentives for re-upping
as we did before.
On other side of the coin how big a part does quality of
life play in the fact that people are leaving the service?
Sergeant Major Hall. Sir, if I could take that one on
first. First of all, we are doing okay in retention. We think
it is a concern, and the caution light is certainly flashing.
But about 70 percent of our mid-career force is re-enlisting.
The ones who get out, get out for a number of reasons: the
perceived lack of benefits, such as worry about a stable
retirement system. I mean, these are staff sergeants, mid-
managers, who have been in the Army about 10 to 12 years who
are now beginning to question: Is the military a viable career?
Will I still have a retirement benefit after 20 years? That
plays a tremendous role in the decision to stay. They have a
right to worry. They are on the least generous of three
retirement systems. There have been 17 attacks on the
retirement system in the past 4 years. That is a real concern.
But even without that, I have to say that they are still
staying with us. Now, I pray every night that they will keep
staying with us, but somewhere down the road, we will have to
deal with that. Quality of life is a whole package, and it is
all we have to offer our soldiers for doing the deployments
that they have to do, and those deployments are not going to
ease up. In fact, they tell me that they are okay with the
deployments. As long as they know that the family support
activities are at the same level they are at now, they intend
to stay in.
When family support drops, the danger is that they will
vote with their feet.
Mr. Hefner. Does anybody else have anything?
Sergeant Maj. Lee. I will say, sir, again, I think it is
because of the uniqueness of the way the Marine Corps is
organized and structured and our reliance upon what we call the
first-term organization. I honestly have more marines, enlisted
marines that want to stay in the Marine Corps than I can keep.
I honestly have that, and I have that year in and year out. But
I do have the same concerns that the ones Sergeant Major Hall
talked about, the staff sergeants with 8 to 10 years are
willing to get out, because I have a lot invested in that
person, and I have a small career force that I depend on, and I
don't want to lose that person.
Now, if you ask why they are leaving the Marine Corps at 10
years of service, they will all give you 10 separate answers.
But needless to say, they are smart people, they are bright
people, and they want something good for themselves and their
families, and they want something good for the future. So I
reiterate, too, whatever affects the quality of life of those
people is a retention factor for the individual, and the
future, what they are going to do when they leave the service
for good, it is very important to them, i.e., the benefits
associated with retirement and/or veterans' benefits.
But, beyond that, I do want to reiterate to you I do not
have what you would call a retention problem. I don't have
that.
Chief Hagan. Sir, I wouldn't disagree with either answer.
In terms of quality of life, I believe we are holding our own,
and your specific question, I would respond by saying it isn't
very high on the list of reasons given for leaving the service
after one or two terms of service. It is occasionally on there,
and depending upon where you have served, the answer can vary.
But the quality of life that we offer and provide in so many of
our fleet concentration areas now is so superior to what it has
been in the past that quality of life doesn't figure very high.
But, honestly, the number one reason in the Navy is clearly
family separation. Sailors serve their first tour after the
training environment, generally speaking, at sea. The OPTEMO/
PERSTEMPO in the ships and squadrons and the seabee battalions
has been high. In some cases it has been higher than we would
have it, beyond our control. The number one issue I have put in
my subsequent testimony before another committee this month to
stem that is to adjust career sea pay. This is a unique Navy
pay tied to shipboard life. Adjusting career sea pay for
inflation is the number one thing we need in order to meet
retention goals, because we do have--unlike the Marine Corps,
some retention problems. Some of the critical skills, such as
nuclear power fuel techs, fire control tech, and some
engineering rates, are causing us great concern for the future.
But in terms of quality of life, we need to hold on to what
we have got and incrementally add to it. That is my personal
position.
Sergeant Benken. Sir, when it comes to retention, we really
have the caution lights on when it comes to our second termers.
They are the ones that do our training. They are the ones that
are the five levels, as we call them. They are the ones that
are front-line supervisors. And right now they have been going
out at a higher rate than they had, and this has been going on
since about 1992.
The desert rotations have a big impact on us. If you take
some of the core career fields like the avionics folks or the
F-16 aircraft, the F-16 crew chiefs, if you take the folks at
the bomb loaders, et cetera, those are some of the core areas,
security police, some of the core areas where we are starting
to have some problem. A lot of it has to do with the desert,
desert rotation. They see no end in sight. They keep going
continuously on the rotations. In the meantime, they wind up
going to the deserts or to Kunsan, Korea, for instance, on a
remote tour. They come back, and then they stare at desert
rotations continuing. Again, no end in sight to that.
We have training issues. You go to the flight line today,
and the middle of the force, the second termers leaving, that
leaves you with a high-ranking person and a lot of very
inexperienced people in some cases. We have some issues there.
The perception that--erosion of benefits, the retirement
issue is a big issue now because now--in 1986, those that were
grandfathered, it didn't affect that. But folks that are being
affected now, as the Sergeant Major says, are hitting that 10-,
11-year point, and they are starting to say, wait a minute, my
retirement is different. You know, for a Master Sergeant, it is
about $2,500 a year less than the person who has a 50 percent
retirement. So they look at that.
They look at their medical care, and they feel that Tri-
Care, which is going through its bumps and bruises, if they are
deployed and their spouse has a problem with that, that becomes
an issue for them.
Lucrative employment on the outside. Our people are very
technically skilled, very technically qualified. And they are
very disciplined, so they bring something very good to the
market on the outside. So there is a lure for those people.
So it is a combination of a lot of factors, and I will tell
you, in response to your question, though, that the Quality-of-
Life issues and the MILCON issues are certainly a big factor in
the equation, the overall equation of all of that.
Mr. Hefner. Just one other comment. I believe it was Mr.
Hagan who mentioned his reservations about the experiment with
the public and private ventures. I have some reservations about
that also. We have been involved in 801 housing and this sort
of thing. Of course, I think that the whole thing has to do
with the budget and where you can get housing much quicker and
it doesn't appear on the budget as much. You know because most
of us are not going to be there down the road and you won't be
down the road, but we are giving up an awful lot, in my view.
Of course, I am not going to make an opinion--I think the jury
is still out on the overall operations. But I think we ought to
be very cautious about doing this, because I think we could
wind up giving away the store and not getting anything back.
We appreciate you gentlemen coming and your dedication to
your troops, and we always welcome you to this committee.
Thank you, Mr. Chairman.
Mr. Packard. Thank you, Mr. Hefner.
Let me just make a comment, and then we will go to Mr. Wamp
for his questions and any comments he would like to make.
Listening to each of you, it sounds like that we have not
done a bad job of addressing Quality-of-Life issues. I am
reminded that the first quality-of-life hearing that this
subcommittee ever held I think was somewhere in 1981. So it
isn't an issue that we have not been addressing for quite some
time.
It sounds to me like overall we have made some significant
progress in that direction. I feel that we have. I think the
quality of life, as I have been around visiting different
bases--and I have tried to do that rather extensively the last
couple of years--we are seeing a much better quality of
housing, a much better quality of day-care centers. In fact,
day-care centers were almost non-existent 10 years ago or 15
years ago. And our hospital facilities generally are better
than what I think they have been in the past.
I served in the services back when many of you were just
starting your careers in the services, and I compare what I see
today with what I saw then. Camp Pendleton is where I served.
So I think we have made great progress. And it may be that now
the priorities are changing a little bit. That is what I tend
to be hearing from you.
Interestingly enough, most of the concerns that you are
expressing that you are hearing from the men and women that you
talk to are issues that this committee doesn't address: pay,
benefits, deployments overseas and on board ship, et cetera.
Those are perhaps a higher priority concern now than maybe the
quality-of-life issues.
Perhaps maybe those spill over into quality-of-work issues
as much or more than quality-of-home and -life issues, and
maybe we need to evaluate again where our priorities are and
ought to be. But right now our jurisdiction and our funding
responsibility is primarily over housing and quality-of-life
facilities.
And so we will not neglect that, and we certainly won't be
reversing the effort that we have made in the last almost two
decades, but the fact is I think we are hearing this morning
from you that there are priorities that, again, don't fall into
the jurisdiction of this committee that are perhaps even more
important right now.
Sergeant Benken. Sir, I would say that the MILCON is
extremely important as well. If we did a reversal on that, it
would just add to the other issues that we talked about. The
dormitories, for instance, we need to continue on the
privatization----
Mr. Packard. We are not going to reverse that. There is no
question about that. That is our primary responsibility.
Mr. Wamp?

training facilities

Mr. Wamp. Thank you, Mr. Chairman.
I too, from last year to this year, did spend a lot of time
focusing on particularly the pay and benefits issue because
since my election in 1994 I think we have really focused on
trying to move enlisted personnel off of qualification for food
stamps and move it up, but, again, we got off on this last
year, and it is really not our keeping our eye on the ball with
respect to investment in construction, primarily. So I have got
two questions.
One, the Navy talked about training facilities, and I
wonder if the other three service areas have priorities on
training facilities that aren't mentioned that we need to focus
on. If it is that high priority at the Navy, I wonder why there
would be a disparity in the other three service areas in
training facilities, if it is just a Navy problem or if it is
also a problem.
The second thing is if any of you have any input from your
enlisted personnel perspective on the privatization of housing
at our bases where a lot of our enlisted personnel actually
live now developer-run, leased facilities. I know that is just
kind of starting out, but I have a lot of interest, frankly, in
that, not personally, but I hear more and more interest in
privatization of barracks where we are on a long-term lease
basis allowing the free enterprise to compete for this.
What is your perspective from your enlisted personnel on
this whole notion of privatized housing? So the training and
the privatized housing. I just thought I would jump off here.
The Navy has already talked about training facilities. Any of
the other three services?
Sergeant Lee. I will take that question, sir. To my
knowledge, although we received legislative authority in 1997
to pursue PPV for barracks, we are not actively pursuing any
sort of public/private ventures to replace our single marine
housing. We have every intention to keep that under our
control. And as I pointed out in my opening statement, we too
are very, very cautious about any other program we pursue in
PPV, 801-type housing before we get into it. We are very, very
cautious about it.
We do have a couple success stories with some set-aside
housing, and we do have some success stories small-scale with
some 801-type housing. But those we watch very carefully.
On the training, for a long time I think--we are trainers.
We are operators. So probably in retrospect, for many, many
years, we maintained our training facilities maybe at a higher
level than we did the facilities that we have been trying very
hard now for some time to bring up to standard. So our training
facilities are in need of support. Yes, they are in need of
support. But reality is how we are housing enlisted, single and
family, still remains our greatest requirement, and, again,
that is probably because we pay more attention to our training
throughout the years than we did to that aspect of quality of
life.
Sergeant Major Hall. Sir, let me take training facilities
first. I think we are okay on ranges, our multi-purpose range
complex, our fire and maneuver ranges, and our combat training
center type events. I think we are okay. The Kassebaum-Baker
report, of course, which is going through the review process
now and addresses gender-integrated training, may change
things. We may see a big bill for new barracks because one of
the recommendations is that men and women be billeted in
separate buildings. I agree with safe, secure housing. But if
the decision is for separate buildings, we are going to be
hurting. We may have to build new ones at every training
facility. We would have to relook that whole thing.
That is a little bit down the road, but it is coming.
Within the next couple of months, we should know.
Regarding housing, let me talk barracks just a second. We
are okay. We are fully funded in barracks to get to the
standard. If we look out to 2008 to 2012, we are going to be
okay. Now, soldiers chuckle when I tell them we are going to
get well, 14 years down the road because they hope to be other
places in 14 years.

housing privatization

With regard to privatization of housing, let me just tell
you, we can't get there without doing that. We are underfunded
half a billion dollars a year on Army family housing. We will
do privatization at Fort Carson, Colorado, which is the first
one we will privatize. We werehoping that we would be able to
sign a contract this month. My understanding this morning is there has
been another protest, and the judge has delayed it until about May 1998
at this time.
What privatization will do is renovate almost every set of
quarters on Fort Carson. That is about 1,800 sets of family
quarters, and it will build 840 new sets of family quarters on
Fort Carson.
Now, our whole system of family housing at Fort Carson
today is 1,900 sets of family housing, and there are 2,000
people on the waiting list for those 1,900 sets. With our
budget, we are going to be short about $3 billion by the turn
of the century just in Army family housing. And that assumes
that we will be able to revitalize those current facilities
that we have now every 130 years. That is unacceptable.
So we just can't get there without privatization, and, sir,
I understand and I worry about our culture, as the Master Chief
Petty Officer of the Navy says, I understand and I worry about
our traditions and our culture. But there is no way we can get
there without doing it.

training facilities

Sergeant Benken. Sir, on the training facilities, I will
have to take that for the record. I know that we are making
progress in the dormitories or the housing, the RHTs, as we
call them, for the recruits, recruit housing. I know we are
making some progress on getting those well. But I am not sure
exactly what the status is.
On the single housing, the dormitories, I believe that
those are off the books. We are not going to privatize single
housing at all. I don't think that is going to happen.

family housing

As the Sergeant Major says, on privatizing family housing,
I think it is a tool that we can use to leverage MILCON. I
think it is--you know, we had one on track down in San Antonio.
The frustration was how long it was taking to make it happen.
We have to be very careful in how we write the contracts, what
the expectations are of the contractors and those kinds of
things. But I believe that it is something that we have to give
a try and we are going to have to make work. I don't think the
MILCON is going to buy us out.
Chief Hagan. Let me just clarify part of my statement.
First of all, let me address the barracks issue by telling you
I think shipboard berthing makes our issues, Navy issues,
unique. Quite honestly, I believe it makes them a priority
issue because we have huge numbers of Sailors living in 50- to
100-person berthing compartments, some even larger than that,
living in conditions that are--were they not unavoidable, they
would be unacceptable.
Those Sailors live there until they are an E-5 in the
career force before they are eligible for single BAH only
recently passed by the Congress. Prior to the last 2 years, a
single E-6 was required to forfeit housing allowances to live
aboard ship.
We are transitioning to the 1 plus 1 standard over a
lengthy period of time via a 2 plus 0 standard. I find that
acceptable so long as our POA&M each year is visited by all the
right people, including members of this subcommittee.
In terms of PPV, I will restate my concerns. I don't
disagree with either statement that the Sergeant Major or the
Chief Master Sergeant have said. However, I have serious
concerns that we are not using PPV to supplement but that
because it is attractive in the way it fits into the budget,
that we will begin to replace the infrastructure that we now
own.
I would be much more comfortable if there was an in-writing
commitment--perhaps it is the business of this committee to
look into this--an in-writing commitment to preserve the
existing infrastructure or some portion of it beyond debate.
For example, Navy has fewer family housing units, traditionally
Navy-owned, than any other service does compared to the number
of married Sailors. And so both our situation and our need is
greater.
We can't get there from here either without PPVs as a
supplement, but PPVs cost Sailors considerably more than BAH,
and in a certain period of time, we don't own them.
Mr. Hobson. Excuse me. Could you explain that again? Why do
they cost more?
Chief Hagan. Well, sir, when you move into family housing,
traditional family housing, Navy-owned, you forfeit BAQ and BHA
or BAH, and you have no other expenses other than those
utilities that are considered a luxury--your telephone and your
cable TV, for example.
Mr. Packard. In other words, the base housing allowance
covers the cost of housing.
Chief Hagan. The public/private venture varies according to
the unique agreement with the contractor. The statutory goal of
BAH, is 85 percent of your total housing costs. In the tiered
hierarchy structure by rank, the PPVs can cost a great deal
more than that, especially for junior personnel, even mid-grade
career personnel.
So, my concern is that in order to provide the number of
family housing units in fleet concentration areas that we build
new and more efficient ways of managing that Navy-owned
housing, while simultaneously exercising the PPV option.
In this testimony I have gone on the record as being not
opposed to metering family housing units and charging for
utilities. This may be necessary in order to maintain the Navy-
owned infrastructure of family housing, because there is an
efficiency that I see no other way to gain. We currently have
no incentivation for conserving utilities in government-owned
family housing.
But my concern is not that we should never use PPV. We
certainly have several places where we have more housing
options than we would have had. I think we may be leading the
other services in the use of PPVs. We have it in place in
Everett, in Corpus Christi, and this is not the 801, 802, but
something beyond that.
I am not opposed to PPVs. I am just opposed to the fact
that it might slowly and almost surreptitiously displace the
traditional family housing owned and controlled by us.
Mr. Hefner. Would the gentleman yield?
Mr. Wamp. Sure.
Mr. Hefner. I hope it is going to work. You know, we met
with the Secretary a while ago. This has been a while
developing. At Fort Bragg, we did 300 801 housing units. It is
a nice little city there. If I was in the private sector and I
was the contractor, I would do everything I could to get in to
build these ventures or build 801 housing. I don't know of any
other business where you could be guaranteed full occupancy and
after 20 years to say this is mine. You have to renegotiate,
which in most cases it would be applicable to the services.
But it is something that I think we have got to be very
careful about because we could wind up, long after you
gentlemen are retired and I am gone--of course, the chairman
will probably still be here, but we could wind up at the mercy
of--with nothing that we own, like the old Cape Hart building.
I understand why we are doing it. It is because of the budget.
There is an answer to it, and it is called money. If we
would fund it, but then the budget would be completely out of
sight. We couldn't get enough allocation.
I just think we ought to be very careful. As you said, as
we line up these contracts, make sure that the Government is
going to be responsible to keep it for the occupancy and for
the money. So we want to make sure that people that are doing
the venture are going to be responsible for the upkeep and all
the things that go along with it. I have been on this committee
and on the Defense Subcommittee long enough that when we get in
a situation where we are going to have lawsuits, we never win,
whether it is with architects, defense contractors, or anyone
else. The taxpayer never really wins in a lawsuit.
So, Mr. Chairman I thank the gentleman for yielding and I
just think we ought to be real careful about doing this.
Proceed with caution. Let the buyer beware.
Mr. Wamp. Just real quickly, sir, Mr. Hagan, moving up the
live fire range for one year, what is the cost of that?
Chief Hagan. That is currently budgeted at $7.1 million. I
understand it would be cheaper if it is moved up a year.
Mr. Hobson. So it would be less than seven?
Chief Hagan. I understand it would be less than $7 million
if it is built sooner. That is the projected FY00 projection,
sir.
Mr. Packard. Mr. Hobson, we will go to you.
Mr. Hobson. Well, first of all, sir, I think we need to
know, the committee needs to know, how much savings there would
be in doing that, because money is very scarce in this
committee.
Chief Hagan. I can get that for the record quickly, sir,
the projection.
[The information follows:]

The Navy does not anticipate any savings due to
accelerating the Small Arms Range at NTC Great Lakes.

Mr. Hobson. Because we want to help you but we have a lot
of priorities, and I think that is a priority.
I am concerned about the housing also. I have Wright-
Patterson Air Force Base in my district, and housing is, I
think, still a problem. I am also concerned, have some of Mr.
Hefner's concerns, and I happen to come from the real estate
business and a builder, but I am concerned about winding up
with the problem that we have got today with Section 8 housing
where we have all these contracts out there which we have done,
and we can't afford now to continue the payments. And that is a
problem I am worried about us getting into if we do too much of
this, that we won't have the money to pay the bill when it
comes due.
On the other side of that, I am concerned about the fact
that the base housing doesn't take in all the costs of that
when we do it because there are costs in there, like the
metering and things of this sort, that don't encourage people
to do the things that other people do in trying to meet their
utility costs.
But do most--let me say this, if I can say this right,
because when I was in the service, I never wanted to live on
base. But if you are overseas, you can't afford it. But even
then I didn't want to live on base, but I was made to live on
base. So do most--do you survey people? Do most people want to
live on base if they can? Or are they forced to live on base by
the pay? Or in some cases, do you want to control their
lifestyle?
Chief Hagan. Let me begin answering that by telling you I
think most people want the option. I personally strongly want
the service to preserve that option for the career force as a
priority. There is an internal debate occasionally about the
housing being the first priority for the career force, for
senior enlisted or for junior enlisted, where the need can be
quantified as greater. But the simple answer I would give you
is most people want the option, and it is an individual,
specific, situational preference.
Sergeant Lee. Sir, your question is kind of--in the Marine
Corps it is kind of a combination of all the above. Absolutely
we want to control the lifestyles of the single marine,
especially the first-term single marine. We want to control
that person's lifestyle. We intend to keep that person billeted
on base to the extent we possibly can and look after them in
that manner.
What we would like to continue to have is, as the Master
Chief said, the option for those who can't afford to live off
base--if they had the luxury of making that decision. Finally--
you are right, those who live in high-cost areas want very much
to live on base. We have long waiting lists. Camp Lejeune,
North Carolina, if we have a waiting list, it is purely because
of the size of the house or the location because the cost of
living at Camp Lejeune, North Carolina, is not that high.
So that is where the option comes in. We have most of our
marines under 24 years old, single, serving on one contract,
our priority is--a good term you used, ``control of their
lifestyle.'' We are going to continue to do that. That is what
our emphasis is on.
Mr. Hobson. Having been an enlisted man, I know about
controlling lifestyle. [Laughter.]
Mr. Packard. They call it discipline, Mr. Hobson.
Sergeant Major Hall. Sir, from the Army's perspective, Army
families prefer to live on base. They want the close proximity
to medical treatment, the exchange system, the commissaries,
the convenience. All the quality-of-life benefits are
convenient for those who live on base. So most soldiers with
families would prefer to live on base.
Mr. Hobson. Do you survey that? Or how do you handle that?
Does that come like his thing where--I mean, let me put it this
way: There are subtleties that happen in the service that--and
maybe sometimes they aren't to subtle--where you don't have any
choice but to say, yes, I want to live on base.
Mr. Hefner. According to how they explain it to you.
Mr. Hobson. Yes, things have been explained.
Chief Hagan. Our actual waiting lists are better than any
survey we could conduct. In places where we have waiting lists,
people are clamoring and calling almost twice a month to see if
they have moved up. So we have some analytical proof, as the
Sergeant Major said about soldiers, in many locations Sailors
not only want to live on base, the only way they can envision
themselves living in that area is to live in Navy family
housing. Pearl Harbor is one such example.
Mr. Hobson. I have been there. I have toured that facility.
Sergeant Lee. Sir, we do have housing locations, family
housing locations, where we require them to live on base.
Otherwise, we would have a great emptiness. But we do mandate
sometimes that they live on base, even if they don't want to.
Mr. Hobson. I have seen that, not just in your service but
I think it has happened in the Air Force.
Mr. Hefner. Would the gentleman yield?
Mr. Hobson. Yes.
Mr. Hefner. The chairman mentioned day-care, and I remember
years ago we began to really concentrate on day-care at Fort
Bragg. It seems that the people with small children seem to
have sort of a family atmosphere where they know that if you
have got a problem with kids or what have you, you got a good
volunteer group there, and they know these folks. It just seems
to work out better if the housing is adequate. That is the
whole thing. Just knowing that they can call somebody and they
are going to be protected and helped out if they get into a
problem. I think our improvements with daycare that we have
done over the past few years, especially with the type of
services we have now, has been areal boom to the military, in
my opinion.
Sergeant Benken. I believe the number of people on waiting
lists for family housing in the Air Force is roughly 40,000,
which is a significant number. Given the high deployment rates
that we have nowadays, it provides a security for them, their
families are back home, and we have people that are deployed
more than 120 days a year. It gives them a great warm feeling
that their family is on base, secure, and has access to the
facilities and things like that.
On the single side, thanks to your help, we are buying out
the central latrines, the gang latrines, you know, which is no
way to live, and for that reason, our troops are finding much
more satisfaction with living on base on the single side of the
house, too. As a matter of fact, we have some E-5s now that
would like to live on base in the dormitories because of
security and----
Mr. Packard. If the gentleman would yield, there is no
question that as we move toward the 1 plus 1 or the 1 plus 2
facilities, the desire to live within those facilities will
become, I think, even greater.
I can give you a personal observation. My daughter is
married to an Air Force physician, active duty, and they just
were able to get on base. They had been on the waiting list.
Every base they have served in--and he has served now for 10 or
12 years. Every base they have served on, they have put
themselves quickly on the waiting list to get on base housing.
They can afford off-base housing. As a physician in the
service, he is probably one that could afford to live off base
in most any economy. But they still like to go on base. That is
just a personal observation.
Mr. Hobson. What percentage of your first-termers are
married?
Chief Hagan. It is now on the order of 23 percent of our
first-term sailors are married for the entire force, it now
approaches 60 percent now.
Mr. Hobson. I am going to go through that now because I
want to ask the question. I sit on two committees. I sit on
Defense Appropriations Committee as well as this one, so I am
dipping into some knowledge from that, too, if you don't mind.
Sergeant Major Hall. Sir, I can only say 62 percent of the
Army is married. I would have to state for the record the
percentage of first-termers.
[The information follows:]

Percentage Married Among First-Term Soldiers

As of September 1997, 59.4 percent of the active-duty
enlisted force was married. Because the data on marital status
do not provide information on term of service, we have
attempted to get at this by looking at the percentage of
married E-1 through E-3 with two, three, and four years of
service. These percentages came to 21.2 percent, 23.6 percent
and 23.9 percent, respectively, though some unknown percentage
of them are prior service. Among non-prior service enlisted
recruits who accessed in fiscal year 1997, 14.9 percent were
married.

Mr. Hobson. I would like to know because it is important
for the next question I am going to ask, if you don't mind.
Sergeant Lee. Sir, about 39 percent of my total enlisted
force is married, and about 43 percent of my enlisted force had
dependents. Only 17 percent of my large first-term force, E-3
and below, 78,000, only 17--only about 16,000 are married. To
give you the exact numbers, too, I have to do the same thing. I
would say of my first-term force, my 110,000 marines serving on
one contract, my youngest marines.
Mr. Hobson. That is a 4-year----
Sergeant Lee. Yes, sir, on average. I would say roughly
maybe 25 percent of them are married.
Sergeant Benken. Roughly 35 percent of the Air Force are
single. I will have to give you the first-term single.
[The information follows:]

Air Force 1st Term Enlisted Martial status is as follows:
Married: 30,331 (32.1%), Single: 62,366 (65.9%).

Mr. Hobson. The reason I ask that, I think it is very
difficult for a first-termer--I have never heard ``first-
termer'' but that is an interesting term--for the first-time
enlisted person to be married and get the kind of salary that
is necessary to have that lifestyle. I think that is very hard
to do, even with the extra stuff that you give them, for a
young family like that.
Especially using this first term or first enlistments, you
are having a lot of, I guess, stress within the services. You
are beginning to learn about the service. So it makes it a
double shot. But that is enough on that.

medical care

I also want to talk about one other area, if I could, Mr.
Chairman, and that is health care. As you may know, or may not
know, I have been doing some stuff in the National Security
Appropriations subcommittee on the quality of health care, and
there have been some recent discussions on that. Mr. Hefner is
over there too, so he knows some of the stuff that we have been
doing on that.
But the facilities that we have for health care I think is
something that needs to be looked at and continued to look at.
I know we have done some things at the hospital at Wright-
Patterson. But I would like to know how you think the quality
of your facilities are. And then secondly, how that is affects
your retentions. I do not run into any retiree today who said,
the only reason they re-upped was not for the retirement today,
it was for the health care. I do not know whether that is just
because it is changing, but that is what they all say. I do not
think that that is particularly true, but that is what they
say.
I would like you to discuss, if you could briefly, one,
your facilities; two, what the changes in health care and how
important all this is to you in your retention of people.
Sergeant Major Hall. Sir, I will start off. I think the
facilities that we have for health care today are adequate to
support the Active duty force. When you take the retiree
population into consideration, however, I think we are going to
find some challenges. Under TriCare, we are going to cap the
number of people that will be enrolled in one of the programs,
in TriCare Prime. That will be a limiting factor. The
facilities will not support everybody who was promised health
care.
With regard to the health care system today, we have
problems with TriCare. They are being worked, but we have an
education problem on educating the force how to make TriCare
work for them. It is a different TriCare almost everywhere. I
found in every region that I go into, it works a little bit
different. It is not easily transportable from region to
region. There are some nuances there that soldiers have not
figured out yet, but they are being worked.
When I talk to the medical folks, they tell me that we are
now working on how to handle our soldiers who are stationed in
remote locations away from a military installation. We have big
numbers of them out there supporting the Reserve components and
recruiters. They are not near a military installation. They do
not have access. So they are working on how to handle them
under TriCare Remote.
We have problems with access and the time limits that it
takes to receive care. That is being worked. We have problems
with how claims are processed and how reimbursements are paid.
That is being worked. What I say to my soldiers is, ``It is
working, working, working''. That is not a good answer for
them, but it is the only answer I can give them.
Mr. Hobson. Anybody else want to take that on?
Sergeant Benken. I will tell you that we have the horror
stories that the Sergeant Major was talking about, which gets
compounded by the person who is in the desert, for instance,
and calls home and the spouse is wrestling with some kind of a
TriCare payment that has not been made, and the creditors are
calling because the doctor has not been paid and all those
kinds of things. But those things are being worked very, very
aggressively. And where we find those, I think we are able to
work them.
There is no doubt that we are going to have to transition
to another medical care system to support the existing one
because of the declining infrastructure.
Mr. Hobson. How about the facilities?
Sergeant Benken. The facilities, I think for the most part
are good. They will not be able to accommodate the number of
retirees that we have, obviously.
Chief Hagan. Even before we began to downsize hospitals, we
could not accommodate all the retirees who desired medical
care, although in some locations we did very well, for
instance, Orlando. When we BRAC-ed Orlando there was quite a
bit of retiree trauma over access to that treatment facility
going away because they had had good access.
If you leave the retirees out of the equation, our facility
infrastructure is still not sufficient to see dependents.
TriCare Prime continues to improve, and I would concur with the
Sergeant Major of the Army as I heard him state, that it
improves too slowly. I know it is a large bureaucracy and it is
a huge monster.
My own personal concern is that we will not be able in the
outyears to preserve the TriCare core benefit. I think the core
benefit is good. The $6 copay for E-4 and below, the $12 copay
for E-5 and above for outpatient, the $12 a day inpatient cap,
the very reasonable catastrophic cap, and the no annual
deductible is a good plan. I am pleased with that.
My long term worry is not that we will not work out the
bugs and finally make it region to region consistent, et
cetera, but that we will not be able to keep the cost that low.
And of course, I think the retiree will gradually get
accustomed to the fact that the $230 per person, $460 per
family enrollment is reasonable if there is a TriCare network.
As one who will be retired before you interview my peers again,
I say if there is a TriCare network for me to enroll in, $460 a
year seems to be a very reasonable figure.
Mr. Packard. If the gentleman would yield. Let me ask, are
you satisfied with the retention of your providers, your
physicians, nurses, and so forth?
Chief Hagan. No, sir. That continues to be a problem in
some areas where providers are upset with slow payment, with
interpretation of procedures that are eligible and those that
are not. That is one of the issues that we are told regularly
from the OSD health affairs and other places that we are
working on.
Sergeant Benken. Region by region TriCare is very
successful where it has had time to mature. In other areas we
have significant problems with it. It is a huge system and it
is going to take a little bit of time to bring it in place.
Sergeant Lee. Sir, the Marine Corps owns no medical people
or medical facilities, per se. We depend upon the other
services.
Chief Hagan. You depend upon the Navy.
Sergeant Lee. Well, the other services. I want to say,
where the health care----
Mr. Hobson. It is hard for him to say Navy.
Sergeant Lee [continuing]. First of all, where the
facilities are available, the facilities are very good. Where
the care is readily available, the care is outstanding. I want
to lay that out.
But where it is CHAMPUS-ed out or TriCare-ed out, the
growing pains, the disconnection, the happiness with the
providers, all of those things roll into play and they are
considerable. I deal with them all the time.
Is our retention affected? I do not know. I would have to
say in some ways for an individual, yes, it affects retention.
But again, overall I do not have a retention problem so I
cannot measure the one thing.
Mr. Hobson. Just one other thing I want to mention. It is
one thing I think is going to happen from talking to the
Surgeon General. One of the problems that troops have when they
move around is records following them. I think with the
computerization of records project that you are all going to
have problems that people have and delays in some payments get
better. We need to get this little computer chip of records
that everybody is going to have, which is moving forward pretty
rapidly.
The last thing I want to mention is what is being done in
some places including Wright-Patterson. In pediatrics, they
have actually gone to, as I understand this is happening, they
have gone to the children's hospital in the area. They have got
a contract now with--the hospital at Wright-Patterson does.
Rather than continue on with pediatrics, the Air Force is going
to refer those people to the children's hospital in the area. I
think may be a thing that a lot of services need to look at.
Rather than building new facilities you may want to look if
you can outsource some of those facilities. They are still
going to have the same personnel, but you are going to get some
additional help.
So I know it is a tough problem and I appreciate the
indulgence of the chairman, but it is very helpful to have you
talk about these things.
Chief Hagan. Mr. Chairman, could I respond quickly to the
live fire, what you said in the beginning? I should tell you
that I extrapolated the perception of savings in acceleration
based on the data that had we programmed this in 1993 when BRAC
predicted the consolidation of all recruit training at Great
Lakes, it would have cost 5.1. We chose to depend upon the old
range lasting longer than it environmentally did. The cost is
now projected at 7.1.
But regardless of savings, I would just like to underscore
again, it is a considerable deficiency to send Sailors to their
first duty station without live fire. As the security alert
force, the backup alert team, the quarterdeck watch and all
sorts of roving watches aboard war ships, Sailors are required
to be armed and qualified to at least a familiarity degree.
Thank you, sir.
Mr. Hobson. Thank you very much, Mr. Chairman. Appreciate
your indulgence.
Mr. Packard. Mr. Edwards?
Mr. Edwards. Thank you, Mr. Chairman. I think the challenge
of our committee and the other defense committees that Mr.
Hefner and Mr. Hobson sit on, is to take a limited amount of
money and find a way to best use it to keep thebest and
brightest in the military. One of the frustrations I have is trying to
get objective information on where should we really put our resources.
Is it in health care, is it in retirement programs being enhanced, is
it in housing, is it in child daycare?

quality of life survey

We are either going to make those decisions totally
subjectively--and our judgment is not always bad. Between the
people we talk to and certainly the people you talk to, you get
good anecdotal feedback. But is there any sort of objective
system in all the services when enlisted personnel leave, they
fill out a form that could then be computerized and available
to us to show us? You could do it by installation, you could do
it by all sorts of different categories, and rate the primary
reasons people are getting out of the military.
Is that system available? Could this committee get that
kind of information next week if we wanted it?
Chief Hagan. Yes, sir. I can give you the Navy's short
answer. We have exit polls that are fairly detailed, and I can
provide for the record very quickly a summary of, and any
specific data you would like. That is the poll that I quoted
when I said the primary reason given by officers and enlisted
for leaving the service after the first or second, and even
subsequent enlistments because we have a third and fourth term
retention problem in the Navy, is family separation.
That poll is as detailed as 10 or 12 blocks or checks in a
priority. Again, I can provide that for the record, sir.
[The information follows:]

The annual Navy-wide Personnel Survey and Quality of Life
Survey were designed to collect opinion data on a systematic
basis and to provide timely information on issues of importance
to policy makers. The samplings representative of the entire
Navy population, allow the identification and analysis of
trends in opinions and attitudes toward plans, programs, and
policies that materially affect the performance and morale of a
Navy Personnel. Both surveys are administered and analyzed by
the Navy Personnel Research and Development Center in San
Diego, California. Copies of the 1997 Navy-wide Personnel
Survey and 1997 Quality of Life Survey are provided for the
record.
We also collect information on Sailors' attitudes through
our Retention/Separation Questionnaire, given to enlisted
Sailors when they reenlist, extend or separate. Officers are
asked to complete the questionnaire when they leave active duty
or execute a permanent change of station move. Response to the
questionnaire is voluntary. Sailors are asked to rate their
satisfaction with 45 aspects of Navy life and to identify the
most important reason for leaving or thinking of leaving the
Navy. A copy of the Navy Retention/Separation Questionnaire and
OPNAV Instruction are provided for the record. Officer and
Enlisted ``Reasons for Leaving the Navy'' data for the fourth
quarter of FY97 are provided below:
Offset folios 817 to 818 insert here

Mr. Edwards. How long has that poll been in existence?
Chief Hagan. Many years, sir.
Mr. Edwards. So we could go back and look at the trends to
see if the general trends are changing, to see what their
concerns are.
Chief Hagan. The trend is available. Long term trends are
interesting to analyze, and I could also provide them.
Mr. Edwards. That would be interesting to see, and for the
Defense Appropriation Subcommittee to see. Do the other
services----
Sergeant Major Hall. Sir, to the best of my knowledge the
Army does not have an Army-wide survey. We do it installation
by installation. I have seen some of those and it runs the full
gamut of reasons. And of course, those reasons for getting out
are coming from the 30 percent who would probably have gotten
out anyway. They had already made a decision to get out.
Mr. Edwards. I realize we would have to filter that out.
And ideally you would also take a poll of those who are
reenlisting and ask them why they are reenlisting. I think the
ones leaving might be a little more freer to be totally honest
in what they say. But it seems to me at least there ought to be
a system in place of trying to collect that data, and we could
use our judgment and you could use yours to filter through it
and determine what it says.
Otherwise, we are just making these multi-billion dollar
decisions of resource allocation based on totally subjective
experiences in our own particular districts based on who we
just happened to see when we went to an installation in our
district.
I will follow up. I am having a meeting with General Reimer
today even. And it seems like the Army ought to have some sort
of way to collect that information on a system-wide basis.
Sergeant Major Hall. There may be one. I am unaware of it,
if there is one. I will certainly provide a definitive answer
one way or the other to you.
[The information follows:]

Surveys

The Army's Sample Survey of Military Personnel (SSMP) is
conducted twice yearly on a sample of 10 percent of the active-
duty officers and 2-3 percent of the active-duty enlisted
members. Respondents who indicate that they are thinking about
leaving the Army are also asked to indicate the reasons that
first made them think about leaving the Army, as well as the
most important reason. These questions have been asked since
1992, so we do have trend data on the topic of why soldiers
leave the Army. While some reasons are commonly mentioned over
the years by both officers and enlisted members (e.g., amount
of time separated from family and overall quality of Army
life), issues which are increasingly mentioned as the most
important reason for leaving the Army are retirement benefits
and the amount of basic pay.

Mr. Edwards. Thank you very much, Sergeant Major.
Sergeant Major Hall. From an Army perspective, and from an
all-service perspective, sir, I think it is taking a budget and
having to balance modernization, readiness, and quality of
life. It is definitely a balancing act.
Mr. Edwards. It will always, even with this information,
require subjective decisions by members of Congress themselves.
But at least those subjective decisions could be made based on
some sort of objective data.
How about the Marine Corps and the Air Force?
Sergeant Lee. Sir, on the Marine Corps, no, we do not have
one, and I do not think you would benefit from it if you
concentrated on those who leave the service. My example is very
simple. Again, the way we operate, I have got 28,000 very good
first-term marines getting out this year; 28,000. I can only
let 4,500 of them stay in. So to ask the other 24,000 why they
are leaving, many of them are leaving because they cannot stay.
You said something that is very positive. In the case of
the Marine Corps we ask, why are you staying and what would you
like to see help you in the next tour you are going to sign on
for. We would better off----
Mr. Edwards. You do that system-wide?
Sergeant Lee. No, sir, we do not.
Mr. Edwards. I do not understand why the services would not
do that system-wide for those reenrolling as well as those
leaving.
Sergeant Benken. Sir, the Air Force does that. We do a
quality of life survey. We talk to not only individuals--
periodically we do a survey of individuals. But we also do
first sergeants and commanders. Based on that we develop a
quality of life strategy where we have seven primary points
which are fair and equitable compensation; balancing the high
OPTEMPO that we have, especially with the desert rotations;
quality health care; safe and affordable housing; preserve the
retirement system benefits; community programs for our
teenagers and children; and expanding educational
opportunities. Those are the things that are on the list.
The only thing that changes or has changed from year to
year when we have done has been the order somewhat of those
items. But we have a Quality of Life Strategy and we would be
glad to provide it to you.
[The information follows:]
Offset Folios 824 to 844 Insert here

Mr. Edwards. Yes, in fact those of you that do, either for
those leaving or those re-upping, whatever you have maybe for
the last two or three years, just to look at that, I would be
very grateful.
Sergeant Benken. Be glad to do that.
Mr. Edwards. Thank you, Mr. Chairman.
Mr. Packard. Thank you.
We welcome Mr. Kingston from Georgia here, and if you have
any questions?

bingo

Mr. Kingston. Yes, Mr. Chairman, thank you.
Let me apologize to you gentlemen for being late. First
question, bingo, particularly the Department of Army. Are you
familiar with the bingo situation right now?
Sergeant Major Hall. Sir, I was just down at Fort Stewart
about two weeks ago, so I am vaguely familiar with the
situation there now.
Mr. Kingston. As I see it, you are damned if you do and
damned if you do not. You have a private contractor who is
running the bingo, and because of that he has been able to
generate a lot more money, but it has put a hurt on the local
veterans organizations and non-veteran organizations and
whatever charity groups are running bingo, and they are trying
to work out something about it.
What is your recommendation? I see it both ways. I will say
this, Colonel Fife--I assume you have met with him?
Sergeant Major Hall. Yes, sir, I have.
Mr. Kingston. He is a top-notch guy. Have nothing but the
highest things to say about him. He has done extremely good
work with citizen groups in the middle of deploying 3,000
troops to Kuwait. So it is a smaller problem on the scale of
things. But still, the locals just will not let it go because,
you know, they can raise $10,000 a year or more in bingo. It is
huge money to them. They are mostly retirees. They love bingo.
Just let me hear some sage advice on it or a perspective.
Sergeant Major Hall. Sir, I do not want to tell you I do
not have an opinion on it because I do. I think the problem is
that the veterans' groups and other people outside the gates in
Hinesville are not using the private organizations. They are
waiting until they come on post to play bingo. So I do not want
to tell you I do not have an opinion on it.
The division sergeant major down there owes me some
information. Could I get that back to you when they put their
work together?
Mr. Kingston. If you will. I have mixed emotions about
this. I see it both ways. I am not doing any kind of
grandstanding at all. It is an issue that I wish could quietly
fade away. We have been wrestling with it I think for six
months?
Sergeant Major Hall. Yes, sir.
Mr. Kingston. And we cannot get rid of it as an issue.
Colonel Fife has been absolutely a prince about the whole
issue.
But you do have some legitimate concerns out there, and one
of the concerns is that a U.S. military post is exempt from the
Georgia State laws regarding bingo, which in the perception of
the charity groups, gives them an unfair advantage. Whatever
you can do--I do not know exactly what I want you to do except
get the locals happy.
Sergeant Major Hall. I do not either, sir. I would suggest
probably that this not come to this subcommittee, but to come
directly to you. If I could come to you and talk to you about
that one, would that be appropriate?
Mr. Kingston. No sweat whatsoever. Let us just agree to
continue talking.
Sergeant Major Hall. We will do that.
Mr. Kingston. Again, I really appreciate the way you all
have handled it.

child care

Now let me switch over, particularly to Air Force, because
in your testimony you said that daycare was one of your best--
to give the quote, one of the most important benefits we give
our people, particularly young families is base child care
facilities. Now interestingly enough, the Navy has told me that
to some degree daycare is a problem because DOD is not in the
child care business and should not be in the child care
business, and it takes--it is a diversion from the mission
statement of readiness to have officers who are involved in
daycare.
It would appear that we should look at privatizing daycare
rather than going into daycare. You may know at King's Bay we
pushed for a daycare facility. This committee was successful in
funding it, and this committee took a leadership role in that.
But now we have got daycare and it takes away from nuclear
submarines.
Chief Hagan. When you say the Navy has told you, I am not
sure if you are referring to specifically my statement.
Mr. Kingston. No.
Chief Hagan. I did make a specific statement about child
care because I have very serious concerns that we do not try to
quantify 100 percent of the need. I occasionally attend
ameeting at the OSD level and at the Navy level where the goal of some
entity is to establish 100 percent of the need. I always want to define
the need before we establish 100 percent or 85 percent of it and build
an infrastructure to support it. I believe that as some people define
the need, that it is a bottomless pit.
I will go very quickly to my bottom line, and that is that
some child care needs, some parental obligations, no small
amount of them are mutually exclusive with continued military
service. I am not interested in building an infrastructure that
can meet every child care need but simply one that perhaps
prioritizes member-member marriages, single parents, and never
takes into account 24-hour child care or deployment
guardianship. Believe it or not, that is occasionally raised as
an issue by those who would throw in with us for a career if we
could meet their every need.
That is the basis for my reservations. And as I said in my
testimony, we owe the single Sailor more prior to plussing up
or doing any more for child development centers. The single
Sailor who lives on a ship has been long neglected. In our
quality of life master plan that I would be glad to submit
along with that survey which Dr. Roscoe, our ASN at the
secretary level has devised, is a leading part of that single
Sailor need right now. But those two subjects are intertwined
in my mind, single Sailors' needs and child development center.
Mr. Kingston. Is this with deployability as part of this
discussion?
Chief Hagan. Deployability, I am convinced, cannot be a
part of child development center planning.
Mr. Kingston. I agree with you.
Chief Hagan. We deploy for six months, or down in King's
Bay they go for 90 days. That arrangement for child care for
that period of time has simply got to be the parental
responsibility. And in some cases it does conflict in an
unresolvable way with continued service, and I respect the
judgment of those who leave our organization because of that
obligation.
Mr. Packard. If the gentleman would yield for a minute on
that. Is that particularly true with single parent deployments?
Chief Hagan. Particularly true, sir. I respect the
judgments of many single parents when they choose to leave our
service. Some ratings serve five years of sea duty followed by
two years of shore duty. I respect the judgment of a single
parent who says, my situation is not temporary. It is semi-
permanent, and I am forced to separate because there are
obligations in this all-volunteer force that are more
important.
Sergeant Benken. Sir, if I could address the child care
issue from the Air Force standpoint? We tie it to readiness.
Close to 70 percent of our force is married. It is a fact of
life that we have children, and we have to deal with that. With
the deployment rates that we have today, it is necessary for
our troops that are overseas to have great faith that back at
home those children are being cared for properly. We have a
very high accreditation rate. As a matter of fact, the
President said that our child care system is a model for
America. That is what we have done with it and that is how far
we have taken it.
Mr. Kingston. Is it a seven-day-a-week availability, or is
it five?
Sergeant Benken. No, sir, normally it is five days. It is
based on about 50 hours a week.
Mr. Kingston. Is there a push to go to seven days a week?
Sergeant Benken. We have always told local senior enlisted
advisors that they can look at the child care system. If you
have the demand and you can meet it and pay for it without
losing money, which is what we are chartered to do, then they
can certainly look at it. But I will tell you, in most cases we
cannot provide 24-hour a day child care seven days a week, no.
Mr. Kingston. Is it possible that this is going to evolve
into deployability and a decision of reenlistment, the
availability of child care?
Sergeant Benken. I think it will evolve into a reenlistment
issue if we degrade Child Development Centers or child care for
our armed forces. We are meeting about 60 percent of the need
right now, I believe is the number.
Mr. Kingston. Is this something, Mr. Chairman, that we
should be concerned about looking into in the future? Because I
am concerned that it would become the linchpin of reenlistment.
Then you are in the child care business in a major way, far
more than we intended, and it actually becomes one of the huge
benefit considerations, to where we are just taking the money
away from airplanes and ships and tanks and so forth.
Maybe we should acknowledge that we are in the business,
but it should be privatized as much as possible. Because I
would rather have your manhours spent training people how to
fly planes than what the proper conduct is in a child care
center.
Sergeant Major Hall. Sir, if I could add a little bit to
that. Within the Army we are currently, in the aggregate,
meeting about 65 percent of the child care needs, and that is
the DOD goal. That is on base. There is no move for
guardianship type care. Neither is there a move to put soldiers
in the business of running those. Those are primarily non-
appropriated funded facilities.
We do supplement that some, and we are trying to get away
from that. But the cost of bearing payment for child care,
minus our supplements, is done by the soldier. They would,
quite frankly, pay for it whether it is on base or off base. So
on base enhances readiness because it is child development as
opposed to what I call, in some cases, warehousing of kids in
some places off the installation.
Mr. Packard. If the gentleman would yield? I visited
several child care centers on bases and I think that the
comments are correct. That is, my observation is that they are
not run by the military. They are not a military installation,
and there are certainly no active duty personnel involved. They
are usually either volunteers, or the amount that they receive
from the parents with the children at the center will cover the
cost of the personnel required to operate them on a daily
basis. And really they are quite well done.
I think, frankly, our assignment and our role is to provide
the facilities. But as far as the operational activities, I
have not sensed that that has detracted in any way from
readiness or from mission assignments. They are run rather
independent of the military operations and military
supervision.
Chief Hagan. Sir, I would like to provide this material for
the record. I cannot give you the exact data now, but there is
a substantial subsidy in the operation of the child development
center network independent of the MILCON. If they were a break-
even facility, my stance would be very different.
The potential for privatization and for in-home family
caregiver, which is the portion of child development that I am
the most excited about and supportive of, the potential for
those two issues, privatization and in-home family caregiver to
meet an increasing portion of the need I am excited about.
But the actual cost of running the child development
center, from utilities and other overhead, to salaries, is far
greater than we take in in our tiered-fee structure. We charge
junior enlisted less than senior officers, and it does not come
anywhere close to breaking even. But I will have to provide for
the record the actual percentage.
[The information follows:]

The Navy's Child Development Center (CDC) program is
supported with 65 percent appropriated funds (APF) and 35
percent non-appropriated funds (parent fees). It should be
noted that Navy cares for more infants and toddlers (50 percent
of the center program) than the DOD model projected (40
percent). Infant/toddler care is much more expensive and labor
intensive than center-based care for 3-5 year old children
(i.e., an infant space costs approximately $7,000). The overall
direct APF cost per space in the center is approximately
$3,900, but Navy is currently working with Commands and
Claimants to reduce staffing and operating costs in the center.
Navy is also attempting to shift infants and toddlers from
center-based care into the more cost effective subsidized
Family Child Care program. This will allow Navy to realign
potential savings to expand child care and improve the School
Age Care program for children ages 6-12. In addition, Navy is
looking at other more cost effective methods of delivery such
as off-base Family Child Care and the potential of outsourcing
on a regional basis.

Mr. Kingston. I think that would be interesting, because I
know the money comes out of somewhere. That is the concern I
have, and the interest to see that these things are run
privately as much as possible.
Chief Hagan. I will point out, the money that is budgeted
is fenced. There is no discretion by the commanding officer to
shift that budget to some other need. That is the law. So those
inflexible data points are an important part of my personal
stance on child development centers.
Mr. Hefner. Would the gentleman yield? That does not
surprise me that the fees charged for daycare does not meet the
expenses. That does not surprise you, does it?
Chief Hagan. No, sir.
Mr. Hefner. That is what some folks would call a perk
around here. I do not imagine all the things that we do such as
food and things that are cost effective are perks. One of my
real hang-ups is child care. I remember years ago I went out to
Fort Hood and these ladies that were spouses had taken an old
mess hall to use for a daycare facility. They were trying to
redecorate it and fix it up to make a daycare. They were going
to run the daycare. It was going to be operated with
volunteers.
I do not have any problem with privatizing things, but you
get a different atmosphere when you have got the spouses
involved in daycare. This may sound chauvinistic, but the guys,
they do not spend a whole lot of time involved in daycare on
these bases. It is mostly the spouses, the stay-at-home
spouses. Even though some of them work, they go, they drop
their children off at the daycare and pick them up as they come
home from work.
I think you had better be careful just like with housing,
when you start privatizing child care, in my view.
Mr. Packard. If the gentleman would yield?
Regulations almost prevent volunteerism. There are very
strict and specific regulations that require qualified people,
people that have credentials and training and so forth. So it
is not something that you can just decide you want to have a
volunteer program and put just one of the mothers in there for
that two-hour block or whatever. It just does not work that way
any more.
Sergeant Benken. Sir, let me--the Air Force Council looked
at privatization and agreed not to pursue it, and here is the
reason why.
We said it would increase the cost to parents by 20
percent. The law requires matching appropriations. Taxpayers
would be affected. Contractor liability, insurance costs add to
the cost per space. Some of the other difficulties that you
have is contractor's inability to pay and attract Air Force GS-
2 to GS-3 equivalents, military spouse employment opportunities
diminish, employees are 75 percent military spouses. It is a
good PCS employment prospect. Civilian centers, 5 percent
accredited, Air Force centers are all accredited. Contractors
not available overseas and in remote locations.
I think all of those are good reasons to keep child
development centers. As I would again state, the Air Force sees
that as part of the readiness package.
Mr. Kingston. Let me just comment on that. I think those
are excuses, not really reasons. I say that respectfully. I
think if you wanted to privatize, none of that is
insurmountable--none. The suggestion that maybe the military is
going to care or love more than the private sector, and that
the private sector is going to be less sensitive to children
is--and you are not suggesting that, I know.
I am not taking exception at all to anything but the
report. I think that is a cop-out. If you really wanted to
privatize--I mean, the cost of daycare is not cheaper. It is
just that it is subsidized differently.
Sergeant Benken. If you ask any military member, sir, what
they would prefer, to have their children on an on-base Child
Development Center or downtown, I can almost guarantee you, to
the family, they will tell you on base.
Mr. Kingston. I would say on base you still could have some
privatization in there, and not necessarily move it out. For
example, at King's Bay you have, some of the security is
privatized. You have hybrids here and there, but I think in
terms of a $5.4 trillion debt, military spending that has been
basically flat, missions everywhere. And as you know, you have
the strain of your folks going all over the world any time. We
have got to look at what is the best, most effective way to
handle whatever service, be it food or whatever that can be
privatized, we should look into it.
Chief Hagan. We use the word privatization here, sir. I
think innovation might be a better word, because in-home family
caregiver which employs, almost exclusively to the present,
spouses of active duty personnel. Currently we are expanding in
the Navy that off base to the civilian community where we
certify and train and supplement in a modest way the spouse
that stays at home and cares for the children up to a certain
very reasonable number--I think a maximum of five children. We
supplement that to a savings of 90 percent.
In other words, it costs us 10 percent per child of what it
costs to supplement the child development center on base. The
figure I have is $4,300 per year per child out of the Navy MWR
budget. That is exclusive of MILCON and is paid by the Navy. It
costs $430 a year per child when the child is in the in-home
family caregiver program.
I think there are lots of ways we can expand. I am
certainly not against child development centers and child care.
But I do share the concern I perceive here for it to become a
fixed portion of the budget that drives other more important
things.
Mr. Hefner. I do not want to be argumentative here, but I
get the feeling that the children are sort of a byproductof the
military. I have four grandkids and am very concerned about children.
If we are going to have the type of service that we have got, you are
going to have married folks and you are going to have children. You are
going to have to look at daycare. Corporations are beginning to look
after their employees and all of them have daycare service or this sort
of thing or Head Start, and they are involved in these type of
programs.
I like to see the private sector do as much as it can, but
this, to me is something that should be a priority. We do not
build chapels any more and at King's Bay we built craft centers
and car washes and all this stuff. I have been dealing with
King's Bay for years. But to me, it seems we have got to focus
on child care.
Mr. Kingston. If the gentleman will yield? I think if you
look at, say, who cuts the grass, who maintains the trees and
so forth, you do not have to have U.S. Navy personnel to cut
the grass.
Mr. Hefner. We do not do that.
Mr. Kingston. Exactly. You do not have to have U.S. naval
personnel to actually be running and changing the diapers--not
that they are. But as much as possible, whatever can be
privatized is not synonymous with denying the benefit.
Mr. Hefner. I am not getting in an argument with the
gentleman, but I will just tell you what. I am not in favor of
warehousing children or old people; and I happen to be an old
person. We have had problems with nursing homes and this sort
of thing. When you start privatizing, especially the children,
you potentially get into all sorts of problems.
I just have a disagreement. You can disagree without being
disagreeable, which I am doing. You can have the last word. It
is okay.
Mr. Kingston. This is not about warehousing children. This
is not about denying a benefit. This is about, can we do it
better? Can we do it less expensively? And are we going to
think innovatively, and are we going to continue to look at
different ways of spending the dollars?
The thing that I think is also important on anything like
this is what may work on a base might not work on a post, might
not work in Georgia but it might work in Alaska. We have to
have the flexibility to provide the best quality benefit to
that personnel and at the same time be accountable as possible
to the taxpayers and aware of the strained resources that DOD
already is operating with.
Sergeant Major Hall. Sir, if I may? My view is that I am
all for doing anything if we can do it cheaper and also do it
better. I am for doing that.
I do worry about the family unit though. We spend a lot of
time with family units because we are already fighting a
perception that our benefit package is eroding very quickly.
That is one reason that non-commissioned officers tell me they
are getting out of the Army. They are not sure where it is
going. We have to be very careful, in my view, with things like
that because they will see it as one more benefit that is gone.
You know, I also have two grandchildren. I have a daughter
that is married to a sergeant, an E-5, who just came back from
his second tour in Bosnia and leaves in June for his third, and
they are doing okay. My daughter has worked in those child care
facilities. There is a tremendous training and accreditation
process that she had to go through before she could do that.
And they pay very well. So not only is she bringing in income,
she is taking care of my grandkids and also helping to take
care of her Army family at the same time.
But I think it is the benefit package that worries me more
than anything else.
Sergeant Benken. If we already have the best, how can we
make it better through privatization?
Mr. Kingston. As long as you are satisfied with what your
budget allocation is. This is about not your dollar, not my
dollar. We have got to continuously look for ways to provide
the best quality, the best benefits at the cheapest price.
Sergeant Benken. Yes, sir, and I would say that the
American taxpayer needs to recognize the fact that you cannot
go cheap on defense. We cannot do that. We have got to step up
to a lot of things, and that is tough for the American
taxpayer, I realize that. But that is a reality. There are
things that are expensive about defense. Modernization is
expensive. And the care of feeding of the people that operate
and defend this country, there is a price tag to it. I think
the American taxpayer has to step up to that. And I am a
taxpayer, too.
Mr. Packard. This hearing has gone a little longer than I
anticipated and I have not got to my questions. I am only going
to ask a couple three small ones. Are you through?
Mr. Kingston. I have got to go meet a school group. Thank
you for the time.

morale and welfare

Mr. Packard. Thank you very much, Mr. Kingston.
Morale, how would you evaluate the morale generally? Very
quick answer from each of you.
Sergeant Major Hall. Sir, I would say morale is very well.
It is fragile, but it is okay right now.
Mr. Packard. Is it improving or going the other way?
Sergeant Major Hall. Well, the Army has had a hard time
over the past year, so I would have to tell you right now it is
improving. We have learned a lot about ourselves as a service
because of the situation at Aberdeen and other places. Morale
took a big dip. It is on the upward slope, but fragile.
Mr. Packard. Sergeant Major?
Sergeant Lee. Very good, sir. Very good.
Mr. Packard. I would expect that in the Marines.
Chief Hagan. Acceptable and steady. I do not have a morale
concern about the state of morale. Good leadership is meeting
that need, yes, sir.
Sergeant Benken. General Ryan and I just went through the
desert. We went over there right before the diplomatic
conclusion came about. I want to tell you that morale was
peaked at that time. I have concerns about morale associated
with the desert and the continued rotations over there and not
seeing an end in sight. That definitely concerns me.
Mr. Packard. I think our general observation is, we have
gone on the bases, is very similar. I think that it is not a
huge concern of ours right now. We think that it is good. We
recognize that even though budgets are trimmed down
significantly that it has not destroyed morale like it was 15
years ago.

overall funding

That brings up one other point. We are having a decreasing
budget. My notes show that, and I mentioned it, that our first
quality of life hearing was in 1981, February, and since then--
the budget that year, incidentally for the 1982 budget year was
$7.3 billion. We moved up in that 17-year period to about $11.3
billion, and we are now down to where the President submitted
at $7.8 billion. So it is almost back to the level of 1982.
We really have not had any significant growth in our
budget. Does that give you concern, and do you think that is
going to continue to be eroded?
Sergeant Benken. Sir, I think from an American
perspective--and I am not an economist and I am not a
policymaker, but I would just say that we have to take care of
the people that defend this Nation. We have to take care of
veterans, and we have to modernize our force. We have to do all
those things. To have us shifting things around and trying to
figure out how we are going to do that, in my mind is just not
the way to do business.
But I understand living within budget constraints and
things like that, but there is a price to be paid for that.
Chief Hagan. The shrinking budget concerns me the most from
the standpoint of readiness, apart from the important issues we
have been talking about today. But perhaps more important is
that we build more than one ship a year to replace the fleet.
Long term as a taxpayer, and I hope an honest patriot, I am
concerned about what could be called modernization or
recapitalization.
But whatever size Navy we are going to have, within the
window that I believe we are shooting for, we are not replacing
it fast enough under current shipbuilding. So a flat budget
gives me pause all across the spectrum from the quality of life
issues and holding what we have got, to having an adequate
force for the needs of the future.
Sergeant Lee. Sir, we are flat out hurting. You know that.
In fact, we need money for improvement, we need money for
modernization, we need money for O&M, we need money for more
MILCON. Probably $1 billion is what we need this year to give
us a reasonable expectation for the year 2000.
Sergeant Major Hall. Sir, I would tell you--and I am not a
mathematician nor a budgeteer--that if you do the math, we are
probably $3 billion under-funded in the Army this year. It is
going to be a tremendous balancing act to do what we have to do
and pay the bills that we must with regard to modernization,
readiness, and quality of life.
We just spent a few days at an off-site with all the senior
commanders, and just the level of detail that those senior
commanders have as they run their major commands and to make
just the base operations piece work is extraordinary. It is
going to be tough.

family separation

Mr. Packard. Let me direct this to the Navy. Are families
choosing family separation because of shortages of affordable
housing rather than mission requirements? I think it is
referred to as geographical bachelors. How widespread is this
problem in the Navy?
Chief Hagan. I hate the phrase ``geographic bachelor,'' but
it is the one we have adopted. It describes a married
individual who is separated from their family because of their
permanent change of station status. They have chosen not to
move their family with them to the new location. It is driven
by a variety of factors.
The lack of adequate family housing on the receiving end
where the member is not the highest one on the list is one
significant factor. But higher than that is cultural and
societal pressures: to keep children in the same schools, for
spouse employment, because they have made an investment in a
home that they do not want to sell or rent. Those seem to be
the leading factors.
This is a phenomenon that is causing us, in the Navy a
great concern because of our sea-shore rotations. I appreciate
the fact, sir, that you have read it and considered it an issue
worthy of your attention.
Mr. Packard. Thank you very much. I would like to just--
unless you have some further questions?
Mr. Hefner. I just want to make an observation, Mr.
Chairman, if it is in order. I have been on this committee for
a long time. My dad was in World War I and this reminded me of
a little story about this fellow campaigning down in the Ozarks
who used to be a member here.
He went into this store and this old fellow was sitting
there with his coveralls on and a cap, and he was chewing
tobacco and had a pot-bellied stove. This old man was sitting
over at the bar, and he walked over and said, uncle, how old
are you? He said, if I live to January 2nd I will be 96-years-
old. He said, I guess you have seen a lot of change in your
life. And he said, yep, and I have been against every damn one
of them. [Laughter.]
Over the period of time that I have been here there have
been some tremendous changes in the mood in the country. Around
here we do what the taxpayers will let us know. Occasionally we
will put one over on them or something, but there was a mood in
the country back in the Reagan years where if you said it was
for defense, it did not matter what it was, the public was
behind it.
Now the average guy out there on the street, he does not
see that there is any potential threat. The Soviet Union is no
longer a superpower. He sees it as just brushfire wars and what
have you, and there is really no demand to spend a lot more for
defense. So we have to struggle to try to stay where we are.
Yesterday and today we are having hearings on the Defense
Subcommittee and we are talking about some systems that we need
to do that are under-funded and we are not going to be able to
accomplish. So, I just said that little story to just show how
things change. God forbid that we would ever have to go to
another full-scale war, but I think we have to be prepared.
In my view you have got to have that rock bottom, what do
you call it, grass roots support, and it starts with the
families. Especially with the kind of force that we have got
now, if you do not keep the family happy, the guy is not going
to enjoy going out there and fighting. But it all ties together
and we just have to cope with it as best we can. I really
sympathize with you. It has been our focus to try to do our
best to keep you guys happy on the bases, and also keep the
wives and everybody else happy.
That is a tough challenge, and the chairman has done a
tremendous job of fighting for more allocations with the full
committee. But it is a tough job. It is one of the reasons I am
quitting this year.
Mr. Packard. Certainly one of the men that has done
probably more than any single person in trying to bring about
these positive changes that he has referred to is the gentleman
himself. Mr. Hefner has certainly been a long supporter of the
programs that you have fought for, and he has fought for them
here. He has made a remarkable contribution and he will be
sorely missed. I do not know whether he initiated these
hearings with you gentlemen, but certainly he has been through
most of them for many, many years, and has listened carefully
and made a major contribution.

privatization

I have one comment that I would like to make and then we
will close. On the privatization issue, there is not anyone
that has pushed for it more than I have and has been a
supporter of making that a supplement to the existing--in an
effort to close the huge gap that exists on the quality of life
facilities. But I think that I can express a concern, as I have
heard particularly from the Navy and others on the committee,
that we may be making this transition faster and going further
than what even we intended.
I particularly was interested in the Navy's testimony day
before yesterday where we are now not looking--and my initial
feeling or attitude on PPVs was that it would be a way of
building new facilities or refurbishing existing facilities.
But now we see where we are literally exchanging and making
almost wholesale proposals to exchange current and existing
base facilities and transferring it into the private sector,
which means that we could very well be depleting existing
Government operated and owned facilities much more rapidly than
what we anticipated.
It is an area that I think we are going to have--the
committee is going to have to look into to see if that is a
direction we want to go. In San Diego alone, the Navy's
proposal is to transfer some 9,000 units to the private sector.
Those are units that now exist, that this committee has built
in the last umpteen years.
That is something that I had not thought about in terms of
privatizing. My concept was that when we need 200 new units at
Camp Pendleton or in San Diego or at Norfolk or at Fort Bragg,
my concept was that maybe the private sector can help us build
those 200 units and retain ownership. But that would not affect
the other 5,000 units that we already have there, or whatever.
So we have to look into that and see if we are moving in a
direction that is literally transferring existing facilities
that we have worked hard to catch up on, to the private sector
and leaving ourselves literally without the current existing
stock. That is an interesting thing. But I see the Navy moving
more aggressively than perhaps the other branch of the
services, or at least if I have heard the testimony of the last
few days accurately.
That may be proceeding--we have asked the same question to
every one of the Secretaries. That is, are we replacing the
current process of MILCON quality of life facilities
withprivatization? The answer generally has been no, it is a
supplement. But I am concerned that maybe in fact it is a replacement
process. We will have to look into that carefully and make sure that
your concerns are not going to come to fruition, and it is now our
concern as well.
There is a place for privatization; a very important place
for privatization. But I think there is also a significant
place for what we have been doing for years and years in trying
to close the gap. We in some way have to come on this committee
to a blend of those, and other innovative ideas that will allow
us to do what has to be done to close the gap and still provide
the right quality and character of housing and facilities for
our men and women.
You have enhanced that concern, at least in my mind, and I
think in the committee's mind. Your testimony has been
extremely valuable from a variety of points of view, but that
is certainly one of them.
There will be some questions that we will submit for the
record. These are often more detailed questions, or more
specific questions on specific bases or specific issues. We
would appreciate your responding to that. But if you have no
further question or comment?
Mr. Hefner. Good to see you, gentlemen again.
Mr. Packard. Good luck to each of you. Thank you very much.
The hearing is adjourned.
[Clerk's note.--Questions for the record submitted by
Congressman Porter]

Naval Training Command Great Lakes

Question. As you know, Great Lakes was forced to close its
only live fire range this past year due to extreme
deterioration of that facility. Could you please comment on the
effect this has had on the training of recruits?
Answer. The live fire range at Naval Training Command Great
Lakes had to be closed due to environmental concerns centered
on high lead levels throughout the facility. Continued weapons
training for recruits has been limited to high tech, laser
weapons simulations. This technology enables limited training
and scoring of weapons accuracy for the qualifications as
``marksmen,'' ``sharpshooter,'' and ``expert.'' However, this
does not enable recruits to even have a familiarization firing
of an actual weapon. Current budget planning is in place for a
new live fire range in two years. In the interim, the Commander
of NTC Great Lakes estimates 200,000 Sailors will complete
their basic training without any live fire experience and
report to the fleet where they must be able to qualify on
weapons to stand security watches. I am concerned that we are
leaving too much of the basic training to be done after Sailors
reach their initial duty station. While training at NTC Great
Lakes only sets the foundation for Sailors, it must include the
basic training necessary for them to meet the needs of the
fleet. Completion of the new live fire range is critical and
will enable us to better meet this goal and to make NTC Great
Lakes a first class facility.
Question. In order to ensure that our recruits continue to
meet the standards set for physical fitness in the Navy, it is
vital that Great Lakes have an adequate number of facilities to
accommodate all of its recruits. Do you perceive that these
standards can be met with existing facilities for physical
training?
Answer. In my studied opinion, the fitness facilities
currently in place at Naval Training Center Great Lakes are
inadequate to meet the minimum requirements to train our
recruits. Many of the facilities date back to World War II and
are in great need of updating. Due to the often harsh winter
conditions at Great Lakes, much of the physical fitness
training must be accomplished indoors. These drill halls are
very old and require maintenance that is fast approaching the
cost effectiveness point. Swimming is also an important
survival skill and fitness goal for Sailors. We currently have
one training pool in place with another programmed but not yet
completed. Building a state of the art swimming facility offers
the opportunity to incorporate increased fitness programs with
training that simulates the conditions Sailors will face at
sea. Our Navy is making every effort to increase the fitness
level, from the most junior recruit to the most senior Admiral.
To set the foundation for this effort, we must start with a
solid fitness program from the very first day recruits enter
Great Lakes. This is all a very fundamental part of making
Great Lakes a first class facility.
Question. My understanding is that, at most, there is only
one confidence course available for use by trainees at Great
Lakes. Could you tell us why it is important to have trainee
access to confidence courses, and the proper number that should
be available at Great Lakes given the number of trainees?
Answer. A single ``confidence'' or obstacle course was
built as a self help project. This course incorporates Navy
specific evolutions into a challenge/obstacle course that is
meant to be used for fitness, team building, and to build
confidence. The current course has a very limited capacity and
only offers the opportunity for recruits to complete this
course once or, at most, twice during their nine weeks of basic
training. Building a network of confidence/challenge courses
would enable us to make this a regular part of recruits
training. A total five to seven such courses would allow
recruits to train on the confidence course three or more times
weekly. This network would allow us to utilize the courses for
their intended fitness, confidence and team building objectives
and would constitute a significant step forward in preparing
recruits to meet the rigors of service in the fleet.
Question. I submitted questions for the record during Under
Secretary of Defense William Lynn's testimony before this
subcommittee regarding Impact Aid. I would be very interested
in having your perspective as well on how quality of life in
the military is affected by the Department of Defense's
repeated neglect of this program so vital to maintaining the
schools attended by children of military personnel.
Answer. The local public school system is an important
consideration for many Sailors in the selection of a new duty
station and the selection of where they live in a current duty
station. Sailors even choose to leave their families at a
previous duty station and serve in a separated from family
(geographic bachelor) status rather than taking their family to
a new duty station where the schools are deemed to be
inadequate. Others are commuting great distances to ensure
their children are enrolled in quality schools. We must take
any necessary measure to ensure a minimum quality standard is
maintained for the education of the children of our Sailors. In
regions where children of Sailors make up a large percentage of
the enrollment of schools, financial support is provided to
ensure the quality of the education is up to that minimum
standard. We owe Sailors a reasonable, consistent quality in
the education system which serves them across their career.
This is an important retention issue of great importance to the
growing number of Sailors, who like parents in all walks of
life, are greatly concerned about their children's education.

[Clerk's note.--end of questions for the record submitted
by Congressman Porter.]
Wednesday, February 25, 1998.

DEPARTMENT OF THE ARMY

WITNESSES

ALMA B. MOORE, ACTING ASSISTANT SECRETARY OF THE ARMY
PAUL JOHNSON, DEPUTY ASSISTANT SECRETARY, ARMY INSTALLATIONS AND
HOUSING
KATHERINE CONDON, ASSISTANT SECRETARY FOR RESOURCES AND MILITARY
SUPPORT
MAJOR GENERAL DAVID WHALEY, ASSISTANT CHIEF OF STAFF, INSTALLATION
MANAGEMENT
BRIGADIER GENERAL JAMES HELMLY, DEPUTY CHIEF, ARMY RESERVE
COLONEL PROMOTABLE MICHAEL SQUIER, DEPUTY DIRECTOR, ARMY NATIONAL GUARD

Statement of the Chairman

Mr. Packard. It is 9:30 and Mr. Hefner, I understand, is on
his way. And we will go ahead. We have Mr. Edwards with us
representing the other side, and as soon as Mr. Hefner arrives
we will hear from him.
We are extremely grateful to welcome Secretary Alma Moore
with us today. She will be our principal witness. We welcome
all of those who accompany you. We appreciate you being here.
We are aware that this is your first time before this committee
as a witness, but it is certainly not your first time before
these kinds of committees. You have spent a lifetime on this
side of the aisle, this side of the table. We appreciate your
wonderful experience over the years and are looking forward to
your testimony.
We want to congratulate you personally for staying the
course in barracks construction, particularly on foreign
locations. There is no constituency that supports foreign
construction. This subcommittee has to stand for that, as well
as, of course, the leadership in our military. But there are a
lot of people that support our bases here domestically here in
the Congress, but there is no one overseas that votes for us to
speak of and so we tend to neglect that. And I appreciate you
staying the course there.
I have read all of your testimony. It kept me up late last
night. And I don't want you to read it to me again.
Ms. Moore. Thank you, sir.
Mr. Packard. We would love to have you highlight as much as
you would like, and you can read any portion you would like. It
was very organized and very well done. I want to say that. You
have good experience, and certainly that came through in your
testimony. I did read it all carefully. I have underlined some
of it. I may have some questions, direct questions relating to
your testimony.
I would like to clarify one thing. I know that your budget
was submitted on the basis that the exercise of the line-item
veto in our last year's bill would stand. And I am sure your
budget reflects that. As you may know, the House has not
approved the line-item vetoes of last year's bill. The Senate
will take that up and vote on it probably today. We fully
expect that they will pass, as the House did, sufficient
numbers to override. So that will have to be taken into account
as we reflect upon your budget.
I know that it appears that there is an increase in the
military construction budget, but with that consideration and
other factors, we recognize it and see it as a decrease. I am
very concerned, as I expressed in the last hearing, of the
overall decrease in military construction budget. The Army has
decreased it from our figuring approximately $48 million, which
is a seven percent decrease when you take into account the
line-item veto issue as well as adjusting for the chemical
demilitarization program.
But nevertheless, we appreciate the budget that you have
submitted. We will do our best to make it right as far as what
we feel is important for men and women in the services and
their support facilities.
We are very grateful, again, to have you here. We hope that
you will be able to highlight the issues that are important in
your testimony. I might announce to the members that are here
in five minutes we have got a full house.
Mr. Edwards. Let us vote.
Mr. Packard. I guess Chet Edwards would offer a motion for
a new chairman and it would probably carry and it would be him.
We are very pleased to--incidentally, I would like to
announce, and I may do it later as others arrive, that our next
hearing will be tomorrow at this same time, 9:30. The subject
will be outside witnesses. That is always an interesting
hearing, and we hope that we will have a good attendance by the
subcommittee members. I am extremely grateful to have the
members of the subcommittee here. Bill Hefner used to be the
chairman of this subcommittee and certainly has served on this
committee for a long time and is one of the experts on military
construction issues. And I would like to hear from him before
we hear from our secretary.
Mr. Hefner. Well, I will be very brief, and it is certainly
good to see you again. You have been a fixture around this part
of the world for a long, long time, and probably know more
about how the military works than everybody combined on this
panel. And I would just like to pay you a compliment for all
those years you gave tremendous help to myself, our staff and
our constituents. You serve the people of this country very,
very well, and we certainly think that they couldn't have
picked a better person. It would have been all right with us if
you would have been the Secretary, not the Assistant Secretary.
Be that as it may, we are happy to have you here this
morning. And I have some questions, just a couple things, but I
will put them in for the record. We are glad to have you this
morning. I am looking forward to you proceeding.
Mr. Packard. Thank you, Mr. Hefner. At the conclusion of
her testimony we will have, of course, time for questions. And
so you may wish to ask them at that time. Again, we welcome you
here, Ms. Moore, and look forward to your testimony. You may
proceed as you wish.

Opening Statement of Acting Assistant Secretary Alma B. Moore

Ms. Moore. Thank you, sir. Mr. Chairman, Mr. Hefner,
distinguished members of the subcommittee, it truly is an honor
to be here today to discuss the Army's military construction
budget requests for Fiscal Year '99. I have to confess that it
feels a little strange to be on this side of the table. I think
it is easier to write those questions than it is to answer
them.
Joining me today representing the total Army is Mr. Paul
Johnson, our Deputy Assistant Secretary of the Army for
Installations and Housing; Katherine Condon, Deputy Assistant
Secretary for Resources and Military Support; Major General
David Whaley, Assistant Chief of Staff for Installation
Management; Brigadier General James Helmly, Deputy Chief of the
Army Reserve; and Colonel Promotable Michael Squier, Deputy
Director, Army National Guard. Colonel Squier is going to be
promoted on Friday.
Mr. Packard. Congratulations.
Colonel Squier. Thank you.
Ms. Moore. Our combined written statement provides in-depth
details of the '99 construction budget. With your permission,
sir, I would like to submit it for the record.
Mr. Packard. Of course, without objection.
[The prepared statement of Acting Assistant Secretary Alma
B. Moore follows:]
Offset Folios 885 to 918 Insert here

Ms. Moore. And just highlight some of the areas, as you
suggested. The FY '99 military construction budget's main focus
is the whole barracks renewal program for which this committee
has been so supportive over the years. It represents our
efforts to provide our single soldiers with a quality living
environment, not just a place to live. The one plus one program
includes such things as personal privacy, larger rooms,
closets, upgraded day rooms and additional parking.
The budget before you includes 12 projects totaling $307
million to keep us on our 2012 goal for completing
modernization of all barracks in the United States and
overseas. We hope to complete the barracks program in the
United States by the year 2008, in Europe by 2010 and in Korea
by 2012.
Next I want to briefly discuss the Army's strategy to meet
family housing needs through maintenance, divestiture and
privatization. In FY '99 we will renovate 514 existing units
and replace 560 units. This budget request also reflects the
demolition of 350 houses that do not meet standards and would
be too costly to repair. But these efforts do not come close to
fixing the Army's housing problems.
The Capital Venture Initiative, also known as the Military
Housing Privatization Initiative, will allow the Army to
leverage housing appropriated funds and Army-owned assets, such
as land, to encourage the private sector to own, operate,
manage, repair, improve and construct family housing.
The Army's first CVI project is, as I am sure you know,
Fort Carson, Colorado. We have notified Congress and we are now
in the 30-day notification period. If Congress has no
objection, we would probably award that contract sometime about
mid-March. Our plan is to use these authorities wherever
feasible and economical in the United States. We will apply
Fort Carson lessons learned to develop 26 additional projects
if all goes well.
Your support of this effort is essential to permit us to
leverage housing resources and provide quality housing to all
of our soldiers and their families in a much shorter period of
time.
This year's military construction budget was built on the
Army's one team, one fight, one future concept. We made a
conscientious effort to balance our resources among all
components, the active Army, the National Guard and the Army
Reserve. I have already talked about whole barracks renewal and
housing, but I want you to know that our focus is also in
Reserve centers and National Guard readiness centers. The Guard
and Reserves were at the table throughout the budget building
process. And I think they will tell you they believe they
received a fair share of constrained resources.
Readiness remains the number one priority for the Army, and
I would like to highlight those projects that enhance our
soldiers' readiness capabilities. We continue to provide
funding for the Strategic Mobility Program to ensure our
soldiers can employ their equipment as expeditiously as
possible. This budget also completes the construction of close
combat training facilities.
The greatest challenge, Mr. Chairman, facing the total Army
in this budget, and as we move toward the future, is balancing
today's readiness and quality of life with tomorrow's
modernization requirements within available resources. This
budget request continues our goal to provide better living
conditions for the families and the single soldier while also
providing the total Army with valuable facilities to enhance
readiness.
Mr. Chairman, this concludes my statement. All the people
behind me are experts in their field, and I hope all of us
together can answer your questions.
Mr. Packard. Thank you very much, Madam Secretary. I didn't
intend for you to be so brief, but again I am hoping that the
members of the committee have read your testimony, and it is
very complete and thorough. I appreciate very much your
comments.
I want to welcome Mr. Hoyer back to the subcommittee. Even
though he has now moved on, he has shown an interest in coming
back. He is welcome at any time.
Mr. Hoyer. Thank you, sir. I am not Mike Parker.
Mr. Packard. No comment on that.
Mr. Hoyer. I want to particularly be here with Alma Moore.
As you know, when Secretary Moore was here, she did an
incredible job with the House of Representatives.
Mr. Packard. That she did. That she did.
Mr. Hoyer. She is one of the best people I think we have in
the public service. Thank you, sir.
Mr. Packard. Thank you very much.
Mr. Hefner. We should have to sit there once.
Mr. Packard. Before you arrived, I thought he did. We will
follow the rules that we set up initially for this subcommittee
in terms of questions. We will hear from the ranking member
first on questions. Then as they have arrived on a bipartisan
basis we will recognize members of the subcommittee. I will
probably defer my questions until later, and so I will just ask
Mr. Hefner if he would like to start with the questions of our
witness.
Mr. Hefner. Thank you, Chairman. I am going to defer. I may
have some questions, but I am interested to hear the concerns
of the other members, because they have deep concerns about
things in their own district. I will wait till the end.
Mr. Packard. That will be just fine.
Mr. Hefner. I would just like to mention once again it is
such a pleasure to have you here. I know that this is going to
really make it much easier for us to have someone in your
position who knows how both sides work, both the legislative
and the proposed and the proposee. So at this time, Mr.
Chairman, I will just yield back my time and reserve my time
for some time later.

family housing privatization

Mr. Packard. That would be fine. That will be just fine.
And Mr. Edwards will be the first, but let me first before Mr.
Edwards is recognized just ask if you would submit for the
record the 26 projects that were mentioned that will follow
Fort Carson in terms of your privatization efforts. We are very
interested in that. I think you are aware that the subcommittee
has been very supportive of that effort. And I think we would
like to know what those 26 follow-up programs are. We think
that Fort Carson very well could be a prototype, and it is an
opportunity, as you have stated, for you to work out the bugs
and to learn from that experience. We hope that it will work
over and over again, if it is successful.
Mr. Edwards.
Mr. Edwards. Thank you, Mr. Chairman. Just a couple points.
I want to begin by commending you, Mr. Chairman and Mr. Hefner.
I never thought I would see a vote on a spending proposal in
the House get more votes than the highway spending, and the
vote on the MilCon line-item veto override, I think, is a real
compliment to you putting together a bipartisan program.
Despite some critics' talk of Congressional add-ons being pork
barrel, it showed that this Congress is committed to seeing
that we have a better quality of life for our military
families.
I just can't do any better than what Mr. Hefner and Mr.
Hoyer said about Alma. What a real pleasure to see you back
after so many years of service. And I think all of us would
like to leave this institution knowing we made a difference. I
don't know about the rest of us. I know in your case you have
made a difference for military families. And I want to say
thank you.
Ms. Moore. Thank you, sir.

milcon budget reductions

Mr. Edwards. Just a couple of questions if I could, Alma.
Is the Army reduction of seven percent in the MilCon budget
equivalent to what the Navy and Air Force will face or will the
Army take a bigger or smaller dip than the other services?
Ms. Moore. General Whaley, can you respond?
General Whaley. In terms of MCA, sir?
Mr. Edwards. Yes.
General Whaley. I think my understanding is that--first, I
have not done a comparative analysis. The Air Force may have.
Our entire budget is constrained. I think we have takena
balanced approach to the MCA, and in fact on the barracks side, you
will find that we are getting better in terms of lowering price for the
same quality, as it is indeed a standard design that has been
beautifully supported by you. And again, let me add I think the total
Army thanks you for your support in the House.
Mr. Edwards. I appreciate that answer. And if someone could
follow up just with a written answer, I would just like to see
how the Army compares relative to other services.
Ms. Moore. It might be a little confusing because the Army
has acquired the budget for the chemical demil program. We also
have several--well, two projects that were on the veto list
that are in this year's budget also. The Chairman mentioned
that. So----
Mr. Edwards. You would have to subtract from that end.
Ms. Moore. Yes, we will try and figure that out for you and
provide a detailed answer for the record.
[The information follows:]

Service Military Construction Budget Comparisons Active Components

The following information compares the fiscal year 1999
(FY99) President's Budget Request with Congress's FY98 Military
Construction Appropriation, by Service. Fiscal year 1998
includes the Congressional Reductions, but is not reduced by
the amount of the President's Line Item Veto. Also, for
comparison purposes, the $125 million for chemical
demilitarization is shown separately.

----------------------------------------------------------------------------------------------------------------
Fiscal year
1998 Fiscal year Change
appropriated 1999 request
----------------------------------------------------------------------------------------------------------------
Army..................................... .............. $125,000,000 Transferred from Defensewide
$706,477,000 665,876,000 6% decrease
Navy..................................... 678,066,000 468,150,000 31% decrease
Air Force................................ 694,255,000 454,810,000 34% decrease
----------------------------------------------------------------------------------------------------------------

family housing privatization--fort carson

Mr. Edwards. Okay. Secondly, I want to commend you on your
innovative efforts in privatization. Fort Carson has been
working on a privatization program for housing. Fort Hood,
which you know I represent, is now in the midst of trying to do
that. Brief thoughts, a little bit more detail as to what the
status of the privatization efforts--what the benefits are. It
is my understanding you shortened the cycle for upgrading the
family housing from, I don't know----
Ms. Moore. 130 years.
Mr. Edwards [continuing]. Way out in the future. Yes, 130
years to the real world.
Ms. Moore. That is the most important benefit. Our soldiers
and their families would get quality housing much sooner. I
think at Fort Carson privatization will provide housing within
5 years. We could never afford to do that in the Defense
budget. As you know, the military construction budget does not
provide enough funds to reduce the timeline. That is the main
benefit from CVI. We have taken a lot of time to work with Fort
Carson because the program is new to all of us and new to the
private sector as well. We notified the Congress, as I said, on
February 10, and there is a 30-day wait. At the end of that 30
days, we intend--if there are no objections from the Congress
to award the contract. And soon after that, we have a
conference scheduled to go over lessons learned throughout this
process up until now. We intend to use those lessons learned as
we go forward to Fort Hood and other locations.
Mr. Edwards. With the limited budget that we have to deal
with, what an innovative way to really expand and more rapidly
upgrade our housing.
Final question on the issue of privatization. Have we
gotten over the hurdle that OMB constantly threw at us in terms
of scoring between a lease payment over 20 or 30 years and the
first year?
Ms. Moore. They approved it, obviously. General Whaley?
General Whaley. We have a working agreement and
understanding of how it can be scored. Sir, we are--typically
we are, I say, joined at the hip, and as we go through each
installation--as you know, each installation will be a
different equation because it will be based on the total
calculation, its own economic conditions, numbers of houses to
be revitalized and number to be built and what economic
indicators are in the area. I think we have cleared the path
using Fort Carson as the spearhead to know what we need to do.
The only piece, and it will vary from each installation, is
exactly how much will be required. And that will vary from
installation to installation.
Mr. Edwards. Very good. Thank you.

scoring

Mr. Packard. Would the gentleman yield. I want to make sure
we are clear on that now. Are you saying, then that the scoring
will be different than what was initially anticipated?
General Whaley. Sir, it will vary--my understanding is that
it will vary from installation to installation depending upon
the economics of each installation and the requirement of each
installation.
Mr. Packard. How will you manage budgeting on that basis,
then? When and how will you know actually how it is going to be
scored?
General Whaley. Sir, we will not know until we present that
to them. Now again, sir, as we go through this, for instance we
are working Fort Hood as we speak, not to award a contract but
the preliminaries of going through that. When we know the
number of quarters to be revitalized, the number of quarters to
be built, which we do at Fort Hood, then we can start bringing
that equation to OMB through the OMB Secretary. And that is why
we have 26 that are working, so we can get out ahead of the
scoring piece and get at least a very good estimate of what
that scoring is going to be.
Mr. Packard. Thank you. You can have your time back.
Mr. Edwards. Thank you, Mr. Chairman. Madam Secretary, it
is a pleasure to call you Madam Secretary. Welcome back.
Ms. Moore. Thank you, sir.
Mr. Packard. We are going to go back and forth. Mr.
Kingston, on the right.

guard construction

Mr. Kingston. Thank you, Mr. Chairman. Ms. Moore, I need a
little lesson here. It is my understanding on Guard
construction that some is an add-on and some comes through the
Pentagon. Which is the difference?
Ms. Moore. In the add-ons?
Mr. Kingston. Yes.
Ms. Moore. The Guard projects that come through the
Pentagon in the budget request, of course, you know it is
obvious what that is. And add-ons are what you gentlemen helpus
with from time to time.
Mr. Kingston. No, I know that, but there is--I understand
from our General that there are certain things that have to be
added on that don't ever come from the Pentagon budget. Is that
not correct? So the Pentagon can request any kind of Guard
funding in all categories?
Ms. Moore. Yes. Any requirement for the Guard----
Mr. Kingston. Okay, so if our----
Ms. Moore [continuing]. Comes through the construction
budget.
Mr. Kingston. Our General has come to me with items which
he has told me will not be requested by the Pentagon because
they cannot be requested by the Pentagon.

guard construction priorities

Ms. Moore. What he probably means is that the priority is
not high enough for certain projects to make it up into the
budget request in the year, near-term year.
Mr. Kingston. That is not the case as I understand it. It
was that there were certain categories----
Ms. Moore. Colonel Squier, can you help here?
Colonel Squier. Let me attempt to address your question. We
have a process that we have instituted and developed a six-year
intensive program that is based on legitimacy of requirements,
based on priority, accuracy of facilities and the priorities of
the state. That is what we use as a budgeting process. What has
happened in the past is that we have had Congressional members
put add-ons to that which we obviously report, but it has to
fall under the categories of our six-year defense plan in order
for us to move it up in the process. You are right, your
General is probably telling you that because of this
prioritization system we can't get it moved up. Well, that is
because we have a large number of those that we need to deal
with that are--the requirements that we have, about $400
million a year, it is pretty hard to do that. We would consider
all of his requirements and attempt to move them up in priority
based on those three factors.
Mr. Kingston. I can see, you know, moving something up in
line and, you know, just sort of having an honest disagreement
with the Pentagon what should be priority and what should not
be.
Colonel Squier. Sure.
Mr. Kingston. But I was under the impression that there
were certain things that just did not get requested by the
Pentagon as a matter of policy.
Colonel Squier. We have a long-term construction program
that is a part of that. It is all valued in those three
factors, readiness support requirements and providing for
adequacy of the facilities within the states and then
priorities of the facilities in the state. We have a factor
applying those and we mathematically figure priority for all of
our----
Mr. Kingston. Is the Army Guard different than the Army in
the ranking of that priority or the way these things are
categorized?
Colonel Squier. No, we are working with the Army in
establishing those rules. And it is based on readiness
requirements, what the force requires. That is priority one.
But it is not the only factor. The state does have input with
that. With the adequacy of facility, one and two, their
priority is also of value.
Mr. Kingston. We have some Army Guard projects that we want
to talk to you about that aren't on your list. We are concerned
in terms of why. That is why I am asking the question.
Colonel Squier. Sure.
Mr. Kingston. Mr. Chairman, I yield back.
Mr. Packard. Thank you. Thank you very much, Mr. Kingston.
Mr. Olver.

prioritization

Mr. Olver. Thank you very much, Mr. Chairman. I would like
to add on--to dwell for awhile on the same topic that my
colleague from Georgia has just talked about. And let me just
start by saying this program that you have of prioritization, I
think you first laid that out for us, if I remember--maybe you
can confirm that, Madam Secretary or General Squier, from our
1997 March hearing data, the executive summary of the hearing
on that date, laying out this program. Is this the first year
that this has been applied thereby, the assessment summary that
you have described, General Squier?
Colonel Squier. This is actually beginning the second year.
We started the process in March of '97 based on your guidance
to us, the Congress' guidance to develop a legitimate process
where we can manage long-term requirements of the Army National
Guard. This is really our second generation of that.
Mr. Olver. But the FYDP for last year would not have been
written with that in--based upon that program.
Colonel Squier. That is correct.
Ms. Moore. That is correct.
Mr. Olver. This is the first FYDP that would be true based
upon that.
Colonel Squier. It would be the true result of that.
Mr. Olver. So the criteria that you have laid out, you say
readiness, my sense of that one, if I may put my own words to
it, is which of the units of the Guard, the Army Guard, would
be first to be called up to support active units in some sort
of a national security situation. So the order of priority
would be most likely to be called up versus less likely.
Colonel Squier. Yes, sir.
Mr. Olver. So readiness is roughly that factor. And the
adequacy is fairly clearly whether the facilities that people
are working with are adequate for the job that needs to be
done. And then the state priority is also reasonably clear. I
think the readiness one is the one that might have some
uncertainty. Do you think that that provides you with an
objective assessment of the program as it ought to be?
Colonel Squier. Sir, I believe that it does provide an
objective assessment based on wartime requirements of our
service. It does have some limitations, obviously, because we
can't meet all of the expectations of the states out there, but
we have to have our number one priority as our federal mission.
And priorities to meet their requirements has to drive our
prioritization system. So I think we have made some real
progress in getting--it probably needs some further work, and
we are working at that, trying to work with the states. The
bottom line is the requirements the service's put on us to be
able to be more ready has to be our priority of effort.
Mr. Olver. Well, I think one would expect any new system to
require some fine tuning, perhaps, over a period of time in it,
but I am glad to hear that you view it as a reasonably good hit
of the target of objectivity here.
Mr. Kingston. Would the gentleman yield?
Mr. Olver. Sure.
Mr. Kingston. I wanted to put his question in a specific
example. If a Guard unit is on a post with an infantry division
that has been deployed, then obviously they are going to be a
high priority for readiness, correct, if they are particularly
maintaining equipment that that infantry division may be using
in Kuwait?
Colonel Squier. Not necessarily. The missioning that we are
talking about is the missions that are assigned to us by the
Army. That unit in all probability is--by what we just defined
is probably part of our force pool, high priority support
package that we provide to the Army. I might have to get some
specifics on what unit you are talking about.
Mr. Kingston. I would--and I am on Mr. Olver's time, but I
wanted to--I would like to follow this up.
Colonel Squier. Sure.
Mr. Kingston. Because there is a project that is not on
your priority list which I would argue should be on the
priority list.
Colonel Squier. I would welcome the opportunity to look at
that.
[The information follows:]

Army National Guard Units on Active Duty Posts

The Army National Guard (ARNG) force structure is assigned
by the Deputy Chief of Staff of Operations of the Army. While
ARNG units may be located on an Active Duty installation,
nearly all are located in communities throughout the States and
Territories. The missions assigned to ARNG units do not reflect
where these units reside. ARNG units on an Active Duty
installation are only tenants of the post, and do not
necessarily have a warfighting alignment with the host units on
the installation. ARNG unit priorities for funding are
established on the basis of their mission, not on their
location.

Mr. Kingston. Because of the Middle East situation right
now, it has changed. What you probably formulated two months
ago, you know, dramatically could have changed in the last
couple of weeks.
Colonel Squier. Well, I can answer that question without
telling you--for the record I can give you a good answer. I
will tell you that we are using units to meet the needs in
Bosnia right now which are not priority forces, because we have
kept priority forces for the full-scale war. That is the
problem. I would be happy to define that issue.
[The information follows:]

Units in Support of Bosnia

Most of the units that we have deployed to Bosnia have been
our lower tier units that are considered part of the nation's
strategic reserve. For the most part, the units that are our
first and second tier units have not been used for the
Presidential Selected Reserve Callup in Bosnia. It is our lower
tier units that have the required skills necessary in that
theater. Currently, we have a company of the 29th Infantry
Division that is in Bosnia. Because it is a divisional unit, it
is low on the tiering. However, this unit has the skills
required for the mission it has been assigned to carry out.

Mr. Kingston. Okay, thank you.
Mr. Packard. Would the gentleman yield for just a moment?
Mr. Olver. Yes, sir.

fydp priorities

Mr. Packard. You have budgeted about $50 million for Guard
activities in this submission. That obviously will not fund all
of your FYDP priorities. Have you selected for funding those
that are at the top of the priority list within the FYDP down
to where the $50 million would be used or are there--are you
dipped down over, passing over some that are a higher priority
or have you prioritized them within the FYDP?
Colonel Squier. We have tried--we have stayed within the
FYDP established. We are getting on that FYDP within the
limitations of the resources that we have, so the $50 million,
approximately $48 million that we have asked for this year will
then take care of those in priority the best we can. Certainly
it will not cover all of the requirements.
Mr. Packard. I think the subcommittee is aware that last
year--virtually all--I think maybe all of the add-ons by this
committee were in the FYDP as well. We did not go outside of
the FYDP to fund add-ons.
Colonel Squier. Right.
Mr. Olver. Are you going to give me some more time since
everybody is taking my time?
Mr. Packard. I sure will. You have as much as you like.

criteria on readiness

Mr. Olver. I was going to say that virtually every member
of this committee would like to have an objective set of
criteria on which we could cite the readiness according to
units and the adequacy of the facilities that are there and
some relationship to state priority ought to be honored. With
your indulgence, Mr. Chairman, I would like to follow up and
look at the FYDP with the actual scoring as it turns out at the
moment. And I spent an hour one night while I was watching a
basketball game and scored everything that was on the FYDP,
what is a very clear numerical arrangement. And everything that
is in the FYDP, including what was in the FYDP for this past
year, if I may pass it out--we have a number of copies here
that we can give to at least the front row and Madam Secretary
and other members. If there are others that want them, I will
be happy to make them available. I would like to just draw a
couple of rather interesting inferences.
[The information follows:]
Offset Folios 941 to 942 Insert here

If you look at the 1998, the first page there, what was on
the '98 FYDP and those scores and then what was added by the
committee and where we took them from different FYDP years,
except for the last three, which were actually taken not from
the FYDP at all, if you look at the averages they are roughly
the same. I was interested to note that the averages of those
that were added by the committee actually were essentially the
same. They are certainly statistically the same, I think, as
the ones that had been on the original 1998 FYDP.
Well, then the rest of this is year by year of the FYDP
score of the remaining five years, '99 through the year 2003.
And interesting, if you note the projects and what year they
were last year on the FYDP as opposed to this year, you can see
the left column is where they appeared on the 1998 FYDP and now
it is the 1999 FYDP, the ones at the bottom of the page, of
each group in turn. The average score ends up dropping very
dramatically for the year 2000, the year 2001, and then it
begins to come up also dramatically in the year 2003 on the
basis of your objective scoring mechanism.
Now I would like to just call to attention, because this is
something that we could spend a lot of time on, I don't think
you will find any numerical errors in my scoring because they
are very clearly objective numerical scorings and very easily
done. But I would like to call your attention to just a couple
of things. In the year 2003, for instance, there are several,
six items that are brought forward from the old infrastructure
list, which is a long list of hundreds of projects. And those
that are brought forward from the infrastructure list are very
high scoring. They are in the highest--they tend to be in the
highest priority of readiness and unsuitability of the facility
and in terms of state's priority.
If you will note that the highest score on any of these,
and it is anywhere in the whole system of any one of the
projects that is out there, is a 943. The 943s appear in 2003.
And interestingly enough, several of them were in what we did
last year. There is not a single 943 in the years '99, 2000,
2001 and 2002, not a single one.
There are several projects on the--further projects on the
infrastructure list that are at a score of 943 that are way
down in the out years that don't even appear on the
infrastructure list--excuse me, on the FYDP. There are at least
the first dozen projects on an infrastructure list, continuing
infrastructure list, first dozen on that list have higher
scores than any one of the items that is on the Fiscal Year
2000 or the Fiscal Year 2001 proposals here, the ongoing Fiscal
'99 programs. There are three projects--maybe I just said this.
There are three projects with 943s, the same highest score that
appears, that don't appear on any of the FYDP years at all.
And there is one other interesting thing. Remember, I come
from New England and I was interested in checking the
geographical base here. And I note that in this list of FYDP
projects through the year 2003, forgetting 1998, because they
are already done and settled, but there are 33 projects from
'99 through the year 2003. Not one of them appears in
Pennsylvania, New York or any one of the New England states,
which is an area of the country of nearly 20 percent of the
total population, which has not a single project appearing on
this FYDP. And actually, there are at least five projects in
those eight states that have higher scores than most of the
projects on these '99, 2000, 2001 and 2002, but not by any
means higher than the 2003 projects.
So I am curious. It seems to me that, yes, this looks like
a good objective kind of scoring mechanism. You say that it is
an objective scoring mechanism and a good tool and so forth,
but I think you have stepped on it in the way it has been used.
Ms. Moore. Sir, I don't know what the rule is. I will let
Colonel Squier address that in a minute, but I can think of two
or three reasons why those projects might be in 2003. For one
thing, Congress may have procured equipment in another
subcommittee perhaps, that won't come out of procurement until
those years. There are a number of similar situations that
could impact this list that don't show readily from the
criteria that are being used.
Colonel Squier. Sir, if I may, I think the first thing I
would like to say is that you have asked a very complex
question, and I think we owe you a good answer. I would like to
take it for the record and give you an answer, but I will
attempt to give you some thoughts on it.
Number one, this program is new. It is a good step in the
right direction. It needs to be fine tuned. We certainly
understand that. There were some projects that were already on
what was an established FYDP that we had to leave on there
because of what Ms. Moore just talked about. We had already
programmed for them. We already had equipment for them and we
needed to keep them in the process. And third, I will say, we
are looking for ideas. There are some other factors that we
need to consider like geographical distribution throughout the
state. Maybe that needs to be valued.
I will tell you that what you just told me is probably a
circumstance that the priority force is not very well evenly
distributed throughout the states. If that becomes a driving
factor, which it is as far as you are concerned, of readiness,
then possibly the Northeast is not very well postured with high
priority forces.
Mr. Olver. No, that is not--that is clearly not true. High
priority forces depend upon--will show up in the readiness
factor. And if you have got very high positions in the
readiness factor and very high positions on the adequacy factor
and high positions on the state priority factors, then you end
up with very high scores. That is how you get 943s. You must be
in the highest category of all of those.
Colonel Squier. Right.
Mr. Olver. Since there is no number one on the readiness
factor anywhere in any of these systems, the highest factor is
number two in readiness factor. So that one should not be an
issue. I mean, I think that--I am sure there are other factors,
but if you created an objective assessment system, it seems to
me that in large measure it ought to be producing the products
that are up higher on the system.
Colonel Squier. And we agree with your assessment. Let us
take it for the record and give you a good concrete answer. We
are working with the states and territories in developing this
product, so we are looking for them to give us ideas on how we
can streamline the process of being fair and equitable. If we
get it before states and territories that will be a flare in
this process. Any insights on how we can improve it, we
certainly are taking your ideas.
Mr. Edwards. Mr. Chairman.
Mr. Packard. Yes, sir.
Mr. Edwards. Could I just observe that, John, I think is a
very impressive work and you ask good questions. Could I also
ask the gentleman if that basketball game went into overtime.
Mr. Olver. Well, it is actually very simple, because I had
the list. All I had to do was do the scoring. When the
paperwork is all done, it doesn't take very long. As you
arewatching basketball scores you just score other things as well.

prioritization

Mr. Packard. The time has expired. We will go on and then
come back to you, Mr. Olver. But one comment. Out of the $48
million budget for Guard facilities and about five--in excess
of $5 billion of FYDP projects, it is--there is no way we are
going to be able to really--I mean, the prioritization becomes
even more complicated because you are dealing with such a small
amount where so far behind in terms of the total amount of
projects, 48 million out of 5 billion, is almost--it is
difficult.
Mr. Olver. Sure, the long infrastructure list gets all the
way up to your 5 billion, but many, many of those are very far
down on the list. All I am urging is that we end up with ones
that are up there already high on that list in a scoring
mechanism that we all agree is at least close, maybe needs some
fine tuning. But fine tuning usually isn't more than a couple
of percent on the total assessment in fine tuning. But those
ought to be moving up rather quicker, I think, than they are.

state priorities

Mr. Packard. How do you calculate or bring into your
evaluation of a project in terms of priorities with state
priorities? State priorities are different, of course, than
Pentagon priorities. How do you use the state priorities or how
do they fit in?
Colonel Squier. We have percentages that we apply to those
three factors, the highest one being the readiness requirement.
That is rated at 40 percent. The adequacy of facilities is a
number that you apply to that equation. The adequacy of
facilities is 35 percent. The state priorities is 25 percent.
You mathematically compute all that and you arrive at a figure.
The list of requirements that we have in our major construction
years is growing because we are an old institution, as you are
aware of, and we have a lot of old facilities. And therefore
$50 million is certainly moving in the right direction, but it
doesn't even begin to scratch the surface of our requirements.
Mr. Packard. Thank you.
Colonel Squier. Those are completely included in the scores
that I have given to the projects, the scores by state priority
according to their system.
Mr. Packard. Okay. Mr. Wamp.
Mr. Wamp. Mr. Chairman, I don't have any specific
questions. Without belaboring the point, if you want me to
yield some time to you, Mr. Olver, to continue this, I will be
happy to.
Mr. Olver. No, I think the question--I think that they
would like to answer in detail. I mean, there are obviously
cases where because there is a change--Mr. Kingston made the
comment that there may be a change in some project because a
new force need occurs rather late in the process. That has to
be possible to put in. That would be directed by the Office of
the Secretary of Defense. And there are a couple of them that
appear here as directed projects that went outside of whatever
had been the regular programming.
And if you were one of the fine tunings, obviously, but it
also appears as a subjective factor in essence, namely if you
are doing a several-phase upgrading of a particular facility.
The first two phases might be very high on the score and the
last phase by itself, taken by itself, might not look so high
on the scoring. But on the other hand, to finish the job, you
might do it even though its scoring was only 500 on this 0 to
1000 scale just to complete the job. And that is perfectly
reasonable that that should happen, too. There are a number of
those factors. But I would be very interested in the other fine
tunings that might be there.
I think we need time to maybe review it a little bit later.
Mr. Wamp. Mr. Chairman, I will just yield back.
Mr. Packard. Thank you, Mr. Wamp. I was going to yield time
to Mr. Hefner, but let me ask a question and then we will come
back to you, Mr. Hefner, if we may.

chemical demilitarization

What is the reason for transferring the chemical
demilitarization to be funded under the Army? What are the
benefits of changing that? Does it make a difference whether
the chemical demilitarization is funded under the Army or under
the defense-wide program?
Ms. Moore. It really doesn't. We are the executive agent,
and we can execute the program either way. This was part of the
devolvement from the Department of Defense under a review
recently completed where recommendations were made to reduce
overhead in the Office of the Secretary of Defense. And we--it
came down to us through what we call a PBD or program budget
decision from the Secretary of Defense, devolving the dollars
and the people to the Department of the Army. That program is
managed, except for the military construction, out of SARDA
through the acquisition process.
Mr. Packard. Has the Army's program been reduced to make
room for the chemical demilitarization program either this year
or in the future?
Ms. Moore. No, sir. The dollars were added to the top line.
Mr. Packard. They were. And the cost is figured to be about
$950 million? Is that what I----
Ms. Moore. Yes.
Mr. Packard [continuing]. Understand from your testimony?
Ms. Moore. That is right, $942.8 million.
Mr. Packard. Thank you.
Mr. Hefner. Ms. Moore, what percentage of our budget is
there for the total MilCon budget? Ten percent, 15 percent?
Ms. Moore. It is $125 million this year.
General Whaley. It is about \1/7\, sir. It is 100 of a 700,
roughly 125 million of 800 million, actually.
Ms. Moore. Where we get concerned, if there were ever cost
overruns, we would have to find dollars in the Army budget.

privatization

Mr. Hefner. While you are doing your lessons learned, once
you award the full contract, what are your plans for the long-
term review of the effects of privatization? I think we are
about to rush to judgment on privatization and what have you.
What are your long-term plans?
Ms. Moore. If the program works, and that is a big if, we
intend to watch Fort Carson very carefully. We probably would
not award the second one for two years because it takes that
long. It takes a long time to get these things up and running.
But we intend to watch the operation of it very carefully. And
it will be, again, based on the individual installation and the
factors that exist at that installation. One of the criteria,
the number one criteria, is that it has to be community
supported before we would even consider it. And do you want to
add something to that, General Whaley?
General Whaley. Yes, ma'am. In terms of direct review of
quality and cost, long term we will start quarterly reviews
with Fort Carson internal to the Army to pick up lessons
learned as quickly as we can. Our intent is to accrue better
contracts and better understanding. It is to improve quality
and to improve cost effectiveness as each contract goes by.
There will be a review of that internal to the Army to ensure
that we are achieving the best quality that we can for a
reasonable cost.
Mr. Hefner. If you wait two years, what is that going to do
with the housing projects? Will they be put on hold or what?
Ms. Moore. We have one at Fort Bragg now. We would not do
that for an extended period of time. If that happened, we would
go ahead and build, award contracts and build them with the
military construction budget, but it is just a temporary hold
right now. And that money would be transferred over into the
CVI program as--I hate to use this word, but seed money, if you
will, to get that project, the CVI project, off the ground. If
that doesn't work out or it takes too long, we will go ahead
and award those contracts. So you will get housing one way or
the other.

non-execution of family housing projects

Mr. Hefner. I have no further questions, Mr. Chair.
Mr. Packard. Let me follow up on a question on the point
that Mr. Hefner was following. So have you indicated, Ms.
Moore, that projects are not being held up, at least not being
executed on family housing projects waiting for or pending
privatization approvals and processing?
Ms. Moore. The only one I am aware of is the one at Fort
Bragg.
General Whaley. There are several that are.
Mr. Packard. There are four or five as I understand it.
General Whaley. Correct, sir.
Mr. Packard. What is the total amount of dollars that is
being held up?
General Whaley. $64, $65 million.
Mr. Packard. $64 or $65 million dollars. And is this
primarily because OMB and their scoring costs?
General Whaley. Yes, sir. In anticipation of that, the
other piece, sir, is, as we mentioned, two years may seem like
a long time. We will balance lessons learned from Carson when
we go to do the Fort Hood contract or Fort Bragg follow-on or
any of the others that we follow on. As we learn the lessons,
the time between contracts should go down. We are indeed
confident that we are going to--Carson will not be the model
time line. It may be somewhat less than two years, but we also
have to balance that with some operational experience rather
than just contract award experience before we go on. As we gain
additional experience and knowledge, the rapidity in which we
can do this should increase.
Mr. Packard. So you feel that any delays are temporary,
that there will not----
General Whaley. Yes, sir.
Mr. Packard. They will be corrected?
Ms. Moore. Yes, sir.
General Whaley. And as I said, we are learning as we go
through this. Part of that is the problematics that you have
pointed out. We will act accordingly not to misuse the
authority that you give us.
Ms. Moore. We did not, sir, want to stop programming family
housing because this is an uncertain program at this point. And
we continue to do that at Fort Hood and Fort Bragg, our larger
installations where we know we are going to be there forever.

privatization--savings

Mr. Packard. In answer to a previous question I think it
was indicated that the primary benefit of the privatization is
that it shortens the backlog. Are there actual savings in that?
Have we been able to determine if we are saving money as we
move into the privatization programs?
Ms. Moore. We don't think it will save money, but the major
benefit would be to get the housing faster, sooner.
Mr. Packard. You don't anticipate it saving money?
Ms. Moore. It would just move it from the family housing
over into the----
Mr. Packard. Well, is that----
Ms. Moore [continuing]. Allowances account and they pay
their monthly allowances and we don't have the capital cost.
Mr. Packard. So you feel it is a shift from this bill to
the housing allowance, is that what you have said? Is this a
zero-sum game, then, that is----
Ms. Moore. Yes.
Mr. Packard. There won't be any savings that you see? It is
simply a shift of cost?
Ms. Moore. Yes.
Mr. Packard. Our assumptions about the future funding
levels for housing allowances--is there--how does it relate to
that? Is there any assumption about the future funding levels
for housing allowances?
Ms. Moore. Simply we expect allowances to go up as the cost
of living goes under the military personnel guidelines as far
as BHA is concerned.
Mr. Packard. Then if there is not really a savings
anticipated, how do you look on the privatization? Do you feel
that it is a direction where we want to move everything in or
is virtually every project looking at privatization? Are we
going to continue to do some under the standard program?
Ms. Moore. Just some. We don't do it now as a total
program. We would analyze each installation, sir, as we come to
it.
Mr. Packard. So privatization is not----
Ms. Moore. Some places it might work. Other places it might
not work.
Mr. Packard. I see.
Ms. Moore. Where it does, it gives us housing much faster.
Mr. Packard. Mr. Tiahrt.

base realignment and closure

Mr. Tiahrt. Thank you, Mr. Chairman. I was reading your
background here and it says in 1990 you developed a six-year
process for the closure and realignment of U.S. military
installations.
Ms. Moore. My past has caught up with me.
Mr. Tiahrt. It expired December of '95, but it directed the
closure and realignment of 386 military installations. Is that
process complete or is that continuing?
Ms. Moore. We are still closing bases, the '93 and '95
BRACs are still ongoing.
Mr. Tiahrt. Thank you.
Ms. Moore. There was an '88 closed, a '91, and they have
been completed. Is that right, is it '93 and '95 that are still
out there? We expect those to be completed--there was a six-
year time frame associated with each closure list.
Mr. Tiahrt. Are the closures continuing?
Ms. Moore. For six years, yes.
Mr. Tiahrt. Six years, so six years from '95 the last
should be closed?
Ms. Moore. Right.
Mr. Tiahrt. About 2001?
Ms. Moore. Yes.
Mr. Tiahrt. Do you think it is time now to look at another
base realignment?
Ms. Moore. We really need to do that, all the services do.
We didn't get all the installations that we needed to close. We
still have that same capacity in a number of places. And of
course, you know, that costs us money. We need another BRAC.
Mr. Tiahrt. Does that start in 2001 as far as completion?
Ms. Moore. That may be.
Mr. Tiahrt. So you would continue the process by continuing
in 2001?
Ms. Moore. Yes, sir.
Mr. Tiahrt. I think there has been concern that we are not
completing what we started out to do in the previous rounds of
BRAC. And before we do another one, we want to make sure that
we complete the task we started out and not let the process
become politicized.
Ms. Moore. Yes, sir. That was the beauty of that process.
It was not supposed to be politicized, removed the politics
from the list.

privatization--utilities

Mr. Tiahrt. I have a specific question, and this doesn't
have to be answered today, but at Fort Leavenworth with the
disciplinary barracks phase II, it was my understanding that
the Army was trying to get out of the utility business, and yet
there is a gas-fired boiler in the project to provide some
power. I just wonder if there has been a study done of whether
it is cost effective or not.
Ms. Moore. We could----
General Whaley. Sir, I don't know personally, but the
guidance is that before we buy any utility there would be an
economic analysis done to make sure that the right economic
decision is made, privatization versus buying. Heating plants
are one of those that are on--that is really dependent on where
you are, what structure you already have and where the
economics figure in each facility.
Mr. Tiahrt. We will give you an opportunity to answer that
in writing. At the state level they are undergoing retail
wheeling considerations which would allow utilities to bid for
the right to power, and that may make it cheaper than what it
is now.
Ms. Moore. We are very interested in those programs. We are
pursuing them everywhere.

homeowner's assistance program

Mr. Tiahrt. One other thing that I don't know if you have
done any work or studies or not, but in the private sector when
people are required to transfer, there company will quite often
pick up theirprivately owned housing and market it for them or
provide some guarantee that they can move from one location to another
and not fear the loss of equity in their home.
And one of the drawbacks of being in today's military is
that you don't have location security in your job security.
Thus, you may have job security, but you don't have location
security. I wonder if there has ever been a feasibility study
so that enlisted as well as officers have a guarantee that if
they buy a home they will have some kind of assistance for down
payment. In addition to that if they are transferred to another
base that they have the ability to have some company manage the
sale of their home without fear of loss of their equity.
Ms. Moore. We have a homeowner's assistance program that is
designed to help those people who have suffered losses from
their real estate property because of a base closure or some
other action that is beyond their control. And we buy those
houses and help them at the beginning. And we will try to
resell----
Mr. Tiahrt. Is there a policy on that?
Ms. Moore. We can----
Mr. Tiahrt. Would you send that to my office.
Ms. Moore. Yes, sir.
Mr. Tiahrt. Thank you very much. Thank you, Mr. Chairman.
Mr. Hefner. To follow up on what Mr. Tiahrt stated, is
there a length of time that a person has to be at an
installation? Say he goes in and he buys a place and has it for
six months. Then all of a sudden he has to relocate. Does he
have to be there for a certain length of time before he is
eligible for a buy out or whatever?
Mr. Johnson. If he buys the house and then he gets ordered
to move for some reason or another, if the installation has a
drawdown on or an A-76 program. Then he is eligible for us to
pick up his house. And if he sells it, we will guarantee him 95
percent of his loss. If we have to buy it, we give him 75
percent or pay off the mortgage.
Mr. Packard. Okay, we will start the second round of
questions. Mr. Edwards.

quality of life

Mr. Edwards. I really don't have a lot. I wanted to ask,
perhaps, one question that affects my thinking about the
importance of the quality of life issues. On page 3 of your
report, Secretary, you said that on an average 197 days are
spent away from one's family when one has been either deployed
in an contingency operation or off post training. Is that the
same basis that--a year or so ago I was using 135 days as the
average time spent away from home. Is this a different
calculation or are we that dramatically increasing?
Ms. Moore. I think it has currently increased because of
all the contingency operations we have on right now.
Mr. Edwards. And, Mr. Chairman, I just make a note on that.
In our discussions with our colleagues about the importance of
supporting quality education and housing and health care for
these families, I don't know, you know, how many people if they
had to do that year after year would stay in the military no
matter how patriotic they were. My wife would probably push me
over a cliff or divorce me if I spent that many days away every
year, and that is a tremendous strain on our family.
Ms. Moore. That is exactly why all these quality of life
programs are so important, sir. Retention is a very important
result of a good quality of life, because families have a large
say in whether someone stays in the service or not. We need to
take care of our soliders.

base realignment and closure--savings

Mr. Edwards. One other final question. I think this was
addressed earlier. You did touch on BRAC, but you have the
expenditures in the budget for BRAC, but is there a number,
appropriate number for what you estimate the true savings from
base closings to be? Would that be in your budget or somewhere
else? There is a lot of discussion, obviously, around the
capitol about BRAC, and I know the savings have been slow in
coming, but it is my impression that in the last year or so we
were about to turn the corner where there would be a definite
savings.
Ms. Moore. We did last year. We are saving more now than we
are spending.
Mr. Edwards. We are saving more than we are spending?
Ms. Moore. That is right.
Mr. Edwards. Any number on that? Are we about to break
even?
General Whaley. Sir, we have already broken the juncture
where we are now saving more than we are spending. The savings
will continue to grow as we go out in the out-years.
Mr. Packard. And at the same time, the spending will
decrease?
General Whaley. Will decrease, yes.
Mr. Packard. I think that is the long-term picture. The
savings will be in perpetuity almost. The spending will be
very, very short term.
Mr. Edwards. The spending comes out of our military
construction budget, though. The savings may apply to other
areas of the budget, is that correct?
Ms. Moore. We will be saving about a billion dollars come
2001.
Mr. Edwards. Okay, a billion dollars by 2001. Thank you,
Mr. Chairman.

retention

Mr. Packard. In view of some of the comments just made and
the answers, and I know that Mr. Hefner has and every member of
the committee has been saying that retention is being affected
by the deplorable conditions of our quality of life facilities,
housing and barracks, daycare centers, et cetera. We have been
saying that, and I think it is true, but we have really no
statistical background to bear it out. Would you provide for
the committee a comparison chart showing the percentage of Army
reenlistment during the last ten years? I would like to see if
in fact we are seeing a decrease in reenlistments. We don't--
naturally we can make assumptions that much of that could be
because of housing deficiencies and problems. It could be a
multitude of other reasons, of course. But I would like to see
if in fact we are seeing a deterioration of reenlistments.
Would that be a difficult thing for you to produce us with
that, a comparative chart of the last ten years?
Mr. Hefner. I think there are a lot of other things that
enter into the equation other than the housing.
Mr. Packard. Oh, sure.
Mr. Hefner. Because I remember in years past we had some
big incentives for people to reup, and it was fine to be in the
military even back in the Regan years when patriotism was on
the rampant. We found that the majority of people were joining
the services basically for the education benefit that they got.
Of course, they were patriotic, too, but now for people to reup
there is not the real incentives that there were in the past.
Ms. Moore. The economy is good.
Mr. Hefner. The economy is good and you can almost make an
argument to have a draft. You know, I have always said that a
draft, to me that was a logical way where nobody is exempt from
military service. The argument was made that under the
volunteer army we got so many people to pick from. Under the
draft, you got everybody to pick from. So I think we have got a
problem down the road being able to fund quality of life
programs, the retirement system and the whole thing. We have
got a real tiger down the road that we are going to have to
address some way. This committee has fought so hard for so many
years for quality of life. We have povided a major share of the
burden for these programs.
Mr. Packard. Only a man retiring would recommend the draft
come back.
Mr. Hefner. I recommended that 24 years ago.

facilities reduction

Mr. Packard. On page four of your testimony, Ms. Moore, you
mention that you show the figures of the decrease of square
footage of facilities overseas of reductions. I figure--I
calculated about 34 percent reduction in physical facilities on
an overseas basis that is projected by the year 2003. Has the
manpower reduction exceeded that or about the same or is it
much less?
Ms. Moore. We are down, I think, to about 100,000overseas
now.
Mr. Packard. I saw that in your testimony, 100,000. From
how many?
Ms. Moore. We are coming down to 65. 300,000.
Mr. Packard. It was 300, so it appears that the manpower
may exceed the actual physical facility reduction.
Ms. Moore. Yes, sir.

u.s. military academy, west point: physical development center

Mr. Packard. Thank you. Also a couple other questions I had
specific to your testimony. On your Army Military Academy
thing, and I think there is a question or two I had, but I will
probably overlook that for a time. I simply want to emphasize
that in your testimony you mention $12 million of
revitalization for physical development center at West Point.
That really is an $85 million project, is it not?
Ms. Moore. Yes.

chemical demilitarization

Mr. Packard. And then down on that same page, on page 8,
you speak of destroying chemical weapons of war. What are those
chemical weapons?
Ms. Moore. That is the chem demil process. They are
chemical weapons.
Mr. Packard. Would you provide for the record the different
kinds of chemical weapon systems that you--okay, I would just
like to know what they are so that I can be virtually familiar.
[Clerk's note.--The Army did not respond to the chairman's
request.]
Ms. Moore. Yes.
Mr. Packard. Now let us go back to Mr. Olver for his second
round of questions.
Mr. Hefner. New ball game.
Mr. Olver. Thank you very much. I will be much shorter this
time, because I want to agree with the quality of life comments
that have been made here. That is what this committee is about.
I see it as a problem of not just the enlisted and people, but
in something that we get an opportunity to do in making our
recommendations for appointments to the officer core and to go
to the academy. And I must say that within the six years the
number who are applying has gone down very substantially. And
in part it is because of the good economy and the career
development and so forth, but quality of life issues are going
to be very important whether we are going to get high quality
personnel at all levels.
I am not sure that I made a clear enough statement in the
beginning about why I got so interested in this Guard issue. I
would like to say to you, Madam Secretary, that coming from New
England, where as I do, we really don't have much in the way of
active bases anymore. We have basically Guard and Reserve bases
at all of the--in all of the services.
And so I am--if you look around this table, I am the only
one that comes from up that part of the country. And I am--
well, obviously that is not going to be the only thing that I
take an interest in. It is one that I feel that I should be at
least particularly sensitive to the needs of Reserve and Guard
needs, both Reserve and Guard in the services where both of
them apply. The Reserve where there is no Guard----
Ms. Moore. Well, we appreciate that.
Mr. Olver [continuing]. We will be watchful for and
sensitive to the kinds of needs that are there. So I am trying
to understand the process and see that I know it well over a
period of time.
Let me just--one last item here. I have been trying to
figure out, because I had been given an early version, I guess,
of the FYDP. There must be an additional version of the FYDP or
something like that. And the original FYDP had Camp Dawson in
Fiscal Year 2000. Of course, I think that was related--and I
want to get this confirmed whether you would be able to or not.

camp dawson--unbudgeted project

We ended up doing an add-on on Camp Dawson whether it was
Congressional or marking a defense, who knows. It was an add-on
to last year's, the original '98 FYDP, but which if everything
on the '98 FYDP was included, then some additional items were
taken off several other years. And deeper down, every one of
the years, in fact, '99, 00, 01, 02 and 03 were projects taken,
as well as a couple that had not been on that FYDP at all, one
of which was the Camp Dawson. At that point what was put in the
budget for this year was $6.8 million. And I notice in the
original FYDP here we had Camp Dawson down for $13 million in
the year 2000.
Now I see that in the year '99 in the Department of Defense
release--and it does--when it is added, you come up with a 42.9
million project, $42 million plus, that you had given in your
testimony. But with that last project, it was not in the '99
FYDP. It is in for 4.4. There is actually--either project of
the two, what was done in previous fiscal year and what is
done--what you are proposing for '99, does that cover? It is
very close to, at least. It is not quite the same number as the
one that originally appeared in the old FYDP under the year
2000.
Ms. Moore. The 4.4 represents 75 percent of the federal
funding for a smaller facility.
Mr. Olver. Those are two different projects. So the 4.4 in
'99 and the 6.8 that was done in '98, they do not--do they or
do they not go together to substitute for the one which was on
your last year's FYDP before any directions by the Congress?
The two complete to Camp Dawson items.
Ms. Moore. The budget, the 4.4, for the----
Mr. Olver. For the 6.8?
Ms. Moore. Yes.
Mr. Olver. Then indeed the 4.4 would complete that project?
Ms. Moore. That is right.
Mr. Olver. That is all. Thank you.

Advanced appropriation

Mr. Packard. Thank you. Would you explain for me again--I
read carefully your advanced appropriation section of your
testimony. How is this done and how is it scored? I apologize
for my ignorance on it, but I really would like to try to get a
feel.
Ms. Moore. It is our understanding that OSD, after
consultation with OMB, OSD, directed again by a program budget
decision down to the Army that these projects be funded based
on advanced appropriations. Now it does have something to do
with only using funds that can be obligated in a given year but
appropriated for the full project up front.
Mr. Packard. That obligation future Congress knows.
Ms. Moore. Right, it does, yes, sir.
Mr. Packard. But it does not score all of it in one year,
in the year that it is--it is scored on a year-by-year basis?
Ms. Moore. Our incremental funding has done the same thing.
It allows us to include more projects, more priority projects,
bipartisan priority projects in a given year than we would ever
be able to do without the incremental funding. Now OMB has
wanted to fund the entire project in any given year.
Mr. Packard. And score it that way?
Ms. Moore. Yes, and score it that way. Which has made it
very difficult for the services to fund.
Mr. Packard. Has the current system not worked for you, the
incremental funding?
Ms. Moore. Well, we are limited in how many projects we can
get through the budget process to present to you because the
top line doesn't allow a number of them. This is the first time
they have ever allowed it in the budget process, if that makes
sense at all to you.
Mr. Hefner. Have we dealt with this before, Mr. Chairman?
We have dealt with phase funding. That is basically what you
are talking about.
Ms. Moore. Yes, sir, that is what it is.
Mr. Hefner. And I think the question is if this year we
take the Army Hospital in Fort Bragg as an example. We phase
funded that, and say for the sake of argument in this fiscal
year, we are going to have, say, $60 million for that this
phase. Now in the next phase it wouldn't be--only $60 million
that would be carried in this budget that we are talking about,
am I right?
Ms. Moore. That is right.
Mr. Hefner. So you don't get double counting, but something
like he was talking about someone wanted to do the full
funding. If you do that, you are not able to complete the
project, so you have got that money counted there and seethere
is money you have got to borrow or count interest against it some way.
You have got to account for it some way. Phase funding, in my view, is
to assure people or the services or whoever, that once you start a
project with phase funding you have got to commit that you are going to
complete it.
Ms. Moore. That is fair.
Mr. Hefner. So you may have to stretch it out further. I
know in the seventies we had to do this and at Fort Bragg we
had to do it with the medical center there. We do it all the
time with weapon systems.
Ms. Moore. Yes.
Mr. Hefner. We don't pay the whole bill for the B-2 in a
year. I mean, if you did that we would have a lot of pauses
along the way. Is that what we are talking about?
Ms. Moore. I think in a way this committee pioneered the
phase funding, and it has worked very well. It has been done on
the Hill. This is the first time OMB ever bought off on it, but
they are asking for essentially advanced appropriations out
through the life of a contract. We didn't do that with
incremental funding. We just knew we were going to do it every
year.
Mr. Packard. I think this committee will review that very
carefully. The thing we don't want to do is lose control of
those annual funding mechanisms for any savings that might come
about through the process. The committee, I think, would want
to retain control of those. But I want to understand it fully
and I have still yet to do my own research on it and then we
will evaluate whether this is the direction we want to go.

total army force

Did you have any other questions that you had? I wanted to
ask a couple of questions, if I may. We have been briefed here
recently on the Hill on the total Army force. And they were
good briefings, incidentally. And I was somewhat pleased with
what I heard in that it appeared that there was going to be a
greater effort for the active Army to integrate the Guard and
the Reserve into their total planning and total force concept.
Will we see that affecting the way you budget? Are we going to
have a total force budget submitted as we proceed in this
direction? Will we see planning done with an integration of the
Guard or the Reserve better than we have seen in the past where
they become an integral part, sit at the table, determine where
your plan is going to take you----
Ms. Moore. Absolutely.
Mr. Packard [continuing]. And what the budgeting priorities
are going to be?
Ms. Moore. Absolutely.
Mr. Packard. You see that?
Ms. Moore. That happened in this process.
Mr. Packard. It did this year?
Ms. Moore. Yes, sir.
Mr. Packard. For the first time?
Ms. Moore. Yes, sir.
Mr. Packard. Let me ask you, the Reserve or the Guard, are
you satisfied that it is moving into this total force concept,
is it drawing the Guard and the Reserve into the planning
process better than ever before?
Colonel Squier. Yes, sir, I feel very confident in the
process that we are working with the Army now to recognize
every part given the very limited budget. I think we are
pointed in the right direction.
Mr. Packard. I think it goes right back to Mr. Kingston's,
and of course Mr. Olver's interests, and that is in the past
this committee and this Congress have plus upped due to fund
programs in the Guard and the Reserve that were not submitted
in the budget. And the general feeling was that the Guard and
the Reserve were almost, as it were, a stepchild of the active
duty. And the active duty knew that we would plus up and
provide funding, that they didn't have to include it in their
budget. And I think we expressed last year in this committee
that we would like to see that reversed and that their budget
would reflect the priorities of the Guard and the Reserve and
that we would not be required to do nearly as much plussing up
as what has been done in the past. Is that what you anticipate
will be the effect of this total Army force concept?
Ms. Moore. Sir, when we started the integrating, that is
true, and under constrained resources, their packages, they
believe, is fair this year. But it is enough dollars for the
Guard, the Reserve or the entire MilCon budget or anywhere
else, for that matter. So we don't have enough money to satisfy
all the requirements, but we are sharing the lack of money.
Mr. Hefner. Sharing the pain.
Ms. Moore. Yes, and it is painful.
General Helmly. Congressman, if I may, this is actually the
second budget submitted by the Department in an integrated
form. And that is to say that in the mechanical process of
building the Army budget we collapsed the separate program
evaluation group for the National Guard and for the Army
Reserve. And that whole process is integrated across six
program groups. In the case of this committee in particular,
all the installations where we deal with MilCon budget we have
already made a related budgetary department. So that has worked
out well. I would say that as a mark of that Guard and Reserve
proponents saw a real growth despite the fact that the Army's
total obligation authority was down. So I think that that very
fact--there is lots of money top line, but both Reserve and
Guard saw uncertain counts. It shows the integration and
prioritization that occurs regardless of the proponent.
I would add one thing. In testimony a few weeks ago, and I
stated it again this morning, I personally believe that the
Army for its perhaps past sentence has been unfairly branded as
the least integrated of the services. I would only note that in
my own view I believe the Army's faced extraordinary efforts
over the last several years to integrate its Reserve and Guard
at virtually every operational frame, resource, policy making
and management procedure that occurs. And as Ms. Moore said, at
a time when we are all constrained and placing a whole effort
to new challenges of how to reduce, how to respond in terms of
demographic challenges, et cetera. We all share in those
challenges.
I sort of say it this way. For a long time we asked put me
in the game. You happened to put me in the game and the game is
really tough, but we are in the game.
Mr. Packard. Well, I hope you are in the game and I hope
that it is not just rhetoric, that it is not just platitudes to
the Guard and the Reserve when it comes to budgeting. The fact
is, and that is why I am still a little concerned, that it is
not happening quite the way that it sounds. Last year the
request was about the same as this year for Guard and Reserve,
about $50 million, 45 last year. We plus up to about 120 last
year. I would like to see the plus ups come down and the
submissions coming from the Administration going up in that
area to better reflect what the realities are.
That is something I will watch rather closely as long as I
am on the subcommittee, because I really believe that if you
really do intend to integrate into a full Army force or total
Army force, then that has to be reflected in the budgeting. And
if we feel a need to plus up, then either we are wrong or you
are wrong in terms of the funding. And we don't feel that we
ought to be micro-managing your budget. We think that that
ought to come from you, that you are the ones that ought to
determine those priorities and not the political process as it
has been done in the past.
We may not get there. I am not sure we will ever get there
because the politics is going to enter into this probably
forever. But I would like to see that your budget proposal will
come up in those areas as they are integrated into the
planning, into the budgeting, in the prioritizing of projects
and that our plus ups will come down. The need for those plus
ups would come down, I would hope. Comments, sir?
General Whaley. Madam Secretary, Mr. Chairman, if I might,
since my two brothers over here have already given their piece,
two issues. I believe in everything you say. I think we have
made some progress. If you take out the barracks programs,
strategical ability and chem demil, set those aside away from
the act of force, the requirement for revitalization has been
satisfied 12 percent for the Guard,38 percent for the U.S.A.R.
and 13 percent for the active of the requirement. So I think you are
already seeing that adjustment amongst the three components. As Madam
Secretary has already pointed out, if we had more we would spend more.
It is not there. It is a balanced risk program amongst all the other
appropriations.
The other piece is as far as integration. I have an active
Reserve and National Guard MilCon action officer in my office
that fills the FYOP and the budget itself, because I think
before there were agreements made that may not have gotten down
to where the work is actually done. The work is now actually
done by those three component officers that if it starts to get
out of kilter what was agreed to, right back to the components.
At the other extreme, I know the Chief of Staff of the
Army, General Boratz and General Navas, review personally the
level that they got out of the budget. I have heard that from
General Navas's mouth just yesterday. He is pleased personally
with the process.
Mr. Packard. Mr. Hefner.

recruitment

Mr. Hefner. Well, I just want to ask a couple questions
coming to us off of the reservation. Is our recruitment
sufficient now to basically meet our quota?
General Whaley. We are. Fortunately I heard it yesterday,
so it is still fresh in my mind. We are making our reenlistment
and recruitment objectives. It is a delicate balance. Back to a
ten-year how are we doing statistic, we have to put--we
downsized in that ten years, as well. So there is a mix of
messages being sent to American cohorts.
Mr. Packard. If you would yield, please. I understand also
that when reenlistments do not take place or they muster out,
that there are reasons given and those are tabulated. I am not
asking that you give us statistical information on it, but for
members, there are reasons given why they go out. And it would
be very interesting to be able to review those, basically, but
I think the numbers would probably be overwhelming for us to do
so.
General Whaley. Sir, to get to the heart of the matter,
that is your efforts in enhancing quality of life. One of the
reasons that we are being successful in retention is that
families and service members are confident that, one, their
families will be taken care of, and two, the families are
confident that they will be taken care of. And their quality of
life is adequate. So when that service member is not at home,
then the family is being taken care of. They trust you and they
trust us to insure that that quality of life is there. It is
not just housing. It is the family action programs, the Army
family building. It is childcare. It is the hospital.
Across the spectrum if they see improvement as a result of
your efforts in their quality of life and a promise that it
will not only stay the same but indeed will get better in time,
they trust us to do that. I think they are not walking. They
are staying. And there is pockets where folks--where we have
little some stay and some don't by MOS, by skill. We had a
little problem with infrequency, but I think that has been
fixed.
The report yesterday that was asked for of the Army
yesterday was retention is fine and recruiting is up.
Mr. Hefner. One other question. As we continue to draw down
are we going to have a problem with our reserves? The guys that
are coming out that want to stay in the reserve, are we going
to get into a situation where we have to make a choice for the
guy that is already in the reserve? Are we going to have a
problem with that?
General Helmly. Sir, for our part there is--the recruitment
effort is very heavy, and I think the same holds true of the
National Guard for what we call prior service soldiers, because
that young man or woman is being released from the active part
of the Army with a very strong skill level and a great amount
of experience. So we both try to assess very heavily from that.
And I don't believe there is really any competition between the
prior service and non prior service. Non prior service on a
daily basis is getting more difficult, that is recruiting from
the civilian market, because of the many factors you have
discussed here this morning. There is not a competition between
prior service and non prior service.
Numerically there can be an individual basis where you need
a certain type of skill, a mechanic, and the soldier leaving
active duty is a signal repair or something of that nature. And
even there we budget it to provide him retraining to capture
the soldiers prior experience and skill level. That soldier has
already proven their ability to assimilate, live and function
in our Army today, including its values, its missions and
understands its traditions, the chain of command, leadership
and everything. And they provide us an excellent product, prior
service.
Mr. Hefner. I guess that is the answer. What I am basically
interested in is numbers, the ones that are coming out and the
ones that are out. Are we going to be able to accommodate
people that want to stay and people that are coming out and
want to get in. Is that going to be a problem?
General Helmly. I do not believe it will be a problem. Our
industry numbers are sufficient that for the number of soldiers
leaving the active proponent there is room for them. In our
case, this year U.S. Army Recruiting Command recruits centrally
for the Army Reserve and the regular Army. And their
destination target this year is 40,000 for the Army Reserve,
and roughly 60 percent of that will be prior service market as
a whole. And you might be able to find an individual case some
place, but I don't know any instances where an active duty
soldier leaving was denied entry to a National Guard or Army
Reserve unit except on an exceptional kind of basis.
Mr. Hefner. I don't have anything further.

overseas housing authority

Mr. Packard. Thank you. I would like to pursue just, again,
my own edification. The overseas housing authority, outline for
us the Army's legislative proposal for the establishment of the
overseas housing authority as a non-appropriated fund
instrument and provide some details. You might want to provide
for the record more detail, but would you just briefly outline
how it works and in which countries you are anticipating using
it, et cetera.
Ms. Moore. Early on, Korea and Germany.
Mr. Packard. Korea and Germany?
Ms. Moore. General Whaley has been living with that
intimately day by day, so perhaps he can give you the
specifics.
General Whaley. Yes, ma'am. Sir, essentially since we don't
own the quarters and it is in a foreign country, our objective
is the same as it is in the United States, to revitalize our
family housing to standard by 2010. Without massive dollars put
against that, we will not make that. One way to do it is
similar to CVI except the entity that would manage the dollars
that come from a soldier's basic housing allowance would be a
government non-appropriated fund entity, U.S. Government. Those
dollars would be applied against, the revitalization of those
quarters. So it is a steady flow of dollars to put against the
existing sets of quarters. We would not build any more. We
would just revitalize the ones that we have.
There are a couple of issues, one, we need your approval to
do it. Two, the benefits are that it provides a steady stream
of revenue or cash that would allow an entity, a government
entity, a non-appropriated fund to manage, operate and maintain
those quarters with a steady flow of income. Right now the
dollars that we give them is up and down. Did I say something
wrong? No, okay. If I did, please say so.
Mr. Packard. So it is primarily to be used for upgrading
and maintaining?
General Whaley. Yes, sir.
Mr. Packard. Not to build new?
General Whaley. Not to build new.
Ms. Moore. Because of status of forces agreement.
Mr. Packard. Do you anticipate a savings in this process?
General Whaley. No, sir.
Ms. Moore. No, sir.
Mr. Packard. The Congress has never failed to give you what
you have asked for in terms of foreign overseas family housing.
Why do you wish to have this additional authority?
Ms. Moore. Well, sir, we probably should make clear it
hasn't been approved by OMB yet, so it is not really before the
Congress. It is still in the Department of Defense and OMB.
They can't figure how to score it.
Mr. Packard. Okay, well, we will probably hear more about
this later. Is there any--Mr. Olver, do you have additional
questions?
Mr. Olver. No.

low budget submission

Mr. Packard. There are other questions, but I am going to
ask you just to respond to them for the record. I have some
questions I had and then I have a whole list of rather
technical questions that are strictly for the record. Usually
on a project-by-project basis that we certainly don't wish to
get into today.
I think that I can conclude if there are no further
comments or questions by committee members, that we are
concerned about the low budget submission that was expressed in
the last hearing. We would like to express it again that we are
concerned that the President and the Administration has
submitted to us a budget of significant reduction on military
construction overall. The Army, perhaps not quite as great, we
see an overall reduction of about 15 percent from last year's
appropriated levels. To us that is unacceptable. We simply do
not believe we can meet our commitment to our men and women in
the services that we are going to address seriously their
quality of life issues. And we think that a 15 percent cut
where we already have cut ten percent in the last two years in
a row, about a 30 to 35 percent cut over three years. We don't
believe that that reflects a commitment to our men and women
and the quality of life for them in the services.
And so you can fully expect that we will probably be adding
on projects to the submission, the President's submission. Your
submission is about a seven percent cut the way we calculate,
which is certainly about less--more than 50 percent less than
what the overall budget level is in the request of the
President, but it is still of concern to us. I want you to know
that, Ms. Moore. We are concerned about the stated commitment
to protect and provide adequate facilities for our men and
women in the services, particularly in the State of the Union
message, but the fact is that it doesn't reflect in the budget.
And that is something we will have to grapple with as a
committee.
However, we do appreciate very much your testimony, your
explanations, and we will appreciate very much your written
response to the questions that we are submitting for the
record.
Mr. Packard. With that, if you have no further comments----
Ms. Moore. I just have one. I want to thank the
subcommittee for your support over the years to the Army and to
all the services, for that matter. It would be very difficult
without your support. And I also want to say to Mr. Hefner, who
will be retiring, he was a tower of support over the years.
When we had a problem, we could come to Hank and Liz and the
committee and certainly you, sir, have followed in the same
way. We depend on you. We thank you, and we will miss you, sir.
Mr. Hefner. Thank you.
Mr. Packard. That is very true. We will miss Mr. Hefner. We
work very closely, as your own experience reflects, with the
authorizing subcommittee on the National Security Committee.
Mr. Hefner and I have worked closely together, and I will
certainly continue to do that. Your experience there, I think,
will be very helpful in that response. If there is nothing
further from members of the subcommittee, then, this hearing
will be adjourned. And again, thank you.
[Clerk's note.--Questions for the Record submitted by
Chairman Packard.]

Chemical Demilitarization

Question. The Army Military Construction account appears to show a
considerable increase over the amount appropriated for fiscal year
1998. However, after taking into account final action on line item
veto, as well as $125 million for chemical demilitarization that was
financed in the past in another account, the Army's construction is
actually down 7%. What difference does it make whether chemical
demilitarization is funded under the Army or under Defense-wide?
Answer. There will be no change in the execution of the chemical
demilitarization program. However, two changes in current law are
required:
(1) Chemical Demilitarization Legislation must be amended to permit
the program to be funded in the Army Military Construction account
rather than in the Military Construction, Defense account for chemical
demilitarization projects.
(2) Since the prior authorization was provided in the Military
Construction, Defense account for the Umatilla AD and Pine Bluff
Arsenal projects, new appropriation legislation is required to permit
the Army to spend Military Construction, Army (MCA) funds for these
projects.
Question. Has the Army's program been reduced to make room for the
chemical demilitarization programs, either this year or in the future?
Answer. No, the Army's program has not been reduced. Current and
future chemical demilitarization construction program requirements were
fully funded at the time funding responsibility devolved from the
Department of Defense to the Army. In addition, due to future
uncertainties and past history of the program, additional funding was
programmed in the out-years to cover unanticipated requirements. It is
not anticipated that there will be any impact on the future Army
program as a result of the chemical demilitarization program.
Currently, the military construction program is scheduled to be
completed in fiscal year 2003. If cost overruns or program extensions
occur that are not covered within the funding transferred by OSD, the
Army will be responsible to provide the additional funding.
Question. Is it correct that the chemical demilitarization program
will cost over $950 million in military construction over the Future
Years Defense Program?
Answer. A total of $942 million for all chemical demilitarization
construction projects is included in the Future Years Defense Program.

Total Army Force

Question. The Army is briefing members of Congress about the
integration of active, guard, and reserve forces in the total Army
force structure. To what extent is there integration in the planning
and budgeting process, especially or infrastructure requirements?
Answer. In the installations funding arenas, this is a success
story. All components have joined in the process on equal footing or
parity, with each component determining requirements based on the same
methodology; for construction requirements, each component uses a 57-
year revitalization cycle plus buyout of the facilities deficit spread
over 25 years. We believe the concept of parity is fully embodied in
the development process of the Army's installations programs. Each
component is represented on each of the main decision making bodies
involved in the planning and budget process: Program Evaluation Group,
Program Budget Committee, and the Army Resource Board. Nevertheless the
Army has only been able to fund its highest priority programs--
statutory requirements (such as environment and ChenDemil); Barracks;
and Strategic Mobility. Beyond this, all components are funded equally,
for example in revitalization military construction (Active--13%,
Guard--12%, Reserve--38%).
Question. Is there any movement toward developing a single
integrated projects list, coordinating the facilities requirements of
the active duty Army, the Army National Guard, and the Army Reserve?
Answer. No. We do not envision integrating the list of projects
required by the Active, National Guard, and Reserve.

Advance Appropriations

Question. The budget request includes a proposal to provide advance
appropriations of $293,250,000 for fiscal year 2000, $189,500,000 for
fiscal year 2001, and $72,300,000 for fiscal year 2002. What criteria
were applied in determining which projects would receive advance
appropriations?
Answer. OSD directed that selected Army projects be funded based on
advance appropriations. The basis for selecting projects was that all
the funds required for the projects were not needed in the budget year
for construction, and construction completion and delivery of the
projects were not affected by this approach. All of the projects
selected had construction periods of greater than two years. None of
the projects can be split into smaller, complete and usable facilities.
Question. What benefit is expected from advance appropriation?
Answer. This approach permits us to finance more priority projects
that otherwise could not have been funded if large sums of
appropriations were tied up unnecessarily in single, large-scale
projects. Advance appropriations also provides an assurance that the
projects will be fully funded.
Question. What problems would be solved by this approach, and what
problems would be created?
Answer. OMB policy is that projects in the President's Budget will
be fully funded up front. The request for advance appropriations
permits the Army to comply with OMB policy and to pace appropriations
with the expected placement of construction. Advance appropriations
would ensure that all facilities would be complete and usable. We are
not aware of any problems that this would create.
Question. What was wrong with the approach taken in the past--that
is, full authorization followed by incremental annual appropriations?
Answer. OMB policy is that projects in the President's Budget will
be fully funded up front.

Family Housing Privatization Through the Family Housing Improvement
Fund

[``Capital Venture Initiative'' Program]

Question. The Committee has received the notification for the
family housing privatization project at Fort Carson, and it is under
review. We will be going into detail about this project, and about the
ongoing privatization program, when we have our hearing with Under
Secretary Goodman on March 12. I have several questions that I will ask
you to answer from the Army's perspective: Does the Army anticipate
that there will be any financial savings from privatization as compared
with the traditional program?
Answer. No savings are anticipated. The goal of Army privatization
is to leverage appropriated funds and assets to revitalize and replace
existing inadequate family housing that would not otherwise be
revitalized or replaced using traditional MILCON funding. Based on
current and projected funding levels, Army's current revitalization
cycle is 130 years and the revitalization backlog continues to grow. By
leveraging MILCON funds and other available assets (e.g., land and
housing units) by at least three-to-one, the Army can revitalize and
replace existing inadequate housing by the year 2010.
Question. Is privatization becoming a substitute for the
traditional family housing program, rather than the supplemental
program that Congress originally intended?
Answer. We see the privatization authorities as another tool for
providing quality family housing. Our analyses show that we can
leverage our scarce MILCON dollars to revitalize the inventory.
Although we see promise for this approach, we realize not all housing
will be privatized under these authorities and we will not always have
some government family housing.
Question. Is it correct that the cost of the family housing program
is being shifted from this bill to the housing allowances subaccounts
within the military personnel accounts in the National Security
appropriations bill?
Answer. For the housing units the Army retains, we will continue to
require resources in the Army Family Housing appropriations. The Army
will transfer family housing funds incrementally to the military
personnel accounts as privatization projects are executed.
Question. Is this a ``zero-sum'' game, that is, will there be any
savings or is it just a shift of costs?
Answer. There are no savings, but by shifting costs and leveraging
assets, the Army will be able to revitalize its inadequate inventory.
Question. Is there any assumption about the future funding levels
for housing allowances?
Answer. The Army assumes that the funding levels for housing
allowances will increase based on increases in housing costs tied to
the geographic area.
Question. Is it correct that the Army is holding up the execution
of family housing projects for which funds have been appropriated,
pending privatization efforts?
Answer. Yes, we are holding several projects at locations where we
are developing privatization packages. We expect to leverage the MILCON
project funds to obtain an increase in the amount of revitalization at
those specific locations by a ratio of at least 3 to 1.
Question. Which projects are being held up, and what is the total
dollar amount being withheld from obligation?
Answer.
Million
Fiscal year 95:
Fort Carson................................................... $15.8
Fiscal year 98:
Fort Hood..................................................... 18.8
Fiscal year 98:
Fort Meade.................................................... 7.9
Fiscal year 98:
Fort Bragg.................................................... 16.8
Fiscal year 98:
Fort Campbell................................................. 6.0
-----------------------------------------------------------------
________________________________________________
Total..................................................... 65.3

The Army estimates that this $65.3 million may be leveraged to help
revitalize all existing houses and eliminate the deficit at these five
locations.
Question. Are these funds being withheld to meet OMB scoring costs
on mortgage guarantees to developers against base closure, downsizing,
or extended deployments?
Answer. Yes, and also to cover scoring costs on direct loans as
applicable and to leverage enough private-sector capital to revitalize
the existing inventories and buy out the deficits.
Question. The Army is about to conduct a ``lessons learned''
procurement review of the Fort Carson proposal. Of course, that will be
limited to events to date, and cannot offer any ``lessons learned''
from operational experience. The Army is proceeding very aggressively
to execute additional ``whole installation'' type projects, involving
Army contribution of land, facilities, infrastructure, and mortgage
guarantees to developers and financiers. Wouldn't it be prudent to gain
some experience with how well this program works, before making such a
large commitment to turn over so many assets for a fifty year term?
Answer. We believe we are moving forward in a very deliberate
fashion, taking advantage of lessons learned at every step. These
lessons are being applied to the development of projects at other
participating installations but we are not rushing through these. We
should start seeing some results from Fort Carson as well as from other
Services' experiences before our next project.
Question. It took us many, many years to build up these family
housing assets. Tell us about some of the steps the Army is taking to
protect its investments under the Capital Venture Initiative program.
Answer. While it took many years to build up the Army's family
housing assets, inadequate and unpredictable appropriated funding
streams caused these assets to severely deteriorate over the years.
Under the Capital Venture Initiatives program, the Army anticipates
that the existing inventory will be revitalized to meet the
contemporary housing standards within a 10-year period. In addition,
the contractor will be responsible for high quality maintenance and
improvements to sustain the units over the life of the contract.
Contract performance is being insured through a series of escrow
accounts to be used in the event of contractor non-performance.
Question. Provide for the record a list of the twenty-six locations
that are under consideration for Capital Venture Initiative projects
beyond the Fort Carson project, including the number of units in the
current inventory at each location, as well as some indication of the
value of the total government contribution at each location.
Answer. The Army installations participating in the CVI Program are
listed below. In the case of Fort Carson, the government contribution
is $9.6 million as a guarantee to be held in a Treasury account for
scoring purposes. There is no cash contribution to the contractor.
Estimates for the other 26 locations have not yet been determined.
Offset Folios 996 to---- Insert here

Fort Carson, Colorado

[Clerk's note.--On April 22, 1998, the Department of the Army
cancelled the proposed award of the whole-installation capitol venture
initiative project at Fort Carson, Colorado. This contract would have
been the first exercise of the authority sought by the Department of
Defense and enacted in the National Defense Authorization Act for
Fiscal Year 1996 on February 10, 1996 (section 2801 of Public Law 104-
106, 10 USC 2871). The Army's decision was based upon litigation
instituted in the U.S. Court of Federal Claims, and has resulted in a
re-examination of the acquisition process. The Army is now studying
corrective action alternatives,including a return to best and final
offers and re-solicitation.]
Offset Folios 998 to 1002 Insert here

Question. Outline for us how this proposal would work, and in which
counties.
Answer. The Overseas Housing Authority (OHA) would collect rents
from the military occupants equal to their housing allowances. These
rents would be deposited into a single non-appropriated fund (NAF)
account that would be separate and distinct from any non-appropriated
funds that support morale, welfare and recreation. The local
installation would use funds from this account to pay normal operating
and maintenance expenses that would otherwise be paid out of the family
housing operations appropriation. With any excess available funds, the
installation then can invest in major improvements and revitalization
that would otherwise be paid out of the family housing construction
appropriation. No new units will be purchased or constructed above
those already authorized. There are several benefits to a NAF over the
existing system: a stable, predictable income; no-year money; increased
financial flexibility; no OMB scoring; and more simplified procurement
procedures.
The legislation would provide the authority to carry out
demonstration projects for up to five sites overseas (Germany and
Korea). The pilot program will be in Mannheim, Germany. If it is
successful, we plan to transition OHS to other sites.
Question. Isn't this another effort to finance family housing under
the allowances subaccounts in the National Security appropriations
bill?
Answer. This is an effort to get family housing operations into a
more business-like environment. We will only transfer family housing
program funds incrementally to the military personnel account as we
implement this authority if the test legislation is approved and it
proves to be successful.
Question. I am not aware that Congress has ever reduced the amount
that was requested for overseas family housing. Why is this additional
authority necessary?
Answer. The overseas housing program has suffered from insufficient
funding at the same level as Army housing in the United States.
Question. What savings are anticipated from this approach?
Answer. There are no anticipated savings, however the authority
provides a way to revitalize overseas housing at a faster rate than the
130-year revitalization cycle we are now experiencing.
Question. Is the problem in Europe and Korea a housing deficit, or
is it the need to upgrade and maintain government owned or government
leased units?
Answer. The problem is not a deficit issue. It is the need to
revitalize the existing inventory.

SOUTHCOM Headquarters

Question. The Army's original plan was to relocate the headquarters
of the Southern Command from Panama, with no requirement for military
construction. In fact, part of the decision to go to Miami was based on
the plan to lease space. What happened to change this plan, so that
military construction funding is now requested?
Answer. In the aftermath of the Khobar Towers bombing incident,
force protection considerations required a security buffer zone around
the building. The Army is committed to a 10-year firm-term lease on the
headquarters building. However, when coupled with the proposed lease of
a 19-acre security buffer are around the building, it was determined
that approval by the Office of Management and Budget (OMB) and the
Public Works Committees would be required. OMB felt that the combined
leases for the building and land met its criteria and policy
considerations requiring either purchase or a capital lease. Therefore,
the Army included a request for $26,700,000 in its fiscal year 1999
budget for the purchase of both the headquarters and the land.
Question. Is it correct that the Army currently occupies the
SOUTHCOM headquarters building in Miami, under an interim lease?
Answer. Yes, that is correct.
Question. When will the final lease be signed?
Answer. The final lease is expected to be signed February 27, 1998.
(Note: Subsequent to the hearing, the lease was signed on February
27, 1998)
Question. Under the terms of the interim lease, what will happen if
funds are not appropriated to purchase the building?
Answer. If funds are not approved to purchase the building, the
lease continues in force until a final lease is signed. Under the terms
of the proposed final lease, we will be obligated to continue leasing
for a 10-year period.
Question. How is this possibility being addressed in the final
lease?
Answer. The proposed final lease is for a firm-term 10-year period
and does not address purchase. We do not have authority to purchase and
therefore would not be able to enter into negotiations or any written
agreement related to purchasing the building.
Question. Does the draft final lease address the need for a 200
foot security buffer, which requires approximately 19 acres of land?
Answer. No, it does not.

U.S. Military Academy, West Point, New York Cadet Physical Development
Center

Question. The budget request includes $12 million for the cadet
physical development center at West Point. Outline for us the full
scope and cost of this project.
Answer. The total cost of the project is $85 million. It will be
constructed in three phases. Phase I will be in fiscal year 1999 at $12
million. This will allow the construction and conversion of space for a
temporary physical education facility to continue the physical
education program during the construction period. It will also realign
the utility services and enable the remainder of the Center to continue
to function. After realigning the utilities, the central core of the
facility will be demolished to include asbestos and lead paint
mitigation.
Phase 2 is scheduled in fiscal year 2000 at $29 million and it will
allow us to construct various physical education areas in the footprint
of the demolished section.
Phase 3 is scheduled in fiscal year 2002 at $44 million and we will
be able to demolish the central portion of the Center, continue
construction of physical education areas, and expand Crandall pool
along with the diving area.

Base Realignment and Closure: Cost of Base Closure

Question. When this Subcommittee took on the cost of base
realignment and closure, we were assured that these resources would be
returned to the military construction and family housing programs upon
completion of BRAC. How has the Army benefited from this Program?
Answer. The BRAC program has enabled the Army to dispose of excess
infrastructure and consolidate functions resulting in increased
efficiency. The savings generated by these actions will be applied to
Army programs including military construction, housing, research,
operations, and procurement. Units and activities that were relocated
due to realignment or closure moved into modernized facilities at the
gaining installations. Barracks and other facilities accounted for a
substantial portion of the expenditures in the BRAC program.

Line Item Veto

Question. The President's use of the line item veto on last year's
bill took a total of fourteen projects for the active Army, the Guard,
and the Reserve. The House overrode this veto on February 5, and the
Senate will soon attempt override, perhaps today. Can you assure us
that these projects will be executed promptly, if the Senate action is
successful?
Answer. Yes. Based on the Senate override, every effort is being
made to award the projects this fiscal year.

Alabama-Anniston Army Depot Ammunition Containerization Complex
($3,550,000)

Question. The form 1390 for this project indicates that the fiscal
year 2000 program will include a request for $7,000,000 for phase VII
funding for the Anniston ammunition demilitarization facility. Why was
this item not included in the request for advance appropriation?
Answer. The fiscal year 2000 $7 million project is phase VII of the
chemical demilitarization program at Anniston. The chemical
demilitarization project at Anniston has already been fully authorized
in a prior year. Since no appropriation is required for fiscal year
1999, it was not necessary to make an advance appropriations request
this year.
Question. Is it correct that the containerization complex is a
current mission requirement and has nothing to do with the chemical
demilitarization project?
Answer. That is correct. The fiscal year 1999 $3.55 million
ammunition containerization complex is part of the Army strategic
mobility program to improve ammunition storage and shipping capability
during deployment., This project is required for strategic mobility and
has nothing to do with the chemical demilitarization project.

Alabama-Redstone Arsenal: Missile Software Engineering Annex Phase II
($13,600,000)

Question. The existing building was built in 1986, but is now
undersized and inadequate. How will this existing building be
reutilized?
Answer. The missile software engineering annex will be constructed
directly adjacent to the existing software engineering facility. The
existing facility will continue to be utilized to support the growing
requirements for missile, aviation, and other weapon systems
development. The facilities will be connected via enclosed walkway.

Arkansas-Pine Bluff Arsenal: Ammunition Demilitarization Facility Phase
III ($16,500,000)

Question. What is the current status of the first two phases of
work which were funded in fiscal year (FY) 1995 and 1997?
Answer. Construction of the demilitarization facility has not
begun. A construction contract for the full scope of the
demilitarization facility (all phases) was awarded on July 25, 1997.
The funds appropriated for Phase I in FY 1995 and Phase 2 in FY 1997
were obligated against the contract with the exception of $10.9
million. Subsequent to contract award, a protest was filed with the GAO
by one of the unsuccessful offerors, and according to regulations, a
stop work order was immediately issued on August 8, 1997. This
effectively prevented the Contractor from starting work on the
contract. GAO supported the unsuccessful offeror and recommended that
the Army make a new source selection decision for the solicitation.
This new source selection decision is expected shortly. Until the
successful offeror is identified and, if necessary, the contract is
adjusted, the stop work order prevention construction will remain in
effect.

California-Fort Irwin: Heloport Phase II ($7,000,000)

Question. What is the estimated initial operation capability date
for the use of the Barstow-Daggett heliport?
Answer. April 2000.
Question. Upon completion of this project, what will become of the
on-post Bicycle Lake Airfield?
Answer. This airfield will continue to be used to support fixed
wing, air assault aircraft (C-30, C-17), and rotational attack
helicopters. The airfield has no maintenance facilities available.
Question. Currently, the helicopter repair function is being
performed by Lockheed, a contract maintenance service provided at
leased facilities. Upon completion of this project, what annual savings
will be generated by avoiding such costs?
Answer. Lockheed will continue performing maintenance in the new
facilities. The cost to lease the existing facilities is being funded
by the Army, no by the contractor. Negotiations between the Army and
San Bernadino County are not yet finalized on the cost of the long-term
lease for the land at Barstow-Daggett airfield (including charges for
utilities and roads).

Florida-SOUTHCOM Headquarters: SOUTHCOM Headquarters and Land
Acquisition ($26,700,000)

Question. Submit for the record a copy of the current lease
agreement, highlighting provisions regarding annual payments subject to
the availability of funds and regarding lease termination provisions.
Answer. A copy of the current lease is hereby provided as
requested. Provision regarding annual payments subject to the
availability of funds is highlighted. There is no provision for
termination of the lease for the convenience of the Government. Other
circumstances warranting termination of the lease are highlighted. The
interim lease and the final lease are both provided below.
Offset folios 1015 to 1066 insert here

Question. What is the annual payment under the existing ten year
fixed term lease?
Answer. The base lease on the headquarters building is currently
$1,749,393 per year.
Question. Does the current lease agreement include buyout
provisions? If so please highlight the relevant portion for the record.
Answer. The lease does not include a buyout provision.
Question. What is the basis for the estimated $16,700,000 cost for
purchase of the existing leased facility including nine acres of land,
and for the estimated $10,000,000 cost of an additional 19 acres of
land?
Answer. The $26,700,000 estimate was developed in September/October
1997, from data which included the owner's cost of the original two
tracks of land on which the building is sited (10.4 acres), the owner's
capital investment in the building to date, the estimate for the
remaining improvements and the estimate to acquire the additional land
needed for a security buffer. The numbers were first calculated in May
1997, based on then current data, in coordination with the building
owner and GSA Central Office for the purpose of preparing a Lease
Prospectus to submit to Congress. The original estimate was
approximately $25,300,000. This was updated to $26,700,000, based on
general knowledge of the volatile Miami market and development in the
local area of the headquarters.
Question. What are the results of the appraisal that was scheduled
for completion this month?
Answer. The appraisal has not been completed yet.
Question. Wouldn't price escalation argue for continuing the
current ten year fixed term?
Answer. We have included the request for purchase in the Army's
fiscal year 1999 budget based on direction from the Office of
Management and Budget.
Question. Why wasn't a force protection buffer zone included in the
original lease?
Answer. At the time the original commitment to lease was signed,
the Khobar Towers and Oklahoma City incidents had not occurred and a
requirement for a large security buffer was not envisioned. Subsequent
to those two incidents, in November 1996, the Defense Special Weapons
Agency conducted a force protection assessment of the headquarters
building and surrounding area. It determined that various security
enhancements were required, among them the establishment of a 200 foot
security buffer around the building.
Question. Is the additional land available, and are there willing
sellers/lessors?
Answer. Yes, the additional land is available. To the best of our
knowledge, the owners appear to be willing to consider selling.
Question. What would it cost annually to lease this additional land
as a separate action for a ten year term?
Answer. The exact cost would be based on negotiations with the
owners. However, we estimate that the cost would be approximately
$847,100 annually.
Question. When the Army entered into the existing lease, there was
no apparent hesitation regarding dependence on a single contract
provider for the facility space and operations/maintenance/repairs.
Construction was completed and occupancy was taken in September 1997.
What has changed in the last six months to cause this to be a concern.
Answer. We do not see this as a concern.
Question. If no funds are appropriated for purchase of either the
currently leased building or for the nine acres of land that the
building and appurtenances occupy, what impact would this have on the
terms of the existing lease?
Answer. It would have no impact on the current lease.
Question. What is the current status of lease family housing in the
Miami area for SOUTHCOM leadership personnel?
Answer. Eight houses have been leased for SOUTHCOM leadership
personnel.
Question. If the precedent is set for establishing a 200 foot
security buffer for this facility, how big is the Army's backlog of
such force protection requirements?
Answer. This situation is a special case, since the headquarters
building is not a military installation. It is not considered a model
for security requirements for other locations. The Army has no other
current requirements for similar security buffers. However, as new
construction is proposed, the Army will review the concept design for
anti-terrorism/force protection considerations.

Georgia-Fort Benning: Whole Barracks Complex Renewal ($28,600,000)

Question. This project includes demolition of ten buildings
totaling 27,313 square meters and new construction totaling 15,469
square meters. What is the total demolition cost included in this
project?
Answer. The total demolition cost is $1,101,000.
Question. The form 1391 mentions required ``protection of historic
landscape features.'' What does this involve?
Answer. Protecting historic landscape means the contractor will
need to take special precautions not to damage established features
like stone or brick walks, trees, and other plantings.
Question. To what extent is this project made difficult by
considerations within the Historic District of Fort Benning?
Answer. To address the historic considerations, additional
coordination with the State Historic Preservation Officer (SHPO) is
required in addition to the protection of historic landscape features
in the historic district. Coordinating with the SHPO is normal for any
construction project on Fort Benning, given the age of the facilities.
The installation does not foresee any peculiar problems with this
effort.

Hawaii Schofield Barracks: Whole Barracks Complex Renewal ($47,500,000)

Question. Describe the environmental remediation that is required
at this construction site.
Answer. A portion of this project is built on areas previously
occupied by Directorate of Public Works (DPW) facilities. Environmental
remediation, $250,000 is needed for site where underground storage
tanks (UST) were previously removed. It is also needed for clean up of
areas due to pesticide storage and PCB storage contamination of
concrete slabs and surrounding soil.
Question. Only about one-third of the cost of this project is for
barracks, with the balance financing other facilities. Is it correct
that this project will provide barracks for only 192 personnel?
Answer. Yes. This project is the last phase of the Infantry Brigade
Complex. The entire complex will provide for a maximum utilization of
980 soldiers. Most of the barracks were built during early phases to
provide upgraded housing for our soldiers quickly. Nine of the 13
required company operations facilities and all three battalion
headquarters are built in this last phase.
Question. Why were the soldier community building, the company
operations facilities, and the battalion headquarters combined in this
last phase of the Infantry Brigade Complex?
Answer. Most of the barracks were constructed during earlier phases
in the sequence of building facilities to get soldiers out of existing
substandard barracks faster. Two other soldier community buildings were
previously built in the earlier phases to support barracks built during
those phases. The remaining support facilities are required to complete
this Brigade Whole Barracks Complex.

Illinois-Rock Island Arsenal: Electrical Distribution System
($5,300,000)

Question. The Committee encourages the submission of projects such
as this, to address infrastructure requirements at existing facilities.
This project will correct deficiencies in the electrical distribution
system of the building that supplies forty percent of the Army's
mainframe computer processing. How will operations continue while this
work is being accomplished?
Answer. The work will be done in phases. For each phase, after the
new segment of the improved distribution is completed, a power outage
will be scheduled. The switchover to the new system will occur during
the outage. All switchovers will be scheduled for weekends, when less
processing is done.
Question. Upon completion of this project, will this building be
structurally sound and fully adequate to meet its requirements?
Answer. Yes.

Indiana-Crane Army Ammunition Activity: Ammunition Containerization
Complex Phase II ($7,100,000)

Question. Why was this project divided into two phases?
Answer. This project provides a second Ammunition Container Complex
at Crane Army Ammunition Activity. After the programming of the initial
phase, increased outloading requirements were identified due to U.S.
Army Material Command streamlining efforts. A second phase was added to
meet the increased outloading requirement.
Question. Will the first phase provide complete and usable
facilities, and is it on schedule?
Answer. Yes, the first phase will provide a complete, separate and
usable ammunition container complex. The second phase also will provide
a complete, separate and usable ammunition container complex. Each
project is separately sited on Crane Army Ammunition Activity. The
first phase is on schedule, design is complete, and project award is
anticipated for 1 August 1998.

Indiana--Newport Army Ammunition Plant: Ammunition Demilitarization
Support ($2,000,000)

Question. Would this work be required if there were no chemical
demilitarization program?
Answer. No, this project would not be required.
Question. If not, why isn't this project combined with the ``Phase
I'' demil project?
Answer. The support work is physically separate from the
containment area of the demilitarization facility and can be
accomplished more cost effectively as a separate contract to a small
contractor. In addition, parts of the support facilities are required
prior to construction commencing of the main facility; i.e., access
roads and vehicle parking lot.

Indiana-Newport Army Ammunition Plant: Ammunition Demilitarization
Facility Phase I ($27,500,000)

Kansas--Fort Leavenworth: U.S. Disciplinary Barracks, Phase II
($29,000,000)

Question. Phase III construction to complete this project is
programmed for fiscal year 2000. Describe how the second and third
phase of this complex project have been divided.
Answer. Based on full authorization in the fiscal year 1998 budget,
the project will be awarded under a single contract. To minimize any
impact to the contractor due to the incremental funding, the contract
will not define what work is to be performed in each funding increment.
Rather, the contractor is limited by the amount appropriated. The
incremental funding clause of the Defense Federal Acquisition
Regulation Supplement (DFARS) allows the government to identify funds
availability and the contractor's responsibility regarding exceeding
that amount prior to additional funds becoming available.
Question. Will the existing disciplinary barracks continue to
operate until all three phases of this replacement are complete.
Answer. Yes, the existing barracks will be used until the entire
project is complete.
Question. The Army is working to get out of the utility business.
Why does this project include a centralized utility plant with gas-
fired boilers?
Answer. The broiler plant associated with the new disciplinary
barracks provides central heating and air conditioning support to the
complex much the same way as a furnace operates in a house. A boiler
plant is not part of the DOD-wide utilities privatization initiative
since it's main mission is heating and cooling rather than power
generation.
Question. Do the Army and the Department remain confident that a
512 person capacity for maximum security confinement will meet the
requirement?
Answer. Yes, we are confident that 512 person capacity will meet
the requirement for maximum security confinement.
Question. What is the estimated cost of laying away the existing
confinement facility, and is that cost included in this replacement
project?
Answer. The Army plan is to demolish the existing facility pending
historical and environmental concerns. Final costs for the disposition
of the disciplinary barracks are not included in the project and will
not be known until completion of the studies.
Question. Is there any plan to reutilize the existing facility?
Answer. Due to the age and condition of the existing disciplinary
barracks, there is no plan to reuse the facilities. Because the
National Park Service and the Advisory Council of Historic Preservation
have designated the disciplinary barracks a significant historic
structure, an adaptive reuse/demolition study is required by the
National Historic Preservation Act of 1966 and the National
Environmental Policy Act of 1994. These studies/plans are being
developed to ensure all legal procedural requirements are met prior to
the final disposition of the disciplinary barracks.

Kentucky--Blue Grass Army Depot: Ammunition Containerization Complex
($5,300,000)

Question. Would this work be required if there were no chemical
demilitarization program?
Answer. Yes. The ammunition containerization complex project is a
strategic mobility requirement that provides facilities to outload
munitions during a major contingency. It is a separate mission and has
nothing to do with the chemical demilitarization mission.
Question. Is there any relationship between this project and the
``Phase I'' chemical demilitarization project that is programmed for
fiscal year 2000?
Answer. No. This project supports the Army's strategic mobility
program. There is no relationship between this project and the chemical
demilitarization project.

Kentucky--Fort Campbell: Whole Barracks Complex Renewal ($41,000,000)

Question. The form 1391 states that the total estimated design cost
for this project will be $3,400,000. How much was saved on this project
by using a standard or definitive design?
Answer. We expect approximate savings of $450,000, due primarily to
the use of a standard or definitive design.
Question. The form 1391 states that this is the first of three
phases, but the form 1390 shows a barracks project in the fiscal year
2000 program, and no further projects planned for the next three
program years (``new mission only''). When is the third phase
programmed, and at what cost?
Answer. Phase III of the project is currently programmed in fiscal
year 2002 at $36,000,000, in the current Future Year Defense Program
(FYDP). The form 1390 shows only new mission projects in the out years.
Question. Will each of the three phases provide complete and usable
facilities for an entire barracks area, balanced between actual
barracks and other types of facilities--unlike this year's project at
Schofield Barracks?
Answer. Yes. Each phase will provide complete and usable
facilities, and is balanced in the type facilities provided. Each phase
includes the following type facilities as part of the project scope:
barracks, soldier community buildings, battalion headquarters, and
company operations facilities. The brigade headquarters and brigade
dining facility are part of the first phase.

Maryland--Aberdeen Proving Grounds: Ammunition Demilitarization Support
($1,850,000)

Maryland--Aberdeen Proving Ground: Ammunition Demilitarization Facility
Phase I ($26,500,000)

Question. This project differs greatly from the earlier chemical
demilitarization projects, in that it will provide a pilot test of an
alternative to incineration. As such, your estimates are based upon the
best available data and costs are adjusted for risk associated with
design and construction of a first-of a kind plant. Describe for us the
precautions you will take to protect the government from cost overruns
in construction by cost-reimbursable design-build contract, beyond
merely providing ten percent for contingency.
Answer. The U.S. Army Corps of Engineers (USACE) Resident
Engineer's Office will be staffed with qualified personnel and will
carefully monitor and manage the design-build contract, utilizing
``Earned Value Management System'' procedures.
The contract requirements have been written to require the
contractor to complete the design for each construction package prior
to start of construction of the particular construction package. Part
of the requirement is for the contractor to provide an intermediate
design with an associated detailed cost estimate and a final design
package with a detailed cost estimate. The Government will thus have
two opportunities to review, evaluate and agree or disagree with the
cost estimate. Once the Government is satisfied with the final design
and cost estimate, the design package will be authorized for
construction.
As part of ``Earned Value Management'', the USACE resident office
will continuously evaluate the cost and schedule performance of the
contractor and take appropriate management measures to require
compliance and performance.
The contract will be structured as cost plus award fee. The award
fee criteria will include evaluation of cost and schedule performance.
Question. The total cost for this construction project is estimated
to be $184,500,000, plus an additional $62,593,000 in equipment to be
procured from the R&D account. Will the contract include provisions for
termination for the convenience of the government under any
circumstances?
Answer. Yes, the contract will include a clause, termination for
convenience of the government.
Question. Both this project and the project at Newport, Indiana
will utilize neutralization followed by biodegradation. Will the two
plants be substantially identical?
Answer. The two plants, the Aberdeen Chemical Demilitarization
Facility (ABCDF) and the Newport Chemical Demilitarization Facility
(NECDF) are not substantially identical. While both plants will use
neutralization-based primary treatment processes, the treated agent and
reaction chemistry of these primary treatment processes are
substantially different for each facility. The ABCDF will use aqueous
hydrolysis of HD mustard agent and the NECDF will use caustic
hydrolysis of VX nerve agent. Additionally, the secondary post-
treatments at these facilities are completely different technologies:
the ABCDF wil use biodegredation to treat the HD mustard agent
hydrolysate and the NECDF will use Super Critical Water Oxidation to
treat the VX nerve agent hydrolysate.
Question. If so, why not execute one first, to benefit from
``lessons learned'' before proceeding with the second plant?
Answer. Since the treatment processes of the ABCDF and NECDF are
dissimilar (as noted in the previous question), i.e., different agents
and different post-treatment approaches, there is very limited value in
delaying the execution of one of the facilities to benefit from
``lessons learned'' at the other. Additionally, executing these two
projects in series would increase the project schedules, increase the
total cumulative risk due to longer stockpile storage, and not produce
substantive experiences that could be applied to the follow-on
facility.

Maryland--Fort Detrick: Physical Fitness Training Center ($3,550,000)

Question. This project is conjunctively funded with the BRAC
account and the MilCon account, with the MilCon account providing 54
percent of the total construction cost. How was ratio between the two
accounts determined?
Answer. You are correct, the project is conjunctively funded
between MilCon Program Number (PN) 046358 (Physical Fitness Training
Center) Program Amount (PA) $3,550K and Base Realignment and
Construction (BRAC) PN 48153 (Physical Fitness Training Center) PA
$3,050K. The total cost of the project is $6,600K. The split of
construction funds was based on the existing military and dependent
populations at Fort Detrick (1330 people) and the BRAC military and
dependent population from Fort Ritchie (1147 people). The total
population is 2,477 people. This gives a ratio of 1330/2477 or 54% for
MCA and 1147/2477 or 46% for BRAC.
Question. When was the existing gym condemned as a result of
structural storm damage?
Answer. The existing gym was condemned on 27 November 1995.
Question. Why wasn't a new start reprogramming submitted, citing
existing authority to replace damaged or destroyed facilities?
Answer. To replace the existing damaged facility under 10 USC 2854
would have required a higher priority project to be canceled in-order
to fund the replacement gym.

Missouri--Fort Leonard Wood: Engineer Qualification Range ($5,200,000)

Question. Was there an engineer qualification range at Fort Belvoir
that met this requirement before the relocation of the engineer school
to Fort Leonard Wood?
Answer. No. This is a new range based upon new requirements.
Question. Why can't the design of this project be performed
entirely in-house, perhaps at the engineer school itself?
Answer. Project design could not have been given to the Fort
Leonard Wood Director of Public Works or the Engineer School since
neither organization has the excess capability, nor are they set up to
do military construction design work. The U.S. Army Corps of Engineers,
Kansas City District, is performing the design. The District is working
very closely with the Engineer School to make sure the range meets the
school's expectations.

New York--United States Military Academy Cadet Physical Development
Center ($12,000,000)

Question. Please submit for the record one or more forms 1391 that
describe the full scope of work for all phases of this project.
Answer. Three DD Forms 1391 are provided below which describe the
scope of work in each phase.
Offset Folios 1086 to 1097 Insert here

New York--United States Military Academy Cadet Physical Development
Center ($12,000,000)

Question. What will be the final cost per square foot for this
entire project, and how does this compare with other recently
constructed physical development centers?
Answer. The requirement for the physical development center if
42,033 square meters (452,439) square feet) and at $85 million averages
$188 per square foot. If compares favorably in size, scope, and cost
with existing facilities at other military academies and universities.
Question. How does the cost per square foot compare with the
physical fitness center at Fort Detrick, Maryland that is requested
this year?
Answer. The physical fitness center at Fort Detrick is 3,479 square
meters (37,448 square feet) and at $6.6 million averages $178 per
square foot.
Question. How is this project connected with athletic conference
facility requirements?
Answer. There are no program spaces within this project that are
exclusively used for NCAA competition or training. The primary purpose
of all program space within the cadet physical development center is to
promote cadet physical development instruction. Although the primary
use is cadet physical development instruction, shared use for cadet
varsity athletic teams (NCAA sports) is considered in the functional
design layout to meet sanctioned NCAA size requirements.
Question. Submit for the record the economic analysis that has been
prepared in evaluating this project.
Answer. The economic analysis is provided below.
Offset Folios 1099 to 1102 Insert here

North Carolina--Fort Bragg: Whole Barracks Complex Renewal
($47,000.000)

Question. Will this project replace the worst existing barracks at
Fort Bragg?
Answer. Yes. The installation has identified the barracks in this
area as the facilities most in need of repair. This project replaces
hammerhead style barracks constructed between 1951-1953.
Question. If not, why were these barracks selected for replacement?
Answer. Not applicable. These barracks were most in need of repair.
Question. Submit for the record a list of the planned projects to
correct all existing barracks deficiencies at Fort Bragg.
Answer. The fiscal year 1999-2003 Future Year Defense Program
(FYDP) identifies whole barracks complex renewal projects for Fort
Bragg in each year of the FYDP. Those projects are identified below,
starting with fiscal year 2000. The form 1391 identifies the remaining
permanent party barracks requirement at Fort Bragg as 7,781. Of this
amount, 4,894 will be handled by Military Construction, Army (MCA)
funds and the remainder through the operations and maintenance, Army
funded Barracks Upgrade Program. The projects identified below will
take care of 1,960 of the MCA requirement. The remaining MCA
requirement will be programmed in subsequent years to achieve our goal
to buyout barracks to the Department to Defense 1+1 standard by 2008.

------------------------------------------------------------------------
Programmed
FYDP Project amount Scope
------------------------------------------------------------------------
2000......................... Whole Barracks $59,000,000 320
Renewal/82d-1st
Brigade, Phase
II.
2001......................... Whole Barracks 50,000,000 536
Renewal/82d-1st
Brigade, Phase
III & Upgrade
Barracks for
Corps Artillery.
2002......................... Whole Barracks 56,000,000 336
Renewal/82d
Combat Aviation
Brigade, Phase
I.
2003......................... Whole Barracks 58,000,000 768
Renewal/82d
Combat Aviation
Brigade, Phase
II & Upgrade
Barracks for
U.S. Army
Special
Operations
Command Unit.
------------------------------------------------------------------------

North Carolina--Fort Bragg: Deployment Staging Complex ($30,000,000)

Question. To what extent is it necessary to coordinate this project
with the hydrant fuel system project at Pope Air Force Base that is
requested this year?
Answer. While Fort Bragg coordinates with Pope Air Force Base on
projects and joint concerns on a weekly basis, these two particular
projects have no impact on one another, except that they both support
the deployment of military forces from Pope Air Force Base.
Question. Are these facilities being sized to accommodate C-5s, C-
130s, C-141s, and C-17s?
Answer. All of the outload facilities for personnel, equipment, and
cargo at Fort Bragg are planned to accommodate the Army's strategic
mobility requirements using all types of the Air Force aircraft or
commercial aircraft to meet both the strategic mobility airdrop and
airland scenarios.
Question. Describe the dud clearance that is required.
Answer. A portion of the complex will be located on a site that was
formerly used as a training range. This site is required to be cleared
of all unexploded or dud ordinance prior to construction on the site.
Question. What is the total cost of the entire outload complex, by
fiscal year?
Answer. The total cost of the entire complex is estimated at $95.7
million. Phases by fiscal year are:
Phase 1a in fiscal year 1996 for Departure/Arrival Staging Area is
$12.7 million.
Phase 1b in fiscal year 1999 completes Departure/Arrival Staging
Area is $30.0 million.
Phase 2 in fiscal year 2000 for Heavy Drop Rigging Facility is
$30.0 million.
Phase 3 in fiscal year 2001 for Ammunition Holding Area is $13.0
million.
Phase 4 in fiscal year 2002 for Petroleum, Oils and Lubricants
(POL) storage complex is $10.0 million.

Oklahoma--McAlester Army Ammunition Plant: Ammunition Containerization
Complex ($10,800,000)

Question. By how much do the exiting facilities fail to meet the
requirements?
Answer. Current facilities can only outload 58 munitions containers
per day against a requirement of 400 containers per day to support the
Army's strategic mobility program. The existing facilities fail to meet
the strategic mobility outloading requirements by 342 containers per
day.
Question. Will the existing facilities be incorporated into this
new complex?
Answer. No. The existing facilities are dispersed throughout the
installation. However, they will be used to outload 58 munitions
containers per day. The requested project will construct new facilities
to handle the balance of the strategic mobility requirement to outload
342 munitions containers per day.
Question. If so, will they be modernized within the cost of this
project?
Answer. No. The existing facilities will not be modernized within
this project. Existing facilities are being maintained and repaired
through Operations and Maintenance. Army (OMA) projects identified
within the Army's strategic mobility program.
Question. If not, what is the planned utilization of the existing
facilities?
Answer. McAlester will continue to utilize its existing facilities
to outload 58 munitions containers per day.
Question. Briefly describe the ammunition infrastructure
improvement project that is programmed for fiscal year 2000.
Answer. This project will construct approximately 3.5 miles of
railroad track in the container rail yard to accommodate the stockpile
of flat railcars required to be on hand in case of a major contingency.
In addition, this project will include construction of new magazine
roads and maintenance and repair of exiting magazine roads accessing
approximately 66 ammunition magazines.

Oklahoma--Fort Sill: Tactical Equipment Shop Phase I ($13,800,000)

Question. How many phases are there to this project, and at what
cost in which fiscal years?
Answer. This is the first of a 12 phase effort to provide adequate
motor pools for Fort Sill's major tactical unit, III Corps Artillery,
which does not currently have one single motor pool that meets its
requirements. Each complete and usable phase will support either two
battalions, or one battalion. Phase II is in fiscal year 2002 at
$13,000,000; and Phase III is in fiscal year 2003 at $14,600,000.
Subsequently phases are in the Army's Long Range Program. The total
cost of all 12 phases is $165,000,000.
Question. Why were advance appropriations not requested for the
future phases?
Answer. Advanced appropriations were not required because each
phase will provide a complete and usable facility.
Question. Will this first phase provide a complete and usable
facility?
Answer. Yes.

Oklahoma--Fort Sill: Whole Barracks Complex Renewal ($20,500,000)

Question. Will this project renovate existing buildings, or
demolish the existing structures and provide replacement facilities.
Answer. The project builds new barracks and a soldier community
building (SCB) in an area of the installation where World War II wood
facilities were demolished previously. Once construction is complete,
the installation plans to convert the Old Hammerhead style barracks
over to operations facilities. The additional heating, ventilation, and
air conditioning (HVAC) for the SCB, identified on the form 1391, will
be for the existing SCB, constructed as part of a fiscal year 1996
military construction project. The additional HVAC supports the
barracks modules constructed in this project which are supplied with
HVAC from the SCB.
Question. If it is a demolition/replacement project, what is the
estimate for demolition that is funded in this project?
Answer. There is no demolition funded in this project because
demolition has already been accomplished in the project's construction
footprint.
Question. If it is a renovation, what engineering analyses have
been performed to assure that the existing buildings, built in 1954 and
remodeled in 1975, are structurally sound?
Answer. The project does not involved renovation.
Question. What accounts for the increase in cost of $3,500,000 for
this project from last year?
Answer. The original project was included in the second year of the
fiscal year 1998/1999 biennial budget submission. At that time the cost
was not yet based on a parametric estimate. The parametric estimate is
now complete, and the budget request was adjusted accordingly.

Oregon-Umatilla Depot Activity: Ammunition Demilitarization Facility
Phase IV ($50,950,000)

Question. The Umatilla chemical demilitarization project is a site-
adapted standard design. The form 1391 indicates that the total design
cost was $11,410,000, equally divided between contract and in-house
design, compared with the total project cost of $187,000,000. Is that
the design-cost of the entire Umatilla project, or just phase IV?
Answer. The design cost identified is the total design cost of the
entire project, not just Phase IV alone.
Question. If that is the design cost for the entire project, that
comes to 6.1% for design. How does that compare with the design cost
for the chemical demilitarization plants at Johnston Island, Tooele,
and Anniston?
Answer. The total design costs including in-house management costs,
architect and engineer design costs, and U.S. Army Corps of Engineers
District design costs for Johnston Atoll were $5,200,000 or 11%; Tooele
were $13,596,000 or 7.55%; for Anniston $13,620,000 or 8.5%.

Texas--Fort Hood: Railhead Facility, Phase I ($17,500,000)

Question. Why is this project divided into two phases?
Answer. This $32.5 million project was divided into two phases
because the construction duration exceeded 24 months and only $17.5
million could be placed in the first year. Advance appropriations are
also requested in the amount of $15 million in fiscal year 2000 because
this project cannot be divided into separate complete and usable
projects.
Question. Will there be any difficulty continuing to operate and
meet current mobility requirements while this project is being
executed?
Answer. No. Operations on the existing rail loading facility will
not be affected during construction of the new railhead. The new
railhead will be sited away from the existing railhead.
Question. What is the estimated initial operational capability date
for the completed new railhead?
Answer. The estimated operational capability date for the project
is the 3rd quarter, fiscal year 2001.

Texas-Fort Sam Houston: Whole Barracks Complex Renewal ($21,800,000)

Question. The form 1390 shows that a dining facility is included in
the fiscal year 2000 program. Will that facility service soldiers
housed in these barracks?
Answer. No. Soldiers in these barracks will use an existing dining
facility adjacent to the project. The dining facility project indicated
on the form 1390 will service soldiers housed in an area approximately
3 miles away from this barracks project. The dining facility was
originally programmed for fiscal year 2000. Subsequent to the
preparation of the form 1390, the project was placed in fiscal year
2001 based on revised Army priorities.
Question. If so, why isn't it included in this project?
Answer. The dining facility is not associated with this project.
Question. The form 1391 shows that this project will use a standard
or definitive design that was most recently used at Fort Jackson.
However, the total design cost will be $3,600,000, or 16.5% of the
project cost. Why is the cost of a standard design so high?
Answer. The estimated design cost on the form 1391 is in error. The
U.S. Army Corps of Engineers has determined that the current design
cost for this project is estimated at $1,440,000.

Utah--Toole Army Depot: Ammunition Containerization Complex
($3,900,000)

Question. By how much do the existing facilities fail to meet the
requirement?
Answer. Current facilities can only outload 20 munitions containers
per day against an outloading requirement of 310 containers per day to
support the Army's strategic mobility requirement. The existing
facilities fail to meet the strategic mobility requirement by 290
munitions containers per day.
Question. Will the existing facilities be incorporated into this
new complex?
Answer. Yes. This project will expand the two existing outloading
sites to meet the strategic mobility requirement.
Question. If so, will they be modernized within the cost of this
project?
Answer. Yes. The cost to modernize the existing sites is included
in the cost of this project.
Question. If not, what is the planned reutilization of the existing
facilities?
Answer. We plan to use the existing facilities for outloading of
munitions.

Virginia--Charlottesville: National Ground Intelligence Center (NGIC)
Facility (46,200,000)

Question. This project falls under the Military District of
Washington. Does the Army consider this to be a new installation, or is
it a subpost of Fort Belvoir?
Answer. Charlottesville is a satellite installation of Fort
Belvoir.
Question. The remarks section of the DD Form 1390 states that ``the
estimated cost to remedy the deficiencies in all existing permanent and
semi-permanent facilities at this installation is $157,504K based on
the Installation Status Report information on conditions as of October
1996''. To what installation does this information apply . . . Fort
Belvoir or the existing GSA-owned facilities used by NGIC?
Answer. Fort Belvoir.
Question. The 1390 shows an area construction index of 0.00. Does
the Army have a basis for an index for the Charlottesville area?
Answer. Since there is no specific index for Charlottesville, the
average for Virginia would be used--0.90.
Question. Can all of this construction be put in place during
fiscal year 1999?
Answer. No, this project will require 30 months for construction.
Question. If not, why was this project not phased?
Answer. Phasing was not an option because the project is one
building which can not be divided into complete and usable phases.
Additionally, incremental funding, with advance appropriations, was not
feasible because the project was funded with National Foreign
Intelligence Program funds, which are fenced by Executive Order and
under the control of the Director of Central Intelligence.
Question. What is the cost of the access road to the building site?
Answer. There is no cost to the Government. As part of the purchase
agreement, the original landowner agreed to construct, maintain, and
turn over to the Virginia Department of Transportation the access road
to our site. The site is adjacent to Route 29, 10 miles north of
Charlottesville.
Question. Does the Army hold title to the land on which this
project will be built?
Answer. Yes.
Question. Upon completion of this project, will all existing
facilities be turned back to GSA?
Answer. Yes.
Question. What is the nature and extent of GSA's involvement in
this construction project?
Answer. There is no GSA involvement in this project. At one time
this was a GSA project. They were involved in the site selection and
schematic study in 1995 and 1996 but were unsuccessful at getting the
project budgeted.

Virginia-Fort Eustis: Whole Barracks Complex Removal ($36,531,000)

Question. The form 1391 for this project states that ``upon
completion of this project, the remaining permanent party requirement
is 962 personnel at this installation.'' Does this mean that there is a
remaining deficit of 962 barracks spaces, or does it mean that there
will be 962 people in barracks that do not meet standards?
Answer. After completion of this project, there will be
approximately 962 personnel in barracks that do not meet the 1+1
standard, if soldiers are assigned to barracks to achieve maximum
utilization, i.e. one soldier per room.
Question. What is the program for eliminating this deficit/
deficiency?
Answer. There is a barracks project at Fort Eustis programmed in
fiscal year 2001 at $49,000,000, in the current Future Year Defense
Program (FYDP). An additional project will be programmed after fiscal
year 2003 to complete the barracks requirements at Fort Eustis.

Washington-Fort Lewis: Central Vehicle Wash Facility ($4,650,000)

Question. From block 9 on the form 1391, what is a bird bath?
Answer. A bird bath is essentially a basin in which track vehicles
can drive back and forth to loosen excess dirt attached to vehicles.
Question. Describe the size and operations of the 6 bird baths, and
how they will improve the efficiency of the existing wash facilities.
Answer. The bird baths are roughly 12 meters by 42 meters. Track
vehicles drive though bird baths to loosen excess dirt attached to
vehicles; water cannons are utilized to loosen additional debris.
Vehicles then enter the existing wash facility to complete the washing
of vehicles. The designed system essentially provides the
``prewashing'' to knock off the big dirt then vehicles go thru the
existing wash facility for clean up. Efficiencies are gained in the
reduced time that vehicles will utilize the wash facilities and by
eliminating the time that vehicles need to be rewashed due to vehicles
not being cleaned properly.

Washington-Fort Lewis: Consolidated Fuel Facility ($3,950,000)

Question. Why is this project requested in the Army's budget,
rather than that of Defense Logistics Agency (DLA)?
Answer. This project, which supports training, would not have
ranked high enough by DLA to obtain near-term funding because DLA's
priority is toward strategic deployment petroleum facilities.
Nevertheless, it was a priority with the Army, so it was budgeted in
the Army's military construction program.
Question. Isn't DLA the ``consolidated fuels manager'' for the
Department of Defense?
Answer. Yes. However, the Services are not prohibited from
budgeting their own resources for critical petroleum facilities.

Washington-Fort Lewis: Close Combat Tactical Trainer Building
($7,600,000)

Question. This is the only non-chemical demilitarization ``new
mission'' project in the Army's military construction request. It will
provide a $7,600,000 building to house equipment valued at $16,763,000
that will be acquired under the procurement account. Will this complete
the entire program for construction and procurement under this new
mission?
Answer. Yes.

Washington-Fort Lewis: Tank Trail Erosion Mitigation--Yakima
($2,000,000)

Question. This is the fourth of ten phases. Please provide for the
record a table that will show the amounts appropriated to date for tank
trail erosion mitigation, and the annual amounts programmed for the
future, by fiscal year, including a brief description of the scope of
work for each increment.
Answer. Each increment is part of a total program to upgrade
existing dirt roads to crushed rock, with improved drainage.

------------------------------------------------------------------------
Fiscal year Cost ($ million) Scope (kilometers)
------------------------------------------------------------------------
1996-Ph 1....................... 2 56
1997-Ph 2....................... 2 56
1998-Ph 3....................... 2 45
1999-Ph 4....................... 2 53
2000-Ph 5....................... 2 50
2001-Ph 6....................... 2 48
2002-Ph 7....................... 2 53
2003-Ph 8....................... 2 55
2004-Ph 9....................... 2 31
2005-Ph 10...................... 2 35
------------------------------------------------------------------------

Question. At the end of these ten phases, will permanent
improvements have been achieved, or will this become a recurring annual
requirement?
Answer. At the end of the ten phases, permanent improvements will
have been achieved. Therefore, no additional MCA funding is
anticipated. However, a recurring OMA requirement will be needed to
maintain the tank trails.
Question. Could the Army National Guard (ARNG) perform this work,
as part of a road-building exercise during annual training, rather than
going abroad for such training?
Answer. Yes, ARNG engineer units have the capability to perform
this work provided that funds were available for the leasing of
commercial equipment such as tracked excavators and rock crushers. As a
matter of fact, Active duty engineer forces contributed about 25% of
the work to complete the Phase 1 project. A contractor accomplished the
remainder of the work including the supply of crushed rock. The
installation decided to accomplish the subsequent phases totally by
contract for a variety of reasons: (1) the Phase 1 experience showed
that it was impractical to expect the work could be accomplished
entirely by engineer units without some level of contract support, (2)
the difficulty in scheduling engineer units to do the work and being
assured that a higher priority mission would not impact their
availability; and (3) the work must be accomplished during May, June,
and July due to the weather conditions.

Belgium-Belgium Various: Child Development Center ($6,300,000)

Question. Will this project be located in Mons, Belgium?
Answer. This project is in Mons, Belgium. The approved site is
located in the ``hub'' of the community. It will be directly across the
street from the DODDS school, in the housing area and in the same
proximity as the existing child development center.
Question. The existing facilities are at maximum capacity of 132
children and there is an excess demand waiting list of 109 children,
for a total of 241 children. This project will provide a 198-child
capacity. How was this facility sized?
Answer. The facility was sized in accordance with the Army standard
formula for determining child development center capacity. The 198
capacity child development center takes into account programmatic
considerations such as shift workers. Additionally, the capabilities of
the other Army Child Development Services delivery systems of Family
Child Care and Supplemental program Services are considered in the
sizing calculation.
Question. Will it fully meet the requirement?
Answer. Yes. The facilities usage plan provides the blueprint to
fully meet the needs of the Mons community.
Question. Will the facility be used exclusively by U.S. dependents?
Answer. This facility will continue to serve primarily US members
(98%) and meet their mission essential (full day) child care needs. Two
percent of the population that use the child development center are the
international military family members assigned to SHAPE. However, they
primarily use the hourly care program.

Germany-Schweinfurt: Whole Barracks Complex Renewal ($18,000,000)

Question. Do residual value negotiations come down to the level of
individual buildings--will the cost of this project be documented for
any future residual value negotiations that may occur?
Answer. Yes, residual value negotiations/settlements are made
building by building. Yes, the costs of all projects are documented for
future residual value negotiations.
Question. According to page xl of the justification material, the
Army plans to use the DOMFIRA account for real property maintenance on
facilities in Europe, but not for new construction. Submit for the
record a copy of the existing authorization for this account including
the U.S. Code citation.
Answer. P.L. 101-510, Sec 2921.(c) states: ``ESTABLISHMENT OF
SPECIAL ACCOUNT.--(1) This is established on the books of the Treasury
a special account to be known as the ``Department of Defense Overseas
Military Facility Investment Recovery Account.'' Any amounts paid to
the United States, pursuant to any treaty, status of forces agreement,
or other international agreement to which the United States is a party,
for the residual value of the real property or improvement to real
property used by civilian or military personnel of the Department of
Defense shall be deposited into such account. (2) Money deposited in
the Department of Defense Overseas Military Facility Investment
Recovery Account shall be available to the Secretary of Defense for
payment, as provided in appropriation Acts, of costs incurred by the
Department of Defense in connection with facility maintenance and
repair and environmental restoration. . .''
Question. Wouldn't be possible to execute this Conn Barracks/
Schweinfurt project under this DOMFIRA account, and to budget for the
five barracks restoration projects shown on page xl within the RPMA/O&M
account?
Answer. There is no DOMFIRA currently available and we have no
expectation for future cash settlements at this time.
Question. If so, why did you decide one way instead for the other?
Answer. For a barracks restoration to be eligible for DOMFIRA/OMA
funding it must meet certain criteria. The new work element must be
under $500,000 (or $1,000,000 when life/safety issues are involved).
The Army has many barracks where the cost of the new work element
exceeds the DOMFIRA/OMA limitation and their restorations must be
funded using the MILCON appropriation.

Germany-Wuerzburg: Child Development Center ($4,250,000)

Question. How long is the current waiting list for placement in the
existing child development center?
Answer. The present waiting list is approximately 65 to 70
children.
Question. The existing facilities are at maximum capacity of 117
children. This project will provide a 145-child capacity. How was this
facility sized?
Answer. the facility was sized in accordance with the Army standard
formula for determining child development center capacity. The 145
capacity child development center takes into account programmatic
considerations such as shift workers. Additionally, the capabilities of
the other Army Child Development Services delivery systems of Family
Child Care and Supplemental Program Services are considered in the
sizing calculation.
Question. Will it fully meet the requirement?
Answer. The new 145 capacity child development center along with
the other assets and delivery systems in the community will allow the
child care requirements to be full met.
Question. Will this facility be used exclusively by U.S.
dependents?
Answer. This child development center will be used exclusively by
US family members.

Korea: Camp Humphreys Whole Barracks Complex Renewal ($8,500,000)

Korea-Camp Stanley Whole Barracks Complex Renewal ($5,800,000)

Korea-Camp Castle Whole Barracks Complex Renewal ($18,226,000)

Korea: Camp Casey Whole Barracks Complex Renewal ($13,400,000)

Question. The form 1390 states that the cost to remedy the
defiencies in all existing permanent and semi-permanent facilities in
Korea is $1,271,308,000. Will these four barracks projects provide a
dollar-for-dollar reduction in this backlog?
Answer. Yes, these projects will provide a dollar-for-dollar
reduction in the backlog.
Question. Provide for the record a map that will show the location
of these four installations.
Answer. A map showing the location of the four installations is
provided below.
Offset Folios 1123 to-- Insert here

Question. Are each of these four projects in full agreement with
the classified Theater Master Plan dated July 31, 1997?
Answer. Yes, all projects are in agreement with the Theater Master
Plan.

Kwajalein--Kwajalein Atoll: Power Plant, Roi Namur Island ($12,600,000)

Question. Will this project include equipment provided from other
appropriations--generators and so forth?
Answer. The generators are an integral part of this project and are
included as a bid item in the construction contract. As such, funding
for the generators is included in the total military construction cost
estimate for the project. Approximately $1 million of Other
Procurement, Army (OPA) funding will be provided for information/
communication support.
Question. The Ballistic Missile Defense Organization has a project
in the budget request this year that includes physical security
improvements. Is physical security a concern at the Roi Namur power
plant site?
Answer. No, physical security is not a concern at Roi Namur. The
Ballistic Missile Defense Organization's requested security project is
located at Fort Wingate, New Mexico.
Question. How will the KREMs radars be powered while this two-year
phased project is under construction?
Answer. The existing power plant will continue to be used. It is
anticipated that maintenance and repairs will extend current plant
operations until the new power plant comes on line at which time the
existing facilities will be demolished.

Worldwide Various-Minor Construction: Unspecified Minor Construction
($10,000,000)

Question. Provide for the record a ten year history of amounts that
have been requested and appropriated for unspecified minor
construction.
Answer. The information follows:

UNSPECIFIED MINOR MILITARY CONSTRUCTION, ARMY
------------------------------------------------------------------------
Requested ($ Appropriated
Fiscal year millions) ($ millions)
------------------------------------------------------------------------
1989.................................... 16.200 16.200
1990.................................... 11.000 11.000
1991.................................... 7.603 8.603
1992.................................... 11.000 11.000
1993.................................... 3.800 5.500
1994.................................... 12.000 12.000
1995.................................... 12.000 12.000
1996.................................... 9.000 9.000
1997.................................... 5.000 5.000
1998.................................... 6.000 7.400
------------------------------------------------------------------------

Worldwide Various--Planning and Design: Planning and Design
($41,819,000)

Question. Will this funding level meet the known requirements for
the fiscal year 1999 program, including the necessary work on projects
programmed for fiscal years 2000 and 2001?
Answer. Yes.

Worldwide Various--Host Nation Support: ($20,450,000)

Question. Provide for the record a table that will show the
expected distribution of this amount among the three efforts--criteria
package preparation, design surveillance, and construction
surveillance--and that will also show the expected distribution by
country.
Answer. A preliminary distribution of host nation support funds is
as follows:

[In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
Criteria Design Construction Okinawa
preparation surveillance surveillance relocation Total
----------------------------------------------------------------------------------------------------------------
Japan........................................ 6,600 3,700 4,700 ........... 15,000
Korea........................................ 185 260 555 ........... 1,000
Okinawa...................................... ........... ............ ............ 2,000 2,000
Italy........................................ 50 ............ 28 ........... 78
Germany...................................... 92 ............ 2,280 ........... 2,372
------------------------------------------------------------------
Total.................................. 6,927 3,960 7,563 2,000 20,450
----------------------------------------------------------------------------------------------------------------

Barracks

Question. Provide for the record a chart that will show the Army's
barracks construction program at the time the ``one plus one'' standard
was approved, and the current program through completion, broken out by
location in U.S., in Germany, and in Korea.
Answer. The Army's program began prior to the approval of the ``one
plus one'' standard in fiscal year 1996 by the Office of the Secretary
of Defense. The following chart lays out the construction portion of
the Army's Whole Barracks Renewal Program.
Offset Folios 1130 to--Insert here

Family Housing Inventory

Question. Provide for the record a chart that till show the average
number of family housing units supported for fiscal year 1996, 1997,
and 1998, and those expected to be supported in fiscal year 1999,
broken out into government owned (U.S. and foreign), leased (U.S. and
foreign), and privatized under Capital Venture Initiatives.
Answer. The information on Average Inventory follows.

----------------------------------------------------------------------------------------------------------------
FY96 FY97 FY98 FY99
----------------------------------------------------------------------------------------------------------------
Government Owned--U.S....................................... 95,552 93,066 90,406 88,567
Government Owned--Foreign................................... 27,834 29,303 28,764 28,205
Leased--U.S................................................. 4,192 4,200 4,151 4,200
Leased--Foreign............................................. 10,460 10,793 11,168 10,497
Privatized (CVI)............................................ ........... ........... 1,824 1,824
----------------------------------------------------------------------------------------------------------------

Chemical Demilitarization

Question. Submit for the record a chart which will show unobligated
balances available, by fiscal year and by location, and the maximum
amount of construction that could be put in place at these locations
through the end of fiscal year 1999. We would appreciate any comments
you may wish to add.
Answer. The following is a chart showing unobligated balances of
MILCON funds as of March 1998:

----------------------------------------------------------------------------------------------------------------
Unobligated
Fiscal year Location Project balance Obligation
($M) plan
----------------------------------------------------------------------------------------------------------------
1994................................ Anniston, Alabama...... Facility............... 13.0 4QFY98
1995................................ Anniston, Alabama...... Facility............... 4.6 2QFY99
1997................................ Pine Bluff, Arkansas... Facility............... 10.9 2QFY99
1998................................ Anniston, Alabama...... Facility............... 8.9 4QFY99
Umatilla, Oregon....... Facility............... 2.5 2QFY99
Pine Bluff, Arkansas... Depot Support.......... 10.0 3QFY98
----------------------------------------------------------------------------------------------------------------
Note: The unobligated balances provided above are as of February 28, 1998 and include funding held in reserve by
the Corps of Engineers for items such as future contract awards, supervision and administrative costs,
engineering during construction, claim adjustments, management reserve, and contingency.

The maximum amount of construction that could be put in place and
cover long lead construction material, equipment, supplies,
subcontracts and the Army Corps of Engineers contract oversight costs
at these locations through the end of fiscal year 1999 is as follows:

(Dollars in millions)

Site:
Anniston, Alabama................................................. 159.9
Umatilla, Oregon.................................................. 184.4
Pine Bluff, Arkansas.............................................. 65.5

Question. What benefit has been received from the unusual
``limited notice to proceed'' at Anniston? Why are you planning
to use the same procedure at Pine Bluff?
Answer. The Anniston systems contract employed a unique
technique, a ``Limited Notice to Proceed'' (LNTP) provision.
The LNTP allows for pre-construction activities (i.e.,
construction planning, subcontracting, document preparation and
submittal of required plans) but prohibits any construction
activities until the necessary environmental permits are
received.
The LNTP provision in the Anniston systems contract
provided an opportunity for the on-site government team and the
systems contractor (SC) to develop a working relationship and
prepare to manage the contract activities. It also allowed the
SC to fully participate in the environmental permitting process
for the facility and develop a strong community relationship
through well-planned outreach efforts before construction
began. It also allowed the government sufficient time to review
the SC submissions without impacting the contractor's schedule,
especially during the period following contract award. The SC
awarded subcontracts, set up administrative procedures and cost
collection and accounting systems, and prepared contractual
deliverables before the start of the construction phase of the
project.
As numerous benefits were gained during the LNTP period
under the Anniston contract and since award of the Pine Bluff
SC is also expected before receipt of environmental
documentation, the systems contract for the Pine Bluff facility
will also contain a LNTP provision. (The systems contract for
the Pine Bluff facility was awarded in July, 1997 with a LNTP
provision. In November 1997, the General Accounting Office
upheld the protest of an unsuccessful offeror; and a decision
is expected in late-March 1998.) As was the case in Anniston,
the Pine Bluff SC will participate fully in the environmental
permitting and public outreach process through interaction with
local officials and the public before actual construction
begins. While construction efforts will be held in abeyance
until receipt of necessary environmental documentation, which
is expected in 4QFY98, the following activities are planned:
The SC will provide bid bond documentation and insurance
certificates, prepare contract deliverables and obtain
government approval for planned construction work, select and
award subcontracting efforts. Other deliverables include such
items as the planned contract Work Breakdown Structure, Systems
Safety Program Plan, Quality Assurance/Quality Control Program
Plan, Accident Prevention Plan, Emergency Response Plan, and
Facility Security Plan. The SC will submit subcontractor plans
to support the above deliverables, obtain approval of lay down
plans, and submit a construction Network Analysis System which
must be approved before any progress payments can be made.
Question. For the record, describe the ``P.L. 104-208
baseline restrictions'' and how they are being addressed?
Answer. Public Law 104-208 prohibits the obligation of
funds for the construction of baseline incineration facilities
at the Pueblo, CO, and Blue Grass, KY, storage sites until 180
days after the Secretary of Defense submits a report on the
effectiveness of each demonstrated alternative technology to
incineration for destruction of assembled chemical munitions.
Reports are scheduled to be provided to Congress in December
1998 and April 1999. Consistent with Public Law 104-208, the
Program Manager for Assembled Chemical Weapons Assessment
reports directly to the Under Secretary of Defense (Acquisition
and Technology).
Environmental permitting activities and documentation for
incineration-based disposal facilities at Blue Grass and Pueblo
are continuing in the event no viable alternatives are
identified. In this case, a decision by Congress to precede
with the baseline incineration process is required not later
than June 30, 1999, in order to meet Chemical Weapons
Convention disposal deadline of April 29, 2007.
Question: Please provide for the record a chart which will show the
amounts (by location) and timelines for the entire Military
Construction cost of the Chemical Stockpile Disposal Program.
Answer. See attached chart.

[Current year dollars in millions/Fiscal Year]
----------------------------------------------------------------------------------------------------------------
FY97
Project and FY98 FY99 FY00 FY01 FY02 FY03 Total
prior
----------------------------------------------------------------------------------------------------------------
PM-Chem Demil Training Facility... 16.1 ........ ........ ........ ....... ....... ....... 16.1
Tooele, UT Facility............... 198.0 ........ ........ ........ ....... ....... ....... 198.0
Anniston, AL Facility............. 150.0 9.9 ........ 7.0 ....... ....... ....... 166.9
Depot Support..................... 14.3 ........ ........ ........ ....... ....... ....... 14.3
Umatilla, OR Facility............. 76.0 57.43 51.0 9.0 ....... ....... ....... 193.43
Depot Support..................... 11.2 ........ ........ ........ ....... ....... ....... 11.2
Pine Bluff AR Facility............ 49.0 ........ 16.5 72.0 17.0 ....... ....... 154.5
Depot Support..................... ....... 10.0 ........ ........ ....... ....... ....... 10.0
Pueblo, CO* Facility.............. ....... ........ ........ 12.0 52.0 96.5 34.0 194.5
Depot Support..................... 6.3 ........ ........ ........ ....... ....... ....... 6.3
Blue Grass, KY Facility........... ....... ........ ........ 12.0 52.0 92.0 30.8 186.8
Depot Support..................... ....... ........ ........ 11.2 ....... ....... ....... 11.2
Aberdeen, MD Facility............. ....... ........ 26.5 58.5 85.0 14.5 ....... 184.5
Depot Support..................... ....... ........ 1.85 ........ ....... ....... ....... 1.85
Newport, IN Facility.............. ....... ........ 27.5 60.75 87.5 13.8 ....... 189.55
Depot Support..................... ....... ........ 2.0 ........ ....... ....... ....... 2.0
Planning & Design................. 105.3 9.2 ........ ........ ....... ....... ....... 114.5
-----------------------------------------------------------------------------
Total....................... 626.2 86.53 125.35 242.45 293.5 216.8 64.8 1,665.63
----------------------------------------------------------------------------------------------------------------
*Funding requirement may change pending assessment of Assembled Chemical Weapon Assessment Program in consonance
with Public Law 104-208.

Question. What is you assessment of the current safety status of
the unitary chemical munitions stockpile?
Answer. Experience and testing suggests that some stockpile
deterioration has occurred over time, but that it is not dramatic.
Munitions leakage is occurring, but with the possible exception of the
GB-filled M55 rockets, the rate of leakage does not appear to be
increasing at present. It is the Army's assessment that, in general,
the stockpile is stable. The primary sources of risk remain external
events, such as earthquake, lightning, tornado and airplane crash.
Handling of the stockpile items to accomplish any reconfiguration poses
a significant risk to the public, the workforce and the environment.
The Army is confident that there are adequate resources (processes,
equipment, facilities, manpower) in place to ensure the safe and
environmentally sound storage of the chemical stockpile through fiscal
year 2007. We continue to analyze storage risks, leaking munitions,
propellants and explosives used in chemical munitions, and the
condition of the storage structures to further improve our chemical
surety processes and enhance safe storage.
Question. What is the timetable and what are the milestones for
completion of the chemical demilitarization program?
Answer. Following is the Chemical Stockpile Disposal Program
schedule and major milestones.

----------------------------------------------------------------------------------------------------------------
Location Start of construction Start of systemization Operations
----------------------------------------------------------------------------------------------------------------
Johnston Atoll*...................... ....................... ....................... 3QFY90-4QFY00
Tooele, UT........................... ....................... ....................... 4QFY96-4QFY03
Anniston, AL......................... 3QFY97................. 2QFY00................. 2QFY02-1QFY06
Umatilla, OR......................... 3QFY97................. 3QFY00................. 2QFY02-3QFY05
Pine Bluff, AR....................... 4QFY98................. 3QFY01................. 2QFY03-3QFY06
Pueblo, CO**......................... On Hold................ ....................... On Hand
Blue Grass, KY**..................... On Hold................ ....................... .......................
Aberdeen, MD***...................... 1QFY99................. 3QFY02................. 2QFY04-1QFY05
Newport, IN***....................... 1QFY99................. 4QFY02................. 3QFY04-1QFY05
----------------------------------------------------------------------------------------------------------------
Full-scale operations began 2QFY94.
**Schedule on-hold as directed by Public Law 104-208 pending technology evaluation by Program Manager for
Assembled Chemical Weapon Assessment.
***Schedule represents employment of neutrlization-based technology. Start of construction milestones represents
the ``start of design/build'' effort.

Question. Provide for the record a chart showing, by
location, the facilities and operational costs for the chemical
demilitarization program.
Answer. The requested information is shown in the table
below. Facilities costs include the cost of designing,
construction and equipping each of the chemical
demilitarization and support facilities. Operational costs
include all costs to test and operate each facility as well as
training and all other support costs related to the operation
of each facility. Site-specific chemical stockpile emergency
preparedness (CSEP) costs are also included. Non site-specific
programmatic costs are not included.

[Current year dollars in millions]
------------------------------------------------------------------------
Location Facilities Operations Total
------------------------------------------------------------------------
Johnston Atoll................... ........... 1,435 1,435
Tooele, UT....................... 447 1,232 1,679
Anniston, AL..................... 408 990 1,398
Umatilla, OR..................... 448 902 1,350
Pine Bluff, AR................... 347 844 1,191
Pueblo, CO....................... 451 901 1,352
Blue Grass, KY*.................. 433 814 1,247
Aberdeen, MD*.................... 185 517 702
Newport, IN...................... 192 504 696
CAMDS, UT........................ ........... 465 465
PMCD Training Facility, MD....... 35 102 137
------------------------------------------------------------------------
*Costs for these facilities may change as a result of evaluations/
assessment from the Program Manager for Assembled Chemical Weapon
Assessment (as directed Public Law 104-208).

Question. What is the timetable for the funding of all
construction phases, for the obligation of funds, and for the
construction and operation of the chemical demilitarization
facilities at locations for which military construction funds
are requested--Pine Bluff, Arkansas; Newport, Indiana;
Aberdeen, Maryland; and Umatilla, Oregon?
Answer. The construction projects for Pine Bluff, Newport,
Aberdeen, and Umatilla are incrementally funded based on
funding needed to support the construction effort at each site
during that particular year and represents the maximum amount
of construction that could be put in place based on the
specific site award date. The following table provides the
obligation plan for those funds through the end of
construction.

OBLIGATION PLAN (THRU END OF CONSTRUCTION)
[Current year dollars in millions]
----------------------------------------------------------------------------------------------------------------
Location FY97 FY98 FY99 FY00 FY01 FY02 Total
----------------------------------------------------------------------------------------------------------------
Pine Bluff....................................... 38.1 1.3 26.1 72.0 17.0 0.0 154.5
Newport.......................................... 0.0 0.0 27.5 60.8 87.5 13.8 189.6
Aberdeen......................................... 0.0 0.0 26.5 58.5 85.0 14.5 184.5
Umatilla......................................... 76.0 57.4 51.0 9.0 0.0 0.0 193.4
----------------------------------------------------------------------------------------------------------------
*Data does not include any costs associated with the depot support projects.

The schedule for construction, systemization, and
operational phases of the projects is provided below.

----------------------------------------------------------------------------------------------------------------
Project Construction Systemization Operations
----------------------------------------------------------------------------------------------------------------
Pine Bluff...................................................... 4QFY98 3QFY01 2QFY03-3QFY06
Newport*........................................................ 2QFY99 4QFYY02 3QFY04-1QFY05
Aberdeen*....................................................... 1QFY99 3QFY02 2QFY04-1QFY05
Umatilla........................................................ 3QFY97 3QFY00 2QFY02-3QFY05
----------------------------------------------------------------------------------------------------------------
*Schedule represents employment of neutralization-based technology. Start of construction milestone represents
the ``start of design/build'' effort.

Question. What is the total design life of each of these
demilitarization facilities?
Answer. Plant design is not driven by ``life'' criteria but rather
by environmental and safety requirements to achieve maximum protection
as required by law. This equates to a design life of five years of
continuous operation. With prudent maintenance and equipment
replacement, the facility's life can be extended significantly.
However, the cost of extending the life of a facility is dependent upon
local ambient weather conditions; for example, the warm salt air
environment at the Johnston Atoll Chemical Agent Disposal System
greatly accelerates corrosion of exposed equipment and structures.
Question. Are the sums requested equal to the amount of
construction that can be put into place during fiscal year 1999?
Answer. Yes, the funds requested in fiscal year 1999 equal the
amount of construction that can be placed during the twelve-month
period.
Question. What are the current annual costs of maintaining the
stockpile?
Answer. The current estimate for maintaining (storing) the chemical
stockpile at all storage sites, including ancillary costs of treaty
compliance and emergency preparedness is approximately $120 million.
Question. What is the total ``sunk cost'' for the chemical
demilitarization program through the end of fiscal year 1998?
Answer. The Army projects that approximately $4.6 billion will be
obligated for the Chemical Demilitarization Program by the end of
fiscal year 1998. This figure includes $4.3 billion for the Chemical
Stockpile Disposal Program and $0.3 billion for the Non-Stockpile
Chemical Materiel Program.
Question. No funds are requested for chemical demilitarization
planning and design costs, which were funded in the past under the
``Defense-wide'' account. What is the current unobligated balance of
previously appropriated funds, by fiscal year, and what is the plan for
obligating these funds?
Answer. The current (March 1998) unobligated balance of previously
appropriated Military Construction Defense wide funds for chemical
demilitarization planning and design costs include $5.9 million (fiscal
year 1996), $4.12 million (fiscal year 1997), and $9.2 million (fiscal
year 1998) for total of $19.22 million. The obligation plan for these
funds is as follow:
$3.2 million will be obligated during the remainder of fiscal year
1998 to support the U.S. Army Corps of Engineers' (COE's) Huntsville
Center in-house activities and to support additional design efforts for
known changes for Anniston, Umatilla, and Pine Bluff.
$7.0 million is planed to be obligated during fiscal year 1999 to
support the COE's Huntsville Center in-house activities and to initiate
design efforts to update the Pueblo and Blue Grass designs.
$9.0 million will be obligated in fiscal year 2000 to support the
COE's Huntsville Center in-house activities and to finalize design
efforts for the Pueblo and Blue Grass designs.

Advance Appropriations

Question. At this point in the record, please submit charts
displaying the projects and the amounts for which advance
appropriations are requested--tables 1 and 2, which appear in the
justification material on pages xxviii and xxix.
Answer. The tables are provided below.
Offset Folios 1143 to 1144 Insert here

Question. Is it correct that the only precedent for enacted
advance appropriations in the Military Construction
appropriations bill was for the construction of Fort Drum?
Answer. That is correct. The ``Military Construction
Appropriations Act of 1987'' included advance appropriations
for Fort Drum for fiscal years 1988 and 1989. This action was
accompanied by full authorization in the ``National Defense
Authorization Act for FY 87.''
Question. Provide for the record a table displaying the
advance appropriations that were provided for Fort Drum.
Answer. Fort Drum advance appropriations included:
FY 88, $221,000,000;
FY 89, $214,000,000.
Question. What benefits were realized from the Fort Drum
advance appropriations, compared with the well-established
method of full authorization and incremental annual
appropriations?
Answer. Advance appropriation allowed the pace of
construction to continue without having to slow the contractor
to keep pace with the funding stream. The momentum of
construction was such that immediate use of the appropriation
at the start of the fiscal year was required to make payment to
the contractor. Under the established Congressional method of
full authorization and incremental annual appropriations,
contractor work would have been stopped or slowed if there had
been a Continuing Resolution or delay in approving the fiscal
year 1988 budget.
Question. Did the Fort Drum advance appropriations avoid
change orders, overruns, claims, and so forth?
Answer. No, advance appropriations did not avoid change
orders, overruns, and claims.
Question. What benefits are expected from the requested
advance appropriations for fiscal years 2000, 2001, and 2002,
and what is the basis for this expectation?
Answer. Advance appropriations permit the obligation of
funds at the start of each fiscal year and do not slow
contractor execution. This becomes critical if budget approval
is delayed or operates under a Continuing Resolution. If annual
appropriations bills are enacted prior to the fiscal year, the
benefits of advance appropriations are not expected to be
greater than the method of full authorization and incremental
annual appropriations. However, under OMB policy, the Army must
request full project funding to build complete and usable
facilities.
Question. Would advance appropriations have any impact on
the way the Army builds its POM of FYDP?
Answer. Advance appropriations would allow the Army to
develop a program that could include more projects than would
be possible if we had to include a large appropriation request
against a single project.

Korean Currency Fluctuation

Question. Provide for the record a monthly listing of
currency exchange rates between the won and the dollar for each
of the past twelve months.
Answer. The won to the dollar exchange rates for the past
twelve months are as follows:
1997:
MAR--882.62
APR--895.57
MAY--894.67
JUN--891.40
JUL--893.09
AUG--898.71
SEP--912.50
OCT--929.42
NOV--1035.22
DEC--1494.04
1998:
JAN--1707.30
FEB--1628.42
Question. What impact has this had on the Combined Defense
Improvement Program and on the Republic of Korea Funded
Construction Program?
Answer. For the Combined Defense Improvement Program
(CDIP), the currency fluctuation does not impact since all CDIP
construction contracts are awarded and administered by the
Republic of Korea (ROK) government in their local currency, the
Won. The ROK Funded Construction (ROKFC) program provides
dollars to the U.S. Forces Korea for the design and
construction of projects. The economic crisis in Korea has
included hyperinflation in most construction materials and fuel
related costs. Thus, for the ROK Funded Construction (ROKFC)
program, the currency fluctuation savings gained from
devaluation will be negated by increased inflation.
Question. What impact has this had, in turn, on the
requirement for Host Nation Support planning and design?
Answer. There is no impact on the requirement for Host
Nation Support Planning and Design since it is expected that
future Burdensharing levels for Host Nation funded construction
will be no less than the levels we have received in the past.

Prepositioning in Europe

Question. What is the current status of the Army's review
of requirements for prepositioning in Europe?
Answer. As part of the recurring Total Army Analysis (TTA)
process, force structure and equipment needs, derived from all
the unified Commander-in-Chief (CINC) requirements, are
reviewed and validated. Army prepositioned equipment
requirements, specific to Europe, will be included in the
upcoming TAA-07 process. Additionally, U.S. European Command
(EUCOM) is also reviewing their long-term prepositioned
equipment needs to support NATO commitments and contingency
operations. The results of this review, scheduled for release
later this year, will be incorporated in future Army
requirement analysis.
Question. Is it possible that some Prepositioned Organization
Materiel Configured in Unit Sets (POMCUS) sites will be closed or
relocated?
Answer. The Army does not have an approved plan to close or
relocate any of the current prepositioned equipment sites in Europe.
U.S. European Command (EUCOM) and Army Material Command (AMC) have
conducted various studies to analyze operational efficiencies and cost
effectiveness among the various support installations. The most recent
review should be completed later this year. The recommendations of this
analysis will be balanced against strategic requirements and NATO
commitments. Any change in these installations will be thoroughly
reviewed and coordinated with all organizations and countries involved.
Question. What is the current plan for further development at Camp
Darby?
Answer. NATO has approved the funding ($40 million) for a
capability package known as Theater Reserve Unit/Army Readiness
Package--South (TRU/ARPS) at Camp Darby, Livorno, Italy. Project
includes construction of seven new controlled humidity warehouses
(CHW); building a new maintenance facility; POL pump station; hazardous
waste storage facility; battery activation facility; armament
maintenance and storage facility; site communications; vehicle wash
racks; vehicle grease racks; and upgrade of 10 existing warehouses to
CHW. Project is in the 35% design phase which is planned to be complete
3rd Quarter of Fiscal Year (FY) 1998; the entire project was to be
completed FY 2002.
International Military Headquarters
Question. Is the Army devoting any resources over the Future Years
Defense Plan for planning and/or design efforts for NATO headquarters
in Europe, or for the expansion of NATO headquarters in connection with
NATO enlargement?
Answer. The Army is not resourcing any planning and design efforts
for NATO headquarters in Europe, or for the expansion of NATO
headquarters in connection with NATO enlargement over the Future Year
Defense Plan.
Privatization of Utility Systems
Question. Describe in some detail the Army's ongoing efforts to
privatize utility systems.
Answer. The Army goal, as revised in accordance with the recent
Defense Reform Initiative, is to privatize 100% of the natural gas
distribution, electric distribution, water, and wastewater systems by 1
January 2000, except those needed for unique security reasons or where
privatization is uneconomical. Through Fiscal Year 1997, the Army had
addressed 45 of its 265 systems either by (a) establishing that system
was already privately owned or privatization was uneconomical or (b)
completing conveyance of the system to a regional or municipal utility
or qualified investor-owned company. Economic analyses leading to a
privatization decision are under way or will be initiated in FY 98 for
all remaining systems to assist in meeting the goal.
Question. Are you seeking any legislative language to change
existing authority?
Answer. No, the Army is not seeking any legislative language to
change existing authority.
Question. Can you document any savings or avoided costs, in net
present value or are costs merely being amortized through future rate
payments?
Answer. Capital investment costs for privatization of utility
systems are being amortized through future rate payments.
Family Housing--New Construction
Question. What meaning does the form 1391 have for new construction
of family housing units, when the Army is vigorously pursuing whole-
installation privatization--how can you assure that projects will be
delivered at full scope and within the appropriate amounts?
Answer. The forms 1391 were developed to correct existing
conditions as stated on each form, with costs based on the Tri-Service
Cost Model for each specific project site. During development of each
such project, no consideration was given to the costs or other
requirements associated with privatization of the whole installation.
However, because of the potential to leverage these funds more than
three-fold, if analysis indicates that privatization should be pursued,
then these construction funds would be transferred to the Family
Housing Improvement Fund for project scoring. If, on the other hand,
analysis indicates that privatization is not feasible, then these
construction projects will be promptly advertised and awarded, using
standard turnkey procurement methods.
Question. How are you planning to incorporate these projects, as
well as other previously appropriated projects that have not been
executed, into RFPs for whole-installation privatization?
Answer. By leveraging the Military Construction funds we will be
able to accomplish not only the original scope of work, but also
revitalize all of the installation's existing inventory to meet
contemporary standards.
Question. Why are projects requested at locations that are early
candidates for privatization--why not let developers take on the burden
of demolition and replacement construction right away, as they will for
the next fifty years?
Answer. If the analysis shows that privatization is feasible at a
location that has a military construction project programmed, the funds
will be leveraged to accomplish a Capital Venture Initiative project.
However, if privatization does not prove to be the best approach, the
original project can still be executed.
Question. What is the basis for the cost estimate for each of these
projects, military specifications under turnkey contracting, or some
other method?
Answer. The turnkey method of procurement will be used to award
these projects. The cost estimate for each of these projects was
developed using the Tri-Service Cost Model and site specific
infrastructure costs estimates. This is the same method that has been
used to develop family housing new construction projects in prior
fiscal years.
Question. How is it possible to do a cost estimate for new
construction projects at locations that will be Capital Venture
Initiative locations . . . how is it possible to say what new units
will cost?
Answer. Each project was developed to correct existing conditions
as stated on each form, with costs based on the Tri-Service Cost Model
for each specific project site. During development of each such
project, no consideration was given to the costs or other requirements
associated with privatization of the whole installation. This is the
same procedure that has been used to estimate new construction projects
for prior fiscal years. If analysis indicates that privatization should
be pursued, then these construction funds would be transferred to the
Family Housing Improvement Fund for project scoring. If, on the other
hand, analysis indicates that privatization is not feasible, then these
construction projects will be promptly advertised and awarded, using
standard turnkey procurement methods.
Question. How will existing section 801 units be rolled into whole-
installation privatization agreements?
Answer. Section 801 housing is already privatized and will not be
included in the Capital Venture Initiatives agreements.

Family Housing--Post Acquisition Construction

Question. Provide for the record a ten-year history of amounts that
have been requested and appropriated for post-acquisition construction
of family housing.
Answer.

------------------------------------------------------------------------
Requested ($ Appropriated
millions) ($ million)
------------------------------------------------------------------------
Fiscal year:
1998................................ 44.8 86.1
1997................................ 33.75 105.35
1996................................ 14.2 48.856
1995................................ 49.76 49.76
1994................................ 67.53 77.0
1993................................ 143.66 92.6
1992................................ 74.98 74.98
1991................................ 44.1 40.1
1990................................ 36.329 40.0
1989................................ 72.3 72.3
------------------------------------------------------------------------

West Virginia--Camp Dawson (Kingwood): Readiness Center ($4,465,000)

Question. Provide for the record a detailed description of the
differences, if any, between this project and the project that was
authorized and appropriated last year titled ``Armed Forces Reserve
Center'' at a cost of $6,828,000?
Answer. The presently planned project, an Armed Forces Reserve
Center (AFRC), was authorized and appropriated in fiscal year 1998, at
$6.828 million. An AFRC requires two or more reserve components to
utilize the facility. In this instance the AFRC will be housing
elements of the West Virginia Army National Guard and the U.S. Army
Reserve. The $6.828 million represents 100% Federal funding of a larger
facility.
Because the Army Reserve had reservations to this ARFC at the time
the fiscal year 1999 President's budget was prepared, the Army National
Guard proceeded ahead with a request for only a Readiness Center. This
project planned at $4.465 million would have housed only West Virginia
Army National Guard elements. The $4.465 million represents 75% Federal
funding of a smaller facility. The Army Reserve has now agreed to share
this facility and it will be an ARFC.
Question. Is it correct that this project is not required if H.R.
2531 (the line item veto disapproval bill) becomes law?
Answer. Yes. This project was included in the fiscal year 1999
budget because of the line item veto action. Now that Congress has
acted to restore the line item veto projects, the funds for this
project are no longer required in fiscal year 1999.

Utah--Salt Lake City: USAR Center/Organizational Maintenance Shop/
Direct-Support-General Support/Equipment Concentration Site
(13,200,000)

Question. Is it correct that this project is not required if H.R.
2631 (the line item veto disapproval bill) becomes law?
Answer. No. Assuming that the state of Utah provides only $500,000
as they have currently offered as assistance to the Army Reserve for
this project, the Army Reserve needs $4,590,000 from the FY 99
appropriation for the Ft. Douglas project. That amount is a more
accurate estimate of costs of the project, land acquisition, site
preparation, relocation, interim lease, and environmental costs.
Without an additional appropriation, all these costs will be taken from
the $12,714,000 FY 98 project appropriation, resulting in a reduced
project scope or reprogramming requirement.
Question. Provide for the record a detailed description of the
differences, if any, between this project and the project that was
authorized and appropriated last year titled ``Camp Williams: USARC/
OMS'' at a cost of $12,714,000?
Answer. The projects are the same. However, the $12,714,000 was
based on the assumption that the state of Utah would provide land, site
preparation, relocation costs, interim lease costs, and environmental
cleanup costs of the land to be conveyed to the state of Utah. The
State has offered only $500,000 to the Army Reserve to pay for those
costs.
Question. Bring us up to date with plans to vacate the current
site, relocate to interim leased facilities, and construct permanent
facilities at Fort Douglas, Camp Williams, or elsewhere.
Answer. The Army Reserve will turn over the 10 acres on Ft. Douglas
to the state of Utah no later than 30 September 1998. Environmental
remediation of the 10-acre site is underway and should be completed
this summer. The units and activities currently occupying the site will
relocate to interim leased facilities no later than 30 September 1998.
Suitable facilities have been located for leasing, and actions are in
progress to secure the lease. Design has been initiated for the
permanent facility construction, and the project is 10% designed. A
reasonable contract award date is September or October 1998 with
construction to begin soon thereafter.

[Clerk's note.--End of questions for the record submitted
by Chairman Packard:]
[Clerk's note.--Subseqent to final Congressional action
overriding line-item veto of fiscal year 1998 projects, the
Army National Guard and the Army Reserve revised their Future
Years Defense Program (FYDP). The following information
supercedes that which appears in Part 1 of this year's hearings
volume, at pages 552, 553, and 606 through 609.]
Offset Folios 1160 to 1166 Insert here

[Clerk's note.--Question for the record submitted by Mr.
Hobson.]

Active and Reserve Components Funding

Question. My feeling is that the army, historically, has
not done as good a job with its Guard and Reserve units as some
other Services. I think that's a real problem in readiness.
When the Army has to go, the Army Guard and Reserve have to go
as well. However, they get a lot of criticism because they're
not ready. The Army has to look at the changes in the world
today and, like it or not, treat the Guard and Reserve as a
true part of the total force. In the future, there is going to
be more, not less, dependence on the Guard and Reserve. I think
the Army is a little slow in recognizing that. What in the
budget would make me think otherwise?
Answer. The involvement of the Reserve Components in
determining the allocation of installations resources as part
of the Total Army Force is a success story. We believe the
concept of parity is fully embodied in the development process
of the Army's installations programs. Each component is
represented on each of the main decision making bodies involved
in the planning and budget process. Nevertheless, the Army has
only been able to fund its highest priority programs--statutory
requirements (such as environmental and Chem Demil); Barracks;
and Strategic Mobility. Beyond this, all components are funded
equally, for example, in revitalization military construction
we have funded the Active at 13%, the Guard at 12%, and the
Reserve at 38% of requirements. Included in the budget request
is $24.6 million for Guard readiness centers (armories),
training sites, and ranges. The budget request also includes
$44.5 million for Army Reserve centers and maintenance
facilities.

[Clerk's note.--End of questions for the record submitted
by Mr. Hobson.]

Tuesday, March 3, 1998.

DEPARTMENT OF THE NAVY

WITNESS

HON. ROBERT B. PIRIE, JR., ASSISTANT SECRETARY OF THE NAVY,
INSTALLATIONS AND THE ENVIRONMENT

Statement of the Chairman

Mr. Packard. Ladies and gentlemen, we want to welcome some
of our young people from Spotsylvania, I believe it is, down
south a few miles in Virginia. This is a hearing with the Navy
and the Marine Corps on military construction issues. It is a
very significant part of our committee responsibilities to
service the needs of the Navy and the Marine Corps.
With us this afternoon is Secretary Robert Pirie, a man of
great experience. If any of you have had the time, particularly
on the committee, to read his resume, you will find that he has
had significant experience, having spent a career in the Navy,
and then having been involved in many, many other remarkable
assignments which I will not deliberate on, Mr. Secretary. But
we are delighted to have you here.
We are very much looking forward to your testimony. I have
read it through, and it is very thorough and very complete and
very well done and well organized. As you might suspect, I am
concerned and disappointed, of course, in the lower budget
levels that we are seeing from all the Departments in the
Services, the Navy and the Marine Corps not excepted.
We have made a strong effort on this subcommittee to
increase our effort to catch up on quality of life facilities
for our men and women in the services--housing and child care
centers and hospitals and dental centers, and just the entire
facility issue that our men and women live with.
And it is not just a matter of convenience for our service
men and women, but it is a retention issue. It even reaches a
point of readiness in many instances. If we do not have
adequate facilities, adequate runways, adequate barracks,
adequate activities and facilities for our men and women to be
not only happy but successful in the services, then that
affects readiness in many instances.
As we decrease the budget and have decreased the budget
over the last few years, it is very possible we may be reaching
the point where we might be affecting readiness, not just the
quality of life issues for the service men and women.
By comparison, the budget request last year included 11
barracks projects and we enacted 16 barracks projects. This
year we have significantly less being requested. Only one for
sailors overseas, four for the Marine Corps, and five barracks
for the Navy, compared to 16 last year that we appropriated
for.
I am aware also that your budget was prepared and submitted
previously to any override efforts in terms of the 38 projects,
but even with that calculation we sense that it is still a very
significant reduction in this year's budget.
Yours is not as bad as some of the other departments,
frankly. But it is still a significant reduction from last
year's appropriated levels, and that we hope you will address
as part of your testimony.
It is a pleasure to have you in this subcommittee hearing--
our next hearing will be tomorrow at 9:30 in the morning. We
would like to start if we can on time. That will be with the
Air Force and the Air National Guard and the Air Force Reserve.
It should be an interesting hearing, and we hope the members of
the subcommittee will be here.
With that, Mr. Pirie, I am going to conclude my comments
and ask if Mr. Hefner would like to make any, and then we would
like to hear from you.
Mr. Hefner. Thank you, Mr. Chairman. We are happy to see
you before the committee this morning. I will not make a
statement. I will just echo what the chairman has said, and let
you know that the commitment that this committee has had over
the years for quality of life and benefiting our men and women
in the services. We have fought this budget every year and we
complain about not having a sufficient budget.
We are probably one of the only budgets in this House that
has even remained stagnant or had cuts in real dollars over the
past years. So we are going to do whatever we can to ensure we
use our scarce dollars wisely. I know you are going to do the
same thing, because we both have a commitment to our men and
women in the service. We certainly want to maintain our
retention edge and we just welcome you to the committee today.
Thank you, Mr. Chairman.
Mr. Packard. Thank you, Mr. Hefner.
Again, I think you can assume that we have read your
testimony, and it is well done. We would hope that you would
not just read it to us, but summarize it as you feel you need
to, and then we will spend as much time as we can on questions
and answers.
Mr. Pirie. Thank you. If it is all right with you I would
just like to underscore three things in the testimony.
Mr. Packard. Your entire testimony will be entered into the
record.

statement of hon. robert b. pirie, jr.

Mr. Pirie. All right. First, Mr. Chairman, our requests for
military construction, for family housing and bachelor housing
are generally lower this year than they were last year, even
without considering the projects added by the Congress in last
year's budget.
I want to emphasize that this reflects the administration's
priorities in dealing with strong demands in other program
areas. Reflecting on my four years in this job, I recall that
in 1994 there was great concern about readiness, in 1995 about
quality of life, in 1996 and 1997about modernization and
increasing the size of the modernization accounts and beefing up the
investment.
We have yet in my experience to have a year of concern for
real property. I am not personally happy about this, but it is
not the first time in my experience that the military
construction and real property maintenance accounts have been
used to pay other bills.
In any case, our request is a straight forward expression
of the priorities, and we recognize that there is little
flexibility in the balanced budget amendment for funds to be
added, and we are prepared to live with what we have asked for.
Another area I am not personally pleased about is that of
family housing and public and private ventures. Our progress in
that area has been far less than I had hoped. There are some
fairly good reasons for this, but not excuses.
The source of funding that we have for these public and
private ventures for family housing is MILCON projects. As I
mentioned I think last year, this is an awkward device. The
amount appropriated may bear little relation to the finally
negotiated public private venture.
The fact that there is a project available for obligation
and the start of construction may tempt claimants to press on
with the MILCON and not wait for a public/private venture to be
developed and negotiated. And there is, in fact, not much
incentive for the claimants to go to public/private ventures.
The savings that accrue are centrally managed, and they are
invisible to those in the field. And many of our people in the
field have yet to be convinced that public/private ventures are
the best way to provide housing for our people.
Finally, the many stages of approvals for PPVs tend to
dampen enthusiasm for projects like that. I am very concerned
and I have put the issue at the top of my priority list, and I
expect to make substantial progress this year.
Finally, and also very high on my priority list is the
matter of seeing to completion the BRAC actions of earlier
years. We are nearly finished with the MILCON projects required
to support BRAC relocations. We are beginning to convey
substantial amounts of property to the local redevelopment
authorities for community reuse.
In the coming year, we expect to complete the decision
process for 19 bases, clearing the way for conveyance of the
property in such places as Naval Station Treasure Island, NAS
Alameda, and Naval Shipyard Long Beach.
Each conveyance has its associated issues. But we and the
affected communities are learning how to deal with them
somewhat better, and are helping the communities and their
local redevelopment authorities to become better informed about
the required processes and the constraints under which we must
operate.
I am optimistic that the bulk of the pending disposals will
be in place by the end of next year. Thus, our backlog of
disposals from previous rounds of BRAC will be cleaned up well
before we could have any other disposal pending from future
rounds of BRAC.
Mr. Chairman, with that we would be very glad to hear your
questions.
[The information follows:]

Prepared Statement of the Honorable Robert B. Pirie, Jr.
Offset Folios 2509 to 2528 Insert here

Mr. Packard. Thank you very much, Mr. Secretary. We did not
intend for you to be more brief than you needed to be. I hope
we did not crimp your style on that.
I am going to ask if Mr. Hefner would like to lead us off
in the questions. I certainly have many, but I will withhold
for the other members.
Mr. Hefner. Well, I think I will follow suit.

demolition of facilities

In your testimony you have centralized demolition--
increased efforts to get rid of the old unneeded facilities.
How much of a backlog in demolition do you have in the Navy?
Mr. Pirie. I am not sure what it is in dollar terms. Maybe
Admiral Nash can help me with that.
Admiral Nash. I do not think we have quantified that, sir,
but we found that there is payback when the demolition is
around three to four years. That is a real quick payback. And
we are developing those lists now of what ought to be
demolished.
Mr. Pirie. In fact I think we could commit $25 million
immediately to demolition work, and probably not run out of
projects.
Mr. Hefner. I have some other questions, but I think I will
wait until later, since there are quite a few members here that
may have some questions. I'll reserve the balance of my time.
Mr. Packard. Thank you, Mr. Hefner. Mr. Porter?

great lakes naval training facility

Mr. Porter. The junior members appreciate the Chairman and
Ranking Member allowing us to ask our questions.
I am going to be very provincial, Secretary Pirie, and talk
about the Great Lakes Naval Training Facility. We understand
you have $5.75 million for an applied instruction building
modification, $7.4 million for gas turbine training facility,
and $7.1 million for a hospital and school addition at Great
Lakes.
What other planned or projected construction is on the
drawing board for Great Lakes in the future?
Mr. Pirie. I will have to supply you a complete list. The
one project that I do know about is a small arms range which
has been moved up into fiscal year 00 I believe. Does anybody
have the Great Lakes list?
Admiral Nash. Yes, sir, we do. Or do you want us to supply
it for the record?
Mr. Pirie. What do we have? For 1999, the applied
instruction building mods and the gas turbine training
facility. We have three BEQs for 2001. The small arms range has
been moved up into fiscal year 2000. In 2002 we have drill hall
replacement, a recruiting support center extension, and the
replacement of the recruiting training center drill hall. And
in 2003 a pass security office, an all weather track, and
upgrade of the air conditioning systems there. And we will
supply this list for the record.
[The information follows:]

The Navy has $113 million of projects programmed for Great
Lakes in the remaining years of the current FYDP:

BEQ (Recruit In-processing)............................. $14,400,000
BEQ (``A'' School)...................................... 24,800,000
BEQ (RTC Staff)......................................... 17,400,000
Replace Small Arms Range................................ 5,400,000
Drill Hall Replacement.................................. 10,200,000
Extend Recruit Support Ctr.............................. 1,700,000
Replace RTC Drill Hall.................................. 10,300,000
Pass Security Office.................................... 1,190,000
All Weather Track....................................... 1,560,000
Air Conditioning Upgrade................................ 6,600,000

Mr. Porter. Thank you. I am obviously very pleased to see
that the Navy is continuing its commitment there at Great
Lakes. And thank you for providing that information for me.
Mr. Pirie. It is our only troop training facility, as you
know, and it is extremely important to us.
Mr. Porter. Thank you, Mr. Chairman.
Mr. Packard. Thank you. Mr. Olver?
Mr. Olver. Thank you, Mr. Chairman.
Good to see you again, Secretary Pirie. I also will be
somewhat parochial at this particular point. Last year in the
MILCON budget there was an amount of a little over $4 million
that was appropriated to renovate a building at the Westover
Air Reserve Base in Chicopee, Massachusetts to accommodate a
Marine Corps Air Reserve center that had been part of a BRAC
closure--the BRAC closure being South Weymouth.
And this funding project, as I indicated, was $4 million.
The Marine Reserve, Air Reserve unit had been displaced from
South Weymouth.
Now, it is a modernization renovation of an existing
facility, which had been an Air Force building, and that would
provide the long term training facility for the Marine Aviation
units that were transferred.
Of course, the Marine unit is being provided with
alternative space on the Westover Air Reserve Base in the
meantime.
Do you know what it is that is happening with that? Does
somebody here know what it is that is happening with that?
Mr. Pirie. If it is the one I am thinking about, we got
somewhat hung up with a discussion with the Air Force about the
condition of the property when they turned it over to us. But I
think that has been resolved.
General Hayes. Yes, sir. There is an environmental
remediation issue with the Air Force. The dialogue is ongoing.
I would have to supply the details for the record, sir.
Mr. Olver. Thank you.
[The information follows:]

What are the details of the environmental remediation issue
with the Air Force on FY 1998 Military Construction, Naval
Reserve project P-476 at Westover ARB?
As reflected in the DD1391 for project P-476, the Air
Force, during negotiations regarding renovation of building
P1900 at Westover, accepted the fiscal responsibility for all
environmental remediation and demolition connected with this
project.
The project cost developed by the Department of the Navy
was predicated upon this understanding.
The Air Force acknowledges this commitment and is now
working to provide FY-98 USAF O&M to perform asbestos
abatement, lead paint removal and associated demolition. Once
this preliminary work is completed, we will execute the FY-98
project.

General Hayes. The dialogue is engaged. It probably was not
engaged as sufficiently as it should have been. As recently as
this morning a gentleman appearing at another committee, an Air
Force general gave me his card and said we want to step up to
this responsibility. So we will pursue that.
Mr. Olver. The Air Force?
General Hayes. The Air Force?
Mr. Olver. The counterpart of Secretary----
General Hayes. My counterpart. An Air Force Reserve general
testified on his construction, and told me this morning he was
well aware of it, and they were going to step up to it, and we
are going to pursue that.
Mr. Olver. So you think I need not pursue that, that it is
being pursued already? Are we any where close to a solution? I
am not sure where the misunderstanding occurs.
General Hayes. I cannot give you the details of the
misunderstanding. I will have to provide that for the record,
but we will make sure we pursue it.
Mr. Packard. General, would you give us your name for the
record?
General Hayes. I am Brigadier General Mike Hayes, and I am
facilities director of the Marine Corps.
Mr. Packard. Thank you.
Mr. Olver. I will be seeking a direct answer from you, and
if I can figure out who the direct counterpart is at the Air
Force, to see if we cannot get this sorted out.
Mr. Pirie. I would like to be optimistic and assure you
that we can resolve this in the wink of an eye, sir. But I have
unfortunately been exposed to too many such cases in the past.
But we will work hard on this. We will try to come to a
conclusion.
Mr. Olver. Okay. Thank you.
Mr. Packard. Mr. Hoyer.
Mr. Hoyer. Mr. Chairman, thank you very much, and I
appreciate again your courtesy for allowing me to participate
in this hearing.

base realignment and closure

Mr. Secretary, thank you very much for being here. There
was much discussion in your testimony about the BRAC process.
We have all been through the BRAC process. Caused a lot of
disruption, but on the other hand the reports seem uniform that
we still have a lot of excess infrastructure.
My question to you is on page two of your testimony you
refer to the QDR, that there was enough excess capacity in DOD
infrastructure to warrant two more rounds of closures and
realignments similar in size to BRAC rounds in 1993 and 1995.
Let me ask you from the perspective of the United States
Navy, the implication here is there is a lot of excess
infrastructure. While I may believe that is true across the DOD
spectrum, can you give me your analysis for the committee as to
what position the Navy might be in as it relates to excess
infrastructure?
Mr. Pirie. We are, as a matter of fact, even as we speak,
supplying information to the Office of the Secretary of
Defense. We are going to compile a comprehensive report, and I
hope to have that over here by the first of April.
And I do not really want to leapfrog their conclusions. As
you know, in BRAC 1995, some of the recommendations that the
Department of Defense made with respect to Navy property to the
Commission were not accepted by the Commission.
Unless the calculations have been changed, which I doubt, I
think we would consider there to be excess in those areas,
although since we do not have presently a BRAC authority, we
have not assembled anybody to examine the old methodology to
see if it is warranted.
We have not had any data calls for certified data or
anything like that. So we do not have much to go on.
Mr. Hoyer. Mr. Secretary, let me be a little more specific.
My belief is that the Navy contributes a lot at the office.
Mr. Pirie. Yes, sir.
Mr. Hoyer. To some degree beyond what others saw fit to do
for whatever reasons. In that context do you have, without
going before the report is issued--I understand thatis a
difficult position--to the extent you can, what percent, if you can put
a percentage on it, of excess capacity and infrastructure that we have
in the Navy do you think we have already moved on?
Mr. Pirie. Well, as you know, in BRAC 1993 and BRAC 1995,
we closed a very substantial number of installations, and did
things like all of Alameda and Oakland, all of Charleston. And
that very substantially reduced our excess capacity.
We come down in the bases, something like 14 percent
overall across the whole Department of Defense. I would say in
the Navy we have probably come down closer to 25 percent, in
excess capacity as a whole. So that at the end of the day in
BRAC 1995, we felt that, for example, in Naval stations and
cruiser equivalent pier space and so forth, we had gotten all
the excess capacity there was anywhere to get.
Mr. Hoyer. Thank you. Mr. Secretary, you made a comment
that concerns me--two comments. One, it is easy to defer
maintenance, because we kid ourselves that it will not matter,
and we could get it next year. Of course, next year never
comes, because you have the same kind of fiscal crisis.
At what risk of compounding our costs are we? In other
words, the longer you defer, the greater the cost. Where are we
in that process? The Chairman and Ranking Member have been just
champions on this issue. It is tough, and of course the
Chairman has a tremendous problem in terms of the resources
available to him.
But I know that he is very concerned about this maintenance
issue. Can you tell me at what risk we are at this point?
Mr. Pirie. We have piers and runways that are not in good
shape and need to be fixed. We have buildings, hangars, for
example, that leak, and so forth. We cannot afford to fix all
of these in one year.
We are hoping that our funding line will increase in future
years in the five year Defense program, and currently it is
planned that way. So if Lucy doesn't jerk the football away
from Charlie Brown in future years, we ought to have a little
more money to deal with those issues.
I do not think that maintenance of real property situation
at the moment is a crisis or anything like that. But I, like
you, would not like to see the real property maintenance
backlog grow much more.

retention

Mr. Hoyer. Last question, and thank you, Mr. Chairman, for
your courtesy. Last question, Mr. Secretary. This committee has
been, the Chairman and the Ranking Member have both been,
again, champions of the quality of life.
Number one, we want to do that for our people. But, number
two, as a very practical business judgment, we need to retain
people that we spent a lot of money training. To what degree is
our quality of life budget risking losing our ability to retain
people we have trained and who are doing a good job?
Mr. Pirie. The risk to retention is across the whole
spectrum of things, which include tempo of operations, and
military pay, and quality of life and so forth. I do not think
that we are contributing to that risk unduly, in the family
housing and bachelor housing area.
But I feel constrained to say that when I was assistant
secretary of Defense in the Carter administration, we had
enormously severe problems in retention. And at that time I was
convinced that although we had a military pay gap of fairly
significant proportions, and we had pretty severe tempo of
operations, that a major constituent of the problem was that
our people had decided they were working for a second class
organization, that did not have good facilities, good
buildings, good housing, could not supply spare parts to people
who needed to fix their equipment and things of that nature.
I would hate to see us get to that point ever again.
Mr. Hoyer. Thank you, Mr. Chairman. Thank you, Mr.
Secretary.
Mr. Packard. Let me return to the first point that Mr.
Hoyer brought up, and see if we can kind of wrap that section
up. I have a few questions on BRAC, and if anyone wishes, I
would be happy to yield if we can just kind of wrap up the BRAC
portion of this question and answer session.
You have been very comprehensive in your written statement
on the progress we are making on BRAC, and when we expect to be
through with the first four BRAC activities, and when and how
we are moving into a net savings, and so forth, and I
appreciate the comprehensiveness of your statement on that.
Do we have in place at the present time an evaluation
process to determine if in fact we are doing the right thing in
closing the bases? Obviously we are. But do we have a process
where we can evaluate cost, savings, the transfer of missions
to other areas in the services, the conveyance of properties
and all of this?
Each of these processes are fraught with a lot of problems.
I see some of them, even out in my part of the country, where
it is not a simple process of closing a base, conveying
property to the successor, be in another Federal agency or a
State or local agency or whether it be private sector.
Do we have an evaluation process as we are completing the
transfer of these bases to the private sector or to other
places?
Mr. Pirie. If I understand the question properly, what you
are asking about, is there a fundamental requirements statement
that lays out all the real property that we require to support
the operating forces?
Mr. Packard. That may be, but I am more interested,
frankly, Mr. Secretary, in as we wrap up a base closing, or
even a realignment, do we just walk away from it once that is
done, and forget it? Or do we have a process where we sit down
or have a team that sits down and evaluates how that went, what
went wrong, what could have been done better?
Is it working? Is it all coming together? And where there
are problems--and there are--are they being worked out or
resolved or discussed to avoid them in other BRAC processes?
You are talking about two more BRACs in the future, 2001 and
2003, if that comes about, which I think most of us feel it
won't--at least not on that schedule.
But if it does, we ought to learn from what we have gone
through. Do we have a process to evaluate that?
Mr. Pirie. We do. The Office of the Secretary of Defense
has as committee that calls together all of the military
departments and they lay problems and issues on the table that
we are confronting. And we learn from each other's experiences
and so forth.
In my office we have been doing a great deal of learning in
trying to bring along the folks in the field who have to
implement these things. The latest information about what we
found that works and what does not work.
Mr. Packard. Are we transferring that to the existing
closing processes that we might profit from it?
Mr. Pirie. Oh, yes. Yes, sir.
Mr. Packard. I would hope that we would not retrace the
same problems. I know there are guidelines that are in law as
to the process, but the fact is where we have problems, at El
Toro, for example, or any other base closing, that we ought to
learn from that so we do not repeat the problems.
Mr. Pirie. One of the things that we have learned is that
it is very important for us to start the discussions with the
local redevelopment authority very early and to help them see
the nature of the process that we have to go through.
Certainly the most frustrating thing for all of the
communities and local redevelopment authorities is getting
through the environmental impact statement business and so
forth. And some mayors have expressed themselves as very
impatient with that stuff.
Unfortunately it is hard, sometimes, to tell whether they
are impatient directly with us, or they are impatient with the
operation of the laws. We are getting a lot smarter about how
to do that, but it is a two way street. The local redevelopment
authorities have to recognize that constraints about the clean
up process, things that we must do and things that we are not
allowed to do. And it is a matter of working together.
In general it is improving.
Mr. Packard. Is it? Thank you for that. In the conveyance
of property as a result of BRAC, do you consider that DOD
drives a hard bargain? Do they handle it like a business? Are
they concessionary in terms of other government agencies that
want to reuse the property? What is your primary focus in the
conveyance of property?
Mr. Pirie. Well, there is a hierarchy of needs.
Mr. Packard. I know there is.
Mr. Pirie. And other DOD entities have first priority,
other government agencies priority after that. Then comes the
homeless, and so on. In general, under the modes of conveyance
that we have, we are required to obtain fair market value for
the property.
In the case of economic development conveyances, we can
soften the fair market value requirement if there is a public
purpose to be served, particularly job creation in conveying
the property under liberal terms and so forth.
Mr. Packard. Most agencies, including the private sector,
kind of think that they ought to get the property free. There
is no way that we are going to reach a point where we see a
savings if that is the general attitude.
Mr. Pirie. The fact that communities expect to get the
property free or for a dollar bedevils us and makes it veryhard
for us to get even a reasonable or substantially discounted fair market
value.
So that impression certainly makes it difficult for us.
Mr. Packard. What can you do? What should be done to dispel
that general attitude?
Mr. Pirie. We have to start educating them, as I say, early
in the process. And I think if members can tell their
constituents that we simply cannot give this property away,
that would be helpful, too.
Mr. Packard. The last question on that section, the BRAC
section, that I have is in the environmental clean up area.
Most bases that are being closed or realigned that do not have
air facilities on it, the clean up may not be quite as
difficult.
But virtually any base that has had aviation activities on
it, there are some major clean up requirements. Those generally
are not inexpensive.
Have you calculated, or do you have a feel for how large
this problem is for the Navy and the Marine Corps and are we
going to be doing the clean up ourselves, or are we going to
pass that on to the new property owner or what?
Mr. Pirie. Well, we are required to clean up the
environment.
Mr. Packard. Before conveyance?
Mr. Pirie. Yes. And in some cases we don't have to clean it
up before conveyance, but we do have to have a remedy in place
that will ultimately result in it being cleaned up. Or some
arrangement where for value received somebody else cleans it
up, and we discount the value of the property, or something of
that kind.
We can come to an arrangement like that. But the
responsibility is ultimately ours. We can never step away from
that.
We figure that for--I think it is in my statement
somewhere--we figure that for clean up of the remaining BRAC
actions we need something on the order of $3 billion or so.
$2.1 billion I am much more reliably informed.
And that is a big amount of money, but is not an undoable
amount.
Mr. Packard. Are you able to avoid litigation in the
process of clean up?
Mr. Pirie. Generally.
Mr. Packard. That is one of the major problems of
Superfund.
Mr. Pirie. Yes. Well, when you get to litigation, of
course, everything stops until you can settle that, and the
clock keeps ticking, and it costs more money. Generally we have
been reasonably successful.
Mr. Packard. Thank you. Mr. Cramer?
Mr. Cramer. Thank you, Mr. Chairman.

public/private ventures

I apologize for having to come in late. I may end up being
redundant with some issues that I would like to take this
opportunity to bring up. But I was reading through your public/
private ventures there, and your statement that you are pleased
with the completion of the first two PPV efforts, but you must
admit that subsequent progress has been less than you
contemplated.
Would you tell me a little bit more about that, and why
that progress has not been as you thought it would be, if that
is a fair way to put it?
Mr. Pirie. Yes, sir.
Mr. Cramer. Maybe what I am looking for is what have you
learned from this process, and how will you use that?
Mr. Pirie. In some ways the broad variety of authorities
that we have to create public/private ventures, the fact that
we can contribute land and Federal property, the fact that we
can contribute to a public/private venture a guarantee of
occupancy, the fact that there are a variety of kinds of things
that can be done with a developer to create a public/private
venture--this richness of availability of different means has
kind of made it more complicated than it should have been.
It is like a kid in a candy store. We have not been able to
decide which methods to use. And we have not established any
real good models. The two models that we have, the South Texas
model, and the Washington State model are okay as far as they
go, but I do not think that is going to be the way we do it
everywhere.
In fact, every place is really substantially different.
Mr. Packard. Would the gentleman yield for a moment? Under
the two that you are talking about, you were working with
different authorities. And today we have different authorities
than that. How do you relate your experience there to what your
experience appears to be now?
Mr. Pirie. The initial set of authorities came with some
money, specifically directed toward that, and a fairly
constrained mode of getting into this venture. So we
essentially followed the cookbook and developed these projects.
It was not easy. It took a couple of years just to go from
concept to a request for proposals.
But that was relatively simple. We are talking about far
more complicated deals now, and a general reluctance everywhere
to make a 20 to 50 year mistake. We really want to work these
things out and get them right.
But they are beginning to come into shape. With the Marine
Corps we have a public/private venture in Albany, Georgia that
has just gotten through all the wickets, which involves
contribution of property, both land and houses, that are not on
the Marine Corps base, as our stake in a venture that would
have the developer build houses on the base for occupancy by
Marine Corps personnel. He would build them and maintain them
for some period of time.
Mr. Cramer. Are you discouraged? Are you about to decide
that it is more trouble than it is worth? Or is it just so
unique to every situation that it is too time consuming to come
up with an application that----
Mr. Pirie. We are not discouraged. I think ultimately this
will work. I think ultimately it is a good deal for the
taxpayer and for the sailors and marines. But it has been an
adventure getting everybody on board, figuring out what we want
to do, and also bringing the community of developers into the
picture.
Mr. Cramer. Thank you.
That is all I have, Mr. Chairman.
Mr. Packard. Thank you.
Mr. Hefner?

base realignment and closure-environmental cleanup

Mr. Hefner. If I could just follow up. If I understand it
right, if we decide to close a base, God forbid, say Fort
Bragg----
Mr. Packard. That's a terrible idea. [Laughter.]
Mr. Hefner. Okay, Fort Meade or wherever.
Mr. Hoyer. What was that? [Laughter.]
Mr. Hefner. That's another bad example, isn't it? Let's
start again.
It seems to me that transfering a facility is a bit
cumbersome. When talking about transfers I know that we tried
to transfer the Presidio to the Interior Department we had some
problems.
The Interior Department says they would love to have it,
but we do not have the money to clean it up. So you clean it
up, and then you can give it to us. And then of course the
private sector, says, hey, if you are going to clean it up,
give us the chance to bid on it or get into the process.
It seems we need to work out a situation where it would be
good practical business to transfer a facility from, say, the
military to the Interior Department or whoever. Then let them
utilize their appropriations or have a special appropriation
for clean up in their agency. For example say we are closing it
down and we are going to transfer it to the Interior
Department, and out of their pot they clean it up.
And they have to meet the same guidelines. Does that make
any sense?
Mr. Pirie. That would simplify our problem tremendously. At
the moment we take our own BRAC money and we clean it up, and
then we attempt to persuade Interior, for example, that we have
cleaned it up to standards that meet their approval.
Mr. Hefner. The fact remains somebody has got to cleanit up
before you can do anything with it.
Mr. Pirie. Yes, sir.
Mr. Hefner. Because you have closed the base, it has got to
be cleaned up before you can use it for a shopping mall or
anything else. Somebody is going to have to pay for that clean
up.
If it makes sense to transfer it to the Interior Department
or the Forest Service, or whoever, it seems to me that there
could be a simple formula that could be worked out that says we
are going to transfer this 5,000 acres to the Interior
Department. It will be a simple transfer, but you have to take
on the responsibility and be obligated to clean it up in the
same amount of time that it would take you to clean it up.
This does not make a lot of sense to me.
Mr. Pirie. It is extremely complicated, and the formula
that you propose would be terrific, as long as we could come to
an agreement about what the clean up consisted of.
For example, Naval Air Station Adak in Alaska. We are in
the process of completing the clean up there as far as we are
required to clean it up, which includes petroleum in the ground
and things of that kind.
But there is a discussion with the local redevelopment
authority for Adak about whether we are obligated to knock down
a bunch of buildings that they do not want to use in the
future.
Mr. Hefner. Who is this property going to?
Mr. Pirie. The local redevelopment authority wants to
convey the property to the Aleut Corporation that represents
the interests of a substantial number of Aleut Indians. It is a
rather complicated transfer because Adak is essentially a
National Refuge, and it should revert to the Interior
Department.
The Interior Department does not want it.
Mr. Hefner. Well, they don't want it, but I am saying when
it is in everybody's interest and the--Interior Department
wants it, and we want to get rid of it. It seems to me that
this is an isolated instance that you are talking about.
Mr. Pirie. It is. It is a very unusual and vexatious case.
Mr. Hefner. It seems to me this is human nature. If you
want to transfer it to the private sector, naturally they want
it all cleaned up. They also want all the buildings out of it,
where they can come in and survey it and put a mall there.
But there ought to be some simple way you could say, okay,
we are going to transfer this, but you know what the rules are.
Here is how it has to be cleaned up if you are going to put a
mall or whatever there, under the EPA guidelines, and let the
folks that acquire it clean it up, and work out the price where
they would be responsible for it.
Because you no longer need it, and this is something that
actually is not your field, is it?
Mr. Pirie. Oh, yes. We do the clean ups of existing bases.
Mr. Hefner. I know you can. But that is not what you are
set up to do.
Mr. Pirie. That is right. I mean, for the people who are
going to come in and develop it they ought to have the liberty
to develop it as suits their needs. Generally in 90 percent of
the cases we are able to come to an accommodation.
For example, if it is going to be--if it is an air station
that is going to be an airport, we clean it up to the standards
that are appropriate to an airport, not to national park
standards.
Generally that works. Occasionally, as in the case of Adak
that I cited, it is complicated and it has more features than
we really want.
Mr. Hefner. This may sound simplistic, but if you clean up
an area, and then you sell it to a corporation or whoever. When
they begin to develop it, before they can get loans and cash to
do the development, they are going to come in and demand
another check. They are going to do drillings and additional
testing and it may require more clean up than you have already
done.
It would just seem to me that if you are going to do that,
people that are going to eventually use it in the end, would
want the responsibility of cleaning it up where it would be
sufficient to use once you have conveyed it to them.
Mr. Pirie. Generally we start the process with an
environmental baseline survey. And the people who are going to
be the redevelopment authority are in on that, and also the
local regulators. So we try to establish what is there to a
fair degree of accuracy to really start the process.
Clearly if something that nobody knew about over the course
of time develops, then we are responsible to come back in and
clean that up. There is no way to get out of that under current
law.
Mr. Hefner. I have no further questions.
Mr. Packard. Mr. Olver.

fort devens, massachusetts

Mr. Olver. Thank you, Mr. Chairman.
These exchanges are giving me time to find other things to
discuss here. I notice in the 1999 Defense program that there
are a couple of projects in my State, Massachusetts, Army
Reserve Fort Devens, $3.3 million, and then Navy Reserve, it
lists Lawrence, $840,000.
Well, I now discover that the Navy Reserve Lawrence is
really Naval Reserve for a Marine unit that is presently at
Lawrence, but to move it to Devens. Now, that makes me begin to
suspect that there is a master plan someplace of consolidation
or rearrangement of Reserve units to the Reserve base at
Devens, which was the subject of BRAC 1991, I guess it was.
Where do I find a document which shows which pieces? Do I
have to squirrel these together from Navy documents and Army
documents? Or is there something that says what Devens is
doing, and what is the phasing for what is supposed to happen
there?
Mr. Pirie. I think we can provide you with what the Navy's
plans and what the Marine Corps plans are, and so forth. But
what is coming into Devens, I think that is largely a matter of
the Army's responsibility.
[The information follows:]

What consolidation or rearrangement of Reserve units is occurring
at the Reserve base at Fort Devens, MA that resulted in the relocation
of the Ordnance Maintenance Control Team from Lawrence, MA discussed in
the budget justification for your FY 1999 Military Construction, Naval
Reserve Project p-477?
The Naval Reserve has no short-term nor future plans to relocate or
consolidate drilling Naval Reserve Units to Fort Devens, MA.
The Marine Corps Reserve will relocate the Ordnance Maintenance
Contact Team. It is presently located in the former Naval Marine Corps
Reserve Center in Lawrence, MA and is planned to move to Fort Devens,
MA upon completion of project P-477.
In addition, Weapons, Headquarters and Service Company, First
Battalion, Twenty Fifth Marine Regiment will relocate from Camp
Edwards, MA to Fort Devens upon completion of project P-508 at Fort
Devens. This project was funded by Congress in FY 1996 for construction
originally at Camp Edwards. Environmental problems delayed project
execution at that site, so funding was subsequently reprogrammed for
execution at Fort Devens, MA.

Mr. Olver. But if this is going into Devens, this is at
sufferance from the Army for you? They are suffering you at
Devens? What is this?
Mr. Pirie. Well, it is a closing Army base. And they are
making----
Mr. Olver. There was an active Army----
Mr. Pirie. It was an active Army installation.
Mr. Olver. But this is a unit which is a Reserve Naval
unit, a Reserve Marine unit.
General Hayes. This is a Marine maintenance unit, sir. I
cannot speak to it in terms of movement though.
Mr. Oliver. In terms of what?
General Hayes. In terms of movement relative to BRAC
process. But that project is specifically, the $840,000, is to
rehabilitate a building, as I understand it, for a maintenance
unit for the service support group.
Mr. Olver. Well, fine, but if it is going to be at Devens,
I assume it will be by way of some agreement with the Army.
Would that be correct?
General Hayes. Yes, sir.
Mr. Olver. So should not there somewhere be a document
where I could see what is happening at Fort Devens since we are
now putting units from various forces together? Is this the end
of it? Is this going to be the last of these that happens
bringing Naval Reserve pieces to that particular site?
How would I know that?
Mr. Pirie. I do not really know quite how to answer your
question. I do not think we have any plans to move other Navy
or Marine Corps units to Fort Devens.
The Army may have a consolidated list of activities that
they expect to move in there over the course of the next few
years, which might include other Army activities or other Air
Force activities.
Mr. Olver. I suspect because that is a ground training base
that it probably would not have--well maybe it would have Air
Force activities, you might be right. So I should ask that of
the Army because they are in control of the base and if there
is anything that is in anywhere in the books of Naval plans
that go beyond this, they would know about that?
Mr. Pirie. Oh, definitely. Because one of the requirements
of the base closure process is that application has to be made
to the closing activity for space in the activity for other DOD
stuff.

future year defense plan

Mr. Olver. Okay. For the 1999 FYDP, the items that are here
in the construction plan, are those all design?
Mr. Pirie. All items?
Mr. Olver. Yes.
Mr. Pirie. 1999?
Admiral Nash. They are under design.
Mr. Olver. They are all under design? All of them would be
under design?
Admiral Nash. Yes, sir.
Mr. Olver. Would they be being designed with 1998 monies?
Admiral Nash. It could be.
Mr. Olver. I guess what I am trying to explore is whether--
let me get out what I am really after. I am curious whether you
have enough money to design the projects in the future, and I
am sort of curious about what the phasing is of design for
projects which are in the 1999 FYDP, in the plan, and if you
have FYDP 2000 items, is there design money in this year's--in
the 1999 budget--to cover the design for the year 2000 items?
Admiral Nash. You give us money the year ahead for design.
Mr. Olver. Are we always adequate? Do we always give you
enough to do the design for the next years?
Admiral Nash. We have in the past been able to manage to
get designs done. We also have new ways of doing things, where
we can get design and construction done at the same time, which
speeds up the process.
So as far as I know we have had adequate design funds and
we continue to get them--because that is part of what we are
asking for.
Mr. Olver. So you have new ways of getting design and
construction done in the same appropriation I guess is what you
mean there.
Admiral Nash. Yes, sir.
Mr. Olver. Are any of these 1999 planned programs ones that
have the design and the construction money included and
expected to be in one year?
Admiral Nash. I will take that for the record. We will give
you a list.
Mr. Olver. Yes.
[The information follows:]

The planning and design funding being requested in the FY 1999
budget will be used to design projects currently in the FYs 2000 and
2001 programs.

Mr. Olver. I guess I would like to be able to map out for
my own mind how these things move, how the design for items are
done along the way. And we do add-ons in many of these
instances.
Admiral Nash. Yes, sir.
Mr. Olver. And if we add on, then you will not have had
design to do the add-ons in an orderly manner, would you?
Admiral Nash. We manage that together.
Mr. Olver. You manage those together.
Admiral Nash. We manage those together.
Mr. Olver. Do the designs and the add-ons and the
construction together in a year where we give you that money in
the one year and it can be done in that year, or least into the
process of whatever the reserve of monies into the next fiscal
year applies?
Admiral Nash. And there are formulas for how to get enough
design money the year ahead, and if there is additional design
money required we manage that.
Mr. Olver. I was afraid it was going to be something like--
--
Mr. Packard. Would the gentleman yield?
Mr. Olver. Yes, by all means.
Mr. Packard. My observation is that, number one, there is
flexibility enough in the system where they can design and have
access to design money perhaps in the early years of the FYDP,
first and second year perhaps.
Admiral Nash. Yes, sir.
Mr. Packard. I would assume that it would be quite unusual
to have design work going on in the fourth and fifth year of a
FYDP, simply because that may never come about. It may never
actually be built out.
Back to the other question of add-ons. We select very
carefully add-ons that are executable, and that usually means
that they can be designed, and contracts can be let within the
year.
Every one of the projects of the 38 that were line item
vetoed last year, the reason given that they were lined out
because most of them were not executable was not true. They
were executable. We selected them on that basis.
And that means that they can do the design work, and can do
the contract work within the year that they are approved for
funding. So I think we have been careful on the committee not
to approve add-ons that are not executable.
Mr. Olver. Well, would we be doing design for, say, 2001 or
2002 projects out of monies that are in this year's 1999 design
allowance? Is that likely?
Admiral Nash. We do some levels of design farther out, and
as we get closer we do more designs. We do not do a whole
design on a project that might not occur.
So a few years out we are looking at what wehave--project
cost estimates, and trying to get some kind of idea, and then as we get
closer to the year we are doing more design. So it's a process that we
manage, and that's what I meant in terms of we manage the process. And
it has to be ready to execute.
Mr. Pirie. Some of these projects require a good deal less
design than others. Like dredging projects. They are big,
expensive MILCON projects, but they do not require much design.
The replication of a missile bunker next to one that you
built last year does not require a lot of design, because it is
the same building that you built last year. Some of these
things take a lot. Some do not.
Mr. Packard. Would the gentleman yield one more time?
Mr. Olver. Sure.

lost design

Mr. Packard. I understand that we do have shelves of design
work that has been done over the years on projects that have
never been built and probably never will be built. That is a
waste of money--millions and millions of dollars worth.
We would hope that we could avoid that as much as possible
because politics change, priorities change, a variety of things
change. A project that you pushed through to have design work
done, and they start the design work four years early, and then
you are not here to see it through, and it no longer has the
political support, and it may never be built as a result.
So those are things that I think they are trying to avoid,
and we want to avoid as much as possible. So the design work
generally today, we would hope, means we are moving forward to
construction.
Mr. Olver. It would seem to me to make better sense, as you
put it, that those that are executable within the design and
construction for the same project, for the very reason that you
describe--well, I am just trying to learn how this process
functions. Thank you.
Mr. Packard. Thank you.
Mr. Hoyer, would you like another round?
Mr. Hoyer. If I could, Mr. Chairman.
Mr. Packard. Of course.
Mr. Hoyer. Thank you, sir. I want to observe that I have
spent a lot of time, effort and money trying to avoid not being
here to follow through on my own projects. [Laughter.]

privatization

Mr. Hoyer. A capital investment that I think is very
important.
You mentioned in your statement, obviously in terms of
savings, in house and outsourcing or contracting out. On page 4
of your statement you make a comment that I thought was
interesting.
And I would like to get your view on it, in which you
indicate that there is a 30 percent savings whether it is done
in or out, if in fact if you do it in you do it smart, that is
to say, reinvention or new ways. You say new most efficient
organization.
Tell me a little bit about that. That may not be
specifically in the purview of this committee, Mr. Chairman,
but obviously the savings that it affects either in house or
out house can be used for capital expenditures.
Mr. Pirie. Well, the A-76 process requires that when an
activity is selected for study the government part of the
activity essentially go into competition with the private
sector, and the government part of the activity is then under
the gun to develop the most efficient way of doing it.
So you have the effect of competition both on the
government side of the execution of the project, and of course
whoever comes in from the private sector. The private sector
has to show something like a ten percent additional savings
over the most efficient government organization at the end of
the day to be the winner.
But the track record of these competitions is over the long
haul the average savings run up to 30 percent, and that is
fairly well documented in the academic literature.
Only about half of them are won by the private sector. The
other half stay as government operations, but the competition
forces that operation to tighten itself up and save money.
So that is how that works.
Mr. Hoyer. Just as an aside, my experience has been--and I
have been at this A-76 a long time, as you can imagine, not
necessary related to DOD, but other agencies as well--that in
the short term the private sector in many instances can show a
significant savings. In the longer term, that is, five years
out, experience, though not consistent, is pretty dramatic in
terms of the escalation of costs to the private sector.
Mr. Pirie. I think we always have to be real careful that
the private sector doesn't buy in and then hold us up in the
long run. And also organizations that have been doing the same
thing for five and ten years tend to get set in their ways and
complacent, and do not tend to adapt new technologies and new
methods.
Mr. Hoyer. Mr. Secretary, focusing on the same paragraph,
you talk about 85,500 Navy and Marine Corps billets in support
areas. Again this is not this subcommittee per se, but one of
the things that concerns me, and I would just say this for your
interest, is--and I have talked to Admiral Lockhart about it
and others, and to Secretary Dalton--contracting out technical
services as opposed to support services, where our technical
competence may be compromised both in the short and long term.
I would make that as an aside, but I am very concerned
about it, particularly at Patuxent River. As you know, we are
going through this issue at Pax, and it is causing not only
morale problems, but what it causes in my opinion is a risk of
losing your very best people who are the most competed for, and
who can get the best deals.
And they leave your central, core function, and pretty soon
the idea becomes the father or mother of the reality that you
have to contract out because your core capability has been
undermined.
That is not obviously this committee, Mr. Chairman. But I
know you are very concerned about that.

washington navy yard

NAVSEA moved to the Navy Yard. Can you give me a brief view
of how the shoe horn is working?
Mr. Pirie. We have let the contract for the conversion of
the buildings, and it is on schedule, and I think it is going
to be a good scene in the long run. The whole Navy Yard----
Mr. Hoyer. How long?
Mr. Pirie. I do not think it will take very long. I
understand that the follow up activities, all the aerospace
companies and so forth are beginning to show up in Southern
Maryland around Patuxent River already. I would expect the same
thing to happen with the follow on activities of NAVSEA along
the M Street corridor, and I think that is going to be a real
winner.
I do not think that the rank and file at NAVSEA are
particularly happy to leave Crystal City and go to the Navy
Yard. We are going to do our best to make it comfortable and
safe and a decent working environment for them.
Mr. Hoyer. Mr. Chairman, this is something I think the
committee really needs to focus on. Obviously as a
representative of this area I think rehabilitating the
Southeast quadrant of this city is a good thing to do. I come
across the South Capitol Street Bridge. It is the worst
entrance to Washington, D.C. that we have.
It is, I think, shameful, and we ought to do, and I am
going to be working on it, a Pennsylvania Avenue-type project
for South Capitol Street. There is no reason why that vista and
that entrance should not be a quality entrance.
Mr. Chairman, I was talking about the Southeast Federal
Center, which I know the administration and previous
administrations have had a great deal of interest in. Mrs.
Norton and the District of Columbia, but all of us in this
region have an interest in doing that.
That was my last question. I wanted to ask about the Navy
Yard. I have some others, but they are asked in this packet,
and I presume you are going to submit that.
Mr. Packard. We will.
Mr. Hoyer. No point in my asking.
Mr. Chairman, I know you have had an opportunity of working
with the Secretary. The Secretary has been down to Pax, and I
have had an opportunity to work with him and visiting with him
in the Pentagon.
And it ought to be a continuing source of great pride to
the American public that not only the people that we have in
uniform, but the people that we encourage to come back, entice
to come back from the private sector in which they are earning
geometric sums above what they earn in the public sector, agree
to come back and give of their time and talent.
And I thank him for not just what he has done to Pax--I
know what I wanted to say. We have, in our BRAC success
stories----
Mr. Pirie. Yes, sir.
Mr. Hoyer [continuing]. You mention those that were closed
that were helped out. Let me tell you something, Mr. Secretary.
I want to congratulate you and Admiral Lockart and Captain
Roberts and all the civilian personnel that were involved. You
moved 5,000 people on time, under budget in an incredibly
efficient and effective way down to Pax River, and that is a
logistics success in and of itself.
I know it is not on your list, but I want you to know that
some of us are really very appreciative of that, and you did a
great job.
Thank you, Mr. Chairman.
Mr. Packard. Thank you.
Let me now proceed through some of my questions in more of
an orderly way than when I initially started out.

supplemental request

On a general basis, the supplemental request, we are
moving, and will be moving rather quickly to mark up a 1998
supplemental appropriations bill for the Defense Department and
for other things, too.
We have not yet received an official request for additional
military construction funds from the Navy. Do you expect that
to come, and will there be some areas where you will request a
supplemental for this budget year in light of great operations
in the Mediterranean and some of the operations over around
Iraq?
Are we seeing a need for a supplemental for military
construction?
Mr. Pirie. I'm not sure about the military construction
aspects of the Bosnia supplemental. I do know that we will
certainly be coming forward and asking for money to deal with
storm damage, for example, at Camp Pendleton and in Guam, which
was ravaged by Typhoon Paca.
And we have had some discussions in the Department, and
whether that will be appended to the Bosnia supplemental, or it
will be a stand alone, it looks as if it will now be a stand
alone. That is the current thinking.
Mr. Packard. Okay.
Mr. Pirie. We will try to get it to you as fast as
possible, because we know you are on a fast track.
Mr. Packard. Yes, thank you.

family housing--general reduction

The construction annex to the budget request, the C-1
document, contains an entry for ``Congressional reductions
minus $6.3 million'' in the Navy Family Housing Program. Could
you explain that? Are you familiar with it?
Mr. Pirie. Is this the issue of do we finance current
housing with prior year savings? I think that's right.
Mr. Packard. That's right.
Mr. Pirie. I think the committee rather explicitly told us
not to do that in the past. And all I can say is that it is a
budgetary device over which I have no control.
Mr. Packard. It shows a reduction. I did not know exactly
what it meant, and my staff is not sure.
Mr. Pirie. What it means is we under-ran some projects in
the previous year, and we take the savings from that and apply
them as part of the cost of the next thing, and offset that
project and make a cut in the budget.
Mr. Packard. I see.
Mr. Pirie. It is a budgeteer's device, which are virtually
unlimited.
Mr. Packard. Are these unobligated funds that are made
available to pay for costs of storm damage or whatever in a
supplemental, in other words?
Mr. Pirie. Where someone has applied those funds for some
other thing that he or she would like to have like a weapons
system or----

family housing privatization

Mr. Packard. I see. Now, I want to get into the
privatization issue, because you spent quite a bit of time in
your testimony on it, and it is very comprehensive, and as I
read it there were some concerns and questions, and I thought
we could spend a little time on it.
We have received notification that the Army's Family
Housing Privatization project at Fort Carson is under review,
and the Navy has executed the two that we referred to earlier
in Texas and Washington.
There are several questions I would like to have you answer
if you could in relation to some of these items as it relates
to privatization. Does the Navy anticipate that there are any
significant financial savings from privatizing?
Mr. Pirie. Well, what we hope to do is take the same amount
of money and produce more housing through leveraging private
capital.
Mr. Packard. Which is a savings.
Mr. Pirie. Which would be a substantial savings. Our--in
very rough, general terms, it costs about $15,000 to provide
and maintain a government house for a family. Our allowances
for our people who live in the private sector run around $7,100
a year. So there is a big disparity between those two numbers.
The private sector appears to be able to produce and
maintain an acceptable house at about half of what it costs us
to do it. So accessing the efficient and robust American
housing market seems to be good policy for us.
Mr. Packard. So the per unit cost, it appears that PPVs
will actually render a significantly less per unit cost?
Mr. Pirie. We will get more houses for the same money, yes,
sir.
Mr. Packard. That is different from the Army. The Army
testified last week on that. We asked them the exact same
question, and they answered that they did not anticipate a
significant savings, or any savings at all in fact, the way I
remember it.
And so it will be interesting to follow up on that. Because
I think that is important. As I read your testimony, I think
the Navy and the Marine Corps are moving more vigorously into
privatization than perhaps any other branch of the services.
And I am not critical of that effort. We have been pushing
privatization. But it does lead to the next question, and that
is do you see privatization, PPVs replacing the traditional way
of constructing military housing, or any other military
construction?
Mr. Pirie. Not completely. I see it as a supplement, not as
a replacement. There are places and conditions in which the
only answer is going to be the government provides the housing,
because the market cannot do it.
But on the whole, if the market can do it, if we can figure
out some way to get a private developer interested in coming
and providing housing near or on our installation, and using
private capital for the bulk of this----
Mr. Packard. Is it correct that the cost of the family
housing program is being shifted from this bill to the housing
allowances subaccounts within the military personnel accounts
of the National Security appropriations bill?
Mr. Pirie. The money that finances the housing, in the case
of public/private ventures, is essentially the housing
allowances of the individual. So it is in the military
personnel account, not in the military construction account.
Mr. Packard. Will there be a savings in this cost shift?
Mr. Pirie. The savings--the cost shift is a mechanism which
gives us more houses for the same money.
Mr. Packard. Have we done a fairly thorough evaluation of
the process and the results as we have gone through the Texas
and the Washington State projects? We are moving vigorously
into proposals now that are involving--and those are small
projects. Everything we have tried so far under PPV really have
been small projects. Hundred-fifty units or something in that
general area.
You are now talking of one in San Diego, I read, which my
notes say, a very large effort, 9,000 family housing units,
constructing up to 2,400 new homes. We are moving big time into
the privatization effort here when we are talking in those
numbers.
Have we learned sufficiently from the existing prototypes,
Texas and Washington State, to where we feel competent and
comfortable in moving this vigorously into the process?
Mr. Pirie. I do not think that the small prototypes are
necessarily the model that we will ultimately follow in San
Diego which is why we have taken so much time and effort and
care in trying to construct the bigger packages as we have.
I think it important that we do these things on a large
scale in order to bring in the big developers and to get access
to the big guys and achieve economies of scale, and access this
robust housing market.
In the case of the San Diego projects, we have had a major
conference out there. We are working quite hard to make sure
that we understand all aspects of the project before we go
forward with it. And there are lots of stages of approval.
This cannot be done without the approval of the Office of
the Secretary of Defense, and it cannot be done without your
approval prior to execution.
Admiral Nash, do you want to add anything to the San Diego
picture?
Admiral Nash. Yes, sir. I think we feel confident in the
business processes now that we have developed, and we feel like
we understand what is going on, and so we are right on the cusp
of moving ahead. But I will assure you that we are going to be
very careful.
Mr. Packard. We are moving into another area that is of
interest to me and one that I have not been aware of before,
and again I am not speaking with any reluctance of us moving
forward with this. But it something that's, at least to my
knowledge, unplowed ground.
And that is transferring existing government units to the
private sector. In other words, homes that are built, some of
them probably recently built, in the Camp Pendleton and San
Diego area, transferring them to the private sector and
negotiating something in return.
Could you explain that process, and how you expect it to
work, and what experience you have had in this, and if in fact
you think that we are moving into an area that is unknown. I
would be interested in your comments on it.
Mr. Pirie. Well, we do not have a lot of experience in
this, but as one of the authorities that was given to us three
years ago, in what was called at that time the Perry
Initiatives, and so forth, and essentially it is that the
government brings to the negotiating table as part of its stake
the property that we are going to transform.
And that becomes a part of our contribution, and so forth.
The developer brings his financing and so forth, and then a
calculation is done about what the cost of the project is going
to be and what cash flow is necessary to finance it, what kind
of units we can have, and whether those can be afforded by all
of our members, or only, let's say, the top grades--a lot of
really very complicated business calculations.
Mr. Packard. So not only are we building new and
refurbishing old units under the PPV process, but we are
actually now moving in the direction of transferring housing
that was built under the traditional military construction
process into the private sector, away from the public sector.
Mr. Pirie. Yes, sir.
Mr. Packard. Looking at it from the long term picture that
Mr. Hoyer was referring to, we feel comfortable and confident
that--because again that is moving in the direction of really
moving into the private sector wholesale. I mean, to a very
large extent. Much, much more than we ever envisioned, at least
at this early date. And moving away from traditional housing
stock that we were accustomed to.
Does that include barracks?
Mr. Pirie. It can.
Mr. Packard. On-base housing?
Mr. Pirie. It can. We think that the private sector can
build a garden apartment, let's say a two bedroom garden
apartment under ordinary circumstances at considerably less
cost than it takes us to build a one plus module in a BQ.
If that is the case, we sure ought to be looking at private
sector alternatives to our BQ construction business.
Mr. Packard. We hope your projects and your estimates and
your feelings are right in this, because we are moving quickly.
Again, the Navy and the Marine Corps are moving more vigorously
in this direction than I have seen any other agencies.
I am not suggesting that we put a yellow light up yet, but
certainly this is a huge change of direction for housing. Do
you have any estimates as to how quickly that will move the
Navy and the Marines out of the backlog?
Mr. Pirie. That is the unfilled demand for housing in
places like San Diego and----
Mr. Packard. Throughout the entire country.
Mr. Pirie. It is worse in some places than in others. I
don't expect that we will ever have zero waiting lists for
government housing. But we are hoping at least to reduce the
backlog in places like San Diego, high cost of living areas, to
half or a quarter of what it is now, which I think is
unconscionably large.
Mr. Packard. On particular bases, do you expect any revenue
return, as you negotiate existing housing facilities
transferred to the private sector?
Mr. Pirie. Well, one of the provisions of these public/
private partnerships is that we, in some cases, are a limited
partner, and revenue that accrues to the partnership is shared
by us. And we can use that to finance other public/private
ventures.
So far we do not have the experience of a vast influx of
funds. We are hoping to get some.
Mr. Packard. I was looking at the one in Westover,
Massachusetts that Mr. Olver might be more aware of than I am.
It is where you are projecting that you would convey 320
existing houses to the private sector, and another 279 homes in
a different area to a private developer to manage and so forth.
And I am wondering, in an isolated situation like that,
maybe you are proposing to build new units there in exchange.
But if you are just transferring existing homes to the private
sector, and there is no need or no reason to build new, then
are there any revenues?
How do you negotiate those kinds of deals?
Mr. Pirie. Basically the negotiation is for the maintenance
of these things, rather than refurbishment and all that kind of
thing. And it is more economical for us to have a private
concern operate and maintain the units than to do it through
our existing NAVFAC organization.
Do you want to speak to that?
General Hayes. No. I think that captured it. The dynamics
of those two instances, for instance, Mr. Chairman, are an area
where there has been a draw down, so we can leverage the
existing stock for the fewer numbers of people there, and
provide quality housing in an area that is very expensive for
the serviceman.
The good news there is all four services are participating
in that. We are running it from the Navy, becoming ours,
privatizing it, and the influx is really, the new influx----
Mr. Packard. Maybe I am not seeing it clearly, but on some
of your projects you contract for a private entity to build,
and then sign a long term maintenance agreement, and they
maintain the new housing stock. But they also build, to
transfer existing units to the private sectorsimply for the
cost of maintenance.
Sounds like it is maybe out of reason. But maybe new
construction is a little different than old.
General Hayes. In that case, sir, the housing stock is in
fairly good shape, and so it is renovation that we are looking
for from the private sector.
Mr. Packard. I see. I do not want to prolong this. Do you
have any further questions, Mr. Olver? We can go through a
third round if you like.

outsourcing competitions

Mr. Olver. I did have one, if I could find out where it is.
I've been rifling my own notes here.
I have it. On page 4, where I think Mr. Hoyer had been
talking earlier, on outsourcing competitions, you were speaking
of studying a series of billets and another series of billets,
and ultimately you are going to study 85,500 Navy and Marine
Corps billets.
Now, I take it there are studies of different groups here.
There is some portion of these, recruit services, some of them
housing management, but that sounds as if--does that cover all
of what now is done in food services, housing management,
ground maintenance and so forth throughout the Navy?
Are some sections of it--I take what they are trying to do
is figure out whether you should contract out for all of these
services, and then have your enlisted personnel be majoring in
actually being military personnel rather than potato peelers,
whatever it is, food service entails.
Mr. Pirie. Or Navy civilians. Whether the Navy civilians
are the right way to do it, or whether contract services are
the right way to execute it.
Mr. Olver. So the study is which of those, but not to
continue to do them by enlisted personnel themselves?
Mr. Pirie. These are not military performed functions.
These are functions that are currently being done by civilians
employed by the Navy Department.
Mr. Olver. And does that 85,000--does that mean that there
will be 85,000 Navy and Marine present active positions that
may no longer be there, some portion of them may have
disappeared into these contracts?
Mr. Pirie. Some portion of these billets will be simply
excessed, because the contractor will be performing those
functions.
Mr. Olver. What is a billet?
Mr. Pirie. A billet is a job.
Mr. Olver. Okay.
Mr. Packard. I have maybe three or four quick and simple
questions, and then hopefully we can wrap it up.

line item veto

The Line Item Veto items. Thirty-eight projects. Can you
assure us that these projects will be executed as quickly as
possible?
Mr. Pirie. Yes, sir.
Mr. Packard. You are moving forward with them?
Mr. Pirie. We are moving forward with them, and I believe
that at least five of them will be executable in the fiscal
year. I think the rest will be very shortly thereafter.
Mr. Packard. Within the fiscal year. You say five of them?
Mr. Pirie. Yes.
Mr. Packard. I know part of the year is gone, but we
certainly are--five out of eleven? Would you give us a written
report on the progress of those eleven projects?
I think it would be helpful for us to follow up. I think
Congress went to the effort of overriding, and we would like to
make certain that we didn't just go through the exercise and
then nothing is happening.
Mr. Pirie. We will proceed with those as rapidly as we
possibly can.
Mr. Packard. Thank you very much.
[The information follows:]

The projects restored to the FY 1998 budget will be
executed as promptly as possible. The six month delay between
original appropriation of the FY 1998 program and the overturn
of the line item veto has impacted our ability to execute all
line item veto projects in FY 1998. Our best estimate of
execution of the projects at this time is as follows:

fy 1998 execution

Coronado CA Waterfront Ops Facility (9/98)
Whiting Field FL Runway Improvements (9/98)
Fort De Russy HI Asian Pacific Center (9/98)
St Inigoes MD Maintenance Hangar (9/98)
Johnstown PA Marine Corps Reserve Ctr (9/98)
Johnstown PA Marine Corps Maint Hangar (9/98)
Yorktown VA Tomahawk Magazine (7/98)

fy 1999 execution

Pasadena CA Marine Corps Reserve Ctr (12/98)
Mayport FL Pier Improvements (11/98)
Crane IN Chem/Bio Warfare Facility (1/99)
Norfolk VA Air Operations Building (3/99)
Portsmouth VA Waterfront Improvements (2/99)

child care in san diego

Mr. Packard. I will submit these questions for the record,
and you can respond to them. The Child Development Center in
San Diego is being outsourced, and I would be interested in
something on that.
[The information follows:]

An A-76 Commercial Activities study will determine if the
private sector can manage the entire child care program in the
San Diego region. The goal of the outsourcing study is ``using
on and off-base centers and in-home care, determine if the
private sector can manage the current program, as well as meet
the child care requirements, at equal or better quality and
availability, for less cost to the government.'' The
solicitation is on the street but will be amended to include
five additional areas (El Centro, Port Hueneme, Point Mugu,
Fallon, Lemoore). The current POA&M calls for a decision
whether to contract or remain in-house by December 1998.

dredging in san diego

Mr. Packard. There are two quick questions I would like to
ask. As you know, Mr. Secretary, you and I have been working
together, along with a lot of other people out in the San Diego
area in dredging the harbor, making ready for the Stennis, the
carrier coming into San Diego Harbor this fall.
Would you bring us up to date on the progress of that
dredging and the problems we have run into in terms of sand
deposits on the beach?
Mr. Pirie. The dredging has begun again.
Mr. Packard. It has.
Mr. Pirie. Yes, sir. As you know, two years ago we had
planned and obtained permission to take the sand that we
dredged from San Diego Harbor and put it on various beaches
there in Southern California.
And the additional cost, we obtained some funds to offset
that additional cost, and there was a provision in the
authorization act that the communities should match that dollar
for dollar and so forth.
There was a lawsuit by an environmental group in San Diego
that had to be settled before we could begin the dredging. So
they did not get started with the dredging until some time last
year.
Almost immediately after we had begun to deposit sand on
the beach, we discovered that there was some ordnance in the
sand. That being the case, we felt it was just not consistent
with public safety to go on putting that sand from the harbor
on to the beaches.
We believe that the right way to do this is to proceed with
the dredging project in the most efficient manner and get it
over with, and take the money that will probably be left in the
project, because we are not doing the extra steps required to
put the sand on the beaches, take that money and use it to
finance getting clean sand from some other location put on the
beaches.
And in that way Southern California will be assured of
getting at least some of the sand for the beaches. And that is
what we have been pursuing.
Mr. Packard. Are you on schedule in dredging the harbor for
the Stennis?
Mr. Pirie. Yes, sir. We can make August of this year, if we
do not have any further lawsuits or interference from well
meaning environmental groups.
Mr. Packard. To do all this requires some legislative
language change. Do you intend to put that in the supplemental?
Mr. Pirie. Yes, sir. In fact, I do not believe it is coming
in the supplemental. I think it will be in our legislative
language package.

napalm

Mr. Packard. The second item is again parochial. We have as
you certainly know a Naval ordnance depot adjacent to Camp
Pendleton, and they have been storing for 20 some years now
napalm, old stored napalm bombs. They are deteriorating to
where the canisters are leaking, as you know, and are beginning
to impact the soil and so forth there.
We have now contracted to have it moved. Would you bring us
up to date on that process? There is a delay, a certain delay,
I understand. Would you bring us up to date on that delay, what
has caused it, and when it will be lifted, and when the move
will start?
Mr. Pirie. The delay is a mechanical problem with the
devices that are going to be used to shift the material from
the canisters that they are in into the specially designed
canisters for shipping off to the site in which the napalm will
be blended with other fuels to create industrial fuels for
kilns, for ceramic drying and things of that kind.
Mr. Packard. I know there are some Illinois concerns. But I
think the general understanding is, and all the science and
research has shown that it is actually safer to ship the napalm
to be recycled and burnt for fuel, it is safer than shipping
gasoline that we ship every day in our tankers on the highways
and on the rails.
Mr. Pirie. We have been working on this project for a
considerable length of time.
Mr. Packard. It is an educational problem.
Mr. Pirie. And we finally came up with a design that the
Department of Energy and Battelle Northwest Division, that is
entirely consistent with environmental regulations in
California.
We have had to require public interest and done the
necessary environmental impact statement for that part of it.
The shipping is entirely permitted. The facility that is
going to blend this fuel and turn it into something that is
useful in some other mode of operation is completely permitted,
and so forth. So there is no indication that there is any legal
or environmental deficiency in this project.
And we believe that it should go forward.
Mr. Packard. I do, too. Thank you.
Is there anything further?
Mr. Olver. I have a couple of others here. Mr. Secretary,
can I have a report on that question that I raised about the
Marine Air Reserve, the snag between there and how it is
progressing? That's pretty much very current right now.
Mr. Pirie. We will keep you current on that. I think we can
work that one out.
Mr. Olver. All right. Look, I do not want to be pedantic
about this, but I really am trying to understand. Let me take
you back to this language on page 4 that I was questioning
about, which produced the question about what was a billet.
You say there in January of 1997 you provided Congress with
an intent to compete 10,000 positions. Then the next sentence
says the Navy has now put contracts in place to support the
studies. Most of these studies are now under way.
Are we still talking about the 10,000? They haven't
actually been competed? They are still in study. Most of these
studies are under way and are expected to be completed later
this year or early next year?
Mr. Pirie. The process, looking at the government operation
and coming up with a most efficient organization and so forth
requires hiring some people to help you to develop a new
organization. And those are the studies that are being referred
to there.
Mr. Olver. But this is all in relation to the 10,000 that
you had issued an intent to compete.
Mr. Pirie. Yes, sir.
Mr. Olver. And so--all right. It is only a year and a half.
Less than a year and a half. So those studies are expected to
be completed, and then you would execute whatever it is that
seems feasible from the studies.
But in the meantime you say that you do intend to study,
which is again you really intend to compete more positions,
7,200, an additional 7,800, but those, the studies on thosewill
start, and that will take some time. So we are moving on.
And when you are talking about we plan to study 85,500 in
all these support areas, that may take us, at this rate, that
may take us quite a few years down the road.
Mr. Pirie. Yes, sir.
Mr. Olver. It is a ten year out overall plan to get to that
point.
Mr. Pirie. Yes, sir.
Mr. Olver. And then my last question, which I now
understand, was when you have done those 85,000, if those are
all contracted out or privatized, or whatever the procedure is
there, would that be all the personnel who are doing those
services for the Navy and the Marines?
I guess the obvious answer is----
Mr. Pirie. Would they all lose their jobs?
Mr. Olver [continuing]. Feasible and efficiently done.
Mr. Pirie. The experience is that half of these things
result in--well, some of them----
Mr. Olver. You just won't do.
Mr. Pirie. We will not do. Prove to be not feasible. Some
of them, if the savings are appropriate, we will have a more
efficient government operation, which will be done with fewer
people.
Mr. Olver. Okay. So you are going to study 85,000. Do you
have any guess as to how many of those will actually go this
route of outsourcing?
Mr. Pirie. If we are going to save the historical 30
percent, it would be 30 percent of the 85,000 people.
Mr. Packard. However, some of those would go to the private
sector and do the same job as a private contractor.
This is a personnel issue, not a military construction
issue, but the fact is that I think there are some concerns
among the civilian workers at our bases, that they are going to
lose jobs, and job security, but I think they have always had
that concern as you privatize.
Again, many of those jobs are picked up in the private
sector, and many of those people are qualified and trained and
they go to the private sector and are literally transferred
just from the public to the private sector.
Mr. Olver. However, Mr. Chairman, there will obviously be
losses of jobs.
Mr. Packard. But that is true any time we look to savings
in government. There will be some loss.
I have a list of about 16 or 17 pages of very specific
projects that I would like your staff to respond to that I will
submit for the record. These are a variety of very, very
specific projects and I would appreciate that they take a look
at it.
Mr. Pirie. Certainly. We would be glad to do that, sir.
Mr. Packard. With that, ladies and gentlemen, we appreciate
very much, Mr. Secretary, your testimony, and your very patient
deliberations on the questions and answers.
Mr. Pirie. Thank you, Mr. Chairman.
Mr. Packard. And the hearing is now adjourned.
[Clerk's note.--Questions for the record submitted by
Chairman Packard.]

Arizona--Naval Observatory Flagstaff: Optic Interferometer Support
Facility--$990,000

Question. Quantify the savings that will be realized by
permanent use of the prototype interferometer, compared with
the originally planned follow-on interferometer.
Answer. The project cost of the originally planned follow-
on interferometer was $5.15 million. The current project cost
to support the prototype interferometer is $0.99 million. The
savings realized are $4.16 million.

California--Naval Weapons Center, China Lake: Missile Magazine--
$3,240,000

Question. What is the payback period for this project, in
avoided lease payments to the Army for storage space at
Hawthorne, Nevada, and for related transportation costs?
Answer. Hawthorne Army Ammunition Plant in Hawthorne Nevada
is 280 miles from Naval Air Weapons Station China Lake. Leasing
9,600 square feet for missile magazine storage space at
Hawthorne and using trucks to transport the missiles would have
an estimated cost of:

Amount
Lease of magazine space at Hawthorne: ($.30/SF/month) x
115,200 sq/ft....................................... $34,560
Transportation: Truck at 560 miles round trip x 234
trips x $1,500 per trip............................. 351,000
Contingency 5%.......................................... 19,278
--------------------------------------------------------
____________________________________________________
Total Annual Recurring Cost....................... 404,838
Cost over 25 years...................................... 10,120,000

Estimated cost over 25 years is $10,120,000. This produces a simple
payback of about three years.
California--Naval Air Station, Lemoore: Airframes Facility
Modifications $1,510,000
California--Naval Air Station, Lemoore: Hangar Renovations $5,430,000
California--Naval Air Station, Lemoore: Training Facility Addition
$4,270,000
Question. (a). Is it correct that all three of these projects are
required solely due to the stationing of F/A-18 E/F aircraft at Lemoore
beginning in November of 1999?
Answer. These three projects are required to support the
introduction of F/A-18 E/F aircraft at Naval Air Station Lemoore, CA
beginning in November 1999. All Military Construction (MILCON) projects
required to support the introduction of the F/A-18 E/F aircraft to
Naval Air Station Lemoore, CA were identified in the F/A-18E/F Site
Evaluation Report, prepared by Naval Air Systems Command and issued
April 1997.
Question. (b). Will each of these projects be completed in time to
meet the requirement?
Answer. Yes. Construction for all three projects should begin in
November 1998, affording sufficient time to complete construction just
prior to the aircraft arriving. The Training Facility Addition is
dependent on the delivery of air trainer equipment, which is also on
schedule.
California--Naval Air Station, Lemoore: Weapons Assembly Facility
Improvements $9,430,000
Question. Is the need for this project independent of the
conversion to the F/A-18 E/F aircraft?
Answer. Yes. The Weapons Assembly Facility Improvements have been a
pre-Super Hornet introduction requirement and are required to eliminate
three operational waivers. NAS Lemoore is currently assembling missiles
and bombs, parking explosives laden trucks and storing components for
high explosives under a CNO waiver. In addition, the small door sizes
on current magazines do not support such missiles as the SLAM, AMRAAM,
and HARPOON. This project will eliminate three existing waivers, modify
existing magazines and provide proper storage facilities for the newer,
longer missiles.
California--Naval Facility, San Clemente Island: Bachelor Enlisted
Quarters $8,350,000
Question. (a). Is it correct that block 12D for the form 1391 for
this project means that the future barracks requirement, upon
completion of this project, will be deficient by 104 billets?
Answer. No, The number listed in the Block 12D in an error and
should be zero.
Question. (b). If so, now is this deficiency going to be corrected?
Answer. The deficiency will be corrected by this project.
California--Naval Submarine Base, San Diego: Submarine Support Facility
$11,400,000
Question. Describe the economic analysis that was performed to
determined the cost-effectiveness of decommissioning the submarine
tender USS McKee and performing its work at shore-based facilities.
Answer. Three alternatives were analyzed; The status quo retains
the USS McKee on active duty with operational costs ranging from $6.1M
to $13.OM per year and personnel costs ranging from $42.1M to $97.6M
per year over the 30-year period. A major overhaul would be required in
the next several years which affect SSNs requiring servicing. Another
alternative would use existing DoD facilities at Naval Air Station
North Island (located across the bay from Submarine Base San Diego) and
the Depot Maintenance Facility for nuclear aircraft carriers. This
alternative would require dredging and construction of repair and dry-
dock berths at North Island for the submarines and for the floating
dry-dock ARDM 5 (ARCO). Some work on the submarine Radiological
Propulsion Plant would require moving the floating dry-dock from the
sub base. The last alternative analyzed requires new construction at
Submarine Base San Diego, immediately adjacent to the existing
submarine pier and the ARCO. This alternative has significant
operational benefits and efficiencies. It also has positive quality of
life aspects as training, housing, messing and personnel support
function are close to the workplace. The summary of the net present
value calculations are as follows:

Alternative Name NPV
1. Status Quo........................................... $1,439,409,000
2. Existing Facilities.................................. $24,446,000
3. New Construction..................................... $13,944,000
District of Columbia--Commandant, Naval District: Fitness Center
$790,000
Question. (a). Will the use of this facility be limited to active
duty military personnel assigned to the Washington Navy Yard?
Answer. The use of this facility will be limited to active duty
military personnel assigned to the Washington Navy Yard. It will not be
large enough to accommodate the civilian personnel.
Question. (b). How many such personnel will be stationed at the
Navy Yard at the time this center becomes operational?
Answer. The facility was sized to service the expected 2,300
military personnel.
Question. (c). Upon completion of this project, how will the
existing facilities be re-used?
Answer. The existing Fitness Center in the basement of Building 166
is in poor condition and will be disestablished. The Commandant, Naval
District Washington will decide upon an appropriate reuse for the
basement space upon completion of repairs to the building. The existing
Fitness Center in Building 22 will be shut down and the space will be
used as a food court, in accordance with the Town Center plan for the
Washington Navy Yard.
Florida--Naval Air Station, Key West: Child Development Center
$3,370,000
Question. The form 1391 for this project refers to a CNO letter
dated January 22, 1990. Former facilities were condemned, and leased
temporary mobile units are being used, despite concerns that they can
``become wind borne during tropical storms which are common in the
area.'' Why has it taken so long to present this project for funding?
Answer. This project was slipped for several years due to budget
constraints. The Navy has attempted to provide child care by
contracting with commercial child care providers. All of these attempts
have been unsuccessful. Temporary workarounds have been provided
through the leasing of the mobile units.
Hawaii--Fleet and Industrial Supply Center, Pearl Harbor: Central
Receiving Facility $9,730,000
Question. To what extent will this project reduce the backlog of
real property maintenance requirements, which now totals $27,586,000
for this location according to the form 1390?
Answer. The real property maintenance requirements will be reduced
by $2,009,000 as a result of this project.
Hawaii--Naval Station, Pearl Harbor: Electrical Distribution System
Upgrades $18,180,000
Question. (a). Is it necessary for this project to precede the two
BEQ modernization projects that are programmed for this installation
for fiscal year 2000, at nearly the same cost?
Answer. This project has safety and operational benefits and is
considered to be of higher priority for the activity than the bachelor
quarters modernization and, therefore, precedes them in programming
priority. The electrical upgrades will correct electrical distribution
deficiencies along the Naval Station waterfront providing safe and
adequate electrical power for ships. This project does not provide
power for buildings.
Question. (b). Why not do the barracks this year, and this project
next year?
Answer. As discussed above, this project has a higher priority than
the bachelor quarters modernization projects.
Hawaii--Naval Submarine Base, Pearl Harbor: Bachelor Enlisted Quarters
Modernization $8,060,000
Question. (a). In what year was the existing BEQ constructed?
Answer. The BEA was constructed in 1969.
Question. (b). How confident is the Navy in the structural
soundness of the building?
Answer. The soundness of the existing barracks building was
confirmed during the design phase of the project. The foundation,
structural walls, roof and floors are all adequate and will be capable
of providing a safe, sound structure for an additional 20 or more
years. The structure of the existing building is not a threat to life
safety. However, the existing facility lacks required fire protection
features and is not in compliance with current fire codes. The project
will provide fire alarms, smoke detectors and sprinklers. Asbestos and
lead paint, which also could have adverse impacts on health, will be
removed.
Question. (c). Upon completion of this rehabilitation and addition,
what is the estimated design life of the building?
Answer. The estimated design life of the upgraded building is 25
years.

Hawaii--Navy Public Works Center, Pearl Harbor: Sewer Outfall Extension
$22,877,000

Question. (a). Has the State of Hawaii agreed with the
Navy's proposed correction of Class I and Class II
environmental violations?
Answer. The Hawaii Department of Health (DOH) has not
formally responded to any query by the Navy concerning the
proposed resolution of the environmental problems at Fort
Kamehameha by extending the ocean outfall. However, we believe
DOH views this project favorably based on the numerous informal
discussions held between the Navy and various DOH agencies,
including the Clean Water Branch, and the Environmental
Planning Office. The Environmental Protection Agency has also
been consulted officially and unofficially regarding this
project. All of the regulatory agencies appear to view the
outfall extension favorably. In addition, extension of the
ocean outfall would be consistent with the intent of the Hawaii
Administrative Rules for Water Quality Standards. Since
compliance with the numerical water quality standards for the
State of Hawaii are directly related to the physical
characteristics of the outfall and placement of the discharge,
we have concluded that the project meets the approval of the
regulators.
Question. (b). Why wasn't the need for this extension
foreseen as part of the Fort Kamehameha Wastewater Treatment
Plant expansion, and why wasn't it included in the cost of that
project?
Answer. When the original plans for the Fort Kamehameha
plant expansion were being developed, the State of Hawaii had
not issued the effluent discharge permit that directed effluent
performance caps. The Pearl Harbor estuary designation as a
``water quality limited segment'' in the current permit
immediately placed additional restrictions on the wastewater
treatment plant that could not have been reasonably foreseen.
The Pearl Harbor Estuary is a limited discharge area for the
broad term of ``nutrients,'' all pollutant parameters that
increase the ``nutrient'' loading are ``capped'' pursuant to
Section 304(I) of the Clean Water Act. This was not foreseen by
the Navy nor the regulatory agency who issued the original
permit in 1990. The result of the limitations on Pearl Harbor
means that the effluent discharge permit for Fort Kamehameha
will require nutrient discharge limitations that the current
existing treatment facility and planned expansion cannot
accommodate. Therefore, the alternatives basically equate to
reuse, additional treatment or discharge into a receiving water
that is not limited. Based on the evaluations, outfall
extension is the most reliable and cost-effective alternative.

Hawaii--Navy Public Works Center, Pearl Harbor: Steam Condensate Return
System $6,090,000

Question. (a). This project is required to eliminate
discharges of hot condensate directly into Pearl Harbor, at a
``tremendous waste of energy and water.'' Does the Navy have an
estimate of the savings that will be realized?
Answer. A formal economic analysis was not performed to
verify the savings. The project is being justified on the basis
that it will obviate penalties that otherwise would be levied
upon the Navy by violation of the Clean Water Act since the
steam condensate is being discharged currently into Pearl
Harbor.
Question. (b). Will these savings be passed along to ships
as lower utility rates?
Answer. Not applicable--please see explanation above.
Question. (c). For the record, list the current utility
rates and the anticipated rates upon completion of this
project.
Answer. Not applicable.

Hawaii--Pearl Harbor Naval Shipyard: Engineering Management Building
$11,400,000

Question. (a). This project will convert warehouse space to
administrative space. What non-demolition work will be included
beyond the footprint of the existing building and the 1.5 meter
building boundary?
Answer. The non-demolition work that will be included
beyond the footprint will consist of the following:
1. New outdoor electrical substation and primary ductlines
from existing manholes.
2. Additional telephone lines from the telephone switching
station.
3. Sitework after building demolition such as excavation,
grading, topsoil, grassing, seeding, and irrigation.
Question. (b). Describe the ``special construction
features,'' which total $2,380,000.
Answer. Seismic upgrade is required to convert the existing
4th floor of Building 167 from warehouse use to administrative
use. Executive Order 12941 requires seismic upgrade for any
change in a building's function which results in a significant
increase in the building's level of use, importance or
occupancy. The addition of administrative personnel to 8,361 sm
of the building, which currently houses administrative
personnel on 13,400 sm of the building and warehousing
operations on the remaining 28,000 sm, poses a significant
increase in the building's level of use and occupancy and
warrants seismic upgrade. Work involves constructing footings
and shear walls on the bottom four floors of the five-story
concrete building.

Hawaii--Naval COMMS Area Master Station: Fire Station $1,970,000

Question. Will the existing fire station be demolished, and
is the cost of demolition included in this project?
Answer. Yes, the existing fire station will be demolished
and the cost ($490,000) is included in the project.

Illinois--Naval Training Center, Great Lakes: Applied Instruction
Building Modifications $5,750,000

Illinois--Naval Training Center, Great Lakes: Gas Turbine Training
Facility $7,410,000

Question. Are each of these projects required to perform
current missions, independent of any impacts of base
realignment and closure?
Answer. Yes, both projects are required to support current
missions as well as new training systems and training equipment
which are not related to BRAC.

Maryland--Naval Surface Warfare Center Division, Indian Head: Annealing
Oven Facility $6,680,000

Question. This project will replace existing facilities
that cannot be made to comply with current air quality and
water pollution standards. Has the State of Maryland agreed
with the Navy's proposed correction of Class I environmental
violation?
Answer. Control of water pollution falls within the
cognizance of the Environmental Protection Agency (EPA). EPA
has concurred with the Navy's proposed correction to install a
wastewater collection system to correct Class I environmental
violations at Indian Head, as documented in a 23 December 1996
letter from the Director of EPA Region III's Water Protection
Division to the Commanding Officer of Indian Head Division.
The Maryland Department of the Environment (MDE) has sole
enforcement rights over the air pollution violation since it is
a state standard only (i.e., it is not federally enforceable).
MDE has agreed with the proposed course of action.

Mississippi--Naval Construction Battalion Center, Gulfport: Bachelor
Enlisted Quarters $10,670,000

Question. The fiscal year 2000 program includes a BEQ
modernization project. Is this near the practical limit of how
much such work can be accomplished at this installation in a
single fiscal year, roughly $11,000,000 in barracks
construction per year.
Answer. Well over $11,000,000 per year can be constructed
at an installation in any one year as long as it is primarily
new construction. However, in the case of modernization
projects, places have to be found to house displaced functions
and people during the renovation of the existing facilities.
The amount of modernization work done in one year at an
installation is often limited by the availability of
``workaround'' options. In this case, the barracks renovation
follows the new construction project which will be temporarily
utilized at greater than 1+1 occupancy during the period of the
renovation project. The two projects comprise the complete plan
for BQ requirements at Gulfport.

Rhode Island--Naval Education and Training Center, Newport: Boiler
Plant Modifications $5,630,000

Question. The Navy is working hard to get out of the
utilities business whenever possible. What efforts were made to
privatize utility service at this installation, in part to
avoid the need for this military construction project?
Answer. DoD directives require DON to have the
privatization of utilities completed by January 2000. Steam
plants are not yet included in the current plan, but it is
expected that they will be added at a later time. The
privatization of utility services will not preclude the
requirement for MCON P-406. MCON P-406 is being constructed to
replace boiler plant 86 which is currently in violation of
Rhode Island Department of Environmental Management and U.S.
EPA clean air standards. A consent agreement with the state and
EPA allows limited operation of BP 86 until 31 December 2002.
Under privatization, base facilities would still be utilized
and the requirement for a new boiler plant (P-406) to replace
BP86 would still exist.

Rhode Island--Naval Undersea Warfare Center Division, Newport: Undersea
Warfare Facility $9,140,000

Question. Qualify the economies the Navy expects to realize
through the capabilities offered through this project to
provide synthetic undersea warfare battlespace to supplant live
exercises.
Answer. The construction effort will enable the Navy to
continue to conduct live exercises with the degree of realism
required to maintain Fleet operational readiness in the face of
reduced budgets. By integrating virtual and simulated exercise
participants (generated in a computer) into otherwise limited
live Fleet exercises, the Navy will be able to provide the
additional supporting units and realistic threats needed to
adequately stress Fleet operators and systems. The only
alternatives to the use of virtual and simulated exercise
participants are less training or the use of very expensive
Fleet platforms and targets. Since less training will not
maintain Fleet readiness, the facility will provide a much
needed capability.
The analysis of the economies to be realized is based on a
normal undersea warfare training scenario typical of how the
Navy conducts training when the required Fleet platforms and
targets are available. The economies result when the cost of
live exercise participants is obviated by the availability of
synthetic exercise participants. Typical live participant costs
are:
One hundred exercise undersea warfare munitions (torpedoes,
mines, unmanned vehicles, targets, etc.) cost the Navy $5.0M
per year.
A single ship-day spent at sea for training, taken across
the force, costs the Navy $2.5M per year.
Aircraft cost the Navy $1.5M per year. This is based on an
average of $0.75M in flight hours costs ($0.5K per flight hour
times 6 hour mission duration times 250 aircraft), plus $0.75M
in associated aircraft maintenance costs.
As a concrete example, a nominal live undersea warfare
training exercise might include one destroyer, two submarines,
and 18 exercise munitions. Calculating the cost of days at sea,
flight hours, and exercise munitions support yields a cost of
$5.0M. Using the facility, the number of live exercise
participants would be reduced to the single unit being trained
and the exercise munitions would be eliminated. The cost of
this live/synthetic exercise would be $1.0M for a total cost
savings of $4.0M. Such exercises are conducted several times
each year on both coasts.

South Carolina--Naval Weapons Station, Charleston: Ordnance Railroad
Realignment $9,737,000

Question. Has this project been submitted for NATO funding,
as part of a reinforcement capabilities package?
Answer. The project has not been submitted for NATO
funding. Correction of existing safety deficiencies such as the
elimination of explosive safety waivers is not NATO eligible.
Virginia--Naval Surface Warfare Center, Dahlgren: Weapons System
Development Laboratory Addition $5,130,000
Question. (a). What is the current status of the ``Vision 21''
effort by the Department of Defense to consolidate its testing and
evaluation centers and laboratories?
Answer. ``Vision 21'' has been placed on hold pending inclusion in
the two additional rounds of base closure and realignment requested by
the Secretary of Defense.
Question. (b). How does this project fit with that effort?
Answer. The requirement for this project is to fulfill existing and
future operational needs which would not be affected by a DoD
laboratory consolidation study. Details follow:
TOMAHAWK is a Navy-unique program, and Naval Surface Warfare Center
Dahlgren Division is the single activity designated to provide life
cycle support for the TOMAHAWK Weapon System and the Unmanned Aerial
Vehicle. The equipment and tasking for life cycle support of shipboard
strike warfare functions is consolidated at Dahlgren. The new facility
will house personnel and equipment necessary to provide this support.
This project is required to continue operational support for
current and future TOMAHAWK baselines. Dahlgren is the single site for
validating TOMAHAWK targeting and mission data before deployment, and
serves as operational back-up to CINCLANT and CINCPAC for cruise
missile support activities (since all systems, software, communication
links, and data reside there). It is the only site where the entire
TOMAHAWK weapon system software is tested end-to-end to ensure accuracy
of each version before fleet release, and it is the only site where
fleet reported problems can be duplicated for rapid software
corrections and returned to the fleet.
Dahlgren is the single location for fleet support to the UAV Joint
Tactical Control System for the Navy, Army and Air Force. Each
service's equipment is required to be integrated in FY 2001 and FY 2002
to ensure interoperability before deployment. Dahlgren is also the only
site where the AEGIS, TOMAHAWK, VLS and UAV systems are physically
linked for validating combat system interoperability and for supporting
fleet response with rapid corrections to problems. A delay in
construction will delay the scheduled deployment of TOMAHAWK Baseline
IV system upgrades in FY 2001 and FY 2002 to U.S. ships and the United
Kingdom and the deployment of shipboard UAV Tactical Control Systems.
It also creates a problem in receiving for the activity planning to
receive $21M of highly specialized computer equipment and no adequate
place to put it until the facility is ready.
This facility supports an expanding DoD mission and is the only one
of its kind. Therefore, it is not a viable candidate for elimination or
consolidation at another site.
Virginia--Navy Tactical Training Group, Atlantic, Dam Neck: Training
Building Addition: $2,430,000
Question. How large is the existing building, by how much will this
project expand the building, and will the expansion fully meet the
requirements?
Answer. The existing building is 2778 SM. This project will expand
the building by 1385 SM. The expansion will fully meet the
requirements.
Virginia--Fleet Industrial Supply Center Norfolk: Fire Station
$1,770,000
Question. (a). Upon completion of this replacement project, will
the existing fire station be demolished?
Answer. Yes, the existing fire station will be demolished upon
completion of this project.
Question. (b). The Defense Logistics Agency funds tankage projects
at Craney Island. Do they have a role in reviewing the fire protection
requirement when they expand tankage?
Answer. The Defense Logistics Agency reviewed the plans for this
project and provided design input with regard to the fire protection
requirements for their fuel tanks at Craney Island.
Virginia--Fleet Training Center, Norfolk: Engineering Training Facility
Addition and Renovation $5,700,000
Question. The existing facilities are 50 years old, deteriorated,
and ``beyond economical repair,'' according to the form 1391. Is this
the same building that is being renovated as part of this project at a
cost of only $190,000, or does this describe buildings to be vacated
and demolished?
Answer. The categorization of the facilities as ``beyond economical
repair'' refers to three buildings that are to be demolished. Only a
small portion (95 square meters) a fourth building N-19, which is not
inadequate or beyond economical repair, will be renovated. A fifth
building KBB, which is substandard, will be turned over to the Naval
Station Norfolk.
Virginia--Naval Station, Norfolk: Berthing Pier (Phase I) $32,030,000
Question. (a). Is the second phase of this project for pure
demolition of the existing pier?
Answer. The second phase of this project planned for the fiscal
year 2000 budget request will demolish existing Pier 2 and will provide
some additional dredging.
Question. (b). Would the replacement pier be complete and usable
without demolition of the existing pier?
Answer. The new pier will be built to the south of the existing
pier. The replacement pier will be complete and usable without the
demolition of the existing pier. However, operational use of the north
side of the new pier will be restricted until the old pier is
demolished.
Question. (c). Describe the scheduling adjustments in ship berthing
that will be necessary to continue to operate while Pier 2 is under
construction.
Answer. There will be some operational impacts on the existing pier
during construction. Berthing on the south side of the existing pier
will be occasionally restricted during times of dredging and during
some portions of construction of the new pier. Overall, the impact will
be minimal and berthing restrictions can be temporarily accommodated
through ship scheduling at other piers.
Virginia--Norfolk Naval Shipyard, Portsmouth: Dredging $6,180,000
Question. (a). How long has the Navy been operating with a current
depth of 40 feet at wet slips 3, 4, and 5?
Answer. Norfolk Naval Shipyard has been operating wet slips 3, 4
and 5 at a depth of 40 feet since 1943.
Question. (b). What is the existing carrier draft depth for CVN's
in a fully downloaded configuration?
Answer. The existing carrier draft depth for CVN's in a fully
downloaded configuration is 37.9 feet. A fully downloaded CVN is one
which has all the aircraft, weapons, and jet fuel off-loaded and has a
reduced number of on board personnel, equipment and stores.
Question. (c). Why is this project designed to provide wet slips
and turning basin to a depth of 47 feet plus two feet overdepth?
Answer. The 47 feet of water complies with depth of water
requirements established by the Navy for CVN68 Class carriers to
provide sufficient clearance under the hull to operate carrier systems
and to accommodate differences in carrier trim and list. CVN68 Class
carriers have experienced problems related to sea water discharges and
intakes and therefore, require a minimum bottom clearance of six feet.
CVN68 Class carrier seawater discharges stir up the bottom and floating
organic matter. This material clogs the seawater intakes for the
propulsion plant; requiring that the plant be secured.
Question. (d). Is a 5% contingency an adequate budget for any
dredging activity in this area, with any environmental concerns and
other unknowns?
Answer. Yes, the five percent contingency is adequate for this
dredging project based on sediment samples taken in June 1995, past
maintenance dredging conducted (maintenance dredging in this area last
performed in November 1994), soundings in January 1995 and disposal of
dredge spoils at an Army Corps of Engineers disposal site Craney Island
located 6 miles from the shipyard.
Washington--Strategic Weapons Facility, Pacific Bangor: Security
Facility Upgrades $2,750,000
Question. (a). This project is for the exclusive use of the
Marines. Why is it listed as a Navy project, rather than a Marine Corps
project?
Answer. The Navy is responsible for providing security facilities
to support the Marine force. The Marines provide security personnel for
Navy property under Title 10 USC, Section 5063.
Question. (b). Is there any concern that the form 1391 may be
overly specific in describing the current situation?
Answer. The 1391 has been prepared to ensure that the seriousness
of the condition is understood. Temporary compensatory measures are in
place to address security deficiencies. Completion of this project will
provide long-term resolution of deficiencies and provide quality of
life improvements for the Marine security force.
Greece--Naval Support Activity Souda Bay, Crete: Bachelor Enlisted
Quarters $5,260,000
Question. (a). What generated the relocation of the reconnaissance
mission from Athens to Souda Bay, which in turn created the requirement
for this project?
Answer. The requirement to relocate the Navy/Air Force
reconnaissance mission from Hellenikon Air Base in Athens, Greece to
Naval Support Activity, Souda Bay, Greece was generated by the U.S.
Secretary of Defense. The Secretary announced in January 1990 that the
Hellenikon Air Base should be closed in June 1991 as part of the
Department of Defense European base reduction. The U.S. functions were
moved to Souda Bay and made use of temporary facilities while new
facilities were budgeted and constructed. This is the last major
construction project required for these functions.
Guam--Naval Activities, Mariana Islands: Special Warfare Unit Facility
$5,500,000
Guam--Naval Activities, Mariana Islands: Waterfront Consolidation
Facilities $4,810,000
Question. Has recent storm damage changed the scope or price of
these projects in any way, or modified the requirement?
Answer. No, the damage was isolated to the roll-up doors and roofs
where repairs can be effected with maintenance support.
Italy--Naval Support Activity Naples: NII Public Works Facilities
$18,270,000
Question. Will this project fully meet the requirement for public
works facilities at Capodichino?
Answer. Yes, this project fully meets the requirement for the
Public Works Facilities at Capodichino. The scope of the project was
determined by utilizing NAVFACENGCOM P-80 criteria and by interviewing
the activity staff.
United Kingdom--Joint Maritime Communications Center, St Mawgan:
Education Center Addition $2,010,000
Question. (a). This project constructs an addition to an existing
Royal Air Force library/education center. Was this addition sized
solely to meet the influx of U.S. Navy personnel?
Answer. The addition was sized based on the number of U.S. and
Royal Air Force personnel eligible to use this facility.
Question. (b). Is the additional size for U.S. needs, or for joint
needs?
Answer. The additional size is for joint use of an existing RAF
facility.
Question. (c). Is it correct that this addition is proposed to be
funded solely by the U.S.?
Answer. Yes, by agreement with the U.K., this addition will be
funded solely by the U.S. The U.K. funded the major operational
facilities.

Arizona--Marine Corps Air Station, Yuma: Bachelor Enlisted Quarters
$11,010,000

Question. (a). Upon completion of this project, will the
existing 40-year-old wooden barracks be demolished?
Answer. Yes.
Question. (b). Are the existing barracks in the footprint
of this project?
Answer. Yes.
Question. (c). If so, is demolition included in the cost of
this project?
Answer. Yes.

Arizona--Marine Corps Air Station, Yuma: Land Acquisition for Ordnance
Storage

Question. What is the current status of land acquisition
for ordnance storage at Yuma Marine Corps Air Station, and why
are no funds requested for fiscal year 1999 as the Committee
directed in our report last year?
Answer. A waiver to the DoD Land Acquisition Moratorium has
been obtained from DoD, a Record of Decision (ROD) on the
Environmental Impact Statement is expected in December 1998,
and the project remains programmed in the FY 2000 Military
Construction program.
Top-line constraints require that we make tough decisions
in order to maintain a program that is properly balanced
against the total needs of the Marine Corps. Although we would
have liked to accelerate this project, fiscal constraints did
not allow us to do so.

California--Marine Corps Base Camp Pendleton: Bachelor Enlisted
Quarters $12,400,000

California--Marine Corps Base Camp Pendleton: Bachelor Enlisted
Quarters $15,840,000

Question. The form 1390 for these projects indicates that
no further barracks projects are programmed at Camp Pendleton
until fiscal year 2003, but the forms 1391 state that the
future requirement for unaccompanied housing at Camp Pendleton
totals 10,198 barracks spaces. With this large requirement, why
are no barracks projects programmed for fiscal years 2000
through 2002?
Answer. In order to provide a program that is balanced
against the total needs of the Marine Corps, other activities
with deficiencies and urgent needs have received the focus of
our barracks replacement effort in fiscal years 2000 through
2002. Between 1996 and 1999 Camp Pendleton has over $100
million (approximately 30% of the total barracks funding) in
new bachelor quarters construction. This funding provides over
2,500 new room-configured spaces. Although MCB Camp Pendleton's
need for new bachelor enlisted quarters remains great, we have
been unable to further accelerate these funds under present
fiscal constraints.

California--Marine Corps Air Station, Miramar: Bachelor Enlisted
Quarters $29,570,000

Question. The form 1391 states that the future requirement
for unaccompanied housing at Miramar totals 1,522 barracks
spaces, but the form 1390 indicates that no further barracks
projects are programmed through fiscal year 2003. Is this
deficiency being fixed via projects funded under the real
property maintenance account, rather than by military
construction?
Answer. In order to provide a program that is balanced
against the total needs of the Marine Corps, other activities
with deficiencies and our urgent needs have received the focus
of our barracks replacement effort in FYs 2000 through 2002.
Between 1996 and 1999 MCAS Miramar has received approximately
$96 million (28% of the total barracks funding) in new bachelor
quarters construction. This funding provides almost 2,500 new
room-configured spaces. Although there is a requirement for new
bachelor quarters at MCAS Miramar, this requirement must be
weighed against total Marine Corps requirements for bachelor
quarters.
Hawaii--Marine Corps Air Station, Kaneohe Bay: Bachelor Enlisted
Quarters $27,410,000
Question. Two more major barracks projects are programmed in fiscal
years 2001 and 2003. What are the operational limitations on how
quickly the barracks construction program can be accomplished at
Kaneohe Bay? That is, do you need to spread the work out like this, or
could it be accelerated?
Answer. For the Marine Corps, all future barracks projects plan to
demolish existing inadequate barracks and build new barracks in their
footprint. Therefore, we will temporarily lose billeting space while
the new barracks are under construction. To minimize the dislocation of
enlisted personnel we have scheduled one barracks project per year.
Accelerating the project would unnecessarily displace a larger number
of enlisted personnel
For the Navy, this project supports the increased Navy bachelor
housing requirements at Marine Corps Base Housing after the closure of
Naval Air Station Barbers Point. Based on the site given for this
project, there should be no negative impact to the Marine projects. No
requirements exist to suggest acceleration is required.
North Carolina--Marine Corps Base, Camp Lejeune: Fire Station
$1,830,000
Question. (a). The French Creek area of the base is currently
served by a fire station that is not located properly to meet response
time and distance parameters. Will this project supplement that
station, or will it replace the existing station?
Answer. Yes, the existing fire station will be replaced by this
project.
Question. (b). If this is a replacement, what is the plan for
demolition or reuse of the existing station?
Answer. The old station will be converted to an emergency dispatch
center and will be used for maintenance and storage of fire alarm
equipment, fire sprinklers, fire extinguishers, and reserve apparatus,
as recommended by the Head Area Fire Marshal for Atlantic Division,
Naval Facilities Engineering Command.
North Carolina--Marine Corps Base, Camp Lejeune: Infrastructure
Physical Security: $12,770,000
Question. (a). Does this project support existing training ranges
in the Greater Sandy Run area of the base, or is it designed and sized
to support future construction?
Answer. This project will increase accessibility to three new
ranges that are scheduled to become operational during CY 1998.
However, the primary purpose of this infrastructure project is to
provide a tactical trail network within the Greater Sandy Run Area
(GSRA) that provides access to the ranges and maneuver areas within the
GSRA (west side of US Highway 17).
The tactical trails will connect to the existing tactical trail
network located on the main Camp Lejeune complex (east side of US
Highway 17) via three overpasses across US Highway 17. The State of
North Carolina is constructing these overpasses to carry US Highway 17
traffic, thus allowing Marine Corps tactical vehicles to travel below.
These grade-separated access points and internal circulation routes are
designed to minimize conflict between civilian and military vehicles,
to maximize security, and to efficiently provide access for heavy
tracked vehicles to and from the maneuver areas and ranges.
Question. (b). Provide for the record the future projects, if any,
that would be supported by this project.
Answer. This project contributes to the support of the following
future projects.

P-029 LAV/AAV Gunnery Range
P-031 Multi-Purpose Machine Gun Range
P-032 Infantry Squad Battle Course
P-033 Anti-Armor Tracking Range
P-034 Multi-Purpose Machine Gun Range
P--035 Multi-Purpose Machine Gun Range
North Carolina-Marine Corps Air Station Cherry Point: Aircraft Fire and
Rescue Station Addition $1,620,000
Question. (a). The existing facility has enough space to park six
aircraft fire and rescue vehicles, compared with a requirement to house
nine vehicles. How long has this requirement been unmet?
Answer. The original requirement to house aircraft fire and rescue
(AFR) vehicles was submitted to HQMC in 1985. In February 1996, trucks
belonging to the 2d Marine Aircraft Wing were transferred to the air
station under an indefinite intraservice support agreement, bringing
the total authorized vehicles at MCAS Cherry Point to 14. Since four of
the 14 vehicles are down for maintenance at any given time (and thus
housed in the maintenance facilities), and one vehicle is on the flight
line for flight operations, there is a requirement to house nine
vehicles.
Question. (b). Is the requirement driven by the sortie rate, or by
other factors?
Answer. The requirement for vehicles is driven by the aircraft
maximum gross takeoff weight in pounds handled at the air facility.
MCAS Cherry Point has a gross weight category of three, which means the
minimum number of P-19A vehicles needed is four. Additionally, at least
one truck is needed for response off base, and several for use away
from the air station on exercises. Because the P-19A is so maintenance
intensive, additional vehicles are needed to ensure that at the height
of flight operations, at least seven vehicles are available to meet
mission requirements.
Question. (c). How long has the operational tempo been at the level
of 13,000 landings and departures per month?
Answer. The operational tempo has averaged approximately 13,000
landings and departures per month since 1985.

North Carolina--Marine Corps Air Station Cherry Point: Child
Development Center $4,420,000

Question. There are 268 children in the existing
facilities, and an average waiting list of 195 children. This
project will provide a center with a capacity for 258 children.
How was this project sized to meet the requirement?
Answer. The size of this project was based on the total
number of children that require child care minus the number of
children being taken care of in permanent adequate facilities.
There are 463 children requiring child care at MCAS Cherry
Point (200 in adequate permanent facilities, 68 in temporary
trailers, and 195 on the waiting list). There are adequate
permanent facilities available for 200 children, so the
remaining number of children requiring child care is 263.

South Carolina--Marine Corps Air Station, Beaufort: Missile Magazines
$1,770,000

Question. (a). This project involves the renovation of two
of the three existing inadequate missile magazines at Beaufort,
and construction of one new magazine. Why can't the third
existing magazine be renovated in order to avoid the need for
new construction?
Answer. The third existing missile magazine, if renovated,
would not have enough capacity to store the remainder of the
missiles. The existing missile magazines were not designed for
the size of today's missiles and do not have enough space to
allow for aisles. This means that if the missile(s) needed are
not in the front of the magazine, all the missiles would have
to be removed from the magazine until you reached the required
missile(s). (This also applies to the two magazines being
renovated, but these will be used to store missiles that are
infrequently accessed.) The chance of accidentally damaging a
missile increases with handling or movement.
Question. (b). How will the third (unrenovated) magazine be
utilized, or will it be demolished or abandoned?
Answer. The third existing magazine will be used to store
moderate explosives (as opposed to high explosives) so as not
to infringe on Combat Aircraft Loading Area (CALA) operations.
Question. (c). These magazines will store 544 Sidewinder,
HARM, and AMRAAM missiles. What is the dollar value of this
inventory?
Answer. The total value of the 544 missiles is
approximately $190 million.

South Carolina--Marine Corps Recruit Depot Parris Island: Weapons
Battalion Mess Hall $7,960,000

Question. (a). How will the existing inadequate mess hall
be re-utilized, or will it be demolished or abandoned?
Answer. The existing inadequate mess hall will be
demolished.
Question. (b). Does this project include the cost of all
required food service equipment?
Answer. The project includes the cost of built-in
equipment. An additional $1.5 million for collateral equipment
is planned for FY 2000.

Worldwide Various--Minor Construction: Unspecified Minor Construction
($8,900,000)

Question. Provide for the record a ten year history of
amounts that have been requested and appropriated for
unspecified minor construction.
Answer.

------------------------------------------------------------------------
Requested Appropriated
------------------------------------------------------------------------
Year:
1990................................ $14,000,000 $14,000,000
1991................................ 13,300,000 13,300,000
1992................................ 12,400,000 12,400,000
1993................................ 5,000,000 \1\ 10,300,000
1994................................ 5,500,000 \2\ 8,350,000
1995................................ 7,000,000 7,000,000
1996................................ 7,200,000 7,200,000
1997................................ 5,100,000 5,100,000
1998................................ 11,500,000 11,500,000
1999................................ 8,900,000 \3\
------------------------------------------------------------------------
\1\ $5,300,000 added to original request via approved reprogramming.
\2\ $2,850,000 added to original request via approved reprogramming.
\3\ Pending Congressional approval.

Worldwide Various--Planning & Design: Planning and Design ($58,346,000)
Question. Will this funding level meet the known requirements for
the fiscal year program, including the necessary work on projects
programmed for fiscal years 2000 and 2001?
Answer. The total of $58,356,000 will be sufficient to design the
projects in FYs 2000 and 2001. Planning and design funds approved in
FYs 1997 and 1998 are being used to complete the designs for projects
in the FY 1999 program.
Barracks
Question. Provide for the record a chart that will show the Navy's
barracks construction program at the time the ``one plus one'' standard
was approved, and the current program through completion, broken out by
locations in the U.S. and Europe, and other overseas locations.
Answer. In July of 1995, the Navy developed the following
programmatic plan for the conversion of permanent party barracks to the
1+1 standard:

----------------------------------------------------------------------------------------------------------------
Permanent party barracks spaces FY95 FY00 FY05 FY10 FY13
----------------------------------------------------------------------------------------------------------------
Spaces to convert:
Served by Gang Latrines.............................. 23,000 15,600 5,600 ......... .........
Three or more per room............................... ......... 16,000 8,900 4,900 .........
Two per room......................................... ......... 38,900 37,400 27,400 13,400
Converted spaces: One per room (1+1)..................... 1,000 16,200 40,200 63,500 76,700
----------------------------------------------------------------------------------------------------------------

At the time, we believed that applying $2.65 billion ($2.05 billion
MILCON, $0.3 billion OMN and $0.3 billion anticipated foreign
government construction) from FY 1995 to FY 2013 would provide 1+1
barracks for permanent party personnel by FY 2013.
This program has been superseded by new policies on berthing of 3-
5/6, revised allowances, and the development of installation
implementation plans for the new standard directed by Congress. These
changes are causing major revisions to the original plan. The
implementation plan is due in April and will provide base-by-base
comprehensive plans that will outline the construction, renovation and
repair required to upgrade the Navy's bachelor quarters.
Family Housing Inventory
Question. Provide for the record a chart that will show the average
number of family housing units supported for fiscal years 1996, 1997,
and 1998, and those expected to be supported in fiscal year 1999,
broken out into government owned (U.S. and foreign), leased (U.S. and
foreign), and privatized under Public--Private Ventures.
Answer. A chart showing the average number of family housing units
supported and available for occupancy for fiscal years 1996, 1997, and
1998 and projected for fiscal year 1999, broken out into government
owned (CONUS, U.S. Overseas and foreign), leased (U.S. and foreign),
and privatized under Public Private Ventures follows:

----------------------------------------------------------------------------------------------------------------
FY 1996 FY 1997 FY 1998 FY 1999
----------------------------------------------------------------------------------------------------------------
Government owned............................................ 70,651 69,337 65,182 61,923
CONUS................................................... 51,680 50,105 46,638 44,020
U.S. Overseas........................................... 11,279 11,290 10,892 10,649
Foreign................................................. 7,692 7,942 7,652 7,254
Leased...................................................... 4,522 4,847 5,558 6,457
U.S..................................................... 2,920 3,279 3,664 3,940
Foreign................................................. 1,602 1,568 1,894 2,517
PPV Units................................................... 0 0 585 585
----------------------------------------------------------------------------------------------------------------

Privatization of Utility Systems
Question. (a). Describe in some detail the Navy's ongoing efforts
to privatize utility systems.
Answer. As part of the Defense Reform Initiative Directive (DRID),
the Services have been directed to develop a plan for privatizing all
utility systems (electric, water, wastewater and natural gas) by
January 1, 2000--except those needed for unique security reasons or
when privatization is uneconomical.
The Navy and Marine Corps worked jointly to develop the required
privatization plan. The plan addresses the proposed approach, timeline,
and cost estimate for each privatization effort. It includes issues
involving contracting, real estate, environmental, and economics.
The Department of the Navy recently submitted the privatization
plan to the Defense Management Council. Execution guidance and generic
contracting documents are being prepared to facilitate this effort.
Question. (b). Are you seeking any legislative language to change
existing authority?
Answer. No. Special legislation was passed last fall which gives
Service Secretaries the authority to approve the transfer of utilities
systems to a privatization company when life cycle analysis determines
that the privatization action is economical to the government. A
congressional notification period is also included in the legislation.
Question. (c). Can you document any savings or avoided costs, in
net present value--or are costs merely being amortized through future
rate payments?
Answer. The Department of the Navy, having just submitted its plan
to the DMC, has not yet completed any privatization efforts. The
necessary analysis will be done later during the development of each
individual function to be considered for privatization.
Public-Private Ventures in Family Housing
Question. (a). Under current law, can the Navy transfer Family
Housing funds to the Military Personnel accounts?
Answer. Under current law, DON cannot transfer funds authorized and
appropriated by Congress from the Family Housing (FHN/FHMC) to the
Military Personnel accounts (MPN/MPMC). Adjustments to the accounts are
made during budget preparation prior to submission of the President's
budget to Congress.
Question. (b). If not, what execution difficulties can you
anticipate?
Answer. The Services allocate resources to particular budget
categories (appropriations) up to two years in advance of the actual
need during development of the President's budget. We program
sufficient funds in the personnel accounts to pay the Basic Housing
Allowance (BAH) for eligible members, and the family housing account to
pay for the operation and maintenance of government owned units. When
we expect to privatize government owned units, we adjust our planned
budget to reduce funding in the family housing account because we will
no longer expect to operate or maintain those units, and increase funds
in the personnel accounts to pay BAH. These assumptions are included in
the President's budget submitted to Congress. The difficulty comes
about if privatization occurs at a different rate than planned in the
budget request. If privatization occurs sooner than planned in the
budget, it creates a surplus in the family housing account and a
shortage in the personnel accounts. Conversely, if privatization occurs
later than planned in the budget, it creates a shortage in the family
housing account, and a surplus in the personnel accounts. The greater
the difference between the planned privatization date and the actual
privatization date, the greater the execution challenge. Further
complicating matters is that we have little experience to date to
reliably predict a PPV implementation schedule.
Question. (c). In the preparation of this year's budget materials,
have there been ``transfers in the estimates'' for fiscal year 1999,
moving funds out of the family housing account and into the military
personnel account?
Answer. During preparation of this year's budget request, the Navy
transferred $3.9 million from the family housing account to the
military personnel account. Funding transfer was based on anticipated
family housing operation and maintenance cost avoidance resulting from
the potential privatization of government homes. The Marine Corps did
not transfer any funds in this years budget request.
Albany, Georgia: Public-Private Venture Family Housing Project
Question. Submit for the record a copy of the Congressional
notification regarding the PPV project at Marine Corps Logistics Base
Albany, Georgia.
Answer. For the record, copies of the Congressional notification to
the four subcommittees on the PPV project at MCLB Albany are attached.
Offset Folio 2648 Insert here

BRAC Environmental Restoration
Question. (a). Upon completion of the current Base Realignment and
Closure program in the year 2001, under which account does the Navy's
Future Year Defense Program envision funding ongoing environmental
restoration for those locations?
Answer. BRAC requirements for funding ongoing environmental
restoration in Navy's Future Year Defense Program after 2001, will be
held in the Environmental Restoration, Navy (ER, N) account.
Question. (b). Is there a current estimate of the annual funding
requirement beginning in fiscal year 2002?
Answer. The current estimate of the annual funding requirement
beginning in fiscal year 2002 is as follows:

[In thousands of dollars]

2002.............................................................. 93.8
2003.............................................................. 31.5
Availability of Land Sales Revenues
(proposed general provision section 123)
Question. (a). Provide for the record a history of the proposed
general provision Section 123, regarding land sales revenues at Paine
Field in Snohomish County, Washington.
Answer. The National Defense Authorization Act for Fiscal Year 1993
authorized the Secretary of the Navy to sell approximately 68 acres of
land, together with 74 units of Naval family housing located at Paine
Field in Snohomish County, Washington. The law also authorized the Navy
to use the funds, subject to the availability of appropriations, to
acquire or construct not more than 350 units of family housing for
Naval Station Puget Sound. The property was conveyed to Snohomish
County in July 1996 and the proceeds, totaling $6,000,000 are currently
held in escrow pending the availability of appropriations to use the
funds for the intended purpose. At the present time, the Navy is
leasing back the 74 units from the purchaser of the property at a cost
of approximately $1,000,000 per year.
The provision in the current legislation ``subject to the
availability of appropriations'' is precluding us from using the funds
for their intended purpose. To our knowledge, there are only two means
to make the funds available:
Make an amendment to Section 2842 of Public Law 102-484, deleting
the opening phrase ``Subject to the availability of appropriations for
this purpose.'' We are unaware of any scoring implications associated
with this alternative, but we understand that there are procedural
rules within the House of Representatives that may impact upon this
alternative.
Appropriate the funds received by the Secretary of the Navy, making
the funds available for the purposes authorized in PL 102-484. It is
our understanding that the appropriation of these funds for these
purposes would be subject to scoring.
Question. (b). Does the Navy agree with scoring by the
Congressional Budget Office that states that this language will cost
$6,000,000 in budget authority and $1,000,000 in outlays during FY
1999?
Answer. The Navy has no objection with the scoring by the
Congressional Budget Office that states this language will cost
$6,000,000 in budget authority and $1,000,000 in outlays during fiscal
year 1999. However, there is concern that our FY 1999 request could
decrease by $6,000,000.
Maryland--U.S. Naval Academy, Annapolis; Bancroft Hall Renovation
Question. (a). Outline for us the military construction project
that was requested but not appropriated in fiscal year 1990, for the
expansion of Bancroft Hall, and provide the form 1391 for this project
for the record.
Answer. The 1990 Military Construction project was intended to add
two additional 170,500 square foot wings to the existing eight wings of
Bancroft Hall. Designated as Wings 9 and 10 these wings would have
provided housing for an additional 924 Midshipmen. Copies of form 1391
dated 1 Jan 1989 for this project are provided for the record.
Question. (b). This fiscal year 1990 project requested $24,000,000
for the first phase of a two phase project, totaling $48,000,000. Is it
correct that the Navy is in the midst of an Operation and Maintenance
account-funded project to renovate but not expand Bancroft Hall?
Answer. This is correct. The current Operation and Maintenance
funded project repairs the existing eight wings of Bancroft Hall.
Question. (c). Give us the history of annual funding of the O & M
project, from inception through its scheduled completion.
Answer. The table follows: Note that values do not include design
cost. ``*'' denotes projections.

Fiscal year: Amount
1994................................................ $21,182,000
1995................................................ 33,366,000
1996................................................ 28,792,000
1997................................................ 28,107,000
1998................................................ *21,775,000
1999................................................ *29,563,000
2000................................................ *30,725,000
2001................................................ *33,145,000
2002................................................ *24,886,000

Question. (d). Give us a detailed comparison of the differences in
scope of work and cost between the $48,000,000 proposed military
construction expansion project and the O&M renovation project.
Answer. The Proposed Military Construction project added two
additional five story, 170,500 square foot wings to the existing eight
wings of Bancroft Hall. This addition would have provided additional
berthing for 924 Midshipmen. Costs identified in the Military
Construction project are solely related to the construction of the
additional wings. The current O&M funded project repairs the 1.4
million square feet in the existing eight wings. Repairs are being done
to the mechanical and electrical systems, building envelope, life-
safety and other code requirements. Costs identified for this repair
effort are solely related to restoring the existing facility to a state
of operating efficiency.
Question. (e). Submit for the record the guidance the Navy relies
on when deciding whether work should be funded by military construction
or by O&M.
Answer. Guidance used by the Navy is included in the Facilities
Project Manual, OPNAV Instruction 11010.20F. It incorporates all
applicable laws and regulations, and applies to all facilities
projects, regardless of cost or method of accomplishment, financed
from: (1) Operations and Maintenance, Navy and Naval Reserve; (2)
Research, Development, Test and Evaluation Navy; (3) Military
Construction, Navy and Naval Reserve; (4) Non-appropriated funds; (5)
Other Procurement, Navy; and (6) Navy Working Capital Fund (NWCF). The
instruction includes the requirement for Assistant Secretary of the
Navy (Installations and Environment) approval of repair projects
exceeding over $5 million. The instruction's definition of repair is
consistent with that stated in Section 2811 of Title 10, United States
Code and as amended by Section 2802 of the National Defense
Authorization Act for FY 1998, Conference Report (105-340) to accompany
H.R. 1119.
Offset Folios 2654 to 2657 Insert here

Louisiana--Naval Air Station, New Orleans: Engine Test Cell
Modifications $2,200,000
Question.This project will provide a ``hush house'' engine test
cell for testing approximately 72 F/A-18 (F404) jet engines. Will this
facility fully meet the requirement for maintenance that is performed
at this location?
Answer. This project will result in NAS JRB New Orleans being fully
capable of performing all of the intermediate level maintenance actions
on the F/A-18 (F-404) engine.
Minnesota--Naval Reserve Readiness Command, Minneapolis: Administrative
Headquarters Building $3,630,000
Question. Submit for the record a copy of the current agreement
between the Naval Reserve and the Air Force Reserve Base in
Minneapolis/St. Paul.
Answer. The Air Force Reserve Base memorandum of August 15, 1996
confirmed the extension of the permit to May 31, 2001. Please see
attachment (1). Southern Division, Naval Facilities Engineering
Command, Real Estate Division letter dated August 28, 1996 confirms
permitted use and permission by the Air Force to the Navy to remain at
the existing facility. Please see attachment (2). The Base Civil
Engineer's letter of October 8, 1996 stated that ``There will be no
further lease extension.'' Please see attachment (3).
Extrapolating the time line to solicit, construct, equip and occupy
the new building based on acquiring obligation authority in November
1998, allows use in June 2000. Exiting the existing facility prior to
lease termination is in the spirit of cooperation with the Air Force.
The Air Force has an emerging and growing requirement for billeting.
Turning over the building as soon as reasonably possible offers the Air
Force the opportunity to ease their billeting problem. The Air Force
was extremely helpful in obtaining a site for the new headquarters
building, and as such, the good will generated by returning the old
facility will only benefit future working relations.
Question. Can you tell us why the Air Force Reserve wants its
building back?
Answer. The Air Force wants the building returned in order to
convert it back to its original purpose as lodging quarters.
Question. The Air Force Reserve has provided a 1.79 acre site for
this project. Will they have any control over this building in the
future, or will this facility be under the Naval reserve's exclusive
control?
Answer. The permit on the 1.79 acre site is ``revocable at will by
the Secretary'' [Secretary of the Air Force]. The revocable clause is a
standard government clause that is rarely used. The new Headquarters
Building is expected to be under the Naval Reserve's exclusive control,
subject to normal rules and regulations of the Installation Commander.
Offset Folios 2661 to 2663 Insert here

Virginia--Naval Air Reserve Center, Norfolk: Hangar Alterations
$1,660,000

Questions. (a). How large is hangar 200? What is its current
replacement value, and what fraction of the hangar will be refurbished
under this project?
Answer. Hangar 200 is 83,223 square feet or (7.740 square meters).
The 1997 Current Plant Value for hangar 200 is $23,661.000. This
project will renovate 10,495 square feet or (976 square meters). This
is 12.6% of the total square footage of the facility.
Questions. (b). Why is this a military construction project rather
than an operation and maintenance project?
Answer. The Naval Reserve is limited for Operations and Maintenance
funded new construction to $500,000 by 10 U.S.C. 2805(C). The cost of
the new construction portion of this project, which is the building
area being added to the facility, is estimated to be $638,000.

Massachusetts--Marine Corps Reserve Center, Fort Devens: Reserve Center
Renovations: $840,000

Questions. This project renovates three buildings at Fort Devens to
provide facilities for a unit that is now located in Lawrence,
Massachusetts. Will this renovation fully meet the facilities needs of
this unit?
Answer. Yes, this project will full meet the facilities needs of
this unit.

Texas--Marine Corps Reserve Training Center, Galveston: Marine Reserve
Training Center $4,090,000

Question. (a). Is it correct that this project will be built on
44.9 acres of land that is currently owned by the Marines?
Answer. Yes, this property was assigned to the Marine Corps in
September, 1991.
Questions. (b). Upon completion, will this project meet all land
and building requirements for the assigned unit at full strength, or
will leased land or facilities still be required?
Answer. When this project is completed it will meet all land and
building requirements for the assigned unit at full strength.

Supplemental Request

Questions. The Committee will be moving quickly to mark-up a fiscal
year 1998 supplemental appropriation bill, including funds for the
Department of Defense. We have not yet received an official request for
additional military construction funds, but we understand that the Navy
may be seeking funds for storm damage repairs. Is there anything you
can tell us today about the Navy's request?
Answer. To date, the Marine Corps has identified a total
requirement for flood damages of:

Operations & Maintenance, MC............................ $27,200,000
Military Construction, MC............................... 2,600,000
Family Housing, MC...................................... 1,000,000
--------------------------------------------------------
____________________________________________________
Total............................................. 30,800,000
The Navy's portion of the supplemental appropriation
request for FY 1998 to cover storm damage in Guam
is:
Operations and Maintenance, Navy........................ $48,100,000
Navy Working Capital Fund............................... 24,017,000
Family Housing, Navy (MILCON)........................... 15,600,000
--------------------------------------------------------
____________________________________________________
Total............................................. 87,717,000
Total Department of the Navy........................ 118,517,000

Funding to cover El Nino damage is in the supplemental
appropriation request as part of a Department of Defense $50M lump sum
for unspecified projects. Damage incurred at Department of the Navy
facilities is part of that request.

Family Housing General Reduction

Question. (a). The Construction Annex to the budget request--that
is, the ``C-1'' document--contains an entry ``Congressional Reductions,
minus $6,323,000'' in the Navy's Family Housing program. Please explain
this entry.
Answer. The C-1 Annex entry reflects our intent to partially fund
this year's $59,504,000 construction request using $6,323,000 in
savings from prior year new construction programs. The savings resulted
from favorable bids on prior year projects.
Question. (b). Is this unobligated balance currently available to
pay the costs of storm damage that will be requested in any
supplemental for fiscal year 1998?
Answer. No, unobligated funds are budgeted for Navy replacement
construction projects included in our FY 1999 program. Loss of the
$6,323,000 unobligated balance would result in a reduction in the scope
of our FY 1999 projects.

Family Housing Privatization Through the Family Housing Improvement
Fund [``Public-Private Venture'' Program, or ``PPV'']

The Committee has received the notification for the Army's family
housing privatization project at Fort Carson, and it is under review.
The Navy has executed two projects in Texas and Washington under
somewhat different authorities, and several other projects are under
review within the Navy. We will be going into detail about the ongoing
privatization program when we have our hearing with Under Secretary
Goodman on March 12. I have several questions that I will ask you to
answer, from the Navy's perspective.
Question. Does the Navy anticipate that there will be any
significant financial savings from privatization as compared with the
traditional program?
Answer. The Navy and Marine Corps will leverage its capital
investment, and expect to realize a life-cycle cost savings of 20-30%
over the term of the agreement. These savings will be reinvested in
housing programs in order to solve our housing challenges faster.
Question. To what extent is privatization becoming a substitute for
the traditional family housing program, rather than the supplemental
program that Congress originally intended?
Answer. It has been DoD policy to rely on communities near military
installations to provide housing for our service members, and to
program military family housing where the community cannot meet housing
requirements or where available housing is unacceptable. Using the
investment authorities provided by Congress, the Department of the Navy
will rely on PPVs to satisfy housing needs where the private market
cannot meet our requirements. PPVs also will be the first choice for
accomplishing whole-house revitalizations, acquiring replacement units,
and solving housing deficits. We believe that by using the PPV
authorities, we can leverage our scarce resources to gain three to four
homes for the same investment required to build and maintain one home
using traditional military construction. However, if an analysis of
economic, quality and market factors demonstrates that a PPV is not
feasible, we would turn to our military family housing program to meet
our requirements.
Question. Is it correct that the cost of the family housing program
is being shifted from this bill to the housing allowances sub-accounts
within the military personnel accounts in the National Security
appropriations bill?
Answer. The only funds that will be transferred from the Family
Housing, Navy account to the Military Personnel, Navy or Military
Personnel, Marine Corps accounts is an amount equivalent to the housing
allowances associated with the occupants of the privatized houses.
During preparation of this year's budget request, $3.9 million was
transferred from the Family Housing, Navy account to the Military
Personnel, Navy account. There was no FY 1999 transfer for the Marine
Corps.
Question. Is this a ``zero-sum'' game, that is will there be any
savings or is it just a shift of costs?
Answer. If we are successful with our PPV projects there will
initially be significant housing revitalization cost avoidance for the
Navy and Marine Corps. We also anticipate a life-cycle cost savings for
a PPV project compared to a military construction project. We
specifically intend to reinvest these savings into housing programs in
order to solve housing challenges faster. There is a significant up
front benefit--we expect to leverage our housing funds to get at least
three to four times the housing compared to traditional military
construction.
Question. Is there any assumption about the future funding levels
for housing allowances?
Answer. As government homes are privatized the Department of the
Navy will rely on housing allowances to ensure families are suitably
housed. However, with the recent enactment of the new Basic Housing
Allowance (BAH), it is difficult to predict future funding levels. BAH
is being phased in over the next five years and will better tie housing
costs to local market conditions and equalize out-of-pocket costs for
equivalent housing, across the nation. The Department of the Navy will
be watching closely how this affects the housing situation for our
members and their families. None of our PPV projects assume any major
changes in current housing allowance levels.
Question. (a). Is the Navy holding up the execution of family
housing projects for which funds have been appropriated, pending
privatization efforts?
Answer. Yes. Family housing construction projects are being
evaluated to realize maximum advantage from privatization's potential
to provide three times more housing for the same money as military
construction.
The Marine Corps is reserving the minimum level of MILCON funds
required to successfully execute proposed PPV projects. All other FH
MILCON funds have been released for execution. We believe this provides
a balanced approach to steadily improve the quality of our family
housing.
Question. (b). If so, which projects are being help up, and what is
the total dollar amount being withheld from obligation?
Answer. The Navy list of projects undergoing PPV-potential
evaluation prior to obligation of funds is attached.
For the Marine Corps the total dollar value is $102.9M, as shown
below:

In millions
Camp Pendleton, FY 1996........................................... $10.0
Camp Pendleton, FY 1996........................................... 10.0
Beaufort, FY 1997................................................. 14.0
Camp Lejeune, FY 1997............................................. 10.1
29 Palms, FY 1998................................................. 23.9
Chery Point, FY 1998.............................................. 6.0
Miramar, FY 1998..................................................**28.9
-----------------------------------------------------------------
________________________________________________
Total....................................................... 102.9

**Reserved for COMNAVBASE San Diego Navy Regional PPV Project.

Question. (c). If so, are theses funds being withheld to meet OMB
scoring costs on mortgage guarantees to developers against base
closure, downsizing, or extending deployments?
Answer. No, not at this time.
Offset Folios 2675 to Insert here

Question. The Army is proceeding very aggressively to execute
``whole installation'' type projects. The Navy policy envisions a
``regional scope.'' Does this mean the same thing, privatizing all
family housing in a large geographic area?
Answer. All Department of the Navy housing in a region will be
evaluated for inclusion in a PPV project. A ``region'' is defined in
terms of contiguous commuting areas. Where appropriate, the inclusion
of non-contiguous areas may be considered. Within these regions, the
installations' entire inventory of housing would be considered for
privatization.
Question. Under current authorities, family housing privatization
involves government contribution of land, facilities, infrastructure,
mortgage guarantees, and differential lease payments to developers and
financiers. Wouldn't it be prudent to gain some experience with how
well this program works, before making such a large commitment to turn
over so many assets for a fifty year term?
Answer. As a general rule, the Department of the Navy has decided
that it will not sell its assets, but, rather, will enter into long-
term leases for its land and facilities. We have proposed 50-year deals
where all land and improvements revert to the Navy at the end of the
term, and the housing is renovated along the way. However, there will
be exceptions, and each situation will be reviewed on a case-by-case
basis.
Question. It took us many, many years to build up these family
housing assets. Tell us about some of the steps the Navy is taking to
protect its investments under its program.
Answer. As a general rule, the Department of the Navy intends to
protect its investment by entering into long-term leases for its land
and facilities and not selling its assets. We have proposed 50-year
deals where the control of all Navy-owned land and improvements revert
to the Navy at the end of the term, and the housing is renovated along
the way. However, there will be exceptions, and each situation will be
reviewed on a case by case basis. The objective is to provide the best
deal to the Department of the Navy that still provides adequate and
affordable housing for our Sailors, Marines, and their families.
Question. Provide for the record a list of the Navy locations that
are under consideration for such projects, including the number of
units in the current inventory at each location, as well as some
indication of the value of the total government contribution at each
location.
Answer. We can not at this time provide the value of the total
government contribution at each location. That will be determined by
the specific nature of the PPV at each location, which may include
government owned assets. The following table lists the current work
estimate for each location along with the other information requested.
For the Marine Corps:

WHOLE BASE
----------------------------------------------------------------------------------------------------------------
Units under
Activity Type consideration Total units CWE ($000)
----------------------------------------------------------------------------------------------------------------
Campe Lejeune............................ Const....................... 94 4,453 $10,110
29 Palms................................. Const....................... 132 1,704 23,891
Other PPV locations:
Camp Pendleton....................... Const....................... 138 6,119 20,000
MCAS Beaufort........................ Const....................... 140 1,276 14,000
MCAS Cherry Pt....................... Improve..................... 83 2,764 6,000
MCAS Miramar......................... Const....................... 166 520 28,881
----------------------------------------------------------------------------------------------------------------

All other projects are expected to be executed as Family Housing MILCON
vice PPV.
A list of Navy locations that are under consideration for Public
Private Ventures is attached.
Offset Folios 2680 to Insert here

Overseas Housing Authority

Question. Is the Navy interested in a legislative proposal for the
establishment of an ``Overseas Housing Authority'' as a ``Non-
Appropriated Fund Instrumentality,'' which the Army is pursuing, and
which is now under review at the Office of Management and Budget?
Answer. The Department of the Navy supports the Army's proposal.
The Navy intends to monitor the pilot program's progress for
applicability and to ensure that the Navy, Marine Corps, and air Force
military personnel accounts are adjusted to reflect allowances for
their personnel living in Army homes at the pilot locations.

Cost of Base Closure

Question. When this Subcommittee took on the cost of base
realignment and closure, we were assured that these resources would be
returned to the military construction and family housing programs upon
completion of BRAC. How has the Navy benefited from this program?
Answer. Navy closures and realignments directed under the four
rounds of BRAC are 85 percent complete. The Navy will benefit from BRAC
by having less infrastructure to operate and maintain. By the end of
this fiscal year, we expect net savings (cumulative savings minus
cumulative costs) from all 4 BRAC rounds to total $1.4 billion in
savings. By the end of FY 2001, when all four rounds of BRAC will be
complete, we project the Department of the Navy will have spent $10.0
billion and saved $15.7 billion, for a net savings of $5.5 billion.
Equally important, beginning in FY 2002, we will save an additional
$2.6 billion each year because we no longer operate and maintain those
bases.

Line Item Veto

Question. The President's use of line item veto on last year's bill
took a total of eleven projects for the Navy and Naval Reserve. The
House overrode this veto on February 5, and the Senate followed suit on
February 25. Can you assure us that these projects will be executed
promptly now that funding is resolved?
Answer. The projects restored to the FY 1998 budget will be
executed as promptly as possible.

Advance Appropriations

Question. (a). The budget request includes a proposal to provide
advanced appropriations of $13,500,000 for fiscal year 2000 to complete
a berthing pier at Norfolk, Virginia. What criteria were applied in
determining which projects would receive advance appropriations?
Answer. The Office of the Secretary of Defense selected only one
Navy project for which advanced appropriations are being requested. It
was selected because it is felt that only $32,030,000 of the total
$45,000,000 requirement can be executed in FY 1999.
Question. (b). What benefit is expected from advanced
appropriations?
Answer. The benefit is that the funds that would have otherwise
been appropriated in FY 1999, but not executed in that year, can be
used to add additional items into the Defense Department's budget.
Question. (c). What problems would be solved by this approach, and
what problems would be created?
Answer. This approach will mean that large projects that cannot be
substantially executed over one fiscal year would be split funded and
only the appropriations that can be executed in the fiscal year will be
requested in that year. This will improve the Department's MILCON
appropriations outlays. Problems would be created if the follow on
appropriations were not provided which would preclude portions of the
project from being executed in a timely manner.
Question. (d). What was wrong with the approach taken in the past--
that is, full authorization followed by incremental annual
appropriations?
Answer. The problem with the approach taken in the past was that
there was no certainty that the follow on incremental appropriations
would be approved. This meant that the Department was entering into
construction contracts without having all the appropriations required
approved up front. The Office of Management and Budget directed the
Department of Defense to stop requesting incremental funding. The
approach taken this year is to request advanced appropriations in FY
1999 for work to be done in FY 2000 so that the Department will have
full approval of all required appropriations prior to entering into
construction contracts.

Naples, Italy

Question. Bring us up to date with events of the past year and the
current status of the Support Site Initiative in Naples, Italy, as well
as the entire Naples Improvement Initiative.
Answer. Work continues at both Gricignano Support Site and the
Capodichino Operations Site. At the Gricignano Support Site, over 170
families are now living in family housing and the K-12 school is
operational. Community support facility construction is anticipated to
begin in the summer of 1998. At the Capodichino Operations Site, BEQ
and QOL facilities are nearing completion (e.g., the consolidated club,
NEX, gym, theater, library, chapel, etc.) and construction of the
dispensary, child development center, administration facility and air
cargo terminal is underway. In January 1998, the Navy stood up a new
office, Officer-in-Charge of Construction (OICC) Naples, which is
responsible for all lease construction, MILCON and major OM&N
construction at both the Gricignano and Capodichino sites. Additional
details for each site follow:
Gricignano support site
Increment I (Housing and K-12 school): A total of 1000 FHUs are
planned for construction. Two hundred forty family housing units (FHUs)
were delivered through 30 December 1997. One hundred seventy are
occupied and 173 have been assigned. New assignments and move-ins
continue on a daily basis as personal property deliveries allow. An
additional 222 FHUs are under construction. An option to construct an
additional 360 FHUs was awarded 17 September 1997. A final option for
the balance of the units remains on hold pending further Navy analysis
of the requirement.
The discovery of artifacts during archeologtical surveys has
delayed the Italian government's release of some sites for
construction. Archeological surveys remain underway at 5 buildings (42
FHUs), one of which has 80+ grave sites with assorted artifacts dating
from roughly 800 B.C. The proposed site layout is being reviewed to
minimize the impact of these sites on the remaining work.
The impact of artifact finds is difficult to predict because the
cultural and scientific values are unknown. Archaeologists disagree on
what constitutes a ``significant fund'' and what constitutes an
``artifact,'' and on which items require lengthy investigation and
which items can be quickly documented in place and removed immediately.
In fact, most artifacts are removed immediately to prevent pilfering,
and neither the Navy nor the Lessor are apprised of what has been
found. The Lessor funds the surveys but the survey personnel are
supervised by the Italian Ministry of Cultural Resources.
The August 1997 electrical subcontractor's default and material
supplier's delays (smoke detectors) impacted the September 1997,
November 1997 and January 1998 deliveries; however, all deliveries were
made within 30 days of their Contract Completion Date (CCD).
The fire protection and potable water reservoir was structurally
completed in October 1997; leak testing and start up procedures are
underway. Fire protection and potable water are currently provided
through direct connection to the aqueduct from the water source.
The schools were opened on schedule 25 August 1997, and the
remaining issues include improving TV system/signal reception and
normal minor ``punch list'' items.
Increment II (Community Support Facilities): This increment was
awarded March 1997 and consists of three phases:
Phase A--Child development center (CDC), site improvements
(primarily utilities and roads), fire station and housing welcome
center.
Phase B--Recreation maintenance facility, public works building,
housing maintenance facility, hobby shop.
Phase C--Village forum, AFRTV studio, POV processing and PW
disposal and salvage facilities.
The Lessor has completed and submitted all facility designs, and
the building permit process is underway. The archaeological survey for
the CDC is complete and construction will begin upon receipt of
permits, expected May 1998. Construction of the remaining Phase A
facilities is expected to begin later this summer, depending upon the
duration of archeolotgical surveys. Construction will last
approximately 12 months. The dates for Phases B and C construction
starts will depend upon archaeological survey completion.
Increment III (Health Care Facility): This increment consists of a
hospital, dental clinic and energy building. Award of the hospital
lease construct contract is anticipated in 1998 and the facility is
expected to be operational in 2001.
Increment IV (Recreational/Retail Buildings): This increment
consists of an exchange/commissary complex (including a food court,
theater, post office, credit union), fitness center (gym, outdoor pool,
and bowling alley and tennis courts), and bachelor lodge (moved from
increment III to IV due to funding issues). The Request or Proposals
for the entire increment was released in September 1997, and proposals
are being submitted in two parts. The first part, the financial
capability documentation was submitted in December 1997 and the second
part, the rent/technical submission is expected in March 1998.
Selection of a successful proposer is anticipated in July 1998. The
exact construction start dates will depend upon approval of the
building permits, and the completion of the archaeological surveys.
Capodichino operations site
The total MCON program at Capodichino is valued at $207M. The
following facilities are completed and are operational:
P-126A C4I Complex (FY 1989)--Includes utilities, BEQ I, fire
station/security building, west parking structure, and Marine general
purpose building.
P-126B C4I Complex (FY 1990)--Includes C4I facility, administration
building (Phase I), east parking structure, pass and ID facilities.
P-137 Utilities (FY 1992)--Includes addition to east parking
structure, 9MW switch station, water treatment plant (treatment plant
still under construction).
The following are in progress:
P-136 Quality of Life, Phase I (FY 1994)--The consolidated club is
93% complete and the enlisted dining facility (EDF) is 98% complete.
P-173 Navy Exchange (FY 1994)--The exchange is 99% complete.
P-179 BEQ--Phase II (FY 1995)--The BEQ is 90% complete.
P-189 Quality of Life, Phase II (FY 1995)--The gymnasium is 98%
complete. Construction of the child development center will begin when
EDF is complete.
P-176 Quality of Life Phase III (FY 1996)--Includes BOQ, theater,
library and chapel. Construction is 59% complete.
P-187 Admin Bldg, Phase II (FY 1996)--Construction is 66% complete.
P-651 Dispensary (FY 1996)--Construction is 80% complete.
P-112 Air Cargo Terminal (FY 1997)--Construction is 3% complete.
P-196 Air Passenger Terminal (FY 1998)--Awarded as an option to the
contract for the air cargo terminal in December 1997. A notice to
proceed (NTP) with design was issued in March 1998. A separate NTP will
be issued prior to the beginning of the construction.
The following projects are planned in the future:
P-172 NII Public Works Facility (FY 1999)--$17.6M.
P-200 Administration Building, Phase III (Future)--$25M.

Child Care Centers Privatization

Question. Bring us up to date with the Navy's efforts to outsource
child development center services in San Diego.
Answer. An A-76 Commercial Activities study will determine if the
private sector can manage the entire child care program in the San
Diego region. The goal of the outsourcing study is ``using on and off-
base centers and in-home care, determine if the private sector can
manage the current program, as well as meet the child care
requirements, at equal or better quality and availability, for less
cost to the government.'' The solicitation is on the street but will be
amended to include five additional areas (El Centro, Port Hueneme,
Point Mugu, Fallon, Lemoore). The current POA&M calls for a decision
whether to contract or remain in-house by December 1998.

[Clerk's note.--End of questions for the record submitted
by Chairman Packard.]
Wednesday, March 4, 1998.

DEPARTMENT OF THE AIR FORCE

WITNESSES

HON. RODNEY A. COLEMAN, ASSISTANT SECRETARY OF THE AIR FORCE (MANPOWER,
RESERVE AFFAIRS, INSTALLATIONS AND ENVIRONMENT)
MAJOR GENERAL GENE LUPIA
MAJOR GENERAL PAUL WEAVER, DIRECTOR OF THE AIR NATIONAL GUARD
BRIGADIER GENERAL RALPH CLEM, DEPUTY TO THE CHIEF OF THE AIR FORCE
RESERVE

Statement of the Chairman

Mr. Packard. We'll go ahead and open the hearing. Welcome,
Members of the subcommittee. I am happy to have Bill Hefner
with us. This is the second time I've had the privilege of
sitting with the Secretary, Mr. Coleman, in this type of a
setting. We're delighted to have you here, along with all of
those who are here to support and accompany you.
This is a hearing on the Air Force, the Air National Guard
and the Air Force Reserve. We're aware that you have placed, as
we have, the quality of life issues for your men and women in
the service, in your branch of services, at the highest
priority. I want to congratulate you for staying the course on
barracks construction and particularly in foreign locations.
There's not a great constituency for foreign bases and the
upgrading of those bases. This committee and subcommittee is
probably the only real constituency and no one votes over there
for us, and so no one is here to really push for it.
I was pleased to see on your fiscal 1999 program a buy out
of the last permanent party central latrine dormitories. I
thought that was a little bit in the direction that you've been
working on for some time and certainly we're pleased to see it
happen.
I might comment and it's the same comment that we've made
in all of the other hearings, we're quite disappointed, of
course, in the level of funding for military construction this
year. It's about a 15 percent cut from last year's appropriated
levels. If you recognize the override of the line item vetoes,
and that's a substantial one year cut.
In the Air Force, unless I see it differently than you do,
it appeared that you have a much greater cut in the Air Force.
We're concerned. We're very concerned, but we're not only
cutting into the quality of life issues and quality of work
issues for men and women, but we may be reaching the point
where we're really cutting into readiness and safety and other
things, with those kinds of cuts.
That's of great concern. I hope that you'll address that a
little bit, Mr. Secretary. Your testimony is certainly well
organized and well done. We appreciate receiving it and after
Mr. Hefner and other Members of the subcommittee make any
statements they would wish to make, we'll then have you.
Go ahead, Mr. Hefner.
Mr. Hefner. Thank you, Mr. Chairman. I'd just like to
welcome you to the committee and I think what our Chairman has
said is something that we have said to everybody that's been
here. It's been our concern for years and years and years, so
there's nothing new, but for this old ground to be replowed. So
with that, Mr. Chairman, I'll yield back my time.
Mr. Packard. Thank you. Mr. Kingston, do you have anything
you'd like to say?
Mr. Kingston. Thank you, Mr. Chairman, Mr. Coleman, welcome
to the committee.
Mr. Packard. Mr. Edwards?
Mr. Edwards. Mr. Chairman, I'm just glad to have our
witnesses here today.
Mr. Packard. Thank you very much. We would be pleased now
to have you summarize. We have your testimony. It's complete.
It will be entered into the record as you've submitted it and
if you'd like to summarize or----
Mr. Coleman. Very good.
Mr. Packard. Just don't read it all.
Mr. Coleman. Yes sir, no, I will not.
I want to introduce my partner here, Major General Gene
Lupia.
Mr. Packard. Glad to have you back with us.
Mr. Coleman. Major General Paul Weaver, Director of the Air
National Guard, and Brigadier General Ralph Clem, who is the
Deputy to the Chief of the Air Force Reserve.

Statement of the Honorable Rodney A. Coleman

We come before you to discuss our $1.5 billion FY 1999
military construction program for the Air Force and since last
year a lot has transpired. The DOD has both issued a
quadrennial defense review or QDR and a defense reform
initiative or DRI.
The National Military Strategy states that we shape,
respond and prepare now for an uncertain future. The QDR
confirms and balances the overall defense program to support
that strategy. And DRI offers three innovative approaches of
executing that strategy, specifically adopting new business
practices, streamlining our operations through competitive
sourcing and eliminating unneeded infrastructure.
I believe we're on target and provide a clear road map for
those two items, provide a clear road map for facility
investments.
However, in order to embrace this military strategy and
carry out the QDR and the DRI, I also firmly believe that we
must be a seamless Air Force.
As you know, Mr. Chairman, today we have about two thirds
as many of our people deployed to about four times as many
places as in 1989 which is just nine years ago. And that
remarkable feat, in our estimation, cannot be done without a
seamless Air Force or using every component that we have, that
being Guard, Reserve, active, civilians and contractors.
I mention this because as you read my testimony, this
seamlessness is woven throughout our $1.5 billion MILCON and
family housing budget. It provides a balance needed to sustain
our force readiness, fund modernization and ignite the
revolution in military affairs.
We have kept the Guard and Reserve's military construction
needs in the forefront of our MILCON investments strategy.
That's why you see a National Guard MILCON budget that is
comparable to Air Combat Command. In addition, you'll see that
new mission funding for the Guard is greater than our European
and Pacific Commands.
In concert with this balanced approach is our continued
commitment to examine our internal operations and support
activities to determine where we can right-size, demolish
unnecessary structures, enhance joint use of facilities with
other services, and truly embrace the revolution in business
affairs through better business practices.
As you know, base realignment and closure or BRAC rounds
are means of attaining those infrastructure reduction goals,
and as you know, we fully support two more BRAC rounds as
requested by the Secretary of Defense.
As in past submissions, Mr. Chairman, installation programs
continue to reflect hard decision and tough choices. The Air
Force corporate strategy for installation support programs
includes supporting the quality of life priorities like family
housing and buying out the gang latrine dorms, supporting Level
1 environmental programs, supporting new mission beddown and
core modernization. Now that our overseas drawdown is stable,
we are reinvesting in our remaining overseas bases, targeting
dorm construction for our single members.
In conclusion, let me thank you for your past strong
support of our MILCON program. Your commitment has resulted in
countless benefits to Air Force readiness. I believe our MILCON
submission does two things this year, Mr. Chairman. First, it
reflects the corporate priorities, supporting the total force.
And secondly, it balances our commitment to the intent of QDR
and DRI.
We stand ready to respond to any question that the
committee may have.
[Prepared statement of the Honorable Rodney T. Colman
follows:]
Offset Folios 2698 to 2729 Insert Here

supplemental request

Mr. Packard. Thank you very much, Mr. Coleman. It's a
pleasure to have you summarize your testimony. Let me ask one
initial question before we go to the other Members of the
subcommittee.
We're expecting and in fact, we're already in the process
of drafting up our priorities and levels on a supplemental.
There's been some damage because of El Nino to some of our
bases. I don't know how many of your bases have been affected,
but I presume that there's been some requirements. And then
we've had, of course, some operations in the Mediterranean and
so forth that may require--Bosnia and a variety of other areas.
Could you give us some feeling as to what your requests
will be in terms of a supplemental?
Mr. Coleman. Yes, we're looking at about $60 million--the
Air Force, just for those unfortunate instances: a typhoon in
Guam and El Nino at Vandenberg Air Force Base which did
approximately, I feel it's about $60 million, whatever would be
the supplemental request. You want to go into detail, we can
discuss the----
Maj. Gen. Lupia. We have some facility costs. Many of those
will be taken care of in the operations and maintenance
account, things such as repairs to hangers and roads. Out at
Vandenberg, for example, the biggest problem came from the
erosion of roads, much of which we saw on CNN, as a matter of
fact. We have some large expenses there.
Very small amounts, really, in family housing. I say small
amounts, about $1.5 million in Guam and about $900,000 at
Vandenberg were submitted by the Department in the original
supplemental request.
Mr. Packard. Those were the two primary bases where there
was damage?
Maj. Gen. Lupia. Yes sir. There was a small amount of
damage at Kadena in Japan, but that's not included in the
supplemental. It's small potatoes.
Mr. Packard. Are we responsible for the damage in Japan
or----
Maj. Gen. Lupia. It was only a couple of million dollars
worth and I believe we'll be able to take care of it with our
own account.
Mr. Packard. Your total level of your request will be
somewhere around $60 million?
Maj. Gen. Lupia. In the neighborhood of $60 million, yes
sir.

korea

Mr. Hefner. Thank you, Mr. Chairman. The Chairman mentioned
how difficult it is to get military construction funds for
overseas projects outside the United States. In Korea, you've
got a real need for barracks. These people seem to be
forgotten. I remember when General Gary Luck was over there, we
gave him some money when he first took over because there were
such dire circumstances.
Is the financial crisis in Korea affecting any of the
projects that you have underway?
Mr. Coleman. It's affected in the standpoint of trying to
get the Korean initiative going where they come to the table
and assist more than they have in the past.
I don't have any direct insight into the impact that that
crisis has had, but I feel that that could be a reason why
we're still not where we want to be with the Korean government
with regard to support of our facilities.
Mr. Hefner. Would you utilize local contractors to build
these facilities?
Mr. Coleman. More than likely, yes sir.

demolition

Mr. Hefner. On the demolition, we believe that you would
have to tear down before you can move ahead with this
demolition. It makes good sense. But you didn't request any
demolition funding last year. You only requested enough money
this year for one million square feet. Does that mean you have
pretty much eliminated your backlog?
Mr. Coleman. Pretty much, but I'll let General Lupia answer
that.
Maj. Gen. Lupia. Sir, we typically do most of our
demolition work at the operations and maintenance account, not
the military construction account. We had a very good year in
FY 1996. We spent $52 million on demolition and we were able to
demolish 5 million square feet. For example, that would be
equivalent to Langley Air Force Base in Virginia, just to kind
of put 5 million square feet in perspective.
The following year, 1997, we were able to demolish another
2 million square feet that cost us $22 million, so we've
demolished already going into this fiscal year 7 million square
feet.
We do have a very large requirement in the out years. As a
matter of fact, in the Air Force funded program we have $195
million between FY 1999 and FY 2003, $15 million in 1999; $29
million 2000, and these amounts are based on facilities being
freed up as a result of other projects or consolidation or in
some cases a new line item that builds us the space we need.
That's a long winded answer to your question, but we have a
long way to go. We've demolished about 7 million square feet.
We expect to demolish another million this year and then have
14 million left to go, a total of about 22 to 23 million square
feet which equals about four Air Force bases.
Mr. Hefner. Have you projected a certain time when you will
complete this, if you get the funding that you request?
Maj. Gen. Lupia. Yes sir, by 2003, FY 2003.
Mr. Hefner. I have no other questions.
Mr. Packard. Let me follow up, if I may, on that. Are we
required to demolish old buildings in the base closing process
or do you normally turn those over to the replacement
landowner?
Maj. Gen. Lupia. I yield to Mr. Coleman.
Mr. Coleman. It would depend on--if we already had it in
the program, we would more than likely and it's already under
way, we would demolish it. Whether or not, I can't recall an
instance, sir, and I will check this when I get back, of where
we BRAC'd a base and we went on and did demo work. More than
likely it was included in the transfer of the property.
Mr. Packard. That's what I assumed.
Mr. Coleman. The local redevelopment authority.
Mr. Hefner. I'd like to follow up on that.
Mr. Packard. Sure.
Mr. Hefner. I don't know this for a fact, but I would
imagine it would have no EPA impact, environmental impact and
you would not be obligated----
Mr. Coleman. Oh yes sir. We would take the obligation.
Mr. Hefner. What I meant was if the old buildings had no
impact on the environment and you wouldn't be mandated to use
funds to demolish----
Maj. Gen. Lupia. You're exactly correct, Congressman. Our
expert here, Ms. Pohlman, who was with the Base Realignment
Closure Agency for some time just whispered to me that
typically we leave the building standing and the local
community makes the decision what to do with it, but the Air
Force does not demolish it before we turn the base over.
Mr. Hefner. Thank you.
Mr. Packard. Mr. Edwards?
Mr. Edwards. No questions.
Mr. Packard. Thank you. Mr. Olver.
Mr. Olver. Thank you, Mr. Chairman. I'm not without
questions.
Mr. Packard. I knew that.

air guard and air reserve

Mr. Olver. Thank you very much, Mr. Chairman. I'm sorry, I
didn't come in early enough for all your statement, Mr.
Coleman, but let me ask you what's the relative personnel in
the Air Guard and the Air Reserve, roughly, what would be the
total personnel in the two?
Mr. Coleman. The personnel, the Air Force Reserve has
approximately 73,000 people, 110,000 Guard.
Mr. Olver. And 110,000 in the Guard?
Mr. Coleman. Yes sir.
Mr. Olver. 73,000 in the Reserve?
Mr. Coleman. Yes sir.
Mr. Olver. Interesting. Well, I'm not sure--I will keep
those numbers in mind because they say something to me, in any
case.
I noticed looking over the military construction history
over a 5 year period, that the average amount for the Air Guard
has been a bit over $200 million in the MILCON budget for the
Guard, but under $50 million for the Reserve on a year by year
basis, on average.
Now that's going back through to Fiscal 1994. The numbers
in the early part of that time are a little higher. It could be
year by year from 1994 forward, it's 241, 249, then 171, 189
and 190. You know, it's down a little, but holding at a pretty
good size number.
In the case of the Reserve, it looks to me pretty ominous.
In those same five years, it was 72, 57, 36, 52, then 15 last
year and the request this year in the President's budget is
only $10 million.
Mr. Coleman. Yes sir.
Mr. Olver. The request, by the way, in the President's
budget on the Air Guard is way down. It's only $34 million.
Now if we plussed up toward $200 million which is roughly
their average, or $180 or $190 or whatever, somewhere in that
range, we'd be plussing up a huge amount in the Air Guard and
basically we haven't been plussing up much in the Reserve. I'm
curious what it is that puts the Reserve in so much better
shape that we can afford to be doing so little in relation to
the Reserve, compared with the personnel that are there. I
don't know where those personnel are, maybe base structures,
but you told me there are 110,000 Air Guard personnel and
73,000 Air Reserve personnel. And what we'redoing in facilities
and generally facilities and quality of life housing, this, that and
the other thing, clearly is way down comparatively for the Reserve.
What's the reason for it?
Mr. Coleman. It's an important question. I'd like my
colleague to respond after I make a comment. I don't think,
with all due respect, that the ratio of the personnel strengths
can be necessarily directly proportional to the MILCON budgets
over an extended period of time. The corporate structure, as we
explained last year, that is the racking and stacking process
of priorities of projects of the three different areas, active,
Reserve and Guard, all come to the fore when we're doing our
racking and stacking. We have a $62 billion or so budget in
which to work everything that we have. The Chief of Staff,
General Fogelman and myself, General Lupia, stated last year on
the record that we purposely went in and took Reserve and Guard
potential monies and used that for modernization for 1998 and
1999 and we committed to you that we would start to ramp up in
2000.
I'm here to tell you that that is still the Air Force's
intent. General Clem and General Weaver and General Lupia may
want to add to this, but I don't--I hope we don't leave here
with the fact that based on numbers of people, there's an
automatic transference to the numbers of projects or the MILCON
request money being on a percentile basis.
Mr. Olver. Well, okay, clearly in the Air Guard there are
bases in every state, in some states, two or three. And so on.
Because it's meant to be spread all over. And the Reserve
bases, I would assume, are a fewer number and larger by
comparison because they are a concentration of units, so yes,
that would make sense.
Mr. Coleman. And some are on active bases.
Mr. Olver. Pardon?
Mr. Coleman. Some units are on active bases.
Mr. Olver. Are on active bases where the costs are covered
on active Air Force rather than on the Reserve accounts?
Mr. Coleman. Some of the clusters share, like roadways and
stuff like that. Their facilities are not.
Mr. Olver. But they'd be built by active monies?
Mr. Coleman. No. I was only saying as a stand alone, as
opposed to a stand alone operation like Stewart Air Force Base
in New York, you have a Guard and Reserve unit at Andrews Air
Force Base that is sharing the runways, sharing the road
systems, gymnasiums and so forth.
Maj. Gen. Lupia. Child care centers.
Mr. Olver. Okay.
Mr. Hefner. How many of those facilities have joint use
across the country?
Mr. Coleman. General Weaver?
Gen. Weaver. In the Air National Guard, we've got 89 on-
going units and when you say joint units, you're talking
about--we're on 66 civilian airports.
Mr. Hefner. On what?
Gen. Weaver. Sixty-six civilian airports around the country
of those 89, and approximately 25 other joint bases.
Mr. Olver. Okay, that's very helpful, but the 89 does,
since every state has at least one, I guess that would be the
case. That sort of tells us what the number of places where
there were two and three in a few cases.
Gen. Weaver. If you look at the different numbers and
facilities, there's 89 flying units within the Air National
Guard and 13 Air Reserve bases.
Mr. Olver. Okay, well, that explains part of the
difference, but I am, I still am truly puzzled how we're
properly dealing with the Reserves and those 13 bases if we're
down to 14 one project in 1999, 14 last year which was a couple
of projects, that is for 1998, for 1999 is one project in the
proposed budget. Your FYDPs for the future, you're apparently
asked, allowed to ask in your FYDPs or put forward in your
FYDPs something like $25 million on average per year. I don't
know exactly the number you're told, but the FYDPs into the
future, 2000, 2001, 2002 and 2003 are 25, 30, 33 and 35, but
what's coming through is 15 in 1998 and one request in the
President's budget for $10 million in 1999.
Is that adequate for the Reserve?
Mr. Coleman. I'll let the Reserve respond. The overall
corporate response is that we have purposefully taken the
monies that we could allocate to MILCON and devote them to the
priorities that the Guard, Reserve and active collectively have
said it has to be that way for 1998 and 1999.
You will see in 2000 a ramping up out across the FYDP, but
we had to take this money now to use for some modernization
projects.
General Clem and General Weaver would like to respond. I
would open the floor, General Lupia?
Maj. Gen. Lupia. Congressman, let me lay the ground work
for you in terms of the process. When we collect the
requirements to be put into the military construction program,
we wind up with far more requirements than we have dollars to
spend in military construction.
As we put the 1998 program together our major commands gave
us $1.2 billion in requirements and we brought you last year a
$600 million program. As we built this $500 million program, we
had $1.4 billion in requirements, so we were only able to get
about one third of the requirements into the program to begin
with.
Mr. Olver. How far is the program?
Maj. Gen. Lupia. It's the 1999 program, $1.4 billion in
requirements brought your $500 million.
Mr. Olver. Okay.
Maj. Gen. Lupia. Next year, for example, as we do 2000, we
have $2.3 billion, this bow wave keeps growing in requirements
and we'll only be bringing you about $600 million, depending on
how the Air Force budget finally comes together.
We have eliminated any fair share for any command in the
Air Force and we've taken every one of the requirements
submitted to us and we've gone through a matrix that gives them
points for nine different categories of things and then
basically said we will spend every dollar we're spending in the
Air Force on its most important requirements for military
construction.
Remember that of the $500 million we brought you this year,
we took $120 million off the top for dormitories for our
enlisted folks because we were committed to solving the central
latrine dormitory problem. So we then got down to only $380
million put against our other requirements. When we racked and
stacked them, we came up with those smaller amounts for the Air
National Guard and Reserve, but it was all for a very corporate
process. Every meeting on every panel, each of the components
was represented.
I'll yield to General Weaver, if I may.
Gen. Weaver. Sir, if I may stand for a moment, I can't
agree with General Lupia more. It is a total corporate process
that we're involved in.
If you look at the numbers, are we satisfied with the
numbers? Absolutely not. We're not. But we do, we are part of
the corporate process. We have the ability to discuss all of
the priorities within the budgetary constraints that we are
given as an Air Force and we lay out those priorities. I can
tell you that General Lupia, Mr. Coleman, Mr. Dishner are there
fighting for us within the Air Force Council all the time for
the Guard and Reserve, but when you lay out the priorities it
looks at some of the things on active duty, the family housing,
the barracks for the young troops and then look at our
priorities as well, you've got to weigh that in which we do and
take those priorities and within the budget, take your
constraints and come out with that figure.
We know the figure is lower. I'm privileged to have a
little bit better than the Reserves. We've got great support,
especially from this committee in the past which has helped us
in our quality of life as far as building facilities that our
people are operating out of, but when we look at the entire
corporate process, we as a total force have a platform to be
able to speak to our priorities and then we go forward with a
single voice.
Mr. Olver. Well, General Weaver, you're active?
Gen. Weaver. Guard.
Mr. Olver. You're Guard.
Gen. Weaver. Yes sir.
Mr. Olver. Ah. Okay. Would I know that? Should I know that
by looking at you?
Gen. Weaver. Pretty seamless, aren't we?
Mr. Olver. Seamless.
Gen. Weaver. I looked a lot younger before. That's not for
the record.
Mr. Coleman. Mr. Olver, General Clem is Reserve. General
Lupia is active.
Mr. Olver. Okay. Okay.
Mr. Packard. Let's have General Clem respond as well.
Brig. Gen. Clem. Yes sir, thank you. I'd like to echo
General Weaver's remarks about our full integration into the
Air Force's corporate MILCON allocation process.
I am new to this job, as you know. This is my first time
before this committee. I'm happy to be here by the way. When I
came on board and looked at that one project for this current
budget, like General Weaver, I said that's not going to happen.
I went into the process to try to figure out exactly how we had
arrived at that and it had occurred prior to my coming on
board, so I was interested in going back and looking at the
history of that.
But clearly, I was told, that every stage of the process,
Guard and Reserve people are at the table, fully involved in a
way in which those projects are dealt with. My mind led me to
look at the matrix that was referred to by General Lupia to
find out exactly what those criteria were in terms of
establishing the weighting and the prioritization list.
The way that that worked out in this present budget, sir,
is that first of all a number of very high priority projects
that had been referred to here before were essentially fenced
off in a total MILCON budget. And then secondly, the particular
weighting criteria do not necessarily lend themselves well to
Air Force Reserve projects. New mission, for example, is
something--we undertake some new missions, but of course, not
as dramatically as does the active component. Things like
dormitories, we typically have dormitories. We typically don't
have dining facilities and other of the standard quality----
Mr. Olver. Reserve doesn't have dining facilities? Guard
does, but not Reserve?
Brig. Gen. Clem. Very few dining facilities. We have some,
but it's not a major activity as it would be on a residential
Air Force base.
Mr. Olver. I would have thought that they would be roughly
the same as Guard.
Brig. Gen. Clem. No.
Mr. Olver. Since that's not a residential air base either,
really.
Brig. Gen. Clem. I'm not sure about the dining facilities
situation at Guard bases. Typically, Reserve bases will have
some kind of dining facility, but not the very large types of
facilities that you would need on an Air Force base to feed the
resident population because most of our population is
transient. Same lodging facilities.
Now what I would suggest is that for us and the Reserve,
quality of life is defined slightly differently. Work place
factors are very important issues for us as are lodging
facilities particularly for folks coming in for the weekend for
annual tour and so on.
I'm happy to report that in the beginnings of the 2000
process, that the Air Force Reserve has considerably more, at
this point, four projects above the line and moving forward and
we're confident that these short falls are going to be
redressed in the out years.
Mr. Olver. Well, okay, if I may just finish this on this
general comment, then I have a couple specific ones and I'll
wait for the next round, but it is--the rest of this pattern,
at least as I look at the last two, three years of it, is that
typically this committee has plussed up, if what you're saying,
that there is an integrated command and you put forward the
priorities, sort of in order, then proportionately, roughly
when the plan comes in, the amount for the Guard and the amount
for the Reserve would be in relation to their strategic need.
Well, then this committee in its plus ups has plussed up the
Guard by at least doubling in each what had been asked for in
the President's budget, doubling in Fiscal 1996, considerably
more than that, tripling in 1998, what had been there, but in
the case of the Reserve, our plus ups have been only one third
of what had been asked for in 1996. $1 million is a plus up
from $51 in 1997 and $.5 million in 1998. So if you were
proposing to us what was correctly proportioned between the
active Guard and the Reserve on the basis of strategic need,
then we have not kept up on the Reserve side, we've not
proportionately upped to expend that, to cover additional
congressional needs. That would be my only point there. It's an
oddity, I think, in the totals.
I'll come back later, thank you, Mr. Chairman, for allowing
me a few minutes further to finish a thought.
Mr. Packard. Mr. Cramer?
Mr. Cramer. Thank you, Mr. Chairman, and thank you for your
presence here today. I'm new to the committee and I'm very
interested in the committee's issues and I won't bog you down
as I attempt to catch up in the prior history and involvement
here, but I was interested in your mission list in terms of
determining, I assume it's a priority for your construction of
family housing programs under this MILCON budget, to maintain
what we own. Is that a list based on order of priority or is
that just a statement of accomplishments, things that you want
to accomplish, your philosophy there? And in Alabama, at
Maxwell Air Force Base, under current missions, I assume,
you've got the Air Force Reserve project ``Consolidated
Aircraft Maintenance Facility'' $5.2 million, is that a
priority to support that current mission?
Brig. Gen. Clem. Yes sir.
Mr. Cramer. That's very, very important. That's not my
District, but I know that we as a state delegation talk about
what needs to be accomplished there, so I'm very pleased to see
you segregate that.

base realignment and closure

In terms of BRAC and determining priorities, how much has
the BRAC process caused you to delay what you would otherwise
like to do in order to accommodate what has to be done as you
consolidate equally in new locations and sort through the needs
of Air Force installations around the country?
Mr. Coleman. We have taken the BRACs 22 closures, 17
realignments, I believe and shaped the force per what is
remaining of finding that some cases 19PAA at our bases is
still spreading it too thin and that's why we really do
needanother BRAC in our estimation without going through a detailed
analysis of what, when and why.
Mr. Cramer. Too many loose ends left or----
Mr. Coleman. Well, it's spread too thin. We're all over the
map. A prudent businessman would say that you marshal your
forces in the most efficient operations that you can find, the
plants, for instance, you're taking an Air Force base as a
plant, I want to maximize the capacity of that plant. We still
have too much capacity in the Air Force. That's why we are
supporting the SECDEF on two more rounds of BRAC.
Insofar as priorities and have we done things that we would
not normally do, I don't think so. We're keeping our force fit
and trim, based on the CONUS locations that we have. We
fighters, as well as the political appointees, feel that just
based on what is out there, what we know is there without going
through a BRAC analysis, we still have too much infrastructure.
And not only the Air Force, but the Army and the Navy has too
much infrastructure for what we're doing in the next millennia.
Mr. Cramer. How much of your budget is consumed with
environmental issues that are necessary for you to spend money
on in order to turn, closed bases over to communities?
Mr. Coleman. Overall, I think we're going to expend
approximately $2 billion over all our BRAC, over the course of
time. I think between now and I would say 2005, 2006, something
like that, 2010. So you're talking about a $2 billion bogey
over the course of time for those 22 bases that we're going to
close.
Mr. Cramer. For environmental costs?
Mr. Coleman. For environmental costs, yes.
Mr. Cramer. $4 to $5 billion.
Mr. Coleman. Just environmental, yes.
Mr. Cramer. And as far as you can tell, that should be a
stable figure?
Mr. Coleman. Well, it's a moving target. We're digging
every day and most of it's behind us.
Mr. Packard. Could the gentleman yield for a moment? When
do you anticipate crossing the line or maybe you already have
where you actually reflect a savings versus an outgo?
Mr. Coleman. That figure is very hard to ascertain. We are
receiving some benefit in the sense of monies for leases and
sales and so forth and so on, but the actual cost savings, I
would think, would not start to accrue until about 2001 from
the earlier rounds where you had already manifested your
personnel costs and your infrastructure costs at other bases to
realign what you've taken out.
I wouldn't rush to judgment that BRAC is anything but a
success until it has had time to mature. It has not had time to
mature. Amortizing all of the costs that we've had to expend,
like the $2 billion amortized over a course of time for the
environmental, the BRAC-related costs on moving units and
realignments. It's going to take a long time to amortize that.
Mr. Packard. To go a little further, Mr. Coleman, two other
questions come to mind then. If, in fact, you're recommending
and supporting the recommendation of two additional BRACs, our
concern and our concern has always been before we have any
additional BRACs, we ought to analyze and evaluate the success
and the process and a lot of other factors for the existing
BRACs.
You might want to respond to that. If we've not matured in
that process yet, and I certainly agree with you in that
statement, then is it wise that we go further into BRACs, base
closing until we can evaluate and review the maturing process.
Mr. Coleman. Sir, I said not mature. I did not mean that we
were myopic in our choices or we failed in our business
practices in conveying the properties. What I was talking about
is that all of the bases have not been fully turned over
according to the economic development conveyance or the public
benefit conveyances. The LRAs, local redevelopment authorities,
haven't fully marketed their facilities that they are working
with us on to turn over to private industry.
You're talking about enormous tracts of property. You're
talking about industrial sites that have been for 40 and 50
years in communities. You're talking about a national
understanding of industrial properties. I came from General
Motors where I was in charge of plant consolidation. We closed
30 plants. There are some plants that still have not matured
and that's been over the course of 14 years of my life, that
still have not been able to fully come back as meaningful tax
paying, tax producing properties in some of the Rust Belt
communities.
These properties that are on the market right now, like
Loring Air Force Base, Maine, you're talking about an extreme
property in the sense of geography. Likewise, K.I. Sawyer,
Michigan in the Upper Peninsula. You just can't automatically
turn over thousands and thousands and thousands of acres of
property and automatically think that it's going to turn in a
short time frame, unlike a--I mean a house, you can. A piece of
bare property that has a good site, possibly you can get that
off the market for a housing project, but you're talking about
enormous industrial tracts of property that are on the real
estate market of the United States all at one time, on the Air
Force, Navy, plus industry.
So when you say that you're going to attract the American
Can Company to some place, well, there's a lot of private
sector firms out there that have industrial sites available
to0.
Mr. Packard. Second question that you prompted in my mind
is the reason that the Air Force is finding it a longer period
of time to where you cross that point of actually reflecting
the savings, different from the Navy and the Army, they are
already to that point and is the reason because air bases have
clean up problems and more serious and more expensive problems
or are there other reasons?
I know that most air facilities have major clean up
problems and they're often quite expensive and quite lengthy
into the process.
Why is it that the Air Force is perhaps a year or two
behind that crossover to where we reflect a savings from the
Army and the Navy?
Mr. Coleman. It's a good question, Mr. Chairman. I'm not
here to debate my colleagues. I do not believe that they are at
that crossover point, but that's a personal professional
opinion.
Maj. Gen. Lupia. I think Mr. Goodman has testified, Mr.
Goodman from OSD, joined in and has testified that the savings
from BRAC are greater than expected and the costs to carry out
BRAC are less than expected in the report he actually will
provide and, I believe, this comes from the auditors. I may not
be right in that regard, but I believe it will show even better
results than we were expecting.
Mr. Packard. We will be having a hearing on the 12th. We'll
certainly get more----
Maj. Gen. Lupia. I think he'll be telling you that.
Mr. Cramer. Reclaiming my time, you're not contradicting
that testimony?
Mr. Coleman. No sir, no. We're saying the results are even
better than we thought.
Mr. Cramer. You've got to be careful where you draw
conclusions. I mean I don't want to put words in your mouth,
you're not saying you're withholding judgment on whether you're
successful or not?
Mr. Coleman. No sir.
Maj. Gen. Lupia. And the indication is that it's more
successful than we thought.
Mr. Packard. Well, again, the question has to be then why
are we crossing that line later rather than sooner in terms of
savings?
Mr. Coleman. I don't want to get into a debate with a
fellow service about their numbers and about what is deemed to
be the crossover point. That's what I was trying to say when I
said I have a personal and professional opinion about what you
said with regard to the Navy crossing over faster.
I think that the Air Force has been very thorough, very
prudent, meticulous in how we do things, how we report to Mr.
Goodman the numbers and I think Mr. Goodman will comment and
give you testimony that as a military--department of
government, DOD is far ahead of where they thought they would
be with regard to BRAC.
Mr. Packard. Thank you. For the benefit of the Members that
are here, we will be having our next hearing tomorrow at 9:30.
We'll have the four Master Chiefs.

Family Housing Privatization

Let me proceed, before we go into the next round then with
some questions on privatization and family housing that we've
asked most of the others in most of the other hearings very
much the same questions. The Army and the Navy are both moving
forward, Navy quite vigorously, in privatization. The Air
Force, would you review what your attitude is on privatization?
Do you anticipate that it will lead to financial savings? Are
you pursuing it? Is it a substitution for the existing
traditional family housing process that we've had in MILCON
years? Just generally. I'd be interested in what your approach
to that whole question of privatization is.
Maj. Gen. Lupia. We are pursuing privatization and I'd be
the first to admit to you that we're doing it very cautiously.
We're going very slowly to make sure that we don't make
mistakes because we clearly feel that a mistake is about a 50
year mistake if we make it.
Our first project is a small one, it's 420 units of
housing. It's at Lackland Air Force Base in San Antonio, Texas.
We go from that to a project with a little over 600 units at
Robins Air Force Base.
Mr. Packard. What are you doing on those two?
Maj. Gen. Lupia. The Lackland one we expect to have
contract award by July of this year. The Robins one, the
request for proposals from industry is about ready to be put on
the street. That's 600. Our third one, we get a little bit
bigger. It's at Elmendorf Air Force Base in Alaska which will
be almost 900 units. That's a combination of the first two,
actually, and it's the first time that we begin to bite into a
deficit, that is to say, at Elmendorf we give to the developer
roughly 300 houses that he has to invest in to bring up to
standards. A little over 200 houses that are in very good
shape, so he will get the fund stream from, but he doesn't have
to invest a lot in. But then we're going to give him a parcel
of land where he will build 300 new housing units for us. All
those numbers kind of rounded together, are nearly over 900
units.
Then we go sort of into even bigger projects where we have
at Kirtland Air Force Base and Mountain Home Air Force Base,
proposals to give our entire housing inventory to a developer,
build the houses that we need to buy out our deficit and then
receive the fund stream from, in some cases, 1600 to 2000
homes.
Mr. Packard. Most of these projects are on base?
Maj. Gen. Lupia. Yes sir. Many of them are on base. The one
at Lackland is on base. The one at Robins Air Force Base is
across the street, what we call Robins West. The one at
Elmendorf, the houses are right in the middle of the base, that
we give up, in addition to those we had built.
So what I try to portray for you is we start at 400 and
went to 600 than almost 900 and are working to larger projects.
We have 12 projects that we are looking into right now.
I should also tell you, Mr. Chairman, that of the projects
that we have looked at, not every one has been a success for
privatization. That is to say when we apply the economic
models, we have had to eliminate three projects that were
contenders because we just couldn't make the economics of the
project work out.
Mr. Packard. What's the reasons for those, do you think?
Maj. Gen. Lupia. The reason was that the fund stream we
were going to be able to give the developer would not cover the
cost that he or she would have had to renovate the units that
we were going to give them. They were not in good enough shape.
So you had to make a very big investment renovation and the
fund stream they would receive back would not have paid the
mortgage for it. So went we on six different excursions, as a
matter of fact, at one Air Force Base in Mississippi. None of
those six could we make work.
Mr. Packard. How do you approach bidders? To what extent do
you use local bidders versus others?
Maj. Gen. Lupia. Absolutely. We have what we call an
industry forum where we put a draft request for proposal on the
street and we say this is what we're thinking about doing. We
give industry an opportunity to comment on that draft and then
we have an industry day, as we call it, where anybody who is
interested comes out to the base, listens to the proposal,
hears our plan of attack, and kind of gives us their
suggestions before we actually put the request for proposal on
the street for bids.
We have very good bidding. In Texas, we had 22 proposals, I
believe it was, to start with, that we whittled down to the
final winner.
Mr. Packard. Do you expect the privatization projects that
you have underway will reflect a savings to the Air Force?
Maj. Gen. Lupia. No sir, I don't. As a matter of fact,
we've done--our financial management and comptroller community
did a very sophisticated analysis and concluded that the life
for the Air Force, the life cycle cost of the privatization
project was the same as the military construction cost.
However, there's tremendous saving in time. At the rate that we
bring in projects to the Congress, and that's about $250
million a year in improvements and new construction, it would
take us about 26 years to buy out our requirement to fix up
61,000 houses.
We believe with the privatization projects, as a supplement
to our existing programs, that we can buy out that requirement
by the year 2010. So we'll cut the 26 years roughly in half by
using privatization.
I want to go on the record, clearly, Mr. Chairman, as
saying that we do not expect savings from the process.
Mr. Packard. Thank you. Is it right, is it true that the
cost of family housing programs being shifted from the bill,
from this bill to the housing allowances subaccounts, in the
military personnel accounts, in the National Defense Bill?
Maj. Gen. Lupia. In the Air Force today, that is not
happening. The money is remaining in the Family Housing Account
because of this 26 year backlog, we believe that the only way
we can get there is to continue to invest at about the $1
billion level in the family housing account each year which is
a significant amount of money. Out of $62 billion, $1 billion
for family housing. So we have not shifted money.
But in the long term, I believe that shift will have to
take place because eventually a lot more people will be
collecting a housing allowance and giving it to the developer
as opposed to living in a government house, and so the money
will have to shift in the out years in the budget.
Mr. Packard. Are there any Air Force projects being held up
by virtue of pending privatization? Is it holding up execution
of typical MILCON construction?
Maj. Gen. Lupia. We have some funds that are against the
Lackland Air Force Base project and against the Robins Air
Force Base project. What has been executed through the military
construction program, 1996, 1997, that we are using, in effect,
the seed money to make these projects work.
Mr. Packard. How much money are we talking about?
Maj. Gen. Lupia. I've got it here. One second, sir. At
Lackland Air Force Base, it's $17.7 million; $6.2 million of it
comes from the 1996 appropriation, $11.5 million comes from the
1997 appropriation.
At Robins, it's $12 million; $5.2 million from the 1997
appropriations, $6.8 million from the 1998 appropriation. The
third one, Kirtland Air Force Base, which I haven't mentioned
to you in New Mexico, has $5.4 million and comes out of the
1997 appropriation and $20.9 million that comes out of the 1998
appropriation. Those are the only three projects that have
military construction.
Mr. Packard. Are these funds being withheld to meet OMB
scoring?
Maj. Gen. Lupia. No sir. Absolutely not. They are, in fact,
the Air Force contribution to the project, but not as a result
of OMB scoring.
Mr. Packard. The Army is proceeding with whole installation
type projects. The Navy, more regional. Is there a--what's the
policy on the Air Force?
Maj. Gen. Lupia. In the Air Force, we're looking at each of
our bases individually and we intend to publish by this
December a family housing master plan, much like the dormitory
master plan which I was very pleased to see was laying on the
table here when I walked in. And in that family housing master
plan, we will look at each base in the Air Force and make an
initial determination, is the right solution at this base,
privatization or is it a military construction project or is it
in the operations and maintenance program or is there an
alternative that says we don't need all these houses anyway,
let's just depend on the private sector.
So by December, we hope that we will be able to give you a
copy of that family housing master plan. That's our approach.

overseas housing authority

Mr. Packard. Let me conclude my housing questions and then
I'll come right back to you, John. On overseas housing, I have
only one more question, really. Is the Air Force interested in
a legislative proposal for establishing an overseas housing
authority as a nonappropriated fund instrumentality? The Army
is pursuing it.
Mr. Coleman. We'd like to see how they do it. We can use
them as a barometer as to its validity. They're moving ahead on
it. We'd like to study their experience.
Mr. Packard. So you're not moving into it at this point in
time? You're in a wait and see----
Maj. Gen. Lupia. No sir. We're actually using build lease
to solve some of our housing problems overseas. We have a 500
unit project in Aviano, Italy and a 500 unit project in
Lakenheath in the United Kingdom. We've brought, as a matter of
fact, to your committee staff to look over for us. We owe them
some answers back on the economic analysis, but we believe
without any investment and effect on our part, that the local
developers will provide these houses for us and we have two
very good projects.
Mr. Packard. Could you bring us up to date, briefly, on the
Aviano project? That's a $404 million project. Is that the one
that you're talking about?
Maj. Gen. Lupia. Sir, the family housing part is to
construct 500 units.
Mr. Packard. In Aviano?
Maj. Gen. Lupia. Yes sir.
Mr. Packard. Okay. Mr. Olver?
Mr. Olver. Thank you, Mr. Chairman. I'm going to ask for
the record a question that would get you for the Air Force to
put down the several criteria, I think you've indicated, that
there are nine criteria in the development of your priorities.
I very much respect the idea that you are developing an
integrated program here and just looking to ask questions about
that might not otherwise have been asked, somewhere along the
way, but what I'd like, obviously, is for the matrix of those
nine criteria, so that with the explanation it's possible to at
least explore without a long discussion here.
Let me go back to the FYDP business. I need to understand
and maybe this is partially done by the previous comments. On
your FYDP for the future, 2000 through 2003, you have items
which are marked ARS. I take it that's Air Force Reserve
Station? What would that be, ARS?
Maj. Gen. Lupia. Air Force Reserve Station.
Mr. Olver. And ARB is Air Reserve Base?
Maj. Gen. Lupia. Yes sir.
Mr. Olver. And the AFB, I think that's obvious as an Air
Force Base. And when it's marked as an NAS, that would be a
Naval Air Station?
Maj. Gen. Lupia. Yes sir.
Mr. Olver. So in any of these cases where it's not ARS or
ARB, these are co-located, at least co-located on other parts
of those 25 that are co-located locations for your major
facilities, I take it, something along those lines?
Mr. Coleman. Carswell Air Force Base is now Carswell Air
Reserve Base. It's run by the Navy, but the Air Force is there.

westover arb

Mr. Olver. Okay. I'm down now to the parochial things, I
guess, after the previous comments.
I notice in the 2001, I take it there's only one Reserve
Base in New England, isn't there? That's Westover Base?
Mr. Coleman. Yes sir.
Mr. Olver. I notice in the 2001 submission, there is a
control tower there. Is that in design? Has that been designed?
Can anybody tell me?
Maj. Gen. Lupia. My guess would be no. If it's in 2001----
Mr. Olver. Your guess is no.
Brig. Gen. Clem. Just starting the initial design.
Mr. Olver. Starting the initial design. How long does the
design take?
Maj. Gen. Lupia. What's the size of the project, sir?
Mr. Olver. It's a $4 million design. It's a small project,
relatively small project.
Maj. Gen. Lupia. From inception to completion, probably a
year, to hire the architect/engineering firm, provide them the
project description, then to come back, have their designs
reviewed at maybe 35 percent, again, 65 percent--it takes about
a year.
Mr. Olver. Yes, a control tower is not a common cookie
cutter or something like that?
Maj. Gen. Lupia. It could be.
Mr. Olver. Could be.
Maj. Gen. Lupia. But we don't know what that is.
Mr. Packard. Is that with the environmental reviews?
Maj. Gen. Lupia. Yes sir. They're part of the process.
Mr. Olver. All right.
Maj. Gen. Lupia. And it could be, what you're calling
cookie cutter, we call a site adapt. We adapt it to the site
from some other site and therefore it could be six months or
four months.
Mr. Olver. Maybe if I see site adapt in the chart enough
times, I'll drop cookie cutter.
Maj. Gen. Lupia. That would be good, but we understand.
Mr. Olver. Okay. I notice in the, in your long term Air
National Guard FYDP for up in the part of the world that I come
from, the list for yours is constructed in a little bit
different way. I see in the case of the Air National Guard--the
Air Reserve, it's by year for all facilities. The piece of it
that I have is only a piece for a group of states from Idaho to
Maryland, the one page that I have, but it includes
Massachusetts which, of course, is why I'm asking the question.
It still carries the replacement of the dining hall which
the Chairman was kind enough to move up from the 2000 to the
1998 and that was done in the 1998 program, so that comes off.
I notice there's a thing here, a location, relocate
taxiway. This sort of fits with a program of upgrading the FAA
bid on civilian monies, an intersection strengthening and
reconstruction at that Barnes Air Guard Base last year. It was
a bit over $1 million--well, it's in construction now. It's
expected to be going forward or thereabouts, which was viewed
as a 1-2 punch with this relocation of taxiway which they feel
is very important because of it being the taxiway as it
presently functions, taxis right through the National Guard's
facilities and right through and among its planes and its
hangers and so forth. They want to move the taxiway so that
commercial traffic using the same facility can skirt around
that. And this a two-piece, one being done with the airport and
by FAA monies under the Airport Improvement Program under
transportation. Then this one would be done here.
Is that--has that been designed?
Gen. Weaver. No sir, the airport will design that.
Mr. Olver. The airport will design that. They will do the
design and they will pay for the design, is that how that
works? You will pay for it?
Gen. Weaver. You pay for the design and they'll do the
design.
Mr. Olver. I see, so that comes out of design appropriated
money here before one does this.
How long does the design of a taxiway take?
Gen. Weaver. My information says six months.
Mr. Olver. That's all my questions.
Mr. Packard. Thank you. I only have one more question and
then I think we're about ready to close the hearing.

line item veto

As you know, we have completed override of the line item
veto package of the 38 projects. Thirteen of those projects, I
believe, involved in the Air Force and the Air Reserve.
Now that that's been done and the funding issue has been
resolved on it, are you going to be able to execute those
projects?
Maj. Gen. Lupia. Yes, absolutely, without a doubt. I've
asked for monthly reviews to be done by my Division Chiefs and
I will do quarterly reviews to insure that by the 30th of
September this year, those 13 projects will be awarded;
contract award, which is obligation of the funds, by the 30th
of September this year.
Mr. Packard. That's very good. Any other questions? Mr.
Olver?
Mr. Olver. No, I'm done, I thank you, Mr. Chairman.
Mr. Packard. We appreciate very much the chance to visit
with you. I don't know whether this will be our last chance or
not. I don't know whether I'll be here or you'll be here.
Mr. Coleman. I'm not going to be here. This is my last----
Mr. Packard. That's been announced. I wasn't going to
mention that. You mentioned it to me, but I wasn't going to
mention it until you--because I didn't know whether it was
public or not.
Mr. Coleman. It is public. I thank you for your support of
our efforts over the four years that I've been here.
Mr. Packard. You've made a great contribution to not only
the Air Force and the Air Reserve and Air Guard, but also to
the country. We appreciate all that you've done.
Mr. Coleman. Thank you very much.
Mr. Packard. Are you returning to the private sector?
Mr. Coleman. Yes sir.
Mr. Packard. Congratulations. We feel and I'm sure your
staff will be delighted at this. I've got about 15, 16, 15
pages I think of rather specific issues on specific bases that
our staff would like to get some information. If they'll
respond to that.
Mr. Coleman. Sure, we appreciate that.
Mr. Packard. And any other questions we might submit for
the record, we'd appreciate a response.
Mr. Coleman. Yes sir.
Mr. Packard. With that----
Mr. Olver. May I make one comment?
Mr. Packard. Of course.
Mr. Olver. Usually, when we return to the private sector,
there's condolences given, although it may be congratulations.
Mr. Packard. It is congratulations. It will be for me, too,
when that time comes. Most of us serve out of duty, almost as
it were.
Again, it's a pleasure to have you with us this morning and
we appreciate all that you've done in terms of your testimony,
your questions and answers and with that we'll close the
hearing.
Mr. Coleman. Thank you very much.
Mr. Packard. Thank you.
[Clerk's note.--Questions for the record submitted by
Chairman Packard.]
Supplemental Request
Question. The Committee will be moving quickly to mark up a fiscal
year 1998 supplemental appropriation bill, including funds for the
Department of Defense. We have not yet received an official request for
additional military construction funds, but we understand that the Air
Force may be seeking funds for storm damage repairs. Is there anything
you can tell us today about the Air Force's request?
Answer. With respect to the Military Family Housing Appropriation,
Typhoon PAKA damaged Andersen AFB Guam's Furnishing Management Office's
(FMO's) roof and loaner furniture which was stored inside. If not
replaced, the base will not have loaner furniture for members doing
Permanent Change of Station to Andersen AFB which will adversely impact
quality of life. The FMO's office equipment and office furniture were
also damaged. Additionally, Typhoon PAKA destroyed bus-stop shelters
which are planned to be replaced with typhoon-proof shelters to avoid
the hazard of wind-blown bus-stop shelters. Storm damage related to EL
Nino which was which was incurred at Vandenburg AFB CA is also
specified.

[In thousands of dollars]
------------------------------------------------------------------------
Location Item(s) Amount
------------------------------------------------------------------------
Andersen AFB Guam (Typhoon PAKA)... Debris Removal........ 90.0
Generator Fuel........ 2.2
Civ pay--Damage 9.3
assessment/Inspection.
Housing/Housing 245.1
Infrastructure repair.
Furnishings and 1,157.0
Equipment.
------------

Subtotal..................... ...................... 1,503.6
============
Vandenberg AFB CA (El Nino)........ Overhead Electric..... 1,700.0
Debris/Tree Removal... 800.0
Structural Repairs.... 600.0
Misc. Supplies/Equip.. 400.0
Storm Drainage Sys.... 50.0
Fencing............... 50.0
------------

Subtotal..................... ...................... 3,600.0
============

Total........................ ...................... 5,103.6
------------------------------------------------------------------------

With respect to other appropriations, associated storm-related
requirements will be addressed separately.

Family Housing General Reduction

Question. The Construction Annex to the budget request--that is,
the ``C-1'' document--contains an entry ``General Reduction, minus
$7,584,000'' in the Air Force's Family Housing program. Please explain
this entry.
Answer. The $7,584,000 General Reduction appearing on the C-1 is
attributable to the presumed availability of prior year unobligated
balances which were directed by OSD to be used to fund FY99 authorized
projects. These balances, however, are vital for completion of prior
year Military Family Housing Construction projects as they are reserved
for contingencies and Supervision, Inspection and Overhead (SIOH).
Construction costs are obligated at contract award with contingency and
SIOH funds held in an unobligated status to meet unforeseen conditions
and contract claims.
Question. Is this unobligated balance currently available to pay
the costs of storm damage that will be requested in any supplemental
for fiscal year 1998?
Answer. No. These funds ($7,584,000) were directed by OSD to be
used to fund FY99 authorized projects.

Family Housing Privatization

through the family housing improvement fund [``public-private venture''
program, or ``ppv'']
Question. The Committee has received the notification for the
Army's family housing privatization project at Fort Carson, and it is
under review. The Navy has executed two projects in Texas and
Washington under somewhat different authorities. We will be going into
detail about the ongoing privatization program when we have our hearing
with Under Secretary Goodman on March 12. I have several questions that
I will ask you to answer from the Air Force's perspective. Does the Air
Force anticipate that there will be any significant financial savings
from privatization as compared with the traditional program?
Answer. The Air Force does not anticipate savings from
privatization. However privatization does allow us to leverage our
MILCON dollars to revitalize a large number of housing units at a
faster pace than the traditional MILCON program.
Question. To what extent is privatization becoming a substitute for
the traditional family housing program, rather than the supplemental
program that Congress originally intended?
Answer. The Air Force does not see privatization becoming a
substitute for the traditional family housing MILCON program but rather
as another tool that can be used with our traditional approaches to
accomplish family housing requirements. We intend to use privatization
to the maximum extent possible to leverage limited funds to accelerate
revitalization of our housing inventory.
Question. Is it correct that the cost of the family housing program
is being shifted from this bill to the housing allowances subaccounts
within the military personnel accounts in the National Security
appropriations bill? Is this a ``zero-sum'' game, that is, will there
be any savings or is it just a shift of costs? Is there any assumption
about the future funding levels for housing allowances?
Answer. It is correct that the cost of the privatized family
housing units is being shifted from this bill to the housing allowances
sub-accounts within the military personnel accounts in the National
Security appropriations bill. However, in order for privatization to
achieve the acceleration of housing revitalization programs, funds will
be retained in the housing investment accounts. Defense Planning
requires that savings realized from leveraging resources with the
private sector should be reinvested in housing projects instead of
reducing programmed housing resources. Accordingly, as a result of
privatization initiatives, Air Force will reinvest any cost avoidance
savings realized in the Military Family Housing (MFH) Operations and
Maintenance (O&M) appropriation into MFH accounts to expedite
revitalization of the Air Force MFH inventory.
This is not a ``zero-sum'' game. Instead of transferring savings to
the housing allowances sub-accounts, the savings will be retained
within MFH accounts while the housing costs associated with the
privatized units will shift from MFH O&M to the Air Force military pay
account. The payoff to this initiative is that the Air Force will be
able to accelerate the revitalization of the housing units.
Privatization will allow us to leverage the funds in our investment
programs to accomplish this acceleration.
The only assumption about the future funding levels for housing
allowances is that they are a ``must pay'' which will be funded at a
rate to cover the new BAH entitlement.
Question. Is the Air Force holding up the execution of family
housing projects for which funds have been appropriated, pending
privatization efforts? If so, which projects are being held up, and
what is the total dollar amount being withheld from obligation? If so,
are these funds being withheld to meet OMB scoring costs on mortgage
guarantees to developers against base closure, downsizing, or extended
deployments?
Answer. MILCON dollars are being used to cover the required
government upfront investment for some of the Air Force privatization
projects. These upfront costs cover the ``scored'' amount of government
loans, loan guarantees, differential payments or other authorities used
in the deal. The Air Force is closely monitoring these privatization
efforts and is making sure that they are executed responsibly or in the
case that privatization does not work, that we are configured to
execute the original MILCON as expeditiously as possible.
Active privatization projects which include prior year MILCON are--
Base and dedicated MILCON:
Lackland--$17.7M ($6.2M FY96 and $11.5M FY97);
Robins--$12.0M ($5.2M FY97 and $6.8M FY98); and
Kirtland--$26.4M ($5.5M FY97 and $20.9M FY98.
Total Prior Year MILCON: $28.4M.
Total MILCON (Add FY98): $56.1M.
Question. The Army is proceeding very aggressively to execute
``whole installation'' type projects. The Navy policy envisions a
``regional scope.'' What is the Air Force policy with regard to
privatizing all family housing in a large geographic area?
Answer. The Air Force is pursuing ``whole installation'' concepts
in two of its FY99 deals: Mt Home and Kirtland. For FY00, we are
looking at whole base deals at Dover and Hanscom. As we are developing
the family housing master plan, we will plan to ``lay in'' whole base
and possibly multi-base deals where it makes sense. However, we still
have a lot to learn on single base deals and are focusing on getting
that right first.
Question. Under current authorities, family housing privatization
involves government contribution of land, facilities, infrastructure,
mortgage guarantees, and differential lease payments to developers and
financiers. Wouldn't it be prudent to gain some experience with how
well this program works, before making such a large commitment to turn
over so many assets for a fifty year term?
Answer. The Air Force is pursuing privatization at a comfortable
pace with 12 initiatives currently under consideration and development.
Privatization is very new and an entirely different approach to
facility acquisition than the ``traditional methods''. The Air Force is
building expertise over time. Our measured approach will allow us to
build on success.
Question. It took us many, many years to build up these family
housing assets. Tell us about some of the steps the Air Force is taking
to protect its investments under its program.
Answer. The Air Force is working hard to make sure its investments
in these deals are protected in both the short and long term. For the
short term, we are taking actions such as requiring the developer to
have significant financial investment and not providing financing until
construction and/or renovation is completed to make sure the offer
provides a good initial product. In the long term, we are using
detailed ground leases and operating agreements to insure proper offer
treatment of the investment.
Question. Provide for the record a list of the Air Force locations
that are under consideration for such projects, including the number of
units in the current inventory at each locations, as well as some
indication of the value of the total government contribution at each
location.
Answer.

----------------------------------------------------------------------------------------------------------------
Fy Base Inventory MILCON available
----------------------------------------------------------------------------------------------------------------
1998..................................... Lackland................... 724 $17.7M ($6.2M FY96 and
$11.5M FY97)
1999..................................... Robins..................... 1479 $12M ($5.2M FY97 and $6.8M
FY98)
Elmendorf.................. 1608 $12.5M FY98
Kirtland................... 2115 $26.4M ($5.5M FY97 and
$20.9M FY98)
Mt Home.................... 1525 $11M FY98
Peterson................... 491 No MILCON
Dyess...................... 988 $19.9M ($10.5M FY98 and
$9.4M FY99)
2000..................................... Dover...................... 1549 $9.0M FY99
Hanscom.................... 858 No MILCON
Hurlburt................... 380 No MILCON
Patrick.................... 1556 $9.7M FY99
Wright-Patterson........... 2359 $5.6M FY99
----------------------------------------------------------------------------------------------------------------

The available MILCON funds may have to be supplemented with other
government contributions in the form of leased or conveyed land,
conveyed housing units or other facilities, subsidies and other
incentives. Each location's funding availability and other
circumstances will determine the mix and value of government
contribution required for each location's privatization initiative.
Question. Describe for us the reasons privatization probably won't
work at some of the places that the Air Force has reviewed.
Answer. In some cases, the assets that we bring to the deal do not
provide a sufficient funds stream to sustain the deal. Examples include
housing allowances below market rent or existing units that are in need
of a major renovation. In some cases, our deals have been limited in
size by available MILCON funding for upfront investment resulting in
too little economy of scale of drive significant efficiencies.

Overseas Housing Authority

Question. Is the Air Force interested in a legislative proposal for
the establishment of an ``Overseas Housing Authority'' as a ``Non-
Appropriated Fund Instrumentality,'' which the Army is pursuing, and
which is now under review at the Office of Management and Budget? If
not, why not? Is it a question of cost per housing unit? Are the Air
Force's overseas housing needs different than the Army's needs?
Answer. The Air Force does not object to the Army's proposal to
test the concept and feasibility at Army overseas locations but would
like to wait and see the Army's result with respect to budget
neutrality (MILPERS increases offset by military family housing
operations and maintenance savings) and cost effectiveness before
starting to test the authority.
The whole focus of the Air Force Housing program is to provide
quality housing for our people. While the Army's initiative may prove
to be a viable alternative for future consideration, we are currently
taking a different approach overseas as evidenced by our build-lease
efforts at Aviano AB, Italy (where we have no base housing) and RAF
Lakenheath, United Kingdom (where we have the largest deficit of
adequate housing in the Air Force: more than 1,800). Build-lease is
privatization; it allows us to quickly provide over 1,000 units of
quality housing for our personnel and their families at an affordable
price at two key forward deployed locations. It is not strictly a
question of cost per housing unit, although cost is always a factor.
Quality housing at an affordable cost is our goal.
We believe the housing needs are essentially the same for both
Services; however we anticipate being in the housing business well into
the future. We are convinced the future of Air Force housing involves
an optimum mix of Air Force owned housing and privatized housing with
the goal of providing quality housing for our people at an affordable
cost.

Cost of Base Closure

Line Item Veto

Question. The President's use of line item veto on last year's bill
took a total of thirteen projects for the Air Force and the Air Force
Reserve. The House overrode this veto on February 5, and the Senate
followed suit on February 25. Can you assure us that these projects
will be executed promptly, now that funding is resolved?
Answer. Yes, the Air Force will execute these thirteen projects
this fiscal year (FY98).

Aviano, Italy

Question. Bring us up to date with the current status of the Air
Force beddown at Aviano, Italy, which has a total facilities cost of
$404,000,000 from all sources.
Answer. Construction related to the F-16 beddown is scheduled to be
completed in 2002. NATO approved an amendment to the Aviano Capability
Package in February 1998 for 14 additional projects at $83M which
includes critical facilities such as munitions storage, jet fuel
storage, airfield lighting restoration, and passenger/freight terminal.
A major portion of this program will be funded by NATO in FY98/99/00.
It is critical to maintain a sufficient level of NATO funding in order
to continue the current momentum on this program.
Question. When will this effort be completed?
Answer. With the exception of one MILCON project, all Aviano
Beddown projects will be completed by 2002. The remaining MILCON
project, Radar Approach Control Facility ($3.5M), will be submitted by
the command for funding in a future MILCON program. A precautionary
prefinancing statement will be submitted to NATO.

Alabama--Maxwell AFB

ots student dormitories ($12,765,000)
alabama-maxwell afb: ots dining facility ($4,796,000)
Question. What is the total construction program for meeting all
Officer Training School requirements at Maxwell AFB, by fiscal year
programmed?
Answer. The Officer Training School MILCON program is as follows:
Fiscal year and title:
(In millions of dollars) Cost
1997, Academic Facility....................................... 8.2
1998, Academic Facility....................................... 4.5
1998, Physical Fitness Center................................. 1.1
1999, Dormitory............................................... 12.8
1999, Dining Facility......................................... 4.8
200x, Dormitory............................................... 7.9
-----------------------------------------------------------------
________________________________________________
Total....................................................... 39.0
fire training facility ($1,837,000)
Question. Will this project meet all fire training requirements at
this location?
Answer. This project constructs the Air Force standardized crash
fire rescue training facility, which provides all aircraft fire rescue
training required for certification on the installation. This project
is not intended to support structural firefighter training, hazardous
material training, confined space rescue training, or high-angle rescue
training requirements.

Alaska--Eielson AFB

consolidated munition facility ($4,352,000)
Question. Is it correct that the unit cost for this project is only
$63 per square foot, when converted from metric to standard and
adjusted for the area cost factor [$2,950/27/1.73]?
Answer. The unit cost for the Eielson AFB munitions facility is
$273 per square foot. Using the OSD formulation factor from square
meters to square feet is 10.76. Adjusted for the area cost factor
(1.73), the standard DoD unit cost for this type facility would have
been $158 per square foot.
Question. Does this project provide a permanent or a temporary
facility?
Answer. The Consolidated Munition Facility project at Eielson AFB,
Alaska is a permanent facility.
Question. What is the estimated design life of this one step
turnkey facility?
Answer. The munitions facility is designed as permanent
construction with a 25-year life before major repairs are needed.

California--Edwards AFB

Question. This facility provides all of the general maintenance and
repair operations for aircraft assigned to the Flight Test Center. How
will the Center conduct its test programs while this renovation is
being performed?
Answer. The design process currently underway for this project
incorporates phased construction with minimum impact to the operations
within this facility. The construction will create constraints/impact/
workarounds, but will not take the hangar totally out of use.

California--Vandenberg AFB

space iqt academic facility ($9,209,000)
Question. It is correct that this project is required due to unit
and mission relocations from Peterson AFB and Falcon AFS?
Answer. This project is required for the permanent beddown of the
Space Initial Qualification Training Program which moved from leased
space in Colorado Springs, CO and relocatable facilities at Falcon AFS
to Vandenberg AFB.
Question. Does this project replace the previously occupied space
in kind, foot for foot?
Answer. The project scope is not based on previously leased space
(7,992 SM in Colorado Springs) nor temporary relocatable facility space
(2,100 SM at Falcon AFS) when the Space IQT mission was still located
in the Colorado Springs area. The project scope (3,800 SM) is designed
to meet the current Space Initial Qualification student load training
requirements.
Question. How is the previously occupied space being used now?
Answer. Except for 502 SM remaining to support training which did
not relocate to Vandenberg, the leased space (7,992 SM) in Colorado
Springs was terminated. The relocatable facilities (2,100 SM) on Falcon
AFS, which were used for a portion of the Space IQT mission, currently
house DoD satellite operations support functions.
add/alter missile maintenance facility ($9,500,000)
Question. What is the current estimate for how far into the future
it will be necessary to provide Minuteman ICBM Follow-On Test and
Evaluation activities that require this project? Is the building being
planned to outlast the program.
Answer. The Minuteman ICBM weapon system is identified for
sustainment through 2020 by the Air Force Long Range Plan, 27 Mar 97.
The Minuteman ICBM reliability is verified through Follow-On Test and
Evaluation functions performed in this facility. This project renovates
the existing missile maintenance facility and is expected to extend the
life of the facility until 2020.

Colorado--Falcon AFB

operational support facility ($9,601,000)
Question. Does this project include the cost of demolishing the
current temporary facility, which is actually 118 trailers bolted
together?
Answer. This project includes the cost associated with demolishing
51 (3534SM) of the 118 (8178SM) trailers. The remaining trailers will
be demolished after construction of a future logistics support
facility.

Colorado--USA Academy

add/alter prep school building ($4,413,000)
Question. Provide for the record a table that will show the
enrollment at the Academy and at the Prep School for each of the least
ten years, and showing how many of each year's Prep School graduates
move into the following year's student body at the Academy.
Answer.

----------------------------------------------------------------------------------------------------------------
Percent
Prep of prep Percent of
Entered Graduated school school Total USAFA USAFA
Year prep prep sch grads grads enrollments enrollments
school entering entering prep school
USAFA USAFA grades
----------------------------------------------------------------------------------------------------------------
1987...................................... 238 215 165 76.7 1377 12.0
1988...................................... 235 193 151 78.2 1492 10.1
1989...................................... 270 225 191 84.9 1407 13.6
1990...................................... 256 206 169 82,0 1415 11.9
1991...................................... 237 194 151 77.8 1405 10.7
1992...................................... 226 178 153 86.0 1242 12.3
1993...................................... 206 174 161 92.5 1180 13.6
1994...................................... 218 178 159 89.3 1308 12.2
1995...................................... 217 158 147 93.0 1348 10.9
1996...................................... 255 204 182 89.2 1238 14.7
1997...................................... 236 189 163 86.2 1110 14.7
----------------------------------------------------------------------------------------------------------------

District of Columbia

bolling afb: honor guard technical school ($2,948,000)
Question. Describe the course of study for the newly established
technical school for honor guard units.
Answer. The course of study varies to suit the needs for honor
guard units. Base level honor guards are primarily administered a 2
week (80 hrs) course to learn basic protocol, various ceremonies,
fundamental drills and uniform care/maintenance. Physical conditioning
is also required throughout the course of study. New members assigned
to the Air Force Honor Guard are required to complete the Basic
Ceremonial Guardsman Course (9 weeks, 360 hours) consisting of basic
orientation, skills training, academics to include history, protocols,
customs and courtesies, drills, manual of arms, ceremonies, and final
inspection/transition.
Question. Why couldn't this be done in another, less expensive
location, rather than bringing 600 students per year to Washington?
Answer. The Honor Guard School uses personnel from the air Force
Honor Guard for its core training cadre. Centralizing all honor guard
training at Bolling efficiently combines the need to train ``Total
Force'' personnel worldwide while satisfying the extensive ceremonial
requirements of the National Capital Region.

Florida--Eglin AFB

dormitory ($7,866,000)
Question. This project includes the cost of demolition of two
buildings, totaling 4,550 square meters. Are these two buildings the
existing modular dorms with central latrines?
Answer. Yes.
Question. Is this demolition in the footprint of the new
construction?
Answer. Yes.
santa rosa island test sites ($12,571,000)
Question. What makes this location uniquely capable to test against
land, sea, and air targets/threats?
Answer. Because of the geographic position and layout of Santa Rosa
Island in relation to the Eglin AFB Range and the Gulf Test range,
these test sites provide simultaneous tracking of an airborne weapon
over land-sea scenario. These test sites provide munitions and Command,
Control, Communications, Computer, and Information (C4I) programs the
unique capability to test against land, sea, and air targets, and
threats in a single mission, thus reducing test and test-team
deployment costs. Emerging weapons technologies found in long-range
standoff munitions such as Joint Air-to-Surface Stand-off Missile
(JASSM), Joint Direct-Attack Munitions (JDAM), Precision-Guided
Munition (PGM) and air-to-air technologies in Air Intercept Missile
(AIM-9X) will benefit from this capability.

Florida--Eglin 9

control tower ($2,014,000)
Question. When was it determine that existing control tower is
``operationally unsafe'', and why is 1999 the right year for
replacement?
Answer. A HQ USAF Flight Standards Agency Report (28 Sep 95)
identified a potential flight safety issue (major blind spots and a
hangar obstructing vision of the approach zone), and fire and life-
safety protection deficiencies. FY99 is the earliest year we can
satisfy this requirement.
fire training facility ($1,823,000)
Question. Will this project meet all fire training requirements at
this location?
Answer. This project constructs the Air Force standardized crash
fire rescue training facility, which provides all aircraft fire rescue
training required for certification on the installation. This project
is not intended to support structural firefighter training, hazardous
material training, confined space rescue training, or high-angle rescue
training requirements.

Florida--MacDill AFB

kc-135 simulator facility ($2,514,000)
Question. This facility will house a flight simulator device valued
at $25,000,000, to be provided from other appropriations. Has this
procurement been timed to correspond with the availability of this
facility?
Answer. Yes. The modifications to the flight simulator at MacDill
are timed to correspond with the construction of the KC-135 simulator
facility. Both are scheduled for completion in 4Q FY 99.
Question. How many identical KC-135 full motion simulator devices
does the Air Force have right now, and where are they?
Answer. There are four KC-135 full motion simulator devices--one
each at Altus AFB OK, Fairchild AFB WA, Grand Forks AFB NC, and Tulsa
IAP OK.
fire training facility ($2,494,000)
Question. Will this project meet all fire training requirements at
this location?
Answer. This project constructs the Air Force standardized crash
fire rescue training facility, which provides all aircraft fire rescue
training required for certification on the installation. This project
is not intended to support structural firefighter training, hazardous
material training, confined space rescue training, or high angle rescue
training requirements.

Georgia--Robins AFB

depot plant services facility ($11,894,000)
Question. Will this facility house Capital Working Fund activities?
If so, will the rates charged users be reduced upon completion of this
project, to reflect consolidation and streamlining?
Answer. The facility will house depot maintenance activities of the
Air Force Working Capital Fund (WCF). Savings derived from reductions
in inventories, energy consumption, and overtime will be passed on to
WCF customers.

Hawaii--Hickam AFB

repair airfield pavement ($5,890,000)
Question. The form 1390 indicates that a future project is planned,
to ``repair airfield pavement'' at a cost of $7,735,000. How does the
project relate to this project, and when is it programmed?
Answer. The repair of the aircraft parking apron at Hickam AFB is
the final phase to replace failed airfield pavement. This project
repairs 98,000 square meters of pavement ($7.7M), and is currently
planned for the FY02 MILCON program. The FY02 project replaces failed
pavement similar to that being repaired by this FY99 MILCON request.

Idaho--Mountain Home AFB

land acquisition ($1,000,000)
Question. Does the Department of Defense still have moratorium on
land acquisition in effect? If so, is it correct that this particular
land acquisition is exempted from the moratorium because the
acquisition will be performed by the Bureau of Land Management?
Answer. No. An exemption to the moratorium is required to add real
estate to Department of Defense accounts. This action is not an
acquisition of private land, but a transfer of US government owned land
managed by the Bureau of Land Management. This project will reimburse
ranchers for grazing rights and transfer land management
responsibilities to the Air Force.
Question. What legislation must be enacted to accomplish this
acquisition?
Answer. Land withdrawal legislation must be enacted. The Air Force
plans to construct a 12,000-acre tactical range on Bureau of Land
Management (BLM) withdrawn land in the southwest Idaho under the
provisions of the Federal Land Policy Management Act of 1976 (43 U.S.C.
1701 and following sections) and the Engle Act (43 U.S.C. 155 and
following sections). The proposal includes one 640-acre no drop
simulated target area; four 5-acre simulated target areas; ten 1-acre
emitter sites; and twenty \1/4\ acre emitter sites and modifications.
The proposed land withdrawal requires the purchase of 12,000 acres of
grazing with an estimated cost of $1M and is identified in the FY99 Air
Force Military Construction Program.
dormitory ($8,897,000)
Question. This project includes the cost of demolition of one 54
room wooden dormitory. Describe this dormitory, and is it currently in
use?
Answer. This 54-room, two-story dormitory is substandard. It was
built in 1954 with interior corridors and constructed with wood frames
and aluminum exterior siding. There is no bathroom exhaust and the
ventilation is inadequate. Electrical systems are inadequate for
loading and do not meet current electrical and safety code
requirements. The original evaporative cooling units (swamp coolers)
and inefficient high-temperature radiant heat systems are at the end of
their useful life and energy wasteful. The dormitory has damaged walls
and cracked joints and the roof system is failing.
The dormitory is currently still in use.
range improvements ($2,400,000)
Question. By what date must the land acquisition be accomplished in
order to execute this project during fiscal year 1999?
Answer. Land acquisition is required by 1 July 1999 to support the
Idaho Range project.
Question. Provide for the record the entire military construction
funding requirement for land acquisition and range improvements, by
fiscal year.
Answer. The construction funding needed for the Idaho range
improvements is:

----------------------------------------------------------------------------------------------------------------
FY99 ($M) FY00 ($M) FY01 ($M)
----------------------------------------------------------------------------------------------------------------
Land Acquisition............................................. 1.0 ............... ...............
Range Improvements........................................... 2.4 17.0 10.7
----------------------------------------------------------------------------------------------------------------

Maryland--Andrews AFB

child development center ($4,448,000)
Question. Andrews AFB currently has a waiting list exceeding 300
children, the largest in the Air Force. Over 1,200 children are
eligible for child care services at Andrews AFB. Submit for the record
a copy of DoD Directive 6060.2, which limits the capacity of child
development facilities to 305 children, which is the capacity provided
by this project.
Answer. The current edition of the DoD Directive 6060.2 does not
restrict the size of military child development centers. This
restriction was inadvertently left out of the revision of the 1989
version which did include this requirement. The DoD Child Development
Program standards, which are used by DoD to inspect military child
development programs, do restrict the size of centers to 305 maximum
capacity. A copy is attached.
Offset Folios 2817 to 2820 Insert here

Question. Did the Air Force seek a waiver to this directive?
Answer. The Air Force has not sought a waiver to exceed 305 maximum
capacity for child development centers. We support this size limit. For
child abuse protection reasons, child development centers must have a
single point of entry. This requirement precludes multiple points of
entry that would require staffing of multiple desks and shortens the
distance from the entrance to the individual rooms.
Question. Will the fiscal year 2003 project also be sized for 305
children?
Answer. Any future child development center project for Andrews
will be sized based on the need at the time.

Mississippi--Keesler AFB

training support facility ($5,756,000)
Question. Describe the economies that should result from the
consolidation of student support operations in a central facility.
Answer. The student operations facility is part of the student
campus being developed at Keesler AFB to replace existing deteriorated
student dorms and support activities. Student support functions are
currently scattered among existing dormitories (in an old dining area
space) and will be demolished as new dormitories are constructed. A new
central campus support facility designed for administrative functions
is required to replace the demolished space. Student in- and out-
processing will be more efficient; personnel records management
centralized and easily accessible; student processing and conference
capabilities consolidated; and overall information transfer and
communication enhanced as a result of this project.
student dormitories ($29,770,000)
Question. How far will these new student dormitories be located
from the Training Support Facility, and how far will they be from main
base operations?
Answer. The dormitories will be collocated with the training
support facility as part of the student campus adjacent to the student
academic complex. The campus area is located approximately one mile
from the center of main base operations.

Nevada--Indian Springs Field

Question. The C-17 program is in the midst of a seven year, $16.3
billion multiyear contract. What is the status of the C-17 multiyear
contract?
Answer. The C-17 program has delivered 38 production aircraft, and
the last 26 have been delivered early (average 27 days) with excellent
quality. The last aircraft delivered (P38) was 46 days early. With
respect to the Multi-Year Procurement (MYP) contract, the FY97 and FY98
aircraft have been fully funded as well as the advance buy for the FY99
aircraft. The first MYP aircraft (P41) is expected to be delivered
prior to the 31 Aug 98 contract delivery date. The last MYP (P120)
aircraft contract delivery date is 30 Nov 04.
uav logistics and training facility ($3,965,000)
uav-sq ops/amu facility ($7,059,000)
uav-comm maint fac/utilities ($3,989,000)
Question. With the Air Force's considerable experience at managing
large construction programs at rather remote installations, how
confident are you that all of these projects at Indian Springs can be
awarded during fiscal 1999, that bids will be competitive, and that
each project will be delivered at full scope and within cost?
Answer. Projects are currently on schedule and reflect a first
quarter FY99 award. Competitive bids have been received at Indian
Springs for an FY97 UAV-Squad Ops/Hangar project. Current designs
provide full scope as identified in program documents and are within
programmed amounts.
Question. What is the future construction program for Predator
beddown at Indian Springs?
Answer. There are two future year projects, a dormitory ($10.8M)
and a dining facility ($3.5M), identified to support the Predator
beddown at Indian Springs. Because most of the community activities
supporting Indian Springs are located at Nellis AFB, the dormitory will
be constructed there. Neither project is in the current FYDP.

Nevada--Nellis AFB

dormitory ($6,378,000)
Question. What is the estimate of savings in design costs by
accomplishing this project by one step turn key procedures?
Answer. We cannot determine design cost savings, if any, at this
time. The contractor is required to separate out the cost of design in
his proposal. Therefore, at construction contract award we will know
the total design cost.

New Jersey--McGuire AFB

dining facility ($6,044,000)
Question. The form 1391 states that the requirement is 1,950 square
meters, and the existing dining facilities to be demolished offer a
substandard 2,817 square meters. Will this net reduction of nearly one-
third in size be missed?
Answer. Constructing one-third less dining facility space than
currently exists will provide an adequately sized and configured dining
facility to support the personnel at McGuire AFB.

New Mexico--Kirtland AFB

fire training facility ($1,774,000)
Question. Will this project meet all fire training requirements at
this location?
Answer. This project constructs the Air Force standardized crash
fire rescue training facility, which provides all aircraft fire rescue
training required for certification on the installation. This project
is not intended to support structural firefighter training, hazardous
material training, confined space resume training, or high angle rescue
training requirements.

North Dakota--Grand Forks AFB

fire training facility ($2,686,000)
Question. Will this project meet all fire training requirements at
this location?
Answer. This project constructs the Air Force standardized crash
fire rescue training facility, which provides all aircraft fire rescue
training required for certification on the installation. The project is
not intended to support structural firefighter training, hazardous
material training, confined space rescue training, or high-angle rescue
training requirements.

Ohio--Wright-Patterson AFB

acquisition management complex ($22,000,000)
Question. The form 1390 refers to this project as ``phase 4A''.
What further work is planned, when is it programmed, and at what cost?
Answer. The Acquisition Management Complex, Phase 4B, ($16.0M) is
the only project identified for a future year construction program
(FY03).

Oklahoma--Tinker AFB

combat comm sq ops facility ($5,085,000)
Question. Describe in some detail what a ``squadron operations
facility'' includes, and how this will differ from currently used
facilities.
Answer. The Combat Communications Squadron is composed of two major
communication system sections, (airfield support systems and network
systems, such as satellite communications.) the squadron also has
organic vehicle, power production, and air conditioning maintenance
functions; a command and control element; and specialized security and
training sections.
The existing Combat Communications squadron is located in several
substanard facilities which do not meet current fire of physical safety
considerations. Alignment of command and control, maintenance, and
operations to new adjacent functional areas eliminates exposure to
unsafe, unsecure conditions, and optimizes support systems.
dormitory ($9,100,000)
Question. Another dormitory is programmed at Tinker AFB for fiscal
year 2000. Will the fiscal year 1999 project replace the worst existing
barracks at Tinker AFB? If not, why were these barracks selected for
replacement this year?
Answer. No, the fiscal year 1999 dormitory construction project
will not replace any existing dormitories at Tinker AFB. The fiscal
year 1999 project constructs a new 144-room enlisted dormitory to
reduce the 858-room deficit at Tinker AFB--it adds new rooms to the
existing inventory.
Question. Submit for the record a list of the planned projects to
correct all existing barracks deficiencies at Tinker AFB, by fiscal
year programmed.
Answer. The existing dormitory deficiency at Tinker AFB is a
shortage or lack of enlisted dormitory rooms. The following table
describes the planned projects to correct the 858-room deficit at
Tinker AFB:

----------------------------------------------------------------------------------------------------------------
Cost (In
Fiscal year \1\ Project title Scope thousands)
----------------------------------------------------------------------------------------------------------------
1999..................................... Dormitory................... 144 Rooms.................. $9,100
2000 (tentative)......................... Dormitory................... 96 Rooms................... 5,800
2001 (tentative)......................... Dormitory................... 96 Rooms................... 6,000
Future................................... Dormitory................... 144 Rooms.................. (\2\)
Future................................... Dormitory................... 144 Rooms.................. (\2\)
Future................................... Dormitory................... 120 Rooms.................. (\2\)
Future................................... Dormitory................... 120 Rooms.................. (\2\)
----------------------------------------------------------------------------------------------------------------
\1\ The only fiscal year project that represents an official Air Force request is the fiscal year 1999 dormitory
project included in the President's Budget.
\2\ To be determined at a later date.

Oklahoma--Vance AFB:

fire training facility ($1,823,000)
Question. Will this project meet all fire training requirements at
this location?
Answer. This project constructs the Air Force standardized crash
fire rescue training facility, which provides all aircraft fire rescue
training required for certification on the installation. This project
is not intended to support structural firefighter training, hazardous
material training, confined space rescue training, or high-angle rescue
training requirements.

South Carolina--Charleston AFB

dining facility ($5,221,000)
Question. This project is justified, in part, by the fact that the
dormitory area, which has developed through revitalization and
construction over the past several years, is no longer in close
proximity to the existing dining facility. Why wasn't this dining
facility programmed as part of a ``whole barracks complex
revitalization'' type of project, rather than a single stand-alone
project?
Answer. Charleston Air Force Base's plan to construct and
revitalize the dormitories included constructing a new dining facility
within the new dorm campus. The goal was to provide adequate
dormitories first, then follow with construction of a new dining hall
within the dorm campus. It is not typical to program dormitories and
dining facilities in a single MILCON project.
c-17 life support facility ($4,701,000)
c-17 sq ops/amu facility ($6,769,000)
c-17 sq ops/amu facility ($7,639,000)
Question. Is it correct that none of these three projects, totaling
$19,109,000, would be required this year if it were not for the beddown
of the C-17 at Charleston AFB?
Answer. These projects are required in the FY99 MILCON program to
support the beddown of the C-17 aircraft at Charleston AFB.
Question. With the Air Force's considerable experience at multiple
construction projects at a single installation in a single year, is
there a plan to execute these three projects as a ``bundled'' or
``packaged'' bid in order to increase competition?
Answer. As construction agent for the Air Force, the Navy will
combine the two FY99 C-17 Sq Ops/AMU projects into a single contract
solicitation due to site proximity and likeness of work. The C-17 Life
Support Facility project will be bid separately because it is a
different type of structure and is located over a mile away from the Sq
Ops/AMU facilities. The life support facility size and cost also make
this construction ideal for small to medium size contractors to bid.
Question. What is the future construction program for C-17 beddown
at Charleston AFB?
Answer. The final C-17 beddown projects at Charles AFB are a C-17
flight simulator facility and a corrosion control facility. Both
projects will be submitted by the command in a future year construction
program.

Texas--Lackland AFB

operations facility ($8,130,000)
Question. This project will provide a facility for Air Force, Navy,
Army, and Marine cryptological elements. Why is it in the Air Force
program rather than another service, or the Defense-wide account?
Answer. As the host service for the Median Regional Signal
Intelligence Operations Center, the Air Force is responsible for
programming and executing the MILCON program. Funds were transferred to
the Air Force from Defense-wide accounts ($8.13M) for this project.
dormitory ($6,800,000)
Question. There are additional dormitory projects in fiscal year
2000, and in the out years. Is this about the maximum rate of dormitory
replacement that can be accomplished at Lackland AFB without disrupting
operations, roughly $7,000,000 of dormitory work per year?
Answer. The fiscal year 1999 and fiscal year 2000 dormitory
projects at Lackland AFB do not replace any existing dormitories, but
rather add new dormitories to reduce the overall deficit of dormitory
rooms for our permanent party enlisted airmen. These projects will not
disrupt any mission operations, nor do they represent any maximum rate
of dormitory work per year.

Texas--Randolph AFB

base operations facility ($3,166,000)
Question. Describe in some detail why a ``temporary facility'' is
required within the cost of this project. Is this due to a severely
constrained construction site, or other factors?
Answer. The current base operations facility will be demolished to
allow construction of the new facility on the same site. The temporary
facility is needed primarily for unique communication and weather
requirements supporting base operations.
Question. The existing facility is falling apart, largely because
it is constructed on expansive clay soils, but it is eligible for
listing on the National register of Historic Places. What challenges
has this presented in programming demolition?
Answer. The demolition and replacement of this facility have been
coordinated with the State Historic Preservation Office. The new
facility is being designed to closely resemble the architectural style
of the facility being demolished.
Question. Submit for the record the ``certificate of exception''
that has been prepared.
Answer. The ``Exception to the Requirement for Economic Analysis
(EA) for Military Construction Program (MCP) Project at Randolph AFB's
Base Operations Facility'' is attached.
Offset Folios 2846 to 2849 Insert here

Washington--Fairchild AFB

kc-135 sq ops/amu facility ($7,620,000)
Question. This is the fourth squadron operations/aircraft
maintenance unit to collocate aircraft operators with aircraft
maintainers at Fairchild AFB. Will this complete the requirement for
such facilities for support of the 59 KC-135 aircraft assigned to
Fairchild AFB?
Answer. The fourth Sq Ops/AMU facility completes the requirement
for KC-135 squadron operations/maintenance collocation at Fairchild
AFB.
Question. Current operations are dispersed among five facilities,
but only two of these are substandard and will be demolished as part of
this project. How much space will be vacated, and what is the planned
re-use of such space at the other three facilities?
Answer. After the KC-135 Squad Ops/AMU facility is completed, one
of the remaining facilities (3,175 square meters) will be sued for a
field training detachment and precision measurement equipment lab; a
second facility (4,000 square meters) will be used primarily for base
communications; the third facility (131 square meters) is scheduled for
demolition in the FY00 operations and maintenance program.

Washington--McChord AFB

c-17 adal aircraft maint shop ($2,321,000)
c-17 ramp/hydrant fuel sys ($18,025,000)
c-17 alter maintenance hangars ($6,427,000)
adal simulator facility ($1,823,000)
c-17 repair base roads ($2,224,000)
c-17 add/alter age maint facility ($2,110,000)
c-17 flightline support facility ($4,029,000)
c-17 shortfield assault strip ($2,321,000)
c-17 alter composite shop ($1,630,000)
c-17 sq ops/amu facility ($6,524,000)
life support equipment facility ($4,413,000)
Question. Is it correct that none of these eleven projects,
totaling $51,847,000, would be required this year if it were not for
the beddown of the C-17 at McChord AFB?
Answer. These eleven projects ($51,847,000) are required in the
FY99 MILCON for the beddown of the C-17 aircraft at McChord AFB.
Question. With the Air Force's considerable experience at managing
large construction programs at single installations, how confident are
you that all eleven of these projects at McChord AFB can be awarded
during fiscal 1999, that bids will be competitive, and that each
project will be delivered at full scope and within cost?
Answer. Based on our experience with previous C-17 MILCON projects
and the current status of the FY99 C-17 design program, we are very
confident all eleven projects in the FY99 program at McChord AFB will
be awarded during FY99, and the program delivered at full scope and
within cost. The FY99 C-17 construction program for McChord will be
ready to advertise before the first quarter FY99.
Question. What is the future construction program for C-17 beddown
at McChord AFB?
Answer. Future C-17 beddown projects at McChord AFB include a third
($8,100,000) and fourth ($7,100,000) Sq Ops/AMU, and two projects to
extend nosedocks ($2,050,000 and $3,700,000). The $8,100,000 SQ OPS/AMU
project is included in the current FYDP.

Germany--Spangdahlem AB

dormitory ($9,501,000)
Question. Why are these two projects not eligible for NATO or host
nation funding? Have precautionary prefinancing statements been
submitted to NATO nonetheless?
Answer. The consolidated air control squadron operations facility
project is not currently NATO eligible because the US is the only ally
in NATO that uses ground-based, forward air control. It is extremely
unlikely NATO will support this mission, however a precautionary
prefinancing statement is being submitted.
Dormitory construction is not NATO eligible. NATO supports
operational infrastructure at a minimum military requirement level for
member nations. NATO does not fund non-operational requirements such as
dormitories. Precautionary prefinancing statements for dormitories have
not been submitted to NATO because they do not have a reasonable
potential to become NATO eligible.

Korea--Kusan AB

dormitory ($5,958,000)
Question. Describe in some detail the readiness and force
protection concerns at this location, and how this project will address
those concerns.
Answer. Housing our unaccompanied force on-base in Korea is a major
readiness and force protection concern for the Air Force. We believe
our mission readiness is protected and enhanced by having our airmen
live on-base, within a safe community. Force readiness is a serious
concern anywhere in the world for the U.S. military, but especially so
when our mission and airmen are in close proximity to potentially
hostile threats or forces. The safety and protection of these airmen is
paramount.
In addition, the off-base accommodations in Korea are unacceptable
and inappropriate for U.S. military personnel, further exacerbating our
force protection and safety concerns. The off-base quarters are
generally in high-density, crowded areas making protection from
terrorist or criminal activities difficult, if not impossible. The off-
base quarters are not located in areas near the base, reducing the
timeliness of emergency responses to and from the base and making
communication by commanders and base authorities difficult. Off-base
quarters are substandard--the facilities lack potable water and safe
heating systems.
This project will replace the last central latrine dormitories at
Kunsan Air Base, allowing the base and the Air Force to achieve a
monumental quality of life milestone and provide 122 private rooms on-
base for assigned enlisted personnel. The central latrine dormitories
were constructed in 1961 and are no longer suitable for permanent party
unaccompanied enlisted housing. The infrastructure is well beyond
reasonable and economic repair; occupants are not assured of reliable
water, sewage, heating or cooling in their on-base quarters--their
homes. Kunsan will still have a 213-room dormitory deficit after
completion of the fiscal year 1999 dormitory.
Question. What is the design life of this dormitory project?
Answer. The facility is designed as permanent construction with a
25-year life before major repairs are needed.
Question. Are there any Republic of Korea funded dormitory projects
at Kunsan?
Answer. Yes, there have been three recent dormitory projects at
Kunsan Air Base funded by the Republic of Korea (ROK). One additional
dormitory project is planned for host nation funds in the future.

----------------------------------------------------------------------------------------------------------------
Calendar year Project title Scope ROK Cost (In thousands)
----------------------------------------------------------------------------------------------------------------
1995................................. Dormitory.............. 100 Rooms.............. 6,500
1996................................. Replace Dormitory...... 122 Rooms.............. 7,200
1997................................. Replace Dormitory...... 122 Rooms.............. 7,800
Future............................... Dormitory.............. 122 Rooms.............. (^{1)
----------------------------------------------------------------------------------------------------------------
\1\ To Be Determined at a Later Date.
Both the 1996 and 1997 dormitory projects replace old, substandard central latrine dormitories. The future
project builds a new dormitory to reduce the deficit at Kunsan.

Question. Outline the remaining dormitory program at Kunsan, beyond
this U.S. funded project.
Answer. The following table depicts the remaining dormitory
construction program at Kunsan Air Base beyond the fiscal year 1999
U.S. funded project. The table below includes planned projects for both
U.S. MILCON funds and host nation (Republic of Korea) funds. Both
projects provide new construction to buyout the room deficit at Kunsan.
These projects enhance readiness and force protection and are required
to provide our enlisted personnel safe, adequate on-base housing at one
person per room.

----------------------------------------------------------------------------------------------------------------
Fiscal year Project title Scope Fund source
----------------------------------------------------------------------------------------------------------------
Future............................... Dormitory.............. 122 Rooms.............. US MILCON.
Future............................... Dormitory.............. 100 Rooms.............. Host Nation Funds.
----------------------------------------------------------------------------------------------------------------
\1\ These projects are consistent with the Air Force Dormitory Master Plan and the Air Force goal to buyout our
deficit and most critical existing dormitories no later than fiscal year 2009.

Question. Is there any plan to leave Kunsan within a ten-year
timeframe?
Answer. There are no current plans for USAF units to leave Korea
during the next ten years. Continuing tensions on the Korean peninsula
and US military strategy require the stationing of USAF forces Korea.
North Korea still possesses a highly unpredictable threat and the
continued forward positioning of North Korea's offensive capabilities
on the South Korean border remains a source of concern. The credibility
of US commitment to deter aggression is evidenced by the stationing of
US forces and equipment in this region.

Korea--Osan AB

dormitory ($7,496,000)
Question. Describe in some detail the readiness and force
protection concerns at this location, and who this project will address
those concerns.
Answer. Housing our unaccompanied force on-base in Korea is a major
readiness and force protection concern for the Air Force. We believe
our mission readiness is protected and enhanced by having our airmen
live on-base, within a safe community. Force readiness is a serious
concern anywhere in the world for the U.S. military, but especially so
when our mission and airmen are in close proximity to potentially
hostile threats or forces. The safety and protection of these airmen is
paramount.
In addition, the off-base accommodations in Korea are unacceptable
and inappropriate for U.S. military personnel, further exacerbating our
force protection and safety concerns. The off-base quarters are
generally in high-density, crowded areas making protection from
terrorist or criminal activities difficult, if not impossible. Multi-
occupant apartment buildings usually have no in-place security measures
and provide open access to the general public. One of the most common
types of off-base quarters near Osan Air Base also serve as hotels. The
off-base quarters are substandard and lack potable water and safe
heating systems.
Osan Air Base has the largest deficit of on-base enlisted dormitory
rooms of any Air Force location is the world. The fiscal year 1999
MILCON project and the two Korean-funded projects in calendar year 1998
and 1999 are all focused on reducing this significant shortfall. Each
project constructs a 156-room dormitory and will collectively reduce
the deficit from 1,485 rooms to 1,017 rooms--still leaving a
significant deficit.
This project is a crucial part of a multi-year construction
requirement to provide our unaccompanied enlisted personnel stationed
at Osan Air Base with safe, adequate on-base housing. Housing our
unaccompanied military members on-base improves the readiness of our
forces in Korea and provides the force protection that the Air Force,
Congress, and the American public demand.
Question. What is the design life of this dormitory project?
Answer. The facility is designed as permanent construction with a
25-year life before major repairs are needed.
Question. Why is this project required at this location, in
addition to two other force protection/deficit dormitory projects
funded at Osan by the Republic of Korea at $22,000,000?
Answer. This 156-room enlisted dormitory project is a crucial part
of a multi-year construction requirement to provide our unaccompanied
enlisted personnel stationed at Osan Air Base with safe, adequate on-
base housing. Housing our unaccompanied military members on-base
improves the readiness of our forces in Korea and provides the force
protection that the Air Force, Congress, and the American public
demand.
Osan Air Base has the largest shortage of on-base enlisted
dormitory rooms of any Air Force location in the world. the fiscal year
1999 MILCON project and the two Korean-funded projects in calendar year
1998 and 1999 are all focused on reducing this significant shortfall.
Each of these three projects constructs a 156-room dormitory and will
collectively reduce the deficit from 1,485 rooms to 1,017 rooms--still
leaving a significant deficit. All dormitory requirements and
construction projects at Osan have been validated by the Air Force
Dormitory Master Plan completed in August 1997. Our force structure at
this primary overseas installation has stabilized.
Without Congressional support of the fiscal year 1999 MILCON
project, we deny our airmen the adequate force protection, privacy, and
quality of life they deserve. Sole reliance on Republic of Korea
funding to buyout the dormitory deficit would take over 10 years--this
is an unacceptable timeline. A prudent, and systematic investment plan,
in concert with annual host nation funding, has been developed to
resolve this shortfall at Osan in a reasonable timeframe.
Question. Outline the remaining dormitory program at Osan, beyond
this U.S. funded project and the two Korea funded projects.
Answer. The following table depicts the remaining dormitory
construction program at Osan Air Force Base beyond the fiscal year 1999
U.S. funded project and the two Korea funded projects. The table below
includes planned projects for both U.S. MILCON funds and host nation
(Republic of Korea) funds. All projects listed below provide new
construction to buyout the significant room deficit at Osan Air Base,
Korea. These projects enhance readiness and force protection and are
required to provide our enlisted personnel safe, adequate on-base
housing at one person per room.

----------------------------------------------------------------------------------------------------------------
Fiscal year \1\ Project title Scope Fund source
----------------------------------------------------------------------------------------------------------------
2000 (tentative)..................... Dormitory.............. 156 Rooms.............. US MILCON.
2000 (tentative)..................... Dormitory.............. 156 Rooms.............. Host Nation.
2001 (tentative)..................... Dormitory.............. 156 Rooms.............. US MILCON.
Future............................... Dormitory.............. 156 Rooms.............. Host Nation.
Future............................... Dormitory.............. 156 Rooms.............. US MILCON.
Future............................... Dormitory.............. 156 Rooms.............. Host Nation.
----------------------------------------------------------------------------------------------------------------
\1\ These projects are consistent with the Air Force Dormitory Master Plan.

Question. Is there any plan to leave Osan within a ten-year
timeframe?
Answer. There are no current plans for USAF units to leave Korea
during the next ten years. Continuing tensions on the Korean peninsula
and US military strategy require the stationing of USAF forces in
Korea. North Korea still possesses a highly unpredictable threat and
the continued forward positioning of North Korea's offensive
capabilities on the South Korean border remains a source of concern.
The credibility of US commitment to deter aggression is evidenced by
the stationing of US forces and equipment in this region.

Turkey--Incirlik AB

central security control facility ($2,949,000)
Question. The personnel strength at Incirlik AB is programmed to
come down from the current total of 3,541 to 2,723 at the end of fiscal
year 2003, a reduction of nearly one-fourth. What particular concerns
led to this project for ground defense of the base, in a semi-hardened
facility that will be chemically and biologically protected?
Answer. The facility in question functions as the Base Defense
Operations Center (BDOC) which is a command and control facility for
base security and defense. It plans, directs, integrates and controls
all base defense efforts. Although there is a projected reduction in
force at Incirlik, this change will not reduce the force protection
mission since the size of the base and number of critical resources
will not change. The current BDOC is completely inadequate and does not
meet operational base defense requirements for the following reasons:
a. Due to limited space, there is no place for senior battle staff
members to work when BDOC is activated, severely hampering mission
accomplishment during emergency operations.
b. Due to limited space, key security force functions must be
located up to \1/2\ mile away, severely hampering dispatch of response
forces during emergency operations.
c. Utilities are undersized and the existing armory portion is
condemned. As always, command and control facilities are vulnerable to
attack by weapons of mass destruction such as chemical, biological, or
radiological ballistic or hand delivered weapons. Protection from these
weapons systems can only enhance the overall force protection for the
installation.
Question. What does the threat analysis show, as to the relative
threat presented today by terrorist, Kurdish, and Iraqi threats?
Answer. Turkey continues its vigorous pursuit of several violent
leftist and Islamic extremist groups, especially the Kurdistan Workers'
Party (PKK) and the Revolutionary People's Liberation Party-Front
(DHKP/C), which are responsible for terrorism in Turkey. The PKK
launches hundreds of attacks each year in Turkey, including
indiscriminate bombings in areas frequented by Turkish and foreign
civilians, as part of its campaign to establish a breakaway state in
southeastern Turkey. For example, the group set off a bomb outside a
cafe/grocery store in Izmir on 17 Sep 95, killing five and wounding 29.
The PKK also continues its attempt to drive foreign tourists away from
Turkey by attacking tourist sites. Moreover, the PKK continues to
expand its activities in Western Europe, especially in Germany, where
its members frequently extort money from Kurdish immigrants and attack
ethnic Turks and Turkish commercial establishments. A successor to the
Marxist/Leninist Devrimci Sol (Dev Sol) known as the DHKP/C and several
Islamic extremist groups are active. Dev Sol was responsible for
several anti-US attacks of the 1991 war, which resulted in the deaths
of US persons. The DHKP/C continues to collect information on US
citizens. The group's actions include taking over a restaurant in
Istanbul, holding several civilians including three US tourists
hostage. All of the hostages eventually were released unharmed. In
early January 1998, DHKP/C terrorists were captured while planning to
attack Incirlik AB with stand-off weapons. Loosely organized Islamic
extremist groups, such as the Islamic Movement Organization and IBDA-C,
continue to launch attacks against targets associated with Turkish
official facilities and functions and may have been responsible for the
attempted assassination of a prominent Jewish community leader in
Ankara. Finally, Iraqi sponsored terrorist groups have the capability
to conduct operations in Turkey against US interests.
Question. Are Turkish military forces taking steps to increase
perimeter security as U.S. forces draw down?
Answer. The Turkish Air Force (TAF) is continuing their effort to
enhance perimeter security at Incirlik Air Base, but there is still
much to be done. A new NATO perimeter fence is being installed and is
approximately 90% complete. A recent security assessment of this fence
by Air Force Office of Special Investigations personnel revealed
numerous deficiencies that the 39^th Wing Commander is
addressing with the Turkish Installation Commander. Additionally, the
TAF is replacing its conscript guard force with a professionally
trained force--this effort has been in progress for more than a year
and is not yet complete. To compliment the new security force, they are
acquiring up-to-date security aids such as night vision devices, off-
road vehicles, and hardening guard towers. The perimeter exterior is
the responsibility of the Turkish Jandarma and the Turkish National
Police. These agencies will respond to incidents along the fenceline.
Question. Why is this project not eligible for NATO funding? Has a
precautionary prefinancing statement been submitted to NATO
nonetheless?
Answer. This project is not eligible for NATO funding because,
under NATO rules, security is a user-nation responsibility. Funding for
facilities tied to security are not supported by NATO. However, a
precautionary prefinancing statement will be submitted in the event the
NATO criteria change.

United Kingdom

raf lakenheath: dormitories $15,838,000
raf mildenhall: dormitories $10,926,000
Question. Why are these two projects not eligible for NATO or host
nation funding? Have precautionary prefinancing statements been
submitted to NATO nonetheless?
Answer. Dormitory construction is not NATO eligible. NATO supports
operational infrastructure at a minimum military requirement level for
member nations. NATO does not fund non-operational requirements such as
dormitories.
Precautionary prefinancing statements have not been submitted to
NATO because these projects do not have a reasonable potential to
become NATO eligible.
kc-135 sq ops/amu facility ($14,034,000)
Question. This project will collocate flyers and maintainers of
aircraft at RAF Mildenhall. Will this complete the requirement for such
facilities for support of the KC-135 aircraft assigned to RAF
Mildenhall, and for the European Tanker Task Force?
Answer. This project nearly completes the requirement to collocate
flyers and maintainers of KC-135 aircraft at RAF Mildenhall. An
additional project required by the KC-135 mission is a flight simulator
facility ($2.25M) programmed for future years. The flight simulator
facility will provide an in-theater location for standard annual flying
proficiency training, currently unavailable for KC-135 aircrews in
USAFE.
Question. Why is this project not eligible for NATO funding? Has a
precautionary prefinancing statement been submitted to NATO
nonetheless?
Answer. Air refueling missions are currently not eligible for NATO
funding because NATO has been a fight-in-place theater in the past. Few
member nations had the capability or requirement for air-to-air
refueling; therefore, NATO chose not to support refueling missions for
common funding. Under NATO's new mobility concept, air-to-air refueling
requirements may become eligible for NATO funding in the future. A
precautionary prefinancing statement is being submitted.

Worldwide Various Minor Construction

unspecified minor construction ($7,135,000)
Question. Provide for the record a ten year history of amounts that
have been requested and appropriated for unspecified minor
construction.
Answer. The active Air Force information follows:

[In thousands of dollars]
------------------------------------------------------------------------
Fiscal year Requested Appropriated
------------------------------------------------------------------------
1988......................................... $16,000 $16,000
1989......................................... 16,500 16,500
1990......................................... 7,000 7,000
1991......................................... 10,272 10,272
1992......................................... 11,500 11,500
1993......................................... 12,000 7,000
1994......................................... 6,844 6,844
1995......................................... 7,000 7,000
1996......................................... 9,030 9,030
1997......................................... 9,328 9,328
1998......................................... 8,545 8,545
------------------------------------------------------------------------

Worldwide Various Planning and Design

planning and design ($35,592,000)
Question. Will this funding level meet the known requirements for
the fiscal year 1999 program, including the necessary work on projects
programmed for fiscal years 2000 and 2001?
Answer. Yes, the funding level will meet known active Air Force
MILCON project requirements.
planning and budgeting process
Question. Provide for the record the titles of those who served on
the Military Construction Integrated Process Team in the planning and
budgeting process that resulted in the fiscal year 1999 budget request.
Answer. The attached list identifies the organizations represented
on the MILCON Integrated Process Team during development of the FY99
MILCON budget request. The representatives from these offices were
program managers or program analysts unless otherwise indicated on the
attachment.
Offset Folios 2878 Insert here

Question. Describe in some detail the ``proven weighting matrix''
that was used in developing the budget.
Answer. The attached papers provide the details of the MILCON
weighted scoring matrix used to produce the integrated MILCON priority
list.
Offset Folios 2880 to 2883 Insert here

Question. Provide for the record the list of all projects
requested for the Air Force, the Air National Guard, and the
Air Force Reserve, in the integrated priority order that was
determined by the planning and budgeting process.
Answer. The FY99 MILCON project list, in integrated
priority order, is attached.
Offset Folios 2885 to 2886 Insert here

Question. How many projects, with what total dollar value,
were contained on the entire prioritized unconstrained list of
all construction requirements?
Answer. The FY99 unconstrained, prioritized MILCON project
list contained 231 projects with an estimated cost of $1.4B.
barracks
Question. Provide for the record a chart that will show the Air
Force's barracks construction program at the time the ``one plus one''
standard was approved, and the current program through completion,
broken out by locations in the U.S., in Europe, and at other overseas
locations.
Answer. The Air Force did not have a line-item dormitory
construction program built at the time ``one plus one'' was approved in
1995. The Air Force plan in 1995 was based on a headquarters-level
requirements analysis; it did not contain specific construction
requirements. In 1995, the Air Force plan estimated that we would
complete ``one plus one'' implementation worldwide (including host-
nation funding) by the year 2019. After completion of the Dormitory
Master Plan in August 1997, Air Force requirements have become better
quantified. The Air Force goal is to buyout our permanent party central
latrine dormitories by fiscal year 1999; the deficit and our most
critical existing dormitories by fiscal year 2009. The following tables
depict the Air Force's dormitory MILCON programs to buyout the deficit
and replace our most critical dormitories starting with fiscal year
1996, the first year of ``one-plus-one'' dormitory construction. The
fiscal year 1996 through fiscal year 1998 programs indicate
appropriated MILCON projects. The fiscal year 1999 program depicts the
Air Force's dormitory MILCON requirements included in the President's
Budget. Beyond fiscal year 1999 are the projected dormitory MILCON
projects outlined in the Air Force Dormitory Master Plan.
Projects with an asterisk (*) indicate Student or Recruit
dormitories that are built to the ``Pipeline'' or Basic Military
Training Student (BMTS) Construction Standard respectively. These
dormitories are not built to the ``one-plus-one'' standard, which
applies only to our permanent party airmen.

------------------------------------------------------------------------
CMD Base Title
------------------------------------------------------------------------
FY96 Air Force Dormitory MILCON Program

ACC................. Cannon AFB, NM.......... Add/Alter Dormitory.
ACC................. Davis-Monthan AFB, AZ... Construct Dormitory.
ACC................. Dyess AFB, TX........... Add/Alter Dormitories.
AETC................ Keesler AFB, MS......... Replace Student Dorm*.
AETC................ Luke AFB, AZ............ Construct Dormitory.
AFMC................ Edwards AFB, CA......... Construct Dormitory.
AFMC................ Eglin AFB, FL........... Upgrade Dormitory.
AFMC................ Hill AFB, UT............ Construct Consolidated
Range Dorm.
AFMC................ Robins AFB, GA.......... Upgrade Dormitories.
AFMC................ Tinker AFB, OK.......... Add/Alter Dormitories.
AFSPC............... Buckley ANGB, CO........ Troop Support
Facilities.
AFSPC............... F.E. Warren AFB, WY..... Alter Dormitories.
AFSPC............... Peterson AFB, CO........ Add/Alter Dormitory.
AMC................. Andrews AFB, MD......... Construct Dormitory.
AMC................. Charleston AFB, SC...... Construct Dormitory.
AMC................. Fairchild AFB, WA....... Alter Dormitories.
AMC................. Fairchild AFB, WA....... Construct Dormitory.
AMC................. Grand Forks AFB, ND..... Construct Dormitory.
AMC................. McChord AFB, WA......... Construct Dormitory.
AMC................. McGuire AFB, NJ......... Construct Dormitory.
AMC................. Scott AFB, IL........... Construct Dormitory.
AMC................. Travis AFB, CA.......... Construct Dormitory.
AMC................. Travis AFB, CA.......... Construct Dormitories.
PACAF............... Eielson AFB, AK......... Alter Dormitory.
PACAF............... Hickam AFB, HI.......... Alter Dormitory.
USAFE............... Araxos Radio Relay Stn, Construct Dormitory.
GR.
USAFE............... Ghedi, IT............... Construct Dormitory.
USAFE............... Spangdahlem AB, GE...... Construct Dormitory.
11WG................ Bolling AFB, DC......... Alter Dormitory.
11WG................ Bolling AFB, DC......... Construct Honor Guard
Dormitory.

FY97 Air Force Dormitory MILCON Program

ACC................. Dyess AFB, TX........... Add/Alter Dormitories.
ACC................. Nellis AFB, NV.......... Construct Dormitory.
ACC................. Shaw AFB, SC............ Renovate Dormitories.
AETC................ Keesler AFB, MS......... Replace Student Dorm*.
AETC................ Lackland AFB, TX........ Upgrade Recruit Dorm*.
AETC................ Luke AFB, AZ............ Construct Dormitory.
AFMC................ Brooks AFB, TX.......... Replace Student Dorm*.
AFMC................ Robins AFB, GA.......... Upgrade Dormitories.
AFSPC............... Malmstrom AFB, MT....... Construct Dormitory.
AFSPC............... Peterson AFB, CO........ Construct Dormitory.
AMC................. Andrews AFB, MD......... Alter Dormitory.
AMC................. Charleston AFB, SC...... Construct Dormitory.
AMC................. McChord AFB, WA......... Construct Dormitory.
AMC................. McConnell AFB, KS....... Construct Dormitory.
AMC................. McConnell AFB, KS....... Construct Dormitory.
AMC................. McGuire AFB, NJ......... Construct Dormitory.
AMC................. Travis, AFB, CA......... Construct Dormitory.
AMC................. Travis, AFB, CA......... Construct Dormitory.
PACAF............... Osan AB, KO............. Construct Dormitory.
USAFE............... RAF Lakenheath, UK...... Construct Dormitory.
USAFE............... RAF Lakenheath, UK...... Construct Dormitory.
USAFE............... RAF Mildenhall, UK...... Construct Dormitory.
USAFE............... Ramstein AB, GE......... Construct Dormitory.

FY98 Air Force Dormitory MILCON Program

ACC................. Mountain Home AFB, ID... Construct B-1 Dormitory.
AETC................ Keesler AFB, MS......... Replace Student Dorms*.
AFSOC............... Hurlburt Field, FL...... Construct Dormitory.
AFSPC............... Clear AS, AK............ Alter Dormitories.
AFSPC............... Peterson AFB, CO........ Add/Alter Dormitory.
AMC................. Pope AFB, NC............ Construct Dormitories.
PACAF............... Kunsan AB, KO........... Construct Dormitory.
USAFE............... RAF Lakenheath, UK...... Construct Dormitories.
USAFE............... Spangdahlem AB, GE...... Construct Dormitory.

FY99 Air Force Dormitory MILCON Program (President's Budget)

ACC................. Mountain Home AFB, ID... Construct Dormitory (144
PN).
ACC................. Nellis AFB, NV.......... Construct Dormitory (84
PN).
AETC................ Keesler AFB, MS......... Replace Student Dorms
(800 PN)*.
AETC................ Lackland AFB, TX........ Construct Dormitory (96
PN).
AFMC................ Eglin AFB, FL........... Construct Dormitory (144
PN).
AFMC................ Tinker AFB, OK.......... Construct Dormitory (144
PN).
PACAF............... Kunsan AB, KO........... Construct Dormitory (122
PN).
PACAF............... Osan AB, KO............. Construct Dormitory (156
PN).
USAFE............... RAF Lakenheath, UK...... Construct Dormitories
(216 PN).
USAFE............... RAF Mildenhall, UK...... Construct Dormitory (144
PN).
USAFE............... Spangdahlem AB, GE...... Construct Dormitory (108
PN).

Projected FY00 and beyond Air Force Dormitory MILCON projects

AETC................ Keesler AFB, MS......... Replace Student Dorm
(200 RM)*.
AFMC................ Tinker AFB, OK.......... Construct Dormitory (96
RM).
PACAF............... Elmendorf AFB, AK....... Construct Dormitory (144
RM).
AFMC................ Tinker AFB, OK.......... Construct Dormitory (96
RM).
PACAF............... Osan AB, KO............. Construct Dormitory (156
RM).
AFSOC............... Hurlburt Field, FL...... Construct Dormitory (144
RM).
ACC................. Langley AFB, VA......... Construct Dormitory (96
RM).
AETC................ Lackland AFB, TX........ Construct Dormitory (96
RM).
PACAF............... Elmendorf AFB, AK....... Construct Dormitory (144
RM).
ACC................. Langley AFB, VA......... Construct Dormitory (96
RM).
ACC................. Offutt AFB, NE.......... Construct Dormitory (120
RM).
AETC................ Lackland AFB, TX........ Construct Dormitory (96
RM).
AFMC................ Brooks AFB, TX.......... Construct Dormitory (144
RM).
AFSOC............... Hurlburt Field, FL...... Construct Dormitory (144
RM).
AFMC................ Tinker AFB, OK.......... Construct Dormitory (144
RM).
PACAF............... Osan AB, KO............. Construct Dormitory (156
RM).
AFMC................ Eglin AFB, FL........... Construct Dormitory (120
RM).
ACC................. Davis-Monthan AFB, AZ... Construct Dormitory (120
RM).
AETC................ Sheppard AFB, TX........ Replace Student Dorm
(300 RM)*.
USAFE............... Aviano AB, IT........... Construct Dormitory (120
RM).
AFSPC............... Thule AB, GN............ Construct Dormitory (96
RM).
AFSPC............... Peterson AFB, CO........ Construct Dormitory (144
RM).
USAFE............... RAF Lakenheath, UK...... Construct Dormitory (120
RM).
ACC................. Langley AFB, VA......... Construct Dormitory (96
RM).
USAFE............... Spangdahlem, AB, GE..... Construct Dormitory (120
RM).
AFMC................ Wright-Patterson AFB, OH Construct Dormitory (144
RM).
ACC................. Offutt AFB, NE.......... Construct Dormitory (120
RM).
PACAF............... Elmendorf AFB, AK....... Construct Dormitory (180
RM).
AFSOC............... Hurlburt Field, FL...... Construct Dormitory (144
RM).
AETC................ Lackland AFB, TX........ Replace Student Dorm
(200 RM)*.
AFMC................ Eglin AFB, FL........... Construct Dormitory (120
RM).
PACAF............... Eielson AFB, AK......... Construct Dormitory (120
RM).
AFMC................ Tinker AFB, OK.......... Construct Dormitory (144
RM).
ACC................. Barksdale AFB, LA....... Construct Dormitory (96
RM).
USAFE............... Aviano, AB, IT.......... Construct Dormitory (120
RM).
AETC................ Keesler AFB, MS......... Construct Dormitory (120
RM).
ACC................. Davis-Monthan AFB, AZ... Construct Dormitory (120
RM).
USAFE............... RAF Lakenheath, UK...... Construct Dormitory (120
RM).
AFMC................ Hill AFB, UT............ Construct Dormitory (144
RM).
ACC................. Langley AFB, VA......... Construct Dormitory (96
RM).
PACAF............... Kunsan AB, KO........... Construct Dormitory (122
RM).
AETC................ Lackland AFB, TX........ Construct Dormitory (96
RM).
AFMC................ Edwards AFB, CA......... Construct Dormitory (128
RM).
AFMC................ Los Angeles AFB, CA..... Construct Dormitory (84
RM).
ACC................. Moody AFB, GA........... Construct Dormitory (144
RM).
AETC................ Goodfellow AFB, TX...... Construct Dormitory (96
RM).
AFSOC............... Hurlburt Field, FL...... Construct Dormitory (144
RM).
USAFE............... RAF Mildenhall, UK...... Construct Dormitory (168
RM).
ACC................. Offutt AFB, NE.......... Construct Dormitory (120
RM).
AFSPC............... Thule AB, GN............ Construct Dormitory (96
RM).
AFSPC............... Thule AB, GN............ Construct Dormitory (96
RM).
AFSPC............... Thule AB, GN............ Construct Dormitory (96
RM).
AFSPC............... Thule AB, GN............ Construct Dormitory (96
RM).
AFSPC............... Thule AB, GN............ Construct Dormitory (96
RM).
AFSPC............... Thule AB, GN............ Construct Dormitory (96
RM).
AFSPC............... Thule AB, GN............ Construct Dormitory (96
RM).
PACAF............... Osan AB, KO............. Construct Dormitory (156
RM).
AFSPC............... Peterson AFB, CO........ Construct Dormitory (144
RM).
AFSPC............... Antigua................. Construct Dormitory (144
RM).
ACC................. Beale AFB, CA........... Construct Dormitory (120
RM).
AMC................. Pope AFB, NC............ Construct Dormitory (96
RM).
AETC................ Sheppard AFB, TX........ Replace Student Dorm
(300 RM)*.
USAFE............... Spangdahlem AB, GE...... Construct Dormitory (96
RM).
AFSPC............... Malmstrom AFB, MO....... Construct Dormitory (144
RM).
AETC................ Maxwell AFB, AL......... Construct Dormitory (144
RM).
ACC................. Seymour Johnson AFB, NC. Construct Dormitory (144
RM).
AFMC................ Tinker AFB, OK.......... Construct Dormitory
(1204 RM).
AETC................ Lackland AFB, TX........ Construct Dormitory (96
RM).
AFSPC............... F.E. Warren AFB, WY..... Construct Dormitory (120
RM).
AMC................. Scott AFB, IL........... Construct Dormitory (120
RM).
AETC................ Sheppard AFB, TX........ Construct Dormitory (120
RM).
AFMC................ Edwards AFB, CA......... Construct Dormitory (144
RM).
USAFE............... Aviano AB, IT........... Construct Dormitory (120
RM).
PACAF............... Elmendorf AFB, AK....... Construct Dormitory (180
RM).
AMC................. Charleston AFB, SC...... Construct Dormitory (144
RM).
ACC................. Barksdale AFB, LA....... Construct Dormitory (96
RM).
AETC................ Tyndall AFB, FL......... Construct Dormitory (144
RM).
AETC................ Goodfellow AFB, TX...... Replace Student Dorm
(200 RM)*.
USAFE............... RAF Lakenheath, UK...... Construct Dormitory (120
RM).
PACAF............... Eielson AFB, AK......... Construct Dormitory (120
RM).
ACC................. Minot AFB, ND........... Construct Dormitory (132
RM).
AFSOC............... Hurlburt Field, FL...... Construct Dormitory (96
RM).
AFMC................ Wright-Patterson AFB, OH Construct Dormitory (144
RM).
USAFE............... Ramstein AB, GE......... Construct Dormitory (120
RM).
ACC................. Lajes Field, PO......... Construct Dormitory (96
RM).
ACC................. Langley AFB, VA......... Construct Dormitory (96
RM).
AETC................ Lackland AFB, TX........ Construct Dormitory (96
RM).
AMC................. Dover AFB, DE........... Construct Dormitory (120
RM).
ACC................. Hill AFB, UT............ Construct Dormitory (144
RM).
ACC................. Nellis AFB, NV.......... Construct Dormitory (144
RM).
AMC................. Pope AFB, NC............ Construct Dormitory (96
RM).
AETC................ Lackland AFB, TX........ Replace Student Dorm
(200 RM)*.
AETC................ Lackland AFB, TX........ Replace Student Dorm
(100 RM)*.
ACC................. Davis-Monthan AFB, AZ... Construct Dormitory (120
RM).
AFMC................ Eglin AFB, FL........... Construct Dormitory (120
RM).
USAFE............... Spangdahlem AB, GE...... Construct Dormitory (96
RM).
ACC................. Offutt AFB, NE.......... Construct Dormitory (120
RM).
AETC................ Luke AFB, AZ............ Construct Dormitory (96
RM).
AETC................ Keesler AFB, MS......... Construct Dormitory (96
RM).
AFMC................ Tinker AFB, OK.......... Construct Dormitory (120
RM).
ACC................. Cannon AFB, NM.......... Construct Dormitory (96
RM).
AETC................ Lackland AFB, TX........ Construct Dormitory (96
RM).
AMC................. Travis AFB, CA.......... Construct Dormitory (168
RM).
AETC................ Sheppard AFB, TX........ Replace Student Dorm
(240 RM)*.
AETC................ Sheppard AFB, TX........ Replace Student Dorm
(240 RM)*.
ACC................. Moody AFB, GA........... Construct Dormitory (120
RM).
ACC................. Barksdale AFB, LA....... Construct Dormitory (96
RM).
ACC................. Beale AFB, CA........... Construct Dormitory (120
RM).
AFMC................ Edwards AFB, CA......... Renovate Dormitory (60
RM).
ACC................. Dyess AFB, TX........... Construct Dormitory (120
RM).
AMC................. Travis AFB, CA.......... Construct Dormitory (168
RM).
PACAF............... Elmendorf AFB, AK....... Construct Dormitory (144
RM).
ACC................. Seymour Johnson AFB, NC. Construct Dormitory (120
RM).
ACC................. Langley AFB, VA......... Construct Dormitory (96
RM).
ACC................. Minot AFB, ND........... Construct Dormitory (120
RM).
AMC................. MacDill AFB, FL......... Construct Dormitory (144
RM).
AETC................ Keesler AFB, MS......... Construct Dormitory (96
RM).
AETC................ Lackland AFB, TX........ Construct Dormitory (96
RM).
ACC................. Barksdale AFB, LA....... Construct Dormitory (96
RM).
AETC................ Goodfellow AFB, TX...... Replace Student Dorm
(200 RM)*.
ACC................. Nellis AFB, NV.......... Construct Dormitory (120
RM).
ACC................. Offutt AFB, NE.......... Construct Dormitory (120
RM).
AMC................. Travis AFB, CA.......... Construct Dormitory (168
RM).
AETC................ Little Rock AFB, AR..... Construct Dormitory (144
RM).
AFSOC............... Hurlburt AFB, FL........ Construct Dormitory (168
RM).
AFSPC............... Malmstrom AFB, MO....... Construct Dormitory (120
RM).
AFMC................ Eglin AFB, FL........... Construct Dormitory (144
RM).
AETC................ Keesler AFB, MS......... Construct Dormitory (144
RM).
AFSOC............... Hurlburt Field AFB, FL.. Construct Dormitory (168
RM).
ACC................. Davis-Monthan AFB, TX... Construct Dormitory (96
RM).
------------------------------------------------------------------------

Dormitory Master Plan

Question. Submit for the record the executive summary and
``Appendix A'' of the Air Force Dormitory Master Plan dated August
1997.
Answer. The Executive Summary and ``Appendix A'' of the Air Force
Dormitory Master Plan, dated August 1997, are attached per your
request. Please note that all project costs shown in ``Appendix A'' are
initial planning estimates only and are expressed in FY98 dollars.
Costs shown are for to-level planning purposes and do not include
project-specific site requirements such as additional infrastructure or
unique site improvements.
Offset Folios 2896 to 2908 Insert here

Family Housing Inventory

Question. Provide for the record a chart that will show the average
number of family housing units supported for fiscal years 1996, 1997,
and 1998, and those expected to be supported in fiscal year 1999,
broken out into government owned (U.S. and foreign), leased (U.S. and
foreign), and privatized under Public-Private Ventures.
Answer.

------------------------------------------------------------------------
Fiscal year--
-------------------------------------------
1996 1997 1998 1999
------------------------------------------------------------------------
Owned Homes:
Government Owned--U.S.
(Includes Alaska,
Hawaii, Guam).......... 85,909 85,037 84,735 85,130
Government Owned--
Foreign................ 25,211 25,262 24,919 24,699
-------------------------------------------
Total Owned Homes
Supported............ 111,120 110,299 109,654 109,829
Leased Homes Based on Leased
Months):
U.S. Leased Units
(Includes Alaska,
Hawaii, Guam):
--Domestic.......... 191 227 287 329
--801 Authority..... 3,956 4,028 3,828 3,828
Foreign................. 4,264 3,901 4,011 4,128
-------------------------------------------
Total Leased Homes
Supported............ 8,411 8,156 8,126 8,285
-------------------------------------------
Total Owned & Leased
Homes................ 119,531 118,455 117,780 118,114
Privatized Homes............ 0 0 0 272
------------------------------------------------------------------------

Privatization of Utility Systems

Question. Describe in some detail the Air Force's ongoing efforts
to get out of the business of owning, operating, and maintaining
utility systems where it makes good sense.
Answer. The Air Force was diligently pursuing the utility
privatization concept and had an ongoing privatization program in place
prior to issuance of the Defense Reform Initiative Directive on
utilities privatization. We initiated 4 pilot projects last spring to
test, evaluate and formalize a viable privatization process. These
analyses are well underway:

------------------------------------------------------------------------
ECD for
Base System Remarks privatization
------------------------------------------------------------------------
Scott......... Wastewater...... Draft RFP due Jan 99.
Apr 98.
Edwards....... Electrical...... Draft decision Mar 99.
analysis by Mar
98.
Hill.......... Industrial Draft decision Jun 99.
Wastewater. analysis by Jul
98.
Langley....... Electric & Draft decision Sept. 99.
Natural Gas. analysis by Aug
98.
------------------------------------------------------------------------

The Air Force has 22 systems already privatized, and has identified
over 240 systems at 88 bases as candidates for privatization that will
be examined through FY06. We have also published a utilities
privatization policy and guidance manual consolidating strategy,
policy, roles and presenting the privatization process.
Question. Will these efforts eventually expand beyond water,
wastewater, electric, and gas--to include telephone?
Answer. In addition to authority to convey water, wastewater,
electric, and natural gas systems, the current authority also permits
the Services to convey systems for the generation or supply of steam,
hot water, and chilled water. The Air Force possesses many of these
utility systems and intends to look at the potential of these systems
for privatization, outsourcing or energy performance contracts.
Telephone systems are not being examined for privatization at this
time.
Question. Are you seeking any legislative language to change
existing authority?
Answer. At this time, we are not seeking any legislative language
to change the recently approved conveyance authority.
Question. Can you document any savings or avoided costs, in net
present value--or are costs merely being amortized through future rate
payments?
Answer. It is premature to identify or document savings as the
initiative is still in its infancy with only pilot project studies
underway. As required by the conveyance authority, an economic analysis
assessing economic viability will be conducted for each privatization
initiative. Only if privatization is more economical than the status
quo operation of the system will privatization be accomplished.

Public-Private Ventures in Family Housing

Question. Under current law, can the Air Force transfer Family
Housing funds to the Military Personnel accounts? If not, what
execution difficulties can you anticipate?
Answer. Current law only authorizes transfers of housing funds to
the Family Housing Improvement Funds administered by the DOD Housing
Revitalization Support Office. We do not anticipate execution
difficulties as privatization initiatives are planned well enough in
advance that funding can be programmed in the appropriate budget cycle
to meet requirements in the Military Personnel accounts.
Question. In the preparation of this year's budget materials, have
there been ``transfers in the estimates'' for fiscal year 1999, moving
funds out of the family housing account and into the military personnel
account?
Answer. No, there have been no transfers in estimates for fiscal
year 1999. Air Force MFH Operations and Maintenance (O&M) funds have
been retained in the MFH O&M account to continue funding key
maintenance tasks to reduce our backlog of deferred maintenance.
Question. Submit for the record the FY 99-03 Defense Planning
Guidance requirement with regard to using privatization as a tool to
meet family housing needs.
Answer. The FY99-03 Defense Planning Guidance requires: ``The
Military Departments will program to revitalize, divest through
privatization, or demolish inadequate family housing by or before
2010,'' In addition: ``Components should . . . continue to leverage
appropriated funds with private capital. Savings realized from
leveraging resources with the private sector should be reinvested in
housing projects instead of reducing programmed housing resources.''
Question. Current statutory authorities expire in February of 2001.
Are Air Force efforts being paced with this ``sunset'' date in mind?
Answer. The Air Force has taken a measured approach to family
housing privatization which will allow us to build solely on success.
With increased experienced afforded by time, we expect to become more
familiar and comfortable with authority application and may extend or
increase as appropriate. Even with our moderate approach to housing
privatization, the Air Force is pursuing 12 privatization initiatives
through FY00. The Air Force is receptive to the extension of
privatization authorities and is considering a FY00 legislative
initiative to seek authority extension.

Child Development Centers Privatization Efforts

Question. The Navy and the Defense Logistics Agency are the
executive agents for privatizing and outsourcing child development
center services. What is the Air Force's involvement in following their
lead, and in reviewing their findings and recommendations?
Answer. The Air Force is closely following the Navy's efforts as
well as those of the Defense Logistics Agency to privatize and
outsource child development center services and has reviewed all of the
attempts that have been made since the 1980s. We have also provided
information to the Rand Corporation which is reviewing all outsourcing
efforts for DoD and the services. In addition, we recently hired a
private contractor to study the feasibility of outsourcing the
management and/or construction of a new facility at one of our bases.
The contractor concluded that the most cost effective approach was for
the Air Force to build and operate the center.
We will continue to monitor the Navy's efforts to see if any
favorable results can be applied at those Air Force bases in large
metropolitan areas where the private sector can meet our needs.

C-17 Depot Facilities

Question. Depot facilities at Kelly AFB were modified at a cost of
$13.1 million, and Kelly AFB has now been realigned. What is the
current plan for maintaining C-17s, and what is the timetable for
determining a new location for this work?
Answer. The Air Force recently awarded a contract for maintenance
and repair support for the C-17 under a concept known as Flexible
Sustainment. At the present time, the C-17 steady state workload is
unknown, since the fleet is still increasing and maturing. The Air
Force plans to review the C-17 flexible sustainment strategy with
intent to make long term depot support decisions in 2003, approximately
two years before the end of production.

BRAC Environmental Restoration

Question. Upon completion of the current Base Realignment and
Closure program in the year 2001, under which account does the Air
Force's Future Year Defense Program envision funding on-going
environmental restoration for those locations?
Answer. On-going actions for environmental compliance will be
funded in the Air Force Operations and Maintenance Account--
Appropriation 3400. Actions for environmental installation restoration
will be funded from the Air Force Environmental Restoration Fund--
Appropriation 0603.

Aviano, Italy and Lakenheath, United Kingdom: Build-Lease

Question. Describe in some detail the build-lease proposal the Air
Force is developing at Aviano and Lakenheath in order to drive down the
largest family housing deficit in the Air Force, including the
estimated cost and the timetable for execution.
Answer. Aviano AB has no accompanied housing assets and supplements
its housing needs through the Government Rental Housing Program which
provides approximately 625 houses. Aviano AB's current Housing Market
Analysis reflects a projected 533 housing unit deficit. RAF
Lakenheath's projected housing deficit of 1882 houses is the largest in
the Air Force. Both installations have seen recent mission changes with
dramatic manpower increases but local housing markets which have not
kept pace with the demand.
To address this shortage, USAFE, using build-lease authority,
issued Requests for Proposal (RFP) to construct new housing units at
various off-base locations by private developers. The new housing units
will then be leased by the Air Force for 10 years with two 5-year
renewal options. Developers will construct ``Italian and British-
style'' houses while satisfying RFP amenity requirements. The result is
housing appealing to both host nation and US families.
USAFE completed source selection at Aviano AB in Dec 97 and
tentatively selected six offerors (four Italian and two American firms)
to build 530 housing units on 16 separate estates in towns within a 35
minute commute from the base. Aviano AB estates range in size from 12
to 75 units with the average estate size being 33 units. Approximately
92% of the development will be townhouses with the remaining 8% being
apartments (29% will be four-bedroom units, 52% three-bedroom units,
and 19% two bedroom units). Over 55% of the units are within a 15
minute commute of the base, 33% are within a 25 minute commute, and 12%
are within a 35 minute commute.
Source selection for RAF Lakenheath was completed in Jan 98. USAFE
tentatively selected four offerors (three British and one joint US-
British consortium) to build 518 housing units on 7 separate estates in
towns within a 30 minute commute from the base. Estate sizes range from
11 to 125 units with the average estate size being 74 units.
Approximately 50% of the development will be single-family homes, 28%
will be duplex townhouses, and the remaining 22% being quadplex
townhouses (36% will be four-bedroom units, 62% will be three-bedroom
units, and 2% are two bedroom units). Over 20% of the units are within
a 15 minute commute but all are within a 30 minute commute of the base.
The cumulative Net Present Value (NPV) cost to obtain 530 build-
lease housing units at Aviano AB for the initial ten year lease period
is $99.5M (including utilities and maintenance). RAF Lakenheath's
estimated cumulative NPV cost to obtain 518 build-lease housing units
for the initial ten year lease period is $91.8M (including utilities
and maintenance). ``All-up'' costs are under the statutory cap
applicable to 10 USC 2828 leases.
Execution schedules are contingent upon obtaining congressional
approval to enter into the build-lease agreements. Final proposals were
presented to The Civil Engineer, U.S. Air Force; the Deputy Assistant
Secretary of the Air Force, Installations (SAF/MII); and congressional
staffers on 26 Feb 98. Formal SAF/MII approval and Congressional
notification processes are expected in Mar 98. Project awards could
begin as early as Apr 98 with occupancy estimated to start in the
second quarter of FY99 with completion by the second quarter of FY00.

BRAC Environmental Restoration

Question. Is there a current estimate of the annual funding
requirement beginning in fiscal year 2002?
Answer. The current funding estimate for Air Force BRAC
environmental compliance/restoration is $101.6M for FY 2002, and $88.2M
for FY 2003.

NATO Precautionary Prefinancing

Question. Submit for the record a copy of the precautionary
prefinancing statements that have been submitted to the NATO
infrastructure committees for each European project for which funds
were appropriated for fiscal year 1998, and for each such project
requested for fiscal year 1999. Provide an explanation for any project
for which statements have not been submitted.
Answer.

----------------------------------------------------------------------------------------------------------------
Fiscal year Base Project Statement complete? Remarks
----------------------------------------------------------------------------------------------------------------
98.................... Aviano........... Waste Water YES..................... Copy Attached.
Disposal Sys.
98.................... Aviano........... Road/Utilities... YES..................... Copy Attached.
98.................... Lakenheath....... Dormitories...... NO...................... See Note.
98.................... Spangdahlem...... Dormitories...... NO...................... See Note.
99.................... Incirlik......... Central Security NO...................... Submitting.
Cont Fac.
99.................... Lakenheath....... Dormitories...... NO...................... See Note.
99.................... Mildenhall....... Dormitory........ NO...................... See Note.
99.................... Mildenhall....... Ops Group Complex NO...................... Submitting.
99.................... Spangdahlem...... Dormitory........ NO...................... See Note.
99.................... Spangdahlem...... Consol Air NO...................... Submitting.
Control Squad.
----------------------------------------------------------------------------------------------------------------
Note: Dormitory construction is not NATO eligible. NATO supports operational infrastructure at a minimum
military requirement level for member nations. NATO does not fund non-operational requirements such as
dormitories.

Georgia--Robins AFB

b-1 weapons release systems and load crew training facility $3,250,000
Question. Provide for the record the entire program of construction
requirements for beddown of the B-1 at Robins AFB, by fiscal year.
Answer. The following chart identifies the entire Air National
Guard military construction program for the beddown of the B-1 at
Robins AFB, GA. For projects in fiscal years 1994-1998, the
appropriation amount is shown. Projects in fiscal years 1999-2004
reflect the programmed amount.

------------------------------------------------------------------------
Fiscal year Project number Project title ($000)
------------------------------------------------------------------------
1994............. UHHZ939784.............. B-1 Beddown..... 5,750
1995............. UHHZ939785.............. B-1 Consolidated 9,400
Aircraft
Support and
Hydrant Systems.
1995............. UHHZ939788.............. B-1 Hangar 8,400
Complex.
1997............. UHHZ959701.............. B-1 Aircraft 8,800
Parking Apron
and Relocate
Taxiway.
1997............. UHHZ959519.............. B-1 AGE and 2,800
Munitions
Trailer
Maintenance
Complex.
1997............. UHHZ949508.............. B-1 Site 5,500
Improvements,
Roads and
Utilities.
1997............. UHHZ939789.............. B-1 Composite 12,400
Aircraft
Maintenance
Complex.
1998............. UHHZ959648.............. B-1 Aircraft 520
Organizational
Maintenance
Shops.
1998............. UHHZ939787.............. B-1 Power Check 1,000
Pad and Sound
Suppressor.
1998............. UHHZ939790.............. B-1 Composite 5,300
Operations
Complex.
1999............. UHHZ959533.............. B-1 Weapons 3,250
Release Systems
and Load Crew
Training
Facility.
1999............. UHHZ939797.............. B-1 Medical 860
Training
Facility
Addition (P-
341).
2001............. UHHZ969620.............. B-1 Munitions 9,600
Maintenance and
Training
Complex.
2001............. UHHZ939792.............. B-1 Operations 6,100
and Training
Facility.
2002............. UHHZ939793.............. B-1 Base Supply 5,000
and Equipment
Warehouse.
2002............. UHHZ939799.............. B-1 Vehicle 2,100
Maintenance
Complex.
2002............. UHHZ939798.............. B-1 Base Civil 3,200
Engineer
Maintenance
Complex.
2003............. UHHZ959703.............. B-1 Area Site 1,000
Improvements.
2004............. UHHZ989002.............. B-1 Avionics 4,000
Facility.
------------------------------------------------------------------------

Question. Is the cost for demolition of the current facility,
building 270, included in the cost of this project? Why, or why not--
doesn't the building belong to the Air Force, not the Air National
Guard?
Answer. The cost for demolishing building 270 is included in the
cost estimate for this project. The Active Air Force host wing had
scheduled this building for demolition prior to the Air National Guard
(ANG) unit moving into it as an interim workaround. The host had
already programmed operations and maintenance funds to dispose of this
building and was ready to execute the project at the time of the ANG
use. As a result, it was locally agreed that the ANG would demolish
this building (to include funding the disposal) after moving out of it.
Question. Is building 270 in the footprint of this project?
Answer. Building 270 is not in the footprint of the proposed
construction. It is located on the other side of the base and thus
provides an ineffective and inefficient workaround for Air National
Guard maintenance personnel.

Michigan--Alphena County Regional Airport

sanitary sewer lines $3,900,000
Question. This project will connect the on-base sanitary sewer
system to the county-owned sewage treatment plant, with estimated
savings in manpower and operating costs of $250,000 per year. The
county will take over the entire on-base and off-base system after this
project is completed. Outline for us the history of this example of
utilities privatization, including the analysis of annual costs before
and after privatization.
Answer. Besides being almost 25 years old, the existing wastewater
treatment plant is significantly undersized and violates Federal and
State environmental compliance requirements. The State had issued a
temporary operating permit contingent on completion of a permanent fix.
New construction was the only option that would meet all operational
and environmental requirements. The cost to replace the plant is
estimated to be $2.5 million. Currently, the base expends $170,000 a
year in operating costs and $100,000 annually in manpower costs (two
personnel). No maintenance is being accomplished creating close to
$900,000 in deferred requirements. By hooking into the off-base
wastewater treatment system owned by the city, the annual costs to the
base are expected to be $20,000, resulting in savings of $250,000 per
year.

Michigan--Selfridge Air National Guard Base

replace control tower and rapcon center $5,200,000
Question. Describe for us in some detail the operations of a
``RAPCON'' center, and why it is desirable that the center should be
collocated with the control tower.
Answer. RAPCON is the acronym for Radar Approach Control. This
function is conducted in an air traffic control facility using radar
and non-radar capabilities to provide approach control services to
aircraft arriving, departing, or transiting airspace controlled by the
facility. RAPCON is required for all Instrument Flight Rule (IFR)
operations within that airspace. Collocation of RAPCON with the control
tower is desirable and improves mission effectiveness and efficiencies.
Question. Does Selfridge have any civilian aircraft traffic?
Answer. Selfridge Air National Guard Base is fee property owned by
the Air Force and licensed to the Michigan Air National Guard.
Permanently based there are Air National Guard F-16 and C-130 aircraft,
and Air Force Reserve KC-135 aircraft. It has no civilian aircraft
traffic.

North Dakota--Hector Field

regional fire training facility $800,000
Question. Will this project meet all military fire training
requirements at this location?
Answer. This project constructs the Air Force standardized crash
fire rescue training facility, which provides all aircraft fire rescue
training required for firefighters being trained at this facility. This
project is not intended to support structural firefighter training,
hazardous material training, confined space rescue training, or high-
angle rescue training requirements.
Question. Will this project meet all environmental requirements?
Answer. The project meets all Federal and State environmental
requirements. Unlike hydrocarbon liquid fuel training pits, this
facility uses state-of-the-art technology that eliminates ground and
groundwater pollution and produces little to no smoke pollution.
Question. Upon completion of this project, what fire training
facilities will be decommissioned?
Answer. To meet Federal and State environmental statutes and
regulations, the Air National Guard has already abandoned and closed
most of its hydrocarbon liquid fuel training pits. The fire training
pit at Portland International Airport, Oregon will be closed in the
near future.
Question. How large a region will be served by this facility?
Answer. Besides training Air National Guard (ANG) firefighters in
North Dakota, this facility will provide required annual training for
ANG units in South Dakota, Iowa, Kansas, Minnesota, Montana, Wyoming,
Colorado, Nevada, and Oregon. Located with the Regional Home Station
Training Site, this facility will be utilized by firefighters deploying
with their civil engineer units. The facility will also provide live
fire testing during units' Air Force Operational Readiness Inspections.

Wisconsin--Volk Field

upgrade runway and taxiway $9,600,000
Question. Is it correct that Volk Field is not a joint use
(civilian/military) airfield, and that this project meets a strict
military requirement?
Answer. Volk Field is fee property owned by the Air Force and
licensed to the Wisconsin Air National Guard. It is not a joint use
civilian/military airfield and does not service any civilian aircraft
traffic. Volk Field is one of the Air National Guard's Combat
components, it provides a valuable training environment. As such, the
Upgrade Runway and Taxiway project only supports a military
requirement.

Alabama--Maxwell AFB

consolidated aircraft maintenance facility $5,200,000
Question. The Future Years Defense Program for the Air Force
Reserve includes twenty-one military construction projects for fiscal
years 2000 and 2003. Describe for us why this Maxwell AFB project is
the highest priority for funding in fiscal year 1999.
Answer. The project consolidates dispersed Air Force Reserve (AFR)
aircraft maintenance functions into one location. Existing facilities
have outdated mechanical, electrical, ventilation and fire protection
systems, and require frequent maintenance and repairs. Without the
project, the unit will have to continue working in antiquated, 50 year
old facilities.
Question. Was the Air Force Reserve treated fairly by the Military
Construction Integrated Process Team in the planning and budgeting
process that resulted in the fiscal year 1999 budget request, or does
the Reserve get outvoted by higher Air Force budget priorities and
stiffer competition in Total Force prioritization of projects?
Answer. The Air Force Reserve (AFR) is an active participant in the
Air Force Military Construction (MILCON) prioritization process. The
AFR has a voting member at each level of the Air Force Board Structure;
from the MILCON integrated process team (IPT) up through the Air Force
Council.
The Air Force apportions its MILCON funds into two broad
categories. First, certain projects or programs are considered ``must
pay'' and command a significant share of the available MILCON. These
projects are required for legal or treaty requirements, have
Congressional interest, are directed by the SECAF or CSAF, or address
fact-of-life issues. The remaining funds are apportioned by the MILCON
IPT and approved by higher levels of the Air Force's corporate
structure. The AFR, like all Air Force Major Commands (MAJCOMs),
submits its total, unconstrained MILCON requirements to the MILCON IPT.
The MILCON IPT, as objectively as possible, evaluates each project
based on data and justification submitted by the MAJCOMs via DD Forms
1391. The IPT evaluation process employs a scoring matrix against which
each project is judged. The scoring matrix gives relatively greater
weight to certain criteria, such as force modernization and readiness/
sustainability.
The AFR, as it happens, typically has few projects which qualify
for either fenced monies or the high priority category of force
modernization. We have completed most ``must pay'' environmental
compliance projects and have very few new missions as compared to
current (i.e., continuing) missions. Although we have lodging needs for
our reservists, we have no permanent party dorms to qualify for monies
fenced for that program. Thus, although the AFR is afforded the
opportunity to present its current mission projects to the MILCON IPT,
competition for these remaining unfenced funds is very stiff.
In an era of fewer resources and higher OPSTEMPO, we find
that the same stresses which challenge the Air Force likewise
challenge the Air Force Reserve. As a proud partner in the
Total Force, we are capable of and willing to step up to the
requirements levied upon us, and have always appreciated the
support which Congress has given us to make that happen.

[Clerk's note.--End of questions for the record submitted
by Chairman Packard.]
[Clerk's note.--Questions for the record submitted by
Congressman Hobson.]
Ohio--Wright-Patterson AFB: Occupational Health Clinic
Question. One project not included is the $3.7 million Occupational
Health Clinic at Wright-Patterson. Construction of this new facility
for the operations of Public Health, Occupational Medicine, and
Bioenvironmental Engineering has been pending since 1987. When is it
scheduled? Could it be accelerated into fiscal year 1999.
Answer. This project, currently estimated at $3.9M, is included in
FY2000 in the DoD's Medical Military Construction Program and is
planned to be submitted to Congress as part of the President's FY00/01
Biennial Budget. It was not included earlier due to higher priority
projects. The project could be accelerated for an FY 1999 construction
contract award.

Ohio--Wright-Patterson AFB: Air Force Museum

Question. I note that a $15 million addition to the Air Force
Museum at Wright-Patterson is programmed for fiscal year 2001. This
important project has great public relations, recruiting, and archival
benefit. How firm is this date?
Answer. Yes, the museum project is in the current FYDP at FY01, but
it can be executed in FY01 or earlier. However, the Air Force will
corporately reassess the FY01 MILCON program in the near future to
develop a prioritized project list which meets its most urgent needs.

Wright-Patterson AFB--445th AFR Air Lift Wing

Question. The 445th Air Force Reserve Air Lift Wing has been
selected by the Air Force to receive a simulator which will be used in
training C-141 pilots. Installation will cost $1.6 million. However,
the $1.6 million is neither in the budget or on the FYDP (Future Year
Development Plan). Why? And, How can you help me help the Air Force
Reserve?
Answer. The $1.6 million project to alter an existing hangar to
house a C-141 simulator scheduled for July 1999 delivery is not in the
Air Force Reserve's FY 1999 Budget Request or FYDP because the
requirement was not known at the time of the budget submittal. When
Congress inserted funds in the Air Force Reserve's FY 1998 program to
purchase the simulator, it was assumed that existing space, with minor
alterations, would be adequate. However, a facility survey, conducted
after the FY 1999 budget request and FYDP was finalized by OSD,
revealed the cost to alter Hangar 30152 would exceed both Operation and
Maintenance and Unspecified Minor Construction limitations.
Had the Reserve known the scope of the facility alterations before
the 30 September 1997 budget request and FYDP deadline to OSD, the
project would have been submitted for consideration in the Air Force's
integrated MILCON prioritization process to appear in the Reserve's FY
1999 budget request. Failing that, the Reserve would have included the
project in the FYDP for FY 2000.
Due to the urgency of this project, the Air Force Reserve is trying
to down scope the project to meet the $1.5 million limitation for
Unspecified Minor Construction projects. If successful, the Reserve
will use its limited FY 1999 Unspecified Minor Construction funds to
alter Hangar 30152 to house the C-141 simulator. However, under this
work around, necessary support functions such as offices, classrooms,
and storage areas may have to be eliminated.

Springfield ANG Base--Civil Engineering Complex

Question. I understand that the Air Force recognizes the need to
construct a Base Civil Engineering/Security Forces Complex for the Ohio
Air National Guard 178^th Wing at Springfield, Ohio. The $5
million project would correct safety, Americans with Disabilities Act,
and quality of life deficiencies to meet mission requirements. Current
facilities are temporary and substandard. Is this project designed? Is
it in the five year plan.
Answer. The $5 million Base Engineer/Security Forces Complex
project at Springfield-Beckley Municipal Airport is 35 percent design
complete. This mission essential project is included in the Air
National Guard's Future Year Defense Plan.

Springfield ANG Base--Munitions Storage Building

Question. Springfield would also like a Munitions storage building.
However, this project cannot go forward until the City of Springfield,
Ohio, provides additional land. Is this your understanding of the
situation? How fast can this project move?
Answer. The current munitions maintenance and storage facilities at
Springfield-Beckley Municipal Airport are antiquated and not adequately
sized or configured. As such, they are not able to effectively support
the 178^th Fighter Wing's (178 FW) F-16 munitions
requirements. A new munitions complex is estimated to cost $6 million
and the Base Comprehensive Master Plan has identified a potential site
on land owned by the City of Springfield. The city has yet to respond
to a January 30, 1997 letter from the 178 FW requesting this area be
added to the existing long-term Federal lease. Due to the real estate,
weapons safety, and environmental timeliness involved, the project
cannot be executed any earlier than fiscal year 2001.
[Clerk's note.--End of questions for the record submitted
by Congressman Hobson.]
Thursday, February 26, 1998.

Statement of the Chairman

Mr. Packard. Good morning, ladies and gentlemen. We will
open this hearing and will be hearing from Members of Congress
and from some other organizations--the National Military Family
Association, the Fleet Reserve Association, and the Reserve
Officers Association. We'll have several Members of Congress
that will probably be at the beginning of our hearing.
We want to welcome you here and we're looking forward to
hearing what you have to say and what your requests are. This
is the time when we do listen to the requests of several
Members of the Congress.
Most of you know that the budget that has been submitted by
the President has been significantly reduced from last year.
It's about a 15-percent reduction from what we appropriated
last year. We're concerned about that. We fully expect to
perhaps increase the level of spending, but it depends a lot on
what our allocation will be to this Subcommittee. But at any
rate, we're looking forward to hearing what your concerns are
with military facilities within your districts for Members of
Congress and, of course, we're anxious to hear from the other
organizations that I've just named.
Welcome, Mr. Olver, we appreciate your being here. Members
of the Committee will arrive off and on during the morning, so
we'll proceed with the hearing as scheduled and if, for any
reason, the Members of Congress are delayed, we will move down
to the organizations that are here.
We're very pleased to have Mr. Ed Whitfield with us, from
Kentucky, and we'll have him as our first witness. He'll be
followed by Mr. Bart Gordon, who I think is here.

STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF KENTUCKY

Mr. Whitfield. Chairman Packard, thank you very much for
giving me the opportunity to be here and, Mr. Olver, I
appreciate it very much. I'm delighted to hear that you're
giving some consideration to trying to up funding because we
feel like the military over the last eight or nine years has
really been reduced in funding, but I would like to testify
today in support of the FY 1999 military construction budget
for the 101st Airborne Division, Air Assault, at Ft. Campbell,
Kentucky.
I want to commend the entire Subcommittee for the support
you continue to provide our soldiers, seamen, airmen and
Marines throughout the United States, and I am especially
grateful for your past support of the 101st Airborne Division,
and certainly would like to invite all of you to visit Ft.
Campbell and to observe first-hand how important your efforts
have been to the 24,000 soldiers who are stationed there.
The President's FY 1999 military construction
appropriations request contains $41 million for Phase I
construction of a 336-person barracks complex for the 101st
Division Support Command. The budget also recommends $15
million for an aircraft maintenance hangar for the 160th
Special Operations Command co-located at Ft. Campbell and
$5.435 million for the Kentucky National Guard Training Center
in Greenville, Kentucky. Your strong support for these three
budget requests would certainly be appreciated.
In addition to the $41 million for barracks construction,
there are several other mission support and family housing
projects I would like to see funded that were not included in
the President's request. All of these projects, however, are
included in the Army's five-year plan for construction at Ft.
Campbell.
The number one priority of the Division is the construction
of a new helicopter runway, parallel taxiway, refueling helipad
and extension of existing aircraft parking aprons at the SABRE
Army Heliport. The total cost of the project is $16.5 million
and will include the necessary operational instrumentation and
lighting, as well as the purchase of either a navigational
easement or property in fee for the approach pattern.
The second request is for $14.5 million to construct a
Military Operations Urban Terrain Training Center complex using
the latest available technology in targetry, automated scoring
systems, special effects, after-review video techniques, mock
buildings and structures. The entire complex will include 33
buildings, 17 of which will be full-sized. These ``mock
cities'', as you know, are being used throughoutthe military
today and are a valuable multi-purpose training tool used by combat
units throughout the services.
There are currently no existing facilities at Ft. Campbell
to effectively simulate urban terrain combat operations. The
new complex would provide training for all units of the 101st,
the 160th Special Operations Aviation Regiment, the 5th Special
Forces, as well as National Guard and Reserve units.
The third request is your approval of funds to construct a
vehicle maintenance facility for the 129th Corps Support
Battalion totaling $13.2 million. This complex includes a
vehicle maintenance shop, deployment storage, petroleum, oil
and lubricant storage, sentry station, and hardstand for
organizational vehicle parking. It would replace the eleven
World War II buildings totaling 53,675 square feet which
currently house these functions. The current structures are
unsafe and totally inefficient from both an operational and
environmental standpoint.
Finally, knowing of this Subcommittee's strong support for
the well being of our soldiers and their families, I request
your support for $10.2 million to complete the renovation of
the final 26 company-grade family housing units at Werner Park
and to begin a two-phase revitalization of the company-grade
family housing complex at Gardner Hills. The first phase would
provide for renovations and improvements to 70 of the 232 total
units. $2.67 million is needed to complete the upgrades at
Werner Park--last year $8.5 was requested, $6 was appropriated,
so there is still $2.67 million to go--and then $7.53 million
to complete Phase I of the Gardner Hills project.
Mr. Chairman and Members of the Subcommittee, the projects
listed here today and the order in which they were presented
have the complete support of our new Commanding General at Ft.
Campbell, Major General Robert Clark, as well as the complete
support of the surrounding civilian communities.
I for one believe the President's military construction
budget request is woefully inadequate in terms of meeting both
the construction and family housing needs of our armed forces.
I will continue to support your efforts to correct the funding
deficiencies this budget fails to address, and I ask for your
continued support of the 101st Airborne Division and Ft.
Campbell throughout this process.
Mr. Hefner came in a little bit late and I certainly want
to offer my special thanks for the many years that you've
served in providing leadership in this Subcommittee for our
military services, and I want to wish you the very best in your
future endeavors.
Mr. Chairman, thank you so much for giving me the
opportunity to be here this morning.
[Prepared statement of Hon. Ed Whitfield follows:]
Offset Folios 2954 to 2956 Insert here

Mr. Packard. Thank you very much. We want to welcome Mr.
Hefner and Mr. Wamp and, of course, the Honorable Steny Hoyer,
we're very delighted to have you here.
Mr. Hoyer. Delighted to be here.
Mr. Packard. Any questions of Mr. Whitfield?
Only one. Did I understand you to say that these are listed
in the order of priority?
Mr. Whitfield. Yes, sir.
Mr. Packard. The way you presented them.
Mr. Whitfield. Yes, sir.
Mr. Packard. Thank you very much.
Mr. Whitfield. Thank you, Mr. Chairman.
Mr. Packard. Mr. Bart Gordon from Tennessee is our next
witness. By the way, for the benefit of those who are already
here, I have reviewed your testimony and you need not read the
entire testimony. If you would like to summarize, it would be
appreciated.

STATEMENT OF HON. BART GORDON, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF TENNESSEE

Mr. Gordon. Thank you, Mr. Chairman, and Ranking almost
gone Member.
Mr. Hoyer. He's here at markups, Bart.
Mr. Gordon. Yes, he's here. We're proud of you for a little
bit longer, anyway.
Mr. Olver, Mr. Wamp, and I guess semi-Ex Officio Mr. Hoyer,
this is my third year to be before you on this particular
issue, so I will be brief. I will just remind you that here are
my remarks.
In 1970, the old Sewart Air Force Base in my home county of
Rutherford was closed. It was really the last of the base
closings until this more recent series. Since that time, the
property has been turned over to a local airport authority, to
the National Guard, and to the Corps of Engineers.
The Guard has a training facility there, of which our
brethren John Tanner and Bob Clement both trained there. They
have horrible barracks facilities, of which I want to submit to
you photographs, which I have done in the past.
[The information follows:]
Offset Folios 2959 to 2982 Insert here

These are 1942 era barracks that have asbestos floors, have
80-percent termite damage, and have 30-year-old plumbing, so it
really is a problem there. They are so bad that most of the
trainees--you know, obviously, they can't stay there--and so
the Guard is having to pay for them staying in motels nearby.
So, we're spending hundreds of thousands of dollars to pay for
folks that can't stay in this dorm.
This is a $3 million proposal. The dorm will be used not
only for the Guard, but also Middle Tennessee State University
has some training programs there as well as the Tennessee
Police Institute. So, by renting the barracks out to these
other individuals and groups when it is not being used by the
Guard allows them to get the money then to take care of the
maintenance. So I think it's very cost-effective because it
will stand on its own, we won't have to be spending money to
house these Guardsmen in other places, the National Guard--and
I have a letter here that says this is their number one
priority in Tennessee behind their leased facilities which they
are required to address.
I also have a letter here from John Tanner and Bob Clement
pleading for better accommodations, and I will submit that for
the record and say once again, I think this is a cost-effective
facility, something that needs to be done, and I hope that the
good graces of this committee can smile on it this time.
[Prepared statement of Hon. Bart Gordon follows:]
Offset Folios 2985 to 2989 Insert here

Mr. Packard. Maybe the third time will be the charm.
Any questions of Mr. Gordon?
Mr. Hefner. Is this in the President's request?
Mr. Gordon. No.
Mr. Hefner. I remember it hasn't been too many years, we
didn't have any outside witnesses come before this committee.
It's always good to have the Members come and set their
priorities. As you well know, with the agreements being reached
on the budget and what have you, we have no idea how much money
we're going to receive. We're going to have to come up with
billpayers, unlike in years past.
We had an interesting meeting with some members of the
Guard the other day, and I think you have a good case. Some of
the people you mentioned as backup support, I'm not so sure
about that, but we're going to try to do everything we can to
support these projects. Three times is a long time to work at
it.
Mr. Gordon. I fully recognize that you've got limited
resources and, again, I come here hopefully with some bit of
reasonableness knowing that, in that we're spending money--I
mean, these things can be paid for by virtue of not having to
pay outside hotels. And, again, we're not going to see any
additional expense for the annual upkeep. So I think it really
is a cost-effective, and I think that that's what wehave to do.
I mean, as Members, we have to recognize your position and try to bring
you reasonable suggestions and projects, and I hope we've done this in
that way.
Mr. Wamp. Mr. Chairman, I just want to add briefly, Mr.
Gordon, what he's done is he's paying attention to
congressional delegation, and he has been very patient. And
this is only my second year on the Subcommittee, but last year
he didn't go away pleased, but he didn't go away mad, and he's
back here again this year with patience, and it's a virtue. And
I just want to encourage our consideration of this particular
request. Last year we had other requests of this Committee that
I think took precedent, and in terms of the limited resources
that we had, facing the veto, et cetera, et cetera. But I also
want to point out that Ft. Campbell, being on the border of
Tennessee and Kentucky, is also important, and I know that
Representative Whitfield came in here just a moment ago with a
list of items. This is a single request in Smyrna, and I hope
we will give it favorable consideration this year. And I want
to commend Representative Gordon for the way that he conducts
himself and, frankly, from the Tennessee delegation's
perspective, we really, really want to throw our weight behind
this year.
Mr. Gordon. Number one priority of the National Guard.
Mr. Packard. Thank you very much for your testimony.
We're delighted to have two of our fine Members from New
Jersey, Mr. Frank Pallone and Mr. Michael Pappas, and we'd like
to have both of you come forward. And, again, we'd encourage
you to summarize if you can.

STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY

Mr. Pallone. Thank you, and thank you to the other Members
of the Committee. Mr. Pappas and myself are pretty much arguing
for the same thing here today, and I have a statement a full
statement for the record which I would like to submit, and I'm
just going to summarize it briefly.
Let me say we are basically talking about two bases that
are in our district that basically we share. One is the Naval
Weapons Station Earle and the other is Fort Monmouth, New
Jersey, and we have several requests before the Subcommittee.
I just wanted to talk in detail with regard to Earle, about
one of the projects. Earle is the only major surface fleet
presence north of Norfolk, Virginia, and right now we have 36
percent of the East Coast's Naval Weapon Stations' explosive
storage capacity. We're actually increasing ships. There's
going to be another three AOE-class ships coming this summer
that will be homeported, at Earle, bringing the total to four.
And I'm not going to go into all the details about why Earle is
so important. We know it is, the Navy knows it is. The main
reason is we need a berthing pier replacement for Piers 2 and 3
at Earle in order to be able to accommodate this increased
capacity, the new ships that are coming in as well as the old
ones.
Right now, those piers were constructed in 1944 and they
really haven't had any major renovation since then. We're
asking essentially for $85 million in order to replace these
piers. They are in very deteriorated condition, in desperate
need of repairs. We talked about them before before the Members
of the Subcommittee. I'm sure some of you are probably tired of
me talking about it, but the need is there. It's an immediate
need.
I'm just going to list the other requests for Earle. One is
for an explosive truck holding yard, that's an $8 million
project; security improvements which are $1.25 million, and
other things that would improve the quality of life for the
sailors at Earle which we detailed are about $3 million and,
again, I'm not going to get into the details of that.
There is a Pier Club, there is a recreation center that's
needed, and the Committee will go into these as we proceed over
the next couple of months.
With regard to Fort Monmouth, again, Fort Monmouth is the
headquarters of the Communications and Electronics Command,
CECOM, worldwide. It's missions are very high-tech oriented to
provide command, control, communication, computer and
information technology for the battlefield, very important base
with regard to the Persian Gulf and the things that we've been
doing there and will continue to do there.
The most important priority there is the Software
Engineering Center addition which would cost $14 million.
Again, in order to keep up with the state-of-the-art in the
communications field. That is really needed. It basically is
additional computer labs and a number of other things.
I'm just going to list the other things that we would like
to see. We need a transportation study because as a result of
BRAC, all missions have been consolidated at the main post of
Fort Monmouth, and traffic congestion has greatly increased. So
we'd like to do a study about what could be done to improve the
traffic situation there. I know that we have Barbara Freeholder
and the Mayor of Eatontown who is here today with us, who have
been concerned about that for sometime and talked about the
transportation need; also walkway connectors to link the
various facilities at CECOM. And I'm going to end with that and
turn it over to my colleague who has been joining me on these
issues. We have a committee that we work with at the base that
Congressman Pappas and I co-chair.
[Prepared statement of Hon. Frank Pallone follows:]
Offset Folios 2996 to 2999 Insert here

Mr. Packard. Thank you.
Mr. Pappas?

STATEMENT OF HON. MICHAEL PAPPAS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW JERSEY

Mr. Pappas. Thank you, Mr. Chairman, Mr. Hefner, and
Members of the Subcommittee. Thank you for hearing us. I want
to echo everything that my colleague, Mr. Pallone, has said.
And for your benefit, Mr. Chairman, the gentleman sitting
behind me to my left, Mr. Ed Staminsky, the Mayor of Eatontown,
is also a member of the county governing body of the county
that had a community that was interested in that HUD and
illegal immigrant displacement issue, so he knows who Ron
Packard is.
I want to thank you folks for hearing us. I want to echo,
as I said, what Mr. Pallone has spoken about. The work on Pier
2 I think is pretty significant in that this is, I believe, the
only pier of its kind on the East Coast. The other piers are in
good condition and are properly able to serve ships, but Pier 2
does need to be replaced.
The other projects that Mr. Pallone mentioned in reference
to Earle I concur with, and urge your serious consideration.
With regard to Fort Monmouth, I serve on the Research and
Development Subcommittee of National Security, so I'm keenly
aware of its importance to our infrastructure and that it is
really considered by many to be ground zero of our nation's
intent to modernize for the battlefield of the 21st century.
The addition to the building at Fort Monmouth for the
Software Engineering Center is important. Modernization for
telecommunications infrastructure to the tune of $28.5 million
is a request that has come before this Committee before, and
just to elaborate a bit upon the need to improve the road
system leading to the Fort, Mr. Pallone has requested, and I
certainly concur with, funds for a study, but I'd go a step
further. I had the engineer for the county in that area put
together a proposal, and I would even request in excess of
$500,000 to the tune of $5 million for all of the road
improvements that he feels is necessary to minimize the impact
on the quality of life for the military personnel that live in
that area as well as the nonmilitary personnel. As we all know,
quality of life issues are very important to our military, and
I know that this Subcommittee has been paying particular
attention to those quality of life issues as they relate to the
ability that our services have to retain personnel, and I
believe that that's very important.
In our country, each of the 50 states benefits from our
military's ability to do its job. New Jersey, because of its
location geographically and some of the facilities that we
have, and we've just spoken of two but there are others in our
state that are each very, very unique, and we certainly hope
that this Committee would favorably look upon the request that
we're making, not just Mr. Pallone and I, but the others from
our State's delegation because at times when we've looked at
where the funding has gone, New Jersey, while we appreciate the
support that you've given us, we think deserves a little bit
more consideration based upon what has taken place elsewhere. I
thank you for your consideration.
[Prepared statement of Hon. Michael Pappas follows:]
Offset Folios 3004 to 3011 Insert here

Mr. Packard. Thank you very much, Mr. Pallone and Mr.
Pappas. And welcome to all of those who have accompanied you
here from your state. Mr. Mayor, I want you to know that Mr.
Pappas was probably the most active in getting the loophole
closed on the illegal alien issue. We appreciated his efforts.
Any questions by members of the Committee?
Mr. Hefner. No questions. I remember this from last year.
Mr. Packard. I have one. The $85 million request for the
berthing pier, can that be phased? It will be very difficult to
fund any project at the full $85 million level in one budget
year.
Mr. Pallone. I think the answer is yes. I mean, obviously,
we'd prefer if we had it all up front, but I think the answer
is yes. Clearly we could work something out.
Mr. Packard. Any other questions?
[No response.]
Mr. Packard. I didn't mention the arrival of Mr. Hobson,
David Hobson. We deeply appreciate him being here again this
morning.
If there's no further questions, thank you very much.
Mr. Beureuter is next on the agenda. I saw you come in. How
are you, Doug, it's a pleasure to have you here from Nebraska.
We're looking forward to and hope that you would summarize your
statement. We all have your statement and it will be entered
into the record.

STATEMENT OF HON. DOUG BEREUTER, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEBRASKA

Mr. Bereuter. Thank you, Mr. Chairman, Congressman Hefner,
and Members of the Committee. It's a pleasure to address the
Subcommittee this morning. I come here to express my support
for two projects in my congressional district but actually
serve the entire state, that were not included in the
Administration's Military Construction Appropriations request
for Fiscal Year 1999, but are nonetheless meritorious and
deserving of the Subcommittee's attention.
As you may remember, my colleagues, I was disappointed that
these two projects were not included for the current fiscal
year. These are very worthy Nebraska Army and Air National
Guard projects that will significantly improve the operational
readiness, cohesiveness, and morale of the National Guard units
to our state. As you may recall, many worthy construction
projects were not properly advanced last year by the National
Guard Bureau.
I want to point out that these two projects are the first
military construction projects on which I have made a request
as the primary congressional sponsor since I entered Congress
in 1979. So, if Mr. Wamp is right that patience is a virtue,
then you can draw the conclusions on that.
Mr. Packard. You are a very virtuous man.
Mr. Bereuter. That is to say, to my knowledge, I have not
initiated a request for previous military construction projects
during my entire congressional service. In short, I think I
have great justification for some favorable consideration on
these requests, but I know you have a tough job, as always.
The first of these projects is a joint Air-Army National
Guard Medical Training Facility to replace an antiquated Korean
War-era facility currently in use on the Lincoln Headquarters
base for both elements of the Guard. The existing clinic is
inaccessible, undersized, and housed in a converted warehouse
with a high-lead-content water distribution system and
asbestos. It is inadequate in size.
Mr. Chairman, the existing center is ill-suited to the
Guard's training mission and basic physical and dental care and
lab work. There are not enough examination rooms, the clinic
lab is little more than a small apartment-sized kitchen. The
National Guard units are unable to use additional basic
diagnostic equipment because of the lack of space.
Frankly, I am concerned about the health hazard the
existing clinic itself poses to our National Guard personnel.
Unless a new facility is constructed, training of Army and Air
National Guard units will continue to suffer.
Currently the Air National Guard is flying many missions
into Bosnia all the time with the tankers they have. They are
constantly in the air, it seems, much more than when they had a
RF4 responsibility.
I also think you've gotten, as taxpayers, more than your
money's worth at this cobbled together kind of facility that
they've been using for some 30-plus years.
The other project is a relatively small one, $1.1 million,
but it is for a baffled rifle and pistol qualification range.
The current one in use by the National Guard in the state was
shut down a couple of years ago because they couldn't protect
the civilians across the river. And so these units now are
traveling to Fort Riley, Kansas, generally 75-200 miles away
for personnel in the closest parts of Nebraska, or to the
Hastings Training area, a distance of 90 miles from Lincoln,
200-plus miles from northeast Nebraska, and larger mileage away
from some other parts of the state. So we're cutting into
training time with this unproductive transit and it's expensive
as well.
The new range will support all units of the Nebraska Army
National Guard to accomplish necessary combat weapons training
and qualification.
Mr. Chairman, while I recognize the budgetary constraints
under which we operate, the projects I have just mentioned are
important to the health, morale, and operational readiness of
thousands of National Guard personnel.
I would also mention, Mr. Chairman, there are no Nebraska
National Guard projects in the current budget request or the
Fiscal Year 1997 program, so I don't think we can be accused of
asking for more than our fair share. I would be happy to
provide any additional information or try to respond to the
questions of the Members of the Committee here today. Thank
you.
[Prepared statement of Hon. Doug Bereuter follows:]
Offset Folios 3018 to 3020 Insert here

Mr. Packard. Thank you, Mr. Bereuter. You make a very
persuasive statement. Is the Army and the Air Guard facilities
one and the same?
Mr. Bereuter. Yes. It would be divided on a 53-47 percent
cost-share basis per square foot.
Mr. Packard. But they occupy the same facilities?
Mr. Bereuter. They do.
Mr. Packard. They would be using the same medical
facilities jointly.
Mr. Bereuter. Yes, they would, under a new proposal as
well. So that does make it a little unique and you need
coordination between those elements of the Guard.
Mr. Packard. Is your first and second request in order of
their priority?
Mr. Bereuter. They are, medical first, baffled rifle range
second.
Mr. Packard. Thank you very much. Any other questions by
Members of the Committee?
Mr. Hefner. No questions.
Mr. Bereuter. Thank you, Mr. Chairman. May I say
additionally that I visited Ford Island and Pearl Harbor
shortly after your visit. I'm very much impressed with the
plans for private-public construction there. I want to be
helpful in that as part of my responsibility on the Asian
Pacific Subcommittee. Call on me for help.
Mr. Packard. Thank you. It was a very interesting proposal.
Mr. Bereuter. Yes, it is.
Mr. Packard. Thank you very much.
Representative Darlene Hooley from Oregon. We appreciate
your being here on schedule, and we have your statement and it
will be entered into the record. If you would like to
summarize, we'd appreciate it.

STATEMENT OF HON. DARLENE HOOLEY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF OREGON

Ms. Hooley. Thank you. I'm delighted to be here. Thank you,
Mr. Chairman, Members of the Committee. I appreciate the
opportunity to be here today.
I represent the Fifth District in Oregon and, as many of
you know, Oregon does not have an enormous number of military
installations or defense manufacturing. However, we have some
very high priority National Guard units stationed in Salem that
serve as a critical force support unit during a presidential
call-up.
Oregon has also suffered from a lot of natural disasters.
Just in 1996 alone we had three major floods where we called
for deployment of the Guards, and in that same year in August,
with hot temperatures and dry conditions and high winds, we had
wildfires that destroyed more than half a million acres of
forest and grasslands in the state, again requiring Guard
deployment.
In addition, my district sits on a volcanic range that is
now overdue to erupt in what may be one of the most powerful
series of earthquakes or tsunamis in history. In 1993, Oregon
had a couple of earthquakes.
So, despite these wideranging natural disasters that
continue to plague our state, Oregon's emergency
managementsystem continues to operate out of inadequate facilities that
contribute to inefficiency and delays. And although our emergency
personnel, including Oregon Guardsmen--and by the way, I have to tell
you, in my state, because of our disasters, everybody loves the Guard.
I mean, they are sort of the saviors out there. They have worked
admirably well even though they have had inadequate tools to do their
job.
The reason I'm here today to talk about this project is the
beauty of this project is it brings together the Oregon
National Guard, it brings together the Oregon State Police and
the Office of Emergency Management so that you have three
groups dealing with disasters all in adequate facilities,
housed under the same roof. What that will do is allow them to
respond to any disaster in a much quicker order.
The center that we're talking about would also serve as the
primary headquarters for the National Guard's 1249 Combat
Engineer Battalion, which is Force Support Package 2 unit, the
highest priority unit in the state. The current headquarters,
which was built in 1958 for a unit half the size, is very
inadequate. Its location provides no staging area for the
battalion and is not coupled with the Department of State
Police and the Office of Emergency Management.
If we could move the 1249 into this headquarters, the
Guards would be able to close another aging armory ultimately
saving some operation and maintenance funds. As I said,
Oregon's emergency management is also in cramped space. Again,
this proposal has been designed. It's 117,000 square feet. It's
been included in the Defense Department's Future Year Defense
Plan. Unfortunately, it has failed to move up in the Guard
Bureau's queue for funding, although a number of other projects
have been funded.
The reason this project is immediately important to the
State of Oregon, first of all, the Army is currently preparing
to incinerate chemical weapons stockpiles and, although we have
an emergency preparedness program in development, this facility
would aid in the implementation of the emergency plan to ensure
public safety.
Second, as the West Coast continues to suffer the effects
of extreme weather, we must be better prepared to deal with
those disasters.
Finally, in the event of a military deployment, it is
essential that the facility be equipped to appropriately
prepare the 1249 Battalion for mobilization. Furthermore, this
facility would allow Oregon's National Guard to fully implement
the National Defense Panel's recommendation that the National
Guard and the Army Reserve take the lead in preparing for an
attack using weapons of mass destruction.
We're asking for $12.1 million to complete this project.
Oregon's legislature has already appropriated their share,
$3.5, and I emphasis again, the reason it's important this year
is it allows us to have an opportunity to take three partners
and put them together under one roof. And I am afraid if we
don't fund it this year, we are going to lose that opportunity,
so that's why it's important.
This project was included in last year's Senate bill, we
were not able to get it marked up in the House bill, but I hope
you will be able to include it this year.
Again, Mr. Chairman, I appreciate your time and your
listening to me, and I would be happy to answer any questions
that you might have.
[Prepared statement of Hon. Darlene Hooley follows:]
Offset Folios 3027 to 3028 Insert here

Mr. Packard. Thank you very much, Ms. Hooley. Are there any
questions?
Mr. Olver. I have one.
Mr. Packard. Mr. Olver.
Mr. Olver. The 1249 Battalion, that's an Army Guard?
Ms. Hooley. Yes.
Mr. Olver. As is the 41st Enhanced Infantry Brigade is
Army.
Ms. Hooley. Yes.
Mr. Olver. And it is a statewide National Guard
headquarters, so it would be the headquarters function for both
the--it is only Guard--this is only Guard function.
Ms. Hooley. Right.
Mr. Olver. But Air Guard headquarters would be out of the
same complex along with Army Guard statewide headquarters as
well as the headquarters for these two Army Guard units, is
that right?
Ms. Hooley. Right.
Mr. Olver. How many total people are there in the two
units?
Ms. Hooley. 1200.
Mr. Olver. Thank you.
Mr. Packard. Thank you very much, appreciate your
attendance and your testimony.
We're pleased to have now Mr. Peter Visclosky with us as
our next witness from Indiana. We have your statement, Mr.
Visclosky, and it will be entered into the record. It's
relatively short, so if you wish to either read or summarize,
you're welcome to do whatever.

STATEMENT OF HON. PETER J. VISCLOSKY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF INDIANA

Mr. Visclosky. Mr. Chairman, I don't. I simply appreciate
the opportunity to come before you and Mr. Hefner and Mr. Olver
and the other Members of the Subcommittee, to emphasize to you
that I am very concerned about the quality of water in the
current system at Camp Atterbury, Indiana. The Members of the
Committee and the staff have been very good to work with in the
past. We would anticipate working with you in the future as far
as ordering your priorities, given the tremendous pressure you
have been under.
I would simply add that I want to really congratulate the
Subcommittee for your extraordinary efforts on behalf of the
quality of life for all the men and women in the United States
Armed Forces.
[Prepared statement of Hon. Peter J. Visclosky follows:]
Offset Folios 3032 to 3033 Insert here

Mr. Packard. And you are requesting $6.7 million over the
President's budget request.
Mr. Visclosky. Yes, sir. We would appreciate your kind
consideration.
Mr. Packard. Thank you very much.
Chris Smith, from New Jersey. We've already heard from two
of your colleagues from New Jersey. We want to welcome you and,
again, we have your written testimony.

STATEMENT OF HON. CHRIS SMITH, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW JERSEY

Mr. Smith. Mr. Chairman, I am again appearing before your
Subcommittee to ask for help on an API lab. The lab, known as
MILCON P-208, would be for the Naval Air Warfare Center in
Lakehurst, New Jersey.
I think it should be underscored and stressed that this
lab, a super lab, if you will, that consolidates functions
throughout Lakehurst for the arresting gear, the launch and
recovery of our aircraft. It is a one of a kind facility, the
only facility in the world that does this kind of work.
This would have been up and running had it not been for two
BRACs that had Lakehurst on the list, and most recently the
last BRAC, by a vote of 7-to-1, the BRAC strongly affirmed that
Lakehurst, because of its unique mission, needs to be
continued. So this MILCON, frankly, is something that should
have been done yesterday.
The Navy itself--and I have letters from all of the
appropriate, from Rear Admiral Smith to Vice Admiral Lockard,
strongly urging that this be part of our military construction.
The target year is now the year 2000. For the last decade,
we've seen those years slip every time because of some other
extraneous--in the case of BRAC, it just put it off completely.
So we're hoping that best case, put it in the Fiscal Year 1999
budget, at least engineering money and some design money that
might be put forward in the year 1999, and then stay on track
for the year 2000, as the Navy says it would like it to be.
I know last year you were under some constraints of no new
labs. The hope is that this lab, which again is a decade late
in being constructed, be done as soon as possible, preferably
in the year 1999.
[Prepared statement of Hon. Chris Smith follows:]
Offset Folios 3037 to 3043 Insert here

Mr. Packard. Thank you very much for your testimony. This
is on the five-year development plan, to your knowledge, and
scheduled for the year 2000?
Mr. Smith. Scheduled for the year 2000, it's one of the top
five priorities of NAVAIR. So, in terms of all of their types
of scoring, it's right at the top of the list. But I'm asking
that this Subcommittee consider an extra boost because we've
had one delay not of our making for the last decade, namely,
being on two BRACs, on hit lists.
Mr. Packard. Thank you, Questions?
Mr. Hefner. No questions.
Mr. Smith. I would ask, Mr. Chairman, as well, if these
letters from these distinguished Admirals be made a part of the
record.
Mr. Packard. They will be a part of the record.
Mr. Smith. Thank you very much.
Mr. Packard. Thank you, Mr. Smith.
We're pleased to have now Mr. Sam Farr, one of my
colleagues from California. We're pleased to have you before
the Subcommittee, Sam, and you have a relatively short
statement. You can either summarize or read it.

STATEMENT OF HON. SAM FARR, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF CALIFORNIA

Mr. Farr. Thank you, Mr. Chairman, I will summarize. I
represent a lot of military interests, as you know. Fort
Hunter, which is one of the fifth largest properties in the
country, the Defense Language Institute, the Naval Post
Graduate School, the Coast Guard Center, the Fleet Weather
Station, and Fort Ord was the largest base closed in the
smallest area in the history of a BRAC closing, and I've never
been before this Committee, but I come before you today because
the issue is vitally important.
The Defense Language Institute is on the Presidio of
Monterey, which is the oldest active military property in the
United States. You'd think it would be on the East Coast, but
it's actually in California. It was a Spanish Presidio before.
In that, we have the largest language school in the world.
It's a military language school called the Defense Language
Institute. It's run by the Army TRADOC. That language school
is, at this moment, if you look at that map, is teaching 21
languages around the world to 3,000 military students. It also
has the capability and is doing video teletraining. What they
do is they train students here in Washington. They train people
in the Gulf. They train peopleon the Sinai Peninsula. Frankly,
this is a school that is our military intelligence training. The people
who go through that school are probably housed in every classroom,
linguist classroom in your district, in any district of any Member on
this Committee because 80 percent of the language teachers in America
have come through the Defense Language Institute. So, it's in our
national security.
What the school needs, because it's got all these old
buildings, it's got a shortage of space to build what they need
as a video training facility. At present, there are seven
teletraining studios in temporary studios which have been
created out of existing classrooms, and we have increased the
workload of that school from a little over 2,000 last year to
almost 4,000 by the end of this year. So, the military services
realize that language training is in their keen interest, and
it's interesting the Marines have been sending the largest
delegation. First ashore seems to know that they want to be
able to speak the language of the place they're going to.
The studios are not equipped with proper lighting,
insulation, or network capability for teletraining, and they
cannot be expanded. The space they occupy is desperately needed
for its original purpose, classroom instruction, so we just
have this incredible cramping. And at a cost of $1.35 million,
this really would be more cost-effective than leasing space
off-post.
TRADOC made this the highest priority to construct,
although it didn't make the final cut list of the Army, and
that's why I'm here today. I think that's why we have this
Committee to be able to look at the Administration's
recommendations and to give some political priority to them
where you feel it's competent.
I'm just here to ask your support in light of what's going
on in the world today, that we need to have a video training
facility. This is a teletraining facility, this doesn't just do
it for the people there, this does it for anybody, and what
this school does so well is, after you are a student there,
they keep in touch with you and update your skills all the
time, so you don't have to go back to Monterey to do it, you
can pick up these updating skills here in Washington, you can
do it anywhere in the world that they can do the teletraining,
but they need a facility on-base to do that, a state-of-the-art
facility, and that's why I'm here asking for your help in
getting that for us. And the rest is in the submitted
testimony.
[Prepared statement of Hon. Sam Farr follows:]
Offset Folios 3049 to Insert here

Mr. Packard. Thank you very much. Is there a question?
Mr. Hefner. I have no questions.
Mr. Packard. Thank you, Mr. Farr.
Mr. Farr. Look forward to working with you.
Mr. Packard. I did not see any other members come in, so we
will proceed with the National Military Family Association, if
you would like to come forward, please.
Again, we have your testimony, I've reviewed it, and if you
would like to summarize, we'd appreciate it.

STATEMENT OF JOYCE RAEZER, SENIOR ISSUES SPECIALIST, ISSUES
AFFECTING MILITARY FAMILIES, NATIONAL MILITARY FAMILY
ASSOCIATION

Ms. Raezer. Thank you, Mr. Chairman. NMFA, as usual, is
most grateful to you and all the Members of the Subcommittee
for their steadfast support for the military. We can't show you
all the fruits of your labors over the years, but we have
included in Attachment 1 of our written statement, pictures of
the groundbreaking of the new child development center in
Darmstadt, Germany. Funds for this project were added to the
Fiscal Year 1996 budget by this Subcommittee.
I'd like to take a moment, Mr. Chairman, just to thank
Representative Hefner on behalf of NMFA for his many years as
one of the military family's best friends. We will miss him and
wish you well in your future endeavors.
Mr. Chairman, NMFA supports the construction request in the
Department of Defense's Fiscal Year 1999 budget, especially for
DOD schools. We also wish to associate ourselves firmly with
the eloquent words in your press release of February 12, 1998--
military families do not understand how senior leaders can say
that adequate and affordable housing is a high priority and yet
requests that so little be done to ameliorate the current
deplorable situation.
Of particular concern to NMFA is the deficit in funding for
repair and maintenance of government family housing. Families
are resigned to hearing that routine maintenance and repairs
can't be done because there's no money. What disturbs them,
however, is when installations don't seem to have the resources
to repair potentially dangerous problems, such as the glowing
electrical outlet that we describe in our statement. The Marine
whose wife has lived with this glowing outlet in her kitchen
since October is presently deployed to Japan from his home base
in Beaufort, South Carolina. His wife is the key wife
coordinator for the squadron. She needs her computer and phone
hookup for e-mail contact with the squadron's family readiness
officer and for emergency contact between Beaufort and Japan.
Maintenance workers temporarily fix, however, left her no
power to the outlet that controls her phone that's hooked up to
the computer for four days. As of February 24, not all of her
quarter's electrical problems had been fixed.
Families see a disconnect between a government that
proclaims its interest in the welfare of its troops and yet
allows family members to live in quarters with pealing paint,
insect infestation, leaky roofs, and filthy kitchens like some
of the family housing in Germany we illustrate in our
testimony.
NMFA recognizes that the normal process of military
construction and the reduced Defense budget will not allow
massive renovation projects or replacement construction in a
timely manner. We therefor have supported the concept of
privatization for the construction of housing for military
members. However, as we've expressed in the past, we have
several concerns about the process. The first is oversight.
Will the services simply hand over the money to private
developers and wash their hands of what happens when military
families occupy these homes?
What happens when, as in the case of the Bridge Pointe
Landing development in Texas, families become frustrated if the
developer does not provide the promised level of quality
housing and service. Who will hold the developers accountable
for fulfilling the provisions of the contracts?
The second is cost. Will service member cost to rent these
homes be ``equivalent to their housing allowance'', as stated
by Under Secretary of Defense William J. Lynn, in his February
12 testimony before this committee? Early experiences in some
of the new developments indicate that costs are often higher.
Three is community. Will military families moving into
these new developments expect the same level of community
support and recreational services found on base, and will they
be disappointed.
Fourth concern is education. Housing privatization can have
a tremendous impact on a school district. If replacement
housing is built on land that's not federal, the local school
district will lose approximately $1800 per child in Impact Aid
money. Will local schools be able to absorb the influx of
children from new housing? Are leaders of the surrounding
communities, especially school superintendents, being consulted
early enough in the privatization process to provide input on
the project's possible impact on the entire community? The word
that we're receiving is that they are not being included in
those discussions.
With deep gratitude for what you have done in the past,
NMFA again turns to this Committee for assistance in helping
the military families we represent. Repair and maintenance
accounts can't be raided to the extent that military families
are forced to live in substandard and even dangerous
situations. Privatization initiatives should be carefully
constructed so families benefit and the civilian communities in
which they live are not negatively impacted.
Communities are not just bricks and mortar, but are living
organisms. As families are separated more and more often by
frequent deployments, the importance of the military community
as a stabilizing force to families increases. Privatization,
housing or services, must not lead to the destruction of that
community. Thank you.
[Prepared statement of Joyce Raezer follows:]
Offset Folios 3055 to 3075 insert here

Mr. Packard. Thank you very much, Ms. Raezer, we appreciate
your testimony. I think both Mr. Hefner and I have made a
significant effort to go into the housing, much of which has
been certainly dilapidated and poorly maintained housing. I
have done so across not only this country but across the world
in the last two years, I've been to many housing projects. We
visited some of the newer remodeled or reconstructed housing
and some of the new construction housing projects, and talked
to some of the families. Certainly, we're doing all we can, we
think, at least that's our highest priority, is to try to catch
up with the backlog, huge backlog that exists out there.
I was very interested in your comments on privatization and
your questions very well put together, and certainly those are
questions that need to be answered, and I hope will be answered
before any project moves into a private enterprise. We do
think, however, that the private sector has a role to play in
trying to help us catch up faster than what the traditional way
that we've been doing would allow us.
So we are going to seriously look, and continue to look at
privatization, but certainly your concerns are our concerns as
well, and we're very anxious that the housing allowance take
care of our families' housing needs, that there's not a need to
go off-base and into the community and thus increase their
cost.
Every private sector project, whether it's on-base or off-
base, however, for family housing, we think should be designed
and the contract should include provisions that would allow the
housing allowance to be the sole requirement from the active
duty. We can't promise that, but that's our goal.
Do you have any comments or questions?
Mr. Hefner. No.
Mr. Packard. We again appreciate very much your testimony,
it's very well done.
Ms. Raezer. We appreciate the opportunity.
Mr. Packard. We're on the same team, I believe.
Ms. Raezer. I think so.
Mr. Packard. I think our goals and our objectives are yours
and your association's.
Ms. Raezer. And I think we agree on the privatization. We
understand we have to go this way, we're just looking for the
safeguards.
Mr. Packard. And we're asking the question of most of our
witnesses, is it their intent to make privatization their sole
method of building or refurbishing housing, or is it simply an
augment to the existing system. And I think we're getting back
the answer that they're going to still continue to provide
MILCON housing as probably their fundamental source of housing,
with privatization assisting and augmenting it rather than
replacing it. Thank you again, Ms. Raezer.
Ms. Raezer. Thank you.
Mr. Packard. The Fleet Reserve Association. We appreciate
your being here and we're looking forward to your testimony.
Again, you have submitted a comprehensive testimony and, if
possible, we'd appreciate your summarizing.

STATEMENT OF JOSEPH BARNES, DIRECTOR, LEGISLATIVE PROGRAMS,
QUALITY OF LIFE, FLEET RESERVE ASSOCIATION

Mr. Barnes. Thank you, Mr. Chairman. Fleet Reserve
Association thanks you for this opportunity to present its
recommendations. We'd also like to associate ourselves with
remarks of NMFA to Mr. Hefner, thank him for his tremendous
support through the years, and wish him fair winds and
following seas in the future.
This distinguished Subcommittee takes seriously the task of
supporting the quality of life for our uniform personnel and
their families, and the Association salutes you and Members of
the Subcommittee for your strong and continuing commitment.
FRA has difficulty, however, believing that DOD shares this
strong commitment when it reviews the 1999 Military
Construction budget. A chart depicting total obligation
authorities for recent years against those requested for 1999
is attached to our complete statement. Especially noteworthy is
the fact that family housing construction has decreased over 40
percent annually since 1996.
The 1995 Defense Science Board Task Force on Quality of
Life recommended privatizing much of the housing for military
families. Some difficulties have surfaced with the commercial
units now available for military families in Texas and
Washington. As the representative of enlisted personnel of the
Navy, Marine Corps, and Coast Guard personnel, FRA is concerned
about unaffordable rental costs for junior enlisted members and
the negative effect off-base commercial housing may have on
impact aid provided to nearby public schools. Some local
communities are waiving property tax for developers in order to
encourage them to build military housing. This loss in the
school tax base is significant to the schools educating
military children and to the quality of the education being
provided to them.
FRA cautions DOD and the services to go slowly in
encouraging privately developed housing. Commercial residences
must be cost-effective for all pay grades. It must also be
secure and well maintained. For these reasons, FRA is not yet
prepared to fully endorse privatization of military housing.
Although current Navy and Marine Corps bachelor housing
leaves much to be desired, no BQs have been requested for the
Navy and only four for the Marines for 1999. Many sailors and
Marines are deployed for six months or more each year, and
deserve better than being housed in crowded barracks lacking
privacy and equipped with gang heads, inadequate laundry
facilities, and no place to store gear.
Good physical fitness is important to reducing the
increased stress of frequent deployments. While physical
fitness centers are at the top of wish lists for bachelor
personnel, only three fitness centers are requested for 1999.
Childcare is of great importance to service families.
Twenty-three facilities were approved for construction from
1996 to 1998, but only three are requested for 1999. The
Quality of Life Task Force report cited DOD's aim to meet 65
percent of the demand for childcare by 1997 and 80 percent by
1999. FRA questions the Department's commitment to attaining
this goal.
Where practical and affordable, Congress should direct the
Service Secretaries to include requests for family service
centers, libraries, religious and education centers, dependent
schools and medical and dental facilities, particularly where
current infrastructure requires replacement or renovation.
The Navy moved its entire recruit training program to the
Naval Training Center, Great Lakes, which is the Navy's oldest
basic training installation. Its infrastructure is in poor
condition and, if not rebuilt soon, it will no longer be fit to
train new accessions into the Navy.
Additional attention is directed to deteriorating work
areas at other Naval and Marine Corps installations, a
situation that is a significant readiness challenge. Only
Congress can direct the military to work on modernizing its
infrastructure. FRA recommends that DOD take funds requested to
close and realign additional bases and use it to improve the
military's crumbling infrastructure at existing installations.
Press accounts cite a pending federal budget surplus and a
military budget windfall. If realized, any portion of this
money should be appropriated to fund recommendations detailed
in this statement.
Mr. Chairman, FRA is grateful to this Subcommittee and
Congress for its efforts to provide quality of life programs
for the nation's uniformed personnel. Serious challenges face
the military. Not only is there concern for the military's
infrastructure, but recruiting and retention rates are down,
operational and personnel tempos continue to be high, and
peacekeeping missions are threatening readiness. Despite this
scenario, there is continued pressure to further reduce
manpower levels. Our country can ill-afford another exodus of
talent as occurred in the 1970s.
Mr. Chairman, this Subcommittee can, as it often does, lead
the way on these important quality of life needs. Thank you
very much.
[Prepared statement of Joseph Barnes follows:]
Offset Folios 3083 to 3092 Insert here

Mr. Packard. Very well stated, Mr. Barnes, we appreciate
your testimony. I think we recognize, as you have stated, the
inadequacies of the budget that's been submitted, particularly
in bachelor quarters and in family housing and other areas.
This Committee is committed to those issues and we'll do what
we can to beef up the budget.
Comments or questions, Mr. Hefner?
Mr. Hefner. No.
Mr. Packard. Thank you very much.
Mr. Barnes. Thank you.
Mr. Packard. Our concluding witness is Mr. Anderson, and he
will be testifying with regard to the Reserve Officers
Association. We have your comprehensive statement. I have
reviewed it, it is extensive. We hope that you will summarize.

STATEMENT OF STEVE ANDERSON, GUARD AND RESERVE ISSUES, RESERVE
OFFICERS ASSOCIATION

Mr. Anderson. I shall be brief, sir.
Good afternoon, Mr. Chairman. On behalf of more than 90,000
members of the Reserve Officers Association, representing each
of the uniformed services, I appreciate the opportunity to
address this Subcommittee.
The Association is very grateful to the Subcommittee for
its continuing support of the Guard and the Reserve. Frankly,
without your support and without the facilities you provided,
the Guard and Reserve could not have contributed as effectively
as they have to recent mobilizations.
Base closures and force realignments have generated
requirements for new construction to support new missions. Much
of the appropriated funding for military construction for the
Guard and Reserve has been for new construction, while the
needs for repair and renovation have grown. During the '80s
when defense spending was on the rise, Reserve component
military construction backlogs continued to grow.
If the Reserve components are to continue to make
significant contributions to national security, they must be
provided adequate facilities to meet unique requirements,
including the location of facilities where there are persons
and skills needed to meet Reserve component needs.
Demographics are indeed critical to the location of Reserve
units and Reserve component effectiveness. Unlike their Active
component counterparts, who can readily move to new locations,
Reservists are tied to their civilian employment and are often
unable to relocate for Reserve assignments. For this reason we
must provide the best training facilities as possible and put
them where Reservists are located.
The following will address military construction needs for
each of the Reserve components. Today the Army Reserve has a
backlog of $1.9 billion of known construction requirements.
This facility shortage is further complicated by numerous base
closings and the loss of support facilities, many of which were
geographically proximate to Army Reserve units. All of these
factors contribute to an average utilization rate of over 200
percent in existing facilities.
Over half of the Army Reserves' 2800 facilities, which
average 33 years old, are inadequate to meet recognized
training, maintenance and storage requirements. Many fail to
meet Army standards. This situation has created a training
environment that is increasingly unsafe, environmentally
unacceptable, and damaging to readiness.
To further compound the situation, the Army Reserve has
taken over management of several Army installations formerly
operated by the Active Army. As a result, the Army Reserve now
has an additional 2600 buildings and its inventory is now
averaging 47 years old.
We urge the Congress to authorize and to fully fund the
Army Reserve's $63.9 million budget request for major
construction. We further urge the Congress to authorize and to
appropriate additional funding to move essential construction
projects into FY 1999.
The Military Construction program for the Air Force is
divided into three categories--environmental compliance, new
missions, and current mission MILCON. The total Air Force
Reserve MILCON request for FY 1999 is for one project valued at
$10.5 million. It contains no funds for new mission MILCON,
$5.2 million for current mission MILCON, no funds for
environmental compliance, and $2.9 million for minor
construction and $2.4 million for architectural and engineering
services.
The Air Force Reserve current mission MILCON funding levels
are inadequate to meet existing infrastructure and needs. The
$485 million current backlog would require over 100 years to
eliminate at current funding levels.
Additional funding is requested for current mission MILCON
to provide adequate facility support to the Air Force Reserve
mission. A listing of 106 recognized requirements is included
in our testimony.
The budget for military construction for the Naval and
Marine Corps Reserve for FY 1999 is for $12.4 million. This
request will support only five relatively small projects. It
does not include any funds for minor construction, and it
includes only minor funding for planning and design of future
projects.
The backlog of military construction, the critical backlog
of essential maintenance and repair of Naval and Marine Corps
Reserve facilities still approaches $423 million. Once again,
the MILCON Naval Reserve request for FY 1999 will not keep pace
with the impact on inflation on these backlogs.
ROA recommends that the Military Construction request to
the Marine Corps and Naval Reserve be approved and that
Congress add authorizations and funding for as many projects as
possible from a list of projects that we have provided. Of the
projects included in the budget request, we particularly wish
to emphasize the $4.1 million for the Marine Corps Reserve
Training Center in Galveston, Texas, and the $3.6 million for
Naval Reserve Administration Headquarters Building in
Minneapolis, Minnesota. We also recommend that funds be
provided for much needed minor construction.
The budget request for military construction for the Army,
Air Force, Naval and Marine Corps Reserves represents the very
minimum required and should be funded. Any additions to the
military construction request for the Reserve components will
be money very well spent. Thank you for giving ROA an
opportunity to testify here today, and I shall be happy to
answer any questions you may have.
[Prepared statement of Steve Anderson follows:]
Offset Folios 3099 to 3125 Insert here

Mr. Packard. Thank you very much, Mr. Anderson. I think we
have been rather close to the ROA for many years and followed
their efforts and attended many of your functions both here and
in our districts.
What criteria did you use and how did you get the
information that would be necessary to list the individual
projects within each branch of the services?
Mr. Anderson. These came from the services.
Mr. Packard. They came from the Pentagon?
Mr. Anderson. Yes, sir, indirectly.
Mr. Packard. And yet most of these, if not all, are not on
the President's budget----
Mr. Anderson. No, sir, regrettably they are not. We always
seem to fall below the line when the priorities are set.
Mr. Packard. Do you believe that these are the top
priorities of the Pentagon that didn't make the President's
budget?
Mr. Anderson. We believe that they are all legitimate
priorities, sir, they all are high priorities. They simply fell
below the allocation.
Mr. Packard. Are they all on there, if you know?
Mr. Anderson. Yes, sir, they are.
Mr. Packard. You've done a lot of work, appreciate it.
Question?
Mr. Hefner. No questions.
Mr. Packard. Thank you, Mr. Anderson, very much, very
complete.
To my knowledge, that completes the witnesses that have
been scheduled. Are there any others that were unscheduled? [No
response.]
With that, ladies and gentlemen, we'll conclude the
hearing. We appreciate all of you being here. The hearing is
adjourned.
[Clerk's note.--The following testimony was submitted for
the record.]

W I T N E S S E S

----------
Page
Anderson, Steve.................................................. 1034
Barnes, Joseph................................................... 1022
Benken, CMSAF E.W................................................ 437
Bereuter, Hon. Doug.............................................. 974
Clem, BG Ralph................................................... 807
Coleman, R.A..................................................... 807
Condon, Katherine................................................ 535
Farr, Hon. Sam................................................... 995
Goodman, J.B..................................................... 311
Gordon, Hon. Bart................................................ 927
Hagan, MCPON John................................................ 437
Hall, SMA R.E.................................................... 437
Helmly, BG James................................................. 535
Hooley, Hon. Darlene............................................. 979
Johnson, Paul.................................................... 535
Lee, SGTMAJ Lewis................................................ 437
Lupia, MG Gene................................................... 807
Lynn, W.J........................................................ 1
Moore, A.B....................................................... 535
Pallone, Hon. Frank, Jr.......................................... 958
Pappas, Hon. Michael............................................. 965
Pirie, R.B....................................................... 723
Raezer, Joyce.................................................... 998
Smith, Hon. Chris................................................ 987
Sodano, Henry.................................................... 1
Squier, CP Michael............................................... 535
Visclosky, Hon. P.J.............................................. 984
Weaver, MG Paul.................................................. 807
Whaley, MG David................................................. 535
Whitfield, Hon. Ed............................................... 921

I N D E X

----------

OVERVIEW

Page
Advance Appropriations...........................................37, 42
Advance Appropriations........................................... 88
Air Guard and Air Reserve........................................26, 27
Alaska--Defense Fuel Support Point Elmendorf AFB................. 230
Army Guard and Reserve........................................... 39
Army National Guard.............................................. 45
Ballistic Missile Defense Organization Kwajalein................. 220
Barracks......................................................... 45
Base Closure and Realignment Schedules........................... 98
Base Realignment and Closure Funding History..................... 77
Base Realignment and Closure.............................17, 25, 32, 43
Base Realignment and Closure..................................... 92
Base Realignment and Closure..................................... 97
Breakage and Design.............................................. 69
California--Beale AFB............................................ 220
California--Camp Pendleton Marine Corps Base..................... 221
California--Edwards AFB.......................................... 221
California--Naval Amphibious Base Coronado....................... 257
California--San Diego Naval Hospital............................. 221
California--Travis AFB........................................... 222
Chairman, Statement of........................................... 1
Chemical Demilitarization........................................ 44
Child Care....................................................... 33
Child Development Centers........................................ 47
Congressional Review Act......................................... 260
Contingency Construction Various................................. 258
Contingency Construction......................................... 78
Davis-Bacon: Costs............................................... 69
Defense Medical Facilities....................................... 220
DOD Environmental Project List................................... 69
DOD Life Safety/Health Project List.............................. 71
DOD Revised Executive Summary of the Base Realignment and Closure
Accounts....................................................... 263
Environmental Levels............................................. 71
Environmental Restoration at BRAC Locations...................... 92
Execution Rates.................................................. 76
Facility Reductions.............................................. 43
Facility Strategic Plan.......................................... 43
Family Housing Construction Improvements......................... 259
Family Housing Construction Reductions...........................37, 43
Family Housing Improvement Fund..............................38, 43, 49
Family Housing Maintenance Costs................................. 49
Family Housing: Annual Maintenance and Repair.................... 48
Family Housing: Average Age of Units............................. 48
Family Housing: Deficit.......................................... 48
Florida--Defense Fuel Support Point Jacksonville--Mayport Annex.. 231
Florida--Defense Fuel Support Point Jacksonville................. 253
Florida--Eglin AFB............................................... 222
Florida--Eglin Auxiliary Field 9................................. 257
Florida--Eglin Auxiliary Field................................... 257
Florida--MacDill AFB............................................. 258
Florida--Pensacola Naval Air Station............................. 223
Foreign Currency Exchange Rates.................................. 68
General Provision 123--Navy...................................... 88
General Provisions--Section 101.................................. 85
General Provisions--New Section 121.............................. 87
General Provisions............................................... 86
General Provisions: Deletions.................................... 86
General Provisions--New Section 122.............................. 87
Georgia--Fort Stewart............................................ 223
Georgia--Moody AFB............................................... 223
Guam--Elementary School.......................................... 256
Guard and Reserve................................................ 97
Housing Allowances............................................... 49
Housing Privatization............................................ 16
Illinois--Great Lakes Naval Station.............................. 224
Impact Aid....................................................... 96
Inflation........................................................ 51
Italy--Sigonella Naval Air Station............................... 229
Kentucky--Fort Campbell.......................................... 258
Line Item Veto...............................................37, 40, 42
Line Item Veto................................................... 85
Lost Design...................................................... 69
Louisiana--Barksdale AFB......................................... 224
Lynn, Prepared Statement of the Honorable William J.............. 8
Lynn Statement of the Honorable William J........................ 4
Maryland--Fort Meade............................................. 257
Medical Projects, Management of.................................. 230
Metric Guide for Federal Construction............................ 181
Military Unaccompanied Housing Improvement Fund.................. 46
Minor Construction Various....................................... 258
Mississippi--Defense Fuel Support Point Camp Shelby.............. 253
Mississippi--Keesler AFB......................................... 224
NATO............................................................. 97
New Mexico--Holloman AFB......................................... 224
New York--U.S. Military Academy.................................. 255
Non-Appropriated Funds........................................... 51
North Carolina--Camp Lejeune..................................... 256
North Carolina--Defense Fuel Support Point Pope AFB.............. 253
North Carolina--Fort Bragg....................................... 225
North Dakota--Grand Forks AFB.................................... 225
Oklahoma--Defense Fuel Support Point Fort Sill................... 254
Overall Funding...........................................16, 23, 27,42
Pennsylvania--Carlisle Barracks.................................. 225
Phase Funding.................................................... 69
Planning and Design--Air Force................................... 60
Planning and Design--Navy........................................ 56
Planning and Design Various...................................... 259
Planning and Design.............................................. 84
Planning and Design--Army........................................ 72
Portugal--Defense Fuel Support Point Lajes Field................. 255
Prioroties.......................................................29, 34
Privatization....................................................22, 38
Public/Private Ventures--Administrative Overhead................. 96
Puerto Rico--Fort Buchanan....................................... 256
Puerto Rico--NS Roosevelt Roads.................................. 258
Quadrennial Defense Review....................................... 40
Real Property Maintenance--Air Force............................. 84
Real Property Maintenance--Army.................................. 84
Real Property Maintenance--Navy.................................. 84
Real Property Maintenance Accounts, OSD Guidance Regarding....... 259
Replacement Value................................................ 48
Reprogramming.................................................... 85
Revised Economic Assumptions..................................... 85
Rossmoor Liquidating Trust Settlement Account.................... 85
Section 6 Schools................................................ 261
Spain--Moron AB.................................................. 255
Summary and Reconciliation....................................... 93
Texas--Fort Hood................................................. 225
Transfer Authority............................................... 39
Transfer Authority............................................... 44
Troop Housing ``1 Plus 1''....................................... 45
Troop Housing: Budget Request.................................... 46
Troop Housing: Deficit........................................... 45
Troop Housing: Inadequacies...................................... 46
United Kingdom--RAF Lakenheath................................... 230
Unobligated Appropriations....................................... 47
Unspecified Minor Construction--Air Force Reserve................82, 83
Unspecified Minor Construction--Air Force........................81, 83
Unspecified Minor Construction--Air National Guard............... 83
Unspecified Minor Construction--Army.............................79, 83
Unspecified Minor Construction--Navy.............................80, 83
Unspecified Minor Construction................................... 76
Virginia--Cheatham Annex......................................... 225
Virginia--Defense Supply Center, Richmond........................ 254
Virginia--Portsmouth Naval Hospital.............................. 227
Washington--Bangor Naval Submarine Base.......................... 228
Washington--Bremerton Naval Hospital............................. 228
Washington--McChord AFB.......................................... 229
Worldwide--Various Locations..................................... 255
Y2K/Millenium Bug................................................ 96

HOUSING PRIVATIZATION

50-Year Contracts..............................................343, 367
Base Realignment and Closure, Use of Funds....................... 369
Budget Tool...................................................... 365
Building Practices............................................... 368
California-Camp Pendleton........................................ 346
Chairman, Statement of........................................... 311
Civilians........................................................ 368
Colorado--Fort Carson: Award Cancellation........................ 394
Colorado--Fort Carson: 50-Year Term of the Proposal.............. 393
Colorado--Fort Carson: Background................................ 391
Colorado--Fort Carson: Economic Analysis......................... 391
Congressional Notifications...................................... 394
Contractor Performance........................................... 367
Cost Comparison Methodology...................................... 363
Energy Savings................................................... 434
Family Housing Improvement Fund, Status of Funds................. 390
Family Housing Privatization, through the Family Housing
Improvement Fund............................................... 424
Family Housing Privatization, Initial Project at Naval Air
Station Corpus Christi, Texas.................................. 387
Family Housing Privatization, Initial Project at Naval Station
Everett, Washington............................................ 387
Family Housing Privatization, Success of......................... 366
Family Housing, Public-Private Ventures in....................... 424
Federal Energy Management Program................................ 434
Fiscal Year 1999 President's Budget Request...................... 433
Goodman, Prepared Statement of the Honorable John B.............. 318
Goodman, Statement of the Honorable John B....................... 313
Government-Wide Performance Plan................................. 364
House Revitalization Support Office.............................. 369
Housing Allowances............................................... 342
Housing Allowances............................................... 343
Housing Allowances............................................... 368
Housing Privatization, Delays in................................. 329
Housing Privatization--Reasons for Implementation................ 344
Housing Referral Office.......................................... 369
Housing Shortages................................................ 349
Housing Strategy, Well Planned Overall........................... 365
Impact Aid....................................................... 369
Implementation................................................... 366
Installation Reluctance.......................................... 369
Long-Term Plan.................................................350, 365
Long-Term Privatization Agreements............................... 340
OMB Scoring...................................................... 347
OMB Scoring...................................................... 369
Overall Funding................................................348, 362
Overseas Housing Authority....................................... 433
Oversight........................................................ 366
Permanent Authorities............................................ 367
Privatization Agreements, Long-Term.............................. 367
Privatization and Impact Aid..................................... 349
Privatization, Savings from...................................... 362
Separate Organizations........................................... 368
Unaccompanied Personnel Housing Privatization.................... 366

QUALITY OF LIFE

Benken, Prepared Statement of Chief Master Sergeant Eric W....... 471
Benken, Statement of Chief Master Sergeant Eric W................ 470
Bingo............................................................ 521
Chairman, Statement of........................................... 437
Child Care....................................................... 522
Family Housing................................................... 486
Family Separation................................................ 529
Hagan, Prepared Statement of Master Chief Petty Officer John..... 450
Hagan, Statement of Master Chief Petty Officer John.............. 448
Hall, Prepared Statement of Sergeant Major Robert E.............. 441
Hall, Statement of Sergeant Major Robert E....................... 439
Housing Privatization............................................ 485
Lee, Prepared Statement of Sergeant Major Lewis G................ 462
Lee, Statement of Sergeant Major Lewis G......................... 460
Medical Care..................................................... 492
Morale and Welfare............................................... 528
Naval Training Command Great Lakes, Illinois..................... 532
Overall Funding.................................................. 529
Privatization.................................................... 531
Quality of Life Survey........................................... 495
Retention........................................................ 481
Training Facilities............................................484, 486

ARMY

Active and Reserve Components Funding............................ 721
Advanced Appropriation....................................595, 603, 706
Alabama--Anniston Army Depot..................................... 614
Alabama--Redstone Arsenal........................................ 615
Arkansas--Pine Bluff Arsenal..................................... 615
Barracks......................................................... 700
Base Realignment and Closure--Savings............................ 591
Base Realignment and Closure..................................... 589
Base Realignment and Closure: Cost of Base Closure............... 614
Belgium.......................................................... 696
Budget Reductions................................................ 574
California-Fort Irwin............................................ 615
Camp Dawson--Unbudgeted Project.................................. 594
Capital Venture Initiative Program............................... 603
Chairman, Statement of........................................... 535
Chemical Demilitarization............................586, 593, 602, 702
Facilities Reduction............................................. 593
Family Housing--New Construction................................. 711
Family Housing--Post Acquisition Construction.................... 711
Family Housing Inventory......................................... 702
Family Housing Privatization..................................... 573
Family Housing Projects, Non-Execution of........................ 587
Florida--SOUTHCOM Headquarters................................... 615
Fort Carson, Colorado..........................................575, 607
FYDP Priorities.................................................. 579
Georgia--Fort Benning............................................ 668
Germany--Schweinfurt............................................. 696
Germany--Wuerzburg............................................... 696
Guard Construction Priorities.................................... 577
Guard Construction............................................... 576
Hawaii--Schofield Barracks....................................... 669
Homeowners Assistance Program.................................... 590
Illinois--Rock Island Arsenal.................................... 669
Indiana--Crane Army Ammunition Activity.......................... 669
Indiana--Newport Army Ammunition Plant........................... 670
International Military Headquarters.............................. 710
Kansas--Fort Leavenworth......................................... 670
Kentucky--Blue Grass Army Depot.................................. 671
Kentucky--Fort Campbell.......................................... 671
Korea--Camp Casey................................................ 697
Korea--Camp Castle............................................... 697
Korea--Camp Humphreys............................................ 697
Korea--Camp Stanley.............................................. 697
Korean Currency Fluctuation...................................... 709
Kwajalein--Kwajalein Atoll....................................... 699
Line Item Veto................................................... 614
Low Budget Submission............................................ 601
Maryland--Aberdeen Proving Ground..............................671, 672
Maryland--Fort Detrick........................................... 672
Military Academy, West Point: Physical Development Center......593, 614
Missouri--Fort Leonard Wood...................................... 673
Moore, Opening Statement of Alma B............................... 537
Moore, Prepared Statement of Alma B.............................. 538
New York--United States Military Academy.......................673, 686
North Carolina--Fort Bragg....................................... 691
Oklahoma--Fort Sill.............................................. 692
Oklahoma--McAlester Army Ammunition Plant........................ 691
Oregon--Umatilla Depot Activity.................................. 693
Overseas Housing Authority....................................... 600
Prepositioning in Europe......................................... 710
Prioritization.................................................578, 585
Privatization--Savings........................................... 588
Privatization--Utilities......................................... 590
Privatization of Utility Systems................................. 710
Privatization.................................................... 587
Quality of Life.................................................. 591
Readiness, Criteria on........................................... 580
Recruitment...................................................... 598
Retention........................................................ 592
Revised FYDP..................................................... 713
Scoring.......................................................... 576
SOUTHCOM Headquarters............................................ 613
State Priorities................................................. 585
Texas--Fort Hood................................................. 693
Texas--Fort Sam Houston.......................................... 693
Total Army Force...............................................596, 602
Utah--Salt Lake City............................................. 712
Utah--Toole Army Depot........................................... 693
Virginia--Charlottesville........................................ 694
Virginia--Fort Eustis............................................ 694
Washington--Fort Lewis........................................... 694
West Virginia--Camp Dawson....................................... 712
Worldwide Various--Host Nation Support........................... 699
Worldwide Various--Minor Construction............................ 699
Worldwide Various--Planning and Design........................... 699

NAVY

Advance Appropriations........................................... 803
Arizona--Marine Corps Air Station Yuma........................... 780
Arizona--Naval Observatory Flagstaff............................. 772
Barracks......................................................... 783
Base Closure, Cost of............................................ 803
Base Realignment and Closure--Environmental Cleanup.............. 754
Base Realignment and Closure Environmental Restoration........... 787
Base Realignment and Closure..................................... 748
Base Realignment and Closure..................................... 748
California--Marine Corps Base Camp Pendleton..................... 780
California--Naval Air Station Lemoore............................ 772
California--Naval Facility San Clemente Island................... 773
California--Naval Submarine Base San Diego....................... 773
California--Naval Weapons Center China Lake...................... 772
California--San Diego: Child Care................................ 768
California--San Diego: Dredging.................................. 769
Chairman, Statement of........................................... 723
Demolition of Facilities......................................... 746
District of Columbia--Commandant, Naval District................. 773
Family Housing--General Reduction................................ 763
Family Housing General Reduction................................. 797
Family Housing Inventory......................................... 784
Family Housing Privatization through the Family Housing
Improvement Fund............................................... 798
Family Housing Privatization..................................... 763
Family Housing, Public/Private Ventures.......................... 785
Florida--Naval Air Station, Key West............................. 774
Future Year Defense Plan......................................... 757
Georgia--Albany.................................................. 785
Great Lakes Naval Training Facility.............................. 746
Greece--Naval Support Activity Souda Bay Crete................... 779
Guam--Naval Activities, Mariana Islands.......................... 780
Hawaii--Fleet and Industrial Supply Center, Pearl Harbor......... 774
Hawaii--Marine Corps Air Station Kaneohe Bay..................... 781
Hawaii--Naval Comms Area Master Station.......................... 776
Hawaii--Naval Station, Pearl Harbor.............................. 774
Hawaii--Naval Submarine Base, Pearl Harbor....................... 774
Hawaii--Navy Public Works Center, Pearl Harbor................... 775
Hawaii--Pearl Harbor Naval Shipyard.............................. 775
Illinois--Naval Training Center, Great Lakes..................... 776
Italy, Naples.................................................... 804
Italy--Naval Support Activity Naples............................. 780
Land Sales Revenues--Availability of............................. 787
Line Item Veto................................................... 768
Line Item Veto................................................... 803
Lost Design...................................................... 759
Louisiana--Naval Air Station, New Orleans........................ 793
Maryland--Naval Surface Warfare Center Division, Indianhead...... 776
Maryland--U.S. Naval Academy, Annapolis.......................... 787
Massachusetts--Fort Devens....................................... 756
Massachusetts--Marine Corps Reserve Center, Fort Devens.......... 797
Minnesota--Naval Reserve Readiness Command, Minneapolis.......... 793
Mississippi--Naval Construction Battalion Center Gulfport........ 776
Napalm........................................................... 770
North Carolina--Marine Corps Air Station Cherry Point............ 782
North Carolina--Marine Corps Air Base Camp Lejeune............... 781
Outsourcing Competitions......................................... 767
Overseas Housing Authority....................................... 803
Pirie, Prepared Statement of the Honorable Robert B., Jr......... 726
Pirie, Statement of the Honorable Robert B., Jr.................. 724
Privatization of Utility Systems................................. 784
Privatization.................................................... 760
Privatization--Child Care Centers................................ 805
Public/Private Ventures.......................................... 753
Retention........................................................ 750
Rhode Island--Naval Education and Training Center, Newport....... 776
Rhode Island--Naval Undersea Warfare Center Division, Newport.... 777
South Carolina--Marine Corps Air Station, Beaufort............... 782
South Carolina--Marine Corps Recruit Depot Parris Island......... 783
South Carolina--Naval Weapons Station, Charleston................ 777
Supplemental Request............................................. 762
Supplemental Request............................................. 797
Texas--Marine Corps Reserve Training Center, Galveston........... 797
United Kingdom--Joint Maritime Communications Center, St. Mawgan. 780
Virginia--Fleet Industrial Supply Center Norfolk................. 778
Virginia--Fleet Training Center, Norfolk......................... 778
Virginia--Naval Air Reserve Center, Norfolk...................... 797
Virginia--Naval Station, Norfolk................................. 778
Virginia--Naval Surface Warfare Center, Dahlgren................. 777
Virginia--Navy Tactical Training Group, Atlantic, Dam Neck....... 778
Virginia--Norfolk Naval Shipyard................................. 779
Washington Navy Yard............................................. 761
Washington--Strategic Weapons Facility, Pacific Bangor........... 779
Worldwide Various--Minor Construction............................ 783
Worldwide Various--Planning and Design........................... 783
Air Guard and Air Reserve........................................ 844
Alabama--Maxwell AFB............................................. 862
Alabama--Maxwell AFB............................................. 917
Alaska--Eielson AFB.............................................. 862
Barracks......................................................... 894
Base Closure, Cost of............................................ 861
Base Realignment and Closure Environmental Restoration........... 913
Base Realignment and Closure..................................... 849
C-17 Depot Facilities............................................ 912
California--Edwards AFB.......................................... 863
California--Vandenberg AFB....................................... 863
Chairman, Statement of........................................... 807
Child Development Center Privatization Efforts................... 912
Coleman, Prepared Statement of the Honorable Rodney A............ 810
Coleman, Statement of the Honorable Rodney A..................... 808
Colorado--Falcon AFB............................................. 863
Colorado--U.S. Air Force Academy................................. 863
Demolition....................................................... 843
District of Columbia--Bolling AFB................................ 864
Dormitory Master Plan............................................ 897
Family Housing General Reduction................................. 859
Family Housing Inventory......................................... 911
Family Housing Privatization..................................... 852
Family Housing Privatization..................................... 859
Florida--Eglin AFB............................................... 864
Florida--MacDill AFB............................................. 865
Georgia--Robins AFB.............................................. 865
Georgia--Robins AFB.............................................. 916
Germany--Spangdahlem............................................. 879
Hawaii--Hickman AFB.............................................. 865
Idaho--Mountain Home AFB......................................... 866
Italy, Aviano and United Kingdom, RAF Lakenheath: Build-Lease.... 913
Italy, Aviano.................................................... 862
Korea............................................................ 842
Korea--Kunsan AB................................................. 880
Korea--Osan AB................................................... 881
Line Item Veto................................................... 857
Line Item Veto................................................... 862
Maryland--Andrews AFB............................................ 866
Michigan--Alpena County Regional Airport......................... 916
Michigan--Selfridge Air National Guard Base...................... 917
Mississippi--Keesler AFB......................................... 871
NATO Precautionary Prefinancing.................................. 914
Nevada--Indian Springs Field..................................... 871
Nevada--Nellis AFB............................................... 872
New Jersey--McGuire AFB.......................................... 872
New Mexico--Kirtland AFB......................................... 872
North Dakota--Grand Forks AFB.................................... 872
North Dakota--Hector Field....................................... 917
Ohio--Springfield ANG Base....................................... 918
Ohio--Wright-Patterson AFB....................................... 872
Ohio--Wright-Patterson AFB....................................... 918
Oklahoma--Tinker AFB............................................. 872
Oklahoma--Vance AFB.............................................. 873
Overseas Housing Authority....................................... 855
Overseas Housing Authority....................................... 861
Planning and Budgeting Process................................... 884
Privatization of Utility Systems................................. 911
Public-Private Ventures in Family Housing........................ 912
South Carolina--Charleston AFB................................... 873
Supplemental Request............................................. 842
Supplemental Request............................................. 858
Texas--Lackland AFB.............................................. 874
Texas--Randolph AFB.............................................. 874
Turkey--Incirlik AB.............................................. 882
United Kingdom--RAF Lakenheath................................... 883
United Kingdom--RAF Mildenhall................................... 883
Washington--Fairchild AFB........................................ 879
Washington--McChord AFB.......................................... 879
Westover AFB..................................................... 856
Wisconsin--Volk Field............................................ 917
Worldwide Various Minor Construction............................. 884
Worldwide Various Planning and Design............................ 884

OUTSIDE WITNESSES

Andersen, Prepared Statement of Stephen P........................ 1037
Andersen, Statement of Stephen P................................. 1034
Barnes, Prepared Statement of Joseph............................. 1024
Barnes, Statement of Joseph...................................... 1022
Bereuter, Statement of the Honorable Doug........................ 974
Bereuter, Statement of the Honorable Doug........................ 976
Chairman, Statement of........................................... 921
Farr, Prepared Statement of the Honorable Sam.................... 997
Farr, Statement of the Honorable Sam............................. 995
Gordon, Prepared Statement of the Honorable Bart................. 953
Gordon, Statement of the Honorable Bart.......................... 927
Hooley, Prepared Statement of the Honorable Darlene.............. 982
Hooley, Statement of the Honorable Darlene....................... 979
Pallone, Prepared Statement of the Honorable Frank, Jr........... 961
Pallone, Statement of the Honorable Frank, Jr.................... 961
Pappas, Prepared Statement of the Honorable Michael.............. 966
Pappas, Statement of the Honorable Michael....................... 965
Raezer, Prepared Statement of Joyce.............................. 1000
Raezer, Statement of Joyce....................................... 998
Smith, Prepared Statement of the Honorable Chris................. 988
Smith, Statement of the Honorable Chris.......................... 987
Viscloskey, Prepared Statement of the Honorable Peter J.......... 985
Viscloskey, Statement of the Honorable Peter J................... 984
Whitfield, Prepared Statement of the Honorable Ed................ 924
Whitfield, Statement of the Honorable Ed......................... 921}