[Senate Hearing 105-275]
[From the U.S. Government Publishing Office]


[DOCID: f:39863]
                                                        S. Hrg. 105-275


 
       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 1998

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                                   on

                               H.R. 2016

    AN ACT MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION FOR THE 
 DEPARTMENT OF DEFENSE FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1998, 
                         AND FOR OTHER PURPOSES

                               __________

         Printed for the use of the Committee on Appropriations






 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

                        U.S. GOVERNMENT PRINTING OFFICE
 39-863 cc                    WASHINGTON : 1998
_______________________________________________________________________

            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402




                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington             DALE BUMPERS, Arkansas
MITCH McCONNELL, Kentucky            FRANK R. LAUTENBERG, New Jersey
CONRAD BURNS, Montana                TOM HARKIN, Iowa
RICHARD C. SHELBY, Alabama           BARBARA A. MIKULSKI, Maryland
JUDD GREGG, New Hampshire            HARRY REID, Nevada
ROBERT F. BENNETT, Utah              HERB KOHL, Wisconsin
BEN NIGHTHORSE CAMPBELL, Colorado    PATTY MURRAY, Washington
LARRY CRAIG, Idaho                   BYRON DORGAN, North Dakota
LAUCH FAIRCLOTH, North Carolina      BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas
                   Steven J. Cortese, Staff Director
                 Lisa Sutherland, Deputy Staff Director
               James H. English, Minority Staff Director
                                 ------                                

                 Subcommittee on Military Construction

                     CONRAD BURNS, Montana Chairman
KAY BAILEY HUTCHISON, Texas          PATTY MURRAY, Washington
LAUCH FAIRCLOTH, North Carolina      HARRY REID, Nevada
LARRY CRAIG, Idaho                   DANIEL K. INOUYE, Hawaii
TED STEVENS, Alaska (ex officio)     ROBERT C. BYRD, West Virginia
                                       (ex officio)

                                 Staff

                              Sid Ashworth
                      C. Richard D'Amato, Minority



                            C O N T E N T S

                              ----------                              

                        Tuesday, March 11, 1997

Department of Defense:
    Department of the Navy.......................................     1
    Department of the Air Force..................................    35

                         Thursday, May 8, 1997

Department of Defense:
    Department of the Army.......................................    61
    Defense agencies:
        U.S. Special Operations Command..........................   101
        Assistant Secretary of Defense for Health Services 
          Operations and Readiness...............................   101
        Defense Logistics Agency.................................   101
        Defense Finance and Accounting Service...................   101



       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 1998

                              ----------                              


                        TUESDAY, MARCH 11, 1997

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:37 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Conrad Burns (chairman) presiding.
    Present: Senators Burns, Stevens, Murray, Reid, and Inouye.

                         DEPARTMENT OF DEFENSE

                         Department of the Navy

STATEMENT OF HON. ROBERT B. PIRIE, JR., ASSISTANT 
            SECRETARY OF THE NAVY, INSTALLATIONS AND 
            ENVIRONMENT
ACCOMPANIED BY:
        MAJ. GEN. JOSEPH STEWART, DEPUTY CHIEF OF STAFF, INSTALLATIONS 
            AND LOGISTICS, U.S. MARINE CORPS
        REAR ADM. DAVID NASH, CHIEF, NAVAL FACILITIES ENGINEERING 
            COMMAND, U.S. NAVY
        CAPT. JOHN BRUNELLI, DEPUTY CHIEF, NAVAL RESERVE, U.S. NAVY

                   OPENING STATEMENT OF CONRAD BURNS

    Senator Burns. Good morning and I will call the committee 
to order. Senator Murray, the ranking member, is on her way.
    The subcommittee this morning will hear testimony on 
military construction, family housing, BRAC, and Reserve 
programs for the Navy and the Air Force. I welcome this morning 
our new ranking member of military construction, Senator Murray 
of Washington State, and thank you for coming. I look forward 
to working with her and her staff as we work our way through 
the 1998 military construction programs.
    We are pleased to hear from the Assistant Secretary of the 
Navy for Installations and Environment, Robert B. Pirie, and we 
welcome you this morning. It is great to have you with us 
again. I certainly thank you for coming.
    Would you please introduce the gentlemen that you brought 
with you this morning.
    Mr. Pirie. Thank you, Mr. Chairman.
    With me this morning are: Rear Adm. Dave Nash, who is the 
Chief of the Naval Facilities Engineering Command; and Maj. 
Gen. Joe Stewart, who is the Deputy Chief of Staff of the 
Marine Corps for Installations and Logistics; and Capt. John 
Brunelli, who is the Deputy Chief of the Naval Reserve.
    Senator Burns. We thank you and want to commend you for 
your commitment to the quality of life of our sailors and our 
marines, as well as their families. We recognize the Navy has a 
significant challenge to maintain the momentum in an area that 
we want to work with you to achieve those objectives.
    I think our missions have changed in the last 10 years. We 
continue to appropriate and be concerned with the quality of 
life of our marines and sailors. We know that they are probably 
the most mobile of all of our military troops and we want to 
make sure that they have everything that they need in order to 
make a really fighting outfit like they are known to be.
    We have asked you to address the fiscal year of 1998, the 
construction request for Navy housing, a portion of the base 
closure account, and the request for the Navy reserves. So if 
you have your opening statement, and I would tell you that your 
entire statement will be made part of the record, and thank you 
for coming this morning. You may proceed.
    Mr. Pirie. Thank you, Mr. Chairman. With your permission, I 
will just hit some of the highlights.
    Senator Reid. I wonder if I could----
    Senator Burns. Oh, I am sorry. I better do this. I better 
recognize my ranking member this morning. Senator Murray, I am 
sorry.

                       STATEMENT OF PATTY MURRAY

    Senator Murray. Thank you, Mr. Chairman. I really 
appreciate your arranging this early hearing on our Navy and 
Air Force military construction, BRAC, and housing programs, 
and I am very pleased to serve as your ranking member on this 
very important subcommittee, and I look forward to working with 
you, Mr. Chairman, and all of the committee in much the same 
fashion as my predecessor Senator Reid, who is here with us 
today, worked so successfully with you last year.
    The programs the subcommittee oversees are crucial, 
focusing as they do on the quality of life of our uniformed 
personnel here and abroad and on the vital infrastructure that 
allows our forces to operate with assurance as the world's sole 
superpower. These programs allow in the long run to defend our 
interests and those of our allies and friends across an 
increasingly confusing and complicated world scene.
    I recall that this committee was able to mark up and report 
its annual bills out, get them through the Senate and the 
Congress and to the President's desk very early in the process. 
Even though the committee added some $617 million to the 
request last year, the President wisely signed it. It was 
overwhelmingly supported in the Senate, much of that due to 
your excellent work, Mr. Chairman, in putting it together. I 
hope that we can repeat that performance this year.
    Mr. Chairman, judging from the President's request, it 
looks like we are being invited to rewrite much of the budget 
submitted. The request for our Guard and Reserve program is, as 
in the past several years, largely inadequate and perhaps 
deliberately so. For the Guard and Reserve we appropriated $411 
million last year. The request for fiscal year 1998 is for less 
than $173 million. So either the administration is preparing to 
put the Guard and Reserve out of business or, more likely, it 
expects us to add to the budget to fund it appropriately, just 
as the committee did last year.
    I have no doubt that we will together do just that. We 
admonished the administration last year not to repeat the 
budget history of underfunding the Guard and Reserves, 
anticipating a huge plus-up by the committee, but it seems to 
have done just that.
    First, the overall request for the Guard and Reserve is 
two-thirds less than the amount we appropriated for fiscal year 
1997. In order to match last year's amount, we would have to 
add nearly $239 million to the budget.
    Second, Mr. Chairman, the budget for housing has been 
reduced by some 13 percent from last year's appropriated 
amount. This is the heart of quality of life and I am not 
certain that we can leave it at the requested level. I know 
that the Department is attempting to put into place a new 
public-private housing initiative, the Department of Defense 
family housing improvement fund, which allows the private 
sector to participate in our housing programs. I fully support 
that initiative, and indeed one of the first of two of these 
programs has just been announced at a naval base at Everett, 
WA.
    But this program is in its infancy and I am not certain 
there is any justification for the substantial reduction in the 
budget for family housing.
    Third, Mr. Chairman, I have looked through this budget and 
I have found that the only category which actually experiences 
an increase over last year is for NATO infrastructure. The 
request is slightly over last year's amount, but is greater 
than the entire amount requested for the Guard and Reserves. I 
have to ask, what is wrong with this picture?
    We gut the American National Guard and Reserve and plus-up 
the amounts for allied construction in Europe. And I thought 
the cold war was over.
    Having said all this, Mr. Chairman, I warmly greet Messrs. 
Pirie and Coleman, Assistant Secretaries of the Navy and the 
Air Force. Each of them have been most helpful to this 
committee in the past and I know that they are concerned about 
the budget problems that I have just cited, and I know that 
whatever can be done to correct them, each of us will do so.
    So I welcome all of you back before us and, Mr. Chairman, I 
look forward to working with you this year.
    Senator Burns. Thank you, Senator Murray.
    Now my good friend from Nevada in this matter, and we have 
been through these wars before and plan to go through them 
again. Senator Reid from Nevada.

                        STATEMENT OF HARRY REID

    Senator Reid. Chairman Burns, thank you very much.
    The reason I wanted to drop by today is to express publicly 
how much I enjoyed working with Chairman Burns. This bill on 
two separate occasions has been brought through the Congress by 
Senator Burns and, hopefully with my assistance, we have been 
able to get the bill to the President. Our military 
construction bills were the earliest and first signed bills of 
any of the appropriations bills these past 2 years. Most of 
that is due to Chairman Burns' ability to work with his 
colleagues and those on the other side of the aisle.
    I just want to say to Senator Burns how much I appreciate 
having had the opportunity to work with him.
    I say to my colleague Senator Murray, she has done a lot of 
the same things that I have done. She has had the experience of 
working with the legislative branch, which is a difficult bill, 
and now she has the opportunity to work on this bill. I think 
these bills are both extremely important.
    I want to reiterate what Senator Burns has said about how 
the Guard and Reserve has been neglected. Some day we are going 
to just follow the submission of the President and then see 
what happens. We should probably do that except it would be, in 
my opinion, too drastic. It is just unfair to the Guard and 
Reserve.
    Especially, I do not think the American public would 
understand when, if you look through the budget, you find the 
only category that maintains the same level of funding this 
year is for NATO infrastructure. It is a little hard for me to 
justify that we are going to spend more money for NATO 
infrastructure and have these huge cuts for Guard and Reserve.
    So I would hope, Mr. Chairman, that with your attention you 
will again direct money to the Guard and Reserve Forces, which 
in my opinion are a very key component of making our military 
the mightiest in the world.
    I look forward to working with you and Senator Murray in 
this Congress and the Congresses to come.
    Senator Burns. Thank you very much and thanks for the work 
of both of you. It really is a pleasure to work with Senator 
Reid and Senator Murray. I am sure we will get it to the 
President first this time too, so we can be on vacation when 
everybody else is still working. We will do that.
    I have a statement from Senator Craig that I would like to 
put in the record at this time.
    Mr. Secretary, thank you.
    [The statement follows:]

              Prepared Statement of Senator Larry E. Craig

    Mr. Chairman, it is indeed a pleasure to be a member of the 
Appropriations Committee and on this very important Subcommittee for 
Military Construction. Although military construction represents a 
small portion of the overall defense budget, it is the only portion 
that touches everyone within the service and their families.
    Every type of facility and installation contributes to the quality 
of life. High quality installations contribute to personnel and family 
readiness, which translates directly to combat capability. That is why 
the success of your installations is just as important as your next 
generation of new technology.
    Mr. Pirie, I welcome you and note the Navy's ongoing efforts to 
replace many antiquated facilities with a single composite facility at 
specific installations. Such a composite engineering and support 
facility is currently being constructed at the Naval Surface Warfare 
Center at Bayview, Idaho. This effort will save future moneys by 
reduced utilities and maintenance costs, necessary to operate the older 
facilities.
    Likewise, Mr. Coleman, I welcome you and the efforts the Air Force 
has put forward in developing the new enhanced training range in Idaho. 
We are working closely with your Air Force team, the Bureau of Land 
Management, our communities and environmentalists to ensure that the 
future range becomes a valuable combat resource and a good neighbor to 
the community. I believe that ranges can rival the importance of as our 
next air superiority fighter, and high quality ranges can only be 
accomplished with solid planning and programming.
    With the completion of the range, Mt. Home Air Force Base in Idaho, 
which the Air Force considers one of the most successful composite 
wings today, will be the model installation and wing for the Air Force 
of the 21st century.
    Mr. Chairman, thank you for holding this hearing, and I look 
forward to working with you to provide funding adequate for high 
quality installations, necessary housing and environmental protection 
for our lands. This the least a grateful Nation can do for our service 
personnel and their families.

                      statement of robert b. pirie

    Mr. Pirie. Thanks. Good morning, Mr. Chairman, Senator 
Murray, and Senator Reid. I am really very glad to be here this 
morning to present the Navy's military construction, family 
housing, and base closure implementation program for----
    Senator Burns. Pull the microphone up.
    Mr. Pirie [continuing]. For fiscal 1998. Is that better?
    Senator Burns. Yes.

                           statement summary

    Mr. Pirie. Just to summarize some of the main points in my 
formal testimony, our fiscal year 1998 Milcon, family housing, 
and BRAC request runs about $2.8 billion in total. That is down 
some $800 million from the fiscal year 1997 level of $3.6 
billion because in the environment of downsizing, fiscal 
stringency, and the need to beef up our investment accounts. 
Our judgment is that this is about all we can afford in this 
area.
    There is enormous and continuing pressure to reduce overall 
infrastructure costs and to increase our force modernization.
    The fiscal year 1998 Milcon budget is down some $200 
million from fiscal year 1997, and that is something that I am 
not particularly happy about, but, in fact, we could not 
sustain, given the other pressures within our budget, the 
fiscal year 1997 level. We focus projects on those that support 
military readiness needs, and that includes quality of life. 
About one-third of the fiscal year 1998-99 budget is for BQ 
construction. It will provide an additional 5,676 spaces and 
replace some 1,723 old substandard spaces in BQ's.
    All permanent party BQ's in the Navy that are built new 
will be of the one plus one standard. The marines will replace 
their oldest and worst facilities using an alternative called 
two plus zero, which in our judgment is the fastest and best 
way to get the most marines into some acceptable dormitories.
    The fiscal year 1998 family housing budget is down about 
$200 million from fiscal year 1997. The primary reduction is in 
the area of new construction, and this is a result of a 
decision we made to scale back the acquisition of houses that 
the Government would own and operate. We looked in depth at the 
cost of housing our sailors and marines in the private sector 
with housing allowances versus in Government-owned and operated 
homes. We have concluded that building and operating Government 
houses is not a good deal either for the taxpayer or the 
average sailor or marine.
    It costs about $15,000 a year to operate and maintain a 
Government-owned house on the average. We pay our members not 
in Government housing about $8,000 a year in allowances, to 
which they add about $2,000 a year on the average from their 
own pockets to get decent housing.
    Our research indicates that in many locations the private 
sector can provide appropriate housing at a price much closer 
to the allowance figure than to what it costs for a Government 
house. We think it is a good idea at this point to go slow on 
Government-provided housing and to explore the possibilities 
open to us in public-private ventures and in enhanced 
allowances.
    Last year's BAQ increase and VHA floor are an enormous help 
in this area, and this was something we are very grateful to 
the Congress for providing. The Office of the Secretary of 
Defense is now preparing a report and recommendations to remedy 
some of the known defects in the current allowance indexing 
methodology.
    The Navy is making public-private ventures a reality. We 
had a groundbreaking last December for 404 homes in the Corpus 
Christi, TX, area. Occupancy will begin this November.
    We provided congressional notification last month for 185 
homes in Everett, WA. The Navy is a limited partner in this 
endeavor and contributing $5.9 million. The general partner 
contributes about $12.9 million. We expect to sign that 
agreement this month and have occupancy of these houses in May 
1998.
    Both projects give sailors and marines preference for 
renting and a rent reduction of approximately $100 a month 
under comparable homes in the locale.

                      base closure and realignment

    With respect to base closure and realignment, the fiscal 
year 1998 BRAC budget is down about $400 million from fiscal 
year 1997, primarily because of lower BRAC Milcon needs. By the 
end of the year 2000 we will have invested $10 billion in the 
implementation of four rounds of base closure. By that time we 
will already have saved $15 billion, for a net savings of $5 
billion, and we will save $2.6 billion a year every year 
thereafter.
    We are now on the down slope of BRAC implementation. We 
have already completed 66 percent of all mandated closures and 
realignments. Thirty-one more are scheduled this year, 
including big ones like Long Beach Naval Shipyard and the Naval 
Air Station at Alameda.
    Fiscal year 1998 is the last year with significant BRAC 
construction requirements. Our BRAC budget is transitioning 
from a closure and realignment phase to the completion of 
environmental cleanup and the disposition of the property. We 
are, of course, committed to the cleanup of all BRAC property, 
but we give priority in funding to sites with near-term reuse 
potential.
    The general area of BRAC this year has seen the 
privatization of the Naval Air Warfare Center in Indianapolis 
and the Naval Ordnance Station in Louisville. These actions 
have saved the taxpayer money, saved jobs in the area, and 
opened the possibility of continued productive use of the 
installations under the aegis of local redevelopment 
authorities.
    We are pleased with this result because it shows that we 
can, working together with communities, get past the trauma of 
BRAC rapidly.
    We are pursuing a number of initiatives to reduce 
infrastructure support costs, including outsourcing, 
privatization, and regionalization of functions. Details of 
these activities are provided in my full testimony, Mr. 
Chairman, and that concludes my summary.
    [The statement follows:]

               Prepared Statement of Robert B. Pirie, Jr.

    Good day, Mr. Chairman and members of the Committee. I am Robert B. 
Pirie, Jr., Assistant Secretary of the Navy for Installations and 
Environment. I appreciate the opportunity to speak to you today on the 
Department of the Navy's installations and facilities programs.
    My statement will cover a number of areas:
  --The need for quality Naval facilities;
  --The Department of the Navy's overall infrastructure budget;
  --Program highlights of our base closure implementation, military 
        construction, and family housing programs;
  --Meeting the housing challenge; and
  --The need for further infrastructure efficiencies.
              the need for quality naval shore facilities
Naval Forces--Defending U.S. National Security
    Naval forces provide unique capabilities in defending our national 
security interests around the world. Able to provide forward presence, 
power projection, sea control, maritime superiority, strategic 
deterrence, and strategic sealift, the Navy and Marine Corps team 
continues to conduct operations around the world, 24 hours a day, every 
day of the year. On any given day, roughly 30 percent of the Navy and 
Marine Corps operating force, consisting of more than 50,000 men and 
women aboard 100 ships, is deployed throughout the world. Last year, 
Navy ships made over 1,600 port visits to 99 nations and conducted 160 
major multinational and bilateral exercises with 64 different 
countries. Naval operations ranged from providing humanitarian care in 
Bosnia, to promoting regional stability and freedom of navigation in 
the Straits of Formosa between China and Taiwan, to suppressing air 
defenses in the skies over Iraq.
    Well-trained, highly motivated people are our most important asset 
in maintaining this military capability. We need to attract, properly 
train, outfit, and retain top caliber people from across the United 
States if we expect to maintain a fully responsive military capability 
to support our national goals.
Shore Facilities--the Gateway to the Sea
    Our shore facilities are the gateway to the sea. They are the home 
base for maintaining the readiness of our Naval forces. They provide 
the daily ``at work,'' ``at home,'' and ``at play'' locations for our 
Sailors and Marines when they are not at sea. Whether it is piers that 
provide berthing, electrical power, and support facilities for ships in 
homeport; hangars that shelter aircraft; training facilities and ranges 
where Sailors and Marines hone their war fighting skills; shipyards 
that provide the industrial capability for ship repairs; or the housing 
that our Sailors, Marines and their families call home--all are a 
critical ingredient in our ability to deploy Naval forces when needed.
    I know this Committee understands how high quality shore facilities 
bring out the best in our people. Our mutual goal is to provide quality 
shore facilities to support the current and future readiness of U. S. 
Naval forces.
Investing in the Shore Infrastructure
    Our facilities are old. Nearly half were constructed between 1931 
and 1950. We are devoting about 1.7 percent of current plant value to 
real property maintenance. The Center for Naval Analyses concluded that 
we must invest about 2.0 percent of current plant value each year to 
maintain the present condition of our facilities. Often, our repair and 
maintenance choices are limited to short-term cash flow alternatives 
rather than long-term investment strategies. Our military construction 
and family housing budget represent only 2.3 percent of the Department 
of the Navy fiscal year 1998 budget. The current critical backlog of 
maintenance and repair (BMAR) is $3.0 billion, and is projected to grow 
to $3.7 billion in fiscal year 1998.
    Unfortunately, we cannot afford to invest more in our shore 
infrastructure. Budget constraints, the need to modernize the remaining 
force structure for the future, existing pockets of excess shore 
capacity, and the potential for additional downsizing limit larger 
infrastructure investments. We have been able to invest only limited 
funds to support new and expanding mission needs.
    While I would like to see us investing more money in our 
facilities, our situation in the facilities business is certainly no 
worse than that of other parts of the Department of the Navy. As you 
know, it is very important that we recapitalize our force structure. I 
strongly support this priority.
                     infrastructure budget request
Facilities Investment Strategy
    The Secretary of the Navy must carefully balance many competing 
demands. Our shore infrastructure investment strategy consists of:
  --Implementing the decisions of the four rounds of Defense Base 
        Closures and Realignments (BRAC) to attain the expected savings 
        and efficiencies;
  --Investing in military construction projects that support readiness;
  --Enhancing the quality of life of our Sailors, Marines and their 
        families;
  --``Holding the line'' on Base Operations Support (BOS) and 
        Maintenance of Real Property (MRP) funds; and
  --Pursuing further shore infrastructure efficiencies.
Fiscal year 1998-99 Infrastructure Budget Request
    This Subcommittee, and your colleagues in Congress, supported 
significant increases last year. The $9.6 billion added to the 
Department of Defense's topline budget included $209 million in 
Military Construction, Navy, and $96 million in Family Housing, Navy, 
above the President's fiscal year 1997 budget request. We are grateful 
for the additional funds which will allow us to build important new 
projects such as the BEQ at Marine Corps Air Station Kaneohe Bay, 
Hawaii, and to renovate existing facilities such as the pier electrical 
upgrades at Naval Station Norfolk, Virginia.
    However, affordability and other budget priorities prevented the 
Department of the Navy from sustaining that higher level of funding 
into the fiscal year 1998 and fiscal year 1999 budget for military 
construction, and family housing. Our fiscal year 1998 military 
construction budget request of $554 million is on par with our fiscal 
year 1997 budget request of $536 million. Our $1,255 million family 
housing budget request maintains our focus on fixing what we own, but 
reduces new construction. We have reduced our base closure budget 
request, not because of affordability, but as a result of having 
completed much of the construction requirements needed to relocate 
forces. Our BRAC budget is now transitioning from one with large 
construction and relocation costs to one that is focused on 
environmental cleanup and disposal of property.

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                Fiscal year             
                                 ---------------------------------------
                                    1996      1997      1998      1999  
------------------------------------------------------------------------
Military construction...........       569       745       554       491
Family housing..................     1,573     1,514     1,255     1,272
Base closure....................     2,496     1,375       991       605
BOS/MRP.........................     4,344     4,091     4,015     4,028
                                 ---------------------------------------
      Total.....................     8,982     7,725     6,815     6,396
------------------------------------------------------------------------

    I will now discuss our budget request in greater detail.
                          brac implementation
Implementation of the Four Rounds of BRAC
    The base closure process is a challenging one for the Department of 
the Navy and for the many communities who have hosted our ships, 
aircraft, Sailors and Marines for so many years. Yet it is one we must 
pursue if we are to properly size our shore infrastructure to reflect 
the smaller force structure of the Post Cold War era. As you know, 
excess capacity in our shore facilities creates a significant financial 
drain on the Department of the Navy's budget.
    We are implementing four rounds of base closure as directed by law, 
the first was in 1988 under the Defense Authorization Amendments and 
Base Closure and Realignment Act of 1988 (Public Law 100-526), and 
three additional rounds in 1991, 1993, and 1995, under the Defense Base 
Closure and Realignment Act of 1990 (Public Law 101-510). As a result 
of these decisions, we are implementing a total of 178 actions 
consisting of 46 major closures, 89 minor closures, and 43 
realignments.
BRAC Implementation Strategy
    Our implementation strategy focuses first on achieving operational 
closure at each military installation selected for closure as quickly 
as possible. By that, I mean all mission equipment and military 
personnel (with the exception of a small caretaker cadre) have been 
disbanded or relocated to the ``receiving'' location and the military 
mission has ceased. Second, we seek to expeditiously cleanup and 
dispose of BRAC property to support local communities in their 
conversion and redevelopment efforts.
    Rapid operational closure benefits both the Navy and the base 
closure communities. The faster we close a base, the sooner we attain 
savings. Operational closure substantially reduces the costs for 
utilities, fire and police protection services, supplies, waste 
handling and disposal, administrative support personnel, and a host of 
other landlord functions. The savings generated by not having to 
operate and maintain this excess infrastructure are significant. Annual 
savings first exceeded annual implementation costs in fiscal year 1996, 
and total savings will exceed total costs in fiscal year 1998. By the 
end of fiscal year 2001, when all BRAC actions must be completed, we 
will have invested $10 billion and saved $15 billion, for a net savings 
of $5 billion. We expect savings of $2.6 billion per year thereafter. 
We are counting on these savings to recapitalize our force structure in 
the future.
    Rapid operational closure also provides base closure communities 
with early opportunities for economic redevelopment. Effective 
community involvement and planning are central to conversion and 
redevelopment of our bases and to the retention of a skilled labor 
force in the base closure communities. Our conversion and redevelopment 
efforts are guided by President Clinton's Five-Point Plan for 
Revitalizing Base Closure Communities: Job-centered property disposal 
as an economic incentive; Fast track environmental cleanup to 
facilitate reuse; Base Transition Coordinators to reduce red-tape; 
Ready access to redevelopment assistance; and Larger redevelopment 
planning grants.
                       brac implementation status
    The Department of the Navy has completed two-thirds (118 of the 
total 178) of the closures and realignments required under the 4 BRAC 
rounds. We plan to complete 31 more BRAC actions this year, 14 in 
fiscal year 1998, 12 in fiscal year 1999, two in fiscal year 2000, and 
one in fiscal year 2001. Major closures planned in fiscal year 1997 are 
Naval Air Facility Adak, Alaska; Naval Air Station Alameda, California; 
Long Beach Naval Shipyard, California; Naval Training Center San Diego, 
California; and Naval Station Treasure Island, California.
BRAC Budget
    The Navy's BRAC implementation budget request totals $991 million 
in fiscal year 1998, and $605 million in fiscal year 1999, compared to 
$1.4 billion in fiscal year 1997. There are 19 BRAC 93 construction 
projects and 15 BRAC 95 construction projects in fiscal year 1998. The 
BRAC 93 projects support closures of Naval Air Station Barbers Point, 
Hawaii, and Marine Corps Air Station El Toro, California. The BRAC 95 
actions include the relocation of Naval Sea Systems Command 
headquarters, the closure of Naval Air Station Cecil Field, Florida and 
the realignment of Navy assets from Naval Air Station Miramar, 
California.

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                     Fiscal year        
                                           -----------------------------
                                              1997      1998      1999  
------------------------------------------------------------------------
BRAC II...................................        88       117        59
BRAC III..................................       834       485       277
BRAC IV...................................       452       389       269
                                           -----------------------------
      Total...............................     1,374       991       605
------------------------------------------------------------------------

    The decline in the Navy's BRAC budget occurs because the Navy is 
``over the hump'' on construction and relocation requirements. Fiscal 
year 1996 was the Navy's single largest year for the construction and 
O&M funds that were required to relocate forces. Fiscal year 1996 and 
fiscal year 1997 are our largest years for completing major closures 
and realignments. Our emphasis is now shifting from closure and 
realignment to environmental cleanup and property disposal.
    We are proud of our execution performance. Through the end of 
fiscal year 1996, we had obligated 93.8 percent of all BRAC funds 
allocated.
    While our execution performance has been very good, it is a 
constant struggle to balance construction plans, realignment schedules, 
and environmental cleanup priorities. The BRAC account has allowed a 
great deal of execution flexibility, due to the statutory six-year BRAC 
implementation deadline. However, last year report language was added 
requiring a Congressional reprogramming action if the award of a 
construction project slipped and required funds in the following fiscal 
year. This makes the BRAC account more restrictive than current 
reprogramming standards for military construction accounts and 
complicates BRAC execution and management. I ask that the Committee 
review this area with the goal of applying the current military 
construction reprogramming standards to the BRAC process.
Privatization of Louisville and Indianapolis Facilities
    We are particularly proud of our successful efforts last year to 
privatize the former Naval Ordnance Station Louisville, Kentucky, 
(NOSL), and the Naval Air Warfare Center Indianapolis, Indiana, (NAWC). 
NOSL was an engineering and industrial organization of approximately 
1,600 employees and had a plant value of $274 million, while NAWC 
Indianapolis was an engineering research and development activity with 
approximately 1,800 employees and a plant value of $147 million. The 
BRAC 95 Commission recommended two options: close the facilities and 
move the work to other government activities or privatize the work in 
place.
    The Navy initially pursued both options, but soon realized that 
privatizing in place could eliminate excess infrastructure and support 
the communities' reuse goals. Instead of simply turning the Navy's work 
over to a private company, ``privatization'' would provide private 
industry with the facilities, equipment, workload, and most 
importantly, the skilled people to perform the work in support of the 
Fleet.
    Privatization in place had never been done in the Department of 
Defense. We relied on the skill, dedication, and persuasion of a team 
from the Navy, Members of Congress and their staffs, the Environmental 
Protection Agency, State and city officials, the Local Redevelopment 
Authorities, and private industry to craft an agreement that was 
acceptable to all parties. The agreement was implemented just 10 months 
after the BRAC 95 decision was final for NAWC Louisville, and after 
only 15 months for NOSL.
Supporting Economic Redevelopment
    In implementing BRAC closures, we want to convey property to 
communities expeditiously to advance their economic recovery--but not 
so quickly that we fail to protect the public from contaminated soil, 
air and water, lead-based paint, and friable asbestos. We are also 
required by law to consider the impact of property disposal on the 
protection of wetlands, the coastal zone, endangered species, and 
archeological and historic sites. A final, approved reuse plan from the 
Local Redevelopment Authority (LRA) is critical to the process.
    This process takes time, and in many ways, is far more challenging 
than the closure and relocation actions. We can provide interim leases 
of base closure property to promote redevelopment, but as stewards of 
Federal land, we are required first to prepare an environmental 
document known as the ``Finding of Suitability to Lease'' (FOSL). To 
accelerate this process, we have been working with LRA's to identify 
the most attractive leasing prospects and to prepare the required 
documentation ahead of time. We also prepare the required ``Finding of 
Suitability to Transfer'' (FOST) as soon as the property is 
environmentally suitable to convey title. We have conveyed 7,835 acres 
of land to local LRA's and other federal agencies at 27 activities to 
date.

------------------------------------------------------------------------
                                                           FOST    FOSL 
------------------------------------------------------------------------
Completed...............................................      25     533
Acres covered...........................................   7,234   4,696
Projected in fiscal year 1997:                                          
    Completed...........................................     134     332
    Acres covered.......................................   5,417   5,038
------------------------------------------------------------------------

Proceeding with Environmental Cleanup
    Several communities have expressed concerns about the pace at which 
the Navy is able to cleanup contamination on closing bases. Navy has 
occupied these Bases for 50 to 100 years or more, many of them as 
industrial areas. We now know that disposal practices that were 
acceptable in the past are no longer practiced because of the 
environmental contamination they leave behind. However, environmental 
problems posing an imminent risk to health and human life are rare, and 
in fact, we give these problems immediate priority in our cleanup 
efforts. Cleaning up these sites will be expensive--an estimated cost 
of $2.5 billion--and time consuming.
    We have established BRAC cleanup teams comprised of Navy personnel 
and environmental regulators to assess, prioritize, and expeditiously 
perform the necessary cleanup. We are working with regulators to tie 
cleanup standards to the nature of the reuse. This will speed cleanup, 
save money, and still protect human health and the environment. We have 
established detachments of former shipyard workers and trained them to 
do the necessary cleanup work. We have put into place both national and 
local contracting authority to perform the work.
    Nevertheless, budget constraints limit our ability to accomplish 
the cleanups which do not pose an imminent threat but still must be 
performed before the property can be conveyed. There is simply not 
enough money to clean up every base at once. Our goal is to target 
cleanup dollars on those sites that have the most immediate and 
definitive prospect for reuse. Those sites that are supported by 
approved reuse plans with feasible reuse will get top priority for 
cleanup funds. Our intent is to not let cleanup get in the way of 
reuse. We are also working with EPA and state regulators to use the new 
Section 334 Amendments to CERCLA, which permits the conveyance of 
property before the cleanup has been completed.
    The Department of Defense has categorized the environmental 
condition of property under the Comprehensive Environmental Response 
Facilitation Act (CERFA) to provide a convenient breakout of the 
current status of our BRAC property. CERFA categories 1-4 properties 
are environmentally suitable for transfer. CERFA category 5 indicates 
analysis is underway. CERFA category 6 includes property where the 
actual cleanup is underway. CERFA category 7 property has not yet been 
completely evaluated.

                                                                 Acres  
        As of 30 Sept. 96                                     (All BRAC)

CERFA Cat 1-4.................................................   107,833
CERFA Cat 5...................................................    11,260
CERFA Cat 6...................................................     7,572
CERFA Cat 7...................................................    39,194
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................   165,859
                         military construction
Military Construction in Support of Readiness
    The Honorable William S. Cohen, the new Secretary of Defense, has 
stated that maintaining readiness will continue to be the number one 
priority of the Department of Defense. Our military construction budget 
request, comprised of Military Construction, Navy, and Military 
Construction, Navy Reserve appropriations, has been structured to 
maintain Naval readiness into the future. These two appropriations 
provide the necessary investment funds to construct new and replacement 
facilities for the active and reserve forces of the Navy and Marine 
Corps.

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                        Fiscal year     
                                                 -----------------------
                                                     1998        1999   
------------------------------------------------------------------------
MC,N............................................         540         475
MC,NR...........................................          14          15
                                                 -----------------------
      Total.....................................         554         490
------------------------------------------------------------------------

    Military planners view readiness in terms of ``force,'' 
``capability,'' and ``mobility.'' ``Force readiness'' provides well 
trained, highly motivated personnel that are needed to carry out a 
particular mission. ``Capability readiness'' refers to the equipment 
needed to perform the mission. ``Mobility readiness'' provides the 
flexibility to perform the mission wherever and whenever we can take 
advantage of our Naval strengths and the adversaries' weaknesses. Of 
course, we must comply with all environmental and safety requirements.
    It is useful to view the military construction program in this 
manner, especially since Fleet and Fleet Marine Force operators have a 
decisive input in establishing military construction project 
priorities. Force Readiness provides the proper facilities to induct 
and train new recruits, to enhance the quality of life necessary to 
attract and retain the best and brightest Sailors and Marines, and to 
provide continuous skill training and educational opportunities for 
their professional development.
    Force Readiness projects typically consist of training buildings, 
ranges, reserve centers, barracks, other personnel support and quality 
of life facilities. Our fiscal year 1998 military construction budget 
request includes a total of $162 million Navy, $64 million Marine 
Corps, and $11 million Navy Reserve for force readiness projects. 
Specific examples of such projects include an $8.7 million enlisted 
dining facility at Marine Corps Air Station, Miramar, California; a 
$25.0 million barracks at Administrative Support Center, Bahrain; a 
$4.4 million child development center at Naval Shipyard Puget Sound, 
Washington; and a $6 million Marine Corps Reserve Training Center at 
Naval Weapons Station, Seal Beach, California.
    Operational readiness projects include research, development and 
testing facilities that allow us to design, engineer, develop, test and 
sustain the technological advantage in weapons systems and platforms 
that we now enjoy over our adversaries. It also includes maintenance 
hangers, repair shops, utility systems upgrades, and pier replacements. 
Our fiscal year 1998 budget request includes a total of $104 million 
Navy, and $40 million Marine Corps for operational readiness projects. 
Specific examples include a $15.3 million Nuclear Aircraft Carrier 
Maintenance Facility at Naval Air Station, North Island, California; a 
$21.9 million River Flood Control Project on the Santa Margarita River 
at Marine Corps Base, Camp Pendleton, California; an $8.9 million 
Undersea Weapons Systems Laboratory at Naval Underwater Systems Center 
at Newport, Rhode Island; and a $1.5 million Hangar Alteration and 
Repair at Naval Air Reserve Center, Norfolk, Virginia.
    Mobilization readiness projects supply the proper facilities to 
store war reserve stocks, outload and embark forces and material, and 
sustain our deployed forces. Typical projects include ammunition 
wharves and supply piers, facilities at forward operating bases, 
warehouses and munitions magazines, air and port terminals. Our fiscal 
year 1998 budget request includes a total of $48 million Navy and $10 
million Marine Corps for mobilization readiness projects. Specific 
examples include a $14.2 million Air Logistics Terminal at Naval Air 
Station Norfolk, Virginia; and $2.7 million Tactical Support Van Pads 
at Marine Corps Air Station New River, North Carolina.
    Compliance projects ensure that our actions meet all Federal, 
state, and local environmental standards, allowing us continued access 
to and use of the sea, land and air for training and operational 
missions. We must similarly comply with safety and health regulations 
to ensure the well being of our military and civilian personnel. 
Typical compliance projects include boiler plant modifications, 
hazardous waste treatment plants, explosive handling aprons, and 
municipal sewer connections. Our fiscal year 1998 budget request 
includes a total of $56 million Navy, and $3 million Marine Corps for 
compliance projects. Specific examples include a $25.0 million Oily 
Waste Collection System at Naval Station Pearl Harbor, Hawaii; and an 
$11.0 million Explosive Safety Ordnance Facility at Naval Air Facility 
El Centro, California.
    Our fiscal year 1998 budget request also includes planning and 
design funds ($42 million in Military Construction, Navy; $2.5 million 
Military Construction, Naval Reserve), and unspecified minor 
construction funds ($10 million for Military Construction, Navy; $0.6 
million for Military Construction Naval Reserve).
    We continue to invest in replacement and modernization projects. 
One-third of the fiscal year 1998 Navy projects and more than three-
quarters of the Marine Corps projects are for replacement and 
modernization of existing facilities.
                             family housing
Quality of Life
    Quality of life programs include military pay and allowances, 
housing, medical care, child care, family services, and morale, welfare 
and recreation programs. We must invest in these programs just as we 
invest in technology, combat systems, and weapon platforms.
    The Secretary of Defense, with the enthusiastic support of the 
Service Secretaries and Chiefs of Staff, has continued to make quality 
of life programs a top priority. I will focus my comments on the family 
housing component of quality of life.
Family Housing Priorities
    Several years ago, Navy adopted a Neighborhoods of Excellence (NOE) 
program to ``first fix what we own.'' NOE used family housing 
improvement funds to upgrade electrical and plumbing systems, replace 
windows and doors, install new insulation, update kitchens and baths, 
and improve landscaping, street lighting, and utility services for an 
entire neighborhood, rather than perform piecemeal improvements on 
selected components of an individual house. The Marine Corps has 
adopted a similar program in the Commandant's Campaign Plan. In 
addition to revitalization, we also program replacement construction 
projects for houses that can no longer be economically repaired and 
maintained.
Family Housing Budget
    Our fiscal year 1998-99 budget request reflects these priorities. 
Our Operations and Maintenance accounts, the backbone of our family 
housing programs, remains steady on a per unit cost basis. Funding 
reductions are the result of a 3,000 reduction in houses due primarily 
to BRAC. The increase in our leasing program is for recruiters at high 
cost locations who are not supported by a nearby military installation; 
and additional leases in Italy. Although the total dollar value of our 
improvements program is down somewhat from fiscal year 1997, the number 
of homes being renovated under our NOE effort remains about the same at 
2,300 homes in 31 locations.

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                    Fiscal year         
                                         -------------------------------
                                           1996    1997    1998    1999 
------------------------------------------------------------------------
Construction............................     207     272      90      61
Improvements............................     293     205     174     211
Design..................................      24      22      15      18
Leasing.................................     104     109     125     134
Operations..............................     411     397     389     385
Maintenance.............................     534     509     462     463
                                         -------------------------------
      Total.............................   1,573   1,514   1,255   1,272
------------------------------------------------------------------------

    Our fiscal year 1998 family housing construction budget request is 
$90 million. There are 2 replacement construction projects and 2 new 
construction projects, which together provide 597 homes. All of these 
homes are for junior enlisted personnel. The fiscal year 1998 new 
construction request is a reduction of $182 million below the fiscal 
year 1997 appropriated level. This reduction represents Navy's decision 
to step back from acquiring new homes that the Government will own and 
operate. Let me explain the rationale for this decision.

------------------------------------------------------------------------
            Location and type                  Cost        No. of homes 
------------------------------------------------------------------------
Fiscal year 1998:                                                       
    NAS Lemoore, CA, replacement........     $14,800,000             128
    MCB Camp Pendleton, CA, new.........      22,500,000             171
    MCAS Miramar, CA, new...............      28,900,000             166
    MCAGCC Twentynine Palms, CA,                                        
     replacement........................      23,900,000             132
                                         -------------------------------
      Total.............................      90,000,000             597
------------------------------------------------------------------------

                     meeting the housing challenge
A Holistic Approach to Housing
    As members of this Committee are well aware, we have an enormous 
challenge before us to solve our housing shortfalls. These are long-
standing, seemingly intractable problems for which we have made great 
plans in the past, but fallen short of the mark in subsequent budgets. 
The necessity for the Department of Defense to increase procurement 
spending to modernize aging weapon systems makes the prospect for 
gaining large increases in housing construction funds unlikely.
    We cannot hope to solve this problem in isolation. Our past 
attempts to do so have been unsuccessful. We must take a holistic 
approach to the housing problem, realistically examining both the 
facilities and the housing allowances. We completed a number of housing 
studies this year that have done just that.

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

                          The Housing Problem
Family housing:
    15,000 homes Navy deficit; solve by fiscal year 2020.
    10,500 homes Marine Corps deficit; solve by fiscal year 2088.
    36,000 unsuitable Navy homes; solve by fiscal year 2005.
    13,000 unsuitable Marine Corps homes; solve by fiscal year 2037.
    $2.5 billion Navy major repair/improvement backlog; solve by fiscal 
year 2005.
    $2.0 billion Marine Corps major repair/improvement backlog; solve 
by fiscal year 2037.
Bachelor quarters:
    78,000 Navy spaces to convert to 1+1 standard; solve by fiscal year 
2075 but in interim moving to 2+0 alternative by fiscal year 2005.
    64,600 Marine Corps spaces to convert to 1+1 standard; solve by 
fiscal year 2078 but in interim moving to 2+0 alternative by fiscal 
year 2005.
    $380 million Navy major repair backlog; solve by fiscal year 2004.
    $110 million Marine Corps major repair backlog; solve by fiscal 
year 2005.

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

Housing Allowances
    Three-quarters of Navy and Marine Corps families live in the 
community and receive housing compensation in the form of Basic 
Allowance for Quarters (BAQ) and a supplemental Variable Housing 
Allowance (VHA). The stated intent of Congress is that Service members 
absorb 15 percent of their housing cost. The absorption is currently 
19.6 percent even after the significant 4.8 percent BAQ funding 
increases provided last year. While this absorption may be the same 
across the country, in practice, personnel in high cost areas tend to 
have smaller, lower quality, more distant homes than in those low cost 
areas. The Navy and Marine Corps have a disproportionately larger 
number of Sailors and Marines living in these high cost areas.
    In addition to the increase in housing allowance, Section 606 of 
the Fiscal Year 1997 Defense Authorization Act established a minimum 
monthly amount of VHA for those living in high cost housing areas. This 
VHA ``floor,'' which became effective on 1 January 1997, applies to 
both single members as well as those with dependents, and will raise 
the VHA amount paid. It will provide additional money to very junior 
personnel enabling them to better compete for housing in the community. 
We are now trying to evaluate the effect that this will have on the 
overall deficit of family housing and bachelor quarters for Navy and 
Marine Corps.
    The Department of Defense is preparing a Congressionally mandated 
report on the pay and allowance system, including any inequities in the 
current BAQ/VHA methodologies. One significant problem with the 
military housing allowance system is that personnel in high cost areas 
often pay significantly more out of pocket for housing than personnel 
in low cost areas. The Secretary of Defense, with the participation of 
the Services, is evaluating alternatives to address the problem. I 
strongly support this study because I think the results could help us 
solve many of our housing problems. The report is due to the Congress 
next month.
Public/Private Ventures
    The Fiscal Year 1996 Defense Authorization Act (Public Law 104-106) 
provided important new tools for us to stimulate development and 
revitalization of housing. This Act expanded the limited partnership 
authorization of the Fiscal Year 1995 Authorization Act, which was 
available only to the Navy.
    We are making good progress. We entered into a limited partnership 
agreement in July 1996 with Landmark Organization of Austin, Texas, to 
construct a total of 404 homes in South Texas. Three hundred homes will 
be built in Portland, Texas, to serve personnel stationed at Naval Air 
Station Corpus Christi and Naval Station Ingleside, and 100 homes will 
serve personnel assigned to Naval Air Station Kingsville. Four homes 
have been set aside for use by the developer for management purposes. 
Navy contributed $9.5 million from the Department of Defense Family 
Housing Improvement Fund (FHIP), and the developer is contributing the 
remaining $22.5 million construction cost. The project will provide 76 
two bedroom, 276 three bedroom, and 52 four bedroom homes targeted at 
an E-5 with dependents. Ground breaking ceremonies were held in 
December 1996, and we expect the homes to be available for occupancy by 
November 1997. Military members receive first preference for renting 
these homes and a lower monthly rent. The partnership extends for 10 
years, with an optional 5-year extension. The Navy will share in the 
proceeds upon conclusion of the partnership.
    The Under Secretary of Defense (Comptroller) provided Congressional 
notification last month for Navy to enter into a limited partnership to 
construct 185 two, three, and four bedroom homes at Naval Station 
Everett, Washington. Military members will receive rental preference 
and a lower monthly rent. The target population is an E-5 with 
dependents. We intend to transfer $5.9 million of Family Housing, Navy, 
construction funds to the FHIP to fund our share of the $18.8 million 
development cost. The developer is now securing financing. Our plan is 
to begin construction this month and complete the project by May 1998. 
The partnership will continue for 10 years, with the developer planning 
to begin selling about 37 units per year as condominiums at the 6 year 
point. Navy families interested in purchasing these homes will be 
entitled to a lower purchase price, partial rent credit, and lower 
sales commission. Navy will share in any profits at the conclusion of 
the agreement.

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

                      Navy Public/Private Ventures
    404 homes now under construction in South Texas, to be completed in 
November 1997.
    Congressional notification submitted for building 185 homes in 
Everett Washington, to be completed in May 1998.
    Navy and Marine Corps actively pursuing additional projects.

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

    We are also proceeding with other privatization projects. The Navy 
has 10 projects in various stages of development. The most advanced are 
projects to provide 824 homes at Norfolk, Virginia; 238 homes at 
Newport, Rhode Island; and another 100 homes at Everett, Washington. 
Site visits have been completed at these locations, and project data 
are being developed. Site visits should be completed this spring at six 
additional locations. The most advanced Marine Corps projects are at 
Marine Corps Base Camp Pendleton, California where we plan to construct 
204 new homes and revitalize 512 others, and at Marine Corps Logistics 
Base Albany, Georgia where we plan to dispose of 419 houses off-base 
and construct 160 new homes on base. Four other projects are being 
developed at other locations including Marine Corps Base Camp Lejeune, 
North Carolina; and Marine Corps Air Ground Combat Center Twentynine 
Palms, California.
    I am pleased with the progress made to date, but would prefer to 
have been further along. We are in unfamiliar waters. It requires an 
entirely different perspective--a cultural change in thinking for both 
Navy and private developers. We are making sure we do this right.
    We are working closely with the Housing Revitalization Support 
Office (HRSO) in the Office of the Secretary of Defense to do the 
necessary analysis and scoping of the projects in light of local market 
conditions. All of the Navy projects have previously authorized and 
appropriated Family Housing, Navy, construction money available to fund 
these initiatives. The Marine Corps also plans to contribute land and 
housing equity for some of their projects. I expect that by this time 
next year we will have more projects underway using the tools provided 
in the 1996 Authorization Act.
Bachelor Quarters
    Our job of solving the bachelor quarters problem is perhaps even 
more formidable than that of family housing. Many of the BQs are as 
obsolete as our family housing units. But, unlike members with 
dependents who live primarily in the community, most unmarried members 
live on the Base.

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

    Navy: 42 percent of bachelors live on base, 32 percent onboard 
ship, and 26 percent in the community.
    Marine Corps: 89 percent of bachelors live on base, 11 percent in 
the community.

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

    Our fiscal year 1998-99 budget request includes funding for an 
additional 5,676 bachelor spaces and replacement and modernization of 
1,732 spaces. Comprising over 30 percent of the Department's military 
construction program in fiscal year 1998 and fiscal year 1999, the 
budget funds construction of 11 BEQ's in the Continental United States, 
2 in Puerto Rico, 2 in Hawaii, and 3 overseas.
    Two years ago, the Secretary of Defense approved a new 1+1 standard 
for permanent party BQs. The new standard is based on a module 
consisting of two individual living/sleeping rooms with closets and a 
shared bath and service area. The module contains up to 47 square 
meters of gross area, including 11 square meters of net living area per 
living/sleeping room. This new standard does not apply to BQs that 
house transients, recruits, and those receiving entry-level skill 
training.
    The new standard will solve long-standing dissatisfaction from 
Service members over the privacy and living space afforded under the 
old standard. Navy is designing all of its permanent party BQ projects 
under the new standard and will convert older BQs to as close to the 
1+1 standard as practicable. Under an exception to the 1+1 standard, 
the Marine Corps will initially emphasize construction of two-person 
rooms, i.e., ``2+0,'' to more quickly improve quality of life for a 
larger number of Marines, and later transition to the 1+1 
configuration. Each installation is now developing detailed conversion 
plans for all of our permanent party BQs.
Housing Direction of the Future
    I mentioned earlier that we had completed several housing studies. 
The conclusions were both illuminating and surprising to many. The 
studies, one performed by the Center for Naval Analysis (CNA) and 
another by an outside consultant, concluded that it costs the 
Government far more to own and operate housing than it costs the 
private sector. CNA found that it costs the Navy $13,000 per home per 
year to operate and maintain its existing inventory in perpetuity. This 
amount excludes $2,000 per year in school impact aid that is not a 
direct part of the Navy budget. In contrast, a family living off-base 
costs the Navy $8,000 per year in allowances, and the family pays about 
$2,000 out-of-pocket costs. Both studies concluded that market forces 
tend to increase the efficiency of providing housing.
    These studies, combined with changes in the VHA floor enacted last 
year, and the possibility of further improvements in housing 
allowances, make it prudent to scale back our family housing 
construction program. The goal here is not to put an additional 
financial burden on our families, but rather to provide them with the 
best housing at the best overall value to both our members and their 
dependents, and the Department of the Navy. We want to put less 
emphasis on acquiring new homes that we will own and operate and focus 
on first fixing what we own. We would look primarily to both a revised 
housing allowance structure and Public Private Ventures projects in 
selected markets to solve our housing problems. We need to let these 
efforts continue to take root and blossom.
            the need for further infrastructure efficiencies
Infrastructure Efficiencies to Modernize Force Structure
    The end of the Cold War has brought about dramatic changes in the 
political, social, military, and economic fabric of the world. Old 
allegiances have disintegrated. New alliances have been formed. The 
threat of global war has diminished.
    The domestic base closure process and overseas base closures such 
as Subic Bay, Philippines, have eliminated substantial excess capacity 
in our shore infrastructure. Nevertheless, even after implementing 
these closure actions, infrastructure reductions have not kept pace 
with our force structure reduction. We will have reduced the plant 
replacement value of our shore infrastructure by only 17 percent since 
1988, the first round of BRAC. This stands in sharp contrast to the 26 
percent reduction in military end strength, and 40 percent reduction in 
ships over this same time period.
    We must continue our efforts to reduce unneeded infrastructure on 
remaining bases, consolidate functions, and demolish unneeded 
structures to minimize operation and maintenance costs. Let me outline 
a few ways that we are accomplishing that.
Competition and Outsourcing
    Competition and outsourcing are business practices that hold 
enormous opportunities to reduce infrastructure costs. The 1995 
Commission on Roles and Missions of the Armed Forces recommended that 
the Department of Defense outsource commercial type work to save money. 
Last year, the Deputy Secretary of Defense directed the Services to 
make outsourcing and privatization a priority. A 1996 CNA analysis 
estimated that the Navy spends over $10 billion each year performing 
in-house functions that could be purchased from the private sector at 
lower cost. Savings could be obtained by competing these functions 
using the procedures set forth in OMB Circular A-76, Commercial 
Activities Program. CNA's analyses of past competitions revealed that 
work was retained in-house in about half of the competitions, with 
savings averaging 20 to 30 percent regardless of who won the 
competition.
    In January 1997, I provided Congressional notification of Navy's 
intent to compete 10,600 positions across the country under Circular A-
76 standards. In this initial effort, the bulk of the positions are in 
base support functions such as public works, supply, berthing, and 
motor vehicle maintenance. There are also significant efforts involving 
administrative support, data processing, and child care. To maximize 
potential savings, we want to compete entire business areas by 
consolidating similar functions within a region where feasible. We hope 
to gain $3 billion in savings through fiscal year 2003 under this 
initiative.
    We have put a team of talented individuals in place to manage this 
process. The Chief of Naval Operations established a new headquarters 
division, N47, headed by a flag officer, to develop detailed execution 
plans to guide Navy wide execution. Navy also established a new 
Outsourcing Support Office (OSO) as a joint effort by the Naval Supply 
Systems Command and the Naval Facilities Engineering Command. OSO is 
preparing generic templates and work statements to simplify and 
standardize cost comparisons.
    Throughout this process, we want Commanding Officers, who will be 
in charge of the competitions, to give their employees and unions every 
opportunity to participate in the cost comparison and to keep them 
fully informed of the progress as it occurs. We will conduct fair and 
open competitions and we will minimize as much as we can any disruption 
to our dedicated work force.
Privatization
    Privatization transfers the control and ownership of government 
assets to the private sector with no impact on mission need. Besides 
the one time benefit to Navy arising out of transfer of the asset, 
privatization reduces current and future infrastructure support costs.
    We are studying the feasibility of privatizing Navy utility systems 
(electric, natural gas, potable water, and wastewater) at Public Works 
Center Jacksonville, Florida; Construction Battalion Center Port 
Hueneme, California; Naval Station Pascagoula, Mississippi; and Naval 
Air Station Whidbey Island, Washington.
Regionalization of Base Support Functions
    Many areas of large fleet concentration have multiple activities 
and tenants who may perform duplicate and redundant base support 
functions. Does each base need multiple managers for galleys? for 
barracks? for fire, security and police protection? We want to achieve 
greater efficiencies by consolidating and centralizing functions to 
provide less costly base operations services with equal or better 
service than before. Regionalization of base support functions at Naval 
Air Station Jacksonville, Florida was our first attempt at 
regionalization and should save an estimated $20 million per year.
    A similar effort is now underway at the Naval complex in San Diego, 
California that should save $40 million per year. We are trying to take 
base support functions now being performed by 10 host activities down 
to just three host activities, and to regionalize specific functions 
such as BQ management, security, food service, supply, mail service, 
and safety under a single command. Regionalization at Pearl Harbor, 
Hawaii would consolidate 8 host activities down to one, saving $18 
million per year. We are gathering data to pursue regionalization 
opportunities in Pensacola, Florida; Washington, D.C; Puget Sound, 
Washington; and Norfolk, Virginia. The central tenet that has emerged 
from all of these efforts is that:
  --No tenant should do what a host can do more cost effectively;
  --No host should do what a large Naval complex can do more cost 
        effectively; and
  --No large Naval complex should do what the surrounding community can 
        do more cost effectively.
    Navy is also trying to reduce the number of major commands who have 
base support responsibilities, thereby eliminating much of the 
management overhead. These efforts will try to identify those core 
functions that are necessary and what drives them, those specific 
functions that can be regionalized, and those organizational structures 
that are necessary to support regionalization.
    We are also trying to take advantage of the competitive forces that 
are now at work in the electric power industry. For example, we 
recently negotiated a new electricity rate with Virginia Power that 
should reduce our utility costs by about 10 percent this year and 15 
percent each year thereafter through fiscal year 2002. We are also 
working with the utility industry to implement demand side management.
Building Demolition
    There are many old, unnecessary, under-utilized and economically 
obsolete facilities on our bases that are often an eyesore and reduce 
morale. More importantly, they create a financial burden for police and 
fire protection and maintenance. We have put $13 million in fiscal year 
1998 in a centrally managed operations and maintenance account to 
eliminate high cost excess facilities. The major claimants can 
supplement this effort with their own Operations and Maintenance funds.
Regional Maintenance
    Navy is restructuring and consolidating ashore maintenance 
functions for ships and aircraft. The Regional Maintenance Concept 
seeks to right-size, level load, and share the use of maintenance 
capacities and facilities. This will eliminate excess infrastructure 
and provide customers with a single provider of maintenance; strengthen 
battle force intermediate maintenance activities; and protect and 
strengthen technical authority.
    Eight Regional Maintenance Centers have been established, and 
Regional Repair Center pilots are also being established. The next step 
is to establish a Ship Availability Planning and Engineering Center 
(SHAPEC) to consolidate ship maintenance engineering and planning 
functions. Full implementation will continue until the turn of the 
century.
Smart Base
    Smart Base is an initiative to identify and implement innovative, 
commercially available technology and better business practices to 
increase shore installation efficiency and reduce infrastructure costs. 
A Smart Base project team was established in November 1996. An 
announcement was published in the Commerce Business Daily to solicit 
responses from industry and academia for suggested technology and 
management applications. Naval Station Pascagoula, Mississippi and 
Naval Shipyard Portsmouth, New Hampshire will serve as the test bases 
for Smart Base.
Other Possible Infrastructure Changes in the Future
    Two other initiatives could alter the shape and composition of our 
infrastructure program: the Quadrennial Defense Review (QDR) and Vision 
21.
    The QDR is a Congressionally mandated review of the future threats 
to the security of the Nation and the Department of Defense's response 
to the threats. One of the QDR panels is assessing current 
infrastructure capacity and support levels, and considering whether any 
changes should be made. This panel is trying to gain more savings out 
of infrastructure to support force modernization. I expect the QDR to 
make some assessment concerning whether another round of base closures 
is necessary. The QDR report is due to the Congress on 15 May 1997. A 
National Defense Panel will review the QDR report and provide its 
independent assessment to the Congress in December.
    Vision 21 is also a Congressionally mandated review of whether 
there is excess capacity in the Department of Defense's research and 
laboratory facilities. A multi-service, interdisciplinary Vision 21 
work group has been collecting and analyzing existing capacity and 
workload requirements. The Vision 21 report will be provided to 
Congress as part of the fiscal year 2000 budget.
Infrastructure Vision of the Future
    For some time now we have been trying to formulate a more precise 
vision of exactly how to tailor our infrastructure needs to best 
support future Naval readiness. After engaging headquarters leaders, 
fleet operators, facility managers, and the analytic prowess of CNA, we 
appreciate both the difficulty and enormity of the task. The QDR and 
Vision 21 add a certain measure of uncertainty as well. We cannot 
determine a baseline requirement for infrastructure until we know what 
force structure requirements result from these two efforts. 
Nonetheless, we continue our efforts to develop an analytical 
methodology to focus our infrastructure requirements.
    We must establish an effective process for evaluating the 
relationship of force structure to the infrastructure required to 
support it, for assessing future infrastructure needs, and for 
prioritizing recapitalization requirements to sustain those future 
readiness needs. Towards that end, the Secretary of the Navy has 
established at my urging a Department of Navy Infrastructure Steering 
Committee to recommend policy on the acquisition, disposal, operation, 
maintenance and recapitalization of the Department's infrastructure. 
The Committee will rely on an existing analysis group, the Department 
of the Navy Organization Management and Infrastructure Team (DONOMIT) 
to gather and analyze data to support strategic investments and policy 
that best match the Department of the Navy's infrastructure to core 
missions and force levels.
    That concludes my statement. I appreciate the support that this 
Committee and its staff has given us in the past, and I look forward to 
continued close cooperation in the future.
                                 ______
                                 

              Biographical Sketch of Robert B. Pirie, Jr.

    Mr. Pirie was confirmed by the U.S. Senate as Assistant Secretary 
of the Navy (Installations and Environment) on 15 March 1994. He has 
over thirty years experience in defense-related work in the armed 
forces, the civil service and in industry. A Naval Academy graduate in 
the class of 1955, he was also a Rhodes Scholar, and attended Oxford 
University from 1956-59. He served twenty years as a naval officer, 
culminating his service with three years in command of a nuclear attack 
submarine.
    Upon retirement from the Navy in 1975 Mr. Pirie joined the newly 
formed Congressional Budget Office as Deputy Assistant Director, 
National Security. In 1977 Mr. Pirie became Principal Deputy Assistant 
Secretary of Defense (Manpower, Reserve Affairs and Logistics). He was 
nominated to be Assistant Secretary of Defense (Manpower, Reserve 
Affairs and Logistics) by President Carter in December, 1978, and 
served in that position until January, 1981. After leaving government 
service he held a variety of positions in the private sector, including 
that of President of Essex Corporation and Vice President of the Center 
for Naval Analyses and Vice President of the Institute for Defense 
Analyses. He also directed the CNO Strategic Studies Group from 1989 to 
1992.
    Mr. Pirie and his wife, the former Joan Adams of Barrington, Rhode 
Island, reside in Bethesda, Maryland. They have three grown children; 
two sons, John and Carl, and a daughter, Susan.

                      housing construction budget

    Senator Burns. Thank you, Mr. Secretary. A couple of 
questions.
    The housing construction budget is down more than 30 
percent from last year. Tell me, does this mean that we have a 
less severe problem than last year or that we think that 
private housing will solve that problem for--I think we have 
around a 15,000 unit deficit?
    Mr. Pirie. We have a fairly substantial deficit, Mr. 
Chairman. And clearly our thinking is the latter, that access 
to private capital, the public-private ventures, and the 
improvement of allowances for the troops, which leverages us in 
two ways--one, it makes ordinary housing in the private sector 
more affordable for them and more available; and second, it 
makes our public-private ventures more attractive to the people 
that we want to attract.
    So we think the combination of that is the way to go in 
housing.
    Senator Burns. What is the average waiting list right now 
for Navy and Marine Corps for family quarters?
    Mr. Pirie. It is between, I think, 1 to 6 months for Navy 
housing and 15 months, if I am not mistaken, for Marine Corps 
housing.
    Senator Burns. I am sorry?
    Mr. Pirie. It is 15 months for Marine Corps housing, Mr. 
Chairman.
    Senator Burns. Do you think that privatization is going to 
help that situation?
    Mr. Pirie. I think so. I think it will give us access to 
more houses faster than if we depend simply on straight 
Government Milcon, because that budget, as we have seen, is 
under intense pressure from other demands.
    Senator Burns. Tell me about the risk in this in the 
private sector whenever we go into another round of BRAC, 
whenever a base closes? How much exposure do we have out there 
on long-term situations that may be very costly to us?
    Mr. Pirie. Well, these deals can take different forms, but 
the ones that we have entered into already, these are two 
limited partnerships, Mr. Chairman. So our liability is limited 
to the amount that we have in the partnership.
    Further, even if we close the installation and move away, 
the housing is available to be used by the partnership and can 
be occupied by civilian people from the local area. So we do 
not believe that the liability is very great.
    Senator Burns. Now, let us go back to another situation. Is 
El Toro closed?

                          El Toro Base Closure

    Mr. Pirie. El Toro still has not reached the operational 
closure phase, but we are beginning to phase down. I think 
General Stewart can give you a little more detail on that.
    Senator Burns. Can you bring me up to date on what state we 
are at El Toro?
    General Stewart. Sir, we are moving along. We are moving to 
Miramar. We have some units at Miramar already, but the closure 
date for El Toro is not until the summer of 1999.
    Senator Burns. When we start in our environmental cleanup, 
Mr. Secretary, so that that base can--then I assume it will be 
put on the market and we will dispose of that. But the cleanup 
has to take place first. I am told that the EPA now is working 
with us and it will depend on what that base will be sold for 
as to the degree of cleanup.
    Is that correct? Or have we got all those things worked 
out?
    Mr. Pirie. Yes, sir; generally, we consider what the use of 
the base will be in standards of cleanup. So if it is going to 
be an airport and it has been an air station, we take that into 
account. We do not clean it back up to national park standards. 
That is taken account of, yes, sir.
    Senator Burns. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.

                     housing initiative--bangor, wa

    Mr. Secretary, I understand that there was a proposal for 
this budget submission to include a new public-private housing 
initiative at our Navy base at Bangor, WA. And I believe the 
amount of public funding was to be $15.8 million. I also 
understand that the planning at the base with regards to this 
initiative, which would produce about 600 or more new housing 
units, was developing very well.
    To my surprise, the funding was eliminated from the budget 
and pushed out into the out-years. Can you explain why?
    Mr. Pirie. I will have to give you a detailed answer for 
the record, Senator Murray. What I know about the issue is that 
the justification for that particular project was considered 
less compelling than the justification for some others. But I 
will provide a detailed response for the record.
    [The information follows:]

    The Navy had project P-406 in the program for fiscal year 1998 to 
provide 118 homes for junior enlisted families at Naval Submarine Base 
Bangor, Washington at a cost of $15,698 thousand. This project would 
have been a candidate for public/private venture and could conceivably 
provide two to three times the number of homes.
    However, this project and three other housing projects at PWC San 
Diego, California were deleted in the final stages of budget 
preparation. As I mentioned in my testimony before this Committee, we 
completed several housing studies this year that concluded that it 
costs more for the Navy to own and operate housing than it costs the 
private sector. These studies, combined with changes in the VHA floor 
enacted last year, along with the possibility for further improvements 
in housing allowance being pursed by the Department of Defense, made it 
prudent for us to scale back our family housing construction program 
and let us focus on fixing what we currently own. The Bangor housing 
project, along with the San Diego projects, were new construction 
projects intended to reduce the housing deficit, and thus would have 
added to our housing inventory. They were not replacement construction 
projects as the other family housing projects that were retained in the 
Navy program and included in the President's Budget Submission.

    Senator Murray. I would like to see the justification for 
that.
    Mr. Secretary, Senator Cohen on February 12 stated before 
the Senate Armed Services Committee--and I want to quote it to 
you:

    My first priority goes to people. We must continue to 
attract and retain the high quality personnel necessary to 
preserve U.S. military superiority. The increasing complexity 
of technology, the quickening pace of warfare, and growing 
unpredictability of the international scene require that our 
people be more adaptable and versatile than ever. The key to 
America's military strength is the superb quality of our 
uniformed men and women.

    He then goes on to state his second priority is readiness 
and his third priority is modernization. But your testimony 
conflicts with Secretary Cohen in several locations because in 
your testimony you say:

    The necessity for the Department of Defense to increase 
procurement spending to modernize aging weapons systems makes 
the prospect for gaining large increases in housing 
construction funds unlikely.

    On page 3 of your testimony you say that you are reducing 
the funding for the construction of new housing. In fact, you 
have reduced the funding for new construction by 44 percent 
below last year's actual level.
    I have to tell you that I represent a region of the country 
with an increased Navy presence and a significant deficit in 
housing. I also want to note that you have a chart that you 
provide which details the housing problem and the chart shows 
that you plan to solve the Marine Corps housing deficit by the 
year 2088, which is about 91 years away. I guess maybe that is 
long-term planning, but I find that a little bit worrisome.
    Do you think that the priorities that you have presented 
today are consistent with Secretary Cohen's?
    Mr. Pirie. Yes, ma'am, I do. I believe that we have 
protected the quality of life accounts fairly successfully in 
the past and we have protected readiness. I think we are under 
some pressure to think about the consequences of a fair amount 
of block obsolescence in the weapons systems and so forth, so 
that, having stood by quality of life and readiness for the 
past few years, we are looking for other ways to make funds 
available for the investment accounts.
    I do not think our budget is inconsistent with Secretary 
Cohen's priorities.
    Senator Murray. Well, it seems to me that if we want to 
attract quality people and keep them in the service, one of the 
things we have to do is make sure that they have adequate 
housing, places to live, and feel comfortable. I certainly 
know, in talking to many of the people in the Navy in my home 
State, that that is a high priority.
    Let me ask one other question, Mr. Chairman, at this time.
    I note that the fiscal year 1998 military construction 
budget contains money for a medical-dental clinic at the 
Everett Naval Station in Washington State. The new clinic is 
going to replace a series of trailers that are now used to 
provide health care services and it is really needed by our 
people in Everett.
    My staff and I were given information about this clinic 
indicating that the facility would be used for active duty 
personnel only, and I wanted to know if you can explain that to 
me. I was recently at the Everett facility and I have to tell 
you this proposal to build an active duty only health care 
facility really contradicts many of the other family friendly 
initiatives that are being undertaken at Everett.
    If you could explain the justification for active only, I 
would appreciate it. I am especially concerned because we have 
a new child development center there. If a child is hurt or 
injured there that needs medical attention, where do they go? 
Or if a family member is injured at the recreational facility, 
where do they go?
    Can you explain the justification for active duty only?
    Mr. Pirie. The policy with respect to the operation of our 
medical facilities is not in my charter or area of 
responsibility, Senator Murray. I can get you an answer from 
the appropriate officials for the record.
    Senator Murray. I would very much appreciate it if you 
would do that for the record.
    Mr. Pirie. Yes, ma'am.
    [The information follows:]

    The existing Branch Medical Clinic at Everett provides care to 
active duty and their family members. Family members will continue to 
receive health care in the replacement clinic as long as capacity is 
not exceeded. If capacity is attained, then family members will be 
enrolled in the civilian TRICARE managed care network that has been 
established in the Everett/Bremerton area. This is a strong TRICARE 
unit with over 35 primary care providers in the network.

    Senator Murray. Thank you, Mr. Chairman.
    Senator Burns. Senator Stevens.
    Senator Stevens. My good friend was here ahead of me.
    Senator Burns. I am referee in this outfit. Senator 
Stevens, would you proceed. [Laughter.]
    Senator Stevens. Well, all right.
    Senator Burns. And if you have a statement, I would make 
that part of the record, or you can give your statement or 
whatever.
    Senator Stevens. I have no statement. I just want to ask a 
question of the Secretary.

                        adak naval air facility

    What I am really interested in is Adak. Adak will close 
this year. There are a series of controversies out there 
arising now. Have you ever been to Adak?
    Mr. Pirie. Yes, sir; I was there last September.
    Senator Stevens. I think one of the things most people 
don't realize about Adak was that it was the logistical center 
for not only the Navy, but also for the various islands there, 
the Native villages, and the fishing industry. The commercial 
airlines went to Adak and offloaded their material, even mail 
for the villages on those islands, and the Navy tugboats 
delivered that material to them. It was a courtesy that was 
developed over a series of years, primarily due to the interest 
of the commander, the base commander there, and it was a real 
interesting relationship that developed.
    Now I understand the Navy is going to take the tugboats out 
of there as it turns over the Adak base to the Aleut Corp. Are 
you familiar with that?
    Mr. Pirie. I have just become aware of it in the last 
several days. As I understand the situation, the Aleut Corp., 
if it, in fact, takes over Adak, which is not yet absolutely 
certain, although we are working to that end--but before they 
are in a position to do that, there will be no one to maintain 
the tugboats in Adak and the Admiral in charge of this area 
believes that it would be best to take the tugboats back to 
Puget Sound and keep them there.
    If the Aleut Corp.----
    Senator Stevens. Are you going to surplus them when they 
get down there?
    Mr. Pirie. As far as I know, they will be useful in the 
Puget Sound area. We will certainly be able to maintain them 
and keep them----
    Senator Stevens. Mr. Secretary, when I went out there I 
found that we had surplused a whole series of trucks by taking 
them down to the west coast, outside, as we call it, and the 
cost of taking the trucks down exceeded the price that the Navy 
got for the trucks.
    Have you looked into what you are doing there in terms of 
incurring costs to move material that is useable to the people 
who are going to take over, but it will cost more to move it 
than it is worth?
    Mr. Pirie. I am not familiar with the truck case, but I 
will look into it, Senator.
    [The information follows:]

    I am not aware of any wholesale movement of surplus trucks from 
Adak to the West Coast for disposition by sale. The non-appropriated 
Navy Exchange System has, however, moved several vehicles off Adak as a 
business decision not affected by the BRAC statutes. I can assure you 
that the small fraction of the total inventory of personal property 
that has left the island has done so with good economic justification 
supporting Navy reuse and only after notification to the Adak Reuse 
Authority. No surplus appropriated material that I am aware of has left 
Adak for the purpose of disposal by sale.

    Mr. Pirie. With respect to the other personal property, we 
have taken less than 1 percent of the available personal 
property, which includes trucks, fire trucks, cranes, and 
things of that kind. Less than 1 percent of that has actually 
been moved out of Adak.
    Senator Stevens. There was a substantial portion of the 
personal property that was moved on. I congratulate the Navy on 
some of that. The school, I think some members know, is named 
after my first wife, Ann Stevens School, and all of the 
materials in that school were distributed up and down the 
chain, which I thought was a very nice thing to do.
    But I really question the extent to which the Navy seems to 
think that it ought to take everything out of there without 
regard to the value of what they are taking. On the tugs, if 
those tugs go away, did you know we are going to have to buy 
some for the BIA or somebody to deliver the material that comes 
to Adak still that goes to Native villages?
    Mr. Pirie. I am not aware of this arrangement, Senator. And 
it is not clear to me who is going to operate the tugs if we 
leave them in Adak, and we are very concerned about maintaining 
them. I think they will be maintained better if they go to 
Puget Sound.
    If the LRA, if the Aleut Nation, later needs them, we can 
transfer them back to them.
    Senator Stevens. When I came to the Senate there were two 
vessels called the North Star One and North Star Two. They made 
a trip annually in the summertime to the villages along the 
chain and up the west coast of Alaska. That was their only 
annual supply.
    They are gone now. One of the reasons they are gone now is 
because we have made arrangements, just sort of ad hoc 
arrangements, all the way along the line using military bases 
for the centers of distribution for the villages. It was worked 
out as an accommodation, as I said, through the generosity, 
really, and courtesy of the military commander.
    I would urge you to take a look at really what has been 
going on out there in terms of how those facilities function to 
assist the people who live in the area. Not all Native people; 
some are part of the fishing industry. At one time there was a 
cannery there and a fishing dock on the other side of Adak, 
away from the naval base, that flourished and worked very well.
    It is my understanding that that will be reopened, 
hopefully, and it will mean that some of the equipment that is 
there in Adak will be necessary to maintain the road and to 
have access to that other area.
    I know you have a job to do in terms of protecting the 
Government's interest in this property. But I also hope that 
there is some way. Let me ask you this: If you need further 
legal authority to allow you to leave that material there so it 
can continue to provide the services for the people in the 
Aleutians, would you let me know?
    Mr. Pirie. Yes.
    Senator Stevens. I think Congress would understand that 
concept. We all know that when that material has been exhausted 
its life is over. Whoever takes over Adak has got to find some 
way to replace it. It is not going to be a permanent 
responsibility, but right now the transition between having the 
tremendous amount of assistance that was available--there were 
four naval bases on Adak. I am not sure that people here even 
realize that was the seventh largest population center in my 
State.
    Now, just 2 months from now, the Navy population will be 
zero.
    Mr. Pirie. We are committed to doing whatever we can, 
Senator, to make this transition of Adak to whoever will be 
operating it in the future as smooth and productive as 
possible, and to protecting the interests of the citizens who 
remain in the area.
    Senator Stevens. One last question----
    Mr. Pirie. So we will work with you, sir.
    Senator Stevens. Are you familiar with the proposed meeting 
for April in Anchorage with all the parties that are supposed 
to be interested in the transition at Adak?
    Mr. Pirie. Yes, sir.
    Senator Stevens. What level of naval people are going to go 
there?
    Mr. Pirie. I believe Admiral Nash is planning to go, and my 
Deputy for Conversion and Redevelopment, Mr. Cassidy, is going 
to go.
    Senator Stevens. Both the Governor and I are interested in 
being there if we possibly can. I will be in touch with you on 
that.
    Mr. Pirie. Yes, sir.
    Senator Stevens. Thank you.
    Thank you, Mr. Chairman. And I thank my colleague from 
Hawaii. I do not agree with what he did.
    Senator Burns. Thank you.
    Our good friend Senator Inouye from Hawaii.

                      ford island development plan

    Senator Inouye. Thank you very much, Mr. Chairman.
    Mr. Secretary, you may be aware that the causeway bridge 
that connects Ford Island to the rest of Pearl Harbor will be 
operational some time this year. I am aware that there are 
plans for the development of Ford Island. Are you prepared to 
discuss that with us or is that a bit early yet?
    Mr. Pirie. It is a bit early. I have seen a conceptual plan 
for the development of Ford Island and I know that the base 
commander is at work. And I know that the base commander is at 
work with that.
    It would include a substantial amount of family housing, 
but also a center which would include a museum and a tourist 
center and things of that kind, and it has a place for the 
Missouri to be moored and access to the Missouri. As a concept, 
it is a very attractive plan and I hope that we can continue to 
move in that direction and build on it.
    Senator Inouye. It has not gone through the process in your 
shop?
    Mr. Pirie. It is still in the thinking stage. So far there 
is no program money or anything like that behind it.
    Senator Inouye. Most of us in Hawaii are very excited about 
this, so we look upon you for your lead.
    Mr. Pirie. Yes, sir.
    Senator Inouye. Thank you very much.
    Mr. Pirie. Yes, sir.
    Senator Inouye. Thank you, Mr. Chairman.
    Senator Burns. Thank you, Mr. Chairman.

                   one plus one barracks requirement

    Mr. Burns. Mr. Secretary, when do you anticipate the Navy 
will meet its new one plus one standard under the current 
funding conditions?
    Mr. Pirie. I think our schedule for one plus one gets the 
Navy there in about 2013, Mr. Chairman.
    Senator Burns. And the bachelor housing deficit in the 
Navy, what is your deficit right now in that kind of housing? 
And also in the Marine Corps, if I could get a figure on that?
    Mr. Pirie. I am going to have to provide that for the 
record. We are not at all certain. Because of the fact that we 
have new authorities for bachelors to take housing in the 
private sector and be given basic allowance quarters and a 
variable housing allowance and things of that kind, I am not 
sure we have got the right numbers. But we will supply them, 
Mr. Chairman, for the record.
    [The information follows:]

    The Navy estimates that it will require $2.3 billion over the next 
sixteen years to construct the 38,500 spaces necessary to satisfy its 
1+1 barracks requirement. The Marine Corps cost is the same but the 
execution time frame significantly longer. This is due to their 
strategy to first build enough 2+0 barracks spaces to erase their 
existing inventory of inadequate spaces. The 1+1 construction that 
follows is estimated to cost $1.9 billion over 73 years to construct 
35,500 spaces. FYDP funding required to work towards the 1+1 barracks 
standard goal is $0.7 billion for the Navy and $0.3 billion for the 
Marine Corps (cost of eliminating inadequate spaces using 2+0 
configuration).

    Senator Burns. General Stewart?
    General Stewart. Sir, in the Marine Corps we have 10,477 
inadequate quarters, bachelor enlisted quarters, which is why 
we went to the two plus zero standard, two marines in a room 
sharing a head, as our standard to fix that more quickly, and 
that is an interim standard. But we plan on having our marines 
out of inadequate quarters by 2005.
    Senator Burns. Is the two plus working?
    General Stewart. We think it is going to work, sir. We 
think that, while we are still committed to the one plus one, 
we think there is a lot of value to having two marines in the 
same room. It is good for training, it is good for morale, it 
is good for unit cohesion. So we do not see it as a degradation 
to use two marines in a room.
    Senator Burns. It is funny how times change. When I was in 
it was 60. [Laughter.]
    Senator Burns. In a Quonset hut, and the air-conditioning 
that you got if you were lucky enough to have a door on both 
ends, those type of situations.
    I want to just bring up a subject here that I think has 
caught a lot of us, and I am not sure that this is the place to 
raise this thing. I would like to know what is the situation at 
Long Beach, CA, and what is happening there with the PRC? It 
caught a lot of us in Congress off guard.

                           port of long beach

    Mr. Pirie. The local redevelopment authority, which is a 
Long Beach city organization, has a reuse plan which 
countenances the naval station and the naval shipyard becoming 
part of the Port of Long Beach. The Port of Long Beach then 
intends to lease part or all of that port facility, which would 
be a major intermodal port, to the China Ocean Shipping Co.
    But this will be after the Port of Long Beach has 
essentially demolished the naval station and the naval shipyard 
and created an intermodal port in the area. So there will be no 
naval facility there.
    What we are talking about is an ultimate commercial deal 
between the Port of Long Beach and one of its customers, China 
Ocean Shipping.
    Senator Burns. But the Long Beach--the civil authorities 
there have complete control of the area of the old Long Beach 
Naval Station and Shipyard, is that correct?
    Mr. Pirie. They will when we turn it over to them.
    Senator Burns. When does that happen?
    Mr. Pirie. Let us see. I think the shipyard closes 
operationally in October. When we will be able to lease--I am 
not certain when we actually will be able to lease it to Long 
Beach and allow them to actually start the demolition. I think 
that is probably beyond October but I am not sure. I will 
supply that for the record, Mr. Chairman.
    [The information follows:]

    The shipyard operationally closes on 30 September 1997. A Lease in 
Furtherance of Conveyance (LIFOC) is the mechanism by which control of 
the facility will be passed to the Local Reuse Authority. Although 
interim leases between Navy and interested parties could be executed at 
any time (before or after closure), the master lease approach (LIFOC) 
to transfer of control is strongly supported by the LRA and the Port 
Authority. This LIFOC will be executed upon the issuance of the 
Environmental Record of Decision (ROD) which is expected by the end of 
the calendar year 1997.
    The Naval Station is operationally closed (9/30/94). The LIFOC is 
in my office with approval waiting for the resolution of a court order 
directed at the Port Authority (so as not to influence the court 
decision).

    Senator Burns. In other words, it is a lease arrangement? 
We are still going to own the property, either the Federal 
Government or the Department of Defense?
    Mr. Pirie. The Navy cannot transfer the property to Long 
Beach until we have completed the final environmental impact 
statement and the cleanup is complete. What we do in the 
interim is lease it to the city of Long Beach to allow them to 
sublease it to the Port of Long Beach, to allow them to build 
the new container port.

                       brac environmental cleanup

    Senator Burns. I understand the Navy is working hard to 
implement the BRAC round of decisions as well as the previous 
three rounds. Long-term financial obligations--what obligations 
do you think the Navy will incur as a result of these 
environmental cleanup activities? What is in the future and 
your plans, and how far have you really planned out into the 
future, because I know the goodly part of BRAC is environmental 
cleanup?
    Mr. Pirie. We figure that BRAC environmental cleanup will 
run us about $2.5 billion, Mr. Chairman, which is about one-
quarter of what it is going to cost us to implement the four 
rounds of BRAC. And the cleanup will run beyond the year 2001 
simply because, in some cases, the technology does not allow 
you to clean these places up that fast.
    So we will then cover the environmental cleanup costs of 
BRAC installations out of the ``Environmental restoration, 
Navy'' account. We have plans to do that.
    Senator Burns. Have we incurred any problem now on turnover 
that has been subject to environmental cleanup or any hangups?
    Mr. Pirie. We have had no problems. No turnovers have been 
delayed because of environmental problems.

                              base closure

    Senator Burns. Does the Navy need another round of base 
closure? How about a little loaded pistol to carry around in 
your pocket?
    Mr. Pirie. That is a fairly straightforward question, Mr. 
Chairman. Let me tell you what I know about that. I know that 
Secretary Perry said some time ago that we would probably need 
another round, perhaps in 2001. And I know that the Chairman of 
the Commission, former Secretary Dixon, picked the same year in 
his valedictory. You are probably aware that the Navy 
recommended a number of installations for closure which the 
Commission denied.
    So I believe that there is enough excess capacity for us to 
contemplate another round. The ``Quadrennial Defense Review'' 
[QDR] has an infrastructure panel and it is quite possible that 
that panel will recommend to the Secretary of Defense that he 
ask for another round of BRAC.
    Senator Burns. With regard to that, your permanent base 
facilities--shoreline facilities, I think there has been--I 
have been questioned about it and I have some concern about the 
infrastructure there, our investment in that infrastructure. 
Has that been adequate?
    Mr. Pirie. Well, it is never as much as I want, but it is 
about as much as is permitted by the other funding pressures. 
Certainly the facilities--piers, runways, hangars, and so 
forth--need to be kept in good shape, and I wish we had more 
money to spend on them.
    I would say that we are accomplishing the art of the 
possible there.
    Senator Burns. Mr. Secretary, could I ask you, you all have 
done a study and you probably have a priority list in what 
infrastructures we invest more in than we do in others. I would 
imagine that some of the facilities in your infrastructure that 
were recommended for BRAC and then were denied by the 
Commission, the investment there would be more scrutinized for 
investment probably than any other area.
    Other than money, what other obstacles do we run into on 
dealing with our infrastructure?
    Mr. Pirie. I do not think we have any. I think Admiral 
Nash's command is quite capable of executing a substantial 
amount of both the maintenance of real property and new 
construction. They have been quite good at that in the past, so 
I do not think we have got limitations other than money, Mr. 
Chairman.
    Senator Burns. I would like to visit with you sometime, 
just sit in an office and sit down and take a look at those 
priorities. I have a list somewhere, but I probably could not 
lay my hands on them. I have got very capable people here.
    But I would like to take a look at the situation of what 
you recommended for BRAC closure and see your priorities and 
maybe work with you a little bit maybe on that infrastructure, 
because there is some concern about that infrastructure. And if 
we could work together, why, I am sure I would just like to do 
that.
    Mr. Pirie. I would be very glad to do that, Mr. Chairman.
    Senator Burns. Mr. Secretary, that is all the questions I 
have for this panel. Senator Murray may have some followup 
questions.

                          community facilities

    Senator Murray. I just have one more general area I wanted 
to ask you about and that is community facilities, like child 
care development centers, physical fitness centers, and 
community centers. How many, roughly, do you have in the budget 
for those kinds of things?
    Mr. Pirie. Let us see. I think we have one child care 
center in 1997 and one in 1998. Is that right, Admiral Nash?
    Admiral Nash. Two, one in Navy, one in Marine Corps.
    Mr. Pirie. Child care centers. With respect to gyms, 
community centers, and other facilities, I will have to take 
that for the record.
    [The information follows:]

    In the fiscal year 1998 Department of the Navy military 
construction budget, there is one Child Development Center, two 
Physical Fitness Centers, one Community/Recreation Center, and one 
Religious Education/Community Support Center. There is one additional 
Physical Fitness Center in our BRAC budget.

    Senator Murray. OK, because the Marsh Commission, I know, 
on quality of life issues recommended 44 fitness centers and 
child development centers. So I would like to know that 
information.
    Also, if you can just give me your rough feeling on how 
many unfunded needs we have in that area?
    Mr. Pirie. I think we could spend a very substantial amount 
of money in the area. The real question here is to what degree 
should we depend on the private sector to support our child 
care needs, to what degree should we depend on the private 
sector to provide for gyms and other things? I think the wave 
of the future is to look to other commercial activities to 
provide services that are not strictly related to the 
operational needs of the forces.
    If in some cases we appear to be dragging our feet, it is 
probably because we are trying to figure out what the best way 
to provide the best services for the people really is.
    Senator Murray. Certainly it depends on what community you 
are in. But I can tell you, Everett or Bangor, child care is a 
tremendous problem in the communities surrounding the bases, 
especially with welfare reform coming down, it is going to have 
a dramatic increased need for day care centers. We need to be 
ahead of the curve so that the men and women on the base do not 
get caught in a bind that there is nothing available for them.
    Mr. Pirie. Yes, ma'am.
    Admiral Nash, do you want to say anything?
    Admiral Nash. I know that this is not my area of expertise, 
but I know that we are actively pursuing other alternatives in 
terms of ways to provide child development. So we are not 
sitting back. We are pursuing this as rapidly as we can.
    Like everything, it kind of depends on the area, whether it 
is housing privatization or child development. But we 
understand, yes, ma'am.
    Senator Murray. That is all I have, Mr. Chairman.

                     Additional committee questions

    Senator Burns. Thank you, Mr. Secretary for your capable 
help today. We appreciate your coming this morning. We have 
some more questions that will be submitted for the record. And 
if other committee members have questions, if you could respond 
to them and to the committee, I would appreciate that.
    Once again, thank you for your great cooperation that this 
committee enjoys with your Department, and we hope to continue 
that right along through this process and we thank you for 
coming this morning.
    Mr. Pirie. Thank you, Mr. Chairman.
    Senator Burns. Thank you.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

                 Questions Submitted by Senator Murray

    Question. I understand that there was a proposal for this budget 
submission to include a new public/private housing initiative at our 
Navy Base at Bangor, Washington. I believe the amount of the public 
funding was to be $15.8 million. I also understand that the planning at 
the base in regards to this initiative, which would produce some 600 or 
more new housing units, was developing well. To our surprise the 
funding was eliminated from the budget, and pushed into the outyears. 
Why?
    Answer. The Navy had project P-406 in the program for fiscal year 
1998 to provide 118 homes for junior enlisted families at Naval 
Submarine Base Bangor, Washington at a cost of $15,698 thousand. This 
project would have been a candidate for public/private venture and 
could have conceivably provided two to three times the number of homes.
    However, this project and three other housing projects at PWC San 
Diego, California were deleted in the final stages of budget 
preparation. As I mentioned in my testimony before this committee, we 
completed several housing studies this year that concluded that it 
costs more for the Navy to own and operate housing than it costs the 
private sector. These studies, combined with changes in the VHA floor 
enacted last year, along with the possibility for further improvements 
in housing allowance being pursed by the Department of Defense, made it 
prudent for us to scale back our family housing construction program 
and let us focus on fixing what we currently own. The Bangor housing 
project, along with the San Diego projects, were new construction 
projects intended to reduce the housing deficit, and thus would have 
added to our housing inventory. They were not replacement construction 
projects as the other family housing projects that were retained in the 
Navy program and included in the President's Budget Submission.
                             infrastructure
    Question. The infrastructure reductions resulting from the rounds 
of BRAC that we have conducted amount to an overall DOD reduction of 
some 18 percent. While this has been difficult, our overall force 
reductions have been far more substantial than that, over 30 percent. 
Doesn't this mean that we still have far too much infrastructure for 
our requirements, and that we should look again at reducing 
infrastructure. Would you support another round of BRAC? If not, why 
not?
    Answer. Yes, I would support at least one more round of BRAC. After 
implementing four rounds of BRAC, we will have reduced the plant 
replacement value of our shore infrastructure by only 17 percent since 
1988, the first round of BRAC. That stands in sharp contrast to the 26 
percent reduction in military end strength, and 40 percent reduction in 
ships over this same time period.
    We are pursuing a number of initiatives to further reduce 
infrastructure support costs, including competition and outsourcing, 
privatization, regionalization of base support function, building 
demolition, regional maintenance, and smart base technologies.
                       privatization of utilities
    Question. I understand that privatization of utilities at our bases 
has been lagging. Is this the case? What is the problem in the 
privatization of utility infrastructure, and what can be done to speed 
this process up? I understand that the Administration has been 
considering proposed legislation for utility privatization--is this the 
case, and what is the status of this legislative proposal?
    Answer. The Navy initiated its utilities privatization effort in 
fiscal year 1996 with a pilot study comprised of four installations: 
PWC Jacksonville (large multi-location complex, well maintained); 
NAVSTA Pascagoula (small, new installation); CBC Port Hueneme (medium, 
aging installation); and NAS Whidbey Island (medium large, aging 
installation).
    The objectives of the pilot study are to identify and remove 
barriers to privatization and to establish criteria that the Navy can 
use to readily identify promising privatization candidates. Although 
the study will not be completed until the end of fiscal year 1997, one 
obstacle to privatization has been identified: no legal authority 
exists to allow the government to transfer or lease non-surplus 
property to a private entity.
    The administration is proposing legislation to authorize the 
Services to privatize utility systems when in the best economic 
interest of the Government and after notifying Congress. The lack of 
legislation allowing privatization requires that DOD seek enabling 
legislation for each and every utility system it seeks to privatize. 
The current process requires that the new owner be identified and an 
economic analysis provided that documents the benefits of privatization 
before special legislation is requested. This process can take two 
years or more which is a disincentive to private corporations to 
participate in the privatization process. The proposed legislation, if 
enacted into law, will provide the legal authority for the Services to 
privatize utility systems where in the best economic interest of the 
Government and subject to a Congressional notification process. This 
will greatly streamline the process.
                     waiting list for base housing
    Question. In general, can you characterize the problem of waiting 
lists for base housing? What is the backlog, and what is the affect on 
morale? How can we eliminate this problem in the long run?
    Answer. As of 30 September 1996, there were 25,000 Navy families 
and 6,000 Marine Corps families on waiting lists for family housing. 
Waiting times for assignment to family housing vary from a few months 
to several years depending on the location, time of year, and other 
factors.
    The waiting list reflects the quality, cost, and availability of 
housing, commuting distances, surrounding support facilities, and 
availability of good schools. The Navy and Marine Corps have a 
disproportionately larger number of members living in high cost areas.
    The best way to reduce waiting lists in the long run is to improve 
housing allowances. Improving the allowance system will reduce members' 
out-of-pocket costs and allow them to afford a wider selection of 
quality housing in the private sector.
    We have also instituted aggressive housing referral efforts to 
identify and capture the maximum supply of affordable community 
housing.
              budget benefits of privatization of housing
    Question. The housing construction budget is down more than 30 
percent from last year. Does this mean we have a less severe problem 
than last year? What does this say about our commitment to quality of 
life initiatives? Do you believe the housing budget is adequate for 
fiscal year 1998? What is the right number? How many housing units does 
a 30 percent reduction represent?
    Answer. The reduction in the family housing construction account 
represents our decision to step back from acquiring new homes that the 
Government would own and operate. The Department of the Navy plans to 
rely more on improved housing allowances; privatization authorities; 
and enhanced housing referral services to meet the housing needs of 
Navy and Marine Corps families. This decision reinforces our commitment 
to quality of life and provides a balanced approach to reducing our 
housing shortfalls.
    Our fiscal year 1998 request supports our policy to ``first fix 
what we own.'' In addition to revitalization, we budget for replacement 
construction projects for units that can no longer be economically 
repaired and maintained. Although the dollar value of our improvement 
request is down slightly from fiscal year 1997, the number of homes 
being renovated remains about the same at 2,300 homes in 31 locations. 
This year's request also includes two projects for the replacement of 
260 homes at Lemoore and Twentynine Palms, California, and two projects 
for a total of 337 new homes at Camp Pendleton and Miramar, California.
    The 30 percent reduction to our construction program request 
equates to about $125 million. At a nominal cost of $142,250 per unit 
cost, this would be about 878 homes.
              new public/private housing initiative in dod
    Question. What is your assessment of the Military Housing 
Privatization Initiative? What are the long-term impacts that we can 
expect in the way of Housing construction? Can the initiative be 
extended to the construction of barracks as well? What can we expect to 
see in the way of projects in the current calendar year?
    Answer. The DOD Military Housing Privatization Initiative (MHPI) is 
off to a good start. It receives praise in public and private forums, 
and requests for activity site visit evaluations continue to increase 
as installation Commanding Officers recognize the potentials for 
leveraging currently held land and housing assets as the Department's 
equity investment in Public-Private Venture (P/PV) deals. We are 
aggressively flattening the learning curve in the application of the 
MHPI Authorities with the help of real estate industry consultants and, 
thereby, increasing the likelihood of a fair investment return and 
reduction of market risks to the developer.
    With respect to long-term impacts on housing construction, the 
Department is shifting course away from traditional Navy construction 
in pursuit of new acquisition methodologies. We anticipate being able 
to identify candidate P/PV projects as part of the budget request in 
the future, but we are not there yet. Housing MILCON funding serves two 
vital purposes. It: (1) provides the only liquid form of equity 
available for P/PV deals; and, (2) keeps the Navy on track with its 
promise to ``fix what we own.'' New housing Authorities, improved 
housing allowances, and enhanced housing referral services will be 
creatively matched with housing requirements to reduce operating costs, 
and multiply the return on our investment through the careful 
leveraging of Navy assets.
    The fiscal year 1996 MHPI legislation included language which 
authorized the Services to address bachelor quarters construction 
requirements. We have been focusing our energies in pursuing P/PV 
initiatives for family housing, and have conceptually discussed 
possible BQ P/PV projects.
    I cannot reasonably predict whether we will have any P/PV projects 
developed to the point where we will provide Congressional notification 
on a solicitation for proposal or intent to sign a contract by the end 
of this calendar year. There are still uncertainties that must be 
resolved, some of which are beyond our immediate control. We are 
proceeding with 10 projects in various stages of development. The most 
advanced Navy projects are to provide 824 homes at Norfolk, Virginia 
and 238 homes at Newport, Rhode Island. Site visits have been completed 
at these locations and project data are being analyzed. The most 
advanced Marine Corps projects are at Marine Corps Base Camp Pendleton, 
California where we plan to construct 204 new homes and revitalize 512 
others, and at Marine Corps Logistics Base Albany, Georgia where we 
plan to dispose of 419 houses off-base and construct 160 new homes.
                    community development facilities
    Question. What is in this budget in the way of community 
facilities, such as child care or child development centers, physical 
fitness centers, community centers? How many of each, roughly are in 
the budget? Is it true that there are only 2 gymnasiums and no Child 
Development Centers in the Air Force budget? The Marsh commission on 
quality of life issues recommended 44 (forty-four) fitness centers and 
child development centers. What is the need for such facilities? What 
is the unfunded need for these type of facilities?
    Answer. The fiscal year 1998 Department of the Navy military 
construction budget includes one Child Development Center, two Physical 
Fitness Centers, one Community/Recreation Center, and one Religious 
Education/Community Support Center. There is one additional Physical 
Fitness Center in our BRAC budget. We are evaluating the feasibility of 
contracting with private child care providers as a way to provide cost-
effective care for more military families.
    Question. Adequacy of funding for Maintenance and Repair of 
Military Family Housing and Real Property Maintenance for Military 
Family Housing. What is the adequacy of the budget request for these 
accounts, and what is the backlog?
    Answer. The Department of the Navy's fiscal year 1998 maintenance 
request provides sufficient funding to take care of routine 
maintenance, preventive maintenance, service calls, and change of 
occupancy, and work on the backlog.
    The current critical backlog is $3.0 billion, and is projected to 
grow to $3.7 billion in fiscal year 1998.
                     unspecified minor construction
    Question. The Unspecified Minor Construction program supports 
urgent, unforeseen requirements that cannot wait for the normal 
military construction program and a lump sum is appropriated to 
accomplish requirements that arise during the year costing between 
$500,000 and $1.5 million. The Navy annual requirement for this fund is 
about $14 million. However, only $10.6 million is requested. Is this 
account under strain, and what is the right number for the fiscal year 
1998 budget?
    Answer. While the Department would like to have more funds 
available to meet unforeseen requirements, the need to balance 
competing demands for resources limited our request for UMC funding.
                                 ______
                                 

                  Questions Submitted by Senator Reid

brac funding for bachelor officers quarters at fallon naval air station
    Question. Naval Facilities Engineering Command solicited for bids 
to build a Bachelor Officers Quarters (BOQ) at Fallon Naval Air Station 
in fiscal year 1997. This project was funded from the BRAC III account 
and construction was to begin this year.
    In February of this year construction on the BOQ was deferred. What 
happened to the funds that were to be used to build this BOQ? How does 
this deferment affect operations at Fallon Naval Air Station?
    Answer. The BOQ project you refer to is the second phase of an 
earlier (fiscal year 1994) project in our BRAC III construction budget. 
The first phase, completed in 1996, provided 140 BOQ rooms; the second 
phase will provide 81 more rooms. The fiscal year 1997 BRAC III budget 
you refer to anticipated income of $244 million from land sales 
revenues to offset various implementation costs. The primary method of 
land conveyance to date has been Economic Development Conveyance which 
have yielded significantly less revenue than anticipated when that 
budget submission was prepared. Funding for a number of BRAC 
construction projects was not available due to this land sales revenue 
shortfall.
    The operational impact on Fallon is minimal, and occurs during peak 
loading of transient personnel at the base. During these peak times 
some transient personnel may be berthed in local hotels. We now plan to 
construct the BOQ in fiscal year 1998.
               fitness center at fallon naval air station
    Question. In last year's Military Construction Appropriation Bill 
this committee directed that not less than $400,000 be made available 
for the design of a gymnasium at Fallon Naval Air Station (anticipated 
cost $5.7M). I understand that planning for this project has not been 
initiated and that the gymnasium is not yet in the FYDP.
    I am deeply concerned, the Department of Defense echoes this 
concern, over the quality of life for our military members. 
Conversations with Navy Fallon personnel reveal that overcrowded 
conditions and long equipment waits prevent our Sailors from 
maintaining their top physical conditioning.
    When do you anticipate that this important project will arrive on 
the FYDP so that we may move forward with construction? (NOTE: No 
progress has been made on this contract even though the report language 
said that ``this design contract is to be awarded as early in fiscal 
year 1997 as practical.'')
    Answer. Preliminary design has been authorized for this project. It 
will be considered for inclusion in the FYDP during our program review 
this summer.
             mess hall addition at fallon naval air station
    Question. In last year's Military Construction Appropriation Bill 
this committee earmarked not less than $1.3 million for the acquisition 
of a mess hall addition at Fallon Naval Air Station. Can you give me an 
update on this project?
    Answer. Senate Report 104-287 which accompanied the Senate 
Appropriations Committee markup of the fiscal year 1997 Military 
Construction Appropriation Bill directed the Navy to use $1.3 million 
of the $9.973 million provided by the Committee for Navy Unspecified 
Minor Construction to construct a Mess Hall Addition. However, because 
only $5.115 million was approved in Conference Report 104-721, 
additional funds were not appropriated to allow us to proceed with this 
project. Since the requirement remains valid, we hope to be able to 
award it with fiscal year 1998 funds.
                      nato infrastructure funding
    Question. This military construction budget, at $8.4 billion, is 16 
percent smaller than what was appropriated in 1997 ($10 billion). Of 
all the account requests, I note that each reflects an overall 
reduction from last year's appropriation, with the exception of one: 
the NATO infrastructure account.
    The request for NATO is greater than what was requested for all 
five of our reserve components. Is it wise to give such assistance to 
our allies at the expense of our own guard and reserve forces?
    Answer. Development of the NATO construction budget is not entirely 
within our influence.
    NATO is a collective security organization of sixteen sovereign 
nations. Program and budget decisions for the NATO military 
construction program, now called the NATO Security Investment Program, 
are based on consensus among those sixteen nations. The U.S. 
contribution to the Alliance is determined by all sixteen member 
nations during discussions at Ministerial meetings held in the spring. 
Procedures and project execution decisions are likewise arrived at by 
consensus by member nations.
    The Department of the Navy does program and budget for reserve 
military construction projects. The fiscal year 1998 President's budget 
request includes $13.9 million budget in fiscal year 1998 and $15.3 
million in the fiscal year 1999 Military Construction, Naval Reserve 
appropriation. This amount reflects a balance between Navy and Marine 
Corps reserve construction requirements and affordability given all 
other funding requirements that the Department of the Navy must 
consider and fund.
    I would note that both active and reserve U.S. naval forces benefit 
from the availability of modern NATO support facilities.
                      Department of the Air Force

STATEMENT OF HON. RODNEY A. COLEMAN, ASSISTANT 
            SECRETARY OF THE AIR FORCE FOR MANPOWER, 
            RESERVE AFFAIRS, INSTALLATIONS AND 
            ENVIRONMENT
ACCOMPANIED BY:
        MAJ. GEN. EUGENE A. LUPIA, THE AIR FORCE CIVIL ENGINEER
        BRIG. GEN. PAUL A. WEAVER, DEPUTY DIRECTOR, AIR NATIONAL GUARD
        BRIG. GEN. JOHN A. BRADLEY, DEPUTY TO THE CHIEF, AIR FORCE 
            RESERVE

                        remarks of senator burns

    Senator Burns. The military construction request for the 
U.S. Air Force is $1.677 billion. Once again, we want to 
recognize the Air Force the way it has handled its needs and 
its service to members. While it appears that the Air Force has 
managed its construction requirements, it seems many key 
quality of life projects are being pushed out in the out-years, 
and I have a wee bit of a concern about that.
    Representing the Department of the Air Force today is the 
Honorable Rodney Coleman, Assistant Secretary of the Air Force 
for Manpower and Reserve Affairs, Installations and 
Environment. Sir, we welcome you back to the committee this 
morning.
    We have asked you to address the fiscal year 1998 military 
construction request for Air Force family housing, the Air 
Force portion of the base closure account, and requests for the 
Air Guard and the Air Force Reserve. Secretary Coleman, may I 
ask you to please introduce your witnesses, your backup 
witnesses, and you may proceed with your statement. If you want 
to make your full statement, that would be all right. But you 
can also submit your statement and summarize if you so wish.
    I would ask comments from my ranking member, Senator 
Murray. I will not forget that any more.
    Senator Murray. I appreciate that, Mr. Chairman, and I will 
just wait and ask questions after your testimony.

                      statement of rodney coleman

    Mr. Coleman. Thank you very much. Thank you, Mr. Chairman, 
Senator Murray.
    With me today is the Civil Engineer of the Air Force, Maj. 
Gen. Gene Lupia on my right. To my left is Brig. Gen. Paul 
Weaver, Deputy Director of the Air National Guard. And on my 
far right is Brig. Gen. John Bradley, Deputy to the Chief of 
the Air Force Reserve.
    We are pleased to be here to discuss with you our $1.68 
billion Milcon submittal for active duty Guard, Reserve, and 
family housing programs. Over the past 18 months, as you are 
well aware, the Air Force has crafted a strategy which spells 
out the role of air and space power for the Nation and the core 
mission capabilities critical to that strategy.
    Our responsibility is to skillfully forge a supporting 
facility and infrastructure approach to that strategy. That 
approach includes emphasis on supporting new mission beddowns, 
protecting the quality of life for our people, and reinvesting 
in our few remaining overseas bases.
    We developed an integrated priority list based on the most 
urgent needs of the total Air Force, integrating new mission, 
current mission, and environmental projects for Active, Guard 
and Reserve components, and then identified the minimum 
requirements to sustain readiness and quality of life.
    We are on target to demolish our worn out and obsolete 
facilities and infrastructure in order to reduce operations and 
maintenance costs. We are also looking very hard at maintaining 
only those facilities that we need to meet core mission 
requirements. We are proceeding to effectively determine what 
we need and to look out for opportunities to consolidate 
functions and retain facilities.
    But even our best management of declining resources will 
not be enough, Mr. Chairman. We have to stretch our dollars and 
use every means available to protect our hard-fought position 
as the world's most respected air and space force.
    Last year's legislation that enabled us to pursue 
privatization of family housing and dormitories hits the mark. 
We also welcome the opportunity to privatize other assets of 
our fiscal plan where it makes economical and operational 
sense. We can optimize our resources using better business 
practices, privatization, or what we call corporate asset 
management. We must think outside the box and embrace 
innovations which are not part of our current paradigms.
    An example of that is our military housing and dormitory 
privatization program. Right now we have 10 privatization 
projects at 10 separate installations, which could produce as 
many as 4,000 new or renovated housing units for our Air Force 
families.
    Well, you may ask, so what? Can we not do that with our 
regular Milcon funds? The difference--the answer is yes, but 
the difference is that with privatizing we are leveraging our 
resources for about a three to one return on our tax dollars, 
getting three times as many units for the same dollar.
    Our people are the foundation of our strength and we must 
recruit, train, and retain the highest quality force possible. 
In this light, we take the needs of our people very seriously. 
Privacy remains the No. 1 concern among our airmen. We have 
focused on the buyout of all remaining permanent party gang 
latrine dormitories. With your constant support, we will be 
able to fully achieve this improvement in the quality living 
conditions with the fiscal year 1999 Milcon program. Then we 
will focus on depleting our 14,000 room dormitory deficit.
    Our fiscal year 1998 quality of life Milcon request 
includes the 10 permanent party dormitory projects valued at 
$128 million and two fitness centers valued at $6.5 million.
    Military family housing is one of our most important 
programs. We are requesting $139 million for fiscal year 1998 
projects at 16 Conus bases that will construct 70 new houses, 
replace 899 existing houses, and replace one housing support 
facility. The replacement units will take the place of existing 
homes that are no longer economical to maintain.
    Our housing budget request reflects our longstanding 
commitment to provide our Air Force families with homes and 
communities that are as comparable to private sector housing as 
we can make them.
    So in conclusion, Mr. Chairman, I want to thank the 
committee for its strong support of the Air Force military 
construction program and its resulting benefits in Air Force 
readiness, recruiting, training, retention, and the quality of 
life of our people. We are ready to respond to any of your 
questions.
    [The statement follows:]

              Prepared Statement of Hon. Rodney A. Coleman

                              introduction
    Mr. Chairman and members of the committee, good morning. I 
appreciate the opportunity to appear before you today to discuss the 
Department of the Air Force fiscal year 1998 military construction 
program.
                                overview
    As the Air Force recognizes its fiftieth anniversary, it is only 
fitting that we celebrate it during a watershed year. 1997 will see a 
remarkable series of events that will define Air Force direction and 
capability for many years to come. Every member of the Air Force will 
impact these events, and every member will be affected by them. Our 
responsibility now lies in mapping out and understanding this journey's 
turning points and major objectives.
    The major objectives of the military construction program must be 
in line with the corporate Air Force. In that light, we will seek to 
follow the path outlined during the long range planning effort. The 
plan's vision, based on fundamentally sound core values, includes 
creating a corporate identity based on a common understanding of Air 
Force core competencies; sustaining our modernization and quality of 
life initiatives; and helping to ensure the success of the quadrennial 
defense review.
    As a result of these goals to support Air Force core competencies, 
force modernization, and our people we are focusing on reducing our 
physical plant using private sector partnerships and sound business 
practices. This will ensure that our infrastructure efficiently 
supports necessary Air Force missions and force structure. We are 
pursuing this ``rightsizing'' of the Air Force physical plant using a 
variety of means which include demolition, consolidation, divestiture 
and privatization.
    We must also balance installation support requirements, while 
accepting a greater level of risk, without diminishing readiness and/or 
quality of life. As with previous submissions, installation programs 
continue to reflect hard decisions and tough choices. The maintenance 
and repair of facilities and infrastructure at Air Force installations 
are essential to our core competencies. We are striving to maintain 
facilities and infrastructure where Air Force people work and live to 
preclude weakening unit readiness, impairing mission accomplishment or 
degrading quality of life. The Air Force corporate strategy for the 
installation support program includes:
  --Ensuring our Milcon program places emphasis on supporting new 
        mission beddowns and current mission necessities, including 
        redirecting limited capital investment to our most pressing 
        requirements.
  --Maintaining our operations and maintenance programs to protect the 
        quality of life of our personnel and their families.
  --Reinvesting in the few remaining overseas bases, which even after 
        host-nation burdensharing have numerous facility needs critical 
        to Air Force core competencies.
  --Maintaining a fundamentally sound, risk-based, environmental 
        program in view of fiscal constraints.
    I must stress, however, that even our best stewardship of declining 
resources will not be enough. The Air Force recognizes that we must 
look at our installation facility requirements differently than in the 
past. This is why the Air Force was very supportive of the fiscal year 
1996 legislation enabling us to pursue privatization of military 
housing and dormitories. We also welcome the opportunity to privatize 
other assets of our physical plant where it makes sense. One example is 
the privatization of our base utilities.
    The actions outlined in this military construction budget will 
fundamentally influence our installation investment strategy and 
quality of life well into the next century. Properly done, these 
actions will be a powerful investment in the future.
    Mr. Chairman, we are cognizant that the Air Force could not 
maintain the quality of any of our facilities and the advantages they 
render without the strong support we have always received from this 
committee, for which we are most appreciative.
    With this background, Mr. Chairman, I would like to proceed now to 
discuss the major program areas of our Milcon budget request. I will 
review the Active Force Program--including military family housing--the 
Air National Guard Program, and the Air Force Reserve Program. Finally, 
I will address the Air Force part of the Department of Defense budget 
request for base realignment and closure accounts.
                 air force military construction budget
    The Air Force Milcon program consists of three principal areas: new 
mission, current mission, and design and unspecified minor 
construction. New mission construction supports the beddown of new 
weapon systems and force structure realignments. Current mission Milcon 
revitalizes existing facilities and infrastructure, and builds new 
facilities to correct existing deficiencies. Design and unspecified 
minor construction includes funds to design our construction projects 
and a small program to handle urgent, unforeseen construction 
requirements.
    Our total Air Force military construction budget request for fiscal 
year 1998 is $1.68 billion. This request includes $1.60 billion for 
Active duty military construction ($520 million for traditional Milcon 
and $1.08 billion for military family housing), $60.0 million for Air 
National Guard Milcon, and $14.6 million for Air Force Reserve Milcon.
          active duty air force military construction program
    The Active Air Force's fiscal year 1998 military construction and 
family housing programs were developed using a facility investment 
strategy with the following objectives: maintain what we have; beddown 
new missions; support quality of life investment; optimize use of 
public and private resources; continue demolition program; reinvest 
overseas; and continue environmental leadership.
Program Overview
    This year we significantly departed from the way Milcon allocation 
occurred in the past. The major commands were tasked to submit an 
unconstrained list of their budget requirements. Our Milcon integrated 
process team, the cornerstone of the Air Force corporate structure, 
developed an integrated priority list based on the most urgent needs of 
the total Air Force, and integrating new mission, current mission, and 
environmental projects for Active, Guard, and Reserve components. This 
priority list was presented to the corporate structure--to include the 
Chief of Staff and the Secretary of the Air Force--for review and 
approval.
Current Mission: Maintain What We Have
    ``Maintaining what we have'' is the investment strategy underlying 
our current Milcon program. This concept results in identifying the 
minimum requirements to sustain readiness and quality of life. This 
strategy is rooted in the stewardship entrusted to us for maintaining 
eighty-eight major installations. We are not looking to increase our 
spending on infrastructure or new facilities. Conversely, we are 
targeting demolition of worn out or obsolete facilities and 
infrastructure in order to reduce reoccurring operations and 
maintenance costs. During the BRAC process, we deliberately delayed 
funding for most of the current mission Milcon while we awaited final 
closure decisions.
    With the BRAC 95 cycle complete, we are looking at our remaining 
installations and assessing their infrastructure and facility needs--
rather than what we would like to have. We are looking very hard at 
keeping only those facilities which we need to meet the core 
competencies stated by the corporate Air Force.
    We will continue our vigil to effectively use available resources 
to determine what we need, to care for what we own, and to look for 
opportunities to consolidate functions in retained facilities.
Beddown New Missions: Provide Timely Support to Modernization and 
        Weapon System Beddowns
    The Air Force is ever evolving, modernizing and realigning weapon 
systems to guarantee future relevancy in an ever changing world. We are 
developing, testing and fielding new aircraft, satellites, and 
communications systems. We are realigning our aircraft to take better 
advantage of their capabilities. This year the integrated 
prioritization process funded 62 percent of known mission requirements. 
We funded those projects essential for our core modernization as well 
as some construction supporting force structure changes.
    Military construction is needed to support programs such as the C-
17; joint surveillance and target attack radar system (JOINT STARS); 
space based infrared systems;, ballistic early warning system; and 
conventional air launched cruise missiles.
C-17
    The C-17 Globemaster III aircraft is designed to replace our aging 
fleet of C-141 Starlifters. It combines the airlift capabilities of the 
C-141, the C-5 galaxy's ability to carry oversize cargo, and the C-130 
hercules' ability to land directly on short, forward-located airstrips. 
In November 1995, the Defense acquisition board determined that the C-
17 met the Nation's needs, after which, the Under Secretary of Defense 
approved the purchase of all 120 aircraft requested.
    At that time, McChord Air Force Base, Washington, was designated as 
the second active duty operational base for the aircraft. We had 
already identified Charleston Air Force Base, South Carolina, as the 
first active duty operational base, and Altus Air Force Base, Oklahoma, 
as the C-17 training base. Since then we have identified Thompson 
Field, Mississippi, as the Air National Guard operating location. 
Military construction projects satisfying the total beddown requirement 
at Charleston Air Force base total $144.4 million; with $87.4 million 
at Altus Air Force Base; and $133.5 million at McChord Air Force Base. 
The fiscal year 1998 program includes both an engine test cell facility 
and a maintenance hangar at McChord Air Force Base at a cost of $10 
million. Air National Guard beddown requirements at Thompson Field have 
not been determined.
JOINT STARS
    JOINT STARS is an Army and Air Force system designed to detect, 
locate, and classify targets. The system then provides the information 
to successfully execute attacks against these targets. The Air Force 
main operating base for J-STARS is Robins Air Force Base, Georgia, 
where we are requesting $18.7 million for five projects. These projects 
will provide facilities needed for continuing beddown of the JOINT 
STARS aircraft. Prior year Milcon to support JOINT STARS at Robins Air 
Force Base totals $92.0 million. Future Milcon requirements at Robins 
Air Force Base totals approximately $13.1 million. There are two 
forward operating locations for J-STARS, one in Europe at Raf Fairford, 
United Kingdom, and the other in the Pacific, at Kadena Air Base, 
Japan. These two locations will require minimal operations, 
maintenance, and support facilities for J-STARS due to reuse of 
existing facilities as a result of defense drawdowns in Europe and 
Japan.
Space Based Infrared System (SBIRS)
    The goal of the SBIRS program is to consolidate all space based 
infrared systems into one integrated architecture. SBIRS replaces the 
existing defense support program providing early warning and 
assessment. The SBIRS will consist of a mission control station and two 
unmanned relay ground stations. It will consolidate the defense support 
program functional capability at the mission control station and enable 
us to close down two manned overseas ground stations.
    The mission control station will be located at Buckley Air National 
Guard Base, Colorado, and the two unmanned relay stations will be 
located in Australia and Europe. Fiscal year 1997 Milcon totaled $14.4 
million and provided the mission control station at Buckley Air 
National Guard Base. The $14.0 million Milcon project in fiscal year 
1998 will construct the two unmanned remote ground stations.
Ballistic Missile Early Warning System (BMEWS)
    The BMEWS Program provides continuous and supportable missile 
warning data to North American Aerospace Defense Command and U.S. Space 
Command. The $47 million fiscal year 1998 Milcon project allows BMEWS 
beddown at Clear Air Station, Alaska. This upgrades the 1960's 
technology to include installation of a precision acquisition vehicle 
entry/phased array warning system (PAVE/PAWS) radar that increases the 
stations inherent operational capabilities. The technology is required 
to maintain the missile warning system well into the next century.
Quality of Life
    The Department of the Air Force continues to believe that our 
people are the most important asset of our service. The Secretary 
maintains that they are the foundation of our strength, and that we 
must recruit, train, and retain the highest quality force possible. If 
we are to be successful, then this Air Force team must take care of our 
people and their families.
    Privacy remains the number one concern among our airmen in 
unaccompanied personnel housing. As we mentioned last year, the Air 
Force has targeted the buyout of all remaining permanent party central 
latrine dormitories. With your continued support, we will be able to 
conclude this immediate, and most pressing, improvement to quality 
living conditions with the fiscal year 1999 Milcon program. The Air 
Force will then turn its attention to our 14,000 room deficit. The 
support of this and other committees has enabled a one-half billion 
dollar investment of Milcon and quality of life enhancement funds over 
the last two fiscal years--another great stride in ``putting our people 
first.''
    The Air Force is continuing its commitment to provide at least a 
private sleeping room to every permanent party airman we house. We have 
began implementation of new assignment policies which will phase our 
junior enlisted personnel into private rooms over the next six fiscal 
years.
    I would be remiss if I didn't report on how the Air Force used the 
additional funds you gave us last year. The $58 million for dormitory 
Milcon enabled us to build and revitalize over 1,000 rooms, and the 
$108 million in quality of life enhancement funds allowed us to convert 
eighteen central latrine dormitories to provide privacy and improve 
living conditions for our airmen. It also reduced our most pressing 
dormitory maintenance and repair requirements.
    Our fiscal year 1998 quality of life Milcon request includes ten 
permanent party dormitory projects valued at $128 million, and two 
fitness centers for $6.5 million.
Optimize Use of Public and Private Resources
    While revolutionary changes in basing requirements are unlikely to 
occur over the short term, careful planning is critical to achieving 
the desired structure at the appropriate future time without the 
unnecessary expenditure of constrained resources. The first essential 
step in leveraging our resources is the movement towards better 
business practices--privatization, or what we call corporate asset 
management (CAM). The greatest obstacle in pursuing CAM is our comfort 
with the old and familiar ways of doing business. Unless we 
aggressively move beyond those ways with all the ingenuity at our 
command, we will not be able to capitalize on the opportunities that 
await us.
    As we prepare for the first quarter of the 21st century, we must 
think ``outside the box'' and embrace innovations far removed from the 
paradigms we have today. These include, but are not limited to, changes 
in military family housing and dormitory privatization. Right now we 
have ten privatization projects at ten installations which could 
produce as many as 4,000 new or renovated housing units for our Air 
Force family. Well, you may ask so what * * * can't we do that with 
regular Milcon funds? The difference is that with privatization, we are 
leveraging our resources for a three to one return on our tax dollars--
getting three times as many units for the same dollar.
    One final observation: We depend on corporate asset management to 
complement our military family housing budget--not to take its place. 
We need housing Milcon to meld with funds from the family housing 
improvement fund to act as seed money for potential privatization 
initiatives. Without the Milcon funding base, privatization as we know 
it today would not be possible.
Overseas Milcon
    Air Force overseas basing and force structure is finally stable 
after years of base closures and major force reductions. In Europe, we 
now have six main operating bases: two in Germany, one in Italy, two in 
England and one in Turkey. In the Pacific, we have five such bases: two 
in Korea and three in Japan. During the recent period of closures and 
force structure reductions, we refrained from investing in our overseas 
installations. Now that things are more stable, we must prudently 
reinvest in these installations. We are actively pursuing NATO funding, 
host nation funding, and payment-in-kind; however, the need is bigger 
than available burdensharing opportunities can satisfy.
    Our 1998 program for our European and Pacific installations 
includes $71 million in unclassified Milcon. The program consists of a 
fire training facility at Kunsan Air Base, Korea; four dormitory 
projects at Kunsan and Osan Air Bases in Korea: Raf Lakenheath, 
England; and Spangdahlem Air Base, Germany; a water treatment plant at 
Lajes Field, Portugal; and a utility upgrade project and a waste water 
disposal system project at Aviano Air Base, Italy. For all European 
projects, we are sending a precautionary prefinancing statement to the 
NATO infrastructure committees. These statements will permit recoupment 
from the NATO infrastructure program if eligibility is subsequently 
established.
Environmental Milcon
    As we continue our stewardship of the environment, we are dedicated 
to improving our already open relationship both with the regulatory 
community and with our installation neighborhoods. We not only strive 
to ensure our operations meet all environmental regulations and laws, 
but we also seek out partnerships with local regulatory and commercial 
sector counterparts to share ideas and create an atmosphere of trust. 
Our aggressive campaign to foster an environmental ethic within the Air 
Force culture has enabled us to sustain operational readiness, be a 
good neighbor, and leverage our resources to remain a leader in 
environmental compliance and cleanup.
    To that end, we have partnered with regulators and local 
communities to execute projects supporting the Presidential mandate to 
reinvent environmental regulations. These projects support our paradigm 
shift to implement pollution prevention projects that eliminate future 
compliance requirements. This allows better business decisions both for 
us and for others concerned with the fate of our shared environment.
    As a result of these cooperative efforts, we have established 
schedules for cleanup commensurate with funding levels, responded to 
community concerns, preserved precious natural, cultural, and 
historical resources, while continuing to maintain a high level of 
operational readiness. We also were able to decrease the number of open 
notices of violations from 262 in fiscal year 1992 to 35 in fiscal year 
1998. This is important for today, and even more important for our 
future.
    Our environmental compliance Milcon request for fiscal year 1998 
totals $32 million for eight, level-1 compliance projects. Our program 
focuses on environmental projects for sanitary sewer systems, 
wastewater treatment facilities, and fire training facilities. All of 
these projects satisfy level-1 requirements. Level-1 compliance 
requirements refer to conditions or facilities currently out of 
compliance with environmental laws or regulations, including those 
which are the subject of a compliance agreement.
    I would also like to draw attention to our stewardship of the 
Defense environmental restoration account. In fiscal year 1997 we 
obligated 34 percent of the budget on actual clean-up actions. This 
year we have turned the corner on studies and will use the lion's share 
of the account, 82 percent, for actual clean-up activities.
Unspecified Minor Construction (P-341 funds)
    We have requested $9 million in fiscal year 1998 for unspecified 
minor construction funds (P-341), which will provide the Air Force with 
its primary means of responding to small, unforeseen Milcon 
requirements that cannot wait for the normal military construction 
process. The rapid rate of change taking place in the Air Force is 
putting a strain on this account. From fiscal year 1991 through 1995, a 
total of $11.9 million was reprogrammed into the account to fund urgent 
requirements. The fiscal year 1993 through fiscal year 1997 accounts 
are now fully committed.
Planning and Design
    Our request for fiscal year 1998 planning and design is $41 
million. These funds are required to complete design of the fiscal year 
1999 construction program and to start design of our fiscal year 2000 
projects.
                        military family housing
    As in years past, the Air Force leadership considers military 
family housing to be one of our most important programs. We are 
convinced that no other facility program so greatly influences the 
performance and commitment of our people as much as having quality 
homes for their families. Maintaining our commitment to the family 
housing program is even more important in this era of major force 
reductions and increased operating and personnel tempo demands. because 
these factors are so stressful for military families, it is imperative 
that we continue to emphasize quality of life issues to mitigate the 
stress.
    Due in large part to strong congressional support, our military 
family housing investment program has been sustained during recent 
force structure changes. Even so, the average age of our family housing 
inventory is 34 years, and over 58,000 of our current 110,000 housing 
units do not measure up to contemporary standards. While we definitely 
must continue our major improvement and replacement programs, the 
current funding stream won't get the job done for at least 26 years.
    The Fiscal Year 1996 Defense Authorization Act created the family 
housing improvement fund. The authorization act permits military family 
housing and dormitory privatization initiatives which enables us to 
accelerate improvement and replacement of our existing family housing 
inventory. We recently released a request for developer proposals to 
provide 420 privately owned housing units at Lackland Air Force Base, 
Texas. So, in lieu of spending Milcon dollars for only 140 units, we 
will get almost three times as many units for the same amount of money. 
That's good business. This is the first of several projects that will 
leverage Milcon funds, existing houses, lands, and family housing 
improvement fund dollars with private sector capital to satisfy a 
portion of our housing needs. We ask for your continued strong support 
for our requested investment level so we have sufficient capital to 
invest in an accelerated fix of our housing deficit.
Housing Improvements
    The Air Force ``whole house/whole neighborhood'' improvement 
concept has been extremely successful. Under this concept, we upgrade 
older homes to contemporary standards--updating worn-out bathrooms and 
kitchens, replacing obsolete utility and structural systems, providing 
additional living space as permitted by law, and at the same time, 
accomplishing all required maintenance and repair. The result is a very 
cost effective investment that extends the life of these houses 25 
years. In addition, the ``whole neighborhood'' program provides 
recreation areas, landscaping, playgrounds and utility support systems 
to give us attractive and functional living environments.
    Our fiscal year 1998 improvement request is $102 million. This 
amount revitalizes 938 homes at 13 bases. This includes $73.9 million 
for 748 homes in the continental United States, $21.6 million for 190 
homes overseas, and $6.5 million for three neighborhood improvement 
projects.
New Construction
    We are requesting $139 million for fiscal year 1998 projects at 16 
conus bases to construct 70 new houses, replace 899 existing houses, 
and replace one housing support facility. The replacement units will 
take the place of existing homes that are no longer economical to 
improve.
Operations, Utilities and Maintenance
    Our fiscal year 1998 request for family housing operations, 
utilities and maintenance is $713 million. These funds are necessary to 
operate and maintain the 110,000 homes remaining in the fiscal year 
1998 Air Force inventory, representing a replacement value exceeding 
$12.5 billion. Approximately 75 percent of this requested funding 
represents the Air Force's obligation as homeowners for items such as 
utilities, refuse collection, and routine maintenance. The remaining 25 
percent is for major maintenance contracts to fix the deteriorating 
infrastructure, such as repairs to electrical distribution systems, 
streets and roofs.
Leasing
    We have requested $117 million for leasing both domestic and 
overseas houses.
    Our fiscal year 1998 military family housing budget request 
reflects our commitment to provide our Air Force families with homes 
and communities that are comparable in design and amenities to private 
sector housing. This program continues to put our people first by 
fostering a sense of community and supporting neighborhood identity. We 
seek to achieve a pride of place mentality within our family housing 
community. We ask for the support of the committee in approving the 
full request for our military family housing program.
                air national guard military construction
    The Air National Guard is an integral element of the total Air 
Force, and has been a full partner in the Air Force mission for a long 
time. The Air Force is increasingly using Guard and Air Reserve Forces 
whenever and wherever it makes good sense. Air National Guard personnel 
operate side-by-side with their active duty counterparts in all 
theaters of operation as part of a true total force team. The Air Guard 
remains a cost effective, community-based defense force trained and 
equipped to rapidly and skillfully respond to the needs of our country, 
our states and our local communities. The volunteer spirit of our Air 
Guard women and men continues in the finest tradition, history and 
culture of the militia of this nation.
Program Overview
    The Air National Guard Program for fiscal year 1998 totals $60.0 
million, including $49.0 million for military construction, $4.0 
million for unspecified minor construction, and $7.0 million for 
planning and design. This will support the readiness of Air Guard units 
by modifying facilities to support mission beddowns and force structure 
changes. It will also ensure compliance with environmental laws and 
regulations. It addresses only our most urgent needs, as identified and 
prioritized by our integrated project matrix.
New Mission
    The fiscal year 1998 new mission Milcon request supports the 
continuing trend of transferring an increasing number of different 
missions to the Air National Guard. The Milcon portion is $37 million, 
which comprises 62 percent of the Air Guard Program.
    This new mission budget request includes projects for the B-1 
beddown at Robins Air Force Base, Georgia; C-130 conversion at Boise 
Air terminal, Idaho; an aircrew combat training system range support 
facility at Alpena County Airport, Michigan; and upgrades of base 
infrastructure systems at Buckley Air National Guard Base, Colorado.
Environmental Compliance
    The Air Guard requests $12.0 million for environmental projects at 
eight locations. These projects will bring fire training facilities and 
fuel cell/corrosion control hangars into compliance with environmental 
regulations, and also provide vehicle washing facilities at two bases. 
This supports our goal to ensure that Air Guard bases comply with all 
Federal, State and local environmental laws. Our staff continues to 
work closely with environmental agencies at every level to resolve and 
eliminate all Air Guard notices of violation.
Unspecified Minor Construction
    We are requesting $4.0 million for this very important program on 
which we depend to satisfy urgent, unforeseen requirements that cannot 
wait for the fiscal year 1999 budget. As with past programs, the large 
majority of projects are expected to be in direct support of aircraft 
conversion and modernization requirements.
Planning and Design
    Our 1997 budget request for $7.0 million will allow us to complete 
and initiate the design for those projects planned for inclusion in the 
respective 1999 and 2000 budget requests.
                air force reserve military construction
    The Air Force Reserve has emerged from another period of 
reorganization, force structure reductions, and constrained budgets 
with an increased role in national defense. Our 73,300 reservists now 
work and train at 67 locations. The Air Force Reserve is host at four 
major installations and eight air Reserve stations, and is a tenant at 
55 locations, mostly on Active Air Force bases.
Program Overview
    The 1998 Reserve military construction budget request of $14.6 
million represents a sound facility investment strategy which is in 
line with the objective prioritization matrix executed by the corporate 
Air Force. Though the budget is tight, it meets the highest priority 
requirements supporting the total Air Force mission. The long-range 
strategy prioritizes our Reserve Milcon into four categories:
    Included in our $14.6 million fiscal year 1998 Milcon budget 
request is $5.2 million for major construction of three projects at 
Youngstown Air Reserve Station, Ohio, $4.6 million for unspecified 
minor construction, and $1.5 million in planning and design. Our fiscal 
year 1998 request also includes two environmental compliance projects, 
a fire training facility at Westover Air Reserve Base, Massachusetts, 
and a corrosion control facility at Minneapolis-St. Paul Air Reserve 
Station, Minnesota. This request adequately funds all Air Force Reserve 
new mission requirements.
Environmental Compliance
    The top facility priority in our fiscal year 1998 program is to 
satisfy our level-1 environmental compliance requirements. One project 
will provide an environmentally safe fire-fighter training facility, 
and the other will bring a corrosion control facility into compliance 
with stringent environmental laws.
New Mission
    Having ensured environmental compliance, we then concentrate on new 
mission requirements. In fiscal year 1998, we have three projects that 
support additional C-130's at Youngstown Air Reserve Station, Ohio.
Unspecified Minor Construction
    The Air Force Reserve request $4.6 million in fiscal year 1998 for 
unspecified minor construction. As in the case of the active duty Air 
Force and the Air National Guard, this authority will provide the 
Reserve with its primary means of responding to small unforeseen Milcon 
requirements. The current rapid rate of aircraft conversions places 
extraordinary demands on this account. To respond to these and other 
changes, we need the strong support of this committee for this request.
Planning and Design
    Our planning and design request for fiscal year 1998 is $1.5 
million. These funds are required to complete design for the fiscal 
year 1999 Milcon program, achieve 35 percent design completion for our 
fiscal year 2000 program, and fully design all late-to-need 1998 new 
mission Milcon projects.
                         base closure accounts
    The Air Force requirements included in the Department of Defense 
fiscal year 1998 budget request for the base closure accounts are 
designed to support the President's five-part program by continuing to 
transfer property at closure installations as quickly and efficiently 
as possible to communities for economic reinvestment at the earliest 
opportunity. As part of the Defense budget, the Air Force request 
reflects a thorough review of all remaining requirements and careful 
budgeting to fulfill validated requirements to the greatest extent 
possible within the budget constraints of the Defense Department. The 
Air Force has significantly improved execution of the BRAC Program, 
effectively minimizing the unobligated balances of past years.
    As a result of these initiatives, we budgeted $139 million for the 
BRAC 1991 account, $120.2 million for BRAC 1993, and $353.4 million to 
meet fiscal year 1998 requirements for BRAC 1995. Of these three fiscal 
year 1998 budget amounts, $124.6 million support fiscal year 1998 
military construction and family housing construction requirements at 
realigned bases. This amount completes the construction programs for 
BRAC 93, and fully funds fiscal year 1998 construction requirements for 
BRAC 95.
    The Department of the Air Force continues to be committed to 
timely, thorough environmental restoration, and smooth transition of 
closing bases to civilian uses as soon as possible. In addition to 
turning over closure bases for reuse, we continue the realignment 
beddown process at remaining installations to ensure base closure does 
not disrupt our operational requirements nor adversely affect quality 
of life issues. We appreciate the support of this committee in meeting 
these objectives.
                               conclusion
    In conclusion, Mr. Chairman, I thank the committee for its strong 
support of the Air Force military construction program and the 
resulting benefits to the Air Force in readiness, retention, 
recruiting, training and the quality of life for our personnel.
    The fiscal year 1998 Air Force military construction submission 
reflects the corporate priorities supporting Air Force core 
competencies while working to maintain our deteriorating plant. Our 
installations constitute a crucial factor in Air Force readiness. We 
rely on our bases as places for people to work to effectively project 
U.S. air and space power. This budget submission reflects our 
commitment to maintain the quality of Air Force installations to help 
ensure that the U.S. Air Force remains the world's most respected air 
and space force.
    Thank you Mr. Chairman and members of the committee. I will be 
happy to address any questions you may have.
                                 ______
                                 

                Biographical Sketch of Rodney A. Coleman

    Rodney A. Coleman is assistant secretary of the Air Force for 
manpower, Reserve affairs, installations and environment, Washington, 
D.C. He is responsible for the management and policy of all matters 
pertaining to the formulation, review and execution of plans and 
programs for Air Force military and civilian personnel, Reserve and 
Guard forces, installations and environment. He assumed this position 
April 14, 1994.
    Mr. Coleman was born Oct. 12, 1938, in Newburgh, N.Y. He earned a 
bachelor of architecture degree from Howard University in 1963, and was 
commissioned as a second lieutenant through the Air Force Reserve 
Officer Training Corps program.
    He served on active duty from 1963 to 1973, attained the rank of 
captain and compiled a distinguished career as an Air Force civil 
engineering officer. During his Air Force career, he was directly 
responsible for the design and construction management of military 
facility projects valued in excess of $10 million. Among the numerous 
projects Mr. Coleman was involved in during his military career was 
serving as the project architect for the million dollar renovation and 
addition to the prestigious Bolling Air Force Base Officers' Club, the 
largest Air Force officers' club in the world.
    Mr. Coleman is the recipient of the Bronze Star Medal, Republic of 
Vietnam Technical Services Honor Medal-First Class, Meritorious Service 
Medal and Air Force Commendation Medal. He also served as an augmentee 
officer-in-charge of the elite U.S. Air Force Honor Guard. In 1970 he 
was one of 17 individuals appointed by the president as a White House 
Fellow, and served as a special assistant to the secretary of the 
interior.
    After separating from the Air Force, he was appointed executive 
assistant to the chairman of the District of Columbia City Council. 
From 1978 until 1980 he was an architectural design consultant to the 
Pennsylvania Avenue Development Corp., Washington, D.C. He joined 
General Motors in 1980 and served successively as director of 
government relations, as director of municipal government affairs, and 
as executive director of urban and municipal affairs. Among Mr. 
Coleman's responsibilities during his GM career was coordinating the 
government relations activities with local governments incident to the 
largest plant closing and consolidation activity in the company's 
history. More than 30 GM facilities were closed throughout the country 
during this rationalization process.
    Mr. Coleman has two children, a son, Stephen, and a daughter, 
Terri.
                               education
    1963--Bachelor of architecture degree, Howard University, 
Washington, D.C.
    1988--The Executive Development Program, University of Michigan 
Graduate School of Business
                           career chronology
    1. June 1963, commissioned as a second lieutenant through the Air 
Force Reserve Officer Training Corps program
    2. June 1963-February 1965, chief, requirements and planning 
branch, U.S. Air Force Civil Engineering Squadron, Dover Air Force 
Base, Del.
    3. March 1965-April 1966, engineering officer, U.S. Air Force Civil 
Engineering Squadron, Kunsan Air Base, South Korea
    4. April 1966-August 1969, project architect, U.S. Air Force Civil 
Engineering Squadron, Bolling Air Force Base, D.C.
    5. September 1969-June 1970, Air Force representative, U.S. Air 
Force Institute of Technology Education-with-industry program, Day and 
Zimmerman, Inc., Architects and Engineers, Philadelphia
    6. September 1970-September 1971, White House fellow, Special 
Assistant to the Secretary of the Interior, Washington, D.C.
    7. October 1971-July 1972, chief, engineering and construction 
branch, 366th Civil Engineering Squadron, Da Nang Air Base, South 
Vietnam
    8. August 1972-October 1972, director, operations and maintenance 
branch, deputy chief of staff, civil engineering, Headquarters 7th Air 
Force, Tan Son Nhut Air Base, South Vietnam
    9. November 1972-July 1973, staff architect, Headquarters Tactical 
Air Command, Langley Air Force Base, Va.
    10. August 1973-January 1979, executive assistant to the chairman, 
District of Columbia City Council, Washington, D.C.
    11. January 1979-October 1980, architectural design consultant, 
Pennsylvania Avenue Development Corp., Washington, D.C.
    12. November 1980-October 1985, director, government relations, 
foundry division of General Motors Corp., Saginaw, Mich.
    13. November 1985-March 1990, director, municipal government 
affairs, General Motors Corp., Detroit
    14. March 1990-April 1994, executive director, urban and municipal 
affairs, General Motors Corp., Detroit
    15. April 1994-present, Assistant Secretary of the Air Force for 
manpower, Reserve affairs, installations and environment, Washington, 
D.C.
                      major awards and decorations
    1996--The Howard University Distinguished Alumni Award for 
Postgraduate Achievement in Corporate and Government Service
    1996--The Lt. Gen. Benjamin O. Davis Jr. Distinguished Achievement 
Award, East Coast Chapter of the Tuskegee Airmen
    1996--The Black Engineer of the Year Dean's Award
    1994--The Newburgh Free Academy Distinguished Alumnus Award
    1972--Bronze Star Medal
    1972--Republic of Vietnam Technical Services Honor Medal--1st Class
    1969--Outstanding Young Men in America
    1969--Meritorious Service Medal
    1965--Air Force Commendation Medal
    1960--PONY Baseball Man of the Year
               professional memberships and affiliations
    White House Fellows Association
    Executive Leadership Council
    Air Force Association
    Tuskegee Airmen, Inc.

    Senator Burns. Thank you very much, Mr. Secretary, I have a 
couple questions.

                            aviano ab, italy

    I want to start off. We just completed a trip. We visited 
Aviano and Prince Sultan. In our planning and our presence in 
that part of the world, with security costs--we all understand 
what those are, especially at Prince Sultan--what is our long-
range liability, because there is no housing at all for 
personnel at Aviano? What is our liability there, and what does 
the Air Force have in mind as far as our longevity at Aviano?
    Mr. Coleman. I am going to have the civil engineer address 
that in more detail. But Aviano is a permanent base for us. It 
is one of our overseas bases, whereas Prince Sultan is not. We 
are looking at all the leased housing that we can possibly do 
at Aviano, and that is why--and some other Milcon at Aviano, to 
make that base a base like any other that we have in our 
overseas network.
    You want to fill in, Gene?
    General Lupia. Senator, I am on the senior executive review 
group at Aviano that meets there every 3 months to go through 
the construction program beddown, and we are, in fact, creating 
some very permanent facilities there, mostly paid for by the 
NATO Program. As a matter of fact, the vast majority of the 
bill is paid for by the NATO Program.
    In terms of housing, we right now have given Aviano 1,000 
lease points, as we call them, to be able to lease houses off 
base. Most of these houses are individually leased, and there 
are some very small complexes, 22 houses, 24 houses, et cetera. 
But we have a submission from our headquarters at Ramstein that 
would allow the Italian developers to create a 500-unit housing 
complex for us. They would not necessarily all be in one place. 
There could be a number of parcels of property. But we would 
hope, through a privatization effort much like we have going on 
here in the United States, that we would be able to release a 
request for proposal for 500 units of family housing, so that 
we could get our people closer to Aviano.
    The problem is that many of the people have to live a long 
way and travel those very narrow, two-lane roads in order to 
get to work. So we think we are on the verge of solving a good 
portion of the housing problem.
    This month, actually April, we will cut the ribbon on two 
big dormitories that have been constructed at Aviano for 552 of 
our airmen. So we will be able to get a number of our airmen 
back onto base at Aviano. And we have additional dormitories in 
the program.
    At Prince Sultan--I was through there I think just a little 
bit before you. At Prince Sultan, we are hoping that that 
housing complex will be paid for by the Saudis. Our Government 
has requested that. I think the Saudis have responded favorably 
to that. And that is how we would intend to solve the housing 
problem at Prince Sultan.
    Senator Burns. I think those negotiations were ongoing as 
we were there, and I have not followed up.
    General Lupia. Yes, sir.
    I believe the first commitment we got from the Saudis was 
that they would pay $100 million toward the bill. Our 
Government responded that that was not enough, and that we are 
now up to a commitment of about $180 million from the Saudis.
    Senator Burns. Well, General, I will tell you. I was there 
during Desert Shield and just after Desert Storm. I could not 
believe my eyes, because I think when the Air Force first went 
down there during Desert Shield I do not even think you had a 
taxiway to the main runway. I think everything had to be built, 
tarmac and the whole thing. Is that correct?
    General Lupia. That is correct, sir.
    Senator Burns. Everybody was operating under tents.
    Has the Air Force made progress in securing a lease for 
Aviano with the Italian Government? Have we got a formal 
agreement with the Italian Government for Aviano, or is that 
still----
    General Lupia. I do not know the answer to that question, 
Mr. Chairman. I will have to provide it for the record.
    [The information follows:]

    HQ USAFE has leasing agreements throughout the Aviano area. These 
leases are off-base for support purposes (e.g., hospital, school, 
regional support group administrative facilities, OSI facility, AAFES 
warehouse, etc.). The Italian government provided the Zappala area to 
the United States without a lease and at no cost. There are no plans to 
lease Aviano Air Base. One hundred tents (greenbacks) are being used 
there, solely for contingency purposes. HQ USAFE is working towards a 
formal agreement with the Italian government for Aviano. The original 
basing agreement is the 1954 Bilateral Infrastructure Agreement, which 
the Italians feel is outdated. USAFE presence at Aviano is governed by 
a memorandum of understanding (30 Nov 93) and a technical agreement (11 
Apr 94), both of which fall under the framework of the 1954 Bilateral 
Infrastructure Agreement. In early 1995, the United States and Italy 
agreed to standardize basing agreements and, when possible, develop a 
subordinate and separate technical agreements for each location. The 
technical agreement is part of the overall basing agreement being 
developed in Italy for the purpose of updating the support procedures 
initiated under the Bilateral Infrastructure Agreement. The current 
Aviano technical agreement is being updated by HQ USAFE and will be 
presented to the Italians in May 1997.

    General Lupia. I do know that the new piece of property we 
have at Aviano, called the Zappola area, was given to us by the 
Italian Government. But in terms of the actual country to 
country agreement for the lease at Aviano, I think we would 
have to provide that for the record.
    Mr. Coleman. We will supply that to you, Mr. Chairman.
    Senator Burns. When we were there there was no formal 
agreement and there was some concern on the committee, the 
Appropriations Committee. There was concern about that there 
should be some formal agreement with regard to Aviano.

               military housing privatization initiative

    Your assessment, Mr. Secretary? Your assessment of military 
housing privatization initiative? Should the initiative be 
extended to barracks?
    Mr. Coleman. Absolutely. We are looking at it for our 
barracks, dormitories. We do not have a specific area where we 
are doing it now because we are studying it, looking at it. But 
it makes sense, sir, to look at every aspect of how we can 
bring in the private sector to assist us in our very stringent 
budget that we have. That is why we are so happy that we have 
your support in doing this.
    Senator Burns. The extended housing and, of course, the 
leveraging of those dollars, of course. And then when you go 
into a BRAC round--and I want to congratulate you. I think the 
Air Force and the Navy has done a very good job in protecting 
its liabilities in the event of a BRAC closing and what can be 
done.
    I would suggest that the exposure, the liability exposure, 
be somewhat kept to a minimum if we possibly can. Do you think 
we will have another BRAC round for the Air Force?
    Mr. Coleman. Do not know, sir. I would assume that--sir, 
you and I know that we are----
    Senator Burns. All your flag officers, that money is going 
to go to the Marine Corps. You remember that. We have got it at 
risk here. [Laughter.]
    Mr. Coleman. Sir, I think that we are looking at a few 
things in our QDR exercise. What that reveals I do not know. I 
am working on the infrastructure panel. We are supplying some 
information to that process. It has to be studied. All things 
have to be weighed. We do not have a definitive list. I do not 
know what our exact excess capacity is. But all of that will 
come out in due time.
    Senator Burns. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.

                     budget for reserve components

    On the budget request for the Air National Guard, $60.2 
million, that is less than one-third of the amount that this 
committee appropriated last year. Can you tell me if that is 
adequate and, if not, what you think the appropriate amount 
should be?
    Mr. Coleman. Senator Murray, as you know, the Chief said 
recently, and the Secretary, when they were up here that we 
have used Milcon as a billpayer, and we did that for a 
definitive reason, to get money into modernization. The racking 
and stacking through the corporate process of what we have 
presented you includes Guard and Reserve input and 
prioritization of their projects.
    I will allow, of course--not allow, but I will ask the 
Guard and Reserve to respond on their behalf with this. But we 
feel it does, Senator. What the Guard and Reserve has in there 
is really adequate for their priorities at this juncture. We 
hope that after the next two submittals, 1998 and 1999, that we 
are able to ramp up, use our money more for military 
construction than we are on this submittal.
    Senator Murray. Well, I wonder if you can comment, because 
the Air Force Reserve is also less than one-third of last year, 
if you can comment on that.
    Mr. Coleman. Well, we make no bones about it, that we did 
take our money and prioritize it more toward modernization than 
we have in the past.
    Paul, John, if you wish to.
    General Weaver. Yes, ma'am. As you know, we sit at the same 
table with our active duty counterparts and we have done that 
for many years. And I think the Air Force--I know the Air Force 
sets the standard as far as its use of the Reserve components. 
As Mr. Coleman stated, we go through the process, through the 
Board, to the Air Force councils as our constrained budget. We 
look at the priorities both within the Air Force, the Air Force 
Reserve, and the Air National Guard. And for what we have, 
within the constraints of the budget, it is adequate.
    I mean, we have got a $1.4 billion backlog in current 
mission Milcon. I know that, everyone else knows that.

                             Milcon backlog

    Senator Murray. 1?
    General Weaver. $1.4 billion.
    Senator Murray. Backlog?
    General Weaver. Backlog, in the Air National Guard current 
mission. And we are hoping to get better. We would need 
approximately about $160 million a year in the out years to 
help solve that. With the budgetary constraints that we do 
have, and we understand that as a total force, that the 
priorities are set by the Chief and the Secretary, and we 
totally support that.
    We also totally support the great support that we have in 
Congress and from you all in allowing us the additional funds 
that you do at times give us. And I can tell you and testify to 
you that every dollar that you do give us for additional Milcon 
goes to our combat capability, our combat readiness in the Air 
Force National Guard and Air Force Reserve, and that is why you 
have got a Reserve component in the Air Force that is the most 
combat-capable Reserve component in DOD, and in large measure 
as a result of the additional add-ons that you have given us, 
and we enjoy that.
    But we also support the President's budget and we also have 
to operate within the constraints of that budget, Senator.
    General Bradley. Senator Murray, I would echo essentially 
what General Weaver has said. The Air Force has had to make 
some very difficult decisions with its budget levels and, as 
General Weaver has said, the Air Force Reserve has been very 
involved in the Air Force prioritization process, in making all 
budget decisions, whether it is in Milcon or in all other 
areas.
    So we are very satisfied that we have been included in the 
process. We are adequately funded for this year and we 
appreciate what the committee has done for us in past years as 
well.
    We have needs in the Air Force Reserve. We want to have 
quality of facilities for our people. And we think that the 
levels that we have this year are adequate. But we are very 
proud to be a part of the Air Force team and be involved in the 
prioritization process.
    We believe that the right thing to do is to make decisions 
for the total Air Force, and we do that through the 
prioritization process for Milcon projects that we have. So we 
believe that the level is correct for this year.
    Senator Murray. What would be the immediate impact if we 
just gave you the budget request that is in here this year?
    General Bradley. Senator Murray, if we received what we 
have asked for in the President's budget, we will be just fine. 
We will be able to operate without reducing any level of 
training or with no reduced levels of readiness. The program we 
asked for in the budget is adequate.
    General Weaver. Same with the Air National Guard.
    Senator Murray. What will happen in the out-years if we do 
not, if we funded this request this year and keep going down? 
What will we eventually see?
    General Weaver. Eventually that will lead to our combat 
capability decreasing as well, absolutely.
    Senator Murray. OK. So my question is how vital are the 
contributions of your agencies in a wartime situation?

              wartime contributions of reserve components

    Mr. Coleman. Absolutely essential.
    General Weaver. We provide 40 percent of the combat 
capability of the total Air Force between the Guard and 
Reserve. If you look at the total Air Force budget, the $4 
billion is our budget in the Air National Guard and $3 billion 
in the Air Force Reserve. So if you are looking at a $66 or $62 
billion Air Force budget, we do provide a lot of combat 
capability of the total force with the Reserve components.
    Lessening our quality, our quality of life issues being the 
facilities in which our people work on the weekends, if we see 
a degradation in that it is also going to lead to a degradation 
of our combat capability as well.
    Senator Murray. Are you going to be able to recruit?
    General Weaver. We still will be able to recruit.
    Senator Murray. Will it make it more difficult?
    General Weaver. I think it will. Yes, it will.
    General Bradley. Yes, ma'am. I would again agree with what 
General Weaver has said. If these levels were to continue to 
reduce in the future, it would certainly impact the quality of 
our facilities, our ability to train and to maintain our 
readiness. It would certainly impact our recruiting ability and 
would impact retention highly, because our people deserve, of 
course, to have good facilities to train in. If we cannot in 
future years provide adequate facilities, then our retention 
would suffer greatly.
    It is a great quality of life issue, as General Weaver 
says, because we do not have housing for Reserve Forces, of 
course. The facilities we work and train in as reservists and 
guardsmen are our quality of life, and we do provide great 
combat capability for the Air Force every day around the world. 
We are working side-by-side with the Active Air Force. So we 
need to continue to fund our facilities in future years at the 
proper levels.
    Senator Murray. Mr. Secretary, you say in your statement 
that:

    The Air Force leadership considers family housing to be one 
of our most important programs. Even so, the average age of our 
family housing inventory is 34 years and over 58,000 of our 
current 110,000 housing units do not measure up to contemporary 
standards.

    Given your testimony and the priorities that have been set 
by the Secretary, it is somewhat perplexing to see that your 
budget actually calls for a 20-percent reduction over last 
year's actual appropriation for new construction of family 
housing. Do you think that this reduction reflects an adequate 
emphasis on the quality of life of Air Force personnel?

                     family housing budget request

    Mr. Coleman. Yes, ma'am. Given what we have to work with in 
this overall budget, we are asking for about $1.08 billion for 
military family housing and about $595 million for Milcon. We 
feel, given our long-range program--privatization, Milcon, 
outsourcing, prudent RPM, taking care of other costs like 
utilities and infrastructure costs hopefully--that our plan to 
build out and to get all of our housing up to our standards, we 
can do it.
    Gene, if you want to.
    General Lupia. Senator, the Air Force request in the 
President's budget this year is actually larger than our 
request in the President's budget last year. For new 
construction last year we asked the Congress for $232 million. 
This year we are asking for $253 million.
    Senator Murray. The appropriation was different than the 
request, though.
    General Lupia. Yes, Senator, it was. We were plussed up 
from the $232 million I just mentioned to $317 million for new 
construction. But our actual budget in the operations and 
maintenance account includes an increase of somewhere around 2 
percent for increased cost of doing business.
    At the same exact time, we went from a housing inventory of 
114,000 down to 110,000 with the closure of March Air Force 
Base or transfer of March Air Force Base, closure or lease, et 
cetera. So we have a smaller inventory by 4,000 houses. We 
asked for a little bit of money to take care of them.
    On the construction side, we actually increased our money 
by $20 million. The Air Force really is committed to housing 
and the dormitory program as well for enlisted folks.

                          usaf survival school

    Senator Murray. Let me ask you one more question, Mr. 
Chairman. As you know, Fairchild Air Force Base is home to the 
USAF Survival School to train our pilots how to survive 
difficult and traumatic situations, much like the survival 
school graduate Scott O'Grady did in Bosnia. Would you regard 
the survival school program as part of what your testimony 
terms the ``Air Force core competencies''?
    Mr. Coleman. Absolutely.
    Senator Murray. Well, given the priority to support these 
competencies, does your budget adequately support the facility 
at Fairchild Air Force Base?
    Mr. Coleman. That I do not know specifically, if there is a 
line item in there for the Fairchild site.
    General Lupia. Our emphasis, Senator, at Fairchild Air 
Force Base is to bed down 135's, the tankers. After the Air 
Force's consolidation, we wound up with tankers in our Air 
Force at three bases, one of which is Fairchild, as you know, 
Grand Forks and McConnell. When we put additional squadrons 
into Fairchild, we have really concentrated in our budget over 
the last few years and in the coming years over building 
squadron operations and aircraft maintenance units at 
Fairchild.
    So that has really been the highest priority for us there.
    Senator Murray. Thank you very much. I appreciate it.
    General Lupia. That is what is in our program again this 
year.
    Senator Murray. Thank you.

                        air guard budget request

    Senator Burns. Mr. Secretary, I have just a couple other 
questions. We have been looking at housing amounts and we are 
following up on that, and I appreciate your efforts there. I 
am, like Senator Murray, still concerned about the Guard. I do 
not think $60 million adequately does the job that I think we 
ought to do, especially if 40 percent of our mission depends on 
them being capable and ready.
    In my State I have F-16's in my Guard. We are very proud of 
the Montana Air Guard up there. I think they fulfill their 
mission, although they have not been anywhere. That is where I 
got my 9G pin, so I do not want to be fiddling around up there.
    General Weaver. They are an outstanding unit, sir. They are 
an outstanding unit.
    Senator Burns. They really are, and I think they have a 
mission and they do very good at it.
    But I want to just caution you, I think. I want to work 
with you on that particular end of this budget and with the 
President to make sure that--40 percent is a big whack.
    General Weaver. Yes, sir.
    Senator Burns. You are not talking about 10 percent or 20 
percent here. Should something happen--and we still, to my 
estimation, live in kind of a rough neighborhood, and I think 
we see some serious things developing a lot closer to home than 
we think, with some very bad situations that could develop into 
some major confrontations.
    So I want to work with you and the President to make sure 
that we have got all of our bases covered, so to speak, 
especially when we start talking about the Guard and Reserves. 
So I have sort of a soft spot in my head for that.
    That is all the questions I have. I want to thank you for 
coming this morning.

                     Additional committee questions

    Do you have other questions?
    Senator Murray. No; that is all I have.
    Senator Burns. We certainly appreciate your cooperation and 
look forward to working with you as this process moves along. 
Thank you very much.
    Mr. Coleman. Thank you, Senator.
    Senator Burns. Thank you.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

                  Questions Submitted by Senator Burns

    Question. I have noted that the Air Force has several privatization 
projects under development. However, I am concerned that these projects 
do not significantly reduce the housing deficit situation, but rather 
improve the quality of family housing. What is your assessment of this 
issue ?
    Answer. The Air Force's housing investment plan puts primary 
emphasis on reducing the significant revitalization backlog on our 
existing housing units. As a result, our emphasis to date in housing 
privatization has been to leverage our investment funds to accelerate 
the buyout of our maintenance backlog. As we continue to mature our 
housing privatization program, we will look at addressing the deficit 
situation.
    Question. What is the Air Force overseas military construction 
requirement in the fiscal year 1998 budget request?
    Answer. The Air Force fiscal year 1998 Milcon request includes 
$102M for overseas requirements.
    Question. Are we asking our allies to help fund some of the Air 
Force's requirements in overseas areas? Is this strategy working? How 
can we ensure that the U.S. doesn't pay the total bill for stationing 
our forces in their country?
    Answer. We are asking our allies to support our facility 
requirements in overseas areas to the maximum extent possible and they 
are contributing significantly. We are aggressively screening all 
projects for potential allied funding eligibility to garner as much 
allied support as possible. We must continue to request Milcon to 
support urgent operational and quality of life requirements which are 
not eligible or cannot wait for allied funding. Our allies have been 
providing support for Air Force requirements as follows:

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                    Fiscal year         
                 Country                  ------------------------------
                                            1994   1995   1996  1997 \1\
------------------------------------------------------------------------
Germany (PIK)............................  .....      1     18       13 
Germany (FAG)............................     18     22     22  ........
NATO.....................................     69    105    108      235 
NATO recoupment..........................      8     24      5       31 
Korea (RFCP).............................      9     16     14       15 
Korea (CDIP).............................      6     11     13       10 
Japan (JFIP).............................    139    305    363      311 
                                          ------------------------------
      Totals.............................    249    484    543     615  
------------------------------------------------------------------------
\1\ The fiscal year 1997 column shows expected funding levels.          
PIK: Payment in Kind.                                                   
FAG: Frankfurt Airport Authority, one-time agreement to construct       
  facilities on Ramstein AB due to Rhein Main AB drawdown.              
NATO: North Atlantic Treaty Organization Security Investment Program.   
NATO Recoupment: Repayment for U.S. prefinanced NATO eligible projects. 
RFCP: Republic of Korea Funded Construction Program.                    
CDIP: Combined Defense Improvement Projects.                            
JFIP: Japanese Facilities Investment Program.                           

    Question. How much money did the Air Force receive in fiscal year 
1996 and anticipate receiving from NATO infrastructure fund? Are we 
getting our fair share?
    Answer. The Air Force received $108 million in fiscal year 1996 and 
anticipates receiving $235 million in fiscal year 1997 from the NATO 
Security Investment Program (NSIP). Additionally, we received $5 
million in fiscal year 1996 and expect $31 million in fiscal year 1997 
as recoupment for NATO eligible projects prefinanced with U.S. dollars. 
Yes, the Air Force is getting its fair share.
    Question. It appears that the only Air National Guard Milcon in the 
fiscal year 1998 budget request is to accommodate new missions and 
environmental compliance. Is the level adequate for the Air National 
Guard? What kind of things will not get done with the proposed $60.2 
million budget?
    Answer. The Air National Guard (ANG) facility investment strategy 
prioritizes military construction (Milcon) requirements as follows: 
environmental compliance, new mission, and then current mission. 
Although the fiscal year 1998 budget does address the ANG's most urgent 
facility needs, some new mission and numerous current mission projects 
had to be slipped to later years. These requirements are identified in 
the ANG's Future Years Defense Plan.
    Question. The Air Force Reserve Budget again looks very slim this 
year. What does the $14.5 million accomplish? Does it provide for any 
quality of life initiatives?
    Answer. The Air Force Reserve Command's $14.53 million fiscal year 
1998 Milcon budget request includes two (2) level 1 environmental 
compliance projects at $3.35 million, three (3) projects at $5.20 
million that support the robust of C-130 aircraft at Youngstown ARS, 
unspecified minor construction at $4.46 million, and planning/design at 
$1.52 million.
    Due to higher Air Force funding priorities, the Air Force Reserve 
Command was unable to include any quality of life initiatives in the 
fiscal year 1998 budget request.
    Question. How can the Reserve components maintain parity with the 
Active Air Force unless they are truly resourced adequately, especially 
in military construction?
    Answer. The Air Force Reserve Command can maintain military 
construction parity with the Active Air Force if adequately resourced.
                                 ______
                                 

                 Questions Submitted by Senator Murray

                     request for air national guard
    Question. Do you regard the budget request for the Air National 
Guard, at $60.2 million, less than one-third of the amount this 
committee appropriated last year, as adequate? What is the right number 
for fiscal year 1998? What would be the result if this committee 
decided to endorse the budget request, and added nothing to it?
    Answer. The Air National Guard (ANG) was unable to fully fund its 
military construction (Milcon) requirements due to higher Air Force 
budget priorities. While the fiscal year 1998 budget request is the 
lowest in 18 years, it does address the ANG's most urgent facility 
needs. If the committee decided to endorse the budget request, the ANG 
would still be able to perform its missions. However, the deferral of 
Milcon projects causes converting units to use inefficient workarounds 
for longer periods of time and severe current mission facility 
deficiencies to remain uncorrected.
                     request for air force reserve
     Question. Do you regard the budget request for the Air Force 
Reserve, at $14.5 million, less than one-third of the amount 
appropriated last year? Is the $14.5 million adequate? Should we 
increase it? What is your professional recommendation?
    Answer. Although the Air Force Reserve Command's fiscal year 1998 
budget request of $14.5 million is, indeed, one-third the amount 
appropriated last year, we consider it adequate in the constrained 
military budget of today. If funds became available to increase the Air 
Force's Milcon program, the Air Force Reserve Command could execute an 
annual Milcon program of $86 million. This would include $73 million 
for Milcon projects, $5 million for unspecified minor construction, and 
$8 million for planning and design. If funds do become available, my 
recommendation is to increase our Milcon program to an executable 
level.
                  role of air guard and reserve in war
    Question. Does the cut in the Military Construction Budget 
reflected in your request indicate that the Air Force can do without 
the Guard and Reserve in a wartime situation? How vital are the 
contributions of these agencies to the warfighting capacity of the Air 
Force?
    Answer. Our reduced total force Military Construction (Milcon) 
requests for the next two years are a deliberate resource 
prioritization decision. We see this as a temporary measure to help pay 
for critical force modernization in fiscal year 1998 and fiscal year 
1999. The Air Force emphatically cannot do without the Air National 
Guard (ANG) and the Air Force Reserve (AFR) in wartime or in 
peacetime--they are an integral part of the Air Force's operations 
daily and partners in the total force. Today, for example, the Guard is 
providing 12 of the 30 combat aircraft flying in Southwest Asia as part 
of Air Expeditionary Force 97-1. The Reserve is a vested partner in 
every operational mission the Air Force has, from airlift and aerial 
refueling to fighters and bombers, to aeromedical evacuation and 
satellite operations. Both the ANG and the AFR represent large portions 
of total Air Force combat capability and wartime contingencies only 
increase their participation.
                          host nation support
    Question. We have in the budget a rather robust request for both 
U.S. facilities construction abroad, and for NATO infrastructure 
funding. Are we sure that we have gone as far as we can to secure 
supporting funding from host nations, particularly Germany, where these 
facilities are going to be built? I understand the Japanese pay for 
pretty much everything, but there are some who feel that the Germans 
could be more supportive, and that the funding by NATO, and by the host 
nations in terms of both funding and so-called ``payment-in-kind'' is 
insufficient and not timely enough to meet our requirements. What is 
the situation?
    Answer. The Air Force fiscal year 1998 Milcon request includes 
$102M for overseas requirements. Only one project, Spangdahlem 
Dormitories at $18.5M, is proposed for Germany. We significantly 
reduced overseas Milcon investment during the overseas drawdown. The 
basing and force structure are now stabilized. We are asking our allies 
to support our facility requirements in overseas areas to the maximum 
extent possible and they are contributing significantly. We must 
continue to request Milcon to support urgent operational and quality of 
life requirements which are not eligible or cannot wait for allied 
funding. Our allies have been providing support for Air Force 
requirements as follows:

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                    Fiscal year         
                 Country                  ------------------------------
                                            1994   1995   1996  1997 \1\
------------------------------------------------------------------------
Germany (PIK)............................  .....      1     18       13 
Germany (FAG)............................     18     22     22  ........
NATO.....................................     69    105    108      235 
NATO recoupment..........................      8     24      5       31 
Korea (RFCP).............................      9     16     14       15 
Korea (CDIP).............................      6     11     13       10 
Japan (JFIP).............................    139    305    363      311 
                                          ------------------------------
      Totals.............................    249    484    543     615  
------------------------------------------------------------------------
\1\ The fiscal year 1997 column shows expected funding levels.          
PIK: Payment in Kind.                                                   
FAG: Frankfurt Airport Authority, one-time agreement to construct       
  facilities on Ramstein AB due to Rhein Main AB drawdown.              
NATO: North Atlantic Treaty Organization Security Investment Program.   
NATO Recoupment: Repayment for U.S. prefinanced NATO eligible projects. 
RFCP: Republic of Korea Funded Construction Program.                    
CDIP: Combined Defense Improvement Projects.                            
JFIP: Japanese Facilities Investment Program.                           

             funding for the dormitory privatization effort
    Question. The fiscal year 1997 Appropriations Act provides $5 
million to support a dormitory privatization effort. How much is the 
fiscal year 1998 request, and is that adequate?
    Answer. The Air Force has no request for this purpose for fiscal 
year 1998. We are studying the application of the housing privatization 
authorities in order to determine how to best integrate the 
privatization tools into our dormitory investment plan. We plan to 
complete that study by May 1997.
                  air guard future years defense plan
    Question. This Committee in last year's committee report directed 
that the ``National Guard Bureau develop and provide a future years 
defense plan to the appropriate committees not later than April 20, 
1997''. What is the status of this planning action?
    Answer. In accordance with the fiscal year 1997 Appropriations 
Conference Report, the Air National Guard (ANG) included the Future 
Years Defense Plan (FYDP) in its February 1997 fiscal year 1998/1999 
President's Budget submission. The FYDP identifies the ANG's military 
construction requirements through fiscal year 2003.
                             infrastructure
    Question. The infrastructure reductions resulting from the rounds 
of BRAC that we have conducted amount to an overall DOD reduction of 
some 18 percent. While this has been difficult, our overall force 
reductions have been far more substantial than that, over 30 percent. 
Doesn't this mean that we still have far too much infrastructure for 
our requirements, and that we should look again at reducing 
infrastructure. Would you support another round of BRAC? If not, why 
not?
    Answer. The need for another round of Base Realignment and Closure 
(BRAC) and its timing depends on the results of the Quadrennial Defense 
Review, currently underway, and appropriate legislation.
                       privatization of utilities
    Question. I understand that privatization of utilities at our bases 
has been lagging. Is this the case? What is the problem in the 
privatization of utility infrastructure, and what can be done to speed 
this process up? I understand that the Administration has been 
considering proposed legislation for utility privatization--is this the 
case, and what is the status of this legislative proposal?
    Answer. Our long term goal is to turn utility systems over to the 
private sector where there is no readiness impact and it makes economic 
sense. Currently, the services have to seek specific legislative 
language for each utility privatization project that they propose to 
accomplish. The process of privatization would go quicker if more 
general legislative authority was provided to pursue these projects 
with proper congressional notification. OMB has approved OSD release of 
proposed legislation for inclusion in a general authorizations request 
to Congress.
                     waiting list for base housing
    Question. In general, can you characterize the problem of waiting 
lists for base housing? What is the backlog, and what is the affect on 
morale? How can we eliminate this problem in the long run?
    Answer. There are housing shortages at 65 of 79 Air Force bases. 
The majority of families on the waiting list are having to pay 20 
percent out-of-pocket instead of the Congressional intended 15 percent 
to supplement BAQ/VHA. Some families, including those with deployed 
member spouses, want to live on base for safety and security as well as 
access to community support facilities.
    There are 41,000 families on waiting lists for government-provided 
family housing. The average waiting time is from 12 to 24 months. This 
impacts morale as it makes on-base housing impossible for families who 
then must seek off-base housing. We are expanding our efforts to 
provide safe and affordable community housing through a ``Housing Set-
aside'' program. This provides for landlords and property managers to 
house service members at below market rates for guaranteed rents paid 
by allotment.
              budget benefits of privatization of housing
    Question. The housing construction budget is down more than 30 
percent from last year. Does this mean we have a less severe problem 
than last year? What does this say about our commitment to Quality of 
Life initiatives?
    Answer. The Air Force requested $231 million for the fiscal year 
1997 family housing construction program. With strong support from 
Congress, the program was increased by $86 million (Congress 
appropriated $317 million for the program). Due to current budget 
constraints and the need to balance the requirements for both 
modernization and quality of life, the Air Force requests $253 million 
in the fiscal year 1998 budget. Although it is $64 million, or 20 
percent, less than the fiscal year 1997 appropriated amount, it is an 
increase of $22 million, or 9.5 percent, to the fiscal year 1997 budget 
request. The Air Force continues to have a backlog of housing 
revitalization needs, however; we are very much committed to our 
``people'' program and support the Quality of Life initiatives.
    Question. Do you believe the housing budget is adequate for fiscal 
year 1998? What is the right number? How many housing units does a 30 
percent reduction represent?
    Answer. We believe the fiscal year 1998 Air Force housing budget 
adequately addresses our most critical housing needs given the current 
budget constraints. With the current funding level, it will take 26 
years to reduce our revitalization backlog of 58,000 units. An 
additional $100 million in fiscal year 1998 would be needed to 
accelerate the revitalization from 26 years to a more manageable 20 
years. The $64 million difference between the fiscal year 1997 
appropriation and the fiscal year 1998 request represents renovation or 
replacement of about 600 housing units.
              new public/private housing initiative in dod
    Question. What is your assessment of the Military Housing 
Privatization Initiative? What are the long term impacts that we can 
expect in the way of housing construction? Can the initiative be 
extended to the construction of barracks as well? What can we expect to 
see in the way of projects in the current calendar year?
    Answer. We are very excited about the new housing privatization 
authorities and are working an aggressive program to institutionalize 
these tools as an additional way to address our family housing 
concerns. The request for proposal on our lead privatization project at 
Lackland AFB was advertised on 11 Feb 97. The project calls for a 
developer to design, construct, maintain, own, and manage a housing 
development of 420 units on 96 acres of outleased base property. Award 
is anticipated in late 1997. We are also working to develop our other 
nine active family housing projects and will notify you as we approach 
release of the request for proposal on each project.
    The Air Force is studying the application of housing privatization 
authorities in order to determine how to best integrate the 
privatization tools into our dormitory investment plan. We plan to 
complete that study by May 1997.
                    community development facilities
    Question. What is in this budget in the way of community 
facilities, such as child care or child development centers, physical 
fitness centers, community centers? How many of each, roughly are in 
the budget? Is it true that there are only 2 gymnasiums and no Child 
Development Centers in the Air Force budget?
    Answer. The fiscal year 1998 budget includes two Physical Fitness 
Centers. There are no Child Development Centers or Community Centers. 
The Military Construction (Milcon) Future Year Defense Plan (FYDP) 
includes 8 Child Development Projects, 17 Physical Fitness Centers and 
19 Community facilities. Additional Milcon requirements exist beyond 
the FYDP.
    Question. The Marsh Commission on Quality of Life issues 
recommended 44 (forty four!) fitness centers and child development 
centers. What is the need for such facilities? What is the unfunded 
need for these type of facilities?
    Answer. A 1995 AF-wide quality-of-life survey rated fitness centers 
as the most important community support program by almost two-to-one 
(over four-to-one for our junior enlisted personnel.) We have already 
conducted independent needs assessment studies that validate the need 
for major fitness center renovation or construction at many bases. Two 
fitness center projects, one for Maxwell AFB and one for the Air Force 
Academy, are included in the 1998 Budget Request. Seventeen other 
fitness center projects are currently in the Milcon Future Year Defense 
Plan (FYDP) at the following locations:
  Aviano AB, Italy
  Barksdale AFB, LA
  Davis-Monthan AFB, AZ
  Grand Forks AFB, ND
  Hanscon AFB, MA
  Holloman AFB, NM
  Kirtland AFB, NM
  Langley AFB, VA
Little Rock AFB, AR
Los Angeles AFB, CA
MacDill AFB, FL
Malmstrom AFB, MT
Robins AFB, GA
Vance AFB, OK
Vandenberg AFB, CA
Wright-Patterson AFB, OH
    Child development centers were ranked number two behind fitness 
centers. Despite the large number of centers constructed in recent 
years, we have also identified a need for additional child development 
centers. Eight of these child development projects are currently in the 
Milcon FYDP at the following locations:
  Andrews AFB, MD
  Bolling AFB, D.C.
  Eglin AFB, FL
  Falcon AFB, CO
Luke AFB, AZ
MacDill AFB, FL
Wright-Patterson AFB, OH (2 centers)
Scott AFB, IL
    Question. Adequacy of funding for Maintenance and Repair of 
Military Family Housing and Real Property Maintenance for Military 
Family Housing. What is the adequacy of the budget request for these 
accounts and what is the backlog?
    Answer. The $432M request in the fiscal year 1998 budget is 
adequate to address the most pressing maintenance requirements for our 
houses. However, it is not enough to satisfy all our requirements. The 
Air Force will need an additional $104M to stop the growth of deferred 
maintenance and repair (DMAR), estimated at $1.06B at the end of fiscal 
year 1998.
                     unspecified minor construction
    Question. The Unspecified Minor Construction program supports 
urgent, unforeseen requirements that cannot wait for the normal 
military construction program and a lump sum is appropriated to 
accomplish requirements that arise during the year costing between 
$500,000 and $1.5 million. The Air Force annual requirements for this 
fund is about $15 million. However, only $8.5 million is requested. Is 
this account under strain, and what is the right number for the fiscal 
year 1998 budget?
    Answer. The fiscal year 1998 $8.5M request is sufficient to meet 
our most urgent needs.
                                 ______
                                 

                  Questions Submitted by Senator Reid

            privatization of military housing and utilities
    Question. In your prepared statement you remarked that the Air 
Force was seeking to support its core competencies, force 
modernization, and quality of life. To do this you are focusing on 
reducing the physical plant using private sector partnerships and sound 
business practices. You discussed that this would be accomplished 
through the use of consolidation, divestiture, and privatization. Would 
you please update me on your progress to privatize military housing and 
utilities.
    Answer. In family housing we have an aggressive program with 10 
active projects. The request for proposal on our lead privatization 
project at Lackland AFB was advertised on 11 Feb 97. The project calls 
for a developer to design, construct, maintain, own, and manage a 
housing development of 420 units on 96 acres of outleased base 
property. The units will be rented to E-3 through E-7 personnel from 
the Lackland community. Award is anticipated in late 1997. We are 
continuing to work the remaining projects and will notify you as we 
approach release of the request for proposal on each project.
    In regards to utilities, our long term goal is to turn these 
systems over to private/public ownership where there is no readiness 
impact and it makes economic sense. OMB has approved OSD release of 
proposed legislation for inclusion in a general authorizations request 
to Congress.
                    air national guard funding level
    Question. The fiscal year 1998 military construction request for 
the Air National Guard is only $60 million. This is less than one-third 
of what was appropriated to the Air National Guard for 1997. Do you 
regard this an adequate funding level? What would be the long-term 
impact to the Air National Guard if Congress simply endorsed this 
budget providing no plus ups?
    Answer. The Air National Guard (ANG) was unable to fully fund its 
military construction (Milcon) requirements due to higher Air Force 
budget priorities. While the fiscal year 1998 budget request is the 
lowest in 18 years, it does address the ANG's most urgent facility 
needs. If the committee decided to endorse this budget without plus-
ups, the long-term effects would be cumulative and eventually degrade 
ANG readiness and quality of life. Deferring Milcon projects forces new 
mission units to use inefficient workarounds for longer periods of time 
and severe current mission facility deficiencies to remain uncorrected.
                       parking ramp modernization
    Question. The Army National Guard estimates that 51 percent of 
their parking ramps are inadequate in size or condition. Contributing 
factors to the untimely deterioration of these ramps include a 
modernized fleet, aging asphalt, and deferred ramp maintenance. Has the 
Air National Guard accomplished any studies to determine if similar 
circumstances exist at their facilities?
    Answer. The Air National Guard (ANG) performs a pavement condition 
survey for each ANG base every five years. These surveys identify those 
pavements that do not meet desired operational parameters and 
standards. The surveys also include recommendations on the necessary 
maintenance and repair work. A review of the 40 most recent surveys 
indicates that 75 percent of the pavements are adequate and only 
require maintenance efforts to remain operational. The other 25 percent 
require some type of repair work. In the last three years, the ANG 
executed Real Property Maintenance projects for airfield pavements as 
follows:

                          [Dollars in millions]                         
------------------------------------------------------------------------
                                                      No. of            
                    Fiscal year                      projects    Amount 
------------------------------------------------------------------------
1995..............................................          9       $2.1
1996..............................................         17       10.6
1997..............................................         13        8.7
------------------------------------------------------------------------

    Currently, the ANG has identified $23.7 million of airfield 
pavement requirements to be accomplished. Within this figure are 18 
projects from local airport authorities for which the ANG cost share 
totals $13 million. These projects are for joint use pavements at civil 
airfields.
                      nato infrastructure funding
    Question. The military construction budget, $8.4 billion, is 16 
percent smaller than what was appropriated in fiscal year 1997 ($10 
billion). Of all the account requests, I note that each reflects an 
overall reduction from last year's appropriation, with the exception of 
one: NATO Infrastructure account. The request for NATO is greater than 
what was requested for all five of our reserve components. Is it wise 
to give such assistance to our allies at the expense of our own guard 
and reserve forces?
    Answer. The fiscal year 1998 request of $176.3 million in budget 
authority for the NATO Security Investment Program (NSIP), formerly the 
NATO Infrastructure Program, is consistent with funds appropriated the 
past two fiscal years. The amount appropriated for NSIP in fiscal year 
1997 was $172 million and fiscal year 1996 was $198.5 million, of which 
$37.5 million was in support of Bosnia. The fiscal year 1998 budget 
request provides the U.S. share of funds for the construction, upgrade, 
and restoration of operational facilities; and other related programs 
and projects the NATO Alliance requires in support of the agreed NATO 
Strategic Concepts and Military Strategy. The NATO Security Investment 
Program is financed by 16 participating NATO nations on a cost sharing 
basis. The U.S. share is approximately 26 percent; therefore, 74 
percent of any comparison between the NATO and Guard and Reserve 
requests, the NATO request supports the Secretary of Defense's 
commitment to the NATO Ministerial and is unrelated to the size of the 
request for the Guard and Reserve.

                          subcommittee recess

    Senator Burns. The subcommittee will now stand in recess.
    [Whereupon, at 10:50 a.m., Tuesday, March 11, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 1998

                              ----------                              


                         THURSDAY, MAY 8, 1997

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:35 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Conrad Burns (chairman) presiding.
    Present: Senators Burns, Stevens, and Murray.

                         DEPARTMENT OF DEFENSE

                         Department of the Army

STATEMENT OF ROBERT M. WALKER, ASSISTANT SECRETARY FOR 
            INSTALLATIONS, LOGISTICS, AND ENVIRONMENT

                   OPENING STATEMENT OF CONRAD BURNS

    Senator Burns. I call this subcommittee to order this 
morning. First of all, let me apologize for being late, I got 
to listen to my esteemed friend, Stephen Ambrose, this morning. 
So we will put that up as we work our way through 
appropriations. It is called ``Undaunted Courage.'' For those 
of you who have not read the book, it is Lewis and Clark's 
expedition from St. Louis to Senator Murray's home State and 
through quite a lot of Montana.
    And the Cannon Building is a hell of a long way from here.
    Senator Murray. They went all the way through Montana and 
Washington State.
    Senator Burns. That is right.
    This morning we will hear testimony on the military 
construction, family housing, base realignment and closure 
[BRAC], and Reserve component programs for the Army and the 
military construction programs for the Defense agencies. First 
we will hear from the Department of the Army. We are pleased to 
hear from Assistant Secretary of the Army for Installations, 
Logistics, and Environment, Mike Walker.
    Welcome, Mike, this morning. We are looking forward to 
hearing your testimony. It is great to see everybody here 
showing a little bit of flexibility and the awareness of our 
mission that we have in front of us, and the ability to work 
together. I appreciate that very much, especially with our 
ranking member, on what our mission is, defining that mission, 
and trying to get there the best way that we possibly can, 
serving our soldiers and our sailors that protect this country.
    The Army's emphasis on replacing and renovating barracks is 
critical to meeting the long-term recruiting and retention 
goals for the Army and ensuring that our service members live 
in housing that is comparable to those of civilian peers.
    In 1998 the Army is recommending $45 million for Army 
National Guard military construction projects. This is a step 
in the right direction, and you are to be congratulated for 
your leadership in this area. Much remains to be done, however. 
Last year Congress added $134 million for the Army Guard and 
Army Reserve military construction projects. We feel with the 
tendency moving from the active Army into the Reserves and 
Guard that we have an obligation to those people as well.
    However, we do appreciate your efforts and look forward to 
ensure that the Reserve components, their critical elements, 
are met.
    Secretary Walker, I would ask you to keep your statement 
short. We are going to kind of hold down here for a little give 
and take this morning.
    Now I would like any opening statement that the ranking 
member, Senator Murray has from the great State of Washington. 
Thank you this morning, and again my apologies for being a bit 
late.

                       STATEMENT OF PATTY MURRAY

    Senator Murray. Thank you, Mr. Chairman. I appreciate your 
arranging for this hearing on our Army and Defense-related 
agencies military construction, BRAC, and housing program.
    The programs the subcommittee oversees are crucial, 
focusing as they do on the quality of life of our uniformed 
personnel here and abroad, and on the vital infrastructure that 
allows our forces to operate with assurance as the world's sole 
superpower. These programs allow us in the long run to defend 
our interests and those of our allies and friends across an 
increasingly confusing and complicated world scene.
    Last year, Mr. Chairman, your subcommittee was able to mark 
up and report its bill out, get it through the Senate and 
conference and to the President's desk very early in the 
process. And even though the committee added some $617 million 
to the request last year, the President wisely signed it. It 
was overwhelmingly supported in the Senate, much of that due to 
your excellent work in putting it together. I hope that we can 
repeat that performance this year.
    Mr. Chairman, judging from the President's request, it 
looks like we are being invited to rewrite much of the budget 
as submitted. The request for our Guard and Reserve program is, 
as in the past several years, largely inadequate, and perhaps 
deliberately so. For the Army Guard and Reserve, we 
appropriated a total of $135.6 million last year. The request 
for fiscal year 1998 is for $84.5 million, a reduction in the 
Guard account of some 42 percent, and in the Reserve account of 
30 percent.
    These are steep reductions. Perhaps the administration 
expects us, as in the past, to increase the budget for these 
accounts, as this committee did last year. We admonished the 
administration last year not to repeat the budget history of 
underfunding the Guard and Reserves, anticipating a huge plus 
up by the committee, but it seems to have done just that.
    The overall request for the Guard and Reserves is two-
thirds less than the amount we appropriated for fiscal year 
1997. In order just to match last year's amount, we would have 
to add about $50 million to the budget for the Army Guard and 
Reserve.
    Second, Mr. Chairman, the Army's budget for housing 
construction has been reduced by some 53 percent from last 
year's appropriated amount. This is the heart of quality of 
life, and I am not certain that we can leave it at the 
requested level. I know that the Department is attempting to 
put into place a new public-private housing initiative, the 
Department of Defense family housing improvement fund, which 
allows the private sector to participate in our housing 
programs. I fully support that initiative and indeed one of the 
first of two of these programs has just been announced at a 
naval base at Everett, WA.
    But this program is in its infancy and I am not certain of 
any justification for the substantial reduction in the budget 
for family housing.
    Third, Mr. Chairman, I note that press reports yesterday 
indicated that very substantial cuts were being discussed in 
the context of the ``Quadrennial Defense Review'' in both Army 
and Army National Guard, and that additional base closings may 
be needed to get our infrastructure costs down. We need to 
understand how these proposals will affect the President's 
budget request, if at all.
    Having said this, Mr. Chairman, I warmly greet Mr. Robert 
Walker, Assistant Secretary of the Army, as well as the 
representatives of the Defense-wide agencies, representing 
special operations, health services, logistics, and the finance 
and accounting service. Each has been most helpful to this 
committee in the past, and I know they are concerned about the 
budget problems I have just cited, and I know that whatever can 
be done to correct them, each will do so.
    So I welcome all of the gentlemen back before us and I look 
forward to their testimony.
    Senator Burns. Thank you, Senator Murray. Senator Stevens 
has joined us from Alaska. Do you have an opening statement?

                        STATEMENT OF TED STEVENS

    Senator Stevens. Mr. Chairman, thank you very much. It is 
nice to see you, Secretary Walker. I have to go to the floor 
rather quickly, so I will not stay to ask questions and I will 
ask the chairman to put them in the record. They are addressed 
to you and Mr. Baillie.
    I do want to make a statement, though, concerning the Army 
hospital at Fairbanks. That is a 74-bed hospital. It was built 
in 1950. It is ready now to be designed; a replacement hospital 
must be designed. We put up $10 million last year to start 
planning.
    The plan is to get a smaller hospital of approximately 50 
beds, and to solve one of the most challenging programs for the 
Army as far as health delivery systems are concerned.
    We seek now to see if we can get an agreement between the 
community hospital, the Indian Health Service hospital, and 
this new Army hospital so that the trauma cases can go on base, 
the OB cases go to the community hospital, and the Indian 
Health Service hospital becomes the out-patient hospital.
    We would have, for the first time, a real cooperative base 
in a rural area, showing what could be done in a new way to 
share the responsibility so that there will not be duplicated 
technology in each one of those three hospitals, but with the 
Army specializing in trauma, your people would have the best 
training in the world in terms of trauma activity during 
peacetime, and they will have the best hospital for OB and 
general family care. The base is almost right in town.
    I think this is really a great opportunity to move forward, 
but I do not know that the timeline is going to be sufficient. 
If we do not get that other hospital on base, in place, the old 
hospital cannot do this, and the community will have to move 
forward and build another hospital.
    So we want to get this other hospital going and get it so 
the community knows what the timeline is so they will not 
proceed to add additional space and so the Indian Health 
Service hospital will not have to add additional space.
    I would urge you to take a look at it, Mike, because I 
think it is one of the finest plans I have seen so far, and it 
is the kind of thing we ought to do on a cost-effective basis 
with military funds. I look forward to your answer.
    Thank you very much. Thank you, Mr. Chairman.

                   prepared statement of senator reid

    Senator Burns. Thank you, Senator Stevens. I know you are 
pretty busy on the floor with the supplemental. I have an 
opening statement from Senator Reid that I would like to put in 
the record at this point.
    [The statement follows:]

                Prepared Statement of Senator Harry Reid

    Thank you Mr. Chairman. I would like to start off by thanking the 
Chairman for calling this hearing. I look forward to the testimony of 
our distinguished panel, especially the testimony of Mr. Walker, and 
hope that we can effectively address some of the quality of life issues 
which are so important in today's environment of shrinking budgets.
    This years budget has significant reductions in military 
construction spending for fiscal year 1998. The President's budget 
proposal calls for a requested budget authority of $8.4 billion. This 
is down 8 percent from the fiscal year 1997 request and is 16 percent 
less than the $10 billion approved by Congress last year. The fiscal 
year 1998 request for the Army National Guard is $45 million as 
compared to a fiscal year 1997 appropriation amount of $78 million, a 
reduction of more than 40 percent.
    I was surprised at Secretary Cohen's comments on Tuesday in which 
he advocated two more rounds of BRAC, the first of which would take 
place as early as 1999. The actual savings that would occur as a result 
of more base closures, especially in the near term, is questionable. We 
know that savings from previous BRAC's have not proven to be as 
substantial as originally anticipated.
    I question the idea of rushing into another round of BRAC until we 
are able to attain a complete and thorough understanding of the 
military implications of additional base closures. To my knowledge, 
there has been no study which analyzes the impact of previous base 
closures. Until we have a firm understanding of the impact previous 
base closures have had on the readiness posture of our military, the 
decision to further reduce our infrastructure should be delayed.
    We cannot look to the MilCon budget and to another BRAC in order to 
pay the bill for the military's weapons modernization program. Over the 
years, this subcommittee has worked very hard to ensure adequate 
funding for our defense infrastructure. This established infrastructure 
is important and helps our military attract, sustain, and retain 
quality personnel. Consequently, I am very hesitant to sacrifice our 
infrastructure in order to fund military's modernization efforts.
    The programs this subcommittee oversees are crucial to our military 
and directly affect our uniformed service members and their families. 
The Military Construction Appropriations bill is the sole source of 
funds for our quality of life programs. At many bases and installations 
throughout the United States, family housing, child care centers, and 
gymnasium facilities are cited as being inadequate to meet the needs of 
the installation. We must remain committed to improving the quality of 
life for our soldiers and their families--it has a conclusive and 
profound impact upon our military's readiness.
    I want to thank our panel members for their efforts in preparing 
for this hearing. I know the work that goes into preparing for a 
hearing and so often the appreciation is never expressed. Again, I 
appreciate your hard work and look forward to continuing this 
relationship in the coming months as we progress through the 
appropriation process.
    I also look forward to working with the other members of this 
committee in much the same fashion as we worked so successfully 
together in the past. I am sure that we can be as efficient this year 
as we were last. I am hopeful that we will be able to markup and report 
the Military Construction Appropriation bill out of committee, and get 
it to the President's desk early in the legislative year.

                     Statement of Robert M. Walker

    Senator Burns. Mr. Walker, we are ready for your statement.
    Mr. Walker. Thank you very much, Mr. Chairman. I appreciate 
the opportunity to appear before the committee again. You know, 
after 3 years of being on this side of the table, I still feel 
awkward. I still feel like I ought to be sitting up there.
    Senator Burns. It is just a matter of moving that chair, 
you know. [Laughter.]
    Mr. Walker. Sometimes I would love to ask myself some 
questions.
    I do look forward to reading Steve Ambrose's new book. I 
have not read it yet. But I must say when you set it up there, 
``Undaunted Courage,'' I was wondering what questions you had 
in mind for me.
    Mr. Chairman, I am accompanied this morning by Mr. Paul 
Johnson, who is the Deputy Assistant Secretary of the Army for 
Installations and Housing, Brig. Gen. Evan Gaddis, who is the 
Acting Assistant Chief of Staff for Installation Management, 
Brig. Gen. William Bilo, who is Deputy Director of the Army 
National Guard, and Brig. Gen. James Helmly, who is the Deputy 
Chief of the Army Reserve.
    Mr. Chairman, we very much appreciate the opportunity to 
appear before the committee to discuss the Army's military 
construction and family housing request for fiscal year 1998.
    I think we all agree that we do have the best Army in the 
world. Our challenge is to keep it that way. While we may have 
the best Army in the world today, I think we all know that that 
status is not preordained. The fact is that in a good economy 
it is hard to compete with the civilian job market.
    Studies are showing that the propensity of young people to 
join the Armed Forces is declining. This year, for instance, in 
the Army we need to recruit almost 90,000 young men and women. 
When I was sworn in 3 years ago, we were only recruiting 
65,0000. And then, once we recruit soldiers, they gain skills 
and training which are valuable in the civilian job market.
    So, Mr. Chairman, there is no guarantee that we will always 
be able to attract and retain the kind of men and women we need 
to protect this Nation's security. That is why the work of this 
subcommittee is so very important.
    Mr. Chairman, it is very imperative that we continue to 
provide a good quality of life for our soldiers and their 
families. If ever our soldiers perceive or believe that we have 
lost our focus on quality of life, then the American Army will 
be in danger of losing its edge.
    The request before you, Mr. Chairman, represents many 
months of discussion and debate within the Department of the 
Army. The guidance we received from then Secretary of Defense 
Bill Perry was that we continue to emphasize military readiness 
as the first priority, and that we provide the maximum pay 
raises allowed by law.
    Now, once we did that, all the other requirements had to 
compete for the remaining resources. But, even so, Mr. 
Chairman, the request before the subcommittee does represent 
some progress. In the fiscal year 1998 request we were able to 
increase the military construction and family housing accounts 
by over $300 million over the amount we had originally planned 
for the fiscal year 1998 budget year.
    As a result, the request before you, for the first time in 
many years, provides more funding for Active Army military 
construction than was approved by the Congress in the previous 
fiscal year. As a result of this increase, we were able to 
fully fund our highest facility priorities, which are barracks 
and strategic mobility.
    Mr. Chairman, since I have been an Assistant Secretary for 
the last 3 years, I have found that today's soldiers are very 
realistic. They know that we cannot do everything right now. 
They understand that there are financial limits and budgetary 
pressures and limitations.
    But what they do want to know is that we have a plan to 
make things better, and that we are working to execute that 
plan. Mr. Chairman, we have developed a plan to replace or 
renovate single soldier barracks in the United States by the 
year 2008, and overseas by the year 2012. The previous plan 
called for completing the job by 2020. That was just too long.
    So, Mr. Chairman, we deeply appreciate this committee's 
support for this effort, and we ask your assistance in helping 
to keep this barracks plan on track in the future.
    We have seen what just a little barracks money can do. When 
the 1st Armored Division deployed from Germany to Bosnia in 
late 1995, they left behind some of the worst barracks in the 
Army's inventory. And, with the help of Congress, we were able 
to begin the rather long process of improving barracks at 
Baumholder and other areas.
    So when the soldiers redeployed back to Baumholder and back 
to Germany, they came back and they saw some improvements. They 
saw that there was a commitment there. They saw that their 
country cared for them. And today I must tell you that that 
division, while it is one of the most deployed divisions and 
busiest divisions in the Army, it also has one of the highest 
reenlistment rates. And one of the reasons reenlistments are so 
high is because we demonstrated a commitment to soldiers' 
quality of life.
    I was just at Baumholder a few days ago, and I heard that 
repeated by soldiers over and over. So quality of life does 
make a difference to the readiness of the Army.
    Now, Mr. Chairman, with regard to family housing, as 
Senator Murray mentioned, the request before you does provide 
for plans to replace or revitalize more than 1,000 units of 
family housing. But, as you point out, we have almost 120,000 
units of family housing. We cannot ask America's soldiers to 
wait more than one century while we replace or renovate 
substandard housing.
    The unfortunate reality is that the traditional methods of 
providing family housing will never be enough for us to meet 
all of the family housing requirements. So we are looking at 
ways of leveraging the private sector to help us to construct, 
renovate, operate and maintain family housing.
    Mr. Chairman, I want to thank this subcommittee for 
approving the seed money to implement the legislation that 
permits us to test a wide range of housing privatization 
concepts.
    I was recently at Fort Carson to review the Army's first 
and the Department of Defense's most complex housing 
privatization effort, and during fiscal years 1998 and 1999 we 
hope to proceed with an additional 15 projects. So, Mr. 
Chairman, we ask for the committee's continued support for our 
housing privatization initiatives.
    Mr. Chairman, briefly with regard to our base closure 
program, I am pleased to tell you that during the current 
fiscal year, fiscal year 1997, we will begin to save more money 
from base closures than we are spending, and by the end of 
fiscal year 2001 we will be saving $1 billion annually from 
base closures and realignments, even after we pay the large 
cost of environmental cleanup. So we ask for the committee's 
continued support for our request to fund the base closure 
program.
    Mr. Chairman, before I conclude and take your questions, I 
would like to highlight one particular request before the 
subcommittee, and that is for our prepositioning program in the 
Persian Gulf region. Recently I visited our new prepositioning 
afloat maintenance facility in Charleston, SC. And during my 
visit the Army was loading the first LMSR--that is the acronym 
for the six-football field-size cargo ship that has joined our 
war reserve afloat fleet at Diego Garcia.
    And while I was walking around observing loading 
operations, I asked a young PFC from Ohio what it all meant to 
him. And he said, without thinking, ``So Saddam Hussein will 
not make the same mistake again.'' I think that PFC was right 
on the money. During Desert Shield it took us 20 days before we 
had even the first M-1 tank in the desert. Last fall, when the 
President deployed elements of the 1st Cav to Kuwait, we had a 
brigade of soldiers beginning to fall in on dozens of tanks in 
96 hours.
    That is deterrence, Mr. Chairman. But our existing 
prepositioning in the region is not enough for long-term 
deterrence or enough to assure a strong enough, swift enough 
defense, should Saddam or some other enemy of freedom decide to 
attack again.
    A future enemy, I think we all know, is not going to do 
what Saddam did the last time. He just sat there and he allowed 
us to build up an offensive capability for 6 months. That will 
never happen again. So we need the additional prepositioning 
capability. Mr. Chairman, the last phase of our prepositioning 
initiative in Qatar is included in this request, and we 
respectfully ask for your support.
    Now, Mr. Chairman, I have taken the last few minutes to 
talk about some of the initiatives that are included in the 
budget. Let me talk about some of those initiatives that you 
both had mentioned that are not included.
    As we went through the programming process for this budget, 
we, of course, found that every requirement could not make it 
to the top, given the top line that we had. And because of the 
necessity to prioritize and to make tradeoffs in order to 
ensure adequate funding for readiness and personnel, we were 
simply unable to provide increases for operational facilities 
or for Guard and Reserve Milcon.
    And that, quite frankly, is our challenge for the future. 
The longer it takes us to revitalize infrastructure, the more 
it is going to cost in the long run. So we know that we must 
find ways to increase our investment in these areas, and the 
requirement to increase our investment in these Milcon areas is 
also coming at a time that we need to increase our investment 
in science and technology and equipment modernization.
    So when we see that challenge before us, and when we factor 
in a balanced Federal budget, we know that the budget for 
Milcon is not going to grow appreciably. So that means that we 
are going to have to continue to do some things better, to 
become more efficient, to become more innovative, to adopt 
better business practices.
    And as we found out already, doing that is not very easy. 
But we are going to have to take that approach if we are going 
to find the resources within our top line to make the facility 
investments that are needed for a modern Army.

                           prepared statement

    So, Mr. Chairman, we are going to need the help and support 
and the suggestions of the subcommittee, and we look forward to 
our continued partnership together on behalf of the men and 
women who are the American Army.
    Thank you very much, Mr. Chairman.
    [The statement follows:]

                 Prepared Statement of Robert M. Walker

    Mr. Chairman and members of the subcommittee, it is a pleasure to 
appear before you to discuss the Active Army and Reserve Components' 
military construction request for fiscal years 1998 and 1999. This 
request will provide new and renovated facilities needed to improve 
Army readiness, quality of life and efficiency. These matters are of 
considerable importance to Americas Army, as well as this committee, 
and we appreciate the opportunity to report to you on them.
    Our statement is in four parts:
    Part I--Military Construction, Army Family Housing, Army Homeowners 
Assistance Fund, Defense
    Part II--Military Construction, Army National Guard
    Part III--Military Construction, Army Reserve
    Part IV--Base Realignment and Closure (BRAC).
  part i--military construction, army family housing, army homeowners 
                        assistance fund, defense
    First, I am pleased to present the Active Army's portion of the 
Military Construction budget request for fiscal years 1998 and 1999. 
This budget provides construction and family housing resources 
essential to support the Army's role in our National Military Strategy.
    The program presented requests fiscal year 1998 appropriations for 
Military Construction, Army (MCA) of $595,277,000, and $1,291,937,000 
for Army Family Housing (AFH). No additional budget authority for the 
Homeowners Assistance Fund, Defense, is required in fiscal year 1998. A 
companion request for authorization in fiscal year 1998 includes 
$555,277,000 for MCA and $1,291,937,000 for AFH. For fiscal year 1999, 
the program requests appropriations of $696,969,000 in MCA, 
$1,255,908,000 for AFH, and $40,229,000 for Homeowners Assistance Fund, 
Defense. The fiscal year 1999 companion authorization request is 
$780,569,000 for MCA, $1,255,908,000 for AFH and $40,229,000 for 
Homeowners Assistance Fund, Defense.
    Now, let's discuss America's Army. Today, ``America's Army'' is a 
total force comprised of Active Duty, Reserve, National Guard, civilian 
employees, and family members serving the Nation both at home and 
abroad. It is the world's premier land combat force, trained and ready 
to answer the Nation's call. We are the Nation's full-spectrum force 
for the 21st Century.
    America's Army is important to our national security. Although 
smaller now than at any time since before World War II, we are being 
called on for a increasing number of diverse missions around the world. 
Whether conducting operations in support of national security policy, 
participating in joint or combined training exercises, providing 
support to civil authorities during natural disasters or stationed 
overseas, American soldiers are the Nation's standard bearers 
throughout the world. However, because we must continue to perform more 
demanding, more diverse and more soldier intensive missions, our 
operational deployments have increased. The impact of this increased 
mission is immense on both our soldiers and their families. We have a 
duty to provide the best possible facilities and improved quality of 
life that is necessary to retain these dedicated soldiers and their 
families.
    In order to continue to undertake our diverse missions, it is 
imperative that we achieve a predictable environment in the Army. To 
successfully meet these increasing operational commitments while 
simultaneously maintaining readiness, we require stability--in force 
structure, quality of life, installations and funding available to 
carry out our missions.
    An imperative to maintaining a trained and ready Army is retention 
of our high quality people. They are the defining characteristic of a 
quality force and are the overarching nucleus of our Army. Our numerous 
and diverse operations require soldiers who are skilled, well trained 
and well led. They must be capable of adapting to complex, dangerous 
and ever-changing situations. High caliber quality of life programs are 
essential to ensuring that the Army continues to retain the soldiers 
necessary to maintain America's Army. We must continue to focus on 
issues important to these men and women who so bravely serve the 
nation. Programs like the Whole Barracks Renewal, Whole Neighborhood 
Revitalization, Army Family Action Plan and Army Communities of 
Excellence remain key in our focus.
    Now, I would like to discuss our facilities strategy as it affects 
the Army and as we move toward the 21st Century.
                          facilities strategy
    The Army's facilities vision is to provide comprehensive, adaptable 
power projection platforms with the quality facilities, infrastructure 
and services that are integral to the readiness of the force and the 
quality of life of our soldiers and their families, while protecting 
the environment.
    The Army's facilities strategy is threefold. First, because 
resources are limited, we must focus our investment on what is most 
important. To do this we must identify required facilities, 
infrastructure and services and then focus our resources on those to 
assure the desired level of readiness. Second, we must divest of all 
unneeded real property. Third, we must reduce the total cost required 
to support our facilities and related services, including management 
and maintenance of our real property inventory.
    As part of our effort to better focus our investment, we have 
developed a decision support tool, the Installation Status Report (ISR) 
Part One (Infrastructure), which is fully fielded, Army-wide, 
worldwide, to help formulate and monitor our facilities strategy. We 
are using it for the first time this year to assess the status of our 
facilities' condition. This identifies critical areas for consideration 
of resource allocation. Also, it assists in condition assessment of our 
facilities essential to the installation's mission, and quality of 
life.
    We are reducing our requirement by rigorously eliminating excess 
facilities. Between our current facilities reduction program and base 
realignment and closure, we will eliminate over 200,000,000 square feet 
in the United States by 2003. We continue to demolish one square foot 
for every square foot constructed and will begin reducing our leasing 
costs significantly in fiscal year 1997. By 2003, with our overseas 
reductions included, the Army will have eliminated over 400,000,000 
square feet from its fiscal year 1990 peak of 1,157,700,000 square 
feet.
    We are looking for innovative ways to reduce the cost of our 
facilities, including privatization or outsourcing of certain 
functions. It is proving an effective solution for installation 
utilities systems. Our goal is to privatize at least 75 percent of all 
Army utilities by 2003. Privatization is also being considered to 
provide better housing for soldiers and their families, while reducing 
the Army's inventory. Partnering with civilian communities around an 
installation is also a viable alternative to the Army maintaining some 
facilities.
    At this time, I will discuss several of the highlights of the 
budget.
                   military construction, army (mca)
    Within our military construction request, we focus on three major 
categories of projects: mission facilities, quality of life projects, 
and support programs such as infrastructure and environmental projects.
                           mission facilities
    In fiscal year 1998, there are six mission facility projects 
totaling $90,000,000. In fiscal year 1999, there are eight projects for 
a total of $103,000,000. Essential mission facilities include several 
initiatives such as the Army Strategic Mobility Program (ASMP) and 
Close Combat Tactical Training (CCTT) facilities.
    Army Strategic Mobility Program.--Fiscal years 1998 and 1999 
continue the upgrade of the strategic mobility infrastructure we 
started several years ago. In fiscal year 1998, we have included 
$23,000,000 to complete the two-phased program at Concord Naval Weapons 
Station, started in fiscal year 1997. This project upgrades the 
ammunition pier to increase the throughput of ammunition on the west 
coast to a level equal to that available on the east coast. Also in 
CONUS, we have included an upgrade to the infrastructure supporting the 
Army Strategic Maintenance Complex at Charleston Naval Weapons Station, 
$7,700,000, and construction of a container loading and shipping 
facility at Crane Army Ammunition Activity, $7,700,000.
    Fiscal year 1998 also completes the multi-phased Strategic Logistic 
Initiative (SLI), that began in fiscal year 1996. This initiative 
constructs facilities in Southwest Asia for the pre-positioning of 
equipment and materiel needed to speed the deployment of forces during 
a contingency in that region. The budget requests the final phase of 
the program, $37,000,000. This project will complete facilities and 
infrastructure required to preposition equipment, materiel, and 
supplies for a second armored heavy brigade, along with unit equipment 
of a division base.
    Fiscal year 1999 includes upgrades to facilities for air deployment 
at Fort Bragg, $31,000,000, and rail loading at Fort Hood, $33,000,000. 
Also included are container and MILVAN loading and shipping facilities 
for McAlester Army Ammunition Plant, $10,400,000; Tooele Army Depot, 
$5,000,000; Crane Army Ammunition Activity, $7,100,000; Anniston Army 
Depot, $3,900,000, and Bluegrass Depot Activity, $5,300,000.
    Close combat tactical trainers.--CCTT facilities leverage 
technology to enhance training and maintain readiness through a group 
of fully interactive, networked emulators and command, control and 
communications work stations. When the first CCTT becomes operational 
in 1997, it will reduce reliance on field exercises as the single 
method for combined arms training and provide a long term, cost 
effective option to field exercises. The budget request includes two 
trainers in fiscal year 1998 at Fort Carson and Fort Riley, 
$14,600,000, and one in fiscal year 1999 at Fort Lewis, $7,300,000.
                        quality of life projects
    The Army remains committed to improving the quality of life of our 
soldiers and their families, since it has a dominant impact on the 
Army's readiness. Over 56 percent of the fiscal year 1998 request and 
over 44 percent of the fiscal year 1999 request is for projects in this 
category. This substantial effort will reduce the amount of time to 
improve the living conditions of our single soldiers. This is our top 
MCA priority. In CONUS, we will provide upgraded or new living 
facilities to our single personnel by the year 2008, while overseas, we 
will complete the renewal by 2012. The largest change in funding from 
previous years' requests is in the area of overseas barracks. The Army 
has done little construction in Korea or Europe since the 1980's. Now 
that both theaters are stabilizing after years of troop reductions, we 
revised our investment strategies for overseas. This request addresses 
long standing shortfalls in both Korea and Europe. Our programs reflect 
significant funding levels for quality of life programs in line with 
the Department of Defense's emphasis in this area.
    Whole barracks renewal initiative.--The Army's Whole Barracks 
Renewal program provides funding for new construction and modernization 
projects. It represents our efforts to provide our single soldiers with 
a home, not just a place to live. We will provide more space, more 
privacy and a quality of life for our single soldiers that is 
comparable to living off the installation or that of our married 
soldiers. The Whole Barracks Renewal program includes personal privacy, 
larger rooms, closets, upgraded day rooms, centrally procured 
furnishings, additional parking, landscaping and administrative offices 
separated from the barracks. In fiscal year 1998, we are planning 
eighteen barracks projects at a cost of $337,800,000. This includes 
five projects in Korea, $76,100,000, and four projects in Europe, 
$43,000,000, to address the deplorable living conditions there. Our 
budget also funds the completion of the Fort Knox barracks renewal 
complex, $22,000,000, that was authorized in fiscal year 1997. Fiscal 
year 1999 adds another eleven projects totaling $312,500,000 for CONUS 
and Korea.
                            support programs
    Included in this area are those projects which provide vital 
support to installations and balance to the military construction 
program. We have requested six projects in fiscal year 1998 for 
$98,000,000. The request includes two environmental projects, one at 
Yakima Training Center, $2,000,000, to comply with an environmental 
remediation plan, and one to construct a replacement facility for a 
central washrack, $5,400,000, at Fort A.P. Hill, Virginia. The fiscal 
year 1998 budget also requests the appropriation of $18,000,000 to fund 
the second phase of the National Range Control Center project at White 
Sands Missile Range that was authorized by Congress in fiscal year 
1997. Funding to construct a replacement facility for the disciplinary 
barracks at Fort Leavenworth, $63,000,000 is included in the fiscal 
year 1998 request. Additional projects at Charlottesville, Virginia, 
for design of the National Ground Intelligence Center and a classified 
location are included for $9,600,000.
    In fiscal year 1999, there are 18 projects totaling $206,950,000 in 
this budget area. Projects include Child Development facilities for 
Germany and Belgium, $11,850,000; a power plant and two unaccompanied 
housing projects for Kwajalein Atoll, $77,500,000; four projects at 
Yakima Training Center--a central fuel facility, $3,950,000, a central 
washrack expansion, $4,650,000, an ammunition supply point expansion, 
$5,500,000, and a road upgrade project to comply with the environmental 
mitigation plan, $2,000,000--to support stationing and training of the 
heavy brigade at Fort Lewis, Washington. Included in this category in 
fiscal year 1999 is funding for the first phase of the revitalization 
of the cadet physical development center at U.S. Military Academy, West 
Point, $4,400,000. Two projects are requested for Fort Irwin. The first 
is a maintenance hardstand for $11,000,000. The second project is for 
the construction of a heliport at Barstow-Daggett for the National 
Training Center. The total cost of this project is $27,000,000; 
however, all but $7,000,000 will be funded from prior year 
appropriations. Construction of the National Ground Intelligence Center 
at Charlottesville, Virginia, $46,200,000, is in fiscal year 1999. 
There are five other projects at Fort Jackson, Fort Leonard Wood, Fort 
Sill, Fort Detrick and Rock Island Arsenal for infra-structure and 
revitalization in the United States totaling $32,900,000. Now, let me 
talk about one of the most important projects in this category.
    United States Army disciplinary barracks.--The fiscal year 1998 
request includes $63,000,000 for a replacement facility for the U.S. 
Army Disciplinary Barracks (USDB) at Fort Leavenworth. This facility is 
required for the Army to perform its executive agent role to confine 
military inmates from all services. Although there is a memorandum of 
agreement to transfer some inmates that have been discharged from the 
military to the Federal Bureau of Prisons (FBOP), over half of the 
current USDB inmates are awaiting appeals or have not been discharged 
and are not eligible for transfer. Additional transfers would also 
exacerbate the overcrowding already experienced in FBOP facilities. The 
current facility was constructed in the early 1900's and is 
deteriorated, showing evidence of structural cracking and exposed 
reinforcement steel, which if not corrected may present a life safety 
problem. The antiquated configuration and outdated facilities are 
expensive to maintain and inefficient to guard and process inmates.
                        budget request analysis
    The fiscal year 1998 MCA budget includes a request for 
appropriations of $595,277,000, along with a companion request for 
authorization for $555,277,000. The authorization request is lower, 
since we are using authority from fiscal year 1997 to fund the second 
phase of the Range Control Center at White Sands Missile Range, 
$18,000,000, and the remainder of the Whole Barracks Renewal Complex at 
Fort Knox, $22,000,000. The fiscal year 1999 MCA budget request 
includes a request for appropriations of $696,969,000, along with a 
companion request for authorization of $780,569,000. The authorization 
request includes full authority, $88,000,000, for the U.S. Military 
Academy project to replace the Cadet Physical Development Center; 
however, only $4,400,000 in appropriations is required for the first 
phase of this project. The request for appropriations for fiscal years 
1998 and 1999, by investment focus, is shown in Table 1.

                TABLE 1--INVESTMENT FOCUS APPROPRIATIONS                
------------------------------------------------------------------------
                  Category                    Appropriations    Percent 
------------------------------------------------------------------------
Fiscal year 1998:                                                       
    Whole Barracks Renewal..................    $337,800,000        56.7
    Strategic Mobility......................      75,400,000        12.7
    Environmental...........................       7,400,000         1.2
    Critical Mission........................     105,200,000        17.7
    Planning and Design/Minor Construction..      69,477,000        11.7
                                             ---------------------------
      Total.................................     595,277,000       100.0
                                             ===========================
Fiscal year 1999:                                                       
    Whole Barracks Renewal..................     312,500,000        44.8
    Strategic Mobility......................      95,700,000        13.7
    Environmental...........................       2,000,000         0.3
    Critical Mission........................     212,250,000        30.5
    Planning and Design/Minor Construction..      74,519,000        10.7
                                             ---------------------------
      Total.................................     696,969,000       100.0
------------------------------------------------------------------------

    TABLE 2 shows the fiscal years 1998 and 1999 distribution of the 
appropriations request among the Army's major commands.

           TABLE 2--COMMAND SUMMARY MILITARY CONSTRUCTION ARMY          
------------------------------------------------------------------------
                                                              Percent of
                   Command                    Appropriations     total  
------------------------------------------------------------------------
Fiscal year 1998:                                                       
    Inside the United States:                                           
        Forces Command......................        $103,100        17.3
        Training and Doctrine Command.......         127,000        21.3
        U.S. Army, Pacific..................          44,000         7.4
        Army Materiel Command...............          33,400         5.6
        Medical Command.....................          16,000         2.7
        Military District of Washington.....          13,600         2.3
        Military Traffic Management Command.          23,000         3.9
        Intelligence and Security Command...           3,100         0.5
        Assistant Chief of Staff                                        
         Installation Management............           6,500         1.1
                                             ---------------------------
          Total.............................         369,700        62.1
                                             ===========================
    Outside the United States:                                          
        Eighth, United States Army..........          76,100        12.8
        United States Army Central Command..          37,000         6.2
        United States Army, Europe..........          43,000         7.2
                                             ---------------------------
          Total.............................         156,100        26.2
                                             ===========================
          Total Major Construction..........         525,800        88.3
                                             ===========================
    Worldwide:                                                          
        Planning and Design.................          63,477        10.7
        Minor Construction..................           6,000         1.0
                                             ---------------------------
          Total.............................          69,477        11.2
                                             ===========================
          Total appropriations requested....         595,277       100.0
                                             ===========================
Fiscal year 1999:                                                       
    Inside the United States:                                           
        Forces Command......................         211,600        30.4
        Training and Doctrine Command.......          94,300        13.5
        U.S. Army, Pacific..................          49,000         7.0
        Army Materiel Command...............          37,000         5.3
        Medical Command.....................          27,100         3.9
        Intelligence and Security Command...          46,200         6.6
        United States Military Academy......           4,400         0.6
                                             ---------------------------
          Total.............................         469,600        66.5
                                             ===========================
    Outside the United States:                                          
        United States Army, Europe..........          11,850         1.7
        Eighth, United States Army..........          63,500         9.1
        United States Army Strategic Defense                            
         Command............................          77,500        11.1
                                             ---------------------------
          Total.............................         152,850        21.9
                                             ===========================
          Total Major Construction..........         622,450        89.3
                                             ===========================
    Worldwide:                                                          
        Planning and Design.................          64,519         9.3
        Minor Construction..................          10,000         1.4
                                             ---------------------------
          Total.............................          74,519        10.7
                                             ===========================
          Total appropriations requested....         696,969       100.0
------------------------------------------------------------------------

                          army family housing
    No single quality of life component matches the importance of 
proper housing for Army soldiers and their families. The family housing 
program provides a major incentive necessary for attracting and 
retaining dedicated individuals to serve in the Army. Yet, adequate 
housing continues to be the number one soldier concern when they are 
asked about their quality of life. Out-of-pocket expenses for soldiers 
living off post in the U.S. are typically 20 to 22 percent above their 
housing allowances. Thus, the Army's continuing challenge is 
maintaining and revitalizing our on-post housing, and finding 
affordable, quality off-post housing for our soldiers and families.
    In an effort to manage our installation family housing program in a 
more businesslike manner, the Army implemented the Business Occupancy 
Program in fiscal year 1996. Under this program, family housing 
operating funds are allocated to our installations on the basis of 
housing units occupied rather than the total number of units in the 
inventory. This provides an incentive to more effectively and 
efficiently manage occupancy and assets, since installation funding is 
now directly related to the number of units occupied, vice the total 
inventory. We saw a two percent increase in occupancy rates using the 
Business Occupancy Program during fiscal year 1996.
    Additionally, the 1996 Defense Authorization Act provided new 
authorities under the Military Housing Privatization Initiative, 
commonly referred to in the Army as the Capital Venture Initiative 
(CVI). Fifteen housing projects are under development using these 
authorities, which will privatize part of our housing inventory. We are 
working closely with the Office of the Secretary of Defense on efforts 
to further privatize the acquisition, revitalization and management of 
housing assets.
    Our fiscal year 1998 budget is $1,291,937,000 and includes 
$143,000,000 for a modest replacement construction program for units no 
longer economical to revitalize; a modest housing revitalization 
program for our aging housing inventory; and for planning and design of 
future construction projects. Funding for the annual costs of 
operating, maintaining, and leasing housing units for military families 
in fiscal year 1998 is $1,148,937,000.
    Our fiscal year 1999 budget is $1,255,908,000 and includes 
$137,900,000 for a modest replacement construction program for units no 
longer economical to revitalize; a modest housing revitalization 
program for our aging housing inventory; and for planning and design of 
future construction projects. Funding for the annual costs of 
operating, maintaining, and leasing housing units for military families 
in fiscal year 1999 is $1,118,008,000. Table 3 summarizes each of the 
categories of the Army Family Housing program.

                                          TABLE 3--ARMY FAMILY HOUSING                                          
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year 1998         Fiscal year 1999   
                       Facility category                       -------------------------------------------------
                                                                Appropriations  Percent  Appropriations  Percent
----------------------------------------------------------------------------------------------------------------
New Construction..............................................         $88,650        7         $81,000        6
Post Acquisition Construction.................................          44,800        3          49,650        4
Planning and Design...........................................           9,550        1           7,250        1
Operations....................................................         180,756       14         183,267       15
Utilities.....................................................         265,732       21         269,582       21
Maintenance...................................................         468,393       36         423,698       34
Leasing.......................................................         234,053       18         241,458       19
Debt..........................................................               3       <1               3       <1
                                                               -------------------------------------------------
      Total...................................................       1,291,937  .......       1,255,908  .......
----------------------------------------------------------------------------------------------------------------

                   whole neighborhood revitalization
    This two year request continues the initiative the Congress first 
approved in fiscal year 1992 to revitalize both the housing unit and 
the entire living environment of the military family. The whole 
neighborhood revitalization program provides for systematically 
upgrading and repairing the existing housing inventory, while 
concurrently improving neighborhood amenities. The projects recommended 
for this program are based on life-cycle economic analyses and will 
provide units which meet community standards. The combination of 
replacement and post-acquisition construction in fiscal year 1998 
provides for an annual worldwide investment that is on a 62 year 
replacement cycle, versus an Army goal of 35 year replacement cycle. 
The fiscal year 1999 program represents a 69 year replacement cycle.
    New construction.--The fiscal year 1998 new construction program 
provides whole neighborhood revitalization projects for replacing 583 
units at five locations, Fort Bragg, Fort Hood, Fort Bliss, Fort Meade 
and Schofield Barracks, where it is more economical to replace than 
renovate current housing. The fiscal year 1998 program also includes a 
project for $2,300,000 to either purchase or construct eight housing 
units in Miami, Florida, for senior key and essential officials of the 
Headquarters, U.S. Southern Command. Further, the fiscal year 1999 
program replaces 536 units at four locations, Fort Bragg, Fort Hood, 
Redstone Arsenal and Schofield Barracks. This replacement construction, 
which includes the supporting infrastructure, ensures that adequate 
housing is available for our soldiers and their families without adding 
to the current inventory. At each location, the housing being replaced 
will be demolished. Each project is supported with a housing survey 
showing that adequate and affordable units are not available in the 
surrounding community.
    Post acquisition construction.--The Post Acquisition Construction 
program is an integral part of our housing revitalization program. In 
fiscal year 1998, we are requesting funds for improvements to 455 units 
at three locations in the U.S. and three locations in Europe. Included 
in this request is a project to revitalize 120 units at Fort Benning 
for $15,000,000, of which $2,000,000 will be funded from fiscal year 
1996 appropriations. The fiscal year 1999 program improves 774 units at 
five U.S. locations and two European locations. Also included within 
the scope of each of these projects are efforts to improve supporting 
infrastructure, energy efficiency and eliminate environmental hazards.
                       operations and maintenance
    The operations, utilities and maintenance programs comprise the 
majority of the fiscal years 1998 and 1999 budget requests. This budget 
provides for the Army's annual expenditures for maintenance and repair, 
municipal type services, furnishings and utilities. The requested 
amounts of $914,881,000 for fiscal year 1998 and $876,547,000 for 
fiscal year 1999 are approximately 71 percent of the family housing 
request.
                                leasing
    The leasing program provides another way of adequately housing our 
military families. Our fiscal year 1998 request is $234,053,000. We are 
requesting $241,458,000 in fiscal year 1999. Our request will fund 
existing Section 2835 project requirements, temporary domestic leases 
in the United States and nearly 11,300 units overseas. The fiscal year 
1998 request is $6,538,000 more than appropriated in fiscal year 1997. 
This increase reflects an increase in the number of leased units 
overseas and approximately 60 new housing units in the Miami, Florida, 
area requested by the Commander-in-Chief of the Southern Command for 
junior enlisted families assigned to Headquarters, U.S. Southern 
Command.
    Our experience shows that the foreign leasing program generally 
saves the Army money. In fiscal year 1996, the average overseas housing 
allowance was $15,732 per family, while our average lease cost was 
$14,566 per unit. Our foreign leasing program increases slightly from 
10,800 units in fiscal year 1997 to 11,300 units in fiscal year 1999.
    The Army's total leasing program request supports approximately 
15,300 units in fiscal year 1998, and 15,400 units in fiscal year 1999, 
to satisfy requirements in the United States, Europe, Korea, Panama, 
and other locations. These are our high priority locations where 
providing flexible family housing solutions to commanders is essential 
to improving the quality of life of our soldiers.
                       real property maintenance
    Real Property Maintenance (RPM) is the primary account in 
installation base support funding responsible for maintaining the 
infrastructure to achieve a successful readiness posture for the Army's 
fighting force. Installations are the power projection platforms of 
America's Army and must be properly maintained in the present condition 
to be ready for the support of current Army missions and any future 
deployments. The appropriations for this program are provided as a part 
of the Defense Appropriations Bill.
    RPM consists of two major functional areas. The Maintenance and 
Repair of Real Property account pays to repair and maintain buildings, 
structures, roads and grounds, and utilities systems. The Minor 
Construction account pays for projects under $1 million which are 
intended solely to correct life, health, or safety deficiencies. It 
also funds projects under $500,000 per project for the erection, 
installation or assembly of a new facility, and for the addition, 
expansion, or alteration of an existing facility.
    Within the RPM area, we have two programs that I would like to 
highlight. The first program is our Barracks Upgrade Program. While 40 
percent of our barracks requirement will be revitalized or replaced 
through our Whole Barracks Renewal effort using major construction 
funding, the larger part of the inventory, 60 percent, can be modified 
to the 1+1 standard using RPM resources. In the fiscal year 1997 DOD 
Appropriations Act, Congress provided Army $149 million in a new two 
year appropriation, Quality of Life Enhancements, Defense (QOLE, D) for 
maintenance and repair of facilities key to quality of life. We have 
allocated all of these funds to start a long-term initiative to repair 
our Volunteer Army era barracks inventory to the 1+1 standard. We call 
this our Barracks Upgrade Program (BUP). The Army committed 
approximately $150 million per year in fiscal years 1998 and 1999 to 
this program, to continue the efforts to upgrade our single soldier's 
quality of life. This program, when combined with the Whole Barracks 
Renewal program, will reduce the amount of time required to improve the 
living conditions of our single soldiers to the current DOD standard by 
almost one half, so all barracks facilities worldwide are revitalized 
or replaced by the year 2012.
    The second is our long range strategy to provide reliable and 
efficient utility services at our installations. As discussed earlier, 
privatization or outsourcing of utilities is the first part of our 
strategy. We are maximizing our efforts to partner with the local 
communities utility departments and private utility companies to 
provide utility services that are more efficient and reliable. We have 
already successfully transferred twelve utility systems at ten 
installations. Additionally, eight other utility systems are currently 
in the process of being transferred. The second part of the strategy is 
the utilities modernization program to help upgrade those utility 
systems that cannot be privatized, such as central heating plants and 
distribution systems. We have requested $60,000,000 for utility 
modernization projects in fiscal year 1998. Utility systems at unique 
or remote installations are particularly reliant on these modernization 
projects. We are also funding energy saving projects which will further 
improve our energy efficiency. We have allocated $40,000,000 per year 
for this effort.
                  homeowners assistance fund, defense
    The Army is the executive agent for the Homeowners Assistance 
Program. This program provides assistance to homeowners by reducing 
their losses incident to the disposal of their homes when the military 
installations at or near where they are serving or employed are ordered 
to be closed or the scope of operations reduced. For fiscal year 1998, 
there are no additional requirements for funds. The fiscal year 1999 
request is for appropriations of $40,229,000, along with a companion 
request for authorization and authorization of appropriations for the 
same amount.
    The request will provide assistance to personnel at approximately 
21 installations that are impacted with either a base closure or a 
realignment of personnel, resulting in adverse economic effects on 
local communities. The Homeowners Assistance Program is funded not only 
from the resources being requested in this budget, but is also 
dependent, in large part, on the revenue earned during the fiscal year 
from the sale of properties.
                                summary
    Mr. Chairman, this budget is essential to ensure that there is a 
balance between all Army programs affecting readiness and the support 
of our personnel. Our strategy can only be achieved through balanced 
funding, divestiture of excess capacity and improvements in management. 
We will continue to work toward maintaining the maximum flexibility for 
our installation commanders to use the resources available to them, to 
maintain maximum readiness and provide the needed support and 
facilities. We will also continue to streamline, consolidate and 
establish community partnerships that generate resources for 
infrastructure improvements and continuance of services. The fiscal 
year 1998 request for appropriations for Military Construction Army and 
Army Family Housing is $1,887,214,000. In fiscal year 1999, our request 
for Military Construction Army and Army Family Housing is 
$1,952,877,000 and $40,229,000 for the Homeowners Assistance Program. 
With approval of this request we will continue to: improve our 
strategic mobilization posture, provide environmental compliant 
facilities; provide additional adequate housing for both our single and 
married soldiers and their families; and meet statutory and regulatory 
requirements. This request will provide for family housing leasing and 
operation and maintenance of the current inventory. Approval of this 
request will provide the minimum level of facilities funding within the 
total funding available to the Department of the Army in fiscal years 
1998 and 1999. Thank you for your continued support for Army facilities 
funding.
          part ii--military construction, army national guard
    Next, I will present the Army National Guard's Military 
Construction Program for fiscal years 1998 and 1999.
    The Guard's fiscal year 1998 request for appropriations of 
$45,098,000 includes $35,600,000 for major construction, $2,800,000 for 
planning and design and $6,698,000 for unspecified minor construction. 
The fiscal year 1999 request of $33,800,000 includes $23,640,000 for 
major construction, $3,160,000 for planning and design, and $7,000,000 
for unspecified minor construction. The companion request for 
authorization and authorization of appropriations is the same as the 
appropriation request for both fiscal years.
    The Army National Guard is America's community based, dual-use 
reserve force, ``A trained and ready citizen-Army,'' and, by statute, 
an integral part of the first line defense of the United States. It is 
balanced and ready. The National Guard is manned with over 367,000 
quality soldiers in 1,823 major units in over 2,700 communities 
nationwide.
    The National Guard is a capabilities based force providing grass 
roots support to America's Army. They have demonstrated combat, combat 
support, and combat service support performance from the Pequot War of 
1637 through the Gulf War of 1991. Recently, the National Guard has 
supported missions in Somalia, Rwanda, Haiti, and is in Bosnia in 
support of Operation Joint Endeavor today. The National Guard has 
always performed its mission superbly. The National Guard has been an 
active participant in every major American conflict. Today, they are 
engaged in over fifty countries around the world. Last year they 
provided one and a half million man-days for Federal and State 
missions.
    The National Guard is a relevant and accessible force. They are 
task organized and readily available to both national and State 
authorities, for all foreign and domestic missions.
    The National Guard is an expandable force. Five times this century, 
they have served as the framework on which to build a larger land force 
to meet a growing threat. The National Guard serves as ``insurance'' 
against an unknown future. They can provide the maximum possible number 
of missioned units as part of the Army's force structure required to 
achieve directed capabilities. They have the expertise and capability 
to respond to the needs of the Nation, both Federal and State.
    The National Guard is affordable. The Guard provides a majority of 
the combat force and over a third of the support units to America's 
Army.
                          facilities strategy
    The National Guard is accomplishing new missions and taking on new 
responsibilities in addition to its historic domestic and international 
roles. To do this, they have higher quality soldiers, trained and 
equipped to a higher degree of readiness than ever before. The support 
of our communities, States, the Active Army, and the Congress have made 
this possible.
    Readiness is the key factor of a strong force. To keep citizen-
soldiers ready, the most critical element is training time. We must 
minimize distractions, such as travel time to distant training sites, 
additional maintenance time on stored equipment, and delays caused by 
working in inefficient and obsolete facilities.
    Adequate facilities are necessary to meet the level of readiness 
demanded by the American people. We have an obligation to provide safe, 
cost effective, and mission essential facilities to keep our citizen-
soldiers ready. Modern facilities enhance training, maintenance, 
administration, quality of life, and the environment. We continue to 
pursue the use of joint installations and facilities by more than one 
reserve component, in order to provide cost effective facilities. The 
Base Realignment and Closure program has also conveyed facilities and 
training land to the National Guard.
    Our vision for the National Guard is a relevant force, missioned 
across the spectrum of contingencies, structured and resourced to 
accomplish its mission when called, with trained citizen-soldiers 
committed to preserving timeless traditions of service to our Nation 
and communities. Adequate facilities are necessary to provide for the 
training, safety, health, and fitness of the force. We envision state-
of-the-art, community based installations and training sites. By virtue 
of their geographical disbursement, these sites can be leveraged by the 
Active Army and facilitate communications, operations, training, and 
equipment sustainment from which to deploy the force.
    The facilities program for the Army National Guard benefits the 
local community, the State, and the Nation. Federal funds for both 
military construction and real property maintenance for many National 
Guard facilities are leveraged by States contributing a share of the 
design, part of the construction costs, and the site for the facility. 
Operations and maintenance costs are a State responsibility for many 
State owned facilities. For other facilities, it is a shared 
responsibility which reduces Federal costs.
    Now, I will discuss several of the highlights of the budget that we 
are presenting today.
           military construction, army national guard (mcng)
    Within our military construction request, we focus on five 
investment areas: ranges, training, maintenance support, readiness 
centers, and planning and design/minor construction. We have grouped 
these into two major categories of projects: mission facilities and 
readiness center projects.
                           mission facilities
    In fiscal year 1998 there are eight mission facility projects, 
totaling $26,139,000. In fiscal year 1999 there are six such projects, 
totaling $19,112,000. Essential mission facilities include several 
initiatives such as training site modernization and maintenance 
facility revitalization.
    Training site modernization.--Fiscal year 1998 continues the slow 
process of adapting existing State operated training sites to training 
strategies for the 21st century. In fiscal year 1998 we have included a 
new project, at $10,229,000, for a multipurpose training range at Camp 
Atterbury, Indiana. This will allow enhanced readiness brigade units, 
both ground and air, in the central United States to conduct 
doctrinally correct crew collective gunnery qualification. It will also 
provide lanes training for these same units so that they can maintain 
their readiness for early deployment. In fiscal year 1999 we have 
included an additional remote electronic targetry system range, 
$1,023,000, at Camp Ripley, Minnesota. This project greatly enhances 
the utilization and realism of the Camp Ripley range complex and will 
permit year-round training in all types of weaponry for soldiers of all 
components in all services.
    In fiscal year 1998 we have also included the final phase of the 
Battalion Training Complex project at Camp Dodge, Iowa, for $4,529,000. 
This will permit full utilization of the Equipment Maintenance Center--
CONUS, a national school house for training general and direct support 
maintenance units for immediate worldwide deployment. The project 
further supports a regional school house, part of the Total Army School 
System, which integrates training for all components of the Army.
    Maintenance facility revitalization.--In fiscal year 1998 we have 
included five projects, totaling $11,381,000, to continue the 
revitalization of Army National Guard maintenance facilities. In fiscal 
year 1999 we have included an additional four such projects, totaling 
$17,474,000. As the Army National Guard has assumed additional real 
world deployment missions, it has received the current generation of 
equipment. Unfortunately, our maintenance facilities were built to 
accommodate the last generation of equipment, which required less space 
and less sophisticated facilities. These nine projects are part of a 
long standing effort. We need to replace our 1950, 1960, and 1970 era 
facilities with ones that permit our undermanned maintenance shops to 
have the working environment necessary to keep our modern equipment to 
readiness standards.
                       readiness center projects
    Army National Guard soldiers require a training environment that 
provides the morale enhancing facilities that will retain them and 
lessen the investment cost of initial entry training of their 
replacements. A critical focal point of this training is the soldiers' 
readiness center. This is also the only place that many Americans see 
America's Army on display. Therefore, in fiscal year 1998 we have 
included in our program three readiness center revitalization projects, 
totaling $9,461,000. In fiscal year 1999 we have included an additional 
two projects, totaling $4,528,000.
                        other program highlights
    Unspecified minor military construction, Army National Guard.--The 
Army National Guard has allocated $6,698,000 in fiscal year 1998 and 
$7,000,000 in fiscal year 1999 to be used worldwide for urgent, 
unforeseen projects.
                        budget request analysis
    This request includes a request for appropriations of $45,098,000 
in fiscal year 1998 and $33,800,000 in fiscal year 1999, along with 
companion requests for authorization and authorization of 
appropriations for the same amounts.
    The fiscal year 1998 appropriations request, by investment focus, 
is shown in Table 1.

                TABLE 1--INVESTMENT FOCUS APPROPRIATIONS                
------------------------------------------------------------------------
                  Category                    Appropriations    Percent 
------------------------------------------------------------------------
Ranges......................................     $10,229,000        22.6
Training....................................       4,529,000        10.0
Maintenance Support.........................      11,381,000        25.3
Readiness Centers...........................       9,461,000        21.1
Planning and Design/Minor Construction......       9,498,000        21.1
                                             ---------------------------
      Total.................................      45,098,000       100.0
------------------------------------------------------------------------

    The fiscal year 1999 appropriations request, by investment focus, 
is shown in Table 2.

                TABLE 2--INVESTMENT FOCUS APPROPRIATIONS                
------------------------------------------------------------------------
                  Category                    Appropriations    Percent 
------------------------------------------------------------------------
Ranges......................................      $1,638,000         4.8
Maintenance Support.........................      17,474,000        51.7
Readiness Centers...........................       4,528,000        13.4
Planning and Design/Minor Construction......      10,160,000        30.1
                                             ---------------------------
      Total.................................      33,800,000       100.0
------------------------------------------------------------------------

                       real property maintenance
    The States will continue to prudently manage their existing 
facilities, despite the challenges of age and shrinking real property 
support funding. Facilities built during the last decade have played a 
major role in meeting force structure changes, accomplishing quality 
training, maintaining readiness, and improving soldier quality of life.
    The operation and maintenance of our physical plant is an issue of 
concern. The replacement value of all National Guard facilities exceeds 
$16 billion. Their average age is 35 years. States take care of these 
facilities using the limited resources in Real Property Maintenance 
accounts, as authorized and appropriated by Congress.
    They do so, however, in a way appropriate to their unique Federal/
State status. The National Guard Bureau does not own, operate, or 
maintain these facilities. The States, Territories, and Commonwealths 
perform these functions. The National Guard Bureau transfers to the 
States money that Congress authorizes and appropriates for this 
purpose. This money supports critical training, aviation and logistical 
facilities. For most of the facilities, the States, Territories and 
Commonwealths must contribute at least 25 percent of operations and 
repair costs.
    The States, Territories, and Commonwealths then pay the utility 
bills, hire and reimburse employees necessary to operate and maintain 
these facilities, buy the supplies necessary for operations and 
maintenance, and contract for renovation and construction projects. 
They also lease facilities when required.
    The Construction and Facility Management Offices are making a 
herculean effort to operate and maintain all National Guard facilities. 
They will do so for $1.56 a square foot in 1998.
                                summary
    The National Guard is a critical part of America's Army. Today's 
challenges are not insurmountable and the National Guard will continue 
to provide the best facilities within the resources made available. The 
soldiers of the Army National Guard wish to express their appreciation 
for the efforts that this subcommittee has made in the past to support 
our requirements.
             part iii--military construction, army reserve
    Next, I present the Army Reserve, representing America's citizen-
soldier, an integral part of, and an essential and relevant partner in, 
America's Army. This fact is clearly evidenced by the fact that Army 
Reserve units and personnel currently comprise 74 percent of American 
Reserve Component forces operating in Bosnia. In addition to relying on 
Army Reserve forces to support major worldwide contingencies, the Army 
is increasingly dependent on its Army Reserve for support of a wide 
variety of daily, ongoing missions at home and abroad during peacetime, 
including an expanding role in commanding and controlling Army 
installations and providing regional base operations support. Army 
Reserve units and soldiers will continue to respond to national 
security needs and constrained resources into the 21st century. To 
ensure continued readiness, they must have the minimum essential 
facilities resources with which to train, support, and sustain our 
forces.
                          facilities strategy
    The organization, roles, and missions of the Army Reserve dictate 
the need for a widely dispersed inventory of facilities. We occupy 
about 1,400 facilities, consisting of more than 2,800 buildings and 
structures that have an average age of about 32 years. Army Reserve 
operated installations add another 2,600 buildings and structures to 
the total inventory. The average age of facilities on these 
installations is about 47 years.
    In order to effectively carry out our stewardship responsibilities 
toward the facilities inventory, the Army Reserve has adopted 
priorities and strategies that guide the application of resources. The 
program is straightforward: provide essential facilities to improve 
readiness and quality of life; preserve and enhance the Army's image 
across America; and conserve and protect the facilities resources for 
which we are responsible. Our priorities are: provide critical mission 
needs of Force Support Package units; address the worst cases of 
facilities deterioration and overcrowding; pursue modernization of the 
total facilities inventory; and carefully manage Reserve operated 
installations. Our strategy for managing Army Reserve facilities and 
installations in a resource constrained environment rests on six 
fundamentals: reduce leases; dispose of excess facilities; consolidate 
units into the best available facilities; use Base Realignment and 
Closure (BRAC) enclaves where practical; use the new Modular Design 
System (MDS) to achieve long term cost savings in construction and 
design costs; and finally, to pursue economies and efficiencies in 
installation management, base operations support, and facilities 
engineering.
                           program highlights
    Readiness.--Army Reserve construction program requirements are 
different from those of the Active Army. Army Reserve forces are 
community based, not installation based, requiring that forces and 
facilities be located in hundreds of cities and towns across the 
Nation. This dispersion of forces and facilities reduces the 
opportunities for regional consolidation and wholesale reductions in 
facilities inventory. Units and their facilities must be located in the 
communities where soldiers live and where we can recruit. They must be 
sufficient to meet the readiness training requirements of the units 
stationed in them. Reserve facilities serve as locally based extensions 
of the Army's power projection platforms by providing essential and 
cost effective places to conduct training, maintenance, storage of 
contingency equipment and supplies, and preparation for mobilization 
and deployment that simply cannot be accomplished elsewhere. Army 
Reserve operated installations support mission essential training for 
thousands of soldiers from each component of the Army each year.
    Quality of life.--Quality, well maintained facilities provide Army 
Reserve units with the means to conduct necessary individual and 
collective training, to perform operator and unit maintenance on 
vehicles and equipment, and to secure, store, and care for 
organizational supplies and equipment. These facilities also provide 
other important benefits. Fully functional and well maintained training 
centers have a positive impact on recruiting and retention, unit 
morale, and the readiness of the full-time support personnel who work 
in the facilities on a daily basis. In addition to supporting the 
missions of units and support staffs, Reserve facilities project an 
important and lasting image of America's Army in the local community.
    Modernization.--The plant replacement value (PRV) of Army Reserve 
facilities is approximately $3.6 billion and an additional $1.9 billion 
for Army Reserve operated installations. The budget requests for fiscal 
years 1998 and 1999 address the Army Reserve's highest priorities for 
modernizing and revitalizing the inventory and for providing new 
facilities in response to new and changing missions.
    Installations and base support.--The Army Reserve continues to 
undergo significant change as America's Army shapes itself for the 21st 
Century. One of these changes is the mission to command and control 
former Active Army installations. These installations serve as high 
quality, regional training sites for forces of both the Reserve and 
Active Components of the Army, as well as the other Armed Services; 
provide sites for specialized training; and offer a variety of 
supporting facilities. To fulfill this important mission, we must be 
able to fund projects that support critical training, mobilization, and 
quality of life requirements at the installations. The Army Reserve's 
military construction program for fiscal years 1998 and 1999 includes a 
total of six projects at Fort McCoy, Wisconsin, one of the army's 
fifteen power projection platforms. These projects directly support 
training and readiness of the force, aircraft operations and safety, 
and improved quality of life for thousands of soldiers and civilian 
employees who train at the Army Reserve Readiness Training Center each 
year. The Army Reserve is also assuming greater responsibilities in 
managing base operations support and facilities engineering activities, 
using the command, control, and management capabilities of its Regional 
Support Commands. This mission reinforces the Army reserve's relevance 
and value to the total Army as a provider of combat service support and 
other essential infrastructure support in both peacetime and wartime.
                        budget request analysis
    The Military Construction, Army Reserve (MCAR) budget for fiscal 
year 1998 includes a request for appropriations of $39,112,000 and a 
companion request for authorization of $47,012,000. The amount of the 
request for appropriations reflects the Army reserve's application of 
unobligated prior year appropriations of $7,900,000 toward the fiscal 
year 1998 budget, as directed by the Department of Defense. The amount 
of the companion request for authorization reflects the full 
authorization of the cost of all projects in the budget request. The 
budget for fiscal year 1999 includes a request for appropriation and 
authorization of $66,140,000. These budget requests for fiscal years 
1998 and 1999, while constrained, provide adequate funds for our 
highest priority, most essential requirements, and they are in line 
with our commitment to operate successfully in an environment of 
constrained resources. They also reflect the priority of maintaining 
near term force readiness and meeting critical requirements for 
military construction that directly supports that readiness. The MCAR 
appropriation includes three categories of funding: Major Construction, 
Unspecified Minor Construction, and Planning and Design.
  --(1) Major construction.--These funds provide for essential 
        construction, revitalization, expansion, alteration, or 
        conversion of facilities, and for land acquisition, when 
        required. For fiscal year 1998, our request for an 
        appropriation of $34,012,000, with a companion authorization 
        request of $41,912,000, will fund the construction of one new 
        Army Reserve center in California and four projects at Fort 
        McCoy, Wisconsin: a new billeting facility at the Army Reserve 
        Readiness Training Center; provision of electrical power to 
        various training ranges; and revitalization of rifle and pistol 
        ranges. The fiscal year 1999 requests for appropriation and 
        authorization of $58,640,000 will fund construction of three 
        Army Reserve centers in Michigan, Tennessee, and Virginia; an 
        Aviation Support Facility in Virginia that supports new mission 
        requirements; and two projects at Fort McCoy, Wisconsin: a new 
        airfield crash rescue station to replace an inadequate and 
        unsafe facility; and construction of a machine gun range to 
        support training readiness.
  --(2) Unspecified minor construction.--These funds provide for 
        construction of projects not otherwise authorized by law, and 
        which have a funded cost of less than $1,500,000. Unspecified 
        minor construction may include construction, alteration, or 
        conversion of permanent or temporary facilities. This program 
        provides an important means to accomplish small projects that 
        are not now identified, but which may arise during the fiscal 
        year, and that must be accomplished to satisfy critical but 
        unforeseen mission requirements. Based on the availability of 
        unobligated prior year funds, the Army Reserve has adjusted its 
        budget request for fiscal year 1998 to include no funds for 
        unspecified minor construction. The budget request for 1999 is 
        $1,500,000.
  --(3) Planning and design.--These funds provide for a continuous, 
        multi-year process of designing construction projects for 
        execution in the budget years and beyond. Planning and design 
        activities include the preparation of engineering designs, 
        drawings, specifications, and solicitation documents necessary 
        to execute major and unspecified minor construction projects. 
        Planning and design funds are also required to support the Army 
        reserve's share of the costs of the continued development of 
        the Modular Design System as an effective and cost and time 
        saving facility design tool. Our budget requests for planning 
        and design are $5,100,000 for fiscal year 1998 and $6,000,000 
        for fiscal year 1999.
    Real property maintenance (RPM).--Another important issue that is 
directly linked to stewardship responsibilities for facilities and 
installations is funding for real property maintenance (RPM). Although 
provided separately by the Operations and Maintenance Army Reserve 
(OMAR) appropriation, these funds complement military construction 
(MILCON) funds to round out the total resources necessary to manage the 
Army reserve's facilities inventory. Long term resource constraints in 
both military construction and real property maintenance have a 
combined effect of increasing the rates of aging and deterioration of 
facilities and infrastructure. In exercising our stewardship 
responsibilities for facilities that belong to the American taxpayer, 
we are applying available resources to only the most critical military 
maintenance and repair needs.
                                summary
    In summary, as the national military strategy has changed to meet 
the challenges of the next century, the Army Reserve has grown in its 
importance to the execution of that strategy. The men and women of the 
Army Reserve have consistently demonstrated that they can and will 
respond to the missions and challenges assigned to them. Our Reserve 
facilities and installations are valuable resources that support force 
readiness and power projection, while serving as highly visible links 
between America's Army and America itself. We are grateful to the 
Congress and the Nation for the support you have given and continue to 
give to the Army Reserve and our most valuable resource, our soldiers.
              part iv--base realignment and closure (brac)
                              introduction
    Closing and realigning installations have been a major part of the 
Army's reshaping efforts during the past decade. The Army is entering 
the final third of a 13 year implementation effort that spans four 
rounds of closures. We are now saving more than is being spent. By 
implementing BRAC, the Army is complying with the law, while saving 
money that would otherwise support unneeded overhead. These closed 
assets are now available for productive reuse in the private sector.
    BRAC savings do not come immediately because of the up front costs 
for implementation and the time it takes to close and dispose of 
property. The resulting savings are not as substantial as originally 
anticipated because potential land, facilities and equipment revenues 
are being converted to local economic opportunities that create jobs 
and expand the tax base. Environmental costs are significant and are 
being funded up front to facilitate economic revitalization. The 
remaining challenges that lie ahead are implementing the final two 
rounds, BRAC 93 and 95, ahead of schedule, disposing of property at 
closed bases, cleaning up contaminated property and assisting 
communities with reuse.
    In fiscal year 1998, we will begin to focus almost exclusively on 
BRAC 1995, the last of the four rounds. The fiscal year 1998 and 1999 
budgets are important because they contain over 40 percent of the 
resources needed over the six year implementation period in support of 
the BRAC 1995 round.
    The Army is accelerating all BRAC actions to obtain savings and 
return assets to the private sector as quickly as feasible. All of the 
five closures approved by the 1991 Commission have already occurred. In 
fiscal year 1997, we are closing Vint Hill Farms Station, Virginia, two 
years early. This was the only closure recommended by the 1993 
Commission. We are also closing the first of the installations 
recommended by the 1995 Commission: Fort Chaffee, Arkansas; Fort 
Pickett, Virginia; Baltimore Publications Center; Maryland; Stratford 
Engine Plant, Connecticut; Fort Totten, New York; Detroit Tank Plant, 
Michigan; and Fort Missoula, Montana.
    The fiscal year 1998 budget supports completing the 
disestablishment of the Aviation and Troop Command in St. Louis, 
Missouri; continuing a major construction program at Fort Leonard Wood, 
Missouri, to house the military police and chemical schools relocating 
from Fort McClellan, Alabama, and the closure of Fort Indiantown Gap, 
Pennsylvania.
    Although the extensive overseas closures do not receive the same 
level of public attention as those in the United States, they represent 
the fundamental shift from a forward deployed force to one relying upon 
overseas presence and power projection. Without the need for a 
Commission, we are closing about seven of ten overseas sites in Europe, 
where we are reducing the number of installations by 68 percent. Forty 
partial closures represent an additional 5 percent. Reductions in 
infrastructure roughly parallel troop reductions of 70 percent. In 
Korea, the number of installations are dropping from 104 to 83, or 20 
percent. Another 8 percent are partial closures.
    While we constantly evaluate the role of forward deployed forces, 
overseas presence helps to reassure friends and deter potential 
enemies. It can reduce our response time in crises by positioning 
forces nearer potential trouble spots. On a typical day, the Army has 
138,000 soldiers providing overseas presence in 120 countries. This 
provides tangible proof of the Nation's commitment to defend American 
interests and those of our allies.
    The President's Five Part Community Reinvestment Program, announced 
on July 2, 1993, speeds economic recovery of communities where military 
bases are closing by investing in people, investing in industry and 
investing in communities. The Army is making its bases available more 
quickly for economic redevelopment because of the additional 
authorities we now have.
    The Army has been working with communities to convert military 
bases to public and private uses. Just last year, the Army completed an 
economic development conveyance of the large maintenance facility at 
Tooele Depot, Utah, to the local community, which has completed a 
business arrangement with Detroit Diesel Remanufacturing Corporation to 
spur economic development and create jobs. Significant parcels of 
property were also conveyed at Fort Benjamin Harrison, Indiana, and 
Fort Devens, Massachusetts. Local and State redevelopment authorities 
are projecting new employment levels that far exceed those of the Army 
when the bases were active. We are also partnering with local reuse 
authorities to conduct cost effective cleanup efforts, consistent with 
local reuse plans and prudent expenditure of resources.
                 base realignment and closure--overseas
    On September 18, 1990, the Secretary of Defense announced the first 
round of overseas bases to be returned. Since that time, there have 
been a total of 22 announcements. On January 14, 1993, DOD announced it 
will withdraw all U.S. military forces from the Republic of Panama and 
transfer all facilities by December 31, 1999. Of the 13 sites in Panama 
announced for closure, ten have been returned. The total number of 
overseas sites announced for closure or partial closure is 664. 
Additional announcements will occur until the base structure matches 
the force identified to meet U.S. commitments. At this time, we do not 
see the need for many more overseas closures.

                                                           Installations
Germany...........................................................   573
Korea.............................................................    29
France............................................................    21
Panama............................................................    13
Netherlands.......................................................     6
Turkey............................................................     6
United Kingdom....................................................     5
Greece............................................................     4
Italy.............................................................     4
Belgium...........................................................     3
                        -----------------------------------------------------------------
                        ________________________________________________
                                                                     664

    Most of the 188 million square feet (MSF) of overseas reductions 
are in Europe, where we are returning over 600 sites. This is 
equivalent to closing 12 of our biggest installations in the U.S.--Fort 
Hood, Fort Bragg, Fort Benning, Fort Stewart, Fort Leonard Wood, Fort 
Lewis, Fort Bliss, Fort Carson, Fort Gordon, Fort Meade, Fort Campbell 
and Redstone Arsenal. Unquestionably, these reductions are substantial 
and have produced savings to sustain readiness.
    The process for closing overseas is much different than in the U.S. 
First, unified commanders nominate overseas sites for return or partial 
return to host nations. Next, the Joint Staff, various DOD components, 
National Security Council and State Department review these 
nominations. After the Secretary of Defense approves them, DOD notifies 
Congress, host governments and the media. The Army ends operations by 
vacating the entire installation and returning it to the host nation. 
If we reduce operations, we end up keeping some of the facilities.
    base realignment and closure 1988--base closure account (bca) i
    BRAC 1988 overview.--Though this round has been completed, the work 
of property disposal and environmental remediation will continue for 
several years. In late 1996, the Army completed the sale of the former 
Cameron Station, Virginia, to a residential developer for $33 million.
    BRAC 1988 financial summary.--The one-time cost to implement was 
$1,361,279,000. The one-time savings during implementation were 
$721,011,000. Annual recurring savings of $259,611,000 began in fiscal 
year 1996.
    BRAC 1988 environmental cleanup and compliance.--Cleanup is 
complete at 460 of 885 (52 percent) sites. Eleven BRAC Cleanup Teams 
and nine Restoration Advisory Boards work on these environmental 
issues.
 base realignment and closure 91 (brac 91)--base closure account (bca) 
                                   ii
    BRAC 91 overview.--Public Law 101-510, the Defense Base Realignment 
and Closure Act of 1990, established a new process for base realignment 
and closure actions in the United States through 1995. The first phase 
of this new process is known as BRAC 91 and the funding account is 
referred to as BCA II. The Army is currently in the final year of the 
six year execution period. All closures are completed. The realignment 
of the Army Research Laboratory in Adelphi, Maryland in 1997 completes 
this round.
    BRAC 91 financial summary.--One-time implementation costs during 
the period fiscal year 1992-97 totals $1,419,433,000. The largest 
component is military construction, which accounts for 38 percent of 
the program. Savings during the same period are $1,181,201,000, 
primarily due to the elimination of 5,648 civilian positions and 
reduced operating costs for installations being realigned or closed. 
Recurring savings are estimated to be $303,825,000, starting in fiscal 
year 1997. Proceeds from land sales are anticipated to be $37,498,000 
million.
    BRAC 91 environmental cleanup and compliance.--Cleanup is complete 
at 136 of 235 sites (58 percent). Five BRAC Cleanup Teams and five 
Restoration Advisory Boards are working at closing sites.
 base realignment and closure 93 (brac 93)--base closure account (bca) 
                                  iii
    BRAC 93 overview.--The Army is in its fourth year of a six year 
execution period. During fiscal year 1997 the Army will close Vint Hill 
Farms Station, Virginia. The Army is working very closely with the 
local redevelopment authority to expedite reuse of the installation in 
support of economic recovery.
    BRAC 93 financial summary.--One time implementation costs during 
the period fiscal year 1994-97 totals $288,953,000. Savings during the 
same period are $206,892,000, primarily due to the elimination of 1,113 
civilian positions and reduced operating costs of installations being 
realigned or closed. We estimate our recurring savings to be 
$67,727,000, starting in fiscal year 1999. Land sales are expected to 
be deferred as part of the economic development conveyance process and 
will be collected in the future as economic development occurs.
    BRAC 93 environmental cleanup and compliance.--Cleanup is complete 
at 12 of 68 sites (18 percent). Three BRAC Cleanup Teams and three 
Restoration Advisory Boards (RAB) are working to accelerate cleanup.
 base realignment and closure 95 (brac 95)--base closure account (bca) 
                                   iv
    BRAC 95 overview.--The Army is in its second year of a six year 
execution period. The Army expects to close Fort Chaffee, Fort Pickett, 
Stratford Army Engine Plant and several minor installations in fiscal 
year 1997. In fiscal year 1998, the Army will complete the 
disestablishment of Aviation and Troop Command in St. Louis and return 
Fort Indiantown.Gap to the State of Pennsylvania.
    BRAC 95 financial summary.--One time implementation costs during 
the period fiscal year 1996-2001 are currently estimated to total 
$2,140,995,000. Savings during the same period are $1,197,973,000, 
primarily due to the elimination of 4,247 civilian positions in the 
Army and reduced operating costs of installations being realigned or 
closed. An additional 1,431 positions from DOD's medical program are 
being eliminated as a result of the closure or realignment of medical 
facilities at our installations. We estimate recurring savings to be 
$363,578,000 starting in fiscal year 2002. Land sales are expected to 
be deferred as part of the economic development conveyance process and 
will be collected in the future as economic development occurs.
    BRAC 95 environmental cleanup and compliance.--Cleanup is complete 
at 183 of 716 sites (26 percent). Twenty BRAC Cleanup Teams and 
seventeen Restoration Advisory Boards (RAB) are working to accelerate 
cleanup.
                                summary
    Closing and realigning bases saves money that otherwise goes to 
unneeded overhead and frees up valuable assets for productive reuse. 
These savings permit us to invest properly in the forces and bases we 
keep to ensure their continued effectiveness. Our debt to local 
communities keeps us dedicated to the rapid reuse of our installations, 
so local communities can realize the opportunities that base closures 
can bring. The Army is supporting the rapid redevelopment of 
communities affected by BRAC by using the economic development 
conveyance authorities established by the Congress. Real property 
assets are being conveyed to local communities, and cleaned 
environmentally when necessary, thereby permitting communities to 
quickly enter into business arrangements with the private sector. These 
business arrangements are producing jobs and tax revenues at the local 
level which, over time, will allow some revenues to return to the Army.
    Mr. Chairman, this concludes my statement. Thank you.

                       barracks projects overseas

    Senator Burns. Thank you, Mr. Secretary.
    Mr. Secretary, the 1998 budget request contains eight 
barracks projects overseas, for a total of about $119 million. 
I guess my question is, is that inadequate, or are we investing 
too much overseas in new barracks in Europe and Germany as we 
have significant amounts of barracks domestically in this 
country sorely in need of repair?
    I cite Fort Sill. I saw some quarters there that really 
need replacing and some facilities that we need to replace on 
some of our posts here in this country to meet the one plus 
one.
    Are we making the investment in the wrong place? Are we 
investing in Europe and Korea and maybe not making the adequate 
investment here?
    Mr. Walker. Mr. Chairman, we are trying to provide a 
balanced program. In our barracks program, as I mentioned, we 
have taken the old barracks renewal program, which said we 
would not finish completing renovating barracks to the one plus 
one standard by the year 2020, and we have rolled that back and 
now will complete all barracks in the United States by 2008.
    We are not going to complete that overseas until the year 
2012, out of recognition of what you say. But I must tell you 
that we have some bad barracks all over, and some of the worst 
barracks I have ever seen are in Korea and Germany. I have been 
going to Korea, for instance, since the early 1980's. We are 
still using 50-year-old Quonset huts for American soldiers to 
live in that should have been torn down when I first went to 
Korea in 1983.
    So we have an obligation to our soldiers, wherever they may 
be, and what we are trying to do is put an adequate amount of 
money so we can conclude this barracks renewal program 
throughout the Army as soon as possible.
    Senator Burns. It looks like throughout our part of the 
country the Quonset Corp., still sells building--grain, machine 
sheds, this kind of thing. Maybe they had better go over and 
take some pictures and see how long their product lasts?
    Mr. Walker. It is amazing.
    Senator Burns. I think we have done an adequate job of 
maintaining and using them a long time.

                                  brac

    I want to ask you now, in light of that, and with the 
announcement a couple of days ago, Secretary Walker--and I 
guess this might be a little too quick, but I would give rise 
to the thought that with the announcement from the Secretary of 
Defense and from the President that they are suggesting another 
round of BRAC, base realignment and closure, and when we start 
talking about making investments, and then looking down the 
line--and I personally, with the demand that has been put on 
the cleanup and especially the underestimation of what our 
environmental liability was and the cost of taking care of that 
liability on these closures--I am wondering if you are starting 
to put together plans that right now we have to start watching 
where we invest for this future round, if it comes to pass, of 
BRAC.
    Mr. Walker. Well, Mr. Chairman, of course, Secretary Cohen 
has not told us yet exactly what his plan is. That will be 
announced on May 19, I believe, Monday next.
    We probably do need another BRAC, though, Mr. Chairman. The 
numbers of soldiers have declined far faster than our 
infrastructure, although I must tell you that in the Army most 
of our soldiers were taken out of Europe, where we have had 
large base closures there.
    Here in the United States, fewer soldiers have been reduced 
proportionately to the number of soldiers overall. But even 
with that said, we still have some flexibility, I believe, in 
order to save some funds for the future.
    What we are finding with regard to base closures is what 
you point out. It is very expensive on the front end. But the 
past four BRAC base closures that we have had are going to 
result, by the year 2001, in a savings to the Army budget of $1 
billion, on an annual basis that we would not have saved. So if 
you can get past the first few years--that is the difficult 
part--then you do end up saving money.
    Senator Burns. With the new approach of providing the seed 
money for off-base housing and a commitment to our family 
housing especially, whenever we close a base or that facility 
closes down, we still have obligations in that area. Does that 
concern you?
    Mr. Walker. Well, of course, that has also been true for 
several years. We had the 801 housing program, which had some 
very large leases throughout all military services. That has 
been on the books for some time. So we faced that before in 
base closure rounds.
    Senator Burns. I bring that up, with the suggestion that we 
have to start thinking in those kind of directions. It may 
change our planners' approach a little bit on how we plan for 
the future and what facilities. I personally do not think 
another BRAC round can probably start until maybe the year 
2001, maybe 2002, because we still have commitments from the 
old rounds that still have to be met, and we can only support 
the closing of so many financially, no matter what your 
feelings are about what size the Army ought to be.
    I am concerned about the declining numbers in Korea and 
Germany, and when we make those investments are we building a 
facility to abandon later on. I ask that because I think 
sometime we better make the investment in this country.
    Mr. Walker. Well, I think the President has, and Secretary 
Cohen on his recent trip to Korea, indicated the troop levels 
will stay pretty much the same in Korea. And I think we are 
still looking at about 100,000 total, 65,000 Army, in Germany. 
So unless QDR makes a change on that, we do not anticipate any 
substantial change in the numbers of troops we have forward-
deployed.

                       planning/expansion of nato

    Senator Burns. In your planning stages, the expansion of 
NATO, does that enter the planning or the mindset of our 
planners at all?
    Mr. Walker. No, sir; we have not been asked to do anything 
on that.
    Senator Burns. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.

                reductions to active and reserve forces

    Secretary Walker, I noted that the lead article in the 
Washington Post yesterday indicated that the quadrennial 
defense review process includes a proposal to cut the Army by 
15,000 but also cut the Army Guard and Reserves by some 70,000, 
most of that coming from the Army Guard.
    Is that report accurate and, if it is, does that represent 
a fair balance in reductions between the Active and Reserve and 
Guard Forces?
    Mr. Walker. Well, Senator Murray, I read that same article 
yesterday, and I must tell you I regret I cannot confirm or 
deny, because I really do not know what the answer is. I do not 
know if the Army staff coordinated their original proposal with 
the Army National Guard or not.
    But I do know that the Army staff did not coordinate their 
original proposal with the members of the Secretariat. I have 
not been briefed, for instance, on any Army staff proposal. 
And, according to another press report today, the Secretary of 
Defense had given the service chiefs great latitude in 
determining the mix of cuts.
    So, like you, I am very interested in seeing what the Army 
staff has proposed, and I regret I do not know the answer to 
your question.
    Senator Murray. Well, the Post indicated that the Guard had 
been excluded from the decisionmaking process, and I wanted to 
know if you knew if that was true or not and whether you 
thought the Guard agreed with the level of reduction that was 
being proposed.
    Mr. Walker. You would need to ask the Guard. I understand 
the leadership of the Guard is probably in town discussing that 
issue today.
    Senator Murray. Well, thank you. Let me move to another 
area, then.
    You mentioned in your opening remarks the propensity for 
young people not to go into the Army today and the declining 
number of people. One of the things I know when I talk to young 
people that we are looking at recruiting is that they talk 
about the quality of life issues.

                       child development centers

    One of the issues that often comes forward is whether or 
not there is any child development centers for young people and 
their families. I notice that there are no child development 
centers in the Army's budget request. I thought DOD had a goal 
for providing child care facilities. If you could tell me why 
we do not see that and what is in the budget in terms of that, 
I would appreciate it.
    Mr. Walker. Senator, I think we have roughly 165 child 
development centers throughout the Army. The goal is to have 65 
percent of our eligible children in child development centers. 
This year I think we are going to make 64 percent. We are 
almost there.
    In addition to organic child development centers on 
military bases, we also have an aggressive program of inhouse 
child care, where you certify homes for child care. So we think 
we are doing a good job at child development. Even though there 
is not a new child development center project in the budget, we 
think the right thing is being done.

                         quality of life issues

    Senator Murray. OK. What about other quality of life issues 
like community centers or physical fitness centers, those kinds 
of things, that really add to the quality of life?
    Mr. Walker. You are right. As I mentioned, you do not see 
very many of them in the budget, very many of those kinds of 
facilities, not very many of operational or mission facilities. 
We have put our emphasis on quality of life in terms of 
barracks, and that is where we are putting most of the money 
now.
    We have many requirements out there like that that we have 
still got to figure out a way to fund in the future.
    Senator Murray. Do you know what the unmet need is?
    Mr. Walker. I do not, but I will be glad to provide that 
for the record.
    [The information follows:]
                    Other Quality of Life Facilities
    With regard to fitness centers, the U.S. Army emphasizes total 
fitness to meet its contingency and mobilization requirements. Although 
facilities continue to need renovation or replacement (average age is 
53 years), resources have been insufficient to fund all of the Army's 
infrastructure revitalization requirements. Our current Future Years 
Defense Program includes funding in Military Construction, Army (MCA) 
of Physical Fitness Training Centers in: fiscal year 1999 at Fort 
Detrick ($3.5 million BRAC/$3.1 million MCA); fiscal year 2001 at 
Walter Reed Army Medical Center ($6.0 million); fiscal year 2003 at 
Fort Eustis ($4.3 million).
    A Soldier Community Building is included as part of each Whole 
Barracks Renewal Complex. This facility provides social gathering 
areas, room for recreational activities, and multi-purpose meeting 
space.
    With regard to community centers, family centers, libraries, and 
other quality of life facilities, resources have been insufficient to 
fund the Army's requirements.

    Senator Murray. I would really appreciate seeing that. I 
think if we want to encourage young people to come into the 
Army--and we do need to do that--that these are astute young 
people and they are looking around at the other opportunities 
that are available, and quality of life is absolutely critical.
    Mr. Walker. You are exactly right, Senator. It is a 
competition out there. We are in competition with the rest of 
the civilian economy and we have got to compete.

                    family housing improvement fund

    Senator Murray. I also notice that there is no 
appropriation request for the family housing improvement fund 
for fiscal year 1998, and I wanted to know how the Army planned 
to execute this program next year.
    Mr. Walker. Senator, we will provide an answer for the 
record for that.
    Senator Murray. I would appreciate that.
    Thank you, Mr. Chairman.
    [The information follows:]
                        Family Improvement Fund
    The Office of the Secretary of Defense centrally manages programs 
and budgets for the DOD Family Housing Improvement Fund (FHIF). The 
fund received direct appropriations of $22 million in fiscal year 1996 
and $25 million in fiscal year 1997. These funds are available until 
expended; approximately $30 million remains available to finance 
projects.
    Consistent with design of the initiative, project award will use 
cash, land, and/or facilities depending on the site and terms of the 
contract. Some sites may not require any up-front money. However, if 
cash is needed (for example, mortgage guarantees), funds will come from 
either the family housing construction account at that site, or the 
Army will request funding from the centrally managed FHIF.

                         relocation of southcom

    Senator Burns. Let us talk about one of my favorite 
projects, the relocation of the Southern Command. I think I 
have brought this up 3 years ago--I do not know how long it has 
been. But I still question the wisdom of moving from Panama to 
Miami. I do not question the wisdom of moving it maybe back in 
the contiguous States, but you have got a request in here for 
$2.3 million for general and staff officer housing.
    And yet we are requiring some enlisted people to move into 
an area where you have a very high cost of living and, you 
know, we all have champagne tastes, but most of us are on 
Miller payrolls. It does not lead to a very, very good 
situation, given the area in which they are moving.
    I have no problem with living in Miami year-round, but I 
also know that these families--I have often wondered, as 
Senator Murray said a while ago, attracting young people to the 
military services, we hear the complaint of housing facilities.
    I tell you what. That was the last thing that was on my 
mind when I joined the U.S. Marine Corps in 1955. But I will 
say that after you are in the service and you find that people 
that you want to retain, then the amenities become very, very 
important in the retention of qualified soldiers and people 
that we want to make career people.
    So would you comment on this relocation and try to put my 
mind at ease that we are doing the right thing in this 
situation, especially when we have facilities that might be 
located in Florida but might not be in Dade County, to be 
specific?
    Mr. Walker. Senator, with regard to your general statement, 
there is a saying in the Army that you enlist soldiers but you 
reenlist families. I think that is very true.
    Since that is true, that was one of the concerns that we 
had with the SOUTHCOM relocation when the Army was given the 
executive agency responsibility to execute that. We sent a team 
from the Corps of Engineers down there to do a family housing 
survey to find out if soldiers could afford living down there.
    And they found in their survey that most soldiers could 
afford adequate housing, given the housing allowances that are 
available. But even with that said, we know that younger 
soldiers, junior enlisted, both single soldiers and junior 
enlisted with families, many of them who have larger families 
or families with special needs still have specific 
requirements.
    So as a result of that, we will be moving about 225 
enlisted into the area totally. We have sought and secured the 
ability to lease housing for about 120 of them, and we are 
going to be leasing 62 junior enlisted housing for the larger 
families and those with particular situations and 60 junior 
enlisted unaccompanied housing units in the area.
    We are doing that for just the reason that you mentioned, 
because we feel that there would be a special burden on some of 
those, and we hope that that will be sufficient to ensure that 
when we check the next time the reenlistments of SOUTHCOM we 
will find that the reenlistment rates are still high.
    Senator Burns. I have still got my questions, I guess, 
about that move, but it does not make any difference what one 
guy thinks and another guy. I just thought it sounded funny at 
the time.

                disciplinary barracks--Fort leavenworth

    There is a $63 million project to build a new disciplinary 
barracks at Fort Leavenworth. That is about 10 percent of your 
total Milcon allocation. It is my understanding that it houses 
prisoners from all services and a significant number of these 
inmates participate in a work release program throughout the 
fort, such as barber shops and different things.
    Why are we building a prison facility at Fort Leavenworth 
that is nicer and more modern than many barracks that we are 
trying to fight so hard for on our military posts for the good 
soldiers?
    Mr. Walker. Mr. Chairman, I think when we finish the new 
facility it is not going to be a place any of us would like to 
live. It is going to be a prison. There is no question about 
it. It is going to be small rooms and small beds and a big door 
that slams closed every night. I do not think we are going to 
see any soldiers trying to trade their barracks room for it 
intentionally.
    The truth is, we are using essentially the same kind of 
design that the Federal Bureau of Prisons uses for their 
prisons. So it is not going to be--these are long-term 
prisoners that will be there. It is not going to be a very 
pleasant place to live.
    It is a lot of money, and I will tell you honestly that the 
project got slipped for the last 2 years because of other 
requirements. We have reached the point that we really cannot 
slip it any longer. The reason we are spending this amount of 
money for this project is because the current disciplinary 
barracks is, frankly, just unsafe.
    The Corps of Engineers has gone in there and we have had 
three other consultants go in there to verify that there is a 
safety problem there. It was built back in the early 1900's by 
prison labor, and, I will tell you, it is a challenge. The 
bricks just fall off the wall.
    Senator Burns. What do you plan to do with the old building 
if this project is approved?
    Mr. Walker. Well, we plan to mothball it. It is not going 
to be used. We are not sure whether we can tear it down or not 
because it falls under the National Historic Preservation Act. 
So there is a process you have to go through there.
    Senator Burns. The only thing is, there at Fort Leavenworth 
I think Custer's horse is still there, isn't he? [Laughter.]
    Mr. Walker. It is a very historic base.
    Senator Burns. I think so.

                   Fort Carson--Housing Privatization

    Fort Carson, a plan to privatize all family housing is at 
Fort Carson, CO. The initiative will revitalize, what, 1,824 
existing units and construct 840 units. Do you want to bring us 
up to date on that?
    Mr. Walker. Yes, Mr. Chairman. The request for proposals is 
out. There have been about, I believe, around 300 responses, 
which is just an enormous response, much more than we expected. 
So we believe as a result of that that we are going to see a 
very competitive project, a project that is going to result in 
family housing a lot quicker for soldiers there than otherwise 
would have been.
    At the current rates of funding that were going in there, 
it would have taken 50 to 75 years to revitalize all that 
housing. Now, the 1,824 units of family housing that is there 
will be revitalized in 5 years and the additional units that 
are going to be built will be built in 5 years.
    We believe that the project is on track for an award 
sometime this summer.
    Senator Burns. The BRAC announcement, would that change 
emphasis on that project there, should it come to pass? You do 
not know?
    Mr. Walker. Of course, we do not know what Secretary Cohen 
is going to recommend at this point.
    Senator Burns. I think just as a suggestion, you know, if 
that announcement is made on that BRAC, I would say that 
planners will have to go back to work anyway. We may be having 
lots of meetings and sitting down and reprogramming, and this 
type of thing.
    Senator Murray, do you have any more questions?

                       guard and reserve budgets

    Senator Murray. Thank you, Mr. Chairman. I just have one 
more. I continue to be concerned with the request for Guard and 
Reserves that you just talked about for 1 minute.
    Does the military construction budget reflected in your 
request mean that the Army can do without the Guard and Reserve 
in a wartime situation?
    Senator Walker. Well, no, we cannot. That is for sure. I 
just came from Bosnia over the weekend, and there in Bosnia I 
think we have got about 3,500 Guard and Reserve personnel. To 
give you an example, at any given time, any day of the year we 
have about 30,000 soldiers who are deployed for a variety of 
missions. Of those soldiers, 7,000 to 8,000 are Guard and 
Reserve, primarily Guard soldiers or units that are deployed 
just like active duty.
    Today in the European theater, when you add it all up, we 
have about 6,000 that are Guard and Reserve. We saw 
demonstrated very clearly in the Persian Gulf war that 60 to 70 
percent, and it may be more in the future, of our combat 
support and combat service support, for instance, has to come 
out of the Guard and Reserve. Other units, such as artillery 
units and others performed magnificently.
    So we cannot go anywhere anymore as an Army, we cannot 
deploy without the Guard and Reserve. So it does not reflect 
that. It reflects very simply that we did not have enough 
money.
    Senator Murray. Thank you, Mr. Chairman.
    Senator Burns. Secretary Walker, thank you this morning. I 
am sure there will be other questions and other committee 
members may have some questions. If we could channel those 
letters to you and if you could respond to the individual 
Senator and to the committee, I would certainly appreciate 
that. We will leave the record open.
    I think with the recent announcement--and I will tell you 
very sincerely I appreciate your cooperation and we may be 
working together a little more closely on some projects as the 
world changes and as our approach to national defense changes. 
So I appreciate your thoughts and your cooperation.

                     Additional committee questions

    Mr. Walker. I look forward to working with you.
    Senator Burns. Thank you very much.
    Mr. Walker. Thank you.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

                  Questions Submitted by Senator Burns

                     national guard milcon funding
    Question. Mr. Secretary, I applaud the Army's effort in securing 
some funding for the Army National Guard. $45 million is a starting 
point, but I am concerned that the proposed funding drops to $33.8 
million in fiscal year 1999. What is the proposed funding for the Army 
Guard in the out years?
    Answer. The military construction funding for the Army National 
Guard as published in the current Future Years Defense Plan (FYDP) 
submitted to Congress with the fiscal year 1998 budget is as follows: 
fiscal year 2000, $44.9 million; fiscal year 2001, $31.137 million; 
fiscal year 2002, $34.037 million; and fiscal year 2003, $36.937 
million. However, the Army reviews these funding levels as it develops 
each year's budget for submission to Congress.
    Question. How does the Department propose to continue this forward 
momentum?
    Answer. Since the Army transitioned to six functional Program 
Evaluation Groups in 1996, the avenues of communication between the 
Army National Guard (ARNG) and the Assistant Chief of Staff for 
Installation Management (ACSIM) have strengthened. The ARNG and ACSIM 
meet frequently on budget and planning issues. The ARNG has placed a 
senior officer on a series of short temporary active duty tours to work 
full-time at the ACSIM. The ACSIM has integrated the ARNG into their 
requirements generation model. The ARNG reports its facility issues 
through the Army's Installation Status Report. We believe that these 
actions will continue the forward momentum.
    Question. How does the Army determine what the priorities are 
between the various Guard projects competing for limited funding?
    Answer. We set priorities by ranking projects using the following 
criteria: readiness priorities of the units supported by the facility 
(40 percent), the adequacy of the existing facility (35 percent), and 
the priority the individual State places on the project (25 percent). 
To break ties when preparing a budget we also examine the design status 
of the project and the State's proven ability to execute military 
construction.
    Question. Mr. Secretary, I understand that the Army is proceeding 
with the full privatization of family housing at Fort Carson with a 
contract award date of July. With Secretary Cohen's recent announcement 
that he wants two more rounds of base closure, why would we want to 
endorse any leasing arrangement which provides guarantees against base 
closure?
    Answer. First, the Army does not make its base closure decisions 
based solely on investments in its installations, whether the 
investment is in facilities construction, or in guarantees such as 
this.
    Second, the housing initiative provides essential support to 
provide the adequate housing we owe our military families. To 
accomplish a privatization initiative we must include some type of 
guarantee for the contractor. The Army recognizes that there is a 
future risk of base closure, but such a guarantee is the only way to 
make the financial risk acceptable to the private sector.
    Question. Any installation with a housing privatization deal would 
be protected in future rounds of base closure, because of the costs to 
buy the government out of the lease. This would seem to lock the Army 
into Fort Carson for the next 50 years, is that correct?
    Answer. No. We believe we can negotiate an equitable settlement. 
And, since the criteria for establishing the military value of our 
installations has not been agreed to, I would be speculating on those 
installations that should be retained, closed or realigning. Further, 
the size and type of force structure will, if a new round of base 
closures is approved by Congress, have an effect on those installations 
retained in our infrastructure.
                                 ______
                                 

                Questions Submitted by Senator Faircloth

                      base realignment and closure
    Question. As I look over the portion of your statement on ``Base 
Realignment and Closure,'' (BRAC), I'm very concerned about all the 
money that is being spent at the time of closure. In fact, it is so 
great that in every case, from BRAC 1988 through BRAC 1995, both your 
actual and planned spending exceeded or exceeds the actual or planned 
savings over the six-year implementation period. For what is all this 
spending? Why is so much new construction needed at a base that is 
being closed?
    Answer. The majority of the costs associated with the closure or 
realignment of an installation are for the movement or separation of 
personnel, transfer or procurement of equipment, environmental 
restoration of the excess land, and construction of new facilities at 
the gaining installation. New construction is required at gaining 
installations for the functions and missions that are transferred or 
realigned from other installations. We are not constructing new 
facilities at installations that are closing. Although there are 
expenses associated with each BRAC round, the resulting savings in 
infrastructure costs are far greater.
    Question. Break down the savings over the implementation period. 
You say it is primarily from elimination of civilian jobs. What portion 
is from this and what portion is from ``reduced operating costs?''
    Answer. The following chart provides the annual savings by fiscal 
year and the civilian personnel reductions.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Fiscal year                                    
                                                                   -------------------------------------------------------------------------------------
                                                                      1989     1990     1991     1992     1993      1994      1995      1996      1997  
--------------------------------------------------------------------------------------------------------------------------------------------------------
BRAC 88...........................................................    -23.0    -10.2    -34.8    -56.3    -119.8    -240.3    -259.6    -259.6    -259.6
BRAC 91...........................................................  .......  .......  .......    -55.1    -105.5    -198.9    -241.3    -276.6    -303.8
BRAC 93...........................................................  .......  .......  .......  .......  ........     -10.9      -1.6     -20.3     -48.5
BRAC 95...........................................................  .......  .......  .......  .......  ........  ........  ........     -19.2     -16.6
CIV RED...........................................................  .......  .......     20.0  1,364.0   2,386.0   3,312.0   1,129.0     757.0   3,410.0
--------------------------------------------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year                                   
                                         ------------------------------------------------------------    Total  
                                            1998      1999      2000      2001      2002      2003              
----------------------------------------------------------------------------------------------------------------
BRAC 88.................................    -259.6    -259.6    -259.6    -259.6    -259.6    -259.6    -2,820.8
BRAC 91.................................    -303.8    -303.8    -303.8    -303.8    -303.8    -303.8    -3,004.0
BRAC 93.................................     -61.0     -67.7     -67.7     -67.7     -67.7     -67.7      -480.8
BRAC 95.................................    -195.7    -255.4    -347.5    -363.6    -363.6    -363.6    -1,925.2
CIV RED.................................   2,856.0     647.0     380.0     101.0  ........  ........    16,362.0
----------------------------------------------------------------------------------------------------------------

    The Army has eliminated 16,362 civilian positions during the first 
four rounds of BRAC. These eliminations account for $831 million of the 
$994 million annual recurring savings. The remainder of the savings is 
from reduced base operating costs.
    Question. You indicated that resulting savings are lower than 
anticipated. By how much? What are these ``local economic opportunities 
that create jobs and expand the tax base?'' Are you giving away moneys 
that you had originally intended would come back to the Federal 
Government? How are these moneys transferred?
    Answer. The Army originally over-projected potential land sale 
revenues. In the first two BRAC rounds $1.7 billion in savings were 
projected, however, $108 million has been realized to date.
    The Army uses Economic Development Conveyance, as authorized by 
Congress, as a vehicle for local economic opportunities that create 
jobs and expand the tax base. Following the July 1993 announcement of 
the President's program to revitalize base closure communities, 
Congress created a new property conveyance authority, designed 
specifically to ease the economic hardship caused by base closures. 
Section 2903 of Title XXIX, Public Law 101-510, gives the Department of 
Defense the authority to transfer property to Local Redevelopment 
Authorities, for consideration at or below fair market value to spur 
economic redevelopment and job creation. If any loss is incurred by the 
Federal Government it would be lost land sales revenues that might have 
been generated if property were at fair market value. No BRAC moneys 
are transferred to state or local governments.
    DOD does provide grants to Local Redevelopment Authorities through 
the Office of Economic Adjustment (OEA) to assist the local communities 
in developing reuse plans and other activities required to transition 
properties to civilian reuse. The money granted by OEA is not part of 
the BRAC account, but is appropriated as a line item in the defense 
wide Operation and Maintenance Appropriation.
    Question. Can we count on the ``recurring savings'' as all federal 
revenue, or are some of these savings transferred to the local economy? 
For how many years will the ``recurring savings'' continue to flow in? 
How can we be certain that these annual savings will not be lower than 
anticipated, just as the savings over the implementation were and are?
    Answer. The ``recurring savings'' generated as a result of BRAC are 
not revenues. They are costs that are avoided as a result of a closure 
or realignment. When an installation is closed, the Army no longer 
incurs the costs for operating that facility. This includes, but is not 
limited to, civilian payroll and base operations costs (utilities, and 
repair and maintenance). These ``recurring savings'' are permanent and 
will continue indefinitely.
    Question. Would you send up the detailed economic analyses that 
accompany BRAC decisions? I would like to see the original estimates of 
costs and savings and a comparison of the actual costs and savings that 
you are sure of today. What was the original, estimated payback period, 
and what has the actual payback period turned out to be? I'm assuming 
that the costs turned out to be higher than anticipated and the savings 
turned out to be lower than anticipated. Is that a correct assumption?
    Answer. All original estimates are contained in the Defense Base 
Closure and Realignment Commission's final reports to the President. 
Attached is a summary of the Commissions final analysis. Also attached 
is a summary of the Army's current budget submission of costs and 
savings to date. BRAC closure and realignment decisions were based on a 
decision modeling tool called COBRA (Cost of Base Realignment Actions). 
Office of the Secretary of Defense policy did not permit the 
consideration of environmental costs in BRAC decisionmaking since 
clean-up would have to be accomplished whether or not a base is closed. 
In fact, budgeted costs are higher with longer payback periods than the 
original COBRA estimates since they include environmental restoration 
costs. Without these added costs, the totals are close to what were 
originally projected. While there are differences between actual and 
projected savings due largely to unrealistic assumptions regarding land 
sale revenues, the figures continue to support the original decisions.
    Question. You indicate that environmental costs are significant. 
What is the nature of these environmental problems on a facility that 
all of the sudden makes uninhabitable after the military leaves, when 
it was perfectly fine for habitation when the facility was in 
operation? Are these environmental costs a portion of the costs over 
the implementation period?
    Answer. Applicable Federal and State environmental laws and 
regulations require the Army to complete this environmental work prior 
to transferring the property to non-federal purchasers. The Army has an 
ongoing program to cleanup environmental contamination on many active 
installations. Although we have very few imminent threats to human 
health and the environment, there are levels of contamination, mostly 
from past practices, that require remedial actions. The BRAC program 
includes funding to support environmental restoration of the excess 
property at closing and realigning installations.
    The Army works with the local communities to clean properties to 
support reuse plans that on occasion differ from the current military 
use of the property while considering affordability of required cleanup 
actions. Cleanup standards do change with some of the differences in 
reuse, and negotiations with the local communities include 
affordability of required cleanup in determining the reuse scenarios.


[GRAPHIC] [TIFF OMITTED] T09MY08.000

[GRAPHIC] [TIFF OMITTED] T09MY08.001


    Question. Why are you funding environmental costs up-front? How 
much per year is this unique financing costing taxpayers?
    Answer. We are funding environmental costs up-front as required by 
various applicable Federal and State environmental laws. The BRAC 
account is the exclusive funding source for environmental restoration 
of any property made excess to the needs of the Department of Defense 
under BRAC. In addition, the law states that this restoration must be 
carried out as soon as possible given the funds available for that 
purpose. The Army is spending between $80 and $350 million per year for 
environmental restoration at BRAC installations.
    Question. Can I assume that savings for closing overseas bases will 
give us a better return than for closing U.S. bases? Give me the same 
analyses on these closures also, please.
    Answer. The closure of overseas bases is funded from the Army's 
operating accounts. As such, we do not have data on the actual cost to 
implement these overseas actions. Generally, the infrastructure is 
excess due to unit realignments to CONUS or unit eliminations in place. 
These types of realignments do not require much construction at the 
gaining installations and civilian personnel relocations are minimal. 
Differences in these implementation costs differences do not change the 
fact that there are significant operational savings generated by the 
closure of both U.S. and overseas bases.
                                 ______
                                 

                  Questions Submitted by Senator Reid

               army guard facilities--carson city armory
    Question. The Army National Guard is taking on many new missions 
and responsibilities in addition to its more traditional domestic 
roles. The Army National Guard has been an active participant in every 
major American conflict, and has always performed admirably. In order 
to maintain a strong National Guard Force, we must first supply the 
Army National Guard with the tools and facilities necessary to do the 
job.
    In Carson City, Nevada, our Army National Guard is operating out of 
woefully inadequate facilities. According to federal criteria, the 
current Armory is undersized by 32,000 square feet. Additionally, the 
roof is in such disrepair that it leaks every time it rains.
    I understand that there are significant problems with many of Army 
National Guard facilities throughout the nation. Does the Army have a 
long-term modernization plan for the National Guard armories?
    Answer. The Army does have a long-term modernization plan for the 
National Guard Armories. In an attempt to fully delineate the cost of 
modernizing and revitalizing the existing infrastructure of the Army 
National Guard, a study was prepared outlining a 25-year long-term 
plan. This study was based on the use of the individual State Long 
Range Construction Programs which were consolidated into a prioritized 
list. This list was developed using the following parameters: the 
readiness priority of unit(s) which the project supports (40 percent); 
adequacy of the existing facility (35 percent); and the state's 
priority (25 percent). Armories are considered as part of the overall 
readiness factor, along with aviation, maintenance, logistic, and 
training facilities.
    Question. Do you know where Carson City armory is on that list?
    Answer. The Carson City armory is currently in the Army National 
Guard's Future Years Defense Program for fiscal year 2003.
                 effects brac has had on the readiness
    Question. Last Tuesday, Secretary Cohen announced that he intended 
to seek two more rounds of base closings. The first round is proposed 
to occur in 1999 with another one in the year 2000. In the last nine 
years, the Army has closed nearly 100 bases in the United States, and 
more than 600 bases overseas. In light of Secretary Cohen's comments on 
Tuesday, do you know of any research being accomplished which addresses 
the long-term effects of these base closures on the Army's readiness 
posture?
    Answer. No specific research has been undertaken to compare base 
closures and readiness. However, base closures can improve readiness 
since they result in considerable savings which can be reinvested in 
readiness accounts.
    Question. In 1996, the Army implemented the Business Occupancy 
Program. As I understand it, the Business Occupancy Program was 
initiated to incentivise the Army housing program and was intended to 
ensure more effective and efficiently managed occupancy rates. Can you 
expand on the progress and the success of this program? Will the 
Business Occupancy Program in anyway change the long-term need for 
additional or rejuvenated military family housing?
    Answer. The Business Occupancy Program presently covers the entire 
Army-owned family housing inventory. The Business Occupancy Program 
achieved its goal to increase the family housing in occupancy rate by 2 
percent in fiscal year 1996 and is on track to meet the goal of another 
1 percent increase in fiscal year 1997.
    The Business Occupancy Program will not affect the long-term need 
for family housing. The Business Occupancy Program is used as a means 
of distributing annually appropriated funds for family housing 
operation and maintenance. It is not a factor in determining either the 
need for family housing or the funding necessary for renovating 
housing.
    Question. In 1996 the Defense Authorization Act provided new 
authorities under the Military Housing Privatization Initiative. I 
understand that as a result of this initiative the Army now has fifteen 
housing projects under development which will privatize part of the 
Army's housing inventory. When do you anticipate that you will be able 
to first move families into these units? Do you plan on expanding these 
efforts to further privatize the management of Army housing?
    Answer. The Army expects to award the first privatization project 
at Fort Carson this summer. The project involves the construction of 
840 new units and the revitalization of the 1,824 existing units. 
Occupancy of the 840 new units is planned over a four-year period with 
the first completed units expected to come on line early 1999. All of 
the existing, 1,824 units will be revitalized within five years.
    The Army's current objective is to pursue privatizing all U.S. 
family housing over the next several years.
                       parking ramp modernization
    Question. I have seen a study which stated that 51 percent of the 
Army National Guard parking ramps are inadequate in size or condition. 
Contributing factors to the untimely deterioration of these ramps 
include a modernized fleet, aging asphalt, and deferred ramp 
maintenance. Now that the Army National Guard is getting newer more 
advanced aircraft; parking locations, pavement bearing capacities, and 
ramp clearances will need to be increased. This is a long term problem 
which cannot be corrected in the 11th hour.
    Is there a mechanism in place, sort of a parking ramp modernization 
panel, which is addressing the inadequacies of the Army National 
Guard's parking facilities?
    Answer. The Army National Guard is addressing the issue as a matter 
of special emphasis through regular aviation staff channels and its 
aviation advisory council. These groups have identified 62 aircraft 
parking ramp maintenance and repair construction projects with a cost 
of $50.7 million and 14 additional projects for which cost estimates 
have not yet been determined. The Army National Guard has made such 
projects a priority item for the use of fiscal year 1997 Quality of 
Life Enhancement-Defense funds. However, a number of these projects 
have not been executed because they require a State matching share.
    Question. Is there a strategic plan for the future that is 
prioritizing ramp construction, renovation, and repair projects based 
on risk analysis and cost effectiveness for maintenance and repair?
    Answer. The Army National Guard aviation staff has proposed a 
parking ramp modernization program that addresses the following: 
conducting engineering surveys of ramp conditions to identify and 
prioritize construction or repair needs based on risk analysis and cost 
effectiveness; providing construction funding for projects currently 
designed, projects programmed to correct urgent safety deficiencies, 
and in support of priority units; and establishing a phased schedule 
for construction, or repair and maintenance, based on engineering 
survey data and cost effectiveness. Projects identified in this program 
will compete for operations and maintenance or military construction 
funding, as appropriate, through established prioritization processes. 
The ability of these projects to compete will depend on the readiness 
priority of the supported units, the adequacy of the existing ramps, 
and individual State priorities. Repair projects will also require a 25 
percent State matching share.
                            Defense Agencies

                    U.S. Special Operations Command

STATEMENT OF GARY W. ROBINSON, COMMAND ENGINEER

   Assistant Secretary of Defense for Health Services Operations and 
                               Readiness

STATEMENT OF BRIG. GEN. ROBERT G. CLAYPOOL, DEPUTY 
            ASSISTANT SECRETARY OF DEFENSE (HEALTH 
            SERVICES OPERATIONS AND READINESS)

                        Defense Logistics Agency

STATEMENT OF FREDERICK N. BAILLIE, EXECUTIVE DIRECTOR, 
            BUSINESS MANAGEMENT

                 Defense Finance and Accounting Service

STATEMENT OF BRUCE M. CARNES, DEPUTY DIRECTOR FOR 
            RESOURCE MANAGEMENT
    Senator Burns. We will now hear from the second panel, 
representing the Defense agencies this morning. We appreciate 
all the folks. We have Mr. Gary Robinson, who is U.S. Special 
Operations Command; Brig. Gen. Robert Claypool, Defense Medical 
Facility Office; Fred Baillie, the Defense Logistics Agency; 
and Bruce Carnes, Defense Finance and Accounting Service.
    We welcome and appreciate you being here today, and we look 
forward to hearing your testimony. I think it will provide the 
subcommittee an overview on your respective agencies' proposed 
1998 budget. I ask again if your statements could be shortened 
up. Your full statement will be included in the record for 
everybody. So I ask you to keep those statements a little bit 
on the short side.
    We have a vote coming up or scheduled for 10:30, and we 
will try to get as much done here as we possibly can.
    Mr. Robinson, if we could hear from you and if you would 
proceed, please. Thank you.

                     statement of gary w. robinson

    Mr. Robinson. Thank you, Senator. Mr. Chairman, members of 
the committee, I am pleased to discuss the U.S. Special 
Operations Command 1998 military----
    Senator Burns. You might want to pull that microphone a 
little closer to you. Thank you.
    Mr. Robinson [continuing]. The fiscal year 1998 military 
construction budget request. Our Milcon program has a direct 
positive impact on our training and operational capabilities. 
The highly specialized skills and equipment required to 
successfully execute a full spectrum of special operations 
missions also demand a modern array of operations, training, 
maintenance and storage facilities.
    The current program is planned to provide facilities that 
will improve this force capability, increase the readiness of 
complex weapons systems, and support our diverse training 
needs.
    Our Milcon budget request for fiscal year 1998 is $29.8 
million for seven major construction projects, plus our 
required unspecified minor construction and planning and design 
funds.

                           prepared statement

    This committee's support in prior years has greatly 
improved our operations capability. We look forward to working 
with your committee to acquire facilities needed by USSOCOM to 
perform our missions and ensure we have a fully trained and 
capable force in the future.
    Thank you.
    [The statement follows:]

                 Prepared Statement of Gary W. Robinson

                              introduction
    Mr. Chairman and members of the committee, I am pleased to present 
the United States Special Operations Command (USSOCOM) fiscal year 1998 
Military Construction (MILCON) submittal. Our MILCON program has a 
direct, positive impact on our training and operational capabilities. 
The highly specialized skills and equipment required to successfully 
execute the full spectrum of special operations missions also demand a 
modern array of operations, training, maintenance and storage 
facilities.
                                purpose
    The long term goal of the USSOCOM facilities program, of which 
MILCON is one part, is to have all units and individuals working and 
living in adequate facilities in order to maximize training and 
operations capabilities. Facilities requirements are generated by the 
need to support new weapons systems, force structure, and missions or 
by the need to modernize or replace inadequate facilities. The current 
program is planned to provide facilities that will improve force 
capability, increase the readiness of complex weapons systems, and 
support diverse training needs. In particular, the program provides 
facilities to support new special operations systems, such as the Mark 
V Special Operations Craft and the AC-130U (Gunship). It also provides 
facilities for the 160th Special Operations Aviation Regiment where no 
facilities exist and replaces substandard facilities for the 75th 
Ranger Regiment. These facilities will accommodate an improved and 
expanded special operations forces (SOF) capability. All of the 
individual construction requests are part of a component master 
construction plan. Component MILCON projects are integrated at the 
USSOCOM level to ensure that the most needed projects are constructed 
at the right place, on time, and with the highest return on investment.
    Your support in prior years has aided immeasurably in improving our 
operations capability. We look forward to working with your committee 
to acquire facilities needed by USSOCOM to perform its mission and 
ensure we have a fully trained and capable force in the future.
                             milcon program
    The seven military construction projects in this program include 
two projects for the Air Force Special Operations Command, three for 
the Army Special Operations Command, one for the Naval Special Warfare 
Command and one for the Joint Special Operations Command. Included in 
the seven are two projects totaling $3.05 million designed to improve 
the resistance of our facilities against terrorist attack. Our MILCON 
budget request for fiscal year 1998 totals $37.6 million: $29.8 million 
for major construction, $3.7 million for unspecified minor 
construction, and $4.1 million for planning and design. Approximately 
45 percent of the construction supports new mission requirements, and 
55 percent support current mission requirements. This budget request 
recognizes the need to balance construction requirements against 
acquisition programs and the high state of readiness required of all 
special operations forces.
    Following is a brief description of each of the seven projects 
listed by state:
Waterfront operations support facility NAS North Island, CA--$7.4 
        million
    This project constructs a new building to house operations, 
warehouse, maintenance/repair, armory and administrative requirements 
for the new Mark V Special Operations Craft. The Mark V provides a 
medium range insertion and extraction capability for Special Operations 
personnel in a low to medium threat environment. There are currently no 
facilities to accommodate this new program.
Squadron operations/AMU, AC-130 Hurlburt Field, FL--$6.1 million
    Construction provides a squadron operations facility and aircraft 
maintenance unit for thirteen AC-130U model Gunships and 551 personnel. 
This facility provides space for planning and briefing combat crews and 
for directing flight and maintenance operations. The commander and his 
staff require administrative space to plan and conduct mission 
briefings and related command activities. Space to maintain, store and 
issue flying clothing and maintenance equipment is also required. The 
squadron is currently accommodated in temporary leased modular 
facilities pending construction of this project.
Perimeter fence/vehicle barrier system Hurlburt Field, FL--$2.45 
        million
    This project will provide a security fence around the flightline 
and upgrade the existing boundary fence. A concrete ditch will prevent 
vehicle entry to the airfield to prevent access to combat aircraft 
aprons except at authorized locations. Pipe bollards and movable 
concrete barriers will channelize and slow traffic at base entry gates.
Battalion and company operations facility Fort Benning, GA--$9.81 
        million
    Construct a battalion command and control facility with classrooms, 
company operations and administrative facilities for the 3rd Battalion, 
75th Ranger Regiment. This battalion occupies Korean War era 
deteriorated barracks buildings that are inadequate for battalion 
operations. The facility layout is inefficient and impedes smooth 
synchronized operations. The facilities' heating, ventilation and air 
conditioning systems are inadequate and failing. Soldiers' workplace 
quality of life is substandard. This project will provide a 
consolidated, permanent, adequate command control facility capable of 
supporting sophisticated intelligence and communications systems.
Company operations facility Hunter Army Airfield, GA--$2.5 million
    This project will provide a permanent adequate facility to support 
the operations, administration, and supply functions for the 
headquarters, two flight companies and a maintenance company of the 3rd 
Battalion of the 160th Special Operations Aviation Regiment. 
Requirements include company operations and briefing functions, company 
supply, NBC personnel equipment area, arms room, storage for individual 
equipment and communications work areas. The unit currently uses space 
within the aircraft maintenance hangar. Functions that would normally 
occupy hangar space are located in WWII wood buildings remote from 
their aircraft maintenance responsibilities. This dispersion and 
improper use of maintenance space causes inefficiencies and impedes 
smooth and synchronized operations.
Electronics maintenance facility Fort Bragg, NC--$1.0 million
    Constructs an electronics maintenance facility to support mission 
needs. This project is required to provide permanent and adequate space 
to receive, maintain and issue multi-million dollar electronic systems 
and equipment. The new facility will provide proper climate control and 
security. Currently, the electronics maintenance functions are being 
conducted in two 2,400 square foot temporary metal buildings. These 
facilities lack adequate power, proper security and environmental 
controls.
Security upgrades Fort Bragg, NC--$0.5 million
    Project will install mylar window film (shatter protection) on 
various facilities. Mylar window film is designed to minimize the 
impact of flying glass and debris in the event of a terrorist attack. 
Facilities included in this project generally house 150 to 450 military 
and civilian employees and are located close to uncontrolled high 
volume traffic areas and parking lots. Many of the Command's facilities 
were constructed and sited prior to the establishment of government-
wide standards for security. As a result, these facilities have minimal 
setback and are located on or near uncontrolled high volume vehicle 
traffic areas. Since Fort Bragg is an ``open installation,'' facilities 
are extremely vulnerable to random terrorists acts. Installation of 
mylar window film will provide a quick method to minimize injury and 
loss of life in the event of an attack.
                                summary
    Our proposed fiscal year 1998 MILCON budget for facility 
investments will significantly improve the operational and training 
capability of special operations forces. Approval of this program is 
essential to ensure the continued development of our nation's Special 
Operations Forces.

               STATEMENT OF BRIG. GEN. ROBERT G. CLAYPOOL

    Senator Burns. General Robert Claypool, Defense Medical 
Facility Office.
    General Claypool. Thank you, Mr. Chairman. I am pleased to 
be here before this committee and I would like to state that if 
I develop a cough during the middle of my testimony I indulge 
your apologies. I feel quite well, but it is an occupational 
hazard being a grandfather, so I get these coughing spells.
    Senator Burns. I was going to get even with you. I have a 
daughter graduating medical school this June. I was going to 
send her to the Army and get even with you. [Laughter.]
    General Claypool. On behalf of Dr. Martin, the Acting 
Assistant Secretary of Defense for Health Affairs, I thank you 
for this opportunity. I would like to address the composition 
of our fiscal year 1998 program.
    Fiscal year 1998 contains a budget request for 14 projects, 
unspecified construction, planning and design, for a total 
appropriation request of $156.425 million.
    We are requesting $20 million for the last phase of the 
Walter Reed Army Institute of Research at Forest Glen, MD. This 
project was fully authorized in previous budget submissions.
    And a project at Fort Detrick, MD, for $4,650,000, funded 
with base realignment and closure funds to accommodate the Fort 
Detrick beneficiaries and mitigate the impact of migration from 
beneficiaries from the closure of Fort Ritchie. The BRAC 
portion of this project is an additional $650,000.
    My testimony includes, and at the request of your 
instruction, sir, I will keep it short, and the testimony will 
include the six clinics that we are submitting for this year, a 
total of six clinics, and a Naval Undersea Medical Institute 
addition/alteration at New London, CT, which will renovate the 
current facility into an adequate and properly configured 
training facility to present the curriculum in a centralized 
facility that provides the kind of learning environment that is 
necessary.
    The environmental and preventive medicine unit at San Diego 
Naval Air Station will consolidate operations from the North 
Island and Mare Island units into San Diego.
    We are also requesting $3 million for a blood donor center 
at Lackland Air Force Base in Texas and this new blood donor 
center is necessary to meet the increasing demand for blood 
products from Wilford Hall Medical Center, the Audie L. Murphy 
VA, and the Armed Forces Whole Blood Program.
    The Department intends to improve the clinical capability 
of 17 small inpatient facilities by reengineering from ones 
that provide low concentrations of inpatient care to facilities 
that provide improved access to ambulatory care for our 
beneficiaries and ensure that care is rendered of the highest 
quality.
    Two ambulatory health care centers are being rightsized 
from hospitals. The first is McGuire Air Force Base, the second 
is the ambulatory health care center at Robins Air Force Base 
in Georgia.
    We are also requesting $2,750,000 for a composite medical 
facility alteration at Wright-Patterson Air Force Base to 
alleviate overcrowding and inefficiencies, and we also have a 
request for unspecified minor construction.
    There are two projects we are requesting authorization for 
only, sir. We are not seeking appropriation for an aeromedical 
clinic at Andersen Air Force Base and for an occupational 
health clinic at Tinker AFB, OK. We have submitted language to 
utilize the dollars from the BRAC-directed cancellation of a 
fiscal year 1995 funded McClellan project, which was a life 
safety upgrade project, and we intend to use those dollars to 
finance the Andersen and Tinker projects. We ask for your 
support on this action.
    For fiscal year 1999, we are asking for $256,959,000 for 24 
projects, as well as $12 million for unspecified minor 
construction and $18.8 million for planning and design.
    A few of the details include funding of $34,954,000 for the 
final phase of the Portsmouth Naval Hospital and, as I think 
you are aware, sir, the draft GAO report which had delayed this 
for 1 year has suggested and supported fully renovating 
building 215 as a practical option.
    One of our projects is conjunctively funded with base 
realignment and closure funds. The alteration at Bremerton 
Naval Hospital modifies a facility built in 1979. Our request 
for construction is $30 million, and the BRAC portion of this 
at an additional $11 million has been canceled due to lack of 
projected workload from homeporting.
    We also request funds for two hospital addition/alteration 
projects--Pensacola Naval Air Station Hospital in Florida for 
$20,400,000 to construct an outpatient clinic; and the Royal 
Air Force Lakenheath Hospital annex replacement to support the 
RAF Lakenheath/RAF Mildenhall communities for $10 million. The 
current annex is an old Quonset hut construction.
    There are a total of 11 clinics included in the 1999 budget 
request. One is at Moody AFB, GA, for $11 million; one at Fort 
Stewart, GA, for $10,400,000; and two at Camp Pendleton Marine 
Corps Base, CA. There is a fifth clinic at Barksdale Air Force 
Base which will consolidate flight medicine, pediatrics, and 
immunizations clinics.
    The sixth clinic is a medical/dental clinic for Grand Forks 
Air Force Base; the seventh clinic is an aerospace medical 
clinic at Edwards Air Force Base, and the eighth clinic is a 
clinic replacement at McChord Air Force Base in Washington to 
provide outpatient emergency care to flight crews and other 
military personnel.
    The ninth clinic is a health clinic addition at Carlisle, 
PA; the tenth is an occupational health clinic and 
bioenvironmental engineering laboratory facility at Wright-
Patterson AFB, OH. And the last clinic is an $11 million 
primary care clinic to provide primary care in the COSCOM area 
at Fort Hood.
    We are also requesting three warehouse projects, to include 
the 44th Medical Brigade war reserve materiel warehouse at Fort 
Bragg, a second one in Yongsan, Korea, and a third war 
readiness materiel warehouse at Holloman Air Force Base.
    Our program contains a blood donor center at Fort Hood to 
support the armed services blood program there. Our program 
also includes a physiological support division addition/
alteration project at Beale AFB, CA.
    We are requesting three instruction facilities in 1999. The 
first is the medical applied instruction facility at Fort Sam 
Houston at a cost of $23 million to renovate the old beach 
pavilion. A second is an aviation physiological training 
facility at Kanoehe Marine Corps Station in Hawaii. And the 
third is an addition at Great Lakes Naval Station for $7 
million.
    The last request is $700,000 for a bioenvironmental 
engineering facility replacement at Kessler Air Force Base.

                           prepared statement

    This concludes my overview of and a condensed version of my 
statement and I thank you for the opportunity to present our 
budget and welcome any questions.
    [The statement follows:]

          Prepared Statement of Brig. Gen. Robert G. Claypool

    Thank you, Mr. Chairman. I am Brigadier General Robert G. Claypool, 
Deputy Assistant Secretary of Defense (Health Affairs) for Health 
Services Operations and Readiness. I would like to submit a written 
statement for the record and open with some brief remarks.
    Mr. Chairman and Members of the Subcommittee: On behalf of Dr. 
Edward Martin, the Acting Assistant Secretary of Defense for Health 
Affairs (AASD(HA)), I thank you for the opportunity to present the 
Department of Defense's fiscal year 1998 and fiscal year 1999 Medical 
Military Construction Program budget request. First I would like to 
address the composition of our fiscal year 1998 program.
                            fiscal year 1998
    Fiscal year 1998 contains a budget request for 14 projects, 
Unspecified Minor Construction, and Planning and Design funds for a 
total appropriation request of $156,425,000.
    We are requesting $20,000,000 for the last phase of the Walter Reed 
Army Institute of Research at Forest Glen, Maryland. This project was 
fully authorized in previous budget submissions. The project at Fort 
Detrick, Maryland for $4,650,000 is conjunctively funded with Base 
Realignment and Closure funds (BRAC) to provide a Health/Dental Clinic 
replacement for the Fort Detrick beneficiaries and mitigate the impact 
of migration of beneficiaries resulting from the closure of Fort 
Ritchie. The BRAC portion of this project is an additional $650,000.
    Six additional clinics are included in our fiscal year 1998 
request. The Troop Medical Clinic at Fort Campbell, Kentucky, at a cost 
of $13,600,000 will consolidate six old, widely disbursed, Korean War 
vintage clinics.
    The second clinic is a Medical/Dental clinic located at Everett 
Naval Station, Washington that will replace seven temporary portable 
modular facilities put in place in 1994 to support the new homeport 
mission which moved from the Sand Point Base in fiscal year 1994. The 
cost for this replacement project is $7,500,000.
    The third clinic is a Medical Clinic Addition for the Naval 
Aerospace Medical Institute (NAMI), at Pensacola Naval Air Station, 
Florida at a cost of $2,750,000. It will provide clinical and training 
space.
    The fourth clinic is a Medical/Dental Clinic Replacement at 
Quantico Marine Corps Base, Virginia at a cost of $19,000,000. It will 
provide primary medical/dental care to the eligible beneficiary 
population in and around Marine Corps Base, Quantico.
    The fifth clinic is an outpatient Clinic Addition to the existing 
clinic adjacent to the main hospital at Hill Air Force Base, Utah for 
$3,100,000. It will replace a Flight Medicine Clinic currently housed 
in a modular building.
    Our last clinic in this program is a Dental Clinic Replacement at 
Holloman Air Force Base, New Mexico. The clinic will replace an old, 
deteriorating and obsolete facility that is functionally inadequate and 
undersized for the delivery of modern dental care. We are seeking 
$3,000,000 for this facility.
    The Naval Undersea Medical Institute Addition/Alteration, at Naval 
Sub Base New London, Connecticut will renovate the current facility 
into an adequate and properly configured training facility to present 
curriculum in a centralized facility that provides a learning 
environment conducive to training officers and corpsmen in undersea 
medicine and radiation health. We are requesting $2,300,000 for this 
project.
    The Environmental and Preventive Medicine Unit Addition/Alteration 
at San Diego Naval Air Station, California will consolidate operations 
from the North Island and Mare Island Units into the San Diego unit. 
The existing building will receive alterations and an addition at a 
cost of $2,100,000.
    We are requesting $3,000,000 for a Blood Donor Center at Lackland 
Air Force Base, Texas. A new Blood Donor Center is required to meet the 
increasing demand for blood products from Wilford Hall Medical Center, 
Audie L. Murphy Veterans Hospital, and the Armed Forces Whole Blood 
Program.
    The Department intends to improve the clinical capability of 17 
small inpatient facilities by re-engineering from ones that provide low 
concentrations of inpatient care to facilities that provide improved 
access to ambulatory care for our beneficiaries and ensure that care 
rendered is of the highest quality. The goals of the initiative are to:
    (1) Improve beneficiary access.--The most common beneficiary 
complaint is inadequate access to ambulatory care. Staff and physical 
plant currently used for inefficient inpatient care will be used to 
significantly increase ambulatory capability.
    (2) Maintain quality.--Low inpatient loads result in challenges for 
providers to maintain skills.
    (3) Efficient use of resources.--Small inpatient facilities are 
inefficient users of resources due to the intensity of inpatient 
staffing requirements and overhead.
    (4) Maintain readiness.--The expansion beds provided by these 
hospitals are excess to wartime requirements. Referral of some 
inpatient work to military tertiary care facilities will provide 
increased physician experience in the appropriate clinical setting that 
will receive wartime casualties.
    Two Ambulatory Health Care Centers being rightsized from hospitals 
are requested in this program. The first is a replacement facility at 
McGuire Air Force Base, New Jersey for $35,217,000. The second is an 
Ambulatory Health Care Center Addition/Alteration at Robins Air Force 
Base, Georgia, for $19,000,000.
    We are also requesting $2,750,000 for a Composite Medical Facility 
Alteration at Wright-Patterson Air Force Base, Ohio to alleviate 
overcrowding and inefficiencies in providing medical services to the 
Air Force Material Command and eligible beneficiaries of the base.
    In addition to our specific line item projects, we are requesting 
$7,958,000 for Unspecified Minor Construction and $10,500,000 for 
planning and design efforts in our fiscal year 1998 program.
    There are two projects for which we are requesting authorization 
only. We are not seeking appropriation for an Aeromedical Clinic 
Addition at Andersen Air Force Base, Guam for $3,700,000 and an 
Occupational Health Clinic Replacement at Tinker Air Force Base, 
Oklahoma for $6,500,000. We have submitted language to utilize the 
dollars from the BRAC directed cancellation of the fiscal year 1995 
funded McClellan Air Force Base, California, Life Safety Upgrade 
project to fund the Andersen and Tinker projects. I ask for your 
support on this action.
                            fiscal year 1999
    Our fiscal year 1999 request seeks $256,959,000 in appropriation 
for 24 projects as well as $12,005,000 for Unspecified Minor 
Construction and $18,800,000 for planning and design. I would like to 
provide a few details on our projects in this year.
    We seek funding of $34,954,000 for the final phase of the 
Portsmouth Naval Hospital, Virginia project. Congress has appropriated 
$316,400,000 to date for this project. This project requested no 
funding in fiscal year 1998 due to an ongoing GAO study. We do not 
anticipate any changes from the GAO study that will alter the planning 
of this project. We continue to ask your support for this important 
teaching hospital which serves the largest population in the Navy.
    One of our projects is conjunctively funded with Base Realignment 
and Closure (BRAC) funds. The Hospital Addition/Alteration project at 
Bremerton Naval Hospital, Washington, modifies a facility built in 
1979. Our request for this construction is $30,000,000. The BRAC 
portion of this project is an additional $11,000,000.
    We also request funds for two hospital addition/alteration projects 
in fiscal year 1999. The Pensacola Naval Air Station, Florida Hospital 
Addition/Alteration requires $20,400,000 to construct an Outpatient 
Clinic addition and to renovate a major portion of the existing 
hospital. Companion Operations and Maintenance projects will complete 
the renovation. Royal Air Force (RAF) Lakenheath requires a Hospital 
Annex Replacement to support the RAF Lakenheath/RAF Mildenhall 
communities for $10,000,000. The current annex is a group of primarily 
World War II era ``Quonset huts'' connected together with a common 
corridor.
    Eleven additional clinics are included in our fiscal year 1999 
budget request. A CMF/Alteration and a Dental Clinic addition is 
required at Moody Air Force Base, Georgia at a cost of $11,000,000.
    Three Medical/Dental Clinic Replacements are requested, one at Fort 
Stewart, Georgia, for $10,400,000, and two at Camp Pendleton Marine 
Corps Base, California, Margarita and San Mateo for $3,050,000 each.
    The fifth clinic, an addition/alteration is sought at Barksdale Air 
Force Base, Louisiana. This clinic will consolidate the operations of 
the Flight Medicine, Pediatrics, and Immunization clinics which are 
located in separate buildings throughout the base. We ask $3,450,000 
for this clinic.
    The sixth clinic, a Medical/Dental Clinic Addition/Alteration is 
required for Grand Forks Air Force Base, North Dakota to provide an 
adequate aeromedical service facility and a replacement dental clinic 
for $5,500,000.
    The seventh clinic, an Aerospace Medical Clinic Addition/Alteration 
is required at Edwards Air Force Base, California to provide adequate 
space for several Aerospace medical clinic functions: Flight Medicine, 
Physical Exams, Public Health, Bioenvironmental Engineering, and 
Optometry at a cost of $6,000,000.
    The eighth clinic is a Clinic Replacement at McChord Air Force 
Base, Washington to provide outpatient and emergency care to flight 
crews, other military personnel, and eligible beneficiaries for a cost 
of $17,500,000.
    The ninth clinic is a Health Clinic Addition required at Carlisle 
Barracks, Pennsylvania at a cost of $4,550,000 to expand the existing 
health care clinic.
    The tenth clinic is an Occupational Health Clinic/Bioenvironmental 
Engineering Laboratory Replacement facility at Wright-Patterson Air 
Force Base, Ohio. We seek $3,600,000 for this facility.
    The last clinic is an $11,000,000 Primary Care Clinic to provide 
family practice health services to active duty personnel assigned to 
the COSCOM area of Fort Hood, Texas and their eligible beneficiaries. 
This project also consolidates functions from a troop medical clinic 
which is located at Hood Army Airfield.
    We are also requesting funding for three warehouse projects. The 
first is a 44th Medical Brigade War Reserve Materiel Warehouse for 
$6,500,000 at Fort Bragg, North Carolina to provide a consolidated 
humidity controlled facility for storage of medical supplies and other 
medical logistics operations.
    The second is a Medical Supply Warehouse Replacement at Yongsan, 
Korea for $2,800,000 to provide an adequate receiving, storage and 
issuing facility with a climate controlled environment for the holding 
of medical equipment and for equipment that requires technical review 
by medical maintenance personnel prior to issuing to the customer.
    The third is a War Readiness Material Warehouse at Holloman Air 
Force Base, New Mexico at a cost of $1,250,000 to accommodate the 
peacetime storage of propositioned medical war readiness material 
resources.
    Our program contains a Blood Donor Center at Fort Hood, Texas for 
$3,100,000 to support the Armed Services Blood program to provide blood 
components to military medical treatment facilities in the continental 
United States, Panama, Hawaii, and Alaska.
    The program includes a Physiological Support Division Addition/
Alteration project at Beale Air Force Base, California for $3,350,000 
to modify a 30 year old facility to provide adequately sized and 
properly configured space to meet the Aerospace Medicine Physiological 
Support division requirements.
    We are requesting three instruction facilities in fiscal year 1999. 
The first is the Medical Applied Instruction Facility Alteration 
project at Fort Sam Houston, Texas at a cost of $23,100,000. This 
project is required to provide consolidated training facilities for the 
Army Medical Department Center and School (AMEDDC&S) to train Army, 
Navy, Air Force, Army Reserve, Navy Reserve, National Guard, and 
foreign national students.
    The second project is an Aviation Physiological Training Facility 
at Kaneohe Marine Corps Air Station, Hawaii for $3,800,000 required to 
meet all of the aviation physiological training needs of the Department 
of Defense aviation personnel in the mid-Pacific.
    The third project is the Hospitalman ``A'' School Addition at Great 
Lakes Naval Station, Illinois for $7,100,000. This project will provide 
adequate and properly configured training facilities to present 
curricula in a centralized facility that provides a learning 
environment conducive to Navy Hospitalman ``A'' School training in one 
location.
    The last request is $700,000 for an Bioenvironmental Engineering 
Facility Replacement at Keesler Air Force Base, Louisiana to 
consolidate all of the Bioenvironmental Engineering functions necessary 
to support the industrial function of the base.
                               conclusion
    This concludes my overview statement of the fiscal year 1998-99 
medical military construction budget request. The programs stand as a 
testament to our commitment to provide quality medical care to the men 
and women of our Armed Forces and to maintain our medical readiness. I 
thank you for the opportunity to present our budget and I welcome your 
questions on any aspect of the budget before you now.

                   statement of frederick n. baillie

    Senator Burns. Thank you very much, General Claypool.
    The Executive Director of the Defense Logistics Agency, 
Frederick Baillie. You know, I want to add a little note here. 
There were some of us who really did not appreciate what 
logistics do if you were not here during the time of Desert 
Shield and Storm. I really appreciate, because this is one 
little agency that sits down there at the end of the corridor 
and does not get much acclaim. But I want to sincerely thank 
you for what you do, and I want you to know that this committee 
takes your work very seriously because you are a key. We do not 
do anything until logistics has been run properly.
    So I want to just say that publicly on the work that you do 
and how important you are. Thank you for coming this morning.
    Mr. Baillie. Thank you, Mr. Chairman. Mr. Chairman, Senator 
Murray, the Defense Logistics Agency's fiscal year 1998 
military construction request is $141.8 million for 12 
projects.
    Our program this year continues the tasks started in fiscal 
year 1996 of integrating the management of bulk petroleum for 
the Department of Defense. Seven of the projects we are 
requesting are fuel related and support the services' 
operational requirements. These projects include fuel receipt 
and storage facilities at several military installations as 
well as a hydrant fuel system project to support strategic 
mobility.
    The projects we are proposing will increase the mission 
responsiveness, eliminate environmental hazards, and improve 
health, safety, and the quality of working conditions at our 
activities. A large portion of this request, 93 percent, to be 
exact, is for projects to replace old and deteriorated 
facilities. At critical military installations we propose to 
replace fuel storage tanks and piping systems that are more 
than 40 years old, cannot meet current operational 
requirements. Due to their condition, these facilities also 
pose a serious environmental hazard.
    Our program also includes the second phase of a hydrant 
fuel system project to improve the Department of Defense's 
strategic inroute fueling capability.
    At two of our most active distribution depots we plan to 
replace inefficient World War I-era warehouses with automated 
warehouses to consolidate operations and improve productivity. 
We will also modify an existing warehouse to refurbish gas 
cylinders to recover and recycle ozone-depleting substances 
within the Department.
    Further, we are continuing our program to construct 
hazardous waste storage facilities that conform with the 
requirements of the Resource Conservation and Recovery Act.
    Finally, we are requesting funds to build a child 
development center at our colocated supply center and depot in 
Richmond, VA.

                           prepared statement

    In summary, our military construction request reflects our 
efforts to support military readiness, protect the environment, 
and provide safe and healthful working conditions for our 
military and civilian work force. We believe these are worthy 
investments with significant benefits.
    Mr. Chairman, this concludes my oral statement. Thank you 
for asking me to appear today.
    [The statement follows:]

               Prepared Statement of Frederick N. Baillie

    Mr. Chairman, and members of the Subcommittee: I am Frederick N. 
Baillie, Executive Director of Business Management, Materiel Management 
business area at the Defense Logistics Agency (DLA). I am pleased to 
have the opportunity to provide information about DLA's fiscal year 
1998 Military Construction request.
                     military construction request
    Our total Military Construction request for fiscal year 1998 is 
$141,831,000. The program consists of 12 projects that will increase 
mission responsiveness, eliminate environmental hazards, and improve 
facility readiness at our activities in support of the Agency's 
missions. This request includes:
  --$78.8 million for replacing or constructing additional fuel storage 
        tanks, fuel unloading facilities, direct refueling systems, and 
        fuel pipelines at six Air Force and Navy bases.
  --$14.4 million for completing the final phase of a project to 
        replace a deteriorated, obsolete hydrant fuel system at a 
        critical Air Force base.
  --$35.2 million for replacing two deteriorated World War I-era 
        warehouses with an addition to an existing distribution center 
        at the DLA distribution depot in New Cumberland, Pennsylvania, 
        and the construction of one high-bay general purpose warehouse 
        at the DLA distribution depot in Norfolk, Virginia. The request 
        also includes the conversion of an existing warehouse for 
        processing cylinders for recycled ozone depleting substances at 
        our distribution depot in Richmond, Virginia.
  --$2.1 million for constructing a new child development center at 
        DLA's Defense Supply Center, Richmond, Virginia.
  --$11.3 million for constructing conforming storage facilities for 
        the disposal of DOD generated hazardous waste at various DLA 
        sites.
                   new fuel mission responsibilities
    In fiscal year 1996, DLA assumed new responsibilities for 
programming fuel-related MILCON projects for bulk and intermediate fuel 
storage and hydrant fuel systems at the Services' installations. The 
Office of the Secretary of Defense approved this responsibility 
transfer from the Services in fiscal year 1992 in its Plan for the 
Integrated Management of Bulk Petroleum. In carrying out this 
responsibility, we are requesting approval of seven fuel-related 
projects at $93.2 million, which is 66 percent of our total program 
request. Four of these projects (at Elmendorf AFB, AK; Andersen AFB, 
Guam; Westover Air Reserve Base, MA; and, Moron Air Base, Spain) are 
priorities of the Joint Chiefs of Staff since the projects will provide 
critical fuels infrastructure to support strategic en route mobility. 
The remaining three projects (at NAS Jacksonville, FL; Truax Field, WI; 
and Craney Island, VA) are necessary to meet environmental compliance 
and operational requirements.
Fuel Receipt and Storage Facilities
    Our proposed investment of $78.7 million is to replace or add fuel 
storage, distribution, and piping systems at six locations. These 
projects will overcome shortfalls affecting support of the bases' 
missions and eliminate potential environmental liabilities.
    At Elmendorf AFB, AK, we will construct a $21.7 million fuel 
storage facility. It will replace existing on-base bulk fuel storage 
tanks that have failed or are failing due to their age and mechanical 
condition. Recent tank failures account for a loss of 63 percent of the 
base's storage capacity, and have forced the Agency to store some of 
the base's critical war-reserve fuel stock at other locations in the 
northwest Pacific. This new facility will allow the base to consolidate 
its war-reserve and peacetime fuel stocks in storage tanks that comply 
with state and Federal environmental regulations. Six aboveground 
storage tanks will be demolished as part of this project.
    At Andersen AFB, Guam, we will replace the two existing 200 
millimeter (mm) aboveground crosscountry pipelines with one underground 
250 mm pipeline for $16 million to meet peacetime and contingency 
operations. Currently, the base receives its entire supply of jet fuel 
from one of these two existing pipelines, which are more than 40 years 
old and are severely corroded. One pipeline has been removed from 
service due to severe deterioration. The new pipeline and improvements 
to the main transfer pumping station are necessary to deliver fuel at 
the required rate to support Andersen AFB and to protect the 
environment from fuel contamination caused by a potential rupture of 
the existing pipeline. The new pipeline will include features to 
protect it from the harsh environment and will employ a leak detection 
system. The existing pipelines will be demolished.
    A $4.7 million project at Westover Air Reserve Base, MA, will 
provide for the construction of a jet fuel storage complex to support 
operations of assigned C-5A aircraft and other transient aircraft. 
Westover lacks onbase bulk fuel storage to support strategic en route 
mobility operations. Commercial storage and pipeline systems are too 
small to meet fuel requirements during contingencies.
    At Craney Island, VA, we will provide aboveground fuel storage to 
replace deteriorated underground bulk storage tanks that have been in 
service for more than 50 years. Our proposed $22.1 million replacement 
project will provide the tanks, spill containment structures, piping, 
and mechanical controls to meet current environmental standards and 
reduce the potential for costly fuelspill cleanups. The project 
includes the decommissioning of 17 existing underground tanks.
    At Naval Air Station, Jacksonville, FL, we will replace 11 old, 
deteriorated underground storage tanks (UST) with three new aboveground 
storage tanks. This $9.8 million project will fulfill an environmental 
compliance consent agreement with the State of Florida to take these 40 
year old UST's out of service by December 31, 2000.
    At Truax Field, WI, we propose a $4.5 million project to construct 
a jet fuel storage complex to replace the existing 40 year old 
underground storage tanks. This project is necessary to meet 
environmental compliance requirements. The facility supports assigned 
units of the Wisconsin Air National Guard. The existing facility does 
not meet safety regulations, environmental statutes, or operational 
requirements, and is located in an environmentally contaminated area 
that must be remediated.
Hydrant Fuel Systems
    We propose to complete the final phase of the replacement of the 
hydrant fuel systems at Moron Air Base, Spain. Phase 1 of this project 
was approved in the DLA fiscal year 1997 MILCON program for $13 
million. The existing system, built in the 1950's, is technologically 
obsolete and incapable of meeting current wide-bodied aircraft 
refueling requirements. Because this system is obsolete, repair parts 
are no longer available; they must be individually fabricated or 
salvaged from other inoperable systems. The $14.4 million project 
provides a new hydrant fuel system, storage tanks, and supporting 
facilities constructed to current standards. This project is not 
eligible at this time for NATO Security Investment Program funding.
               distribution and supply center investments
Distribution Depots
    We propose to invest $35.2 million to replace or modify warehouse 
facilities at three locations. These projects will eliminate 
inefficiencies with the use of aging low-bay facilities by allowing us 
to consolidate and mechanize storage and distribution.
    At the Defense Distribution Depot in New Cumberland, PA, we propose 
a $15.5 million addition to DLA's Eastern Distribution Center. This 
high-bay facility will provide additional pallet rack storage to 
enhance the automated throughput capabilities of one of DLA's primary 
distribution sites for the storage of highly active stock. The 
warehouse addition of 6,850 square meters (73,733 square feet) replaces 
one World War I-era warehouse totaling more than 18,900 square meters 
(203,500 square feet). This wooden warehouse, now storing some of this 
fast moving stock, will be demolished as part of this project.
    A new general purpose warehouse will replace a deteriorated 
warehouse built in 1939 at the Defense Distribution Depot in Norfolk, 
VA. The proposed $16.6 million warehouse will have pier-side 
accessibility for the receipt, storage, packaging, and distribution of 
nonperishable materiel to ships berthed at the Norfolk Naval Base. This 
project supports DLA's plan to consolidate depot storage and vacate by 
fiscal year 2001 more than 260,000 square meters (2.8 million square 
feet) of storage space in aging warehouses remotely located from the 
depot's primary customers at the pier.
    At the Defense Distribution Depot in Richmond, VA, we propose to 
convert an existing warehouse to a processing center for the 
refurbishment of steel gas cylinders and the recycling of ozone 
depleting substances (ODS). This facility will provide clean, 
refurbished cylinders to the Services to recover ODS from worldwide DOD 
locations and will directly support the recycling of these substances 
within the Department. This depot is the Department's storage site for 
the reserve of this material that is critical to the national defense.
Supply Centers
    Our Child Development Center project will provide a facility for 99 
children at the Defense Supply Center, Richmond, VA (DSCR), and the 
collocated Defense Distribution Depot Richmond. There are no facilities 
on or near DSCR that can be used to satisfy the needs of the 3,400 
military and civilian employees at this location. The estimated cost of 
this center is $2.1 million.
Conforming Storage
    Since 1980, DOD has tasked DLA with disposing hazardous waste 
generated by DOD components. Before disposal, DLA must store this 
hazardous waste in conformance with federal and state environmental 
regulations implementing the Resource Conservation and Recovery Act 
(RCRA). In fiscal year 1998 we are requesting $11.3 million to build 
conforming storage facilities at several of our Defense Reutilization 
and Marketing Offices to comply with these environmental requirements. 
We will proceed with those projects that receive RCRA permits from 
state regulators--a process that is lengthy and somewhat unpredictable. 
Consequently, as in prior years, we are requesting single-line-item 
funding for this program so that we may award projects as we receive 
these permits. We will continue to notify the appropriate committees 
before construction of each project.
                                summary
    DLA's Military Construction request reflects our efforts to support 
military readiness, protect the environment, and provide safe working 
conditions for our military and civilian work force. Seven of the 12 
projects provide vital fuel facilities to support the Services. The 
remaining five are needed to meet the Agency's other mission 
requirements and provide quality of life facilities to sustain 
operations into the 21st Century. I believe these are worthy 
investments with significant benefits.
    Thank you, Mr. Chairman, for this opportunity to present our fiscal 
year 1998 requirements.

                      STATEMENT OF BRUCE M. CARNES

    Senator Burns. Thank you, thank you.
    Bruce Carnes, Defense Finance and Accounting Service. 
Whatever accounting you use is foreign to me. [Laughter.]
    If there is one thing in this Government, it is the 
accounting system. Thank you for coming this morning.
    Mr. Carnes. Thank you, Mr. Chairman, Senator Murray. Thank 
you for the opportunity to talk about the Defense Finance and 
Accounting Service [DFAS] request for fiscal year 1998 Milcon 
funds.
    Senator, we are asking for funds for four projects totaling 
$55 million. One of the projects is for the final tranche of 
funds to complete our Columbus center. We have five major 
centers. This funding, $24 million, will complete the 
construction of that building.
    In addition, we are asking for approximately $31 million 
spread across three operating locations, in essence regional 
offices for DFAS.
    I will just add one more word on that, if I could, Mr. 
Chairman. We are closing 330 field level installation-based 
finance and accounting offices. We have closed two-thirds of 
those. By the end of this year we will have closed all but 
about 25 of those, and will complete closing all of them within 
the next 18 months.

                           prepared statement

    We are locating them in these regional operating locations, 
21 of which have been designated by the Deputy Secretary of 
Defense. When we finish that, we will save $120 million per 
year in operating costs. That is an annual savings in operating 
costs that offsets the cost of the renovation of some of these 
regional offices that we are going into.
    Mr. Chairman, that concludes my opening statement. I look 
forward to your questions.
    [The statement follows:]

                 Prepared Statement of Bruce M. Carnes

    Mr. Chairman, members of the committee, thank you for the 
opportunity to appear before you today to discuss Military Construction 
requirements for the Defense Finance and Accounting Service (DFAS) for 
fiscal year 1998.
    The military construction request for the Department of Defense for 
fiscal year 1998 includes $55.0 million for the Defense Finance and 
Accounting Service. Of this, $23.9 million supports Phase III (the 
final phase) of the construction of the Columbus Center. The renovation 
of three other Department of Defense facilities into adequate 
administrative facilities for finance and accounting operations will 
cost $29.7 million, and the remaining $1.4 million will be used for 
planning and design.
    The Columbus Center project, collocated with the Defense Supply 
Center, Columbus, is under construction. When it is complete, the 
building will provide a multi-story 580,000 square-foot administrative 
facility with space for 3,200 people. DFAS Columbus Center employees 
will provide contract pay, travel pay, commercial vendor pay, 
installation accounting, and financial systems design support to the 
Department of Defense. The move to the new facility is scheduled to 
begin in June 1999, and the consolidation of DFAS into the facility 
should be completed by the end of fiscal year 1999.
    The other three projects we request funding for are renovations to 
existing buildings. These buildings are up to 65 years old; one is 
currently configured as a training facility, one is a warehouse, and 
one is the location for Fleet Electronic Systems equipment. Renovation 
of these facilities will provide modern, efficient workplaces which 
will accommodate current and emerging technologies such as electronic 
commerce/electronic data interchange and electronic data management. 
Renovations at all sites include the installation of communications 
lines, increased electrical capacity, and improved heating, air 
conditioning and ventilation systems, and would bring the buildings 
into compliance with current building codes. The interior design of the 
facilities emphasizes an open space concept to the greatest extent 
possible.
    This concludes my formal remarks. I have provided a copy of my 
briefing slides for the record and am prepared to respond to any 
question that you might have concerning these projects.

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

  Defense Finance and Accounting Service Fiscal Year 1998-99 Military 
                          Construction Program
DFAS inherit--total
    6 Centers
    327 Activities
    30,500 Employees
In fiscal year 2001
    5 Centers
    19 Operating locations
    21,500 Employees

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



                  Fiscal Year 1998 DFAS Milcon Program

                        [In millions of dollars]

Columbus, OH......................................................  23.9
Honolulu, HI......................................................  10.0
Memphis, TN.......................................................   6.9
Norfolk, VA.......................................................  12.8
Planning and Design...............................................   1.4
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................  55.0



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

                     Columbus Center Project--Ohio
Office and support space for Columbus Center and Financial Systems 
        Activity--Columbus
    Replaces 8 buildings and 5 trailers on 2 installations (including 
Air Force Plant # 85, 50 year old aircraft manufacturing facility)
    48,800 square meters
    Co-located with Defense Supply Center Columbus
Funded over 3 years
    Total Cost--$80.7 million
    Fiscal year 1998--Final phase of $23.9 million

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

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

           Honolulu Operating Location, Pearl Harbor, Hawaii
OPLOC
    9 DAO's
    304 Personnel
    Vendor pay, disbursing, accounting and travel functions
Building 77, Ford Island
    2 stories
    9,414 SM (101 KSF)
    Constructed prior to WWII
    Configured for Fleet Electronic Systems Equipment
    35 percent Design Complete
    $10.0M

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

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

  Memphis Operating Location, Millington Navel Air Station, Tennessee
OPLOC
    26 Corps of Engineers Finance and Accounting Offices
    400 Personnel
    Vendor pay, disbursing and accounting functions
Building 787
    1 story
    10,223 SM (110 KSF)
    Configured as special purpose training space
    35 percent design complete
    $6.9M

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

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

      Norfolk Operating Location, Cinclantfleet, Norfolk, Virginia
OPLOC
    12 DAO's
    515 Personnel
    Vendor pay, disbursing, accounting and travel functions
Building Z133
    5 stories, renovate 4 floors (2\1/2\ DFAS, 1\1/2\ Navy)
    12,949 SM (139 KSF)
    Conjunctively funded project with Navy
    Configured as warehouse
    Constructed in 1940's
    35 percent Design Complete
    $18.9M (DFAS $12.8M, Navy $6.1M)

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



                  Fiscal Year 1999 DFAS Milcon Program

                        [In millions of dollars]

Seaside, CA.......................................................  20.0
Pensacola, FL.....................................................  17.7
Lexington, KY.....................................................   8.6
Planning and Design...............................................   2.2
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................  48.5



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

            Seaside Operating Location, Fort Ord, California
OPLOC
    3 DAO's
    105 Personnel
    Vendor pay, accounting and travel functions
Defense Manpower Data Center
    400 Personnel
    Manpower, personnel, training and financial analysis
Building 4385
    8 stories
    13,521 SM (146 KSF)
    Constructed in 1972, configured as hospital
    Installation closed
    $20.0M

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

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

   Pensacola Operating Location, Pensacola Naval Air Station, Florida
OPLOC
    7 DAO's
    525 Personnel
    Civilian pay, vendor pay, accounting and travel functions
Building 603
    4 stories
    12,077 SM (130 KSF)
    Configured as administrative and warehouse space
    Constructed late 1930's
    $17.7M

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

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

  Lexington Operating Location, Lexington-Blue Grass Depot Activity, 
                                Kentucky
Building
    1 story
    12,367 SM (133 KSF)
    Constructed in 1943
    Configured as administrative space
    Closed installation
    35 percent design complete
    $8.6M

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

    Senator Burns. Mr. Carnes, while we are fresh in that 
conversation, it seems like we have been building on Columbus 
forever, ever since I have been here anyway.
    Mr. Carnes. Yes, sir.

                       movement of financial data

    Senator Burns. Tell me, when you close these different 
offices, that information has to get to you from our different 
locations for processing in Columbus. In moving that 
information, do you move that electronically, or is that done 
hard copy, courier, or comail? How do you move that 
information?
    Mr. Carnes. We move it by a variety of means. Obviously, we 
are trying to get it all done or as much of it done 
electronically as we can. Because that means we will also be 
able to reduce our staffing.
    When we started that operation, it was all hard copy. We 
had miles and miles of hard copy files--just almost impossible 
to wrestle with. We are imaging some of those documents. We are 
instituting electronic commerce so that we will have electronic 
interchange of data between our customers and ourselves and 
those organizations that we pay.
    Senator Burns. When you move things electronically, are you 
satisfied with the security of moving those documents?
    Mr. Carnes. Yes; in fact, we think that the use of 
electronic means is far superior to any other means not only 
because it is cheaper but because it is more accurate and 
because there are security provisions built into these systems 
so that they are probably more secure. In fact, I feel certain 
they are more secure than the present system of hard copy 
documents.
    Senator Burns. The reason I ask you that is because we are 
going through quite a debate now on encryption and this type 
thing and moving things electronically, and the information 
that you move tells us as much about our military capabilities 
as looking at a base or looking at hardware or anything else. I 
just happen to believe that there are people who have an 
analytical mind that can read finance records. Of course, they 
are a lot smarter than I am, I tell you that.
    Senator Murray.

                   medical/dental clinic, everett, wa

    Senator Murray. Thank you, Mr. Chairman. I just have a few 
questions for General Claypool.
    In your testimony you referred to the medical/dental clinic 
that is located at Everett Naval Station in Washington. I have 
been to that several times recently, and I can really attest 
personally to the need for this facility, so I am really 
pleased that it is in your budget request.
    But I do have a question about that. I have been told by 
personnel on the ground that this facility is only going to be 
available for active duty personnel, and I wanted to know if 
that is true. If so, can you provide me with the justification 
for the decision to exclude family members, particularly since 
we have children on-site at the day care center there--children 
and family members?
    General Claypool. Senator, I will have to get back to you 
for the record on that. I do not know. I made the comment that 
at some places some of the troop medical clinics that we have 
do take care of active duty service people and health clinics 
take care of family members as well. That might be the reason 
behind that, but the specifics I will have to provide.
    [The information follows:]

    The Station has limited space and the site itself is very small. 
The Station is so small that full Navy Exchange, Commissary and BOQ are 
off-site. From the earliest point of planning the Everett Homeport 
(1990 or earlier), directions had come from the Commander Naval 
Surface, Pacific and Commander Naval Base, Seattle that Everett would 
provide active duty medical/dental needs and civilian occupational 
health needs only. The Station is a constrained, active industrial base 
with no civilian traffic unless directly related to ships' services. 
The Managed Care Plan for family members and retirees is to contract 
with a local Health Maintenance Organization (HMO) or Preferred 
Provider Organization (PPO) to provide both routine and specialty 
outpatient care, as well as inpatient treatment. TRICARE was 
implemented in Washington State March 1995. Parking for workers, 
civilian and military, is on the periphery of the base. Buildings are 
sited for walking, not vehicle traffic (except for industrial vehicles 
such as forklifts and cranes).

    Senator Murray. I would really appreciate that.
    You also refer in your testimony to several additional 
Washington State health facilities, including the Milcon 
project at Naval Hospital Bremerton. In your testimony you said 
that this is a fiscal year 1999 item. Is there any reason we 
cannot move that up to 1998?
    General Claypool. It is not ready for design yet. That 
would prohibit that.

              medical training at mc chord Air Force Base

    Senator Murray. OK. We also understand that there is a 
medical training facility request for McChord Air Force Base on 
the Air Force accelerated priority list for 1998. Your 
testimony did not mention this and I wanted to know if that 
project is ready for construction in fiscal year 1998 and would 
you support the inclusion in the construction budget?
    General Claypool. It is under design right now and not yet 
ready for execution.
    Senator Murray. Thank you.
    Senator Burns. Tell me about the situation at Portsmouth. 
Evidently we did not plan far enough or should have planned 
further. Can you bring us up to date on what is happening 
there?
    General Claypool. Yes, sir; as I understand it--I have not 
yet visited the place and I plan to do that--over the life of 
the entire project, health care and health care delivery and 
how the place is going to be utilized has changed, and at the 
present time, under the managed care environment that we have, 
there is a need for administrative kinds of functions to 
support the managed care program, TRICARE.
    So I think to utilize the rest of 215, which is the old 
medical facility, there are plans to relocate administrative 
functions, the TRICARE support office and a naval environmental 
health center in that building.
    Senator Burns. Do you have planned downsizing there? Is 
there a planned downsizing?
    General Claypool. Sir, no; I think the answer to that is 
no. We are reconfiguring in this day and agree of how we do 
less inpatient, less overnight kinds of surgery, more same-day 
surgery, more ambulatory care. So I think the work that is 
being done there will be the same. The actual average daily 
patient load of inpatients, that likely will change.

                         dla child care center

    Senator Burns. Mr. Baillie, you might bring us up to date 
on, for me, the requirement for a child care center at 
Richmond, VA, as contained in this budget request.
    Mr. Baillie. Yes, sir; right now, Mr. Chairman, there are 
approximately 3,400 military and civilian employees working at 
both the supply center and the distribution depot at Richmond. 
There currently are no child care facilities for them at all, 
neither Government-supported nor in the immediate area 
surrounding the operation.
    What this requires is for our folks to have to go through 
some extraordinary means to make arrangements to care for their 
children, so we believe that this is a project that is 
definitely needed to improve the quality of work life at that 
facility.
    Senator Burns. That is just about all the questions that I 
have for this panel. Senator Murray, do you have any followup?
    Senator Murray. I just have one, if I could. General, I do 
have in front of me a memorandum for the record dated March 17, 
1997, from the Air Force with the accelerated priority list 
that includes military construction money. The McChord medical 
training facility is on here. You indicated it is not ready to 
go forward. If it is not ready to go forward, why is it on the 
accelerated priority list?
    General Claypool. I understand, Senator, that it is 
proposed to be accelerated in 1999.
    Senator Murray. It is a letter for fiscal year 1998. It is 
on the accelerated priority list.
    General Claypool. We will have to get back to you for the 
record.
    Senator Murray. If you could, I would appreciate it, 
because that is a very important one for us.
    Thank you.
    [The information follows:]

    Based on the best information available to us (General Fogleman's 
letter to Senator Thurmond dated 13 March 1997), the McChord Training 
Facility referred to in the referenced letter is a notional list of 
unfunded military construction requirements from the Air Force 
Reserves. These types of facilities do not fall under the purview of 
DMFO's medical military construction program.

                     Additional committee questions

    Senator Burns. We may have other questions that will arise 
as we work our way through this process. We appreciate you 
coming this morning. I think other Senators will have questions 
too. If you could respond to them and the committee, we will 
make your statements and those responses part of the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Agencies for response subsequent to the 
hearing:]

                  Questions Submitted by Senator Burns

                       portsmouth naval hospital
    Question. General Claypool, why did DMFO not perform a 
comprehensive review of medical requirements at Portsmouth before 
January 1997? What action precipitated the review?
    Answer. DMFO has performed numerous reviews of the Portsmouth 
project throughout its development including but not limited to:
  --Economic Analysis of 1988 (Proposed renovation of buildings 1 and 
        215 (partial) and construction of a new acute care facility)
  --Space program review of 1990 (finalized the space requirements 
        based on economic analysis)
  --Revalidation of 1992 (identified some reduction in space 
        requirements)
  --DOD IG Review of 1993 (reduction of 101 beds)
  --Health Care Requirements Analysis for Renovation of Building 215, 
        Phase IX, May/June 1995 (validated the requirements based upon 
        the condition of the present buildings, viability of the 
        Portsmouth mission and projected health care needs of the Tide 
        Water beneficiaries)
  --GAO Review of 1997 (concluded that total renovation of building 215 
        is cost-effective)
  --Revalidation of 1997 (full renovation of building 215 is the best 
        economic solution)
    The Senate Appropriations Committee Conference Report for the 
fiscal year 1997 Military Construction Bill directed the GAO to review 
the requirements and funding which has been appropriated for the Naval 
Hospital at Portsmouth.
    Question. Has DMFO been a rubber stamp for Navy plans at 
Portsmouth? Did DMFO play a role in reducing the scope or cost of this 
project?
    Answer. DMFO has never rubber stamped Navy plans at Portsmouth. 
DMFO and Navy have been working together as a team to contain scope and 
cost increase on this project. This project has been designed to or 
less than the DOD's space criteria to meet these goals. Consolidation 
of requirements in the Tidewater area have been thoroughly reviewed and 
analyzed to arrive at the most efficient and cost-effective solution 
for the Portsmouth Naval Hospital complex. In fact, Navy agreed to 
reduce scope by 101 beds following the 1992 Health Affairs and DOD IG 
review. DOD and Navy also eliminated hyperbaric medicine capability at 
a cost avoidance of $13.6 million until considered ``medically 
efficacious'' at some point in the future.
    Question. What impact will the elimination of more than half of the 
Graduate Medical Education programs have on the space requirements or 
use at Portsmouth?
    Answer. Elimination of Graduate Medical Education (GME) will have 
no effect on space requirements at Portsmouth. The proposal to 
terminate 7 of the 12 GME programs would have eliminated or realigned 
87 of 198 resident billets. To accommodate the projected workload, 
these residents would have to be replaced by 50 staff physicians who 
would require the space under construction. The proposal to reduce GME 
has been withdrawn by the Navy.
    Question. Although the revalidation is ongoing, can you describe 
the preliminary results?
    Answer. Revalidation of the Phase IX, MILCON project at Portsmouth 
has just been completed. It concludes that the requirement to renovate 
Building 215 for both medical and administrative/support occupancy has 
been and continues to be a reality and full renovation of Building 215 
is the best economic solution. Timing is critical due to the linkage 
between the pending Phase-9 renovation of Building 215 and all prior 
construction currently underway at NMC Portsmouth. More than 1,000 
people are scheduled to occupy the renovated 215. In the event 
scheduled renovation work is delayed or canceled, nearly two-thirds of 
them could be stranded in trailers or moved off base into leased office 
space at substantial cost to the government. Any further delays may 
result in additional real costs due to construction schedule 
interruption.
    Question. Has DMFO done any studies comparing the cost of 
contracting for certain medical and support functions, rather than 
funding additional DOD infrastructure for this?
    Answer. DOD and Navy have done numerous studies for contracting 
functions and both Departments continue to do so. Prior to undertaking 
the Portsmouth project, an Economic Analysis compared the cost of 
direct care with discounted contract care. Across virtually every 
clinical area and for each beneficiary category, direct care at 
Portsmouth was found to be the best economic solution. DOD follows this 
process for each military treatment facility to determine the best 
economic solution.
    Question. Do you have any plans for consolidation of hospitals or 
clinics?
    Answer. Navy plans consolidating health care administration in the 
northeast. Also, Navy is closing NH Millington and downsizing three 
other hospitals at Groton, Corpus Christi and Patuxent River. Base 
Realignment and Closure resulted in the closure of naval hospitals at 
Philadelphia, Long Beach, Oakland, and Orlando. Navy also turned over 
F. Edward Ebert hospital in New Orleans to the Chief of Naval Reserve 
Forces retaining only a clinic in the building. On-going studies are 
reviewing the future roles of health care facilities worldwide. In the 
fiscal year 1998 budget submission, one project consolidates six troop 
medical clinics into one and two projects rightsize hospitals to 
clinics. Other consolidations may occur as Services decide on 
realignment or rightsizing of its forces and market conditions 
determine the best economic solution.
                       ussocom security measures
    Question. Mr. Robinson, please explain what kind of security 
measures are contained in your fiscal year 1998 budget request? Are 
these upgrades a result of the Khobar Tower bombing?
    Answer. The budget request contains two security improvement 
projects:
  --Hurlburt Field, FL: Perimeter Fence/Vehicle Barrier System ($2.45M)
  --Fort Bragg, NC: Security Upgrades ($500K)
    Both were identified during an OSD-directed review of security 
requirements last fall. Several other security upgrade requirements 
identified were satisfied with O&M or Procurement funding.
                 ussocom critical funding requirements
    Question. In the past few years, the Congress has been instrumental 
in adding MILCON projects outside the normal budget process. What 
efforts are you taking to ensure that your most critical funding 
requirements are met through the budget process?
    Answer. With one exception, our current MILCON investment program 
only allows funding for roughly $30 million in construction projects 
each year. We have determined that we need about double that amount as 
a continuing baseline to replace and renovate our aging facilities and 
to solve facility space deficits. Funding for MILCON investment has 
been necessarily limited within our total funding level in order to 
protect our force structure and readiness demands. Given a higher level 
of construction spending, we could begin to move projects from the 
unfunded into the funded program and achieve improvement to our 
operations and training capability in a much more reasonable timeframe. 
An excellent example is replacement facilities for the 4th 
Psychological Operations Group and the 96th Civil Affairs Battalion; 
these units are among our most heavily tasked organizations and also 
are among the last on Fort Bragg, North Carolina, to still be in World 
War II era wooden facilities.
    USSOCOM makes decisions on strategic planning, program, and budget 
issues through the Board of Directors--a group made up of the CINC, the 
Deputy Commander, the Commanders of our four component organizations, 
and the Assistant Secretary of Defense for Special Operations and Low-
Intensity Conflict. At this time, the board intends to fund our 
planning and design in fiscal year 1999 at a level which will support a 
program level, beginning in fiscal year 2000, of about $60 million per 
year in constant dollars.
                      streamlining infrastructure
    Question. Mr. Baillie, what actions has the Defense Logistics 
Agency taken to reduce and streamline its infrastructure in keeping 
with the overall downsizing of the Department of Defense? Are your 
MILCON requirements for fiscal year 1998 reflective of this 
restructuring?
    Answer. The Defense Logistics Agency (DLA) announced on April 15, 
1997, a new strategy to restructure its distribution depot system while 
maintaining readiness and affordability of its services. DLA has been 
reducing its distribution costs commensurate with the decline in 
military force structure for several years and has significantly 
reduced many of the direct costs of operations. This action, which 
began on April 15 and will be completed over the next several years, is 
intended to adjust the management overhead and reduce overall 
distribution infrastructure to recognize the changing way in which DLA 
has to do business to provide its military customers responsive and 
affordable support.
    In 1993 DLA's distribution management organization was comprised of 
four regional offices and a staff element at DLA headquarters. Today, 
the regional offices have been reduced to two. (Stockton, California 
(Defense Distribution Region West-DDRW) and New Cumberland, 
Pennsylvania (Defense Distribution Region East-DDRE)). Because 
additional measures must be taken, the first step in DLA's 
restructuring strategy is to realign, streamline, and further 
consolidate headquarters distribution management, eliminating 
duplication, reducing overhead costs, and thereby creating a more 
efficient single DLA Distribution Center.
    In May 1997, a site selection team began its analysis to determine 
the best single location for DLA's distribution management 
organization. Selection will be completed by September 1997. The total 
streamlining effort is expected to eventually eliminate approximately 
850 positions. This reduction will generate a projected annual savings 
of about $34 million in fiscal year 2000 and beyond.
    In addition to the Management Center, DLA operates 22 smaller 
distribution depots throughout the United States and Europe. DLA has 
been able to make great steps in reducing the number of depots through 
Base Realignment and Closure (BRAC) Commission decisions in 1993 and 
1995 from 30 depots in 1992 to 24 now (including Primary Distribution 
Sites (PDS's)); 13 in the Eastern Region and 11 in the Western Region. 
There will be 19 depots remaining after BRAC-designated depots have 
been closed.
    Although a considerable amount of excess storage space and 
inventories have been reduced at its distribution depots, DLA's 
downsizing has not kept pace with the 35-40 percent reductions in 
military force structure which have occurred within the Department of 
Defense since fiscal year 1988. To accelerate downsizing further, DLA 
has determined additional actions are required.
    Accordingly, the second step of the restructuring strategy calls 
for a program to subject all DLA distribution depots (excluding PDS's 
and those depots designated for closure by BRAC) to public-private 
competition on a site-by-site basis. DLA has selected this process as a 
fair and effective method of creating rapid and significant cost 
reduction in its shrinking distribution operations. Plans call for the 
new Defense Distribution Center, teaming with the depots, to be the 
Government's bidder for the depot work.
    DLA plans call for implementation to be completed by 2001, with 
projected savings in depot operating costs to be at least 20 percent. 
These savings and reductions will be over and above those generated by 
separate, additional downsizing and efficiency measures already 
planned.
    A similar restructuring effort was also announced for the Defense 
Reutilization and Marketing Service business area on April 10, 1997. 
Plans call for a 25 percent reduction in headquarters staffing and a 
reduction in Defense Reutilization and Marketing Offices from 148 to 
approximately 60 major sites in the continental United States to be 
effected over the next two years.
                  fiscal year 1998 milcon requirements
    Question. Are your MILCON requirements for fiscal year 1998 
reflective of this restructuring?
    Answer. Yes. Our strategy is to invest only in those facilities 
that provide a long term return on investment and is in accordance with 
our strategic plan.
                           child care center
    Question. Describe for me the requirement for a Child Care Center 
in Richmond, Virginia, as contained in the fiscal year 1998 Budget 
request?
    Answer. The feasibility study for the construction of a child care 
facility at Defense Supply Center Richmond (DSCR) went through several 
rigorous reviews to include a needs assessment of the population and 
assessment of available child care centers in the local area. A needs 
assessment was conducted in June 1992 with a total of 3,699 surveys 
distributed and with a 21 percent (789) return. Of those responding, 37 
percent (292) indicated an immediate need for child care facilities.
    The Department of Defense (DOD) views early childhood programs as a 
workforce priority. The emphasis is on providing personnel at least one 
affordable options for a high quality, safe and developmentally 
appropriate early childhood experience. National accreditation is 
required by Public Law 101-189, Title XV, Military Child Care, 
Accredited Child Care Center.
    In the Richmond area, child care demand is high in the civilian 
community. Nationally accredited civilian child care centers within an 
8 mile radius of DSCR, which is located in an industrial area outside 
the Richmond metropolitan city area, do not offer the capacity to meet 
the needs of our DOD population. Within this radius, none of the 
accredited child care centers offer infant care. When an accredited 
civilian facility in the area recently opened, it rapidly filled to 
capacity in less than 8 weeks.
                            personnel levels
    Question. How many military personnel are assigned to this 
facility? Does this number justify building a child care center when 
child care is available in the local community?
    Answer. The facility is designed to support the 2,940 DOD personnel 
assigned to DSCR. Of these, 58 are military and 2,882 are DOD 
civilians. It will also be available to the 37 military families 
residing on the installation (DSCR) but are assigned elsewhere.
    Department of Defense policy states the purpose of child care 
programs is ``to assist DOD military and civilian personnel in 
balancing the competing demands of family life and the accomplishment 
of DOD mission and to improve the economic viability of the family 
unit.'' Priority is given to working parents, both military and 
civilians.
    DLA strongly supports this MILCON project for the child care center 
at DSCR. This initiative supports key work/life issues impacting on 
personnel performance, the corporate ``bottom line,'' and successful 
accomplishment of our combat support mission. Child care programs 
support the President's initiatives on the Family Friendly workplace, 
federal policies on early childhood development, and the National Goals 
for Education 2000.
                       review of dfas operations
    Question. Mr. Carnes, I understand that the DOD Comptroller has 
directed DFAS to reexamine its operations in light of new business 
practices that have been adopted. I further understand that this may 
impact the total number of DFAS facilities required by DFAS. When is 
this review scheduled to be complete?
    Answer. Preliminary results of the study will be presented to the 
DOD Comptroller in the summer of 1997.
                    fiscal year 1998 milcon request
    Question. I am concerned about the requirement to renovate the 
three centers in the fiscal year 1998 budget. Why should we appropriate 
money for these projects when the DOD Comptroller certification has not 
happened yet and the review process is still ongoing?
    Answer. Funds should be appropriated for the renovation of three of 
our Operating Locations, as requested in the President's fiscal year 
1998 budget proposal, for two reasons. First, we expect that during the 
summer the DOD Comptroller will certify the need to renovate certain 
Operating Locations, but that this certification will occur after the 
Subcommittee has marked up the appropriation. Thus, funds would not be 
available if the Subcommittee required certification prior to the 
appropriation.
    Second, the appropriation of funds will neither obviate nor 
supersede the requirement that the Comptroller certify as to the need 
for these facilities in order to spend funds to renovate them. However, 
should the Subcommittee not appropriate the funds but the Comptroller 
certify as to the need for the facilities, the absence of the 
appropriation would make it impossible for us to renovate those 
facilities.
                                 ______
                                 

                 Questions Submitted by Senator Stevens

            replacement for bassett army community hospital
    Question. The Army intends to build a 50-bed hospital at Fort 
Wainwright, Alaska. What does the timeline look like for the 
construction of this new facility?
    Answer. Bassett Army Community Hospital will be a 32-bed facility, 
not a 50-bed facility. Following is the current scheduled timeline for 
the programmed fiscal year 2000 design and construction of this 
facility:
  --35 percent design complete: 24 July 1998;
  --RTA for Construction: 1 September 1999;
  --Contract Award: 30 November 1999;
  --Construction start: April 2000.
    Question. What is the approximate size of the facility and what 
part will it play in the Alaska health care partnership?
    Answer. The replacement facility will be a 32-bed hospital. Bassett 
Army Community Hospital does not ``directly'' play a part in the Alaska 
Federal Health Care Partnership. It does support the Partnership, as 
the new facility design continues to support current levels of service 
at Bassett. The existing Alaska Federal Health Care Partnership is 
primarily an inter-agency contracting support agreement. There are no 
TRICARE wrap-around contracts in Alaska. DOD depends on individual 
provider contracts for TRICARE services. Through the Alaska Federal 
Health Care Partnership, federal agencies can more effectively 
negotiate as a unit in Alaska's non-competitive environment.
                          elmendorf tank farm
    Question. Could you please explain how DFSC intends to spend the $3 
million that we added for planning and design for the Elmendorf Tank 
Farm? I understand that money was intended for design and planning, not 
a new hydrant system.
    Answer. These funds will be used to install and upgrade pipelines 
to improve fuel distribution to current and planned tanks and hydrant 
fuel systems at Elmendorf AFB, AK. Congress added the $3 million to the 
Defense Agencies' construction account, not the planning and design 
account. Neither information in congressional reports nor any 
communication with DLA described the purpose of these funds. Lacking 
any guidance, DLA developed a project, after the funds were 
appropriated, based on information provided to the staff of the Senate 
Armed Services Committee on April 26, 1996, when they initially asked 
us about additional needs at Elmendorf AFB. At that time, we said these 
funds would be used to improve the base's fuel distribution pipelines 
to support the construction of a $21.7 million fuel farm replacement 
project programmed for fiscal year 1998. We formally notified the 
appropriate Congressional committees of the scope of this project on 
February 10, 1997, before beginning design work.
    Design of these pipeline improvements is 30 percent complete. 
Design of the 250,000-barrel tank farm is 50 percent complete. DLA 
funded these designs from the Defense Agencies Planning and Design 
accounts. If Congress approves the fiscal year 1998 project, we will 
solicit one construction contract to accomplish both projects. The 
expected contract award date is March 1998.
                           whittier tank farm
    Question. What is DFSC schedule to turn back to the Army the 
Whittier Tank Farm Facility? What potential problems do you envision 
with environmental concerns?
    Answer. DFSC completed fuel contract operations at Whittier on May 
30, 1997. All DLA product has been removed and the fuel tanks cleaned. 
DFSC is currently coordinating the schedule for return of the Whittier 
facility with the Army. We understand the Army intends to make the 
Whittier facility available for lease to interested commercial 
activities in the near future.
    DFSC will require continued access to the Whittier facility for 
environmental assessment and any required remediation during the 
initial portion, at least, of the proposed lease period. They are 
developing a Memorandum of Understanding (MOW) with the Army addressing 
continued access and lease requirements in order to limit DOD's 
environmental liability to only remediation required as a result of 
past DFSC fuel operations. The environmental assessment and any 
required remediation of the terminal is a long-term process (probably 
3-5 years). DFSC will need unconstrained access for the environmental 
assessment/remediation contractor during that time.
    DFSC has completed the site characterization phase; the risk 
assessment will be finished in 1998. Based on the results of the risk 
assessment, cleanup standards will be established, and construction of 
any required remediation system will proceed.

                         conclusion of hearings

    Senator Burns. With that, I thank you for coming this 
morning and we appreciate your participation and your time.
    These proceedings are recessed.
    [Whereupon, at 10:45 a.m., Thursday, May 8, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Baillie, Frederick N., Executive Director, Business Management, 
  Department of Defense..........................................   101
    Prepared statement...........................................   110
Bradley, Brig. Gen. John A., Deputy to the Chief, Air Force 
  Reserve, Department of the Air Force, Department of Defense....    35
Brunelli, Capt. John, Deputy Chief, Naval Reserve, U.S. Navy, 
  Department of the Navy, Department of Defense..................     1
Burns, Hon. Conrad, U.S. Senator from Montana, questions 
  submitted by...................................................
  53, 92, 119....................................................

Carnes, Bruce M., Deputy Director for Resource Management, 
  Department of Defense..........................................   101
    Prepared statement...........................................   113
Claypool, Brig. Gen. Robert G., Deputy Assistant Secretary of 
  Defense (Health Services Operations and Readiness), Assistant 
  Secretary of Defense for Health Services Operations and 
  Readiness, Department of Defense...............................   101
    Prepared statement...........................................   106
Coleman, Rodney A., Assistant Secretary of the Air Force for 
  Manpower, Reserve Affairs, Installations and Environment, 
  Department of the Air Force, Department of Defense.............    35
    Prepared statement...........................................    37
Craig, Hon. Larry E., U.S. Senator from Idaho, prepared statement     4

Faircloth, Hon. Lauch, U.S. Senator from North Carolina, 
  questions submitted by.........................................    93

Lupia, Maj. Gen. Eugene A., Air Force Civil Engineer, Department 
  of the Air Force, Department of Defense........................    35

Murray, Hon. Patty, U.S. Senator from Washington, questions 
  submitted by...................................................
  30, 54.........................................................

Nash, Rear Adm. David, Chief, Naval Facilities Engineering 
  Command, U.S. Navy, Department of the Navy, Department of 
  Defense........................................................     1

Pirie, Robert B., Jr., Assistant Secretary of the Navy, 
  Installations and Environment, Department of the Navy, 
  Department of Defense..........................................     1
    Prepared statement...........................................     7

Reid, Hon. Harry, U.S. Senator from Nevada:
    Prepared statement...........................................    64
    Questions submitted by.......................................
      33, 58, 98.................................................
Robinson, Gary W., Command Engineer, U.S. Special Operations 
  Command, Department of Defense.................................   101
    Prepared statement...........................................   102

Stevens, Hon. Ted, U.S. Senator from Alaska, questions submitted 
  by.............................................................   123
Stewart, Maj. Gen. Joseph, Deputy Chief of Staff, Installations 
  and Logistics, U.S. Marine Corps, Department of the Navy, 
  Department of Defense..........................................     1

Walker, Robert M., Assistant Secretary for Installations, 
  Logistics, and Environment, Department of the Army, Department 
  of Defense.....................................................    61
    Prepared statement...........................................    68
Weaver, Brig. Gen. Paul A., Deputy Director, Air National Guard, 
  Department of the Air Force, Department of Defense.............    35



                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF DEFENSE

                            Defense Agencies

   assistant secretary of defense for health services operations and 
                               readiness

                                                                   Page
McChord Air Force Base, medical training at......................   118
Medical/dental clinic, Everett, WA...............................   117

                 defense finance and accounting service

Financial data, movement of......................................   116

                        defense logistics agency

Distribution and supply center investments.......................   111
DLA child care center............................................   118
Fuel mission responsibilities, new...............................   110
Military construction request....................................   110

                    u.s. special operations command

Milcom Program...................................................   102
Purpose..........................................................   102

                      Department of the Air Force

Aviano AB, Italy.................................................    46
Budget request:
    Air Guard....................................................    52
    Family housing...............................................    51
Milcon backlog...................................................    49
Privatization initiative, military housing.......................    48
Reserve components:
    Budget for...................................................    48
    Wartime contributions of.....................................    50
Survival school, USAF............................................    51

                         Department of the Army

Active and Reservce Forces, reduction to.........................    87
Barracks projects overseas.......................................    85
BRAC.............................................................    85
Budgets, Guard and Reserve.......................................    91
Child development centers........................................    87
Family housing improvement fund..................................    88
Fort Carson, housing privatization...............................    91
Fort Leavenworth, disciplinary barracks..........................    90
NATO, planning/expansion of......................................    86
Quality of life issues...........................................    88
SOUTHCOM, relocation of..........................................    89

                         Department of the Navy

Adak Naval Air facility..........................................    22
Bangor, WA, housing initiative...................................    20
Base closure.....................................................    27
    And realignment..............................................     6
BRAC environmental cleanup.......................................    27
Community facilities.............................................    28
El Toro base closure.............................................    20
Ford Island development plan.....................................    25
Housing construction budget......................................    19
One plus one barracks requirement................................    25
Port of Long Beach...............................................    26

                                   (all)