    [House Hearing, 106 Congress]
    [From the U.S. Government Publishing Office]

                MILITARY CONSTRUCTION APPROPRIATIONS FOR FY 2000

                                    HEARING

                                    BEFORE A

                               SUBCOMMITTEE OF THE

                            COMMITTEE ON APPROPRIATIONS

                             HOUSE OF REPRESENTATIVES

                            ONE HUNDRED SIXTH CONGRESS

                                   FIRST SESSION
                                     _________

               SUBCOMMITTEE ON MILITARY CONSTRUCTION APPROPRIATIONS

                            COMMITTEE ON APPROPRIATIONS

                       C. W. BILL YOUNG, Florida, Chairman

     RALPH REGULA, Ohio                    DAVID R. OBEY, Wisconsin
     JERRY LEWIS, California               JOHN P. MURTHA, Pennsylvania
     JOHN EDWARD PORTER, Illinois          NORMAN D. DICKS, Washington
     HAROLD ROGERS, Kentucky               MARTIN OLAV SABO, Minnesota
     JOE SKEEN, New Mexico                 JULIAN C. DIXON, California
     FRANK R. WOLF, Virginia               STENY H. HOYER, Maryland
     TOM DeLAY, Texas                      ALAN B. MOLLOHAN, West Virginia
     JIM KOLBE, Arizona                    MARCY KAPTUR, Ohio
     RON PACKARD, California               NANCY PELOSI, California
     SONNY CALLAHAN, Alabama               PETER J. VISCLOSKY, Indiana
     JAMES T. WALSH, New York              NITA M. LOWEY, New York
     CHARLES H. TAYLOR, North Carolina     JOSE E. SERRANO, New York
     DAVID L. HOBSON, Ohio                 ROSA L. DeLAURO, Connecticut
     ERNEST J. ISTOOK, Jr., Oklahoma       JAMES P. MORAN, Virginia
     HENRY BONILLA, Texas                  JOHN W. OLVER, Massachusetts
     JOE KNOLLENBERG, Michigan             ED PASTOR, Arizona
     DAN MILLER, Florida                   CARRIE P. MEEK, Florida
     JAY DICKEY, Arkansas                  DAVID E. PRICE, North Carolina
     JACK KINGSTON, Georgia                CHET EDWARDS, Texas
     RODNEY P. FRELINGHUYSEN, New Jersey   ROBERT E. ``BUD'' CRAMER, Jr.,
     ROGER F. WICKER, Mississippi            Alabama
     MICHAEL P. FORBES, New York           JAMES E. CLYBURN, South Carolina
     GEORGE R. NETHERCUTT, Jr.,            MAURICE D. HINCHEY, New York
    Washington                             LUCILLE ROYBAL-ALLARD, California
     RANDY ``DUKE'' CUNNINGHAM,            SAM FARR, California
    California                             JESSE L. JACKSON, Jr., Illinois
     TODD TIAHRT, Kansas                   CAROLYN C. KILPATRICK, Michigan
     ZACH WAMP, Tennessee                  ALLEN BOYD, Florida
     TOM LATHAM, Iowa
     ANNE M. NORTHUP, Kentucky
     ROBERT B. ADERHOLT, Alabama
     JO ANN EMERSON, Missouri
     JOHN E. SUNUNU, New Hampshire
     KAY GRANGER, Texas
     JOHN E. PETERSON, Pennsylvania

                     James W. Dyer, Clerk and Staff Director

                                      (ii)

                MILITARY CONSTRUCTION APPROPRIATIONS FOR FY 2000

                                  ----------

                                           Thursday, February 25, 1999.

                             DEPARTMENT OF DEFENSE

                                    WITNESS

    HON. JOHN. J. HAMRE, DEPUTY SECRETARY OF DEFENSE

                           Statement of the Chairman

        Mr. Hobson. Since my ranking member is here and we have
    members on both sides of the aisle here, we are going to start.
        I would like to mention a couple of things before we start.
    This is our first official hearing of this Committee. We are
    going to start hopefully on time each time. We are starting
    about 3 minutes late. We will all try to be here on time.
        We are going to recognize members for questioning, except
    the ranking member. No matter when he arrives, he will have the
    first order of questioning as we go, because I think as the
    ranking member, there is a certain privilege that goes with
    that.
        Mr. Dicks. We agree with that.
        Mr. Hobson. I think this is beginning to work pretty well.
    Members will then be recognized for questions as they have
    arrived. We will try where we can, at least in the first round,
    to be flexible with time, but I would like in the beginning of
    questions to just do it like 5 minutes, and then that gives
    everybody hopefully a chance to ask something. Then we will
    come back, but we will try to be flexible.
        We welcome questions for the record. Please provide two
    copies to the staff. We have name plates out for all the
    members.
        I want to say that we have got, I think, a good Committee,
    Dr. Hamre. They are all very interested in learning. We went on
    a trip recently overseas to try to see what is over there. Most
    of us know what is in our districts, but seeing the world,
    there is no constituency for that, generally, other than
    ourselves. So we want to get everybody acquainted with that.
        We want to thank you for coming. We have met a number of
    times. I have some concerns with the budget request and the
    gimmicks that went on. Overall, it is a 37 percent reduction
    from last year's enacted.
        I know you. I know your personal commitment to all of this,
    to quality of life and our service members, but overall, DOD
    continues to put these issues, as they relate to this
    Subcommittee, I think, as kind of the bottom of the list. I
    don't think people and how they are housed and their quality of
    life should be at the bottom of the list. I think, frankly, all
    those airplanes aren't going to function too well and all those
    other pieces of equipment in the Navy or wherever won't
    function as well if the troops aren't happy and have a quality
    of life that they should have.
        All right. You are going to get us out of this this year. I
    am hoping you are going to say here is $3 billion more and
    let's go while you are here.
        Dr. Hamre. I wish I could do that.
        Mr. Hobson. But there is a problem because if some place
    along the way now this $3 billion magically arrives, or any
    part thereof, I think by doing this we have created a Pandora's
    box or something where that $3 billion--it is already $3
    billion, and the next year over, and so we are going to do this
    $3 billion and let that sit. Then it becomes a game. We all
    know there is a certain amount of gamesmanship on this. It was
    unfortunate that this occurred, but I am going to let you
    comment about that.
        Mr. Olver, do you have any comments that you would like to
    make?

                     Statement of the Honorable John Olver

        Mr. Olver. Sure. Thank you, Mr. Chairman. I will comment
    very briefly.
        I certainly want to welcome you, Mr. Secretary, and I
    certainly appreciate your coming to discuss with us the overall
    Department of Defense budget. As the ranking member of Military
    Construction, my first concern is what is happening in military
    construction in the broader context of the defense budget. And
    I would like to just mention a few of those along the way.
        One of them is, of course, the concept of advanced funding,
    which to me seems like a semantic matter because it seems much
    more like deferred funding to me rather than advanced funding
    for items that are of great concern to the people and the
    quality of life out there in the field. It seems to be a
    gimmick to balance books, and I don't particularly like
    gimmicks. It has already been mentioned by the chairman.
        Secondly, I am concerned about finding the appropriate role
    for privatization, in family housing, particularly. I have a
    lot of examples out there and a lot, it seems to me, to think
    about in that area. And I am concerned about the relationship
    between the budgets and projects that we have here and the
    future rounds of BRAC which have been proposed by the
    Department.
        Now, I think that members on both sides--I know all the
    members have concerns in different ways about the same issue.
    So that is at least a little bit just to indicate the focus of
    my concerns.
        Mr. Hobson. Dr. Hamre.

                    Statement of the Honorable John J. Hamre

        Dr. Hamre. Thank you very much, Mr. Chairman. I am
    genuinely grateful for being invited to come. I look forward to
    this hearing. Not too many other hearings do I look forward to,
    but I actually look forward to this hearing, in large measure
    because it is such a--the setting is intimate and
    conversational. You don't normally have an opportunity like
    that. It lets us, I think, frankly, to be a little bit more
    candid about the program we give you and the problems we
    present.
        Mr. Hobson. This is an open hearing.
        Dr. Hamre. It is an open hearing, and I know that I have
    got people who are going to be reporting back to their
    respective offices about what I say.
        If I may take just a moment first to frame the larger
    context, to explain why we didn't give you a program this year,
    that clearly is a problem for you, and I regret that.
        We are really at the transitional year. We are ready to
    enter the new millennium. We are ready to enter a new century.
    And one of the things the Secretary did when we were building
    the budget this year is he said let's pause for a second and
    say, you know, what shape are we in at the end of this century?
    And are we up to the challenges that we are going to meet in
    the next century?
        Let me, if I could, I think there are reasons to be very
    proud of how we are ending up at least this decade of this
    century. We had a number of military operations this last year.
    The one operation, Desert Fox, which was in December, where we
    attacked Iraq, was the most flawless military operation I have
    ever seen. It went exceptionally well. I know of only one
    mission that was aborted because of mechanical problems.
        The accuracy of our troops and the missiles was phenomenal.
    Collateral damage was virtually non-existent. So the troops did
    extremely well.
        I think in a different dimension I look and the United
    States still remains the glue that holds together NATO and,
    frankly, the glue that holds together the U.N. in terms of
    security forces. Some people resent it a bit because we are the
    big power. We are now, not affectionately, called ``the
    hyperpower'' by some of our allies, but nonetheless we remain
    the glue that holds the alliance together, and I think we
    should take pride in the fact that this country still is
    respected for that.
        I am so amazed and impressed at how, after 10 years of
    drawdown--and our budget is 40 percent smaller than it was 20
    years ago. We have been able to retain the professional core
    that really represents the quality of this military. It really
    was done only because of the tremendous support we have had in
    Congress, especially these last several years. I don't think we
    could have done that.
        We certainly couldn't have gone through the transition
    without the transition benefits that Congress designed and
    engineered and gave to us to make sure we could do that.
        Our professionalism is, really, I think undiminished. Those
    are all pluses in which we take a great deal of pride.
        In looking to the future, I think we are postured in a way
    to jump off and deal with some of the big challenges of the
    future: weapons of mass destruction, cyberterrorism, national
    missile defense. We have a funded program here that we are
    finally presenting to you.
        Mr. Hobson. I don't know if Norm and I would agree with you
    after the meeting we sat in on. You weren't there?
        Mr. Dicks. I was there part of the time.
        Dr. Hamre. Believe me, I am not saying the world is a nicer
    place. If you are referring to, I think, the intelligence
    briefing, it is in many ways a much more dangerous place. There
    are lots of bad guys out there. So the challenges are even
    harder, but at least I think that we are postured to try to
    address them. We are addressing them.
        I think we have retained, despite the drawdown, a spectrum
    of capabilities so that we can handle everything from a Desert
    Storm again down to confronting an Osama bin Laden. And I think
    that we have created--in large measure, Congress has pushed us
    to this--an innovative, professional climate in our military
    that is really astounding. If you go to our war colleges, you
    will see people thinking about warfare of the future that just
    will set us apart and well above anything we will confront. So
    we take a great deal of pride in that.
        But it is not without our problems, and we certainly do
    have challenges at the Department. Recruiting is harder than
    ever. We are having a hard time recruiting. The Army is falling
    short this quarter. With the economy as strong and as robust as
    it is, it is really tough to recruit. And retention is down,
    and you know that. Those of you who have military installations
    and you go talk to them, it is really hard.
        Fortunately, I think the President has asked for changes in
    both retirement benefits and pay. Congress has responded very
    quickly on that. I think that will be of great help, but that
    is still a real problem. I will be honest. Our forces are
    strained with all the operations work, and it is very tough for
    us to think about another operation. We will do it, however, if
    the President says we are going to do it, if we decide we are
    going to have to, but we are stretched thin. It is showing.
        Just this morning, I was talking with the vice chairman,
    and some forces that have been deployed forward are overbooked,
    and the question was: Did the Marine aviation unit get to go
    home first or did the Navy aviation unit get to go home first?
    And we decided on the Marine aviation because it has to get
    redeployed in May. I mean, it is that sort of a trade-off that
    we are now looking at. Our forces are really stretched.
        Our bases are threadbare. You have seen that when you go
    out. You see our bases are threadbare. They have taken the
    brunt of the build-down, that and our investment accounts.
        Mr. Hobson. There is going to be a vote and a swearing-in
    of a new member. That shouldn't take too long.
        It is at 10:00. I heard the bells, and I wanted to bring
    that up.
        Dr. Hamre. Our bases are threadbare because we have tended
    to economize by not reinvesting in that capital infrastructure.
    We have done the same with our hardware. We are not investing
    in replacement weapons systems like we should, either. And so
    we come to this turning point in the century with a threadbare
    infrastructure.
        Unfortunately, that sits square on your lap. This committee
    has done more, frankly, to try to keep that up in the last 3
    years than anyone else.
        So when we approach this turning point, it is with a lot of
    pride, with a lot of good capabilities, but some genuine
    concern about what we have to do for the future. So this fall,
    the Secretary, along with the Chiefs, went over and spent a
    fair amount of time with the President trying to get additional
    resources. And we were glad that he gave us additional
    resources both for 2000 and for the 5-year plan. And the
    President submitted a budget, and some people will argue
    whether it is enough. I know that that is still a big debate we
    still have to have, but the President's proposal would increase
    it by $112 billion.
        The outyears were relatively easy. The budget year, which
    is always the case, was hard because the budget year was
    subject to the caps. The caps, of course, go through 2002, I
    think it is. But they really were hard in 2000. And so in order
    to provide the additional dollars--initially, the services
    wanted about $17 billion for 2000. We decided what could we
    defer. We got it down to about $14 billion. We then were able
    to make some other policy choices.
        For example, we thought it was probably a good idea to
    defer the pay table reform by 6 months so as not to have two
    pay raises in the same fiscal year and things of that nature.
    So we got the bill down so it was at about $12.5 billion. But
    we needed $12.5 billion, and the caps just were there. They
    were like $4 billion. So we got $4 billion worth of cash. We
    were allowed to keep inflation savings, inflation and fuel
    savings. That was about $3 billion. We were short $4.5 to $5
    billion.
        We wanted to try to propose emergency funding, for example,
    for Bosnia, for Bosnia operations, and OMB, Jack Lew at OMB,
    said, look, I have had so many sessions with Congress, there is
    no way we are going to do an emergency designation. You know,
    we agreed on that when we built our budget last year.
        So we confronted this terrible problem about how we get
    additional spending money, purchasing power, under the caps.
    And then this idea of advanced funding emerged, which I happen
    to agree with Mr. Olver sounds like deferred funding, not
    necessarily advanced funding. But this idea of advanced funding
    came up. We basically said we will keep exactly the same
    program, so we didn't cancel any projects. But we said we will
    only put the cash up front for the first year, and then we will
    pay for it the second year, next year.
        So when you look at our profile, you know, it is $5 billion
    this year and goes up to $10 billion next year to make up for
    it.
        Do we think this is a good idea? No. I would much prefer
    that we not be doing this. Was it an avoidable idea? And that
    was the problem. As long as we were limited to having to put a
    program together and do it under the caps, this was the way to
    do it.
        Now, the difficulty it presents to you is this would work,
    which is what differentiates this from a gimmick. It is not a
    gimmick in the sense that it is just some kind of a p.r.
    device. This actually would work if you appropriated it the way
    we ask for it. But it has lots of problems, and it is very
    difficult. One of the things in my discussions with Staff
    Director Dawson is how do we help you work this very
    significant problem, because we know that it is a tough problem
    in the House. It is a tough problem in the Senate.
        Mr. Hobson. We need some creative financing, I guess.
        Dr. Hamre. We need creative financing without being
    gimmicks, you know? And this was as close as we could get, and
    it still is a difficult thing. So we do want to talk about
    that.
        As I said to you before privately, we gave you a hot foot,
    you know, with the budget we sent up here this year. And while
    it is possible to produce a MilCon program--and the underlying
    program I think is fairly good--it means you have to buy into
    this financing strategy, which isn't really the way we want to
    go. It is certainly not the way we want to go in the long run.
    We didn't propose this to you as a permanent change. We
    proposed it as a one-time expedient. So we are anxious to work
    with you to find a way to do that.
        Now, if I may, Mr. Chairman--and I know there is short
    time--I will just continue to say a few other things while
    there is time. Is that all right? Or would you prefer to break?
        Mr. Hobson. No, I don't want to break. The vote will be at
    10:00.
        Dr. Hamre. Okay. May I just say something first about BRAC?
    We are, as you know, implementing the four rounds. The first
    two have totally closed. We have finished up those BRAC rounds.
    BRAC Round 3 will be done this summer. We will finish BRAC
    Round 3 in July. BRAC Round 4 is in implementation now, and it
    will continue. It won't end until 2001.
        I know there have been questions raised: Have you really
    saved the money you said you were going to save? We have
    claimed and argued that we would be saving over the period $14
    billion and on an annual basis about $5.6 billion.
        The General Accounting Office did an independent review of
    our numbers, and they came back with a report that said we
    saved more than we claimed and the costs were less than we said
    they were going to be. So I think there is a very clear
    message.
        Mr. Hobson. You must have sent some of your guys.
        Dr. Hamre. I was surprised, I must confess. I was
    surprised. But I think it is true. We know that we save money
    when you can close infrastructure that you don't need. And we
    do know that we have excess infrastructure now.
        Now, I also know it is painful for every Member of Congress
    to go through this. I know of the problems that you have at
    Springfield.
        Mr. Hobson. I will give you some success stories. I just
    read about Newark Air Force Station, which is a positive. I
    will give you another one. Mr. Olver has got one, too, I think,
    but also in Dayton, Tony Hall and I were all upset about
    carrying----
        Dr. Hamre. Yes.
        Mr. Hobson. That has, I think, been a success.
        Dr. Hamre. Yes. It turns out on the average in 3 years we
    are employing 75 percent of the employment that was there the
    day we closed it, and in 5 years we have more. That is our
    track record.
        Mr. Hobson. Those are little installations.
        Dr. Hamre. They are.
        Mr. Dicks. Would you just yield for a second? I really
    strongly support what the administration is trying to do here,
    and I have got a State where we have a lot at risk. We think
    that our military value is very high. But one thing I have
    learned over 30 years up here, military bases don't pay taxes
    locally, and local communities, I think--you know, where they
    have to go through this transition--sometimes are better off
    because the property goes on to the private tax rolls and the
    local communities wind up getting more money because the
    Government doesn't pay any local property taxes.
        I think from a defense perspective, from our other
    committee, the Subcommittee on Defense and National Security,
    if we don't do another round of base closures, we are making a
    serious mistake. The administration deserves to be supported.
    We have got to get over the politics of what happened a couple
    years ago and move on. This to me makes a great deal of sense,
    and I hope we can support it.
        Mr. Hobson. And I think the point you made, we have to
    figure out how to get over the politics of it. There are very
    deep bruises among people on both sides of the aisle. This is
    not a Republican partisan thing. This is on both sides of the
    aisle.
        Dr. Hamre. The tempo thing really did create a lot of
    problems for people. I think we had a very important
    development this year. What we said was the President said we
    want you at least to privatize these things in place. We said
    we can't do that, but we will open them for competition. And if
    they can win work, we will keep it there. But if they can't win
    work, we will have to move it. And they said okay, fine. And we
    did. We conducted three competitions, and in each case,
    frankly, the debt was lost.
        Now, we learned a lot. The first round, frankly, the first
    round was I think skewed because we didn't understand how to do
    it, and we made some mistakes. We certainly learned with the
    next two rounds, and we had some tremendous competitions in the
    work at McClellan that involved Hill and the engine work at San
    Antonio that went up to Oklahoma City. The taxpayer is going to
    save over $3 billion from those competitions.
        So even though it was probably the wrong way to get going
    and it really undermined people's confidence in the base
    closure process, it turned out to be a real plus, I think, for
    the American taxpayers.
        [Prepared statement of the Honorable Kay Granger follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. Granger. Let me say I was mayor when the base closure
    announcement to close Carswell was made. I had taken office a
    month before. And then I chaired the Carswell Re-Use Authority
    that worked on re-use. I thought that the process for re-use
    was horrible. It is now a joint reserve base. It is extremely
    successful and a model for jointness. But had we been left with
    that base as closure, it would have taken 20 years. There was
    no process to turn it over to the community. It was a very
    difficult, cumbersome, overly slow process that stopped
    redevelopment for years.
        So if we are going to have another base closure round, for
    goodness sakes, we need to examine not just the process of
    making a decision but the process of allowing a community to
    use their----
        Dr. Hamre. May I comment on that? I saw a transition in the
    way the Department thought about base closures. The first
    round, even into the second round, the thinking that really
    dominated everybody was: These are wonderful properties, there
    is lots of value here, let's milk these things and really get
    their worth out of them. So that was really the mind-set. We
    really were thinking that there were literally, you know, $3 or
    $4 billion worth of value in these properties. And that, of
    course, contributed to the mind-set that said: Aren't you
    people lucky we are going to give you a base? Of course, we
    didn't do the job we needed to.
        Then we shifted. We started to realize this was really
    putting an enormous burden on these communities. These had been
    our partners throughout the Cold War. We asked a lot of these
    communities. And when we went off for Desert Storm and when our
    troops came back home, they welcomed them with open arms. And
    it isn't fair just to walk away from those communities and say,
    well, you now owe us for the bases we are going to leave you.
        So we made a very specific shift in our thinking that,
    first, the community owns our support when we walk away and,
    second, just as good stewards of public resources, we have got
    to get these things back on the tax rolls.
        So you have seen a very specific and definite shift. We now
    consciously go out and try to work and build base re-use
    committees and to try to get them transferred as soon as
    possible. I won't say we are perfect, and we aren't. But we
    have definitely changed, and I think--and I know, Mr. Farr, you
    have worked very closely with the base re-use committee for
    Fort Ord to try to make this work.
        Mr. Farr. If you would yield, I would like to comment on
    this. I deal with base closure every single day, and I have
    been in Congress for five and a half years. It is because you
    closed the biggest base in the country--Fort Ord, in Monterey,
    California.
        You know, there are two systems here. There is the model
    that leads to what bases are we going to close, and that is a
    Department of Defense decision, and then it is reviewed. But
    where we need to rewrite the law is, after the decision has
    been made, this process has to be improved--you do not have a
    good law on that.
        You have got to start thinking differently. There's two
    ways to do it. You either give the property away. It is all
    taxpayer property, anyway, and you are giving it to local
    entities. Or be in partnership with them. You say we will go
    with you on this. We won't sell you the land because the
    cleanup costs are so big, but we will just let you develop it,
    and whatever money you make off of it, we will take a share. I
    mean, that is essentially the way the private sector does this
    stuff.
        You could move these things a lot faster if you did that. I
    want to be involved, and I think there are others here who have
    been in this process. We need to rewrite the re-use law. It is
    based on a bunch of law that started in 1947 on how we dispose
    of excess Federal property, and they tried to apply it to base
    closure. And it is not disposing of excess property. It is
    essentially a new economic re-use. And I think there is,
    frankly, a great application between base re-use and
    infrastructure development in all the countries that we are in
    with peacekeeping forces. If we are going to get Bosnia and
    Herzegovina or Kosovo back on their feet so that the troops can
    get out in a reasonable period of time, we are going to have to
    have the economic development, and where are we learning to do
    some of that stuff? We are learning how to do it with the small
    businesses and base closure.
        I think if we can develop some expertise, we can go into
    these countries on the civilian side and say here is what we
    have learned, here is what you have got to do.
        Mr. Secretary, you have got to look----
        Dr. Hamre. Yes, I am going to get to your environmental.
        Mr. Farr. Yes. You have got to look at something that is
    going on right behind your back right now. The Department of
    the Army with the agreement of Department of Justice, pursuant
    to a court case--I haven't read the opinion, and I think they
    are erring too much on the side of caution on this--that now
    all the base cleanup process will go through the Superfund
    process. And that means transfers that all that are now in
    process, properties that are now complete, where you find
    suitability to transfer, are now going to have to be stopped at
    this moment and started over again, which is about another year
    or two of delay and an incredible amount of cost to clean up.
    And that decision--I am having the Secretary of the Army in my
    office tomorrow with DOJ. They have given the total enforcement
    responsibility to the EPA. The EPA can call the shots on base
    cleanup. It leaves both the community and the military very
    vulnerable to what is essentially EPA's bureaucracy.
        Dr. Hamre. I didn't know anything about it.
        Mr. Farr. I know. Nobody knows about it. It's got national
    ramifications. So I would hope that you would look at it.
        Dr. Hamre. I will.
        Mr. Farr. Lastly, one of the things that I am really
    impressed with, you know, as we travel around--and I have IMET
    land extended IMET program at the Naval Postgraduate School. I
    am really impressed with the amount of education that we are
    giving to foreign military officers, who are very competent.
    You have to be impressed with the officers that we met in
    Truesdale, the camp. We have some allies that are really smart.
        We need to stop this 9-1-1 idea that Americans say, you
    know, we have to respond to everything. We ought to try to do
    more burdensharing by doing more training. I think also--
    because you have developed this system under Secretary Perry of
    buying commercial off-the-shelf stuff. Why don't we apply that
    same principal to base operations? So you contract with
    municipal entities to do all your roads and sewers----
        Dr. Hamre. One of the things I want to talk to you about is
    this privatization of the utilities.
        Mr. Farr. We have done it on the procurement side. We ought
    to do it on the operations side.
        Dr. Hamre. I would be anxious to talk to you about that.
        Mr. Farr. I think there is significant saving to it and
    better quality-of-life issues for the bases.
        Dr. Hamre. I think that is right. I would be very anxious
    to talk about that.
        Mr. Hobson. I tried to do it not too long ago on utilities;
    OMB didn't like it. But it is going to force some of the
    utilities to come back.
        We can go a little longer here. Allen, do you want to ask
    your questions?
        Mr. Boyd. Yes. Thank you, Mr. Chairman.
        Secretary Hamre, I appreciate the tone of the discussion on
    the BRAC issue. It makes all of us nervous about the process we
    use. Has the Department of Defense identified any bases for
    future BRAC action?
        Dr. Hamre. No, sir. We have not.
        Mr. Hobson. If they did, they aren't going to tell him.
    [Laughter.]
        Dr. Hamre. But, in all honesty, we have not done that, and
    the reason is because we honestly believe that the BRAC
    process, as painful as it is, is the fairest way to deal with
    it. I remember how BRAC got started. I worked at the time on
    the Senate Armed Services Committee, and I remember seeing the
    list that came over when the administration submitted it,
    Secretary Cheney submitted it. Immediately the Hill was flooded
    with arguments. This is a Republican administration going after
    Democrat bases. That was just plumb full of it at the time.
        It turned out, by the way, if you looked, almost 90
    percent, 95 percent of those bases were indeed closed under the
    BRAC process. But at the time, it was perceived as having been
    political. And so we have not done that.
        Mr. Boyd. I thought that that would be the answer because
    that was the exact same answer we got yesterday from the
    Comptroller.
        Are you aware of any proposals by the Air Force to transfer
    any air defense sectors from one base to another?
        Dr. Hamre. Well, sir, there is authority to take and move
    and realign forces inside existing statutory authorities, and,
    yes, we do that.
        Mr. Boyd. As it relates to a BRAC closing?
        Dr. Hamre. No, sir, not as it relates to BRAC and it is not
    prejudging or pre-deciding in association with BRAC.
        Mr. Boyd. Mr. Chairman, I know we have to go, but----
        Mr. Hobson. We have another minute.
        Mr. Boyd. I have a document here from the Air Force that I
    would like to have entered into the record that outlines
    transferring several air defense sectors from one base to
    another and leaves several Air Force bases with little or no
    military presence. That certainly is applicable to its talks
    about the BRAC process.
        I guess the point that I would make is we have heard all
    this talk about not to politicize the issue and making it a
    fair issue and how you do it to avoid all the problems. And we
    have fallen right back into the same trap.
        I want to submit this to the chairman for the record and
    also a list of questions that I would like to have answered
    regarding this matter, if you would.
        Dr. Hamre. Sure. I would be happy to.
        [Prepared statement of the Honorable John J. Hamre
    follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hobson. Do you have any questions?

                          base realignment and closure

        Mr. Tiahrt. Yes. I would argue that we have already
    politicized the BRAC process when we failed to close the base
    that was on the list for Southern California. I don't know when
    the current BRAC is going to be complete, but I think it is
    premature to continue with another BRAC until we complete the
    process of the current one.
        Dr. Hamre. In Southern California, sir, or is it McClellan?
    Because that is in Northern California.
        Mr. Tiahrt. You are right.
        Dr. Hamre. As a matter of fact, I think it is scheduled to
    close this summer. We did, indeed, hold a competition to see
    whether or not they could win, legitimately win. They were
    teamed up with a junior defense contractor. They were competing
    against Hill Air Force Base, a depot which is up in Utah. They
    were teamed with another defense contractor, and California
    lost.
        Mr. Tiahrt. When will the first BRAC be complete?
        Dr. Hamre. The first BRAC is done. Actually, the first two
    BRAC rounds are completely done. The third round is done this
    summer, in July of 1999, I believe, and the last BRAC round
    will be done I think in 2001.
        Mr. Hobson. July 2001?
        Dr. Hamre. Yes, sir. And we are asking for authority to do
    a BRAC, but only after--it is 2001.
        Mr. Hobson. We are going to have to suspend and go vote.
        [Recess.]
        Mr. Hobson. The committee will come to order, and we will
    resume.
        Dr. Hamre, do you have any more comments that you would
    like to make for the record?

                          family housing privatization

        Dr. Hamre. We will probably get into the questions, but,
    somewhat, we need to talk about the privatization problems.
    Could we just do that?
        Mr. Hobson. Do you want me to ask you my question?
        Dr. Hamre. Yes, let's do it that way. I think that would be
    fine.
        Mr. Hobson. The Housing Privatization Initiative was
    originally intended to be a supplemental to the traditional
    housing program, and we are seeing more and more emphasis on
    this program, which is still in a pilot stage, but I think some
    people had a meeting--I do not know when it was, and I think
    Chet may have been in it--and encouraged them to get moving
    forward.
        Of course, I know there has been one project under
    construction. It is an Air Force project. But for fiscal year
    2000, the Army did not request a single traditional family
    housing project in CONUS, not one. How did this get through
    OSD? I want you to explain why the Department is placing such a
    high emphasis on this initiative when it has yet to complete a
    single project under this pilot program. You know what I am
    talking about.
        Dr. Hamre. I sure do.
        Mr. Hobson. The Army had four huge projects in line. The
    Navy wanted to do 85 percent of its housing. I mean, overnight,
    there was going to be a transformation of housing into total
    privatization in those two services, when it was originally
    intended to be not a way of shifting costs, but a way of
    adding, so that we got to the numbers that we need to get to,
    to have the housing when it is done.
        I will lay one other thing on you while you are here, and I
    am going to say this. In Steny Hoyer's district, there is
    probably one of the neatest, cleanest proposals I have seen for
    doing housing. I am looking at it from a private sector view, a
    group that wanted no money from us, no guarantees, is ready to
    go on the ground, had the money put together, and I think has a
    good record from what I can see and has good local community
    support. Yet, the Army stiffed them. So I have got some
    problems with how this is moving forward.
        The other comment that I want to make is that I am worried.
    We need to look at these things with a long range view. Now, it
    is not true with the one in Maryland because they are not
    asking for any guarantees, but in many of these cases, when you
    do this, if the Government has put a bunch of money in it or
    has leased it for umpteen years back or guaranteed them certain
    things, then you have really created a problem.
        What I am concerned about is that we do not do what we have
    done in the FHA stuff, create a program we cannot get out of,
    long term.
        So those are my concerns.
        John, do you want to add any questions in that?
        Mr. Olver. I will have some more once we get those answers,
    I am sure, but that is a good start.
        Dr. Hamre. Let me, if I may, step back, just to put context
    in, and then try to give more specific answers.
        Bill Perry tried to get this going a couple of years ago,
    and it really was based on a systematic review that he had
    undertaken. We pay on the average 30 percent more for housing
    through the military housing process than we think the private
    sector pays to get comparable housing, or, conversely, for the
    same dollars, we could give 30 percent----
        Mr. Hobson. Well, overseas, you are paying--excuse me.
        Dr. Hamre. A different story overseas. A different story
    overseas, and we should talk about that. So we said we have got
    to find some way to break through and get the innovation.
        There is one thing we do pretty well in this country, and
    that is build family housing, and why in the world can't we do
    that for our military?
        We look at our housing stock. We have like 300,000 family
    housing units, and the average age is 35 years old. We are in
    good shape.
        Mr. Hobson. When you say we are in good shape, my question
    is what shape are we in at the end of this century. Not very
    good on housing.
        Dr. Hamre. Not very good, and you look at the replacement
    rate where we had been, it was just not cutting it. I mean, we
    were barely keeping even.
        So Secretary Perry said, ``Look, we really do need to try a
    different approach,'' and we started off not knowing anything
    about this, to be honest. We are pretty good at doing business
    the way the Government does business, but we did not know how
    to do business in a radically different way.
        So we started off, and to be honest, I think we stubbed our
    toe a number of times. We bumped up repeatedly against the
    bureaucracies that were threatened by a new process. We went
    through all the ``Captain, may I?'' sorts of checks that OSD
    tends to do on the services. There was just a lot of problems,
    and nothing much was happening.
        So, last fall, I think it was in September, we came up and
    we met with Mr. Edwards and others, about 10 members.
        Mr. Hobson. Were there any appropriators there?
        Dr. Hamre. Bob Livingston was there for a time.
        Mr. Edwards. Bob Livingston was there.
        Dr. Hamre. I realize that is a different class.
        And we said, ``Look, we agree we have not done a good
    enough job. We will give you a program and a schedule of things
    we are going to try to do,'' and we have had some personality
    changes on our side. We have had some changes.
        What I think you saw, was the Army said, ``Well, let's
    really take advantage of this. This is a window of opportunity.
    Congress is supporting us. Let's really go for it.'' They
    pushed forward very, very aggressively on a program, and all of
    a sudden, it shifted gears for all of you. We were kind of on
    the pilot project mode. Nothing much was happening, very little
    progress. All of a sudden, you are just seeing an enormous
    commitment; in some cases, probably a commitment that makes you
    nervous, whether we can pull it off. So I can understand the
    apprehension you have about it.
        This is going to be a very difficult transition for us if
    we are going to make this work because it requires us to kind
    of develop a new pattern of working with each other. By that, I
    mean Congress and the Defense Department, OSD and the services,
    the old way of doing business where we kind of line up
    everything in great precision in advance and lots of
    documentation and all that sort of stuff, which is the way we
    know how to do most of our work because we have grown up with
    that. It is kind of part of what has been the problem from the
    past, part of the reason why we kind of do not have everybody
    in the private sector that wants to bid and compete on these
    things and does not want to participate with us.
        They say, ``Just do it the way we do it in the private
    sector.'' Well, we are not used to that.
        Mr. Hobson. That is why you need to look at the one, in my
    opinion, in Maryland.
        Dr. Hamre. Right. I will do that.
        Mr. Hobson. Except for the sponsoring agency, it is as
    close as you can get to what would appear to be an easy deal
    for you to handle with a minimum of paperwork and to attain
    your goal with better housing than you guys normally will ask
    for.
        Dr. Hamre. I am unaware of it entirely, until you mentioned
    it. I will find out more about it and study it.
        You raised a couple of issues that I think we have to
    tackle if we are going to make this work. First of all, we have
    to, I think, establish a pattern of trust with you; that right
    now, you do not have in us.
        All of a sudden, we shifted gears, went roaring ahead, and
    you are saying, ``Well, wait a minute.'' So, first of all, we
    have to sit down and establish a----
        Mr. Hobson. When we were asked to sign off, one of the
    things that frightened me, I became chairman of this Committee,
    and overnight, I am hit with signing off on a number of
    situations, and there was a little hiatus in there that
    concerned me because I am not just going to blindly sign off on
    something, on a program that I am not fully aware of.
        Dr. Hamre. You should not, right.
        Mr. Hobson. I think that caused some concern.
        Dr. Hamre. Absolutely, of course, it did.
        In all candor, I think people were saying, ``Look, they all
    want this. Let's just go roaring ahead.'' Well, wait a minute.
    Congress has never once abdicated its responsibility to oversee
    this process, but I think it does mean we have to develop some
    new patterns to oversee this process.
        I personally think it means we have to find a way where we
    bring you into our planning and decision-making and evaluation
    much earlier, rather than just having it once a year we send
    you a set of documents and you look at it. I frankly think we
    need to find a partnership mode here where it is oversight much
    earlier, on much more of a collaborative basis. Otherwise, it
    just is not going to work.
        As I have strongly believed, you are not going to support
    it unless you are confident that we know what we are doing, and
    it is pretty hard to convince you of that when you just get a
    radical change in direction and very little to back it up.
        So we need to develop a new way of doing business with you,
    and I have talked a bit with Ms. Dawson about that. I do not
    have a clear answer. I would invite you to anything, as far as
    I am concerned, but I cannot commit that on behalf of the
    services until I sit down and find out where are we. But I
    think that is what it is going to take to convince you that we
    are thinking it through.
        Mr. Hobson. Frankly, sir, the only reason you got the
    letter we sent, the only reason the letter was sent is that is
    what we asked for.
        Dr. Hamre. Right.
        Mr. Hobson. We did not, in my opinion, get the courtesy of
    that.
        Dr. Hamre. I think that is right, and I take that
    personally. I am responsible for that. I am supposed to make
    sure that the Department runs in the way the Secretary wants
    and the way you tell us to, and I think we dropped the ball. I
    will get us back on course with that.
        I think there are two other concerns which you raised,
    which I think are really very important things we are going to
    talk about. One is how well integrated is this privatization
    issue with the base closure process.
        I will tell you, we are nervous that local projects will
    get started that really are kind of BRAC-proofing projects.
    They may sound good, but they are really designed to prevent
    you from closing an installation downstream, and we do not want
    that any more than you want that. I mean, we know
    installations. We have not picked a hit list of installations
    to close. Let me say that right now, but I can tell you right
    now that no BRAC list is ever going to have Fort Hood on it. No
    BRAC list is going to have Norfolk on it. We have so much. That
    is our center of gravity in a lot of these places. We know
    where we can tolerate.
        Practically speaking, we know where you want to be and
    where you can be more aggressive in trying to do these sorts of
    initiatives because we know in the long run we are going to be
    in these installations, but we need to prove to you, and
    frankly, we need to prove to ourselves, that we are integrating
    this matter. That is number one.
        I think the second thing that we have got to tackle--and
    this is, I think, going to be a hard one. It is the law of the
    land that we are not in competition with local business.
        Now, there are gray areas. We have got a Burger King
    franchise on our post. We have got a McDonald's franchise on
    the post.
        Mr. Hobson. You have got them in Bosnia.
        Dr. Hamre. We have got them in Bosnia. I mean, it is a
    little different in Bosnia because we do not have a Burger King
    outside of the post, but this has always been one of those
    friction spots. We are not supposed to be competing with local
    businesses, but we do have these gray areas. I think this is
    going to be a gray area we have got to do some exploring on
    because some of these projects are more attractive if they have
    some commercial features with them. Obviously, that is a real
    question mark.
        You have got to go through and decide if that is something
    we can live with, and we have to decide if that is something we
    want to buy into. I think those are very important issues.
    Those are policy issues. Those are not individual project
    issues, per se, as much as it is what kind of direction are we
    going to take.
        It is a gray area because we obviously have NWR-type
    activities on post that are really commercial in nature. So we
    will work this through, but that is one of those things we are
    going to have to do as well, and I think that has to be in a
    partnership with you.
        Mr. Hobson. I personally want to thank you for putting Dave
    Oliver on this and try to get it back on track.
        Dr. Hamre. He is terrific.
        Mr. Hobson. He is a good guy and understands what the
    problem is.
        Dr. Hamre. And he understands it exactly the way I do in
    the sense that we have got to be working with you so that you
    have confidence in us that we are going to manage it right and
    that you do not lose any oversight authorities or
    opportunities.
        Mr. Hobson. John.
        Mr. Olver. I would like to follow that up a little bit. Do
    I understand, Mr. Chairman, that your first comments were about
    the Army and that the Army had moved on none of these and then
    suddenly comes in with a very fast move and then a number?
        Mr. Hobson. Well, the Navy had moved on it, and they were
    pretty close to doing about--what was the percentage?
        Ms. Dawson. It went to 85 percent.
        Mr. Hobson. Yes, 85 percent of their housing overnight was
    going to be privatized. What is interesting to me, when we
    heard people resisting to doing any of this at one point, all
    of a sudden, it is full steam ahead. If they want us into this,
    boy, we have figured out a way, and we will get out of the
    housing business totally, boom, overnight. Well, that really
    was not the intent initially of the legislation. It was to get
    us to this point, and then maybe you might arrive to that.
        Mr. Olver. Is it a pilot? Is it an experiment? What is the
    point of view of the Department of Defense, which must be
    different apparently from the point of view of each of the
    services? We are not functioning on anything that looks like a
    similar pattern.
        The Air Force has at least a couple of them done, I guess,
    and has another couple of them approved, ready to go. They seem
    to be a little bit further along than certainly the Army, but
    is it an experiment? You said you had 300,000 units. Do we view
    this as something that is going to sit there as one of a series
    of tools to deal with the housing needs? We know we do not have
    much money particularly if we are going to have forward funding
    here, deferred funding. Problems are going to be worse and
    worse, or could get worse and worse. Are we heading to 30
    percent? What is the goal?
        Dr. Hamre. I think it is our view that this ought to be the
    dominant way in the future to build new houses.
        Mr. Olver. The dominant way in the future.
        Dr. Hamre. Yes.
        Now, what we have had, when we got started, remember, there
    was a lot of confusion. We did not know what we were doing, to
    be honest. We had not had any experience doing this before,
    number one.
        Number two, we had a lot of resistance. We had a lot of
    people that said, ``Well, I do not think we ought to be doing
    it this way,'' internal to the Department. So we had a lot we
    had to overcome.
        So the first couple of years, we said to you, we really
    want to test out the authorities on the project and how we
    could make them work because that really reflected, more than
    anything, where we were in the Department. We did not know
    exactly how to do it. We did not have the expertise in hand,
    and we had a lot of resistance.
        I think what we have seen now is that the leadership, the
    senior leadership of the services, has said this really is the
    way to go.
        So what you are seeing is we are really trying to leap
    forward to make this work.
        Mr. Olver. Do we have any proposals in this year's budget
    for new housing by the traditional method?
        Dr. Hamre. We do for overseas for the Army.
        Mr. Olver. But none State-side?
        Dr. Hamre. That is right.
        Mr. Olver. So that would correspond with----
        Dr. Hamre. I think maybe the Navy has a little.
        Ms. Dawson. There is family housing construction in Hawaii.
        Dr. Hamre. Yes, in Hawaii. They have Hawaii improvements.
        Mr. Olver. Well, construction improvements might be viewed,
    if it is really the policy to be the dominant, then new
    housing, you would expect, then, to be throughout a new
    provision.
        Dr. Hamre. Yes. That is what we would like to try to do.
    Yes, sir.
        Mr. Olver. You are saying there are none for new housing in
    this budget on State side.
        Dr. Hamre. Not for the Army. As I said, State-side, if you
    exclude Hawaii, I think there is some new construction in
    Hawaii for the Navy.
        The Air Force, I do not remember.
        Henry, do you remember? The Air Force has some.
        Mr. Olver. Has some new housing?
        Dr. Hamre. It has some.
        Mr. Olver. So it is not yet to be viewed as the dominant
    provision, right? If it were--so we would be moving toward
    privatized mechanisms for the new housing, for most, if not
    all, new housing.
        Dr. Hamre. People have got to want to do it. I mean, one
    thing I have learned working in OSD for 5 years is they can
    hold their breath longer than I can.
        Mr. Hobson. But, John, explain. I think there is something
    broad. The intent of the legislation in the beginning was not
    to shift all the housing to privatization. The intent in the
    beginning was to do some pilot programs to see what kind of----
        Mr. Olver. How it would work.
        Mr. Hobson. How it will work----
        Dr. Hamre. Yes.
        Mr. Hobson [continuing]. What kind of patterns would be
    there, and then----
        Mr. Olver. And you could regulate the patterns among the
    different services.
        Mr. Hobson. Then make a decision as to whether to go
    totally private or not.
        Along the way, before we ever got any of these done and
    could breathe, people made a decision someplace, aha, we now
    can privatize all of our housing, get out of it, and shift away
    from MILCON for housing and shift this over to an account of
    personnel reimbursement money and get out of this. Maybe not a
    bad idea, long term, but one that they jumped to overnight.
        Mr. Olver. Hardly one that one should plow into when there
    has not been a single housing privatization project under the
    previous authorization that has been completed.
        Dr. Hamre. I wish we had more of a track record under our
    belt.
        Mr. Olver. Before going into massive groups.
        Dr. Hamre. Sir, as I said, I wish we had had more of a
    track record to prove out the concept, but we finally have a
    strong consensus to want to press ahead and try to make this
    work, and we really would like to work with you on it to try to
    find a way to do that.
        Mr. Olver. The questions that I have mostly raised about
    this one is that in cases of rehabilitation of housing, how
    much risk is the developer in this process taking? What is the
    value of the asset to the Government that is being shifted over
    in this process? Are we getting our just consideration in that
    process? Is the developer getting a lot in the process?
        Dr. Hamre. I do not know much about the details of that.
    Let me find the right people to come up and talk with you.

                           family housing allowances

        Mr. Hobson. Well, that raises the question, John, if you do
    not mind, that we really need to get in the record, and I want
    to get into it. First of all, there is a buy-down in these
    things to get the rates down to where people can get into them.
        When Congress ran the authorities for the housing and
    privatization initiative, we were concerned about the shift in
    cost for the family housing construction and O&M accounts to
    military personnel accounts.
        This year, the Army and the Navy transferred roughly $79
    million from family housing O&M into the personnel accounts to
    cover necessary increases in housing amounts due to
    privatization.
        In addition, the Department is requesting transfer
    authority between the two accounts, which are in two different
    bills.
        Last year, we asked the Department to integrate the
    personnel and installation departments on this issue, and we
    need to know whether that has been done.
        Secondly, are the personnel accounts adequately budgeted
    for the increases in amounts due to the privatization
    initiative?
        Lastly, what assurances can you offer us that any family
    housing O&M reductions due to privatizations will be reapplied
    to other family housing improvements and not transferred
    elsewhere?
        Dr. Hamre. I do not have the ability to answer them right
    now. So I will get back with you.
        Mr. Hobson. Well, I want to get those in the record. That
    is why I wanted to do that because it follows along with what
    we are both asking here.
        Dr. Hamre. Absolutely.
        I need to get the guys who are the experts here to come up
    and talk with you and talk with Ms. Dawson so that you can get
    answers to the question. I do not have it under my belt. I am
    sorry. I do not have that detail, but I can tell you, I know
    there is concern about it shifting over to O&M. What we have to
    give you is an alternative process where you can oversee the
    building of housing through a different technique.
        Unfortunately, oversight has tended to follow where dollars
    go, and I think we have to find a new process here because that
    will not work.
        We do need to try to make this work. Otherwise, we are
    going to get stuck in the pattern where we are spending 30
    percent more for housing than we should, but we have to develop
    a method by which you feel comfortable that we really are
    addressing these underlying policy concerns, that we really are
    not giving unfair value to a developer, that we are paying for
    it up front and absorbing the risk. Those are all very valid
    and fair questions.
        Mr. Hobson. John, on one, you will see, that we are going
    to give you, at least if I understand it right, in order to get
    the rents right, we are going to give about $10 million, and
    that basically is what I call a buy-down, to get the rents down
    to where the housing allowance will fit it. Well, if we are not
    there, this guy has just got 6 million bucks in his pocket on a
    deal.
        Dr. Hamre. Which is one of the reasons we need to do a
    better job of integrating on a long-term basis, the
    requirements with our privatization goal.
        Mr. Hobson. John, do you have anything else?
        Mr. Olver. No.
        Mr. Hobson. Chet.
        Mr. Edwards. First of all, I am confident we will come to a
    solution on this. With your commitment at your level to getting
    things done, I think things will move ahead, and I think the
    chairman is asking the right questions. Frankly, those
    questions need to be answered before we go into a whole scale
    of massive programs and totally shifting our philosophy.

                        fort hood housing privatization

        I guess the one concern I want to express and be very clear
    about it is what I do not want is that Fort Hood, which is, I
    believe, by all accounts, an enduring installation, be stuck in
    this no-man's land between shifting messages from Congress.
    Perhaps some people in the administration have made some
    mistakes. We in Congress have sent you very mixed signals over
    the last couple of years, and I think the chairman is now
    focusing on the right questions and we will get those answered.
        I guess what I would want to throw in this mix is the
    possibility of somewhere between 100 percent for this pilot
    project versus taking another 3 years to study the system and
    make a perfect model. I would like to use Fort Hood since it
    was next on the list. There are tremendous housing needs for
    those soldiers. Let's use Fort Hood as a pilot project to try
    to answer these questions, and they should be answered before
    we turn to our theory, but I just hope we can move ahead.
        Mr. Hobson. I agree with you. All we asked for was not the
    RFQ, I think it is, not to go forward until this Committee had
    an opportunity to understand what the program was, and we were
    told forget it. That is not quite the way to start off.
        I do not want to stop. If it is the right program, we want
    it to go forward, but I would at least like to have the
    courtesy of someone explaining it to me before they put out the
    RFQ. I was told you are not entitled to that or we are not
    going to do that.
        Dr. Hamre. You never heard that from me.
        Mr. Hobson. I know.
        Dr. Hamre. And you will never hear that from me.
        Mr. Edwards. I have got to say, I think you had every right
    to ask that, Mr. Chairman, and I am going to support you until
    you get those questions answered.
        In fairness to some of the people involved in this--and I
    think some mistakes were made, but not intentional--but we sent
    a clear message to the Army that this meeting, again, with
    Chairman Livingston being there when he asked whether--so we
    want you to move ahead. In fact, the message we sent to DOD was
    you have one year to start turning some dirt or we are going
    back to the traditional program, which obviously our funding
    levels is terribly unfair to military families.
        So I hope we put the past behind us and focus, and I think
    we will. Dr. Hamre, you are focused on the chairman's
    questions, but let's just not let Fort Hood which has 20
    percent of all the active-duty Army divisions in the world get
    caught in this no-man's land for the next 2 or 3 years. I just
    do not want that to happen.
        Frankly, I would be the happiest person on this committee
    if we did not have to talk about privatization. All we have to
    do is get Democrats and Republicans and the administration to
    support another $3 billion or $5 billion a year for family
    housing, and we can do it the old-fashioned way, but neither
    party is willing to belly up to the bar and do that.
        If there is a chance we can do it, fine. I am happy with
    the traditional approach, but unless that is a solution----
        Dr. Hamre. We would still like to explore the
    privatizations. To be honest, I think we would get more housing
    out of it because we think there is just more efficiency.
        Mr. Edwards. What I understand, based on the numbers we saw
    earlier this week is that we are going to renovate--we had the
    money to renovate last year 5,000 units. There are 200,000
    units in need of repair. By my simple mathematics, that is a
    40-year process, and having bought a house 5 years ago, I know
    that that has moved--we are moving backwards, not forward.
        So I just want to be clear on the record that I appreciate
    the chairman's questions. I think they needed to be asked and
    should be asked, and I hope we can forget the past, move
    forward, and come up with a solution.
        Dr. Hamre. I agree totally with that. I have got 2 years
    and I am out of here.
        Mr. Hobson. Well, we all face that, too, John. [Laughter.]
        Dr. Hamre. If we do not get it going this year, it will
    just fall apart because we will be in one of these transitions,
    no matter who wins the election. There is going to be a
    transition and a change of people. So we really have to make it
    work, but every question you have asked is a fair question, and
    we ought to be able to answer that.
        Mr. Hobson. Well, I am a private-sector guy. If there is
    anybody who likes private sector business, it is me. I just
    want to be assured, and I think John shares this, that it is
    truly private sector. If we are going to do private sector,
    then it ought to be private sector. That is what I happen to
    like about Fort Meade proposal because it comes as close to it,
    even though the agency operating it is not a private sector,
    but it comes as close to taking all the risk off of us. There
    is no buy-down. There is none of that in there.
        So you have my commitment, and I think my committee's
    commitment, that we are going to move forward on this, and
    before our tenure is up, we want to have this in place so that
    at the end of these 2 years, whatever happens, we know where we
    are going. I do not want to wait 2 years to do Fort Hood. I
    want to move forward.
        We have got new people. We have got a lot of new people. We
    are trying to bring them up to a level, and before this
    Committee commits, it wants to have its knowledge level at a
    point that we know where we are going on a totally new deal.
        I did not believe that the Committee as yet had committed
    to privatizing 85 percent of the housing in the Navy in that
    short of a period of time. I am not sure, as John said before,
    that you can do that overnight if you do not have any history
    in it, and the same way with the Army. The Army had three or
    four major projects that are planned-unit-development type
    projects, which may be totally appropriate, but before we got
    too far down that road, this committee, which is basically a
    lot of new members needed to have comfort.
        Dr. Hamre. Yes.
        Mr. Hobson. All we were asking to do, I call it ``due
    diligence.'' All we were asking for is to do our due diligence
    so that when this goes down the road it is a shared burden
    between your people and ours.
        We are not going to say, ``Well, they just went off and did
    that.'' We did not know. We are in it with you.
        Dr. Hamre. This has to be both good economics and good
    Government, and we have to commit to both of those.
        Mr. Olver. I would like to sort of add to that. Yes,
    indeed, if we are going to do this in the sense of
    experimentation or piloting or whatever, I do not think that we
    should be doing 85 percent, when there is no history and no
    experience with the program under the present authorization. We
    might want to look at this and do 10 percent or something like
    that.
        Even that 10 percent perhaps ought not be in just one
    project that covers 10 percent of all the housing under the
    Army or whatever. I do not know the Fort Hood project. I really
    do not know anything about it. We need to talk about it, but I
    would think that we would not do total restructuring at one
    place. I think it ought to be done in two or three places with
    portions so that one has some examples that really make it a
    pilot and an experiment and then see how it goes and make final
    decisions as to whether we are going to go to all 300,000. This
    process should be made the dominant feature of the system only
    after one has had a chance to see how some of them have worked
    out, and work out some of the procedures.
        You talk about the cost being 30 percent greater under the
    traditional method. Under the old ad hoc method that was used
    before the present authorization was put in place, there were
    some projects that went forward, and the different services--it
    had not been worked out what the legal provisions, whether
    Federal Acquisition Regulations were being used in all cases or
    some cases. Some of these things ought to be, it seems to me,
    regularized if what you are thinking is that you are going to
    get a lot more for the dollar, and we are kind of spending more
    than we need to by 30 percent in the process.
        Dr. Hamre. Sure. I would look forward to an opportunity to
    come up and have our people meet with you to go through these
    things to try to give you a sense at least how we think we
    could go ahead with this.
        We know it is a departure from where we were before, but we
    really do not have time to just do a couple more years of
    little pilot projects if this is not going to be launched.
    Otherwise, we are just off for 5 years. I think that is what we
    would like to talk with you about.
        Every one of your concerns if valid, and we really have to
    get together and talk it through and figure out how to answer
    those questions.
        Mr. Hobson. Did you have a question?

                            research and technology

        Mr. Boyd. Mr. Chairman, thank you.
        Mr. Secretary, I know we are about to wind up here, but I
    cannot pass this opportunity. I want to shift gears.
        I have been very supportive of the general direction that
    we have taken for the last 10 years, obviously, with the phase-
    down, and I think probably so. Now we begin an avid debate and
    discussion about how we stop that phase-down, if you will, or
    how we continue.
        One of the very serious concerns that I have, as we have
    been phasing down, is that we maintain our level of technical
    expertise, our technology. That we put our weapon systems and
    our management schemes and our operational and engineering
    schemes, environmental solutions all from a worldwide
    perspective as the very best technology. That is the only way
    that we maintain ourselves as the absolute military power in
    the world.
        You may know where I am going here. The service operates a
    series of labs that conduct research for very specific military
    needs, and there has been----
        Mr. Hobson. You cut the heck out of them.
        Mr. Boyd. Sir?
        Mr. Hobson. You cut the heck out of them.
        Mr. Boyd. There has been a trend over the last few years to
    take--I mean you are just bleeding them dry. As examples, there
    are environmental issues, civil engineering issues, which to me
    are critical as we enter this new phase of the kinds of
    conflicts. We do not have established bases. We have to go into
    remote areas.
        Would you care to comment on what you see as the
    Department's plan to ensure that the military continues its
    research, in these areas, sir?
        Dr. Hamre. I am severely disadvantaged here because I had a
    hard time getting through high school physics. So all this
    stuff is pretty----
        Mr. Boyd. Most of this is new money. I am as disadvantaged
    as you are. The issue is money.
        Dr. Hamre. Well, it does have something to do with money,
    and that is really--the tools that are available to the
    Department really are very crude, and because, ultimately, the
    quality of the science that is going on, in large measure, has
    to be determined by the people who are involved in it. Of
    course, there is always a dilemma there because people think
    whatever they are working on, of course, is the most important
    thing since a can of beer. So what is the best way to evaluate?
    Is this important science, or is this secondary science?
        We really do have to rely on a procedure where there is
    kind of a peer review is coming out of that community, that
    they evaluate. Is this important or is it secondary?
        From very senior management levels, we have taken an
    approach that is basically--as I said, we are going to manage
    it in a very rough aggregate, and historically, the Department
    has basically said, well, we will put about 10 percent of our
    budget into research.
        Over the last 6 or 7 years, we have gone above that. We
    have been at historically high levels on the percent terms of
    the total.
        In part, that is because we have drawn down in the
    procurement part of the budget so sharply. We have actually had
    the procurement budget get close to the R&D budget, which is
    really kind of unprecedented. The problem is we are developing
    all kinds of things in the lab, and we never buy anything
    because we do not have a big enough procurement budget. So
    there is a tradeoff that has to occur inside the services as to
    what is the right balance of designing new things versus buying
    some.
        To the point you raise, one of the hardest things for me to
    evaluate is where is the relevant payoff value of research and
    development dollars being spent inside Government labs, being
    spent in private-sector profit-seeking labs, being spent in
    private-sector non-profit labs, universities. We have a very
    deliberative process that is run by our best scientists to try
    to decide what is the right way to allocate those dollars.
        I do not believe the right answer is to automatically say
    the best work is being done in Government labs. I honestly do
    not believe that. I think frankly sometimes we should all get
    old science in labs. We tend to be buying inputs, not outcomes,
    and I worry about that.
        At the same time, I do not think that the private sector
    necessarily honors what we need to have done in long-term
    research and development. They are going to look for short-term
    maximization of----
        Mr. Hobson. Payoff.
        Dr. Hamre [continuing]. Payoff. Short-term payoff.
        Who is going to husband the long-term science that you need
    for breakthroughs way in the future? That really, I think, is
    going to have to be done through either Government labs or
    Government-sponsored research in the private sector.
        Mr. Boyd. I am not sure how the whole system works, but I
    know that the system works sort of as a combination where you
    have private sector folks contracting in Government facilities
    to do the work, and I am not going to ask you a specific
    question except for this.
        Just take a look at what is happening in terms of some of
    our dollars going into specific areas of research and how that
    is being just dried up, what that means to us in the long term,
    as we try to figure out what kind of military we have to have
    and what our mission is going to be in this age of uncertainty.
    I will give you an example. In the age of environmental
    technology changing every day, we have some very specific needs
    in the military as it relates to what our installations have
    done to the environment.
        Some of those needs are being dealt with in some of our
    labs which are being dried up, which are being closed.
        Dr. Hamre. I will look at it. I surely will, but I also
    have to be honest and I many times have seen new advances where
    the labs are sitting there twiddling their thumbs and we have
    to go outside and get it. Frankly, all of the real advances in
    computing over the last years have come out of the private
    sector. I mean, the revolution in the amount of control over
    the last 10 years has really come by adapting Internet-based
    technology. We may have invented it 25 years ago at DOD, but
    the private sectors have run with it. We are just trying to
    simply take advantage of what they have.
        So it is this very careful balance. I will do that. I will
    go ahead and specifically look at this question, and I know
    that there are specific concerns that bring it to the fore, but
    it is a broader issue you are raising, and we ought to follow
    up on that.
        Mr. Hobson. I share a lot of his concerns because I can
    tell you, General Powell is having a hard time with a lot of
    the labs that we have had.
        The history of this country is that one of the things I
    think we have been able to do is that our technology has always
    out-stripped the technology of our adversaries. If we do not
    have someplace that is looking at long-term stuff--I have the
    same trouble you do--that we do not have these people working
    on this stuff in places where they are not pressured by the
    dividend this quarter or the dividend for this year, some of
    these things would never come about.
        I think we need to have a balance in that, but we cannot
    lose the infrastructure because you do not bring that
    infrastructure back up when you need it later on.
        Dr. Hamre. Sir, if I may use that as an opportunity to say
    I think one of the things I see when I look at our Government
    research science and technology infrastructure, it is that it
    is not being modernized at an adequate pace either, but that is
    because in all candor, we have too many labs.
        Mr. Hobson. I was going to say, if I were looking, I would
    look at the Department of Energy stuff. There is tons of money
    that have been flowing out into that area that is almost
    uncontrolled and----
        Dr. Hamre. Every day, I say, ``And lead us not into
    temptation.''
        Mr. Hobson. Yes.
        Dr. Hamre. So I am not going to answer that question.
        Mr. Hobson. Well, I understand, but I am just getting it on
    the record here, so that people who are watching, they
    understand where a lot of the money is going.
        Mr. Farr. Mr. Chairman.
        Mr. Hobson. Go ahead.

                           naval postgraduate school

        Mr. Farr. Following up on this, I am very concerned that
    this area, particularly where we have that kind of think-tank,
    the intellectual capacity that we already have within the
    military structure, is so low on the priority list of
    readiness, deployment, and you have some institutions,
    particularly in the Naval Postgraduate School that I am
    familiar with.
        Mr. Hobson. I knew you were going to do that.
        Mr. Farr. The Naval postgraduate school has an engineering
    department, and that engineering department, as small as it is,
    has an incredible faculty, which we are now trying to link up
    with the University of California which is also in the region
    to create this kind of synergism between institutions of higher
    education.
        It seems to me that we can get a much better bang for the
    buck if we can begin looking at the institutions where we have
    that academic synergy--this is not in your labs. This is in
    your school. You have a fully credited university in Monterey
    that is doing cutting-edge technology. They are doing all the
    monitoring of the Chernobyl fall-out of the waste material and
    the ice gaps. They are doing cyberspace technology. These are
    the officers and the leaders of tomorrow.
        One of the complaints they have is we put very little
    funding into research in those institutions, and, yet, some of
    the research that is coming out of that is so cutting edge.
    Japan has funded a full-time professor to be at the Naval
    Postgraduate School just to watch this. The professor there
    invented the ability to have sound as an energy source for
    cooling. Can you imagine what this does in every truck that
    uses mufflers to run its refrigeration? Because that is
    essentially the kind of stuff to come out of there, and the
    Japanese are seeing how important it is to them. We, on the
    other hand, don't capitalize on that, to have somebody like
    that on our side. So I would appreciate that, as far as we are
    in this discussion about R&D, that we take a look at some of
    the institutions we have already and see how we might put a
    little bit more money into the research capacity of those
    schools.
        Dr. Hamre. Again, it is exactly that same dilemma. It is
    very hard for all of us who aren't scientific experts to say
    this is good science, this is mediocre science. To me it all
    sounds like great science. I don't know. We really do have to
    have a process where we have peer review and some sense that
    there have to be outcomes, not just inputs in this community.
    This is a community that is too much dominated by inputs only,
    not outcomes.
        It isn't the same as saying I am going to get a fighter at
    the end of this process. What are you going to get at the end
    of research? There has to be, I think, more discipline in this
    community so we don't fund a lot of mediocre science, and I
    must confess I think we do fund some mediocre science in our
    system. We need to work on that. I agree totally with you.
        Mr. Hobson. Mr. Olver.

                                  Laboratories

        Mr. Olver. Mr. Chairman, thank you.
        I think your comment on mediocre science is one of those
    cases like advertising. You know you could have saved half of
    it, but you don't know which half because you are never quite
    sure, as is the nature of science, what is going to have great
    production down the road. You have to take that chance
    somewhere along the way.
        I wanted to follow up on this science thing because you
    opened a couple of questions. You said that roughly 10 percent
    of the budget was in R&D. What is that number of dollars?
        Dr. Hamre. Well, I think it is like $34.4 billion.
        Mr. Olver. Really? So you are really talking about 10
    percent of the overall----
        Dr. Hamre. Oh, yes, the overall budget.
        Mr. Olver [continuing]. Defense budget, or more. If it is
    $34 billion, it is more than 10 percent.
        Dr. Hamre. Historic high percents. These last 5 years, it
    is----
        Mr. Olver. How much of that is spent in the Government
    laboratories, in the Wright-Pattersons and the Hanscon Field
    and Lincoln Labs and things of that sort?
        Mr. Hobson. It is down. The money is somewhere else, as I
    alluded to before.
        Dr. Hamre. The $34.4 billion runs labs. It runs test
    ranges. It funds deep science in the laboratories and in
    universities. It funds the development of F-22's and the
    testing of F-22's. But in FY00 we expect approximately 40% of
    the $34.4 billion R&D budget to be dedicated to our Government
    in-house activities.
        Mr. Olver. It may be very difficult to break down. I was
    going to lay out about three of the categories that I know
    something about, and then there are probably several others
    that you would divide that up into that are pretty distinct in
    what they do. Before I came into this profession, I was a
    scientist, and my research programs depended upon--I give up my
    age by speaking of AEC and FOSR and ONR and things like that.
    NSF has survived.
        Your comment about the Government labs--and I am certainly
    not supporting this. The Government labs may be supporting old
    science. Maybe you meant not supporting that primarily, but
    more than you might wish.
        The academic labs in many cases, the people who are doing
    those didn't really know what it was that the services were
    looking--why they were supporting that particular research. I
    suspect that still may be the case because much of that is
    pretty pure science.
        How much of it goes into things--and in between that we
    have set up the Small Business Innovative Research as opposed
    to putting money into big private companies where they have a
    very clear purpose and don't have enough money to do their own
    research. We are looking for innovation often in pretty risky
    places. Small Business Innovative Research, the SBIR program,
    which I guess gets a percent--half, probably--of most of what
    you are doing in that $34 billion. Would that be roughly
    correct? Do you have somebody who might know how much the SBIR
    gets out of this $34 billion?
        Dr. Hamre. For FY99, 1.4% or $538M of the total R&D budget
    has been set aside for SBIR. We expect the percentage of the
    FY00 R&D budget to be similar.
        Mr. Olver. I would like to see a breakdown of this.
        Mr. Boyd. What is SBIR?
        Mr. Olver. Small Business Innovative Research, which is a
    program that----
        Dr. Hamre. It is a small percent that is applied against
    procurement----
        Mr. Olver. It is applied across all of the Government
    agencies that do R&D.
        Mr. Boyd. Mr. Chairman, I keep getting these whispers in my
    ear that some of the science R&D money is going into space-
    based laser. Can you talk about that a little bit?
        Mr. Hobson. Well, isn't it two programs they put the space-
    based laser in?
        Dr. Hamre. We have lots of----
        Mr. Hobson. They just flip some money into it?
        Dr. Hamre. Well, it may have been an artifice of the final
    build of the budget. I don't know. But it wasn't any
    particular--there wasn't a decision that said we are going to
    put in space-based laser and we are going to take out the
    following things. It really wasn't anything like that. We did
    decide----
        Mr. Hobson. It looks that way.
        Dr. Hamre. Well, I know, but that is just because of the
    mechanics. I know it looks like that. But the space-based laser
    is--we are trying to look ahead 15 years to say what is going
    to be the best way to provide a missile defense system for the
    United States. This is tough science. This is really tough
    science, I mean, to have something of this engineering fidelity
    that you could put up in orbit and then have it engage targets
    under very, very tight time sequences and great precision.
        So we have committed to a demonstration program that could
    lead to an on-orbit testing. I don't remember the time. I think
    it is like 2010 or something. It is quite a ways away. But
    there is an awful lot--we have been doing a fair amount of work
    on space-based laser, but all in ground installations.
    Unfortunately, when we started this project 8 years ago, it
    wasn't sized appropriately, so we need to replace it. But I
    will get people that are more expert on it than am I. I think
    we have committed ourselves to about $130 million a year for
    the next 5 years for space-based laser.
        It is an important development, but it isn't by any means
    the largest. We will be putting more on things like airborne
    laser and things of that nature. By far the biggest part of our
    R&D budget really is to run the infrastructure, both
    laboratories and ranges, and then for test and evaluation of
    new weapons systems. That is probably the largest--our classic
    S&T, science and technology budget, that is like $3 billion,
    something like that. It is much smaller.
        Mr. Hobson. But the money was shifted out of S&T, I think
    is what happened.
        Dr. Hamre. So I will have to try--I am not aware of that.
        Mr. Hobson. John.
        Mr. Olver. We are going to be needing to go here. I want to
    go back to the rather more overall topic, if people have
    finished talking about the science aspect.
        Mr. Hobson. Yes, because we are going to try to not come
    back unless somebody has a burning question.
        Mr. Olver. When I started out, I made a short statement
    about the concerns that I had which you carefully wrote down. I
    thought that was wonderful. You were listening, you know? They
    had to do with housing and the deferred budgeting and BRAC, and
    I want to draw them together.
        You made the comment that the year that we are in, the
    fiscal year, the current year, is the really tough one, and
    then it becomes easier. Well, it only becomes easier if the
    caps are changed. If the caps are not substantially changed--
        Dr. Hamre. That is true.
        Mr. Olver [continuing]. Then what we have done by the
    deferred fund is we have established that we are down to a $5
    billion mil-con program with implications to take it in a
    number of directions, because it says something about what we
    think are the priorities of quality-of-life issues and housing
    that is the meat, the potatoes, of this subcommittee's purpose.
        At the same time, if we are on a deferred funding program,
    then we are going to find it much more difficult to do the
    housing. And we are going to find overall a substantial
    reduction in the regular program for construction. And then it
    becomes even deeper, my concern, because I basically have
    exactly the same position as the number two Democrat on the
    National Security Committee. I support--even the Washington
    Times now supports and understands that we can't have all the
    bases around with an ever-reducing total force and making it
    more efficient. I support that. But I remain concerned that we
    not end up doing housing, and I now know that Hood is not
    anywhere likely to be under stress for that, that we not end up
    doing housing and not end up doing major programs that come
    through the committee and then find that those that we just did
    were on the 2001 BRAC.
        I don't know that you can ever completely eliminate that
    since you don't want to put forward anything other than what we
    can ferret out is a sense of what is important and what isn't.
    But I think we need to have a good kind of a communication
    between this committee and your operations about what those--
    how those interrelate.
        Dr. Hamre. Yes. You have asked two very important things. I
    totally agree that we have to have a better process that
    integrates our base closure requirements and our long-term
    modernization requirements through privatization. I absolutely
    agree with that.
        The other thing you said which I think is enormously
    important is that our full program here really does depend on
    an amendment--a new budget resolution that gives us a new base
    with no caps. I mean, if we stay under the caps that are in law
    next year, we have a big problem.

                          base realignment and closure

        Mr. Olver. In essence, we were asked to fall on our sword
    for this year and hope that somehow that will be made whole in
    the next year. Even in this year, do the proposals in relation
    to BRAC--just taking narrowly the proposals related to BRAC,
    which is $700 million or so, does that assure us that we are
    going--because part of that is deferred funding. Does that
    assure us that we are going to meet your 2001 period that you
    mentioned? You have mentioned several times the 2001 period for
    the completion of Number 4 BRAC?
        Dr. Hamre. Yes, sir.
        Mr. Olver. It will do that?
        Dr. Hamre. Yes. But your point, your larger point, is still
    true, which is that----
        Mr. Olver. I hoped it might be.
        Dr. Hamre. Yes, it clearly is. That if there isn't a change
    in the budget resolution that changes the caps, and we have to
    have a budget now that meets the caps that are in the law right
    now for the next year, we have a big problem.
        Mr. Hobson. We have 8 minutes left.
        Mr. Boyd. The Senate passed S. 4 yesterday, which costs $7
    billion. Your budget is probably about $7 billion.
        Dr. Hamre. Well, that is a problem. It is a problem. We are
    not saying we are not for a pay raise or even a bigger pay
    raise for the troops.
        Mr. Boyd. That may be bringing all----
        Dr. Hamre. The problem is that it is ahead of where we are
    with the budget. So this is an IOU right now that can only be
    liquidated with our modernization program until you have a
    budget resolution.
        Mr. Hobson. Put that in the record. Typical.
        Mr. Boyd. Note the chairman said that, not the witness.
        Mr. Hobson. We only have a few minutes here, guys. If you
    have a question, we are going to have to submit it for the
    record.
        Dr. Hamre. I would be glad to come up privately and talk.
        Mr. Farr. Can I just say--it is a statement and a question.
    When we were in Bosnia, we all heard from the field commanders
    about the need for greater language training. The Department of
    Defense operates the largest language school in the world, the
    Defense Language Institute, in Monterey, California. We really
    need to beef that up.
        Dr. Hamre. It is in California.
        Mr. Hobson. We know where it is. We know exactly where it
    is. [Laughter.]
        If anybody has questions, we will submit them for the
    record, and we would appreciate a timely response.
        Dr. Hamre. Yes, sir.
        Mr. Farr. Well, one other thing I wanted to ask him is
    whether the MILCON budget request for DOD includes a video
    tele-training facility for DLI. Will you look into that?
        Dr. Hamre. I will look into it. I didn't know about that.
        Mr. Hobson. And----
        Mr. Farr. Forgive me, but it is--70 percent of all military
    language training, I think in most of these exotic languages,
    is done at Monterey. Well, 70 percent of all the language
    instruction in America--comes from teachers who studied it.
        Dr. Hamre. It is pretty impressive.
        Mr. Hobson. We would appreciate a timely response back to
    the questions. We are going to actually use your responses. We
    are going to read them.
        The next hearing will be on Air Force military
    construction, family housing, Guard and Reserve, base
    realignment and closure, Thursday, March 4th at 9:30 a.m.
        Thank you, John.
        Dr. Hamre. Thank you.

        [Clerk's note.--Questions for the record submitted by Chairman
    Hobson.]
                             Not Preferred Approach
        Question. The Comptroller told us yesterday that incrementally
    funded individual projects were not the preferred method of financing
    the program, and that DoD only intends to utilize this method for FY
    2000.
        If it is not the desirable approach, and with the general feeling
    an advance appropriation of $3.1 billion is not going to happen, why
    shouldn't we declare this budget dead on arrival and start from
    scratch?
        Answer. The Department prefers to have a fully funded, robust
    construction program. However, given the overriding constraints of our
    FY 2000 topline, which is part of the negotiated budget agreement, the
    use of advance appropriations is the only viable option to retaining a
    construction program that supports the our mission and quality-of-life
    requirements yet still meet our primary readiness goals.
        If the funding caps remain in place for FY 2000, then the only
    alternative to advance appropriations is to institute a de facto
    construction pause. I do not believe that the detriment this will cause
    to the accomplishment of DoD missions is worthy of consideration in
    comparison to financing methodology proposed in the budget which
    provides for the continuation of the Department's infrastructure
    program with minimal impact.
                                   Execution
        Question. How does the Department intend to execute incremental
    funding? What additional authorities will be necessary?
        Answer. At this time we see no need for additional legislative
    relief. Full authorization of the requested projects should demonstrate
    sufficient intent to see these projects through to completion. However,
    the provision of advance appropriations will further ensure that funds
    have already been set aside in FY 2001 for the completion of the FY
    2000 program.
        It would be helpful, however, if one execution item were addressed.
    In the past, reprogramming limitations have been placed on the
    appropriated value of the project to ensure appropriate oversight and
    approval by Congress of substantive changes to the construction
    program. If the limitations for FY 2000 were recognized at the project
    authorized (vice appropriated) value, this would ensure that the
    historical level of congressional oversight remains in place while
    enabling the Department to prevent delays and work stoppages on
    projects that award early in the fiscal year.
                          Percentage of Appropriations
        Question. How was it determined what percentage an individual
    project would be funded in FY 2000?
        Answer. Basically, each appropriation's most recent historical
    outlay rate was used to form the foundation for funds minimally needed
    to execute their construction program. To this factor was added an
    additional 10% to allow for obligation flexibility and potential
    termination liability (although these latter costs are expected to be
    minimal). Based on an historical comparison of first year outlays on a
    project by project basis, these factors used should result in minimum
    disruption to the execution of the FY 2000 program.
        Further, since each appropriation's average outlay rate reflects
    the impact of such costs as planning and design, minor construction,
    supervision and administration, and major construction, the amount of
    outlays attributable to major construction in the first year of
    availability is generally much lower than the average outlay rate.
    Thus, the appropriations requested in FY 2000 should meet all major
    construction related costs that are likely to occur in this year. It
    should also be noted that efforts such as planning and design, minor
    construction, supervision and administration, and phase-funded projects
    (e.g., hospitals, chem-demil facilities, etc.) were funded at 100% of
    their FY 2000 program requirements.
        Question. Why the disconnect with the Army only receiving 15% of
    authorization for individual projects and the Navy and Air Force 25%?
        Answer. As discussed previously, the historical outlay rate for
    each appropriation was the foundation on which the determination was
    made for the amount of appropriations required (plus the 10% allowance
    to provide program flexibility). This approach helped to ensure that
    the components were treated fairly in this process.
                              Congressional Intent
        Question. What assurance do we have that under incremental funding
    all individual projects will go forward in fiscal year 2000? We are
    hearing that the components will use reprogramming authorities and pick
    and choose which projects to go forward with this fiscal year. It
    appears to me, this circumvents Congressional intent.
        Answer. If Congress authorizes and appropriates the FY 2000 program
    as requested, then there should be no justifiable cause for the
    Components to delay projects to the detriment of others. The various
    elements in the Department are working in concert to ensure that all
    projects in the FY 2000 program will be executed as planned under the
    current form of the budget request.
                      Plus Ups Due to Incremental Funding
        Question. Prior to the Department's use of incremental funding, was
    the MilCon program at $8.5 billion? If not, how many projects were
    moved forward, and at what cost, from Fiscal Year 2001?
        Answer. Prior to the use of advance appropriations, the
    Department's MilCon program value was somewhat lower than the program
    value currently supported in the President's budget. With the
    presidential increase to the Department's topline, some projects were
    moved forward from FY 2001 to FY 2000. These projects are:

    ------------------------------------------------------------------------
                                                             Project Value
                Location                    Project              ($000)
    ------------------------------------------------------------------------
    Yuma MCAS, AZ...................  Child Development               $2,620
                                       Center.
    Davis Monthan AFB, AZ...........  Aircraft Processing              7,800
                                       Ramp.
    Barstow MCLB, CA................  Test Track.........              4,670
    Schofield Barracks, HI..........  Whole Barracks                  46,000
                                       Complex Renewal.
    Great Lakes NTC, IL.............  BEQ ``A'' School...             31,410
    Fort Leavenworth, KS............  Whole Barracks                  26,000
                                       Complex Renewal.
    Bluegrass AD, KY................  Ammunition                       6,000
                                       Surveillance
                                       Facility.
    Fort Campbell, KY...............  Physical Fitness                 6,000
                                       Training Center.
    Fort Knox, KY...................  Multipurpose                    16,000
                                       Digital Training
                                       Range \1\.
    Fort Meade, MD..................  Whole Barracks                  18,000
                                       Complex Renewal.
    New River MCAS, NC..............  Family Service                   1,340
                                       Center.
    Camp Lejeune, NC................  Road and Utilities.              8,750
    Sunnypoint Mil. Ocean Term......  Ammunition                       3,800
                                       Surveillance
                                       Facility.
    McGuire AFB, NJ.................  Visiting Officers               11,800
                                       Quarters.
    Wright-Patterson AFB, OH........  Control Tower......              4,000
    McAlester AAP, OK...............  Ammunition Road                  6,800
                                       Infrastructure.
    Letterkenny AD, PA..............  Ammunition                       3,650
                                       Containerization
                                       Complex.
    Fort Bliss, TX..................  Ammunition Hot Load             11,400
                                       Facility.
    Fort Bliss, TX..................  Aircraft Loading                22,000
                                       Apron.
    Fort Hood, TX...................  Whole Barracks                  29,000
                                       Complex Renewal.
    Fort Eustis, VA.................  Whole Barracks                  39,000
                                       Complex Renewal.
    Norfolk NS, VA..................  Pier Replacement...             40,000
    Fairchild AFB, WA...............  Survival Training                4,500
                                       Logistics Complex.
    Bahrain.........................  BEQ................             23,770
    Bamberg, GY.....................  Whole Barracks                   5,700
                                       Complex Renewal.
    Mannheim, GY....................  Whole Barracks                   4,500
                                       Complex Renewal.
    Aviano AB, IT...................  Radar Approach                   3,700
                                       Control Facility.
    RAF Mildenhall, UK..............  Cons. Corrosion                 10,200
                                       Ctrl./Maint.
                                       Complex.
                                                          ==================
        Total.......................  ...................            398,410
    ------------------------------------------------------------------------
    \1\ Authorized in a prior fiscal year.

                                 BRAC Execution
        Question. Is the budget request for BRAC of $705.9 million in FY
    2000 adequate to fully execute the program with no impact on meeting
    the July 13, 2001 completion date?
        Answer. The budget request of $705.9 million for BRAC is adequate
    to fully execute the FY 2000 portion of the planned $1,283 million FY
    2000 program. One of the keys to ensuring the success of the FY 2000
    program as requested, without incurring cost increases or unmanageable
    delays, is the enactment of the FY 2001 advance appropriation resources
    to complete the FY 2000 program. The Department has already reserved
    $577.3 million in the FY 2001 topline and appropriations requests
    recognize the reservation of these funds in FY 2001. By enacting the
    appropriation of the advance appropriations for FY 2001 along with the
    2000 program, contractors will be able to proceed with their projects
    fully aware that resources have been made available to complete the
    projects within the costs and timeframes anticipated. This will permit
    the Department to meet the July 13, 2001 completion date.
                           Mission Essential Projects
        Question. I am concerned about mission essential related projects,
    such as the beddown of the C-17 and testing of the F-22. How can you
    assure us that under a two year program operating schedules will still
    be met?
        Answer. The three FY00 F-22 projects are required in order to meet
    the Mar 02 Nellis beddown for Follow-on Operational, Test and
    Evaluation. These projects must be funded in FY00 or beddown and
    testing will not be accomplished on time. We will continue to work
    contract award and funding strategies with our design and construction
    agents to ensure the beddown and testing of the aircraft at Nellis AFB
    is not impacted by delaying facility construction.
        For the C-17 and other mission facilities we will continue to work
    with our design and construction agents to minimize the impact in
    construction schedules.
                     Potential Additional Contractor Costs
        Question. How does the Department intend on dealing with increased
    contractor risk? (Advance appropriation reduces contractor's ability to
    make large-scale advance purchases, may preclude ordering long-lead
    equipment or supplies, and there is no guarantee of FY 2001 funding.)
        Answer. We believe that we have taken the appropriate steps to
    minimize any increased risks that may be associated with incremental
    funding. Since we are asking for both full project authorization and
    advance appropriations, contractors will be assured that all funds
    necessary to complete the projects have been set aside and will become
    available when needed. This method of providing authorizing and funding
    should be sufficient to ensure that projects will be properly commenced
    and completed within the cost estimate anticipated in our budget.
        Question. How do the components avoid additional costs due to
    contractor claims for delays caused by lack of funds, or contract
    termination for lack of funds if advance appropriations are not
    provided?
        Answer. The Department has been careful to provide sufficient funds
    in FY 2000 to cover construction expenditures that will occur in the
    first year, including an additional 10% to meet unforeseen requirements
    and provide the components with the necessary financial flexibility
    that this question addresses. In addition, we are seeking execution
    reprogramming thresholds that are similar in effect to prior years
    which will enable the components to quickly meet emergent financing
    issues without undue delay or jeopardy to the contract. The advance
    appropriations requested are intended to cover the expenditures that
    will occur in the second year and beyond of the construction project.
    Therefore, advance appropriations (or lack thereof) should have no
    bearing on the first year execution of these contracts.
                        Damaged or Destroyed Facilities
        Question. Under incremental findings are we still leaving enough
    leg-room to deal with unforeseeable requirements for damaged or
    destroyed facilities.
        Answer. Since the core building block in the amount of funding
    being requested for FY 2000 reflects historical outlays, which would
    include the cost of unforeseeable requirements, there should be enough
    funds to meet known and unknown requirements. It should be noted that
    unforeseen requirements will be handled no differently than in prior
    years: that is, prior year assets will be used first to meet such needs
    and, if these are not available, then a review of lower priority,
    approved projects will be made to defer these to free up resources.
    However, since unforeseen projects will be equally incrementally funded
    should they occur in FY 2000, project deferments should not occur at
    any higher rate than in the past.
                           Family Housing Allowances
        Question. When Congress granted the authorities for the Family
    Housing Privatization initiative, we were concerned about the shift in
    costs from the family housing construction and O&M accounts to the
    personnel accounts. This year, the Army and the Navy transferred
    roughly $79 million from family housing O&M into the personnel accounts
    to cover necessary increases in housing allowances due to
    privatization. In addition, the Department is requesting transfer
    authority between the two accounts--accounts which are in two different
    bills.
        First, last year we asked the Department to integrate the personnel
    and installation departments on this issue. Has this been done?
        Answer. No. As it was correctly noted in the conference report
    accompanying the FY 1999 Military Construction Appropriations Act, the
    responsibility for military housing program cuts across many offices
    and accounts. The view that these offices are not coordinating their
    responsibilities or budgeting adequately for the housing and personnel
    accounts is incorrect. No single activity could (or should) deal with
    the myriad of issues associated with the privatization initiative. The
    Department's planning, programming and budgeting system (PPBS) provides
    the integrating process for the relevant offices to coordinate policy
    and funding issues in several phases--first during the planning and
    programming phase and then more thoroughly during the detailed budget
    review. As a result, the FY 2000 President's budget accurately funds
    both housing and allowance requirements. Further, housing allowance
    issues are also reviewed by the Quality of Life Executive Committee
    whose membership includes the Under Secretary of Defense (Personnel and
    Readiness), the Deputy Under Secretary of Defense (Installations) and
    the Principal Deputy Under Secretary of Defense (Comptroller).
        Question. Are the personnel accounts adequately budgeted in the
    FYDP for the increases in allowances due to the privatization
    initiatives?
        Answer. Yes. During the PPBS process the shift in funding
    requirements from housing to allowances was thoroughly reviewed. The
    Services have expressed confidence that the FY 2000 budget and Future
    Years Defense Program adequately funds the housing and personnel
    accounts in concert with the Department's commitment to the
    privatization initiatives.
        Question. What assurances can you offer me that any family housing
    O&M reductions due to privatization will be reapplied to other family
    housing improvements and not transferred elsewhere?
        Answer. Guidance from the Secretary of Defense requires that any
    savings resulting from privatization be reapplied to housing. As noted
    above, family housing O&M funds associated with privatized housing
    units are used to pay for the associated increased housing allowances.
    Also, in some instances the Services added funds to allowances for
    privatization without decrementing the housing accounts in order to
    reapply these housing ``savings'' to other housing-related shortfalls.
                          Base Realignment and Closure
        Question. Is it correct that the Future Years Defense Program
    (FYDP) has ``placeholders'' for base realignment and closure funding in
    fiscal year 2002 and beyond. If so, how much is set aside in each year,
    and how would administrative expenses be financed prior to fiscal year
    2002?
        Answer. The Future Years Defense Program (FYDP) contains $830.0
    million in Fiscal Year (FY) 2002, $1,447.0 million in FY 2003, and $581
    million in FY 2004 to begin implementation of new rounds of base
    realignment and closure in FY 2001 and FY 2005. For FY 2005, the FYDP
    contains net savings of $184 million as the impact of the new rounds
    takes effect. As with previous rounds, administrative expenses for
    developing realignment and closure recommendations will be funded from
    mission funds available to the Military Services and Defense Agencies.

                         Request for General Provisions

        Question. The budget proposes a general provision which would allow
    the transfer of up to $67 million between any accounts in the bill, and
    this could be accomplished at the determination of the Secretary and
    upon the approval of OMB. Congress would be given an ``after the fact''
    notification. What is the need and rational behind this request?
        Answer. Under the proposed transfer authority, the reprogramming
    guidelines established by 10 U.S.C. would still apply. Therefore, the
    Department would be required to provide congressional notification
    prior to accomplishing any transfer between accounts. As is the case
    with all reprogramming requests, the Department does not proceed with
    the projects until both the House and Senate Appropriations Committees
    have responded to our request. This authority would be useful to the
    Department in solving urgent, high priority funding problems within our
    available resources.
        Question. The budget requests transfer authority between the
    military construction accounts and the Military Unaccompanied Housing
    Improvement Fund. Last year, we withdrew this transfer authority after
    being told that barracks privatization was not going anywhere. Is there
    new interest in making this program work?
        Answer. The Office of Management and Budget (OMB) has provided more
    favorable scoring guidelines and expressed interest in having the
    Department more actively pursue barracks privatization. We will
    continue to explore barracks privatization. However, even with revised
    scoring, a number of significant issues exist relating to whether or
    not privatization is financially viable. With a wide variety of
    barracks, ranging from recruit dorms to transient quarters, we are not
    sure which, if any, will lend themselves to privatization using the
    various authorities provided by Congress.
                                Overall Funding
        Question. In your opinion, what can be done about the lack of
    support and funding requested by the Department for facility investment
    and housing, and when can we expect to see a steady path of funding?
        Answer. Our facility investment program value of $8,653,492,00 for
    FY 2000 represents an 11% increase over our FY 1999 request of
    $7,778,074,000 and a 2% increase over the FY 1999 appropriation of
    $8,443,742,000. The growth in the military construction and family
    housing programs continues over the future years defense plan (FYDP)
    for a five to ten percent increase overall. This affirms our continuing
    commitment to invest in our infrastructure. The only difference this
    fiscal year is the manner of financing our FY 2000 program requirements
    (over two fiscal years). We believe this one-time use of advance
    appropriations will not impede our ability to execute the FY 2000
    MilCon program in a timely manner.
                            Advanced Appropriations
        Question. The Department has chosen to build and $8.5 billion
    Military Construction program and spread its funding over two fiscal
    years. Instead of requesting fully executable projects in FY 2000, the
    Department has only requested funding for approximately 10-25% of
    individual project costs. To support the completion of these projects,
    the Department is requesting advanced appropriations of $3.1 billion to
    become available in FY 2001. What benefit is expected to be realized
    from this budgeting approach, and what is the basis for this
    expectation.
        Answer. The benefit from this budgeting approach is two-fold. The
    use of advance appropriations enable the Department to stay within the
    fiscal constraints of the budget agreement while at the same time
    retaining a robust contruction program that is vital to the
    Department's goal to sustain its infrastructure program. While this
    approach is being used on a broad scale for the construction accounts,
    it is similar in fashion to the way many projects have been financed in
    the past by Congress.
        Question. The incremental funding rate for each Service Component
    and Defense Agency is different. How were the rates for each Service
    Component and Defense Agency determined?
        Answer. The core building block for each appropriation to determine
    FY 2000 financing requirements was the historical outlay rate (after
    estimated, full funding requirements had been accommodated (e.g.,
    planning and design, minor construciton, phase funded projects, etc.)).
    To this amount was added an additional financing factor of 10% to
    provide sufficient financial flexibility in FY 2000 to maintain the
    construction program until the balance of funding becomes available in
    FY 2001.
                             Housing Privatization
        Question. Family Housing operations/repair costs are moving to
    ``allowances'' subaccounts of Military Personnel accounts to fund
    housing privatization. For FY 2000, how much, by service, has been
    shifted from family housing to personnel accounts? Is this sufficient
    to meet the needs of the services in FY 2000?
        Answer. The table below reflects, by Service, the requirements that
    have shifted in FY 2000 from family housing to military personnel
    accounts. The amounts transferred are based on the Services' current
    schedules for privatization projects and, barring significant schedule
    changes, should be sufficient to meet the FY 2000 requirements.
                                                               (In millions)
    Army..........................................................     $37.8
    Navy..........................................................      39.0
    Marine Corps..................................................       3.0
    Air Force *...................................................       9.7
                        ==============================================================
                        ____________________________________________________
        Total.....................................................      89.5

    * The Air Force did not shift funds from their family housing accounts
    to the military personnel account but did increase the personnel account
    by this amount for the military housing privatization initiative.

        Question. Why does the budget propose a new section 119, providing
    transfer authority from the Family Housing operations accounts to the
    Military Personnel accounts, rather than requesting direct
    appropriations to the personnel accounts?
        Answer. Predicting when privitization projects will be awarded is
    difficult and therefore budgeting for the shift in housing costs from
    the family housing accounts to the military personnel accounts is risky
    and could result in imbalances (shortfalls or overages) in the two
    accounts if the timing of privatization changes. Authority to transfer
    funds during execution ensures that the proper funding amounts are
    transferred at the appropriate time.
                  Supervision, Inspection and Overhead (SIOH)
        Question. The Department's construction budget includes an
    initiative to annualize the cost of supervising and inspecting
    construction projects. What benefit is expected to be realized from
    this budgeting approach, and what is the basis for this expectation?
        Answer. This approach allows the Department to defer SIOH costs to
    the year of execution and is an efficient use of limited resources.
    This should not hinder the supervision and inspection process since the
    funds are budgeted as needed as opposed to remaining unobligated.
    Additionally, this will align the budgeting of SIOH costs similar to
    other program management costs budgeted for other acquisition programs.
    Also deferring costs will compel the Army Corps of Engineers and Naval
    Facilities Command to more closely manage their overhead costs.
        Question. How much savings did this initiative create, and how were
    those savings reapplied?
        Answer. Annualization of SIOH costs yielded deferred savings of
    approximately $300 million over the FYDP with the majority of these
    savings occurring in FYs 2000/2001. The Services were permitted to
    apply these assets toward readiness, modernization, and
    recapitalization accounts.
                  Supervision, Inspection and Overhead (SIOH)
        Army's Response:
        Question. For the record please provide a list of all projects
    included in the budget request with its specific SIOH cost broken out
    by fiscal year.
        Answer. The Army's budget request includes many projects that were
    authorized but incrementally funded in a prior year's budget. These
    projects were exempt from further SIOH annualization. Funding rates
    vary in many cases based on planned construction schedules. A project
    list with SIOH cost by fiscal year for military construction and family
    housing construction follows:

    ----------------------------------------------------------------------------------------------------------------
                                                                         FY00      FY01
                 State/Station                 Project description       SIOH      SIOH             Comments
                                                                        ($000)    ($000)
    ----------------------------------------------------------------------------------------------------------------
                                            MILITARY CONSTRUCTION, ARMY (MCA)
    ALASKA:
        Fort Richardson...................  Whole Barracks Complex          118       769  .........................
                                             Renewal.
        Fort Wainwright...................  Emissions Reduction             125       807  .........................
                                             Facility.
    ALABAMA:
        Anniston AD.......................  Ammunition                      376  ........  Exempted
                                             Demilitarization
                                             Facility, Ph VII.
    ARKANSAS:
        Pine Bluff Arsenal................  Ammunition                    3,334  ........  Exempted
                                             Demilitarization
                                             Facility, Ph IV.
    CALIFORNIA:
        Fort Irwin........................  Rotational Unit Facility        180       544  .........................
                                             Maintenance Area.
    COLORADO:
        Peterson AFB......................  US Army Space Command           202     1,165  .........................
                                             Headquarters.
        Pueblo Depot......................  Ammunition                      634  ........  Exempted
                                             Demilitarization
                                             Facility, Ph I.
    DISTRICT OF COLUMBIA:
        Fort McNair.......................  Chapel...................        20        48  .........................
        Walter Reed AMC...................  Physical Fitness Training        55       313  .........................
                                             Center.
    GEORGIA:
        Fort Benning......................  Ammunition Holding Area..        23        51  .........................
        Fort Benning......................  Whole Barracks Renewal          383     2,171  .........................
                                             Complex.
        Fort Stewart......................  Multi-purpose Training           58       328  .........................
                                             Range.
        Fort Stewart......................  Whole Barracks Renewal          375     2,125
                                             Complex w/Dining.
    HAWAII:
        Schofield Barracks................  Whole Barracks Complex          766     5,017  .........................
                                             Renewal.
    INDIANA:
        Newport AAP.......................  Ammunition                    3,300  ........  Exempted
                                             Demilitarization
                                             Facility, Ph II.
    KANSAS:
        Fort Leavenworth..................  Whole Barracks Complex          210     1,166  .........................
                                             Renewal.
        Fort Leavenworth..................  US Disciplinary Barracks,     1,015  ........  Exempted
                                             Ph III.
        Fort Leavenworth..................  Water Treatment Plant....        65       370  .........................
    KENTUCKY:
        Bluegrass AD......................  Ammunition Surveillance          48       274  .........................
                                             Facility.
        Bluegrass AD......................  Ammunition                      591  ........  .........................
                                             Demilitarization Support.
        Bluegrass AD......................  Ammunition                      636  ........  Exempted
                                             Demilitarization
                                             Facility, Ph I.
        Fort Campbell.....................  MOUT Training Complex....       117       660  .........................
        Fort Campbell.....................  Physical Fitness Training        48       274  .........................
                                             Center.
        Fort Campbell.....................  Sabre Heliport                  133       754  .........................
                                             Improvements.
        Fort Campbell.....................  Whole Barracks Complex          258     1,843  .........................
                                             Renewal.
        Fort Knox.........................  Multi-purpose Digital           129     1,127  .........................
                                             Training Range, Ph II.
    MASSACHUSETTS:
        Westover AFB......................  Military Entrance                65       150  .........................
                                             Processing Station.
    MARYLAND:
        Aberdeen PG.......................  Ammunition                    3,581  ........  Exempted
                                             Demilitarization
                                             Facility, Ph II.
        Fort Meade........................  Military Entrance                72       169  .........................
                                             Processing Station.
        Fort Meade........................  Whole Barracks Complex          145       837  .........................
                                             Renewal.
    MISSOURI:
        Fort Leonard Wood.................  Wolverine/Grizzly                86       489  .........................
                                             Simulator Facility.
    NORTH CAROLINA:
        Fort Bragg........................  Heavy Drop Rigging              242     1,118  .........................
                                             Facility.
        Fort Bragg........................  MOUT Training Complex, Ph       032        76  .........................
                                             II.
        Fort Bragg........................  Whole Barracks Complex          933     3,067  .........................
                                             Renewal.
        Sunnypoint (MOTSU)................  Ammunition Surveillance          29       169  .........................
                                             Facility.
    NEW YORK:
        USMA..............................  Cadet Physical                1,537  ........  Exempted
                                             Development Center, Ph
                                             II.
    OKLAHOMA:
        Fort Sill.........................  Rail and Containerization       106       607  .........................
                                             Facility.
        McAlester AAP.....................  Fire Station.............        48       113  .........................
        McAlester AAP.....................  Railyard Infrastructure..        91       276  .........................
        McAlester AAP.....................  Ammunition Road                  55       311  .........................
                                             Infrastructure.
    OREGON:
        Umatilla AD.......................  Ammunition                    1,936  ........  Exempted
                                             Demilitarization
                                             Facility, Ph V.
    PENNSYLVANIA:
        Carlisle Barracks.................  Whole Barracks Complex           40       229  .........................
                                             Renewal.
        Letterkenny AD....................  Ammunition                       31       173  .........................
                                             Containerization Complex.
    SOUTH CAROLINA:
        Fort Jackson......................  Emergency Service Center.        60       340  .........................
    TEXAS:
        Fort Bliss........................  Air Deployment Facility         137       786  .........................
                                             Complex.
    VIRGINIA:
        Fort Bliss........................  Aircraft Loading Apron...       177     1,019  .........................
        Fort Bliss........................  Ammunition Hot Load Area.        92       521  .........................
        Fort Hood.........................  Deployment Ready Reactive       108       324  .........................
                                             Field & Trails.
        Fort Hood.........................  Fixed Wing Aircraft             250     1,443  .........................
                                             Parking Apron.
        Fort Hood.........................  Force XXI, Soldier              760  ........  Exempted
                                             Development Ctr, Ph II.
        Fort Hood.........................  Railhead Facility, Ph II.       795  ........  Exempted
        Fort Hood.........................  Whole Barracks Complex          234     1,304  .........................
                                             Renewal.
    VIRGINIA:
        Fort Belvoir......................  Military Police Station..        35        82  .........................
        Fort Belvoir......................  Fire Station.............        27        64  .........................
        Fort Eustis.......................  Whole Barracks Complex          315     1,765  .........................
                                             Renewal.
        Fort Myer.........................  Public Safety Center.....        47       109  .........................
    WASHINGTON:
        Fort Lewis........................  Physical Fitness Training       100       236  .........................
                                             Center.
        Fort Lewis........................  Tank Trail Erosion              108         0  Exempted
                                             Mitigation, Ph V.
        Fort Lewis (YTC)..................  Ammunition Supply Point..        84       198  .........................

                                                        Overseas
    GERMANY:
        Ansbach...........................  Barracks Modernization...       169     1,124  .........................
        Bamberg...........................  Barracks Modernization...        75       492  .........................
        Bamberg...........................  Barracks Modernization...        66       437  .........................
        Bamberg...........................  Barracks Modernization...        46       305  .........................
        Mannheim..........................  Barracks Modernization...        36       240  .........................
    KOREA REPUBLIC:
        Camp Stanley......................  Electrical System Upgrade        59       165  .........................
        Camp Casey........................  Whole Barracks Complex          249     1,621  .........................
                                             Renewal.
        Camp Howze........................  Water System Upgrade.....        49       136  .........................
    KWAJALEIN:
        Kwajalein.........................  Power Plant, Ph II--Roi       2,158  ........  Exempted
                                             Namur Island.
    WORLD WIDE:
        Various...........................  Classified Project.......     1,957  ........  Project fully funded
                                                                      --------------------
          Project Total...................  .........................    30,689    40,302  .........................

                                   MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCARNG)
    ALASKA:
        Anchorage.........................  CSMS/MATES...............       271  ........  Exempted
    ILLINOIS:
        Marseilles........................  Training Site, Batallion        149  ........  Exempted
                                             Complex.
    NORTH CAROLINA:
        Charlotte.........................  OMS......................        58  ........  Exempted
    NORTH CAROLINA:
        Charlotte.........................  Readiness Center.........       134  ........  Exempted
    WASHINGTON:
        Yakima............................  MATES, PH I..............       320  ........  Exempted

                                       MILITARY CONSTRUCTION, ARMY RESERVE (MCAR)
    FLORIDA:
        Orlando...........................  Land Acquisition.........        39         0  .........................
    GEORGIA:
        Ft. Gillem........................  USARC/OMS/Warehouse......       206     1,055  .........................
    NEW JERSEY:
        Ft. Dix...........................  Tactical Vehicle Wash Fac        92       229  .........................
    NEW YORK:
        Ft. Wadsworth.....................  Add/Alt USARC Phase I....       118       212  .........................
    TEXAS:
        Ft. Hood..........................  RTS/Maint-ECS/AMSA.......       153       385  .........................

                                                        OVERSEAS
    GUAM:
        Radio Barrigada...................  Add/Alt USARC Phase I....        64       937  .........................
    Puerto Rico...........................
        Ft. Buchanan......................  USARC....................        82       494  .........................

                                                ARMY FAMILY HOUSING (AFH)
    UNITED STATES
        None..............................
                                                        OVERSEAS
    GERMANY
        Baumholder........................  Family Housing                  185       887  .........................
                                             Improvements.
        Hanau.............................  Family Housing                   75       355  .........................
                                             Improvements.
        Wiesbaden.........................  Family Housing                   85       405
                                             Improvements.
    REPUBLIC OF KOREA
        Camp Humphreys....................  Family Housing New              286     1,179  .........................
                                             Construction.
    ----------------------------------------------------------------------------------------------------------------
    Some projects were exempted from SIOH annualization, since they were authorized in prior budgets.
    ARNG exempt from SIOH annualization. Amount reflects awarding complete SIOH contract in first year of
      appropriation.

        Navy's Response:
        Question. For the record, please provide a list of all projects
    included in the budget request with its specific SIOH cost broken out
    by fiscal year.
        Answer. A list of the requested projects and the associated SIOH is
    provided in the attached spreadsheet.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Air Force Response:
        For the record please provide a list of all projects included in
    the budget request with its specific SIOH cost broken out by fiscal
    year.
        Answer. The attached list of projects reflect the authorization
    requested in the fiscal year 2000 President's Budget submission. SIOH
    cost, broken out by fiscal year, is reflected for each project.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                            Incremental Funding Rate
        Army's Response:
        Question. For the record, please provide a list of all
    incrementally funded projects included in the budget request along with
    the individual project's funding rate excluding Supervision,
    Inspection, and Overhead (SIOH) costs.
        Answer. Some of the fiscal year 2000 projects were incrementally
    funded in prior budgets. These projects were funded to permit
    construction to continue and for project completion. A project list for
    military construction and family housing with each fiscal year's
    increment, excluding SIOH, follows:

    ----------------------------------------------------------------------------------------------------------------
                                                                           FY00
                                                                          Funding
                 State/Station                   Project description     rate (In               Comments
                                                                         percent)
    ----------------------------------------------------------------------------------------------------------------
                                            MILITARY CONSTRUCTION, ARMY (MCA)
    ALASKA:
        Fort Richardson....................  Whole Barracks Complex            15  .................................
                                              Renewal.
        Fort Wainwright....................  Emissions Reduction               15  .................................
                                              Facility.
    ALABAMA:
        Anniston AD........................  Ammunition                         4  .................................
                                              Demilitarization
                                              Facility, Ph VII.
    ARKANSAS:
        Pine Bluff Arsenal.................  Ammunition                        40  .................................
                                              Demilitarization
                                              Facility, Ph IV.
    CALIFORNIA:
        Fort Irwin.........................  Rotational Unit Facility          25  .................................
                                              Maintenance area.
    COLORADO:
        Peterson AFB.......................  US Army Space Command             15  .................................
                                              Headquarters.
        Pueblo Depot.......................  Ammunition                         6  Phase fully funded
                                              Demilitarization
                                              Facility, Ph I.
    DISTRICT OF COLUMBIA:
        Fort McNair........................  Chapel....................        30  .................................
        Walter Reed AMC....................  Physical Fitness Training         15  .................................
                                              Center.
    GEORGIA:
        Fort Benning.......................  Ammunition Holding Area...        30  .................................
        Fort Benning.......................  Whole Barracks Renewal            15  .................................
                                              Complex.
        Fort Stewart.......................  Multi-purpose Training            15  .................................
                                              Range.
        Fort Stewart.......................  Whole Barracks Renewal            15  .................................
                                              Complex w/Dining.
    HAWAII:
        Schofield Barracks.................  Whole Barracks Complex            15  .................................
                                              Renewal.
    INDIANA:
        Newport AAP........................  Ammunition                        33  .................................
                                              Demilitarization
                                              Facility, Ph II.
    KANSAS:
        Fort Leavenworth...................  Whole Barracks Complex            15
                                              Renewal.
        Fort Leavenworth...................  US Disciplinary Barracks,         27  Completes project
                                              Ph III.
        Fort Leavenworth...................  Water Treatment Plant.....        15  .................................
    KENTUCKY:
        Bluegrass AD.......................  Ammunition Surveillance           15  .................................
                                              Facility.
        Bluegrass AD.......................  Ammunition                         6  .................................
                                              Demilitarization
                                              Facility, Ph I.
        Fort Campbell......................  MOUT Training Complex.....        15  .................................
        Fort Campbell......................  Physical Fitness Training         15  .................................
                                              Center.
        Fort Campbell......................  Sabre Heliport                    15  .................................
                                              Improvements.
        Fort Campbell......................  Whole Barracks Complex            15  .................................
                                              Renewal.
        Fort Knox..........................  Multi-purpose Digital             15  .................................
                                              Training Range, Ph II.
    MASSACHUSETTS:
        Westover AFB.......................  Military Entrance                 30
                                              Processing Station.
    MARYLAND:
        Aberdeen PG........................  Ammunition                        36  .................................
                                              Demilitarization
                                              Facility, Ph II.
        Fort Meade.........................  Military Entrance                 30  .................................
                                              Processing Station.
        Fort Meade.........................  Whole Barracks Complex            15  .................................
                                              Renewal.
    MISSOURI:
        Fort Leonard Wood..................  Wolverine/Grizzly                 15  .................................
                                              Simulator Facility.
    NORTH CAROLINA:
        Fort Bragg.........................  Heavy Drop Rigging                15  .................................
                                              Facility.
        Fort Bragg.........................  MOUT Training Complex, Ph         80  .................................
                                              II.
    NORTH CAROLINA:
        Fort Bragg.........................  Whole Barracks Complex            22  .................................
                                              Renewal.
        Sunnypoint (MOTSU).................  Ammunition Surveillance           15  .................................
                                              Facility.
    NEW YORK:
        USMA...............................  Cadet Physical Development        34  .................................
                                              Center, Ph II.
    OKLAHOMA:
        Fort Sill..........................  Rail and Containerization         15  .................................
                                              Facility.
        McAlester AAP......................  Fire Station..............        30  .................................
        McAlester AAP......................  Railyard Infrastructure...        25  .................................
        McAlester AAP......................  Ammunition Road                   15  .................................
                                              Infrastructure.
    OREGON:
        Umatilla AD........................  Ammunition                        19  .................................
                                              Demilitarization
                                              Facility, Ph V.
    PENNSYLVANIA:
        Carlisle Barracks..................  Whole Barracks Complex            15  .................................
                                              Renewal.
        Letterkenny AD.....................  Ammunition                        15  .................................
                                              Containerization Complex.
    SOUTH CAROLINA:
        Fort Jackson.......................  Emergency Services Center.        15  .................................
    TEXAS:
        Fort Bliss.........................  Air Deployment Facility           15  .................................
                                              Complex.
        Fort Bliss.........................  Aircraft Loading Apron....        15  .................................
        Fort Bliss.........................  Ammunition Hot Load Area..        15  .................................
        Fort Hood..........................  Deployment Ready Reactive         30  .................................
                                              Field & Trails.
        Fort Hood..........................  Fixed Wing Aircraft               15  .................................
                                              Parking Apron.
        Fort Hood..........................  Force XXI, Soldier                51  Completes project
                                              Development Ctr, Ph II.
        Fort Hood..........................  Railhead Facility, Ph II..        46  Completes project
        Fort Hood..........................  Whole Barracks Complex            15  .................................
                                              Renewal.
    VIRGINIA:
        Fort Belvoir.......................  Military Police Station...        30  .................................
        Fort Belvoir.......................  Fire Station..............        30  .................................
        Fort Eustis........................  Whole Barracks Complex            15  .................................
                                              Renewal.
        Fort Myer..........................  Public Safety Center......        30  .................................
    WASHINGTON:
        Fort Lewis.........................  Physical Fitness Training         25  .................................
                                              Center.
        Fort Lewis.........................  Tank Trail Erosion                17  .................................
                                              Mitigation, Ph V.
        Fort Lewis (YTC)...................  Ammunition Supply Point...        30  .................................

                                                        OVERSEAS
    GERMANY:
        Ansbach............................  Barracks Modernization....        15  .................................
        Bamberg............................  Barracks Modernization....        15  .................................
        Bamberg............................  Barracks Modernization....        15  .................................
        Bamberg............................  Barracks Modernization....        15  .................................
        Mannheim...........................  Barracks Modernization....        15  .................................
    REPUBLIC OF KOREA:
        Camp Stanley.......................  Electrical System Upgrade.        30  .................................
        Camp Casey.........................  Whole Barracks Complex            15  .................................
                                              Renewal.
        Camp Howze.........................  Water System Upgrade......        30  .................................
    KWAJALEIN:
        Kwajalein..........................  Power Plant, Ph II--Roi           74  Completes project
                                              Namur Island.

                                   MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCARNG)
    ALASKA:
        Anchorage..........................  CSMS/MATES................        21  .................................
    ILLINOIS:
        Marseilles.........................  Training Site, Batallion          21  .................................
                                              Complex.
    NORTH CAROLINA:
        Charlotte..........................  OMS.......................        21  .................................
    NORTH CAROLINA:
        Charlotte..........................  Readiness Center..........        21  .................................
    WASHINGTON:
        Yakima.............................  MATES, PH I...............        21  .................................

                                       MILITARY CONSTRUCTION, ARMY RESERVE (MCAR)
    FLORIDA:
        Orlando............................  Land Acquisition..........       100  .................................
    GEORGIA:
        Ft. Gillem.........................  USARC/OMS/Warehouse.......        17  .................................
    NEW JERSEY:
        FT. Dix............................  Tactical Vehical Wash Fac.        29  .................................
    NEW YORK:
        Ft. Wadsworth......................  Add/Alt USARC Phase I.....        36  .................................
    TEXAS:
        Ft Hood............................  RTS-Maint/ECS/AMSA........       238  .................................

                                                        OVERSEAS
    GUAM:
        Radio Barrigada....................  Add/Alt USARC PhaseI......         6  .................................
    PUERTO RICO:
        Ft Buchanan........................  USARC.....................        14  .................................

                                           ARMY FAMILY HOUSING (AFH) OVERSEAS
    GERMANY:
        Baumholder.........................  Family Housing                    16  .................................
                                              Improvements.
        Hanau..............................  Family Housing                    16  .................................
                                              Improvements.
        Wiesbaden..........................  Family Housing                    16  .................................
                                              Improvements.
    KOREA:
        Camp Humphreys.....................  Family Housing New                18  .................................
                                              Construction.
    ----------------------------------------------------------------------------------------------------------------
    Projects previously incrementally funded in a prior budget were funded at the appropriate level to continue
      contruction and/or complete the project.
    ARNG exempt from SIOH annualization. Amount reflects awarding complete SIOH contract in first year of
      appropriation.

        Navy's Response:
        Question. For the record, please provide a list of all
    incrementally funded projects included in the budget request along with
    the individual project's funding rate excluding Supervision,
    Inspection, and Overhead (SIOH) costs.
        Answer. A list of the incrementally funded projects excluding SIOH
    is provided in the attached spreadsheet.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Air Force's Response:
        Question. For the record please provide a list of all incrementally
    funded projects included in the budget request along with the
    individual project's funding rate excluding Supervision, Inspection,
    and Overhead (SIOH) costs.
        Answer. The attached list of projects reflect the authorization
    requested in the fiscaly year 2000 President's Budget submission.
    Advanced funding requested and the funding rate (excluding SIOH) is
    reflected for each project.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           Chemical Demilitarization
        Question. Once again, the Department proposes to shift funding for
    the Chemical Demilitarization Program from Defense-wide to the Army
    account. What precautions have been taken to make sure the Army program
    is not reduced to fund chemical demilitarization?
        Answer. A complete evaluation of the Chemical Demilitarization
    program was accomplished as part of the Quadrennial Defense Review.
    Consistent with this review, all known Chemical Demilitarization
    program requirements were fully funded at the time of the transfer to
    the Army. As a result of this transfer, the Army's topline was
    commensurately increased thereby holding all Army programs harmless. In
    addition, due to future uncertainties and past history of the program,
    additional funding was programmed in the out-years to cover
    unanticipated requirements before transferring it to the Army.
                               Project Execution
        Question. What impact will incremental funding have on the
    execution of the FY00 military construction budget?
        Answer. The expectation is that there will be some increase in the
    necessary management of the construction program. This will be in the
    form of establishing the appropriate contract clauses that will ensure
    the complete project is undertaken while appropriate financing
    considerations are included to ensure projects remain within available
    funding in FY 2000 and also provide for sufficient lead-time notice to
    address expenditure related issues. The Department is working to
    resolve these issues now so that if the FY 2000 program is appropriated
    as requested, this program can be instituted without delay.
        Question. Will it be possible to execute major construction
    projects under the current reprogramming authorities?
        Answer. In order for reprogramming thresholds to be maintained at
    the effective standard of prior years, the procedures will need to be
    modified to invoke the notification process at the project
    authorization value vice the appropriated value of the project. This
    modification will still retain the necessary project-level cost
    oversight that Congress desires but will also ensure that the
    Department can conduct its FY 2000 construction program in an efficient
    manner without unduly burdening Congress in matters of financing when
    the approved program has not changed. For purposes of project
    authorization, this may require some revision to 10 U.S.C. 2853. For
    the purposes of appropriated funds, this will only require a
    modification to report language.
                       Defense Facilities Strategic Plan
        Question. Please bring us up to date on the Department's effort to
    produce a Facilities Strategic Plan.
        Answer. We have completed the framework for the plan and merged ten
    existing initiatives (such as barracks modernization or facility
    demolition) into the framework. We have also identified eight new
    initiatives (such as improving real property reporting and increasing
    joint use of facilities) and are beginning that work now. The
    initiatives are directed at four strategic goals for our facility
    assets: right size, right quality, right resources, and right tools.
        Question. How will this plan be incorporated into Defense Planning
    Guidance?
        Answer. Where appropriate, performance goals and funding targets
    will be included in the guidance.
                              Facility Reductions
        Question. As part of the Defense Reform Initiative, each military
    Service surveyed its building inventory to identify the obsolete and
    excess buildings they could demolish or otherwise dispose of. The
    survey identified 80 million square feet and about 8,000 specific
    structures. What progress has the Department made in disposing of this
    excess real property, and when does the Department expect to meet the
    desired end-state?
        Answer. In FY 1998, the Department eliminated about 16 million
    square feet, exceeding the FY 1998 goal of 11 million square feet. In
    FY 1999, the Department plans to eliminate an additional 14 million
    square feet. The Department is on track to dispose of at least 80
    million square feet by FY 2003. At the same time, the military services
    and defense agencies will continue to identify additional excess
    facilities with an eye on further savings.
                       Privatization of Utilities Systems
        Question. Please bring us up to date on the Department's effort to
    privatize utilities.
        Answer. Section 2688 of Title 10, United States Code, provides
    authority to convey to the private sector all Defense utility systems,
    including electric, water, waste water, and natural gas, as well as
    steam, hot and chilled water, and telecommunications systems. The
    Defense Reform Initiative states that the DoD will privatize all
    electric, water, waste water, and natural gas utility systems except
    where privatization is uneconomical or where unique security reasons
    require ownership by the Department. The objective is to get DoD out of
    the business of owning, managing and operating utility systems through
    privatization.
        Industry has shown a strong interest in the utility privatization
    efforts of the Department. Competition for both the conveyance of the
    utility infrastructure and the resulting acquisition of utility service
    is key to the effective management of the substantial resources the DoD
    directs at its energy facilities.
        Since establishing the DRI goal, the number of utility systems
    under consideration has increased with the inclusion of minor and
    overseas installations. The expansion of scope and the realization of
    the challenges inherent in privatizing utilities drove a reevaluation
    of the original Jan 2000 goal.
        On 23 Dec 1998, Defense Reform Initiative Directive (DRID) 49 was
    signed resetting the timeline for utilities privatization. The Services
    revised their plans to accommodate award of privatization contracts for
    all utility systems by Sep 2003. All studies will be completed by Sep
    30, 2000 and all solicitations released no later than Sep 30, 2001.
        DRID 49 also issued privatization guidance for utility systems,
    which sets the criteria for exempting systems from the privatization
    program. It also provides basic parameters for the economic analysis,
    and reiterates and expands upon the statutory requirements for the use
    of competitive producers. Service plans are currently being reviewed by
    OSD with a goal of reporting to Congress by the end of April 1999.
                         General Provisions: Deletions
        Question. Why does the budget propose to delete the following
    sections:
    section 111--American preference for A & E contracts
    section 113--notification of exercises
    section 119--annual burdensharing report
    section 121--compliance with ``Buy American Act''
    section 122--American-made equipment and products
    section 124--Partnership for Peace Programs
    section 126--notification of housing privatization solicitations
        Answer. Sections 111 (American preference for A & E contracts), 121
    (compliance with ``Buy American Act''), and 122 (American-made
    equipment and products) are unnecessary restrictions which limit the
    bidding climate. Section 113 (notification of exercises) inhibits the
    President's ability to perform his function of Commander-in-Chief by
    requiring a 30-day notification before military exercises occur. The
    continuing requirement to provide an annual burdensharing report under
    Section 119 is burdensome and unnecessary since it duplicates
    information already provided the committee. Section 124 (Partnership
    for Peace Programs) adversely impacts the NATO Security Investment
    Program (NSIP). The provision appears to confuse NATO multilateral
    military projects with US bilateral military support, and jeopardizes
    longstanding NATO consensus regarding use of NSIP funds for common
    Defense purposes. Section 126, which requires a 60-day notification
    prior to any housing privatization solicitations containing a base
    closure guarantee, only serves to delay privatization initiatives an
    additional 30 days since 10 U.S.C. 2883 already requires a 30-day
    notification prior to any family housing privatization solicitations.
                          Troop Housing--``1 PLUS 1''
        Question. What progress is the Department making in upgrading
    barracks for our single members to meet the new 1+1 standard?
        Answer. Since the adoption of the 1+1 design standard in November
    1995, the Services will have built new or renovated older barracks to
    create approximately 29,000 spaces to the new standard through FY 1999.
    The Army expects to meet the 1+1 standard by FY 2008, the Navy by 2013,
    and the Air Force by 2009. The Marine Corps has been granted a
    permanent waiver to use the 2+0 design standard in lieu of the 1+1
    standard. While the Marines Corps has been granted a waiver, it has
    placed top priority to eliminating the open bays and gangheads by 2005.
        Question. What has the average cost per space been under the ``1
    plus 1'' barracks standard?
        Answer. The Army has reported $65.4 thousand as its average cost
    per space for 1+1 standard, the Navy $62.7 thousand, and the Air Force
    $58.0 thousand. The Marine Corps' 2+0 configuration costs approximately
    $41.0 thousand per space.
                                    Barracks
        Question. Submit for the record a chart that will show, by service,
    the timetable for completion of the barracks revitalization effort at
    the time OSD approved the ``1 plus 1'' barracks standard, as compared
    with the timetable for completion of this effort as a result of
    Congressional initiatives to accelerate this effort.
        Answer. Following chart provides the requested timetable.

    ------------------------------------------------------------------------
                                                    Original       Current
                       Service                     target date   target date
    ------------------------------------------------------------------------
    Army........................................      FY 2020       FY 2008
    Navy........................................      FY 2013       FY 2013
    Marine Corps \1\............................      FY 2088       FY 2037
    Air Force...................................      FY 2019       FY 2009
    ------------------------------------------------------------------------
    \1\ Secretary of the Navy has waived the Marine Corps from the 1+1
      standard in favor of the Marine Corps' preference for 2+0 design. The
      original target date refers to the Service's initial plan to meet 1+1
      standard (before the waiver). The current plan signifies the date the
      Marine Corps anticipates meeting the 2+0 standard.

                             Troop Housing: Deficit
        Question. By Service, what is the total current troop housing
    deficit?
        Answer. The Services troop housing deficits are:
    Army, 53,900
    Navy, 19,000
    Air Force, 17,000
    Marine Corps, 35,074
        Question. Will the other Services be developing a ``Master Plan''
    similar to the Air Force's in the near future?
        Answer. Yes, the other Services are developing master plans. The
    Army's plan is 80 percent complete with final completion scheduled for
    30 September 1999. The Navy is developing a ``1+1'' transition plan for
    each installation that operates bachelor quarters. These plans will
    provide details at the building level, including the number and
    configuration of existing spaces, the space requirement, and a detailed
    plan to achieve the ``1+1'' standard. In addition, regional plans are
    being developed for each of the Navy concentration areas to upgrade
    spaces and achieve the ``1+1'' standard. Both of these plans are
    scheduled to be completed and ready for review in April 1999. In
    February 1999, the Marine Corps submitted an implementation plan for
    the achievement of the ``2+0'' configured barracks inventory to the
    Deputy Assistant Secretary of the Navy. The plan identifies, for each
    installation, the requirement and an implementation plan to achieve the
    standard. The plan is currently under review. The Air Force's Dormitory
    Master Plan published in Aug. 1997 is currently being updated. Its plan
    will identify the long-range requirement to replace or convert existing
    dormitories to the ``1+1'' construction standard as current facilities
    reach the end or their economic life.
                          Troop Housing: Inadequacies
        Question. Provide a breakout of how many barracks are considered
    substandard, inadequate and facilities with central latrines/showers.
        Answer. The following table indicates the number of bed spaces in
    barracks and dormitories considered substandard or inadequate and the
    number with central latrines/showers:

    ------------------------------------------------------------------------
                                                    Substandard
                        Service                          or        Central
                                                     inadequate    latrines
    ------------------------------------------------------------------------
    Army..........................................       21,700       31,000
    Navy..........................................       46,500        6,900
    Air Force.....................................        2,942            0
    Marine Corps..................................        6,278       10,400
    ------------------------------------------------------------------------

                         Troop Housing: Budget Request
        Question. How many spaces are included in the budget request for
    troop housing?
        Answer. The Department's military construction program for FY 2000
    includes more than $780 million to provide just over 11,000 new spaces
    to house our troops.
              Troop Housing: Cost To Buy-Out Troop Housing Deficit
        Army's Response:
        Question. By Service, what would it cost to buy out the current
    troop housing deficit?
        Answer. Between fiscal year 2000 and the last year of funding in
    fiscal year 2008, the Army is projecting an investment of $6.1 billion
    in U.S. funds.
        Navy's Response:
        Question. By Service, what would it cost to buy-out the current
    troop housing deficit?
        Answer. For the Navy, there is a deficit of 19,566 1+1 spaces. The
    estimated cost to construct a 1+1 space is $63,700 in fiscal year 2000
    dollars. The construction cost to eliminate the deficit is $1.2 billion
    in constant budget fiscal year 2000 dollars.
        The Marine Corps estimates a total requirement of $1.6 billion in
    constant budget fiscal year 2000 dollars to achieve the 2+0
    construction standard for barracks. Of this amount, approximately $775
    million is required to construct 19,158 additional barracks spaces in
    order to reach a two persons per room assignment standard. The cost per
    2+0 space is $40,400 in fiscal year 2000 dollars.
        Air Force's Response:
        Question. By Service, what would it cost to buy-out the current
    troop hosing deficit?
        Answer. Based on the Air Force Dormitory Master Plan, beginning
    with the FY00 MILCON program we require $1.2 billion (expressed in FY98
    dollars) of which $0.8 billion is the cost to buyout the current troop
    housing deficit and $0.4 billion is the cost to replace our critical
    condition dormitories. This does not include the cost of host-nation
    funded projects.
        Army's Response:
        Question. By Service, what is the estimated cost per space to
    eliminate the current troop housing deficit?
        Answer. Estimates are based on average construction cost data
    dating back to fiscal year 1996. Cost estimates to construct ``1+1''
    barracks buildings in the United States, including soldier community
    buildings, is $57,917 per space; in Europe, $84,257; and in Korea,
    $54,088. All costs are expressed in fiscal year 2000 dollars.
        Navy's Response:
        Question. By Service, what is the estimated cost per space to
    eliminate the current troop housing deficit?
        Answer. The Navy's average cost per 1+1 space is $63,700 in fiscal
    year 2000 dollars.
        The Marine Corps average cost per 2+0 configured room is $40,400 in
    fiscal year 2000 dollars.
        Air Force's Response:
        Question. By Service, what is the estimated cost per space to
    eliminate the current troop housing deficit?
        Answer. Air Force cost per space is estimated at $59,000 for each
    1+1 standard dorm room (one person per room) expressed in FY00 dollars
    (normalized to size adjustment and area cost factors of 1.0).
                           Troop Housing: Average Age
        Army's Response:
        Question. What is the average age of barracks facilities?
        Answer. In the United States, the median age is approximately 50
    years; in Korea, approximately 30 years; and in Europe, approximately
    45 years. Worldwide, the median age is approximately 45 years.
        Navy's Response:
        Question. What is the average age of barracks facilities?
        Answer. The average age of Navy barracks is 38 years. The average
    age of Marine Corps barracks is 24 years.
        Air Force's Response:
        Question. What is the average age of barracks facilities?
        Answer. Thirty-one years old.
        Army's Response:
        Question. Approximately, how many barracks were built over 30 years
    ago?
        Answer. Approximately 70 percent of our barracks were built over 30
    years ago.
        Navy's Response:
        Question. Approximately, how many barracks were built over 30 years
    ago?
        Answer. There are 728 Navy barracks which were built over 30 years
    ago. Approximately 197 Marine Corps barracks were built over 30 years
    ago.
        Air Force's Response:
        Question. Approximately, how many barracks were built over 30 years
    ago?
        Answer. We have 481 that were built over 30 years ago.
                            Unaccompanied Personnel
        Question. What percentage of the enlisted force does the Department
    estimate is single or unaccompanied?
        Answer. The Department estimates that 46.8 percent of the enlisted
    force is single and 86.26 percent of the single enlisted members do not
    have children. However, data are not available regarding the percentage
    of unaccompanied enlisted members.
        Question. What percentage of the officers does the Department
    estimate is single or unaccompanied?
        Answer. The Department estimates that 27.7 percent of officers are
    single and 89.97 percent of the single officers do not have children.
    However, data are not available regarding the percentage of
    unaccompanied officers.
        Question. How many men and women currently live in permanent party
    unaccompanied personnel housing? Of this amount, how many are enlisted
    personnel and how many are officers?
        Answer. According to the Department's Selected Military
    Compensation Tables for January 1999, about 397,900 single military
    personnel are living on-base receiving quarters in kind. This figure
    can be further broken down to 9,589 officers and warrant officers and
    388,311 enlisted personnel residing on-base.
        Question. What percentage of single or unaccompanied personnel does
    the Department estimate lives in private off-base housing?
        Answer. According to the Department's Selected Military
    Compensation Tables for January 1999, 180,490 (31 percent) of the
    Department's 578,390 single or unaccompanied personnel receive cash
    allowances for living off-base.
                           Child Development Centers
        Question. The budget request seeks funding for only two child
    development centers. Will this enable all services to meet the goal of
    providing for 80 percent of the total childcare need? If not, how much
    further construction by component is necessary?
        Answer. The Department has set an interim goal of meeting 65
    percent of the need by the year 2003. All Military Services are
    budgeted to meet this goal by that date. They will do so through a
    combination of expanding Family Child Care (our in-home care), School-
    age care in youth facilities and schools, and referral to off base
    programs. We are also actively seeking Memoranda of Agreement with
    state and local child care licensing agencies to allow us to certify
    military spouses living in non-military housing as family child care
    providers. At this time, we do not view large-scale construction
    programs as a solution to the need.
        Question. Are all of the components programming to meet the goal of
    80 percent of the potential need?
        Answer. All of the components have programmed funds to meet the
    interim 65 percent goal by the year 2003.
        Question. What progress has been made in the pilot program to
    review ways for providing child care services by using third party
    contracting?
        Answer. We initially were hopeful that third party contracting
    would provide a solution to our need for child care. However, this has
    not materialized. Because quality child care is difficult to find off
    the installation, especially for infants and toddlers (our biggest
    current need), third party contracting has produced fewer than 300
    total spaces in the three years the Navy has pursued this method. While
    we have not given up on this avenue, we do not view it as a major
    source of child care in the future. Essentially, we believe that growth
    will come through a combination of options including all those
    described above.
                           Average Age of Facilities
        Question. What is the average age of facilities and family housing?
        Answer. The average age of DoD facilities and family housing is
    about 40 years old.
                        Family Housing Replacement Value
        Question. What is the current housing replacement value for the
    Department of Defense?
        Answer. The current military family housing replacement value for
    the Department of Defense is $45.9 billion (Army, $17.3 billion; Navy,
    $9.0 billion, Marine Corps, $3.6 billion; and Air Force, $16.0
    billion).
                            Family Housing: Deficit
        Question. What is the current total family housing deficit for the
    Department of Defense, both in units and in cost of replacement,
    repair, or improvements?
        Answer. The following table represents the Department's estimate of
    family housing deficits for new construction, replacement and
    improvements:

                                                 [Dollars in thousands]
    ----------------------------------------------------------------------------------------------------------------
                                                                            New
                                                                       construction     Replacement     Improvement
    ----------------------------------------------------------------------------------------------------------------
    Army:
        Units \1\...................................................          10,442          36,244          52,612
        Costs \2\...................................................      $1,350,000      $3,440,000      $2,500,000
    Navy:
        Units.......................................................          15,900           4,450          21,200
        Costs \3\...................................................        $731,400        $689,750      $1,144,750
    Air Force:
        Units.......................................................          16,000          29,000          30,000
        Costs.......................................................      $2,048,000      $3,712,000      $2,430,000
    Marine Corps:
        Units.......................................................          10,373           3,724           7,485
        Costs.......................................................      $1,490,450        $706,222        $572,912
    ----------------------------------------------------------------------------------------------------------------
    \1\ Army--Based on end of FY 98 inventory of 116,916 on-post houses.
    \2\ Army--Based on traditional MLCON estimates. Actual costs for units in the U.S. to be built revitalized under
      privatization are expected to be lower.
    \3\ Navy--The Navy's new construction deficit reflects the total family housing shortage. The Navy plans to rely
      on an overall strategy that includes public/private venture initiatives, leasing. Aggressive housing referral
      programs, and the improved Basic Allowance for Housing (BAH) to address the total deficit. The cost identified
      here reflects estimated cost to build out the military construction portion of the total Navy deficit.

                      Family Housing: Average Age of Units
        Question. What is the average age of on-base housing?
        Answer. The average age of on-base housing is approximately 35
    years.
                 Family Housing: Annual Maintenance and Repair
        Question. What is the annual maintenance and repair bill on average
    for each unit?
        Answer. The Fiscal Year 2000 President's budget request would
    provide approximately $4,308 per unit for maintenance and repair. This
    is higher than the Fiscal Year 1999 Figure of $4,077 per unit. The
    change is primarily due to an increase in Family Housing O&M funding
    and a 4.8 percent reduction in housing inventory.
        Army's Response:
        Question. Provide a chart which shows a five-year history by
    Service of the annual family housing inventory, the annual maintenance
    amount and the annual maintenance cost per unit.
        Answer. The following table shows five-year history of Army Family
    Housing annual maintenance and repair cost, and cost per unit in
    constant fiscal year 1998 (FY98) dollars.

    ----------------------------------------------------------------------------------------------------------------
                                                                                      Annual
                                                                                  maintenance &      Per unit cost
                          Fiscal year                            Inventory       repair (Constant  (Constant FY98 $)
                                                                                     FY98 $)
    ----------------------------------------------------------------------------------------------------------------
    1994...................................................            132,445        282,363,000              2,132
    1995...................................................            124,558        333,790,000              2,680
    1996...................................................            123,656        623,870,000              5,045
    1997...................................................            122,369        528,199,000              4,316
    1998...................................................            118,416        475,480,000              4,015
    ----------------------------------------------------------------------------------------------------------------

        Navy's Response:
        Question. Provide for the record a chart which will show a five
    year history, by Service, of the annual inventory of family housing
    units, the annual maintenance amount and the annual maintenance cost
    per unit.
        Answer. A chart illustrating the Department of the Navy's annual
    family housing inventory, annual maintenance amount and annual
    maintenance cost per unit over the last five years follows:

                                                      NAVY HOUSING
    ----------------------------------------------------------------------------------------------------------------
                                                         FY95         FY96         FY97         FY98       FY99 \1\
    ----------------------------------------------------------------------------------------------------------------
    Average inventory..............................       72,562       70,651       69,337       62,684       61,158
    Total maintenance (M)..........................       $410.8       $467.2       $440.3       $417.3       $353.2
    Average maintenance cost per unit..............       $5,662       $6,612       $6,350       $6,657      $5,775
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimated figures for FY 99.

        The higher unit cost in Fiscal Year 1998 reflected Navy's
    commitment to eliminating our revitalization backlogs. The reduction in
    the FY 99 per unit costs reflects loss of inventory and savings
    resulting from the replacement/whole neighborhood revitalization/major
    repair efforts to a substantial portion of our old and severely
    deteriorated homes. The new and revitalized homes are less expensive to
    operate because of the installation of new energy efficient appliances
    and heating, ventilation and air conditioning systems (HVAC's), and the
    upgrading of electrical and utilities systems. Our FY99 program is
    adequately funded.

                                                  MARINE CORPS HOUSING
    ----------------------------------------------------------------------------------------------------------------
                                                         FY95         FY96         FY97         FY98       FY99 \1\
    ----------------------------------------------------------------------------------------------------------------
    Average inventory..............................       25,573       25,365       25,477       25,569       24,196
    Total maintenance (M)..........................        $51.6        $88.1        $75.6        $63.1        $71.0
    Average maintenance cost per unit..............       $2,017       $3,473       $2,968       $2,467      $2,935
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimated figures for FY 99.

        The large increase in unit cost in Fiscal Year 1996 was due
    primarily to increased funding to reduce the backlog of minor
    maintenance and repair.
        Air Force's Reponse:
        Question. Provide for the record a chart which will show a five
    year history, by service, of the annual inventory of family housing
    units, the annual maintenance amount, and the annual maintnance cost
    per unit.
        Answer.

                                          AIR FORCE FAMILY HOUSING MAINTENANCE
    ----------------------------------------------------------------------------------------------------------------
                                           FY95            FY96            FY97            FY98            FY99
    ----------------------------------------------------------------------------------------------------------------
    Average inventory (units).......         119,469         114,045         111,299         109,609         108,856
    Maintenance Funding.............    $426,197,000    $421,757,000    $405,443,000    $418,211,000    $387,354,000
    Maintenance Funding Per Unit              $3,567          $3,698          $3,643          $3,815          $3,526
     (Rounded to nearest dollar)....
    ----------------------------------------------------------------------------------------------------------------

                        Family Housing Improvement Fund
        Question. The budget request includes $78,756,000 for the Family
    Housing Improvement Fund. For the record, please provide an object and
    sub-object classification listing of expected obligations of this sum.
        Answer. Due to the nature of this request--for family housing
    initiatives pertaining to alternative means of acquiring and improving
    military family housing, and supporting facilities--it is not possible
    to subdivide these funds by object and sub-object class. Depending on
    the project and authorities used, funds may be spent as investments in
    non-governmental entities to pay the subsidy costs of loans or loan
    guarantees, to make rent differential payments and so forth. Until we
    know the specifics of a deal, we cannot determine how the money will be
    used. The Department plans to allocate the $78,756,000 to the Services
    for privatization projects when they reach sufficient maturity for
    funding, at which time the object classification categories can be
    determined.
                               Housing Allowances
        Question. Submit for the record a chart that will show up, by
    appropriations account, the amount expended during fiscal year 1998 and
    the amounts budgeted for fiscal years 1999 and 2000 for housing
    allowances, separately identifying accompanied and unaccompanied
    allowances.
        Answer. The following table shows the amounts obligated in FY 1998
    for domestic and overseas housing allowances broken down by account and
    whether ``accompanied'' or ``unaccompanied'' for the active military
    personnel appropriations. For these appropriations, funds are also
    requested for partial allowances and for inadequate family housing
    allowances. These funds are shown separately below. For the reserve
    component appropriations, the Department does not specify whether the
    funding requested is for ``accompanied'' or ``unaccompanied''
    allowances. Therefore, these numbers are provided in total.

    ----------------------------------------------------------------------------------------------------------------
                                                                  FY 1998
                                                                obligations      FY 1999 budgeted   FY 2000 budgeted
    ----------------------------------------------------------------------------------------------------------------
    Military Personnel, Army...............................          1,766,726          1,797,232          1,918,030
        Accompanied........................................          1,485,974          1,493,197          1,606,935
        Unaccompanied......................................            267,992            291,563            298,684
        Other..............................................             12,760             12,472             12,411
    Military Personnel, Navy...............................          1,963,616          1,952,465          1,986,054
        Accompanied........................................          1,578,319          1,543,816          1,568,414
        Unaccompanied......................................            375,195            399,126            407,907
        Other..............................................             10,102              9,523              9,733
    Military Personnel, Marine Corps.......................            502,510            532,156            555,126
        Accompanied........................................            418,259            437,854            458,564
        Unaccompanied......................................             76,682             86,779             89,028
        Other..............................................              7,569              7,523              7,534
    Military Personnel, Air Force..........................          1,642,511          1,703,226          1,776,343
        Accompanied........................................          1,240,172          1,265,199          1,300,022
        Unaccompanied......................................            396,704            432,214            470,899
        Other..............................................              5,635              5,813              5,422
    Total Active Personnel.................................          5,875,363          5,985,079          6,235,553
        Accompanied........................................          4,722,724          4,740,066          4,933,935
        Unaccompanied......................................          1,116,573          1,209,682          1,266,518
        Other..............................................             36,066             35,331             35,100
                                                            ========================================================
    Reserve Personnel, Army................................            117,715            122,633            133,383
    Reserve Personnel, Navy................................            122,803            125,559            124,332
    Reserve Personnel, Marine Corps........................             30,798             31,362             28,391
    Reserve Personnel, Air Force...........................             50,915             56,037             60,654
    National Guard Personnel, Army.........................            296,488            311,627            308,631
    National Guard Personnel, Air Force....................            120,448            113,793            124,129
                                                            --------------------------------------------------------
          Total Reserve Personnel..........................            739,167            761,011            779,520
          Total Housing Allowances.........................          6,614,530          6,746,090          7,015,073
    ----------------------------------------------------------------------------------------------------------------

                                   Inflation
        Question. What inflation rate was used in formulating the budget
    request?
        Answer. The FY 2000 budget request reflects an underlying inflation
    rate of 1.5 percent for FY 2000 Department of Defense outlays.
                             Non-Appropriated Funds
        Question. Provide for the record the estimated costs (by State,
    Service and project) of all nonappropriated funded construction over
    $500,000 in fiscal years 1999 and 2000. Also include the lump sum total
    of all projects between $200,000 and $500,000.
        Answer. The Fiscal Year 1999 construction projects over $500,000
    are provided in Enclosure (1). The Fiscal Year 1999 construction
    projects between $200,000 and $500,000 are provided in enclosure (2).
        The Fiscal Year 2000 construction projects are still in staffing at
    the Service level. The Department will send the Fiscal Year 2000
    Commissary Surcharge and Nonappropriated Fund Construction Program to
    Congress in August 1999.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                              Planning and Design
        Army's Response:
        Question. Provide for the record a detailed project listing by
    Service of all projects included in the fiscal year 2000 planning and
    design request. The listing should include project scope, estimated
    cost and estimated design cost.
        Answer. The planning and design funds budgeted for fiscal year (FY)
    2000 will be used to complete final design of the FY 2001 program, and
    develop parametric cost estimate/concept design of the FY 2002 program.

                                                       ACTIVE ARMY
    ----------------------------------------------------------------------------------------------------------------
                                                                                                              Est
                                                                                                 Est cost    design
              State and station             Project description     Scope            UM           ($000)      cost
                                                                                                             ($000)
    ----------------------------------------------------------------------------------------------------------------
                                              FY 2001 (FINAL DESIGN EFFORT)

    Alaska: Ft Richardson...............  Central Vehicle Wash        9,000  SF                     2,700        185
                                           Facility.
    Arizona: Ft Huachuca................  CIDC Field Operations           1  LS                     1,350         92
                                           Building.
    California: Ft Irwin................  Whole Barracks Complex        300  PN                    25,900      1,772
                                           Renewal.
    Georgia:
        Ft Benning......................  Fixed Wing Aircraft        74,133  SY                    17,000      1,163
                                           Parking Apron.
        Ft Gillem.......................  US Army Criminal            8,237  LS                    25,400      1,737
                                           Investigation
                                           Laboratory.
        Ft Benning......................  DS/GS Maintenance Shop          1  LS                    24,900      1,703
    Germany:
        Bamberg.........................  Whole Barracks Complex          1  LS                     4,100        280
                                           Renewal.
        Darmstadt.......................  Whole Barracks Complex         92  PN                     6,800        465
                                           Renewal.
        Darmstadt.......................  Whole Barracks Complex         93  PN                     7,000        479
                                           Renewal.
        Bamberg.........................  Whole Barracks Complex        128  PN                     9,300        636
                                           Renewal.
        Mannheim........................  Whole Barracks Complex         65  PN                     5,400        369
                                           Renewal.
    Hawaii: Schofield Barracks..........  Whole Barracks Complex          1  LS                    35,900      2,456
                                           Renewal.
    Kansas: Ft Riley....................  Whole Barracks Complex          1  LS                    25,900      1,772
                                           Renewal.
    Kentucky: Ft Campbell...............  Whole Barracks Complex          1  LS                    45,900      3,140
                                           Renewal.
    Korea:
        Camp Page.......................  Whole Barracks Complex          1  LS                    20,900      1,430
                                           Renewal.
        Camp Humphreys..................  Whole Barracks Complex        200  PN                    14,400        985
                                           Renewal.
    Kwajalein Atoll:
        Kwajalein.......................  Modernize                     100  PN                    19,900      1,361
                                           Unaccompanied
                                           Personnel Hsg.
        Kwajalein.......................  Child Development               1  LS                     3,400        233
                                           Center.
    Maryland: Ft Detrick................  Whole Barracks Complex          1  LS                    14,200        971
                                           Renewal.
    Nevada: Hawthorne AAP...............  MILVAN Repair Facilty.     90,000  SF                     1,700        116
    New Jersey: Ft Monmouth.............  USMA Prep School                1  LS                    11,800        807
                                           Barracks.
    North Carolina:
        Sunnypoint MOT..................  Rail Equipment             13,600  SF                     2,000        137
                                           Maintenance Facility.
        Ft Bragg........................  Whole Barracks Complex        960  PN                    59,800      4,090
                                           Renewal.
        Ft Bragg........................  Whole Barracks Complex          1  LS                    22,000      1,505
                                           Renewal.
        Ft Bragg........................  Ammunition Holding         30,000  SF                    13,200        903
                                           Area.
    Oklahoma: Ft Still..................  Tatical Equipment Shop          1  LS                    13,000        889
    Pennsylvania: Carlisle Barracks.....  Academic Research          66,770  SF                    11,200        766
                                           Facility (Upton Hall).
    Texas:
        Red River AD....................  Container Pad F.......          1  LS                       820         56
        Ft Bliss........................  Rail Deployment                 1  LS                    27,900      1,908
                                           Facility Complex.
        Ft Hood.........................  Digital Multi-purpose           1  LS                    22,000      1,505
                                           Training Range.
    Virginia: Ft Lee....................  Airborne Training               1  LS                    15,000      1,026
                                           Facility.
    Washington: Ft Lewis................  Tank Trail Erosion              1  LS                     2,000        137
                                           Mitigation--Yakima Ph
                                           VI.
    Worldwide Various Locations Minor     Minor Construction FY           1  LS                    15,000      2,250
     Cons.                                 2001.
                                         ---------------------------------------------------------------------------
          Total Final Design Effort--FY   ......................  .........  .................  .........     37,323
           01 Program.

                                       FY 2001 (PARAMETRIC/CONCEPT DESIGN EFFORT)

    Alaska: Fort Wainwright.............  MOUT Training Range...          1  LS                    14,200        486
    Arkansas: Pine Bluff Arsenal........  Quality Evaluation Lab          1  LS                    18,000        616
    Colorado:
        Fort Carson.....................  Mobilization Material           1  LS                     4,450        152
                                           Warehouse.
        Fort Carson.....................  Multi-purpose Digital           1  LS                    28,000        958
                                           Range Complex.
    Georgia:
        Fort Benning....................  ADACG (Pallet                   1  LS                     1,500         51
                                           Processing).
        Fort Benning....................  DS/GS Consolidated              1  LS                    25,000        855
                                           Maint Shop.
        Fort Benning....................  Passenger Processing            1  LS                     7,100        243
                                           Facility.
        Fort Benning....................  Runway Extension......          1  LS                     3,600        123
        Fort Stewart....................  General Purpose                 1  LS                    16,500        564
                                           Warehouse.
        Fort Gordon.....................  Consolidated                    1  LS                     9,000        308
                                           Communications
                                           Facility.
    Hawaii: Schofield Brks..............  Whole Barracks Complex          1  LS                    49,000      1,676
                                           Renewal.
    Iowa: Iowa AAP......................  MILVAN Repair Facility          1  LS                       310         11
    Kansas:
        Fort Riley......................  Modified Record Range.          1  LS                     3,400        116
        Fort Riley......................  Whole Barracks Complex          1  LS                    40,000      1,368
                                           Renewal.
    Kentucky:
        Fort Campbell...................  Deployment Staging....          1  LS                     2,100         72
        Fort Campbell...................  Expand Keyhole                  1  LS                     1,000         34
                                           Hardstand Area.
        Fort Campbell...................  Passenger Processing            1  LS                     9,400        321
                                           Facility.
        Fort Knox.......................  Physical Fitness                1  LS                     6,200        212
                                           Training Center.
    North Carolina:
        Fort Bragg......................  POL (Avn Fuel) Storage          1  LS                    10,000        342
        Fort Bragg......................  Whole Barracks Complex          1  LS                    40,000      1,368
                                           Renewal.
        Fort Bragg......................  Whole Barracks Complex          1  LS                    39,000      1,334
                                           Renewal.
        Sunny Point MOT.................  Canopies for Cargo....          1  LS                     1,800         62
        Sunny Point MOT.................  Container Chassis               1  LS                     1,600         55
                                           Staging Area.
        Sunny Point MOT.................  River Road Improvement          1  LS                     4,650        159
    New York: Fort Drum.................  Cons. Soldier and               1  LS                    21,000        718
                                           Family Support Center.
    Ohio: Defense Logistics Ctr.........  Military Entrance               1  LS                     1,650         56
                                           Processing Center.
    Oklahoma:
        Fort Sill.......................  Contingency Warehouse.          1  LS                     7,600        260
        Fort Sill.......................  Unit Movement Facility          1  LS                     3,450        118
    Tennessee: Milan AAP................  Magazine Apron                  1  LS                       760         26
                                           Rehabilitation.
    Texas:
        Fort Bliss......................  Contingency Stock               1  LS                     7,600        260
                                           Warehouse.
        Fort Bliss......................  Tactical Equipment              1  LS                     4,300        147
                                           Shop, Org.
        Fort Hood.......................  Contingency Stock               1  LS                    10,200        349
                                           Warehouse.
    Virginia:
        Fort Eustis.....................  Upgrade Main Pier.....          1  LS                    19,200        657
        Fort Myer.......................  Whole Barracks Complex          1  LS                     4,500        154
                                           Renewal.
    Washington:
        Fort Lewis......................  Deployment Center               1  LS                    13,600        465
                                           Vehicle/Material.
        Fort Lewis......................  Railhead Storage......          1  LS                    14,000        479
        Fort Lewis......................  Whole Barracks Complex          1  LS                    49,000      1,675
                                           Renewal.
        Fort Lewis......................  Whole Barracks Complex          1  LS                    49,000      1,675
                                           Renewal.
        Fort Lewis (YTC)................  Tank Trail Erosion              1  LS                     2,000         68
                                           Mitigation, Ph VII.
    Germany:
        Bamberg.........................  Physical Fitness                1  LS                     6,000        205
                                           Training Center.
        Bamberg.........................  Whole Barracks Complex          1  LS                     9,500        325
                                           Renewal.
        Baumholder......................  Vehicle Maintenance             1  LS                    11,200        383
                                           Shop.
        Darmstadt.......................  Whole Barracks Complex          1  LS                     6,800        233
                                           Renewal.
        Darmstadt.......................  Whole Barracks Complex          1  LS                     6,900        236
                                           Renewal.
        Hanau...........................  Whole Barracks Complex          1  LS                     7,300        250
                                           Renewal.
        Heidelberg......................  Whole Barracks Complex          1  LS                     7,200        246
                                           Renewal.
    Korea:
        Camp Carroll....................  Whole Barracks Complex          1  LS                     9,000        308
                                           Renewal.
        K-16 Airfield...................  Whole Barracks Complex          1  LS                    25,000        855
                                           Renewal.
    Kwajalein:
        Kwajalein.......................  Cold Storage Warehouse          1  LS                    12,000        410
        Kwajalein.......................  Connector Road........          1  LS                     4,150        142
        Kwajalein.......................  Vehicle Paint & Prep            1  LS                     5,300        181
                                           Shop.
    Puerto Rico:
        Fort Buchanan...................  Child Development               1  LS                     2,500         86
                                           Center.
        Fort Buchanan...................  US Army South HQ                1  LS                    12,700        434
                                           Building.
        Puerto Rico.....................  SOCSOUTH Restationing.          1  LS                    14,500        496
          Total Parametric/Concept......  ......................  .........  .................  .........     23,382
          Effort--FY 02.................
          Program.......................
                                                                 ---------------------------------------------------
            Grand Total FY 2000 MCA       ......................  .........  .................  .........     60,705
             Planning and Design
             Requirement.
    ----------------------------------------------------------------------------------------------------------------

                                                   ARMY NATIONAL GUARD
    ----------------------------------------------------------------------------------------------------------------
                                                                                                              Est
                                                                                                 Est cost    design
              State and station             Project description     Scope            UM           ($000)      cost
                                                                                                             ($000)
    ----------------------------------------------------------------------------------------------------------------
                                                         FY 2001

    Alabama: Huntsville.................  Unit Training               4,517  SM                     8,916        407
                                           Equipment Site (UTES).
    California: Fort Irwin..............  Maint & Trng Equipment    152,552  SF                    19,717        899
                                           Site (MATES).
    Colorado: Fort Carson...............  Maint & Trng Equipment     72,039  SF                    12,986        593
                                           Site (MATES).
    Florida: Pensacola..................  Readiness Center......     42,401  SF                     3,706        169
    Georgia: Elberton...................  Readiness Center......     54,086  SF                     5,036        230
    Oregon: Salem.......................  Armed Forces Reserve       10,965  SM                    10,893        497
                                           Center.
    South Carolina: Eastover............  Infrastructure Upgrade     28,913  LM                     5,431        248
    FY 01 Program Planning & Design       ......................  .........  .................      3,043  .........
     Effort.

                                                         FY 2002

    Delaware: Smyrna....................  Readiness Center......     46,237  SF                     4,284        195
    Indiana: Camp Atterbury.............  Water System               21,339  LF                     5,058        231
                                           Improvements.
    New Jersey: Fort Dix................  Trng Technology Battle     65,322  SF                     7,653        349
                                           Lab Exp, Ph II.
    Tennessee: Alcoa....................  Readiness Center......     59,967  SF                     6,815        311
    FY 02 Program Planning & Design       ......................  .........  .................      1,086  .........
     Effort.
                                                                 ---------------------------------------------------
          Grand Total FY 2000 AFHC        ......................  .........  .................  .........      4,129
           Planning & Design Requirement.
    ----------------------------------------------------------------------------------------------------------------

                                                    U.S. ARMY RESERVE
    ----------------------------------------------------------------------------------------------------------------
                                                                                                              Est
                                                                                                 Est cost    design
              State and station             Project description     Scope            UM           ($000)      cost
                                                                                                             ($000)
    ----------------------------------------------------------------------------------------------------------------
                                                         FY 2001

    Florida: Orlando....................  Joint Reserve Facility     13,470  M2                    18,000      1,400
    Kentucky: Ft. Knox..................  USARC/Storage Facility      8,410  M2                    11,195        950
    Louisiana:
        Ft. Polk........................  USARC/OMS/ECS.........      9,021  M2                     9,438        710
        New Orleans.....................  USARC/OMS/AMSA........      8,845  M2                    12,481        920
    Texas: Ft. Sam Houston..............  USARC/OMS/ECS.........     12,934  M2                    15,202      1,175
    Washington: Tacoma..................  USARC/OMS/AMSA              6,150  M2                    17,509        845
                                           (Marine).
    FY 01 Program Planning & Design       ......................  .........  .................     83,825      6,000
     Effort.

                                                         FY 2002

    Colorado: Ft. Carson................  Add AFRC/AMSA.........      6,921  M2                     9,754        250
    Connecticut: West Hartford..........  Add/Alt USARC.........      9,234  M2                    16,375        820
    Louisiana: Ft. Polk.................  Add/Alt ECS...........      6,125  M2                     7,043        220
    Washington: Ft. Lewis...............  USARC/OMS/ASF.........      3,027  M2                    14,472        585
    Tafuna: American Samoa..............  Add/Alt USARC/OMS.....      4,948  M2                    14,456        625
    FY 02 Program Planning & Design       ......................  .........  .................     62,100      2,500
     Effort.
                                                                 ---------------------------------------------------
          Grand Total FY 2000 AFHC        ......................  .........  .................  .........      8,500
           Planning & Design Requirement.
    ----------------------------------------------------------------------------------------------------------------

                                            ARMY FAMILY HOUSING CONSTRUCTION
    ----------------------------------------------------------------------------------------------------------------
                                                                                                              Est
                                                                                                 Est cost    design
              State and station             Project description     Scope            UM           ($000)      cost
                                                                                                             ($000)
    ----------------------------------------------------------------------------------------------------------------
                                                         FY 2001

    Germany:
        Ansbach.........................  Family Housing                 42  Unit                   5,000        250
                                           Improvements.
        Heidelberg......................  Family Housing                246  Unit                  10,500        500
                                           Improvements.
        Wiesbaden.......................  Family Housing                144  Unit                  16,000        800
                                           Improvements.
        Wuerzburg.......................  Family Housing                 64  Unit                   7,300        350
                                           Improvements.
    Korea: Cp Humphreys.................  Family Housing                 60  Unit                  20,000      1,000
                                           Improvements.
    FY 01 Program Planning & Design       ......................  .........  .................      2,900  .........
     Effort.

                                                         FY 2002

    Germany:
        Ansbach.........................  Family Housing                128  Unit                  12,600        280
                                           Improvements.
        Darmstadt.......................  Family Housing                191  Unit                   8,200        170
                                           Improvements.
        Stuttgart.......................  Family Housing                 30  Unit                   4,100         90
                                           Improvements.
        Stuttgart (Patch Bks)...........  Family Housing                 54  Unit                   8,000        180
                                           Improvements.
    Italy: Vicenza......................  Family Housing                 74  Unit                   6,900        150
                                           Improvements.
    Korea: Cp Humphreys.................  Family Housing                 60  Unit                  24,700        530
                                           Improvements.
    FY 02 Program Planning & Design       ......................  .........  .................      1,400  .........
     Effort.
                                                                 ---------------------------------------------------
          Grand Total FY 2000 AFHC        ......................  .........  .................  .........      4,300
           Planning & Design Requirement.
    ----------------------------------------------------------------------------------------------------------------

        Navy's Response:
        Question. Provide for the record, a detailed project listing by
    Service of all projects included in the fiscal year 2000 planning and
    design request. The listing should include project scope, estimated
    cost and estimated design cost.
        Answer. A list of projects included in the FY 2000 planning and
    design request is attached.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Air Force's Response:
        Question. Provide for the record a detailed project listing by
    Service of all projects included in the fiscal year 2000 planning and
    design request. The listing should include project scope, estimated
    cost and estimated design cost.
        Answer. The fiscal year 2000 planning and design request is used in
    complete fiscal year 2001 project design and initiate fiscal year 2002
    project design. The fiscal year 2000 planning and design request is
    based primarily on the attached list of projects. Additionally, the
    request includes funds for value engineering, host-nation support
    programs, and the development of housing community plans. The project
    list will change during the review process in preparation for
    submission of the fiscal year 2001 President's Budget.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                        FOREIGN CURRENCY EXCHANGE RATES
        Question. Provide for the record the exchange rates assumed in the
    fiscal year 2000 budget request.
        Answer. The following are the foreign currency exchange rates
    assumed in the President's budget request for FY 2000:

                         FOREIGN CURRENCY EXCHANGE RATES
                 [Units of Foreign Currency Per One U.S. Dollar]
    ------------------------------------------------------------------------
                                                              FY 2000 Budget
                  Country                   Monetary Unit          Rates
    ------------------------------------------------------------------------
    Belgium...........................  Franc...............          35.350
    Denmark...........................  Krone...............          6.5115
    France............................  Franc...............          5.7430
    Germany...........................  Deutsche Mark.......          1.7125
    Greece............................  Drachma.............          287.35
    Italy.............................  Lira................        1,695.00
    Japan.............................  Yen.................          123.05
    Netherlands.......................  Guilder.............          1.9314
    Norway............................  Krone...............          7.5653
    Portugal..........................  Escudo..............         175.610
    Singapore.........................  Dollar..............          1.6490
    South Korea.......................  Won.................        1,242.50
    Spain.............................  Peseta..............          145.65
    Turkey............................  Lira................      301,935.00
    United Kingdom....................  Pound...............          0.6045
    ------------------------------------------------------------------------

        Question. What is the current balance in the Foreign Currency
    Fluctuation Account?
        Answer. There are no funds currently in the Foreign Currency
    Fluctuation, Construction, Account. All funds have been transferred to
    the Components' Centrally Managed Allotments to meet FY 1999 foreign
    currency fluctuation requirements. However, the amounts currently held
    in the Service CMAs are as follows ($ in thousands):

    MILCON, Army..................................................    14,933
    Family Housing Construction, Army.............................     3,091
    Family Housing Operations, Army...............................   103,820
    MILCON, Family Housing Construction & Ops, Navy...............        30
    MILCON, Air Force.............................................     4,300
    Family Housing Construction, Air Force........................     1,000
    Family Housing Operations, Air Force..........................     9,000
    MILCON, Defense-Wide..........................................     5,217
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................   141,391

        Question. How much additional cost has been incurred as a result of
    foreign currency fluctuation over the last three years, in both
    construction and family housing operations and maintenance?
        Answer. The following table reflects the gains (negative numbers)
    and losses (positive numbers) associated with foreign currency
    fluctuation during the last three years:

                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                                                 Family        Family
                                                                    MILCON       housing      housing       Total
                                                                              construction   operations
    ----------------------------------------------------------------------------------------------------------------
    FY 1996....................................................          4.6           1.5         38.6         44.7
    FY 1997....................................................         -3.6           -.6        -38.3        -42.5
    FY 1998....................................................         -8.5          -1.5        -38.4        -48.4
    ----------------------------------------------------------------------------------------------------------------

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

    1994..........................................................    95,004
    1995..........................................................    79,773
    1996..........................................................    79,045
    1997..........................................................    63,867
    1998..........................................................   141,391

                                  Lost Design
        Army's Response:
        Question. How much in lost design occurred in fiscal year 1998 for
    each service?
        Answer. The Corps of Engineers is transitioning to a new project
    management information system and lost design is not available for
    fiscal year 1998.
        Navy's Response:
        Question. How much in lost design occurred in fiscal year 1998 for
    each Service?
        Answer. Lost design as defined by DoD is that portion of design
    obligations that will not result directly in facilities acquisition.
    This includes the cost of scrapped design or redesign. Scope not
    awarded and changes in criteria, siting and requirements usually result
    in lost design. Lost design during fiscal year 1998 for the Department
    of the Navy was $1,634K.
        Air Force's Response:
        Question. How much in lost design occurred in fiscal year 1998 for
    each service?
        Answer. Lost design refers to that portion of design fund
    obligation that will not result directly in facilities acquisition, and
    includes the cost of scrapped design or the cost of design that must be
    redone. We have requested our design/construction agents, the US Army
    Corps of Engineers and the Navy Facilities Engineering Command, to
    provide this data. We will provide an update by 31 Mar 99.
        Army's Response:
                              Breakage and Design
        Question. How much breakage and deferred design occurred in fiscal
    year 1998 for each service?
        Answer. For fiscal year 1998, the amount of breakage and deferred
    design for Military Construction for the Active Army, Army National
    Guard, Army Reserves, and Army Family Housing Construction was $1,046
    million.
        Navy's Response:
        Question. How much breakage and deferred design occurred in fiscal
    year 1998 for each Service?
        Answer. Breakage as defined by DoD is any design obligations
    against projects that will not be acquired. It includes any projects
    that during the reported fiscal year were canceled, dropped from or
    deferred beyond the Future Years Defense Plan (FYDP). Lost design is
    subordinate to breakage; therefore, if a project is classified as
    breakage, the lost design is not counted. Breakage and deferred design
    during fiscal year 1998 for the Department of the Navy was $890K.
        Air Force's Response:
        Question. How much breakage and deferred design occurred in fiscal
    year 1998 for each Service?
        Answer. Design breakage refers to that portion of design fund
    obligation that will not result in facilities acquisition, and includes
    the cost of design for projects that have dropped from the future years
    defense plan. Of Air Force designs accomplished in fiscal year 1998,
    $840,000 was categorized as design breakage.
                               Davis-Bacon: Costs
        Question. What is your estimate of the amount within the budget
    request for fiscal year 2000 that is attributable to the provisions of
    Davis-Bacon?
        Answer. The Department conservatively estimates that 5 to 8 percent
    of project costs could be reduced were the Davis-Bacon provisions to be
    waived. Amounts attributable to Davis-Bacon for Military Construction
    are $125 million at 5 percent and $200 million at 8 percent. Amounts
    for Family Housing are $19 million and $31 million, respectively.
                         DoD Environmental Project List
        Question. Provide for the record a list of environmental compliance
    projects requested in the budget, sorted by service, installation, and
    by level of compliance.
        Answer. The list of projects is attached. All MilCon projects
    included in the FY 2000 President's Budget request are Class I
    projects.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                              Environmental Levels
        Question. For the record, what is the definition of ``Level I'',
    ``Level II'', and ``Level III'' projects?
        Answer. The term ``Level'' should be changed to ``Class''. The
    definitions for Class I through Class III projects, as stated below,
    are found in the DoD Environmental Compliance Instruction, DoD I
    4715.6, dated April 24, 1996. The definitions are as follows:
        Class I--Projects and activities needed that are currently out of
    compliance (have received an enforcement action from a duly authorized
    Federal, State, or local authority, have a signed compliance agreement
    or received a consent order; and/or have not met requirements based on
    applicable Federal, State, and local laws, regulations, and Executive
    Orders, DoD policies, and Final Governing Standards overseas). This
    class also includes projects and activities needed that are not
    currently out of compliance (deadlines or requirements have been
    established by applicable authorities, but deadlines have not passed or
    requirements are not in force) but shall be if projects or activities
    are not implemented within the current program year. Those activities
    include the preparation of plans (e.g.: National Environmental Policy
    Act documentation, master plans, emergency response plans, integrated
    natural and cultural resource management plans, pollution prevention
    plans; etc.), opportunity assessments and inventories. The preferred
    approach is to use pollution prevention projects or activities, if cost
    effective, to bring a facility into compliance. Overseas, this class
    includes projects and activities necessary to alleviate the human
    health threats to ongoing operations or necessary to comply with
    applicable treaties and agreements.
        Class II--Projects and activities needed that are not currently out
    of compliance (deadlines or requirements have been established by
    applicable Federal, State, and local laws, regulations, and Executive
    Orders, DoD policies and Final Governing Standards overseas, but
    deadlines have not passed or requirements are not in force) but will be
    if projects or activities are not implemented in time to meet an
    established deadline beyond the current program year. The preferred
    approach is to use pollution prevention projects or activities, if cost
    effective, as the means of maintaining or bringing a facility into
    compliance. Overseas, this class included projects and activities
    identified using risk based prioritization practices that meet the
    longterm objective of full implementation of the Final Governing
    Standards for each foreign country where DoD maintains substantial
    installations.
        Class III--Includes projects and activities that are not explicitly
    required by law, but are needed to address overall environmental goals
    and objectives.
        There is also a Class 0 that includes activities needed to cover
    the recurring administrative, personnel and other costs associated with
    managing environmental programs that are necessary to meet applicable
    compliance requirements (Federal, State, and local laws, regulations,
    Executive Orders, DoD policies, and Final Governing Standards overseas)
    or which are in direct support of the military mission. Also, includes
    environmental management activities associated with the operation of
    facilities, installations and deployed weapon systems. Recurring costs
    consist of manpower, training, supplies, hazardous waste disposal,
    operating recycling activities, permits, fees, testing and monitoring
    and/or sampling and analysis, reporting and record keeping (e.g. Toxic
    Release Inventory reporting), maintenance of environmental equipment,
    and compliance self assessments.
                      DoD Life Safety/Health Project List
        Army's Response:
        Question. Provide for the record a list of life safety/health
    compliance projects requested in the budget, sorted by Service,
    installation, and by level of compliance.
        Answer. The Army has no projects that are justified solely on the
    basis of life safety/health compliance. Many projects have life safety/
    health improvements as ancillary benefits, but none have life safety/
    health as the primary justification.
        Navy's Response:
        Question. Provide for the record a list of life safety/health
    compliance projects requested in the budget, sorted by Service,
    installation and by level of compliance.
        Answer. A list of Navy life safety/health compliance projects is
    provided in the attached spreadsheet.
        The Marine Corps has two projects in the FY 2000 program that
    involve safety and compliance issues.
        The first is MILCON project P-122, MCB Hawaii, CONTROL TOWER AND
    AIR TRAFFIC CONTROL FACILITY. The existing control tower is only half
    the recommended height and does not have line of sight to all parts of
    the airfield. Radar monitoring equipment and personnel are housed in
    relocatable facilities located next to the existing control tower
    within the airfield clear zone and require a waiver for operation. The
    new tower and ATC facility would meet all FAA regulations and would no
    longer require a waiver to operate.
        The second MILCON project is P-481, MCAS Yuma, LAND ACQUISITION.
    MCAS Yuma needs more land in order to safely store its annual ordnance
    requirement and to load aircraft with ordnance. Currently, MCAS Yuma
    operates under two CNO waivers that allow explosive safety quantity
    distance (ESQD) arcs to extend off-base onto private land and aircraft
    to be loaded on taxiways.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Air Force's Response:
        Question. Provide for the record a list of life safety/health
    compliance projects requested in the budget, sorted by service,
    installation, and by level of compliance.
        Answer. There are no projects in the Air Force FY00 MILCON program
    that are solely to rectify life safety/health problems. However, most
    of the upgrade projects in the program correct life safety/health code
    deficiencies as part of the total upgrade.
                         Unspecified Minor Construction
        Question. Provide for the record a chart, which will show the
    budget request for unspecified minor construction by component,
    compared to the enacted fiscal year 1999 level.
        Answer. The following table identifies the FY 2000 request and the
    FY 1999 enacted level by component for unspecified minor construction.

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                      FY 2000      FY 1999
                       Component                      request      enacted
    ------------------------------------------------------------------------
    Army..........................................        9,500       12,500
    Navy..........................................        7,342        9,900
    Air Force.....................................        8,741        8,135
    Defense Wide..................................       18,618       28,394
    Army National Guard...........................          771        5,046
    Air National Guard............................        2,000        7,502
    Army Reserve..................................        1,416            0
    Air Force Reserve.............................        4,467        2,903
    Navy Reserve..................................        1,036          877
                                                   -------------------------
          Total...................................       53,891       75,257
    ------------------------------------------------------------------------

                                Execution Rates
        Question. What is the execution rate of each component for the past
    three years for both for military construction and family housing?
        Answer. The outlay execution rate for each DoD component for the
    past three years is identified in the table below:

                                            OUTLAY EXECUTION RATES (PERCENT)
    ----------------------------------------------------------------------------------------------------------------
                                                                     Milcon                    Family housing
                                                         -----------------------------------------------------------
                                                            FY 96     FY 97     FY 98     FY 96     FY 97     FY 98
    ----------------------------------------------------------------------------------------------------------------
    Army................................................       8.6      11.8       9.4      60.6      62.1      62.2
    Navy................................................      31.0      26.0      20.9      37.8      39.7      41.8
    Air Force...........................................      12.1      13.7      16.2      54.2      55.9      54.1
    Defense-Wide........................................      24.4      16.3       9.2      18.0      35.4      40.6
    ----------------------------------------------------------------------------------------------------------------

                              BRAC Funding History
        Question. Provide for the record an updated version of the chart,
    which appeared in last year's hearing (part 5, page 77), together with
    whatever comments you may care to add.
        Answer. A revised chart of BRAC environmental restoration funding
    as of December 31, 1998, is provided below:

                                                [in millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                     FY 91   FY 92   FY 93   FY 94   FY 95   FY 96   FY 97   FY 98   FY 99    Total
    ----------------------------------------------------------------------------------------------------------------
    BRAC I:
        Floor.....................   100.0   220.0   134.6     0.0    66.8     N/A     N/A     N/A     N/A     521.4
        Allocation................   351.7   365.8   175.1     0.0    91.5     N/A     N/A     N/A     N/A     984.1
        Obligations...............   348.2   359.9   168.3     0.0    90.6     N/A     N/A     N/A     N/A     967.0
        Outlays...................   332.1   337.0   158.9     0.0    78.8     N/A     N/A     N/A     N/A     906.8
    BRAC II:
        Floor/ceiling.............     N/A   231.7   308.9   262.3   138.7   469.5   223.8   105.2     N/A   1,740.1
        Allocation................     N/A   264.7   311.7   277.1   210.9   433.2   177.1    50.9     N/A   1,725.6
        Obligations...............     N/A   264.4   308.3   275.9   210.4   429.0   174.5    50.7     N/A   1,713.2
        Outlays...................     N/A   252.1   293.0   262.0   178.4   350.3   116.8    16.7     N/A   1,469.3
    BRAC III:
        Floor/ceiling.............     N/A     N/A     N/A   200.0   302.7   236.7   352.0   410.8   271.8   1,774.0
        Allocation................     N/A     N/A     N/A   249.2   333.4   191.0   261.9   360.4   271.8   1,667.7
        Obligations...............     N/A     N/A     N/A   247.8   330.3   187.7   244.4   104.0   190.6   1,304.8
        Outlays...................     N/A     N/A     N/A   215.6   272.9   140.3   115.7    11.9    21.5     777.9
    BRAC IV:
        Floor/ceiling.............     N/A     N/A     N/A     N/A     N/A     N/A   226.1   416.2   426.0   1,068.3
        Allocation................     N/A     N/A     N/A     N/A     N/A   205.0   210.5   407.2   388.0   1,210.7
        Obligations...............     N/A     N/A     N/A     N/A     N/A   200.7   206.8   398.1    48.8     854.4
        Outlays...................     N/A     N/A     N/A     N/A     N/A   170.0   159.4   119.6     1.0     450.1
    Summary:
        Floor/ceiling.............   100.0   451.7   443.5   462.3   508.2   706.2   801.9   932.2   697.8   5,103.8
        Allocation................   351.7   630.5   486.8   526.3   635.8   829.2   649.5   818.5   659.8   5,588.1
        Obligations...............   348.2   624.3   476.6   523.7   631.3   817.4   625.7   552.8   239.4   4,839.4
        Outlays...................   332.1   589.1   451.9   477.6   530.1   660.6   391.9   148.2    22.5   3,604.0
    ----------------------------------------------------------------------------------------------------------------
    Numbers may not add due to rounding.
    Note: The FY 1994 Military Construction Appropriations Act set the floor for BRAC III at $300.0 million.
      However, this floor was revised to $200.0 million in the FY 1994 Supplemental Appropriations Act and further
      revised to $249.7 million through DoD congressional notification actions. Also, the FY 1996 Military
      Construction Appropriations Act established ceilings on environmental amounts for BRAC II and BRAC III as
      indicated. The amounts for FYs 1991-1995 are floors and the amounts in FY 1996 and out are ceilings.

                            Contingency Construction
        Question. What is the current unobligated balance of prior year's
    appropriations, which remain available for contingency construction?
        Answer. Of the funds appropriated for contingency construction in
    FY 1995-1999, $9.4 million remains available.
        Question. Provide for the record a list of amounts appropriated for
    contingency construction projects for fiscal year 1995, 1996, 1997,
    1998, and 1999 together with a list of projects for which these funds
    have been obligated.

                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                 General      Projects
                                                    Appropriated   Rescission   reduction      funded      Balance
    ----------------------------------------------------------------------------------------------------------------
    FY 19995......................................         3,511        2,589  ...........  ...........          922
    FY 19996......................................        11,037        2,315  ...........    \1\ 7,750          972
    FY 19997......................................         4,500        3,000  ...........  ...........        1,500
    FY 19998......................................         4,000  ...........        1,900  ...........        2,026
    FY 19999......................................         4,890  ...........          900  ...........        3,990
    ----------------------------------------------------------------------------------------------------------------
    \1\ $3,750 was provided to USCENTCOM for a Forward Headquarters facility at a Classified location. $4,000 was
      used to provide operational space for National Security Agency (NSA) personnel during the renovation of the
      current Operations Building at Menwith Hill Station, England.

        Question. Provide for the record a list of unspecified minor
    construction projects executed during fiscal years 1997 and 1998, and
    obligations to date in fiscal year 1999, by component and location.
        Answer.

    ----------------------------------------------------------------------------------------------------------------
              Agency, (Fiscal year)                      Location                     Project            Cost ($000)
    ----------------------------------------------------------------------------------------------------------------
    DODDEA. 1997.............................  Korea......................  Seoul High School Addition.        1,500
    JCS, 1997................................  Bahamas....................  Construct Vehicle Maint.             220
                                                                             Facility.
    JCS, 1997................................  Jamaica....................  Construct Ops Building.....          187
    JCS, 1997................................  Grenada....................  Construct Unit Barracks &            184
                                                                             Trng Facility.
    JCS, 1997................................  Dominica...................  Construct Unit Barracks &            125
                                                                             Trng Facility.
    JCS, 1997................................  Trinidad...................  Construct Vehicle Maint.             220
                                                                             Facility.
    JCS, 1997................................  Classified.................  Construct Latrines,                  200
                                                                             Showers, and HAZMAT
                                                                             Storage.
    JCS, 1997................................  Classified.................  Construct classroom........           75
    JCS, 1997................................  Classified.................  Repair Runway/Taxiway......          480
    JCS, 1997................................  Classified.................  Construct K-span Latrine &           336
                                                                             Shower.
    JCS, 1997................................  Classified.................  Aircraft Ops Facility......          416
    JCS, 1997................................  Classified.................  Construct Multi-Purpose              320
                                                                             Trng Range.
    JCS, 1997................................  Classified.................  Construct C-130 and C-17             350
                                                                             Landing Strip.
    JCS, 1997................................  Classified.................  Construct Vehicle Wash Rack          212
    JCS, 1997................................  Classified.................  Live Fire Battle Range.....          205
    JCS, 1997................................  Classified.................  Live Fire Battle Range.....          231
    JCS, 1997................................  Classified.................  Latrine, Shower, Laundry              45
                                                                             Facility.
    JCS, 1997................................  Classified.................  Construct Tent Pads........          200
    JCS, 1997................................  Classified.................  Upgrade Electric System....          209
    JCS, 1997................................  Classified.................  Dining and Billeting                 102
                                                                             Facilities.
    JCS, 1997................................  Classified.................  Renov. Aircraft Maint                150
                                                                             Facility.
    JCS, 1997................................  Classified.................  Construct Tent Pads........          269
    JCS, 1997................................  Classified.................  Renov. Aircraft Ops & Maint          386
                                                                             Fac.
    JCS, 1997................................  Classified.................  Construct Various                    342
                                                                             Facilities.
    JCS, 1997................................  Classified.................  Construct Various                     20
                                                                             Facilities.
    JCS, 1997................................  Classified.................  Construct Tent Pads and               99
                                                                             Frames.
    JCS, 1997................................  Classified.................  Construct Various                     97
                                                                             Facilities.
    JCS, 1997................................  Classified.................  Construct Various                     78
                                                                             Facilities.
    JCS, 1997................................  Classified.................  Construct Various                     10
                                                                             Facilities.
    JCS, 1997................................  Belize.....................  Construct Contingency Base           475
                                                                             Camp.
    JCS, 1997................................  El Salvador................  Construct Contingency Base            50
                                                                             Camp.
    JCS, 1997................................  Panama.....................  Construct Two Exercise Base          366
                                                                             Camps.
    JCS, 1998................................  Honduras...................  Construct Base Camps.......          500
    JCS, 1998................................  El Salvador................  Construct Base Camps.......          250
    JCS, 1998................................  Ecuador....................  Upgrade Support Facilities.          224
    JCS, 1998................................  Haiti......................  Unit Barracks and Trng               228
                                                                             Facility.
    JCS, 1998................................  Dominican Republic.........  Construct Pier.............          230
    JCS, 1998................................  St Lucia...................  Upgrade Support Facilities.          240
    JCS, 1998................................  Bahamas....................  Upgrade Support Facilities.          117
    JCS, 1998................................  Jamaica....................  Unit dining and Training             158
                                                                             Facility.
    JCS, 1998................................  Tobago.....................  Barracks...................          170
    JCS, 1998................................  Classified.................  Renovate Training Complex            150
                                                                             and Base Camp.
    JCS, 1998................................  Bahrain....................  Upgrade Support Facilities.          382
    JCS, 1998................................  Oman.......................  Upgrade Support Facilities.          105
    JCS, 1998................................  Qatar......................  Electrical and Water system          210
    JCS, 1998................................  Bahrain....................  Repair Parking Ramps.......          835
    JCS, 1998................................  Morocco....................  Repair Aircraft Parking              349
                                                                             Apron.
    JCS, 1998................................  Uganda.....................  Construct Storage & Ops              259
                                                                             Facility.
    JCS, 1998................................  Lithuania..................  Upgrade Support Facilities.          450
    JCS, 1998................................  Norway.....................  Construct Billeting                  208
                                                                             Facilities.
    JCS, 1998................................  UK.........................  SOF Exercise Storage and             170
                                                                             Training Facility.
    JCS, 1998................................  Korea......................  Construct Billeting and C3           400
                                                                             Facility.
    JCS, 1998................................  Korea......................  Construct Billeting                  351
                                                                             Facility.
    JCS, 1998................................  Thailand...................  Construct Barracks.........          399
    JCS, 1998................................  Thailand...................  Upgrade Support Facilities.          142
    JCS, 1998................................  Thailand...................  Upgrade Support Facilities.           88
    JCS, 1998................................  Philippines................  Construct Storage Facility.          150
    JCS, 1998................................  Philippines................  Barracks and Boat Facility.          188
    JCS, 1998................................  Philippines................  Construct Water Supply                40
                                                                             System.
    JCS, 1998................................  Philippines................  Upgrade Billeting Facility.           40
    JCS, 1998................................  Thailand...................  Construct Admin Space......          158
    JCS, 1999................................  Bolivia....................  Construct Base Camp........          187
    JCS, 1999................................  Guatemala..................  Construct Base Camp........           40
    JCS, 1999................................  Honduras...................  Construct Base Camp........           87
    JCS, 1999................................  Egypt......................  Construct Ops Support                700
                                                                             Facilities.
    JCS, 1999................................  Uganda.....................  Construct Exercise Equip             243
                                                                             Storage Facility.
    JCS, 1999................................  Tunisia....................  Repair Bomb Range..........          105
    JCS, 1999................................  Korea......................  Upgrade Mess Hall..........          253
    JCS, 1999................................  Thailand...................  Upgrade Support Facilities.          155
    JCS, 1999................................  Korea......................  Construct Shower/Latrine             207
                                                                             Facility.
    JCS, 1999................................  Thailand...................  Construct Mess Hall........          165
    JCS, 1999................................  Thailand...................  Upgrade Execise Support               12
                                                                             Facilities.
    SOCOM, 1997..............................  UK.........................  Construct Munitions                1,494
                                                                             Inspection Fac.
    SOCOM, 1998..............................  Florida....................  Construct Armament Systems         1,479
                                                                             Trainer.
    DMFO, 1997...............................  Colorado...................  Composite Medical Facility         1,400
                                                                             Add/Alt.
    DMFO, 1997...............................  Texas......................  Construction Claim.........        3,742
    DMFO, 1998...............................  Maryland...................  Medical/Dental Clinic Add/         1,250
                                                                             Alt.
    DMFO, 1998...............................  New York...................  Ren Veterinary Treatment           1,300
                                                                             Facility.
    DMFO, 1998...............................  Taxas......................  Construction Claim.........          589
    DMFO, 1998...............................  Germany....................  Add/Alt Clinic.............          928
    DMFO, 1998...............................  Italy......................  Flight Medical Clinic Alt..        1,400
    DMFO, 1998...............................  Korea......................  Renovate WRM Warehouse.....          747
    DMFO, 1998...............................  Korea......................  WRM Add/Alt................          714
    DMFO, 1999...............................  Texas......................  Alt Troop Medical Clinic...        1,350
    ----------------------------------------------------------------------------------------------------------------

                         unspecified minor construction
        Army's Response:
        Question. Provide for the record a list of unspecified minor
    construction projects executed during fiscal years 1997 and 1998, and
    obligated to date in fiscal years 1999, by component and location.
        Answer. The Army's unspecified minor construction program for
    fiscal years 1997, 1998, and 1999 (as of January 31, 1999) is as
    follows:
    Active Army
        Fiscal year 1997
            Fort Bragg, NC.--Combined Arms Battalion Headquarters.
            Fort Sam Houston, TX.--Regional Training Facility.
            Corpus Christi, TX.--Whirl Tower.
            Fort McNair, DC.--Center of Military History.
        Fiscal Year 1998
            Fort Wainwright, AK.--Ice Rink.
            Key West, FL.--Diver Training Facility.
            Fort Buchanan, PR.--Headquarters.
            Times Square, NY.--Recruitment Center.
            Dugway PG, UT.--Hood Valve Replacement.
        Fiscal Year 1999
            Fort Sill, OK.--Fire Station.
            Fort Irwin, CA.--Heavy Equipment Transport Platoon Maintenance
            Shop.
            Fort Polk, LA.--Airfield Apron/Hot Refuel.
    Army National Guard
        Fiscal Year 1997
            Various Locations, AK.--Scout Armories.
            Camp Denali, AK.--Storage Building.
            Waterloo, IA.--Aviation Fuel Storage and Dispensing System.
            Decatur, IL.--Army Aviation Support Facility Ramp.
            Fort Harrison, MT.--Bachelor Officers/Enlisted Quarters.
            Fort Harrison, Mt.--Land Acquisition.
            Camp Grafton, ND.--Water System Replacement.
        Fiscal Year 1998
            Akmautluak, AK.--Scout Armory.
            Camp Roberts, CA.--Hand Grenade Range.
            Camp Roberts, CA.--MK-19/M-203 Range.
            Stone's Ranch, CT.--Ammo Storage Bunkers.
            Quincy, IL.--Indoor Range.
            Camp Beauregard, LA.--Sanitary Sewer.
            Westover AFB, MA.--Flight Simulator Building.
            Grand Ledge, MI.--Aircraft Hangar.
            Fort Harrison, MT.--Combat Pistol Qualification Range.
            Camp Grafton, ND.--Combat Pistol Range.
            Camp Meade, NE.--Washrack Upgrade.
            Syracuse, NY.--Organizational Maintenance Shop.
            Roosevelt Roads, PR.--Marine Maintenance Facility.
            St. Croix, VI.--Paving.
        Fiscal Year 1999
            Ashland City, TN.--Readiness Center.
    U.S. Army Reserve
        Fiscal Year 1997 (No funds)
        Fiscal Year 1998
            Denver, CO.--Add/Alt OMS.
            Farmington, MO.--Add/Alt USARC.
            El Dorado, AR.--Alt USARC.
            Benton, MO.--Storage Building.
            Joplin, MO.--Storage Building.
            Sioux City, IA.--Expand AMSA/OMS.
            Iowa City, IA.--Add/Alt OMS.
            Creston, IA.--Add/Alt OMS.
            Ames, IA.--Add/Alt OMS.
            Salinas, KS.--Add/Alt OMS.
        Fiscal Year 1999.--No funds.
        Navy's Response:
        Question. Provide for the record a list of unspecified minor
    construction projects executed during fiscal years 1997 and 1998, and
    obligations to date in fiscal year 1999, by component and location.
        Answer. The Department of the Navy executed 6 projects in FY-1997
    and 9 projects in FY-1998 using Unspecified Minor Construction funds as
    shown in the table below. While there have been no obligations to date
    in fiscal year 1999, we are well positioned to obligate all $11.4
    million in available funds in FY 99. To date we have three projects
    approved totaling $4.6 million. We are currently processing approval
    requests for two NAS Corpus Christi project totaling $3.2 million with
    FY 99 UMC. Other projects currently on track for award in FY 99 total
    $8.4 million. Therefore, we have projects exceeding $16 million that
    are projected for award in FY 99.

    ------------------------------------------------------------------------
                                                      Program
             PNO/Activity             Description      amount    Award date
                                                       ($000)
    ------------------------------------------------------------------------
    365  COMNAVDIST Washington...  Acquisition          $1,140  96/10/04
                                    Center of
                                    Excellence.
    571  Kings Bay GA NSB........  Dredge (Site VI       1,050  96/10/04
                                    Layberth).
    075  Concord CA NWS..........  Filling Station.      1,330  97/02/13
    915  SW Asia ADMINSUPU.......  Satellite             1,500  97/04/28
                                    Communications
                                    Facility.
    689  Pensacola FL NAS........  Fuels Trainer           950  97/06/13
                                    Facility.
    023  Earle NJ NWS............  Pier 2 Fender         1,150  97/09/30
                                    System.
                                                    -----------
      ...........................  Total FY-1997...  .........  7,120
    001  Fort Washington ITC.....  Interagency             865  97/10/30
                                    Training Center.
    831  Souda Bay Crete NSA.....  Sewage Treatment      2,700  97/12/17
                                    Plant.
    203  Lemoore CA NAS..........  Headquarters          1,100  98/03/10
                                    Building
                                    Addition.
    102  Sigonella Italy NAS.....  Water Storage         1,150  98/03/20
                                    Tank.
    337  Bremerton WA NSY........  Enlisted Dining       1,390  98/03/31
                                    Facility
                                    Expansion.
    916  SW Asia ADMINSUPU.......  Perimeter             3,000  98/05/26
                                    Security
                                    Improvements.
    843  Jacksonville FL PWC.....  Install Backflow        550  98/09/22
                                    Preventer.
    006  Orlando FL NAWCTSD......  Structural              670  98/09/30
                                    Upgrades,
                                    building #1.
    024  Earle NJ NWS............  Pier Electrical       1,400  98/09/30
                                    System.
                                                    -----------
      ...........................  FY-1998 Total...  .........  12,825
    ------------------------------------------------------------------------

        Air Force's Response:
        Question: Provide for the record a list of unspecified minor
    construction projects executed during fiscal years 1997 and 1998, and
    obligations to date in fiscal years 1999, by component and location.
        Answer:
        For Component USAF:
                              LOCATION AND PROJECT
    Fiscal Year 1997
        Mildenhall AB, UK.--Munitions Storage Complex.
        Tyndall AFB, FL.--Communications Maintenance Facility.
        Columbus AFB, MS.--Ground Approach Transmitter/Receiver.
        Kadena AB, OK.--Ammo Loading/Storage Facility.
        Kadena AB, OK.--Ammo Storage Maint and Inspection Fac.
        Mt Home AFB, ID.--B-1 Composite Material Repair Shop.
        Laughlin AFB, TX.--Boundary Fence.
        Eglin 9, FL.--Special Tactics Squadron Facility.
        Malmstrom AFB, MI.--Explosive Ordinance Disposal Facility.
    Fiscal Year 1998
        Hanscom AFB, MA.--Add to Education Center.
        Keesler AFB, MS.--Base Contracting Facility.
        Vandenberg AFB, CA.--Combat Arms Training Facility.
        Dyess AFB, TX.--B-1 Jet Engine Test Facility.
        Hurlburt Field, FL.--RED HORSE Maintenance Shop.
        Hill AFB, UT.--C-130 Flight Test Facility.
        USAF Academy, CO.--Jack's Valley Road.
        USAF Academy, CO.--Global Engagement Readiness Laboratory.
        Ramstein AB, GE.--Air Freight Terminal/Weigh Scale Facility.
    Fiscal Year 1999
        Kelly AFB, TX.--Aerospace Engineering Facility.
        Bolling AFB, DC.--Add to Vehicle Maintenance Facility.
        Andrews AFB, MD.--Air Force-1 COMBS Facility.
                   HM-02-013--UNSPECIFIED MINOR CONSTRUCTION
        Moron AB, SP.--Communications Center.
        Kadena AB, OK.--Add to Flight Simulator Facility.*
        RAF Feltwell, UK.--Military Working Dog Facility.*
    * Contract award of these two projects for $2.7M will fully obligate
    the FY99 program.
        For component ANG:
                              LOCATION AND PROJECT
    Fiscal Year 1997
        Hot Springs, AR.--Base Supply Facility.
        Jacksonville IAP, FL.--Add To And Alter Medical.
        Jacksonville IAP, FL.--Joint ANG/FAA Fire Station.
        Pease Airport ANG, NH.--Add to Vehicle Maintenance.
        Burlington IAP, VT.--Realign Taxiway.
    Fiscal Year 1998
        Eielson AFB, AK.--Medical Training Facility.
        Kulis ANGB, AK.--Add to and Alter ECM/ADS Shop.
        Buckley ANGB.--Add to and Alter Communications.
        Camp Beauregard, LA.--Vehicle Maint/Aircraft Support Eqp.
        Great Falls IAP, MT.--Upgrade Infrastructure.
        Stanley County Arprt, NC.--Upgrade Infrastructure.
        Camp Murray ANGS, WA.--Add to Comm-Elect Facility.
        Volk Field, WI.--Munitions Storage Igloos.
        Shepherd Field, WV.--Add to and Alter Avionics.
    Fiscal Year 1999
        Little Rock, AR.--ADAL Comm Facility.
        Robins, GA.--B-1 Medical Training.*
        Savannah, GA.--Replace Acft Support Equipment and Non-Destructive
    Inspection Complex.
        Duluth, MN.--Base Engineer Pavements.
        Malmstrom AFB, MT.--Red Horse O&T Storage
        Stanley County, NC.--Upgrade Airfield Facilities.*
        Stanley County, NC.--Upgrade Control Tower.*
        McEntire, SC.--Upgrade Munitions Storage.
     Contract award of these two projects for a total of $2.8M is
    scheduled in May 99.
    * Contract award of these three projects for a total of $2.9M will
    result in full obligation of the FY99 appropriation.
        For Component AFRC:
                              LOCATION AND PROJECT
    Fiscal Year 1997
        Barksdale AFB, LA.--Composite Medical Training Facility.
        Dobbins ARB, GA.--Add/Alter Communications Facility.
                   HM-02-013--UNSPECIFIED MINOR CONSTRUCTION
        Gen Mitchell ARS, WI.--Combat Arms Trng Mnt (CATM) Facility.
        Grissom ARB, IN.--Deicing Facility.
        Patrick AFB, FL.--Medical Training Facility.
        Pittsburgh ARS, PA.--Alter Aircraft Maintenance Hangar.
    Fiscal Year 1998
        Anderson AFB, Guam--Aerial Port Training Facility.
        McGuire AFB, NJ.--Medical Training Facility.
        Minn-St Paul ARS, MN.--Multipurpose Fitness Center.
        Pittsburgh ARS, PA.--Alter CATM/Building 221.
        Seymour-Johnson AFB, NC.--Add/Alter Squadron Operations.
        Portland ANGB, OR.--CATM Training Facility.
    Fiscal Year 1999
        Portland ANGB, OR.--Structural Maintenance Shop.
        Westover ARB, MA.--Disaster Preparedness Facility.*
        Robbins AFB, GA.--Medical Training Facility.*
    * Contract award of these two projects for a total of $1.6M will fully
    obligate the FY99 appropriation.
        OSD Response:
        Question. Has this appropriation met the needs of the components
    over the last two years? What shortfalls, if any, have been
    encountered?
        Answer. Funding for minor construction has been adequate over the
    last two years. The President's Budget request of $18.6 million for FY
    2000 is considered a reasonable estimate, and will provide the numerous
    Defense Agencies and Activities supported by the Military Construction,
    Defense-Wide account a capability to react to requirements for
    construction, alteration, or modification of facilities resulting from
    unforeseen situations or opportunities to attain greater efficiency of
    operation.
        Army Response:
        Question. Has this appropriation met the needs of the components
    over the last two years? What shortfalls, if any, have been
    encountered?
        Answer: No. Each fiscal year, the Army receives requirements for
    the unspecified minor construction program in excess of funds
    appropriated. Types of projects which remain unfunded include a child
    development center, fire safety facilities (fire stations, sprinkler
    systems), logistic facilities (aircraft paint shop, warehouse),
    operational facilities (live fire course, crises response center,
    training classrooms), and infrastructure (sewage treatment plant
    upgrade, road alignments, perimeter fence).
        Navy Response:
        Question. Has this appropriation (unspecified minor construction)
    met the needs of the components over the last two years? What
    shortfalls, if any, have been encountered?
        Answer: The Unspecified Minor Construction (UMC) appropriation has
    met the needs of the Department of the Navy for the past two years. No
    shortfalls have been encountered. The funds available through FY 99
    will cover the Navy's most critical UMC requirements. Recent UMC
    funding has allowed us to keep pace with the urgent emerging
    requirements each year, although there are generally some urgent
    projects that are slipped to the next fiscal year.
        Air Force Response:
        Question. Has this appropriation met the needs of the components
    over the last two years? What shortfalls, if any, have been
    encountered?
        Answer: For component USAF: No. The unspecified minor construction
    (UMC) appropriation has not met the needs of the USAF over the last
    several years. Reprogramming actions have been necessary to meet our
    most urgent needs:

            Fiscal year                                 Reprogramming ($000)
    1994.............................................................. 1,711
    1995.............................................................. 1,750
    1996..............................................................   300
    1997..............................................................   800
    1998.............................................................. 1,868

        The UMC account was created to expeditiously fund those
    requirements which must be satisfied before the next budget submission.
    Because these projects are emergent, it is not possible to predict the
    total funding requirement in any given year; however, historically the
    amount has been over $12,000,000. All available unspecified minor
    construction appropriations (FY96-FY99) are committed to approved/
    awarded projects. For component ANG: Funding in previous years has been
    sufficient to meet our most urgent needs. The $2 million in the FY00
    Program for unspecified minor construction is not sufficient for our
    needs. Based on prior year trends, this funding level will force
    deferral of several requirements that are anticipated.
        For component AFR: Although the Air Force Reserve has not
    reprogrammed funds into the Unspecified Minor Construction account,
    their requirements also exceed their funding. The Air Force Reserve
    estimates that they can easily execute an additional $3.5 million of
    Unspecified Minor Construction per year.
                              planning and design
        Question. Does the budget request include sufficient planning and
    design funds to execute the entire fiscal year 2000 program?
        Answer. The Department's estimate for planning and design (P&D)
    requirements for the budget year is based on the size of the two
    succeeding fiscal year military construction programs. These funds were
    not reduced for advance appropriations due to the need to ensure that
    these funds could be used as quickly as possible in the first year of
    availability. The amount requested in FY 2000 will be used to complete
    design of the FY 2001 projects and to initiate design on the FY 2002
    projects and therefore, is a function of the size of these programs.
        OSD Response:
        Question. Are any projects in the budget request at less than 35
    percent design? If so, list and justify such projects.
        Answer. Yes. Most of the projects are not 35% designed. The
    Department now uses parametric cost estimates in compliance with
    congressional direction. While this method provides a high confidence
    estimate, there is actually very little, if any, design performed. This
    method has the advantage of allowing the architect/engineer (A/E) to
    complete the design without any work stoppages or design breakage.
        Army Response:
        Question. Are any projects in the budget request at less than 35
    percent design?
        Answer. Projects at less than 35 percent design are listed and
    justified below. All of these projects will be ready for advertisement
    and award in fiscal year 2000. Most of projects were accelerated to the
    fiscal year 2000 program as a result of the President's additional
    funding for critical readiness requirements.

    ------------------------------------------------------------------------
                Location                    Project          Justification
    ------------------------------------------------------------------------
    DC/Walter Reed AMC..............  Physical Fitness    Critical Readiness
                                       Training Center.
    KS/Fort Leavenworth.............  Whole Barracks      Critical Readiness
                                       Complex Renewal.
        Fort Campbell...............  Mout Training       Critical Readiness
                                       Complex.
        Fort Campbell...............  Sabre Heliport      Critical Readiness
                                       Improvements.
        Fort Campbell...............  Physical Fitness    Critical Readiness
                                       Training Center.
        Fort Knox...................  Multi-purpose       Critical Readiness
                                       Digital Training
                                       Range/PHII..
    MD/Fort Meade...................  Whole Barracks      Critical Readiness
                                       Complex Renewal.
    NC/SunnyPoint MOT...............  Ammunition          Critical Readiness
                                       Survellience
                                       Facility.
    OK/Fort Sill....................  Rail and            Strategic Mobility
                                       Containerization
                                       Facility.
        McAlester AAP...............  Ammunition Road     Critical Readiness
                                       Infrastructure.
    PA/Carlisle Barracks............  Whole Barracks      QoL Initiative
                                       Complex Renewal.
        Letterkenny AD..............  Ammunition          Critical Readiness
                                       Containerization
                                       Complex.
    TX/Fort Bliss...................  Aircraft Loading     Critical
                                       Apron.              Readiness
        Fort Bliss..................  Ammunition Hot      Critical Readiness
                                       Load Facility.
        Fort Hood...................  Whole Barracks      Critical Readiness
                                       Complex Renewal.
    VA/Fort Eustis..................  Whole Barracks      Critical Readiness
                                       Complex Renewal.
        Fort Myer...................  Public Safety       Life, Health,
                                       Center.             Safety
    GE/Bamberg......................  Whole Barracks      Critical Readiness
                                       Complex Renewal.
        Mannheim....................  Whole Barracks      Critical Readiness
                                       Complex Renewal.
    Korea/Camp Howze................  Water System        Failing System
                                       Upgrade.
        Camp Stanley................  Electrical System   Failing System.
                                       Upgrade.
    ------------------------------------------------------------------------

        Navy Response:
        Question. Are any projects in the budget request at less than 35
    percent design? If so, list and justify such projects.
        Answer. The following projects in the budget request are at less
    than 35 percent design:

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                   State                         Agency                  Program              Installation          Project title           Reason <35%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    AZ.................................  Navy..................  MCON..................  MCAS Yuma............  Child Development      Design-build
                                                                                                                 Center.
    AZ.................................  Navy..................  MCON..................  NAVDET Camp Navajo...  Magazine               Revised design
                                                                                                                 Modernization.
    BI.................................  Navy..................  MCON..................  ASU Bahrain..........  BEQ--Transient.......  Revised design
    BI.................................  Navy..................  MCON..................  ASU Bahrain..........  Operations Control     Revised design
                                                                                                                 Center.
    CA.................................  Navy..................  MCON..................  MCAGCC Twentynine      BEQ..................  Revised design
                                                                                          Palms.
    CA.................................  Navy..................  MCON..................  MCAGCC Twentynine      CAST Trainer Addition  Revised design
                                                                                          Palms.
    CA.................................  Navy..................  MCON..................  MCAGCC Twentynine      Tactical Vehicle       Design-build
                                                                                          Palms.                 Maintenance Facility.
    CA.................................  Navy..................  MCON..................  MCB Camp Pendleton...  Armory...............  Revised design
    CA.................................  Navy..................  MCON..................  MCB Camp Pendleton...  BEQ..................  Design-build
    CA.................................  Navy..................  MCON..................  MCB Camp Pendleton...  Integrated             Revised design
                                                                                                                 Communications Hub.
    CA.................................  Navy..................  MCON..................  MCB Camp Pendleton...  Staff Non-Com Officer  Revised design
                                                                                                                 Academy.
    CA.................................  Navy..................  MCON..................  MCB Camp Pendleton...  Tactical Vehicle       Design-build
                                                                                                                 Maintenance Facility.
    CA.................................  Navy..................  MCON..................  MCLB Barstow.........  Test Track/Test Pond   Revised design
                                                                                                                 Facility.
    CA.................................  Navy..................  MCON..................  MCRD San Diego.......  Physical Fitness       Revised design
                                                                                                                 Center Addition.
    CA.................................  Navy..................  MCON..................  NAS Lemoore..........  Aircraft Ordnance      Design-build
                                                                                                                 Loading Facilities.
    CA.................................  Navy..................  MCON..................  NAS Lemoore..........  Strike Fighter         Design-build
                                                                                                                 Weapons Training
                                                                                                                 Facility.
    CA.................................  Navy..................  MCON..................  NAS Lemoore..........  Aviation Armament      Design-build
                                                                                                                 Facility.
    CA.................................  Navy..................  MCON..................  NAVHOSP Twentynine     BEQ..................  Revised design
                                                                                          Palms.
    DG.................................  Navy..................  MCON..................  Diego Garcia           Aircraft Intermediate  Revised design
                                                                                          NAVSUPPFAC.            Maintenance Fac..
    FL.................................  Navy..................  MCON..................  NAS Whiting Field....  JPATS T-6A Trainer     Design-build
                                                                                                                 Facility.
    GA.................................  Navy..................  MCON..................  MCLB Albany..........  Engineering Equipment  Design-build
                                                                                                                 Shop.
    GR.................................  Navy..................  MCON..................  NSA Souda Bay........  Operational Support    Revised design
                                                                                                                 Facilities.
    HI.................................  Navy..................  MCON..................  NSB Pearl Harbor.....  Berthing Wharf.......  Revised design
    ID.................................  Navy..................  MCON..................  NSWC Bayview.........  Underwater Equipment   Design-build
                                                                                                                 Laboratory.
    IL.................................  Navy..................  MCON..................  NTC Great Lakes......  All Weather Running    Design-build
                                                                                                                 Track.
    IL.................................  Navy..................  MCON..................  NTC Great Lakes......  BEQ ``A School''.....  Design-build
    IL.................................  Navy..................  MCON..................  NtC Great Lakes......  Drill Hall...........  Design-build
    IL.................................  Navy..................  MCON..................  NTC Great Lakes......  Recruit In-Processing  Design-build
                                                                                                                 Barracks.
    MD.................................  Navy..................  MCON..................  NSWC Indian Head.....  Sewage Treatment       Revised design
                                                                                                                 Plant.
    ME.................................  Navy..................  MCON..................  NAS Brunswick........  BEQ Replacement......  Revised design
    MS.................................  Navy..................  MCON..................  NCBC Gulfport........  BEQ Modernization....  Design-build
    MS.................................  Navy..................  MCON..................  NCBC Gulfport........  BEQ Renovation.......  Design-build
    NC.................................  Navy..................  MCON..................  MCB Camp Leueune.....  Physical Fitness       Revised design
                                                                                                                 Center.
    NC.................................  Navy..................  MCON..................  MCB Camp Lejeune.....  Road and Utility       Revised design
                                                                                                                 Construction.
    NC.................................  Navy..................  MCON..................  MCAS New River.......  Family Services        Revised design
                                                                                                                 Center.
    NJ.................................  Navy..................  MCON..................  NAWCAD Lakehurst.....  Aircraft/Platform      Revised design
                                                                                                                 Interface Laboratory.
    SC.................................  Navy..................  MCON..................  MCAS Beaufort........  Armory Facility......  Design-build
    SC.................................  Navy..................  MCON..................  MCAS Beaufort........  Corrosion Control      Design-build
                                                                                                                 Facility.
    SC.................................  Navy..................  MCON..................  NWS Charleston.......  Air Traffic Control    Design-build
                                                                                                                 Engineering Center.
    VA.................................  Navy..................  MCON..................  MCCDC Quantico.......  BEQ..................  Design-build
    VA.................................  Navy..................  MCON..................  TACTRAGRULANT Dam      BEQ..................  Design-build
                                                                                          Neck.
    VA.................................  Navy..................  MCON..................  NAVSTA Norfolk.......  Pier Electrical        Revised design
                                                                                                                 Upgrades II.
    VA.................................  Navy..................  MCON..................  NAVSTA Norfolk.......  Pier Replacement.....  Revised design
    VA.................................  Navy..................  MCON..................  NAS Oceana...........  Aircraft Acoustical    Revised design
                                                                                                                 Enclosure.
    VA.................................  Navy..................  MCON..................  NWS Yorktown.........  Trestle Replacement    Revised design
                                                                                                                 and Pier Upgrade.
    WA.................................  Navy..................  MCON..................  Strategic Weapons      D5 Missile Support     Revised design
                                                                                          Fac. Bangor.           Facility.
    WA.................................  Navy..................  MCON..................  NWS Port Hadlock.....  Tomahawk Magazine....  Design-build
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Justification: All of the Navy's FY00 projects have a 35 percent
    design equivalent cost estimate based on the completion of a Parametric
    Cost Estimate (PCE) and Project Definition. While the cost estimate is
    considered equivalent to the traditional 35 percent design cost
    estimate, the PCE and Project Definition do not normally include
    preliminary working drawings and outline specifications associated with
    35 percent design. The PCE and Project Definition do include a concept
    plan, DD Form 1391, budget estimate summary, economic analysis, siting
    certification, environmental certification, and NEPA documentation.
        The current design approach is to start the final design as close
    to the start of the fiscal year of the project as possible so that the
    Architect/Engineer team can proceed quickly from start to finish. This
    process includes design reviews but does not include the traditional 35
    percent milestone. While this approach has proven to be successful and
    has enhanced the Navy's execution, the Navy 1391s show less than 35
    percent design complete by 1 January on many of the FY100 projects.
    Additionally, numerous projects will be designed using the design/build
    method. The budget estimates for these projects are based on completion
    of a PCE and Project Definition as well. However, the design of these
    projects will not be started until after the construction contract has
    been awarded.
        Air Force Response:
        Question: Are any projects in the budget request at less than 35
    percent design? If so, list and justify such projects.
        Answer: The Air Force has 8 projects at less than 35 percent design
    in the budget request. The following table lists each project and
    provides remarks. These projects are scheduled for construction
    contract award in FY00.

    ----------------------------------------------------------------------------------------------------------------
                    MAJCOM                         Project                    Base                   Remarks
    ----------------------------------------------------------------------------------------------------------------
    ACC..................................  Air Control Squadron     Classified.............  Delayed awaiting force
                                            Operations Complex.                               structure decision
    AETC.................................  Squadron Operations      Moody..................  Delayed awaiting force
                                            Facility.                                         structure decision
    AFMC.................................  Consolidate              Rome...................  Late and to FY00
                                            Intelligence and                                  program
                                            Reconnaissance Lab.
    AFMC.................................  Aircraft Processing      Davis-Monthan..........  Late add to FY00
                                            Ramp.                                             program
    USAFA................................  Upgrade Academic         USAF Academy...........  Difficulties awarding
                                            Facility.                                         Architect-Engineer
                                                                                              Contract
    USAFE................................  Consolidated Corrosion   Mildenhall.............  Late add to FY00
                                            Control/Maint Complex.                            program
    USAFE................................  Radar Approach Control   Aviano.................  Late add to FY00
                                            Facility.                                         program
    AFRC.................................  Add/Alter Facilities     Dobbins................  Late add to FY00
                                            for C-130H Aircrew                                program
                                            Training.
    ----------------------------------------------------------------------------------------------------------------

                           Real Property Maintenance
        Question. What is the total fiscal year 2000 budget request for
    real property maintenance? How much is earmarked for barrack
    renovation?
        Answer. The fiscal year 2000 RPM request is $5.3 billion, of which,
    approximately $488 million is for various barrack renovations.
                                 Reprogramming
        Question. Submit for the record a table which will show, by fiscal
    year, the total amount approved by Congress for reprogramming for
    ``Military Construction, Defense-Wide'' for the last five years.
        Answer.

    ------------------------------------------------------------------------
                                                 Number of        Amounts
                                               reprogramming   approved for
                                                  actions      reprogramming
    ------------------------------------------------------------------------
    FY 1995.................................               7     $21,893,000
    FY 1996.................................               2       2,920,000
    FY 1997.................................               3       1,250,000
    FY 1998.................................               2       2,540,000
    FY 1999\1\..............................               1      15,000,000
    ------------------------------------------------------------------------
    \1\ As of 2/28/99.

                             Advance Appropriations
        Question. The President's budget states that requests for such
    advance appropriations are required by 31 U.S.C. 1105(a)(17)
        Is it correct that these specific advance appropriations are not
    required under 31 U.S.C. 1105(a)(17) until such time as the related
    authorizations for advanced appropriations have been enacted into law?
        Answer. The Department's requests for advance appropriations are
    not required by the provisions of 31 U.S.C. 1105(a)(17) which requires
    such requests only for programs for which there is an existing
    authorization of appropriations. Rather, the Department's requests for
    advance appropriations are based on two considerations. The requests
    for advance appropriations for military construction necessary to
    complete projects in connection with projects authorized for fiscal
    year 2000 are based on the length of the construction schedules
    involved and the Service's estimates of the amount of construction that
    could be executed in each fiscal year. The other requests for advance
    appropriations are based on the requirement contained in section 1405
    of the Department of Defense Authorization Act for Fiscal Year 1986.
    This provision provides that ``the President shall submit a proposed
    two-year budget for the Department of Defense and related agencies
    every other year'' after the initial two-year budget request that was
    required to be submitted by that section with respect to fiscal years
    1988 and 1989. These specific appropriations have not yet been
    authorized in an enacted authorization Act. A request for authorization
    for these advance appropriations will be included in the Department's
    requests for authorizations for Fiscal Year 2000 and 2001.
        Question. Please submit for the record a copy of 31 U.S.C.
    1105(a)(17), together with the Department's interpretation of what this
    citation requires.
        Answer. A copy of the provisions of 31 U.S.C. 1105(a)(17) is
    attached.

    Sec. 1105. Budget contents and submission to Congress

        (a) On or after the first Monday in January but not later than the
    first Monday in February of each year, the President shall submit a
    budget of the United States Government for the following fiscal year.
    Each budget shall include a budget message and summary and supporting
    information. The President shall include in each budget the following:
              * * * * * * *
              (17) information on estimates of appropriations for the
            fiscal year following the fiscal year for which the budget is
            submitted for grants, contracts, and other payments under each
            program for which there is an authorization of appropriations
            for that following fiscal year when the appropriations are
            authorized to be included in an appropriation law for the
            fiscal year before the fiscal year in which the appropriation
            is to be available for obligation.
                  Environmental Restoration at BRAC Locations
        Question. How does the Department intend to budget for the
    continuing environmental restoration efforts at BRAC I through IV
    locations beyond fiscal year 01--will there be a continuing account in
    this appropriations bill for these costs?
        Answer. As directed in the Conference Report (Report 105-647)
    accompanying the FY 1999 Military Construction Appropriations Act, the
    Department has submitted a legislative proposal for the establishment
    of Treasury account entitled ``Base Realignment and Closure
    Environmental Restoration.'' Through this account, the Department will
    budget for future costs for environmental restoration related to the
    first four rounds of closure. The Department has programmed funds for
    these costs beyond FY 2001 in the Future Years Defense Program
    attendant to the FY 2000/2001 Budget submission.
        Question. If not, why not?
        Answer. The Department has complied with congressional direction to
    propose the establishment of a separate Treasury account for continuing
    BRAC I through IV environmental restoration costs.
        Question. Do you have an estimate of the annual level of funding
    required for this effort for fiscal year 01 and beyond?
        Answer. The current estimate for FY 2001 BRAC I through IV
    environmental cost is $613 million. The Department's current estimate
    of the annual level of funding required for continuing BRAC I through
    IV environmental efforts beyond FY 2001 is approximately $330 million.
    The projected funding decrease from the FY 2001 level to the annual
    level in the outyears reflects the Department's emphasis on expediting
    environmental cleanup within the six-year BRAC implementation period.
    The implementation period for the last of the current BRAC rounds ends
    in FY 2001.
                           Summary and Reconciliation
        Question. Please submit for the record the two-page chart titled
    ``Summary and Reconciliation of the Authorization, Authorization of
    Appropriations and Appropriations Requested from Congress for Fiscal
    Year 2000''.
        Answer. The reconciliation chart is attached.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                Public Private Ventures--Administrative Overhead
        Question. How do contracts for public/private ventures--
    particularly contracts involving family housing--address administrative
    overhead for federal expenses?
        Answer. Contracts involving family housing do not address
    administrative overhead for federal expenses. Administrative overhead
    expenses are programmed and budgeted for separately by each of the
    military services. Life cycle cost analyses include these costs when
    privatization is considered.
        Question. Do such contracts make any provision for reimbursement of
    federal expenses in any way?
        Answer. These contracts do not include administrative expenses as
    noted in answer #90. However, any other services that the contract
    requires to be provided by the federal government directly to the
    contractor must be reimbursed.
        [Clerk's note.--End of Questions for the Record submitted by
    Chairman Hobson.]
        [Clerk's note.--Questions for the Record submitted by Congresswoman
    Granger.]
        Question. Many members of Congress believe the Department's FY00
    budget number equates to quite a bit less than $12.6 billion in
    additional defense funding. What assurances can you give us that DoD
    will really be able to offer $12.6 billion of new funding without
    cannibalizing other critical defense accounts?
        Answer. I can give no assurances since approval of those additional
    resources largely resides with Congress. Of the $12.6 billion, $4.1
    billion is a requested increase to last year's planned planned topline
    for FY 2000, and approval of any topline rests with Congress. The
    remaining $8.5 billion comes from savings from lower inflation, lower
    fuel prices, rescissions, and other adjustments--savings that the
    President directed DoD to retain and allocate to pressing needs.
    However, Congress has the authority to redirect these savings, rather
    than support the President's plan.
        Question. Last congress, I had the pleasure of serving on the Armed
    Services Committee, and we held a number of hearings late last year
    where we pressed the Joint Chiefs to offer the Committee an accurate
    assessment of the Services' immediate funding needs. We were told there
    was an immediate need for $20 billion in FY00. Were they wrong? Has the
    need gone away? Or is this budget simply not enough?
        Answer. No, the Chiefs were not wrong, nor has the need gone away.
    The FY 2000 budget funds what our military leaders believe are their
    most pressing requirements. However, the President's additional
    resources totaling $112 billion for FY 2000-2005 still leave unfunded
    about $36 billion in less critical requirements identified by our
    military chiefs. We need to continue to work toward meeting these
    requirements, for example through savings from two additional base
    closure rounds.
        Question. What is the average age of housing units in each of the
    Services? What percentage of the housing in each of the Services would
    you consider to be sub-standard?
        Answer. The average age of housing units for the Army is 34 years.
    There are only 91 units remaining in the inventory that are officially
    classified as substandard. However, 76 percent of the existing
    inventory does not meet current standards and is therefore considered
    inadequate.
        The average age of housing units for the Navy is 35 years. At the
    end of FY 1998, 27,285 units, or 44 percent, of the Navy's housing
    inventory were considered unsuitable. These include homes that can no
    longer be economically repaired and maintained: requiring replacement,
    and homes requiring more than $15,000 per unit for repairs and
    improvements.
        The average age of housing units for the Marine Corps is 33 years.
    At the end of FY 1998, 12,853 housing units were considered unsuitable.
    This equates to 50 percent of the Marine Corps family housing
    inventory.
        The average age of housing for the Air Force is about 35 years. As
    of the end of FY 1998, about 61,000 units are deemed inadequate,
    requiring replacement or whole-house improvement. This equates to
    approximately 55% of the Air Force inventory.
        Question. I am sure you agree that ``quality of life'' issues play
    a big part in our ability to retain high trained personnel in the
    military. Obviously, a pay increase and fixing the retirement system
    are helpful, but there are other huge quality of life issues that are
    not at the level they should be, like housing and family-support
    facilities. Help me understand how DoD's MilCon budget is adequate to
    meet these needs?
        Answer. The FY 2000 Military Construction program of $4.9 billion
    includes $780.8 million to construct 11,030 barracks spaces which
    provides more room and a private sleeping area for our servicemen.
    Also, the FY 2000 program includes $90 million to construct 12 physical
    fitness centers, 6 school facilities for dependents, 2 child
    development centers and other community-focused service facilities. In
    addition, the FY 2000 family housing program of $3.5 billion includes
    $180 million to construct, replace, or improve approximately 5,4000
    units. The major emphasis is on replacement of units uneconomical to
    renovate, and upgrading existing units, rather than constructing
    additional units to increase the inventory. The programs above address
    the needs of the Department and identify to our military personnel that
    the Department is making major strides in improving our facilities for
    our personnel.
        Question. You mention in your testimony that the six year, $112
    billion increase will allow DoD to augment it's previous modernization
    plans. It is my understanding the Marine Corps' highest aviation
    modernization priority is the MV-22. Given the Marine Corps' plans to
    transition completely to the MV-22 over the course of an 18-year
    procurement effort (1997-2014), and that the average age of the CH-46E
    is already over 30 years old, can you comment on DoD's plans to
    accommodate the Commandant of the Marine Corps' request to ramp up the
    MV-22 procurement to 36 aircraft per year?
        Answer. The $112 billion increase in the FY 2000-2005 President's
    Budget supported additional V-22's. The V-22 quantity was increased by
    three aircraft in FY 2003 (achieves 30 per year a year sooner) or
    approximately $150 million. In addition, approximately $222 million was
    included ($148 million RDT&E and $74 million for procurement) to fund
    the previously unfunded Operational Requirements Document threshold
    requirement for a defensive weapon system (gun). The Department's FY
    2001-2005 budget process has begun and multiyear procurement will be
    addressed. The V-22 production rate will be considered in the context
    of these multiyear deliberations.
        [Clerk's note.--End of questions for the record submitted by
    Congresswoman Granger.]
        [Clerk's note.--Questions for the record submitted by Congressman
    Farr.]
        Question. How much money has the Army expended on environmental
    remediation at Fort Ord?
        Answer. The Army has obligated a total of $187.5 million for
    environmental restoration at Fort Ord. These obligations are for the
    period from July 1991 to December 1998.
        Question. The transfer of Fort Ord properties to the local
    communities has been delayed by a lawsuit mandating additional
    environmental assessment to determine if unexploded ordnance (UXO)
    exists at parcels that were already determined to be clean. If
    additional environmental remediation is necessary for Fort Ord, is the
    Army going to request sufficient funds in the supplemental
    appropriation to clean up any new assessments that may be mandated as a
    result of the lawsuit?
        Answer. The Army has funded the explosive ordnance (EO) Remedial
    Investigation/Feasibility Study (RI/FS) work in fiscal year 1999. If
    the RI/FS process identifies additional remediation requirements, the
    Army will fund the additional UXO remedial work required to support
    property transfers. Fiscal year 1999 funding for UXO remediation will
    support the UXO team mobilized at the installation for the entire
    fiscal year. UXO removal actions are continuing using the Army's
    removal authority while the RI/FS for EO is ongoing.
        Question. How much does the Department of Defense spend on
    Restoration Advisory Boards?
        Answer. During Fiscal Year 1998, the Department of Defense spent
    approximately $4.3 million on approximately 286 Restoration Advisory
    Boards to provide for their administrative expenses. This is a slight
    decrease from the $4.9 million spent in Fiscal Year 1997 and the $4.5
    million spent in Fiscal Year in 1996.
        Question. Why do Restoration Advisory Boards receive federal
    funding if they have no official advisory capacity?
        Answer. The federal law that created the Defense Environmental
    Restoration Program requires the creation of a Restoration Advisory
    Board or Technical Review Committee ``whenever possible and practical,
    and provides for funding.'' It is the Department's policy to involve
    the local community as early as possible and throughout the
    environmental restoration process at an installation. We believe that
    community acceptance of restoration decisions is crucial element in
    containing costs and meeting our legal obligations. In most cases,
    these advisory boards are effective tools for involving the communities
    in restoration decisions that may affect them.
        According to the Department's Restoration Advisory Board
    guidelines, a Restoration Advisory Board will be established at
    operating and closing/realigning installations and Formerly Used
    Defense Sites, where there is sufficient and sustained community
    interest. Subject to the availability of funds, installations shall
    provide administrative support to Restoration Advisory Boards. These
    activities must be directly related to the operation or establishment
    of the Restoration Advisory Board.
        Finally, advisory boards must meet the requirements of the Defense
    Environmental Restoration Program (United States Code, Section 2705)
    which directs the Department to establish Technical Review Committees.
    Where Technical Review Committees or other similar advisory groups
    already exist, they should be converted to a Restoration Advisory Board
    if there is sufficient and sustained interest within the community.
    Restoration Advisory Boards are an outgrowth of the Technical Review
    Committee concept and provide a wider forum for community members to
    discuss restoration issues with Defense Department officials, the
    Environmental Protection Agency, and local/state/tribal government
    representatives.
        Question. How much R&D investment is DOD making to fund new
    technologies to more efficiently find UXO?
        Answer. The Departments' FY 2000 budget request includes $160
    million for Research, Development, Testing and Evaluation (RDT&E) for
    Unexploded Ordnance (UXO). The scope of the DoD UXO program encompasses
    the five mission areas:
        1. Countermine,
        2. Explosive Ordnance Disposal,
        3. Active and Inactive Range Clearance.
        4. Environmental Remediation (at Closed, Transferred, and
    Transferring Ranges)
        5. Humanitarian Demining.
        These funds will be used to continue the development and
    demonstration of new technologies to detect, discriminate, and remove
    UXO and support the advanced Engineering, Manufacturing, and
    Development (EM&D) processes to field new operational capabilities.
        The FY 2000 R&D investment in Active and Inactive Range Clearance
    and Environmental Remediation mission areas is $7 million. All of this
    investment is directed toward detection and discrimination to more
    efficiently find UXO.
        Question. How does DoD intend to increase its investment in the
    language capabilities of its troops?
        Answer. The Defense Language Institute Foreign Language Center
    (DLIFLC), trains DoD soldiers in foreign language skills. The student
    load, a factor that describes student output in terms of annual
    equivalents, is the standard for determining funding to train service
    members in foreign language skills. Student load is determined by a
    structured process, which all Services participate in, that optimizes
    Service requirements and DLIFLC training capacity. The Army, the DoD
    Executive Agent, has been able to program resources to meet current and
    future training loads and language requirements. Technological advances
    will allow for economically feasible expansion in the language training
    program.
        Question. Does the Milcon budget request for the DoD Center in
    Monterey include funds for a Video Teletraining Facility for the
    Defense Language Institute (DLI)?
        Answer. No, the Monterey project request does not include a Video
    Teletraining Facility for DLI.
        Question. What kind of MilCon investment is the DoD planning for
    the Naval Postgraduate School in the FY00 budget?
        Answer. There are no MilCon projects for the Naval Postgraduate
    School in the FY00 budget.
        [Clerk's note.--End of questions for the record submitted by
    Congressman Farr.]
        [Clerk's note.--Questions for the record submitted by Congressman
    Boyd.]
        Question. I notice in the budget number that the administration is
    asking for a significant amount of money in the out years for future
    BRACs. Has DoD identified any bases for these future BRACs?
        Answer. No, the Department has not identified any bases for closure
    or realignment in future BRAC rounds. Our analysis has shown that
    sufficient capacity exists to warrant two additional BRAC rounds,
    similar in size to the BRAC 93 and 95 rounds, respectfully. Our costs
    and savings estimates for these future BRAC rounds are based on the
    average costs and savings we have experienced for BRACs 1993 and 1995.
    The funds requested in the defense program represent the NET costs for
    a notional size BRAC round in 2001. We recognize that the actual costs
    and savings from future BRAC rounds will depend upon the specific
    recommendations adopted, and that future estimates, regardless of how
    reasonably developed today, cannot replace the component data produced
    during the analytical rigor of future BRAC rounds.
        Question. Are you aware of any proposals by the Air Force to
    transfer air defense sectors from one base to another? Mr. Chairman, I
    have a document from the Air Force that I would like to have entered
    into the record that outlines transferring several air defense sectors
    from one base to another and leaves several Air Force bases with little
    or no military presence.
        Answer. The staff level, draft-working document in question
    proposes the closure of the air defense sector (ADS) at Tyndall AFB and
    the realignment of its responsibilities to the air defense sector
    located on the now closed Griffis AFB. This staff document in question
    is based on a Mission Area Plan (MAP) developed by the Aerospace
    Command and Control, Intelligence, Surveillance and Reconnaissance
    Center (AC2ISRC). The AC2ISRC's MAP proposes the consolidation of four
    air defense sectors into a single ``Atlantic Region Operations Center
    (ROC). The four air defense organizations envisioned by the AC2ISRC
    plan as consolidation candidates include the Northeast ADS at Griffis
    Industrial and Technology Park in Rome, NY; the Icelandic ROC in
    Iceland; the Southeast ADS at Tyndall AFB, Florida; and the Caribbean
    ROC in Key West, Florida. The AC2ISRC plan does not specify nor
    recommend a location for the consolidated Atlantic ROC. However, the
    staff level, draft-working document developed at the National Guard
    Bureau (NGB) is the document that recommends the closure of the ADS at
    Tyndall and the consolidation at Griffis Industrial and Technology
    Park. The proposed realignment directly affect 294 military, civilian,
    and contractor personnel and approximately 150 additional positions if
    First Air Force is re-located to Colorado Springs, Colorado as is also
    proposed by the NGB draft-work document.
        Question. I would like a description of the document that has
    ``Draft briefing given to C2 Center Manpower APOM Working Group on
    February 11, 1999'' on it and the reason why this document was
    prepared.
        Answer. The document in question is a staff officer level Microsoft
    Power Point briefing. The first 11 slides of the briefing establish the
    need for an Air National Guard proposal for modernizing and
    consolidating the sectors in line with the Aerospace Command and
    Control, Intelligence, Surveillance and Reconnaissance Center (AC2ISRC)
    Mission Area Plan (MAP) 12-25 lay out a counter proposal that would
    meet the AC2ISRC goals. This staff officer presentation recommends the
    closure of existing sectors, including the one at Tyndall AFB, based on
    criteria developed at the staff level and perceived by its developers
    to be relevant and accurate.
        Question. What is the time line envisioned for implementation of
    the proposal that is outlined In this document?
        Answer. The document in question is a staff level draft-working
    document. The document is not an implementation plan and therefore does
    not have a specific timeline associated.
        Question. This document proposes to close the Southeast Air Defense
    Sector (SEADS) that is located at Tyndall Air Force Base and allow the
    Northeast Air Defense Sector (NEADS) at Rome, New York to become the
    Atlantic Regional Air Operations Center (RAOC). What criteria was used
    in reaching this conclusion?
        Answer. The limitations and capabilities listed in the subject
    staff level working document for the Southeast Air Defense Sector and
    the Northeast Air Defense Sector are restated as follows:
              Lead turn possible FY01 BRAC issue. Based on last round
            information, Tyndall is a high risk BRAC candidate
              SEADS HURRIVACs several times a year, would be a very weak
            link with only two systems on line
              SEADS facilities and COMM require extensive modernization to
            support the level of operations required for the modernized
            system; ESC estimates the cost at $254,796 for SEADS and
            $56,496 for NEADS
              NEADS is the most modern facility
              NEADS has the most capable system and communications suite
              NEADS can cover Western Air Defense Sector during
            modernization
        The above criteria was used in the staff officer level, draft-
    working document as the basis for recommending the closure of SEADS.
    However, after further review, questions have been raised as to the
    relevance of some of the criteria and accuracy of the information
    gathered in support of the criteria. Specifically: The subject of BRAC
    is not relevant. The NEADS is located on a base that has already been
    closed and the SEADSs could just as easily operate from a containment
    area similar to the one that NEADS now operates if a future BRAC were
    to close Tyndall. Upon further review, it has been determined that the
    SEADS has evacuated only once since its inception in 1983 in contrast
    to the ``several times a year'' used in the staff level decision
    process; that one evacuation was under very unusual circumstances and
    the SEADS could have continued to have operated had the national
    security circumstances warranted.
        The ESC cost study was the only study known to the staff when their
    draft-working document was developed; it is now known that First Air
    Force had also conducted a study on the cost of consolidating the
    sectors and had found that consolidation at Tyndall resulted in $1.3
    million of one-time, non-recurring cost savings and 1.55 million is
    annual cost savings. The scope of both studies will be evaluated and
    the conclusions verified.
        The facilities used to house both the SEADS and the NEADS were
    constructed within two years of each other which is not significant for
    supporting an assertion that one is more modern than the other. Both
    are comparable in this attribute. Both the NEADS and the SEADS have
    comparable communications systems as measured by capacity. Each
    sector's capacity is merely programmed to perform different functions
    during expansions. Additionally, the First Air Force study concluded
    that the SEADS would require $1.2 million of costs to bring a
    nationwide expansion capability on line whereas the NEADS would require
    $2.5 million for comparable capability. Another study by First Air
    Force has determined that modernizing the SEADS first will eliminate
    significant, but avoidable operational risk during the installation and
    testing of the new system.
        The criteria used in the draft-working document and the values and
    conditions assigned thereto were part of a ``draft and develop''
    process. Since this initial draft was first briefed, additional
    information and data has become available and must be evaluated in
    integrated into the process before an implementation plan is approved
    and published by the ANG leadership.
        Question. The document claims ``that ESC estimates SEADS facilities
    and communications (COMM) would be more expensive to modernize'' and
    uses the following numbers: SEADS: $254,796 to NEADS (56,469). How were
    these numbers derived? I have been informed by several sources that
    neither of these numbers are correct. fact, I have it on good authority
    that it would actually cost $1.2 million more per year to operate at
    Rome, New York vs. Tyndall AFB. Furthermore, an additional $1.6 million
    would be needed to modernize NEADS vs SEADS. I would like this
    confirmed or denied, and if denied, the actual numbers that the Air
    Force has and the background on how these numbers were reached.
        Answer. The figures used in the draft-working document were taken
    from an Electronic Security Command (ESC) study dated 5 May 97. We have
    recently learned that a First Air Force study is the source of the
    figures provided to you. Before implementing any plan that will result
    in the closure of SEADS, the scope of both studies will be evaluated
    and the conclusions verified.
        Question. In 1997, there was a discussion of modernizing and
    possibly consolidating SEADS and NEADS. At that time, I was informed
    that consolidation at Tyndall would result in an added savings of
    approximately $1.3 million in up-front costs as NEADS would require an
    expensive COMM package included if that sector was modernized. Why has
    that figure changed so much that the figures in the document are
    correct?
        Answer. Although the source of the 1997 discussions is unknown, the
    figures cited correspond with those in the First Air Force study on
    consolidation published in March 1997. We have recently learned of that
    First Air Force study. Before implementing any plan that will result in
    the closure of SEADS, the scope of both studies will be evaluated and
    the conclusions verified.
        Question. The document states that ``Lead turn possible FY01 BRAC
    issue: Tyndall is high risk.'' I would like to know what is meant by
    that bullet. Is the Air Force proposing that Tyndall be closed? I would
    hope not since those decisions are supposed to be made by an
    independent BRAC commission. But then again, by closing SEADS and
    moving First Air Force and Continental NORAD Region Headquarters (1AF/
    CONR) as proposed in this document AND zero-funding the Environmental
    Technology Branch at the Air Force Research Laboratory at Tyndall as
    proposed in the President's FY00 budget submittal, it appears that the
    Air Force may have already made such a decision. I would appreciate
    comments in response.
        Answer. This document was developed to provide options for sector
    modernization and responsibility realignment and does not propose the
    closure of Tyndall AFB. If there are future BRAC reviews, Air Force
    bases would be reviewed based on the criteria established by the BRAC
    commission.
        Question. The next bullet states that ``key lawmakers have
    expressed concern that critical operations at Tyndall are vulnerable to
    adverse weather (WX).'' I would like a list of names of the specific
    lawmakers that have made such a comment or statement. I believe that
    this bullet was actually taken from a New York delegation letter in
    1997 during the previously mentioned discussion of modernization and
    possible consolidation of SEADS and NEADS. Is this true or if not,
    where did this bullet come from? From my discussions and review of the
    facts, SEADS has only been down for a few hours on one day since 1981.
    I would appreciate you responding to this to either confirm or provide
    me with the actual down time that has occurred at SEADS.
        Answer. Alfonse D'Amato and Daniel Patrick Moynihan of the U.S.
    Senate and Sherwood Boehlert of the House of Representatives first
    raised the question of weather being a factor in December 1996. SEADS
    operations were down for three consecutive days during a Florida coast
    evacuation for Hurricane Opal in 1995. At the time the evacuation
    decision was made, Hurricane Opal was a very rare Category 5 storm.
    However, had national security conditions required SEADS to have
    remained operational, SEADS would have been capable of operating
    throughout Hurricane Opal, much the same as NEADS could continue to
    operate through severe, crippling blizzards. Numerous unscheduled
    events requiring NEADS to cover the SEADS and the SEADS to cover the
    NEADS in the expanded mode have occurred both before and after
    transition to the Guard. Specific data on these events are available if
    required, but would have to be obtained from classified logbooks of
    either facilities or North American Aerospace Defense Command (NORAD).
    Both the NEADS and the SEADS operate computer and communications
    systems that were developed in the late 1970s and fielded in the early
    1980s. Nevertheless, both sectors have operational rates of 99.9+
    percent.
        Question. I have been told that almost the entire slide titled
    ``Select NEADS as Atlantic RACO'' is not correct or only states
    partial-truths. It states that NEADS has the most modern facilities and
    I have been told that this is definitely not correct. I have been
    informed that the next bullet on capability is very naive and the NEADS
    only accepts some of WADS sensors and COMM. And the final bullet
    stating the NEADS can cover WADS area of responsibility is also
    incorrect in that it can only cover part of it. I would appreciate your
    response to the comment made about each bullet.
        Answer. The building housing the Northwest Air Defense Sector
    (NEADS) was constructed 1 or 2 years following the completion of the
    building housing the SEADS. For this reason, and for this reason alone,
    it could be construed to be the more modern facility. However, both
    buildings were built to house what is known today as a Sector Air
    Operations Center (SAOC). Additionally, the SEADS building houses the
    Continental NORAD Region Air Operations Center. The SEADS buildings
    also has a second floor that houses the NORAD Software Support
    Facility. THe SEADS facility is likely the only facility of the two
    that can accommodate the consolidation of all four Atlantic SAOCs/RAOCs
    as envisioned in the AC21SRC roadmaps without military construction.
        Both the SEADS and the NEADS are equipped with absolutely
    comparable communications system capability, only the NEADS system is
    programmed differently to meet the needs of an expansion plan. The
    capacity of the communications system at both facilities is limited
    because of the capacity of the system computer called the Q93 and not
    because of other factors. In a consolidation, however, this difference
    in programmed circuit switching is irrelevant. Both the SEADS and the
    NEADS will require capacity upgrades to accommodate full nationwide
    expansion and according to an available First Air Force study this
    capability will cost an estimated $2.5 million at the NEADS compared to
    $1.2 million at the SEADS.
        The issued of what sites NEADS does or does not pick up during an
    expansion is not necessarily meaningful. During an expansion, the SEADS
    can receive radar data and communication data from the most critical
    sites as can the NEADS received critical data during an expansion into
    the Western Air Defense Sector (WADS) Area of Responsibility. The most
    meaningful point is that both the NEADS and the SEADS will be capable
    of assuming full nationwide expansion once the modernized system is
    installed. The First Air Force study estimates the cost to provide the
    necessary increased capacity to be $2.5 million at the NEADS compared
    to $1.2 million at the SEADS.
        Question. I would also like to submit for the record a copy of a
    January 21, 1999 letter that I sent to the Air Force regarding zero-
    funding for the Environmental Technology Development Branch at the Air
    Force Research Laboratory at Tyndall Air Force Base in my district. As
    you can imagine, I am deeply disturbed that I have yet to receive a
    response to my letter. I would like for you to check and let my staff
    know in a reasonable time frame, would a week be reasonable, when I
    might expect to receive a response from General Paul or some other Air
    Force official.
        Answer. In response to your letter of January 21, 1999, General
    Paul signed out a letter on behalf of himself, Mr. Thomas McCall, Jr.,
    Gen George Babbitt, Lt Gen John Handy, Maj Gen Eugene Lupia, and Maj
    Gen Michael Zettler on March 2, 1999. This letter was hand-carried to
    your office the afternoon of March 2, 1999.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Question. After reviewing the Administration's budget, I have some
    concerns about the privatization of military housing and how it relates
    to BRAC. In the budget request you ask for funding for two additional
    rounds of BRAC in `01 and `05 and also indicate that we will construct
    over 80,000 new privatized housing units. If a base with privatized
    housing is BRACed, where does that leave the developer who builds and
    maintains the projects on the base when it closes? Will the military
    have any legal obligations to the development owners if the base thet
    are located on gets closed and what impact will that have on the cost
    of the proposed BRAC?
        Answer. In the event of a base closure, in communities that have a
    viable housing market, the developer may rent the project's housing
    units to civilians, including military retirees, as the military
    population draws down. The likelihood of default is negligible.
    However, there is an additional potential protection for developers who
    have projects in communities that do not have a viable housing market.
        One of the Military Housing Privatization Initiative authorities
    contained in the 1996 National Defense Authorization Act allows (but
    does not require) DOD to provide a loan guarantee to cover the risk of
    base closure as well as deployment, and downsizing. If included in the
    agreement, in the event of a default which is proved to be caused by
    base closure, the government will be obligated to pay off the balance
    of the loan.
        Question. In reviewing the overall DoD budget I have serious
    concerns about the level of Science and Technology funding and its
    impact on the military's ability to remain technologically competitive
    in the future. The service operated labs conduct research that
    addresses a specific military need and I am concerned this expertise
    will be lost if the Administration continues to cannibalize funding
    from this function to fund other priorities. Can you outline DoD's
    efforts to ensure the military maintains a first class research
    capability to meet future needs?
        Answer. Careful consideration was given to the Department's science
    and technology accounts during the preparation of the FY 2000/01 budget
    request to ensure that they sustain the appropriate level of funding to
    support our future investments. Overall, science and technology funding
    in FY 2000 is slightly above the FY 1999 requested level with the
    subsequent fiscal years being generally consistent with the FY 2000
    request. Within the overall funding, the Department shares your opinion
    that the service-operated labs provide an invaluable expertise and we
    are committed to preserving that capability to address the emerging
    requirements of the Department, especially in support of the Revolution
    in Military Affairs. To support our research capability, the Department
    is proposing several initiatives addressing laboratory personnel,
    including a proposal to hire 60 scientists and engineers without regard
    to a civil service appointment under the authority of a five-year
    experimental program and a proposal to establish a transfer program for
    science and engineering personnel from private industry into the
    Department's laboratories on a temporary basis. In addition, to support
    our robust capability as efficiently as possible, the Department has
    undertaken an initiative to streamline RDT&E infrastructure and reduce
    the overhead costs at the laboratories. This initiative is part of the
    Section 912(C) study and is intended to eliminate unnecessary costs and
    allow the Department to maximize research capability within the
    available resources.
        Question. After reviewing the Administration's budget, I have some
    concerns about the privatization of military housing and how it relates
    to BRAC. In the budget request you ask for funding for two additional
    rounds of BRAC in `01 and `05 and also indicate that we will construct
    over 80,000 new privatized housing units. If a base with privatized
    housing is BRACed, where does that leave the developer who builds and
    maintains the projects on the base when it closes? Will the military
    have any legal obligations to the development owners if the base thet
    are located on gets closed and what impact will that have on the cost
    of the proposed BRAC?
        Answer. In the event of a base closure, in communities that have a
    viable housing market, the developer may rent the project's housing
    units to civilians, including military retirees, as the military
    population draws down. The likelihood of default is negligible.
    However, there is an additional potential protection for developers who
    have projects in communities that do not have a viable housing market.
        One of the Military Housing Privatization Initiative authorities
    contained in the 1996 National Defense Authorization Act allows (but
    does not require) DOD to provide a loan guarantee to cover the risk of
    base closure as well as deployment, and downsizing. If included in the
    agreement, in the event of a default which is proved to be caused by
    base closure, the government will be obligated to pay off the balance
    of the loan.
        Question. In reviewing the overall DoD budget I have serious
    concerns about the level of Science and Technology funding and its
    impact on the military's ability to remain technologically competitive
    in the future. The service operated labs conduct research that
    addresses a specific military need and I am concerned this expertise
    will be lost if the Administration continues to cannibalize funding
    from this function to fund other priorities. Can you outline DoD's
    efforts to ensure the military maintains a first class research
    capability to meet future needs?
        Answer. Careful consideration was given to the Department's science
    and technology accounts during the preparation of the FY 2000/01 budget
    request to ensure that they sustain the appropriate level of funding to
    support our future investments. Overall, science and technology funding
    in FY 2000 is slightly above the FY 1999 requested level with the
    subsequent fiscal years being generally consistent with the FY 2000
    request. Within the overall funding, the Department shares your opinion
    that the service-operated labs provide an invaluable expertise and we
    are committed to preserving that capability to address the emerging
    requirements of the Department, especially in support of the Revolution
    in Military Affairs. To support our research capability, the Department
    is proposing several initiatives addressing laboratory personnel,
    including a proposal to hire 60 scientists and engineers without regard
    to a civil service appointment under the authority of a five-year
    experimental program and a proposal to establish a transfer program for
    science and engineering personnel from private industry into the
    Department's laboratories on a temporary basis. In addition, to support
    our robust capability as efficiently as possible, the Department has
    undertaken an initiative to streamline RDT&E infrastructure and reduce
    the overhead costs at the laboratories. This initiative is part of the
    Section 912(C) study and is intended to eliminate unnecessary costs and
    allow the Department to maximize research capability within the
    available resources.
        Question. I am very concerned about the impact the forward funding
    request will have on the quality of life for military personnel. I
    realize the administration is trying to get as much bang for the buck
    under the budget caps as possible but like several of my other
    colleagues on the committee I am concerned the split funding will delay
    needed construction projects. Can you discuss what steps DoD will take
    to ensure construction projects that are appropriated this year will
    not be delayed by this funding approach? Has the administration looked
    at the possible increased costs associated with split funding and have
    you budgeted for this possibility?
        Answer. We recognize there is an element of risk in the approach we
    are taking to finance our FY2000 military construction program.
    Nevertheless, we believe it is executable and we have requested the
    appropriate legislative precautions to minimize these risks. We would
    contract for the full completion of the projects but limit the spending
    in the first year to the amount appropriated by Congress. To minimize
    any risk, we requested full authorization of the projects, advance
    appropriation of the FY 2001 funds to lock in those funds and the
    flexibility to reprogram funds at a higher threshold, the authorization
    amount. With these tools and careful attention to project award and
    issuance of contractor's notices to proceed, disruption of projects
    and/or higher construction costs would be minimal.
        [Clerk's note.--End of questions for the record submitted by
    Congressman Boyd.]
                                             Wednesday, March 10, 1999.

                        QUALITY OF LIFE IN THE MILITARY

                                   WITNESSES

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

                           Statement of the Chairman

        Mr. Hobson. The meeting will come to order.
        Today's hearing of the Military Construction Subcommittee
    will focus on quality of life in the military. The witnesses
    here today are the senior enlisted members from each Service.
    This hearing is intended to continue the tradition of the
    Subcommittee focusing on quality of life issues. We look
    forward to hearing their views, since they are the most in
    touch with our young Soldiers, Marines, Sailors, and Airmen and
    their families.
        Before I turn this over to Mr. Olver, in case there is
    anything he would like to say, I would like to read a couple
    questions for you to think about so that I do not hit you with
    them at the end, as we usually do. Let me just read a couple of
    these.
        How much opportunity is there for junior enlisted service
    members to have some say in the housing program for your
    service, in designing both the family housing program and the
    unaccompanied housing program?
        Have the views of enlisted personnel--and I do not mean
    just senior ranking enlisted people--been sought out when it
    comes to privatizing family housing, and what views have you
    heard?
        Is basic security a big concern for the average service
    member? If I could give you an example, at Izmir, places like
    that.
        Do you hear many complaints about inequities between
    housing policies for married and single personnel? And is there
    enough balance between the two in rectifying the problems?
        What are the most frequent complaints you hear about family
    housing?
        And lastly, in the past we have listened carefully to your
    suggestions and tried to follow through on them. Is there any
    specific area that this committee should concentrate on in the
    coming year?
        I guess one other one that I would ask later, if we have
    time, is how a person builds any equity in a home. All the
    money we've given to these people for housing over the years--
    I've seen one program for trying to get people equity in
    housing. Have you all thought of anything about that?
        Mr. Olver, do you have any comment you want to make?
        Mr. Olver. Well, I would just say that we are very pleased
    to have the group of you here today. This is a hearing that is
    always very interesting because you, by your very positions in
    the services, are perhaps the best persons to represent the
    views of the enlisted personnel as to how we are doing in
    providing for quality of life issues, what sort of housing,
    what sort of health care and educational opportunities there
    are available for people. And this is the hearing whereby we
    get, more than any other way, perhaps, other than actually
    going out and visiting which we don't have enough time to do in
    a lot of different places, where we get the perspectives that
    you bring to it, and thereby are able to assess in some way the
    impact that we have on these issues for the men and women who
    are serving this country in the armed services.
        And so this is a most interesting hearing and I look
    forward to what you may have to say.
        Mr. Hobson. I would like you all to summarize your
    testimony and submit additional testimony for the record.
        I guess we're going to start off with the Army, the Navy,
    the Marines, and then the Air Force, since it is the youngest
    service.
        So, Sergeant Major Hall.

                   Statement of Sergeant Major Robert E. Hall

        Sergeant Major Hall. Thanks very much, Mr. Chairman and
    members of the subcommittee. Good morning. I have submitted a
    statement for the record.
        I would like to report to you today that it is an honor to
    appear before you as we begin to prepare the Army for the next
    century and the next 100 years of taking care of soldiers and
    families in this great Nation.
        It is my privilege to represent and talk to you about the
    needs and the health of our soldiers, the young men and women
    who are our Army. I will tell you that America's Army is
    answering the Nation's call in a way which should make
    soldiers, past and present, swell with pride. Operating and
    personnel tempos have increased dramatically. Soldiers are
    continually called upon to meet the Nation's commitments in
    operations other than war, as well as those commitments where
    our soldiers are only a short breath away from being in harm's
    way.
        I would like to especially thank you and the Congress for
    your support. We have a song that says, ``When we were needed,
    we were there.'' Now, that normally relates to one of our
    recruiting themes, but I can say that when we needed you, you
    were there. You provided about $1.4 billion for contingency
    operations, and another $375 million that addressed some of our
    most pressing near-term readiness issues. You were there in
    previous years when you supplemented our annual budget request,
    funding unfinanced requirements that significantly improved our
    ability to maintain a trained and ready force, and also created
    a better quality of life for our soldiers and their families.
        Near-term readiness, as well as future readiness, remains a
    challenge. It is a very tight balancing act between people,
    modernization, and training. One unplanned event could upset
    that balance and commanders could find themselves in a position
    where they are forced to use training funds to address
    underfunding of our installations and the quality of life
    programs.
        Recruiting is as tough today as I have ever seen it. We
    find ourselves in competition with other services, colleges,
    and the commercial sector for quality young men and women.
        From my foxhole, Mr. Chairman, the Army's challenge has not
    changed a lot over the past year. Deployments remain high, and
    our warriors are in great demand throughout the world. But I
    think that is okay, because we, as an Army, understand that we
    exist for one reason, to fight America's wars when called upon
    to do so. This takes a force that is trained and ready to
    fight, one that has the ability to sustain the fight and to
    win.
        The single most important resource in all that, that allows
    that to happen, is our soldiers. Their selfless service,
    dedication, and professionalism sustain us today on 299
    missions in 70 countries.
        Our soldiers do not ask for much. They face an
    unprecedented operational pace. They are top quality people;
    they are diverse, highly trained, well skilled, and well led.
    They did not ask to be in those 70 countries; they are there
    because our country and our Army told them to be there, and
    they are doing everything that your Army demands of them. And
    in return, they ask for so little. They ask for decent pay and
    housing, medical care, and retirement benefits for the day that
    they have to take off their uniform for the last time.
        I think those hopes and expectations are reasonable. These
    young men and women protect the freedom of our Nation without a
    single thought to comfort, pleasure, profit, or personal
    safety. They do so much and ask for so little.
        I am just proud to be their representative and to be the
    spokesman for them today.
        Mr. Chairman, thanks for giving me the opportunity to make
    this statement, and I welcome any questions from the
    distinguished Members.
        [Prepared statement of Sergeant Major Robert E. Hall
    follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hobson. We will hold our questions. I will make one
    comment while these young people are here in the room, and I
    want to thank the young people for being here this morning that
    are in the room.
        I think it is important for you to see your Government in
    action. This is probably as close-up as we do a hearing
    process, in this room, but Mr. Olver and a number of us have
    had an opportunity to travel to Bosnia and other places and we
    have seen the young people that you all represent, especially
    the Army.
        This weekend I happened to be in Honduras and saw the
    really great work that they did in Honduras and are continuing
    to do, and those lives that they have saved.
        I also was at Guantanamo Bay and saw three young Marines up
    in the tower. They were just out of basic, and they were just
    wonderful young people. You did not have to worry about them
    performing their jobs. One of those young people who had been
    at it a little bit longer, had a little more rank, is going to
    go to the Naval Academy. So we can be very proud of the young
    people that we have and their performance. Certainly, all the
    services should be proud of the young people they have.
        Every time our committee goes out and visits one of these
    places, I am astounded by the ability, the quality, and the
    professionalism of the young troops. And frankly, that reflects
    well on the leadership that they have.
        So, we will go to the Navy.

     Statement of Machinists Mate Master Chief Petty Office James L. Herdt

        Master Chief Herdt. Good morning, sir, Chairman Hobson and
    members of the committee. Please allow me to thank you for this
    opportunity to speak on behalf of sailors and families of our
    great Navy.
        This is my first opportunity to testify before this
    Committee, as I only relieved Master Chief Hagan just a little
    less than a year ago, March 27th of last year. I look forward
    to answering questions that you may have for me.
        During the course of this last year I have traveled
    extensively from the Antarctic to the Gulf of Arabia, meeting
    with thousands of sailors. And today's Navy continues to be the
    forward-deployed force. Approximately 50,000 of our sailors are
    on deployment on any given day, lasting anywhere from three
    months to six months.
        In my travels to battle groups in the Gulf, I find that our
    sailors do not complain about deploying, nor living aboard
    their ships; neither do they complain about the 14 to 16 hour
    days that they work, seven days per week, while they are at
    sea. But when they do return to port, they feel that they
    should be provided with adequate living conditions ashore
    commensurate with their peers who are not in the military.
        As we all know, we will never be able to afford to pay
    enough for their sacrifices, and sailors do understand this.
    Relative to the vital job that they do in ensuring the freedoms
    that we all enjoy, they really do not expect very much. They do
    ask for an adequate quality of life, and it is essential now,
    more than ever, that we continue to support the quality of life
    efforts for our troops.
        I am convinced that the quality of the facilities in which
    we train, work, and live plays a vital role in recruiting and
    retaining our sailors. While I am confident that other crucial
    issues, such as compensation, have been recognized and are
    being addressed, I want to stress my belief that compensation
    alone will not guarantee that we will continue to recruit and
    retain a quality force.
        As I stated in my written statement, I have two main
    concerns in regards to quality of life and military
    construction.
        The first is the need to increase the quality of permanent
    party single sailor housing.
        The second is our current inability to meet the growing
    need for family housing in the Navy.
        Gentlemen, I look forward to addressing your specific
    questions on any of the other issues that you may have. And
    again, allow me to say thank you for allowing me to come
    forward and represent all of the great sailors in our terrific
    Navy.
        [Prepared statement of Machinists Mate Master Chief Petty
    Office James L. Herdt follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hobson. Next, the Marine Corps.

                    Statement of Sergeant Major Lewis G. Lee

        Sergeant Major Lee. Good afternoon, Mr. Chairman and
    committee members. I want to thank you all for the privilege of
    appearing before you. I have a brief statement, also.
        Sir, today we have about 28,000 Marines that are forward-
    deployed. That is pretty much routine. I want to assure you
    that they are ready for whatever may arise. We remain a young,
    predominantly single enlisted force, and despite the
    difficulties and challenges that you read and hear about, we
    are recruiting the quality and the quantity that we need.
    Furthermore, we are retaining the numbers required to sustain
    our required end-strength.
        We do have problems with certain skills and certain
    experience levels, but many of those are self-inflicted wounds
    and they are not problems that we cannot handle.
        In short, the Marine Corps is solid and continues to be
    capable of doing what it has pretty much always done, and that
    is, we make Marines out of America's youth, and prepare for and
    win battles wherever the need may arise.
        Military construction greatly impacts the quality of life
    of Marines and their families; you all are well aware of that.
    The greatest impact comes from new construction of and/or the
    repair of bachelor and family housing and those types of
    support activities.
        We have made significant inroads on our problem areas over
    the past few years, thanks to your support and the support of
    the Congress. If our fiscal year 2000 requests are approved,
    your Marines will again be very grateful. The detail of what we
    need for fiscal year 2000 is contained in my statement and
    recorded in our budget request.
        As is always the case, we could use more, but I want to
    assure you that we will zealously apply each dollar
    appropriated for what it is intended for. Needless to say, to
    get better quicker would require more appropriations; any
    increased funding for new construction, or for the elimination
    of our backlogs of maintenance, would be greatly appreciated.
        In closing, your Corps will continue to do what it has done
    with what we are provided.
        With that, ladies and gentlemen, I am prepared to answer
    any questions you might have for me.
        [Prepared statement of Sergeant Major Lewis G. Lee
    follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hobson. And now, the Air Force.

               Statement of Chief Master Sergeant Eric W. Benken

        Chief Master Sergeant Benken. Mr. Chairman, I have
    submitted a written statement for the record.
        I would agree with you that this is an amazing process that
    we have, the young people that we have. We are an institution
    that can take an 18-year-old off the street who has a bad
    haircut, a rock-and-roll T-shirt on their back, and their only
    skill is in-line skating, and we make them a somebody. We make
    them somebody who garners the respect and admiration of the
    American public.
        I once worked for a Commander who had a philosophy about
    facilities, who had a philosophy about working conditions. He
    would tell you that the crew chief who walks out to an airplane
    that is in disrepair or doesn't look good, pretty soon will
    start to look the same way as the airplane, pretty soon will
    have that shoddy appearance and pretty soon will have their
    head down when they go to work.
        And I believe that that translates to facilities and
    military construction, as well. If our people have facilities
    that are second rate, if our people have facilities that are
    not maintained well, whether it is family housing or work
    facilities, eventually that begins to have an impact on how
    they work and how they look and how their state of readiness
    is.
        So I think that the work that this committee does is
    extremely important, and I believe that all of the work that
    you have done in the past has had a profound and positive
    impact on our Air Force.
        So I thank you for the opportunity to be here and look
    forward to answering your questions.
        [Prepared statement of Chief Master Sergeant Eric W. Benken
    follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hobson. I just want to show you this picture. This is a
    picture we took in Bosnia, me swearing in a young soldier--he
    was from Jamaica. I thought it was kind of a nice experience.
    We sent him back a copy of the picture. I won't forget it, and
    I hope he doesn't forget, as we move forward.
        Mr. Olver, do you have any questions that you would like to
    ask at this time?
        Mr. Olver. I would like to ask a couple just for pinning
    people into my understanding of your roles.
        Is each of your positions unique in your services? As the
    Sergeant Major of the Army, you are the only Sergeant Major of
    the Army, and in the case of the Master Chief Petty Officer--
    there are lots of Chief Petty Officers, but you are the Master
    Chief Petty Officer?
        Master Chief Herdt. Master Chief Petty Officer of the Navy,
    yes, sir. There is only one.
        Sergeant Major Hall. Within the Army, sir, we have
    Sergeants Major at every command level, but there is only one
    who works for the Chief of Staff of the Army that has oversight
    responsibility for the entire Army, and that is me. I am the
    only one who wears this insignia of rank within the Army.

                   length of service/housing facilities used

        Mr. Olver. Okay.
        Could I ask each of you how long you have been in the
    service, and which of the quality of life features you have
    personally used? That is, were you a user of single housing,
    bachelor housing, and then family housing, and then--I don't
    know what you would be living in at the present time--and then
    which of the other features which are normally part of our
    system you have personally used, which would be the day care
    facilities, if you have children, and the educational benefits.
    Could we do that?
        Sergeant Major Hall. Sir, I came in 1968; last month marked
    31 years of service.
        Mr. Olver. Exactly how long I have been in politics.
        Sergeant Major Hall. I don't know if you intended to stay
    in that long----
        I came in to do three years and get out. It has been a long
    three years for me.
        But growing up, with 31 years, I have gone through
    everything from open bays--I started out as a single soldier
    with open bays of 40 men in an open bay--to six-man rooms, to
    three-man rooms, and then I got married. I have been married
    about 30 years, and have used family housing.
        If you will let me go to the last question that the
    Chairman asked, how do you build up equity in housing?
        I am now living in my 19th house between off-post housing
    and Government quarters. I have invested a tremendous amount of
    money in Government quarters, and have built up zero equity. If
    I have any regret over those 31 years of serving as a soldier,
    it is the fact that I have never owned a home. That is a little
    bit scary, because about June of 2000 I have to go buy my first
    one, and I will figure out how to do that. So I have gone
    through the whole thing.
        I did not use child care as my children were growing up--
    although I still have one at home who is 13 years old. I have a
    daughter who is married to a Sergeant, and my two grandchildren
    are enrolled in child care. So I think between----
        Mr. Hobson. Did your kids go to DOD school?
        Sergeant Major Hall. They just came back from Germany. They
    are en route to Fort Riley, so my oldest grandson, who is
    seven, went to kindergarten and first grade at a DOD school.
        So I guess I have used all the quality of life support
    activities that the Army has had over 31 years. It is
    tremendously better now than it was when I was coming through
    the ranks as a young soldier.
        Mr. Olver. If I may comment on what you have just said,
    before we go on to the others, the one thing that came through
    there, I have never heard anyone else speak to the issue of
    equity in housing.
        Mr. Hobson. I've had a constituent come to me with a
    proposal that the DOD doesn't really like, but I think it is
    something that we want to try to hone. Maybe it will be our
    legacy from the Committee if we can figure out something.
        Master Chief Herdt. Sir, I joined the Navy in 1966,
    actually came on active duty in 1967, sat out for a couple
    years because I didn't think that the life was for me. I
    decided differently and came back in. But in that period of
    time my wife and I--we have been married going on 31 years--I,
    too, have lived in open bay barracks; I have lived in single-
    room barracks; I have lived aboard submarines, cruisers,
    aircraft carriers. We have occupied Government quarters. We
    currently occupy a very nice home that was built especially for
    the Master Chief Petty Officer of the Navy; it is identical to
    the quarters of the Sergeant Major of the Marine Corps and the
    Master Chief Petty Officer of the Coast Guard.
        In all, we have moved 18 times. We have lived on the
    economy and in housing. I have had the great fortune to be able
    to purchase--I own my fifth home. Let me clarify that, only own
    one, but we have been able to buy and move into five homes over
    the years. We have never been able to hang onto any of those
    homes; it was always necessary to sell. Over a three-year
    period you don't build up a lot of equity in buying and selling
    homes. It is eaten up relatively quickly in the process,
    whatever equity you compile.
        We have not used day care because my wife stayed home with
    my son until school age. I think it was just a sign of the
    times, and I recognize that those times have changed.
        With regard to what other benefits I have used, I would
    tell you that I have used the GI Bill, the educational
    benefits, to great advantage, having achieved a Masters, an
    MBA, over these years.
        Sergeant Major Lee. Sir, I have 31 years of service this
    month. I go out of the Marine Corps in June.
        Throughout my career, sir, I have lived in various types of
    housing. What you have heard, the open squad bays, I spent a
    lot of time at sea, a lot of time in field environments. Very
    little have I lived in base housing. I did live in base housing
    overseas once, and I am currently living in provided-for base
    housing now because of my position.
        I have bought and sold three homes through my career. I was
    fortunate enough to be in a good market each time I bought and
    each time I sold. I did not get rich, but I made a little bit
    of money.
        I was single for many years of my life. I used a lot of
    facilities on base, i.e., the gym, things of that nature. Child
    care, I did not use very much.
        That's about it.
        Mr. Hobson. While we're doing this, would you just tell us
    your career field?
        Sergeant Major Hall. I grew up in air defense, sir.
        Master Chief Herdt. I am a nuclear-trained machinist's
    mate, operating nuclear propulsion systems.
        Sergeant Major Lee. Infantry.
        Chief Master Sergeant Benken. Information systems.
        Well, I am just a kid; I have been in 29 years.
        I am thinking about making it a career.
        I have lived in family housing, stairwell housing over in
    Germany. The current house that I live in on base is provided.
    The one house that I bought in Arizona when we were stationed
    there, I anticipated my assignment would be a little bit longer
    than it was. We lived in it for eight months and had to sell it
    and leave. But that was okay, it worked out all right.
        I have two boys who went to DOD school over in Belgium,
    when we were in Belgium. They did fine with the DOD school
    system. They came back and were successful, so I had no problem
    with that.
        The unaccompanied side of the house, I lived in dormitories
    when I first came in that were of the gang latrine variety,
    where everybody showers together. We lived three or four people
    to a room. The square footage was probably about 250 square
    feet or something like that. We have made vast improvements
    over the years in the unaccompanied housing. I will tell you,
    in answer to your question, sir, do the troops have an input,
    yes, they did have an input on the one-plus-one and the privacy
    issue and things like that, which I think is very important.
        Mr. Hobson. We are going to try to adhere to the five-
    minute rule for members of the committee.
        Robert, do you have anything that you would like to ask?
        Mr. Aderholt. No, Mr. Chairman.
        Mr. Hobson. All right.
        Chet, anything?

                     military pay raise/retirement benefits

        Mr. Edwards. Thank you, Mr. Chairman.
        Let me first just say thank you for what you all do for our
    families and our children and grandchildren and their families,
    for the future. I consistently hear from foreign military
    leaders when they come visit the United States, and I am
    privileged to represent Fort Hood, so we have a lot of visitors
    there. But the thing that uniquely impresses them is the
    incredible high quality of our noncommissioned officer corps.
    Even if the Joint Chiefs were sitting in this room, I would say
    that I consider it an honor to be at the same table with the
    noncommissioned leadership of our armed forces. Thank you for
    what you all do.
        Let me ask a broad question that relates to what we are
    going to do, and then one specific question in regard to
    housing.
        The broad question in terms of morale and the military is
    obviously housing, it is education, it is pay, it is
    retirement, it is OPTEMPO. But has there been a visible
    response from the proposal to provide a 4.4 or 4.8 percent pay
    raise, and combine that with better retirement benefits? Is
    that something that is of significant help? Or what would be
    your response?
        Sergeant Major Hall. It will be a significant help. It is
    not there now. Soldiers are, quite frankly, taking a ``wait and
    see'' approach. Expectations are very high.
        The danger is that if we don't do this right, we're going
    to be faced with a bigger problem than we had before, sir. But
    I think it will make a difference; soldiers and NCO's told me
    that retirement has increased more than any other as the reason
    soldiers and NCO's get out of the Army. And Staff Sergeants are
    still saying, ``I don't think it is worth it to stay in 20
    years for 40 percent.'' Those who are just a year or two before
    them are getting 50 percent.
        Mr. Edwards. Not to downgrade the pay raise, because people
    are living month to month and need that help, but is it the
    retirement benefit increase that really caught a lot of our
    mid-career officers' and other personnel's attention?
        Sergeant Major Hall. In my opinion, yes, sir. The pay
    raise, more than anything else, is a show of faith that the
    American people and the Congress and the military leadership
    value their service. But the retirement is the one issue.
        Mr. Hobson. If you will let me interject, some people say
    that they have seen retention rates go up since the talk about
    the pay raise, you can see a spike in the retentions.
        Master Chief Herdt. I would echo pretty much what the
    Sergeant Major says here, sir. We have seen an increase in the
    number of extensions--not necessarily enlistments. What the
    Sergeant Major is saying, just to put a Navy twist to it, I
    would say that we have a lot of sailors that are standing with
    one foot on the deck and one foot on the brow, waiting to see
    which way to go.
        With regard to what is more important, the retirement or
    the pay----
        Mr. Edwards. It's an artificial choice, I know.
        Master Chief Herdt [continuing]. It is not really a choice,
    because whatever you don't fix, the full attention that was
    being split between the two will just be focused on the other.
        I am concerned, as I submitted in my written statement,
    that this is seen as somehow solving the retention problem. I
    think most of us who deal with sailors, soldiers, airmen, and
    Marines on a day-to-day basis know that it is going to take a
    lot more than just this, but this is the door that you must be
    able to get through in order to work on the retention--the
    other pieces of retention. If we don't fix the pay and
    retirement, in my estimation, we do not get a chance to work on
    the other issues with them.
        So I am a little concerned about the ``either/or'' folks
    that I continue to read about, that somehow this is going to
    fix us, that it's the pay and not the retirement or it's the
    retirement and not the pay. It is part of a total package that
    we must work on.
        Mr. Edwards. And if they are living in 50-year-old barracks
    that are falling apart, they still lose there.
        Master Chief Herdt. The focus just shifts.
        Mr. Edwards. Okay. In general, that combination is a
    significant step forward; would all four of you agree?
        Sergeant Major Hall. As the Master Chief says, that gives
    us a chance to try some other initiatives that we may have not
    had otherwise.
        Mr. Edwards. Okay.
        Chief Master Sergeant Benken. If I can add something before
    we leave the subject, I have been to 65 bases in the last two
    years. Everywhere that I go, that is the input that I get. We
    have people standing next to each other who have two different
    systems. When you add everything else, whether it is spare
    parts and they are doing recreational maintenance to fix an
    airplane, or whether it is OPTEMPO away from home, and you
    start adding those things together, it all becomes part of it.
    But the retirement and the pay are certainly the issues.
        I get a little concerned when I see GAO reports in the
    paper that say that this is based on a combination of anecdotal
    reports, survey data, and personal judgments. Well, I will tell
    you, what else would you base it on? It is personal judgments
    on our part; it is anecdotal information from the troops as we
    talk to them. So I am concerned about the input that you get
    beyond the scope of these committees, and certainly our
    experience and the service chiefs' experience.
        Mr. Edwards. Okay.
        Chief Master Sergeant Benken. I believe that what we have
    proposed is right on the mark. It certainly is a reflection of
    what we hear from the troops.
        Mr. Edwards. Do you agree pretty much with those comments?
        Sergeant Major Lee. Mr. Edwards, I do agree. But speaking
    for my service--and my service is obviously different from the
    other services--the morale that is going to be measured among
    my Marines--when I did it, when I spoke with them--frankly, it
    is their ability, more than anything else, to get the job done.
    And yes, the pay raise and the retirement fixes are important.
    But I don't have that many career people that were concerned
    about those issues. Their concerns are their ability to get the
    mission accomplished.
        So as we move forward with the monetary benefits, I
    strongly--for the personal benefits--I strongly encourage you
    to look at the needs of the service as an institution, i.e.,
    modernization, spares, repairs, and things like that, that I
    know this committee is not necessarily dealing with, but I know
    that you all do have to deal with that.
        Mr. Edwards. Mr. Chairman, in respect to the time, I will
    defer my specific question on housing until the other members
    have had a chance.
        Mr. Hobson. There is going to be a vote about 10:30. I
    appreciate that.
        Mr. Edwards. Thank you.
        Mr. Hobson. I know you want to ask the one on housing. I
    want to get into that extensively.
        We are going to have a vote at about 10:30 to 10:45, a
    couple votes, and we will come back. I would like for everybody
    to get at least one question in.
        Allen, I think it is your turn.
        Mr. Boyd. Thank you, Mr. Chairman.

                                    training

        As a person who served two years in the military, I
    happened to serve in the Army, and I served as a 1st and 2nd
    Lieutenant during the Vietnam War, I just want to tell you that
    I am extremely pleased that you are all here today. I am
    somewhat awed to be in the presence of folks who have done so
    well in their careers, and I sincerely mean that, because what
    I did learn in those couple of years was who really ran the
    armed services, whether it be the Sergeant Major or the First
    Sergeant at the company level, or the Platoon Sergeant, or the
    Squad Leader. We all know who does that very effectively.
        I might ask about this issue that we have coming up every
    year in terms of training, the female/male trainees. I know
    that the Marines have a different idea; I thought the way that
    you all did it, Sergeant Major, was the best way, but is that
    having any effect on our quality of life issues or housing? I
    guess that's just more a training-related issue than it is
    performance, isn't it?
        Sergeant Major Hall. I think more than anything else, sir,
    it's a service decision on how you want to train your troops.
    And as long as you train them to standard, then you don't get
    into those other issues.
        Within the Army we train both ways. When we train combat
    arms, we train gender-segregated: infantry, armor, field
    artillery, and combat engineers. The other part of the Army is
    open to females, and we train in a gender-integrated mode.
        Now, as Chief Benken said, you have to be careful of some
    of the reports you see. If you told us to go all gender-
    segregated, then it would cost money, because one of the
    Kassebaum-Baker report recommendations was that you house them
    in completely separate barracks. So if you do that, it's a $306
    million bill to build separate barracks. But when you get right
    down to it, it is just a decision of how you think it is best
    to train these great young men and women.
        Mr. Boyd. Thank you, Mr. Chairman.
        Mr. Hobson. Actually, I think they are reconsidering some
    shifts now. I don't know if you want to comment on that.
        Master Chief Herdt. Yes, sir. Thank you for the opportunity
    to comment on it.
        Our philosophy is, quite frankly, that the last place we
    want to train people to live in the close proximity in which
    they will live on our ships is when they first get to the ship.
    We think the best way to do it is to start from the beginning,
    so that a sailor is a sailor, and it has served us very well.

                                    berthing

        Our ships are configured in a way that there is no gender-
    integrated berthing. The berthing is segregated within the
    ship, and that's pretty much the same way that our barracks are
    configured. They live in the same barracks, as they would live
    on the same ship, but the berthing areas for men and women are
    separate within that barracks.
        So it works very well for us. I really don't think it is a
    quality of life issue as much as all the hand-wringing that
    goes on. It is principally a distractor from what we're trying
    to get done. We have done very well with the way that we are
    doing it. It seems to work for us.
        Mr. Boyd. What is the berthing area?
        Master Chief Herdt. The berthing areas are the places where
    the beds are.
        Mr. Boyd. Okay.
        Master Chief Herdt. It is the compartment in the ship where
    all the racks are. We have berthing areas in our ships that
    sleep as few as three people, and others that hold up to 250
    people in the same compartment, with racks stacked three high,
    with gang heads. That is principally how we live aboard our
    ships.
        Mr. Hobson. I think one of the things we might do is the
    Committee might go out and look at--we've looked at air bases,
    we've looked at some other things, but we need to look at
    ships.
        Master Chief Herdt. We would love to have the opportunity
    to show you a couple of different classes of ships.
        Mr. Hobson. Yes.
        Sam, you and I are going to have trouble sleeping in a
    submarine. [Laughter.]
        Sam.

                            recruiting and retention

        Mr. Farr. Mr. Chairman, I echo my colleagues' profound
    respect for the careers that you gentlemen have had in our
    military.
        Let me take a little bit of a different attitude about
    this. I think that the retention of people in any job, a lot of
    it is attitudinal about what are the benefits derived versus
    the benefits of going somewhere else. All Federal employees
    have a dual scale retirement system. It is probably not as
    profoundly known or talked about as it is in the military. And
    I agree with you; I think that you have to do both salary and
    retirement, because people when they are young think about
    salary, but when they are middle-aged, they think about
    retirement. That goes on right here in Congress; we don't have
    to go off our own Floor to find that out.
        What I am interested in is this attitude about--I am amazed
    that we don't talk more about the support system that we give
    military members and their families. I have represented
    military bases, and until I got on this committee I never
    understood--or never really saw--how much support there is out
    there, support with commissaries and PXs and DOD schools and
    child care and morale accounts for social activities and stuff
    like that. The military offers an incredible support lifestyle
    out there that the outside community doesn't, and I think if we
    publicized that more, we would, be able to recruit. And I am
    sure the people in the military see that and make that decision
    as they are about to leave.
        What I want to ask is, I don't know how long we are going
    to ever be able to continue to do this kind of--when do we not
    provide the isolated support? Because if you are going to be
    asked to be more of a peacekeeping force as opposed to the Cold
    War era, and we are going to be sharing our responsibility with
    our allies, and we give the support to our troops and they
    don't give that kind of support to their troops--getting back
    to attitudes, have you ever sensed that there is a jealousness
    among your career colleagues from other countries about what
    America does that their country doesn't do?
        Master Chief Herdt. Sir, if I could comment on a couple of
    things that you said. One issue would be that you would be
    surprised in your assessment of who is interested in the
    retirement program--you would be surprised at the groups of
    sailors that I stand in front of, at what pay grades they start
    asking about the retirement system. E-3s, E-4s, E-5s are
    talking about the retirement system. So this is a bit of a
    wider issue.
        With regard to the recruiting part of this, advertising
    benefits, I think our recruiters are pulling out every stop
    that they have. In our advertising, having been a recruiter, I
    found that always the biggest hurdle to overcome in recruiting
    was convincing someone to leave everything they have known and
    embark on an entirely different lifestyle that they are a
    little unsure of. Civilian recruiters have always told me that
    if you could sell the military, you could be a civilian
    recruiter for any company in the country.
        Master Chief Herdt. At any rate, they are working very hard
    on that.
        The jealousies with our counterparts, I would tell you from
    a Navy perspective, it is not an issue with regard to the Navy
    CONUS. But I will tell you that the reverse is true, that our
    sailors look at how other people live on board their navy
    ships, particularly in the NATO countries, and our standard of
    living on our ships does not approximate many of the standards
    that the other countries enjoy.
        Mr. Farr. Meaning that the other countries have a higher
    standard?
        Master Chief Herdt. Yes, sir. That is true.
        Mr. Farr. What about from a base operations standpoint? We
    live off the economy in Britain, I presume, and we live off the
    economy----
        Master Chief Herdt. In Japan, in some places, yes. The
    jealousy issue, I have never heard it addressed. I have not
    seen it as an issue and have not heard anybody complaining one
    way or the other, including my counterparts in the other
    services.
        Mr. Farr. Let me follow up on that. I notice, just talking
    to soldiers, that there is a different attitude among those who
    are single--on deployment; the ones in Bosnia who were being
    deployed, you couldn't deploy them enough, but we hear they're
    getting burned out, and this is too much deployment. On the
    other hand, the single military personal seem to enjoy it; it
    is the married ones that have a difficult time. And now I
    understand we are about 70 percent married, so it is a major
    issue with the services.
        Have you noticed that there is a different attitude between
    the single and married soldiers?
        Sergeant Major Hall. What I found, sir, is that you're
    right. It seems to me that's what single soldiers want to do.
        Married soldiers are like that up to a certain point. The
    first deployment, they want to go. The second deployment, they
    want to go. After that, the heat when they get back home gets
    pretty heavy. And that's when it becomes an issue with
    deployments. We've done a lot to spread that out. We're going
    to continually be deployed; that's just the way we're going to
    do that. What we have to do, and we realize this in the Army,
    is we have to put a degree of predictability back in soldiers'
    lives.
        I can remember when we first started going into Bosnia, we
    would tell a Division three months before they had to be there
    that they had to go. This time we went out a year early and
    told the 10th Mountain Division, ``You assume the mission for
    Bosnia in August of 1999.'' What that does is give the unit
    time to prepare and gives families time to prepare. We can do
    the train-up in a logical manner. We can also do block leave,
    so families can do some planning.
        We told the 49th Division that ``You have command and
    control responsibilities for Bosnia in August, 2000.'' That's a
    National Guard Division.
        So that predictability will get us over the hump of the
    difference between married soldiers and single soldiers.
        If I could address the other one you talked about, the
    jealousy issue, just a little bit.
        I think it's out there, and I think there are pros and cons
    on both sides. Some other countries have a better standard of
    living, more money, and better allotments and entitlements when
    they move, but there are some places where we do much, much
    better. We have 22 international students at the Sergeants
    Major Academy at Fort Bliss. The one big issue that comes up
    from each of those student is, how do we, talking about their
    country, their NCO corps, get what we have when it comes to
    duty, responsibility, and authority of a noncommissioned
    officer corps?
        So I think the jealousy is along those lines. It is along
    the lines of duty, but not necessarily financially.
        Sergeant Major Lee. Let me jump in here a second, because I
    think I am a little bit puzzled or not understanding what I am
    hearing. And again, understanding the uniqueness of my service,
    in our recruiting efforts we sell an idea, a challenge, to that
    young man or woman. Frankly, that's about all we sell. Once
    they are in, we teach them the support systems, we teach them
    what they need to know, we make sure they are aware of all
    those things.
        Mr. Hobson. What percentage is married?
        Sergeant Major Lee. Only 40 percent of my people are
    married. And because of our efforts over the past three years
    to teach responsibility and to make sure they understand,
    married versus single, we have in fact decreased our married
    rates significantly--frankly, through an educational program of
    responsibility and what to expect out of the Marine Corps. What
    they have to understand is that we are a forward-deployed
    force, and they are going to spend about 60 percent of their
    time separated from their families and their loved ones. That's
    our ethos.
        Mr. Farr. That's going in?
        Sergeant Major Lee. Well, that's period, sir. That's
    period. Maybe toward the end of your career you are a little
    more stable because of the rank that you hold and the billet
    you hold, but I don't know of any MOS or any rank where we
    don't go, go often, and go alone. That's just it. But we make
    sure they understand that from the time that we start talking
    to them about joining our service, right on through those who
    make it a career.
        Very few of mine make it a career, sir. We are a first term
    organization. About 18 percent of who I recruit will stay and
    become a career Marine for 25 or 30 years. So I do have a
    unique difference here from what the other services have. But I
    just wanted to make sure we understood that.
        Mr. Farr. As far as jealousy goes?
        Sergeant Major Lee. I have never observed jealousy between
    Marines and what they perceive is a better way of life among
    the military of foreign services. They may be jealous of some
    equipment that they see; they may be jealous of some type of
    weaponry they see; but as far as any Marine I have ever known
    feeling like he would be better off in the French Army or
    somewhere else, I haven't run across that person.
        Mr. Farr. What I meant was the attitude of foreign
    nationals about the fact that we do such a good job of support.
    I think we undersell ourselves in many cases; the child care
    systems that I have seen are much better than what we have in
    the civilian community, even in my own home town.
        Sergeant Major Lee. I think, speaking for the Marine Corps,
    sir, you are absolutely right. Those who utilize the services
    and observe what we have to offer, from the outside looking in,
    it is very desirable.
        Mr. Olver. I would like to follow up on this one, Bob and
    Allen.
        Could I turn this envy/jealousy issue around and ask
    whether there is an issue of envy or jealousy between the other
    services and the Marines, which you have now spoken several
    times about, the unique nature of the Marines?
        Sergeant Major Lee. I'll be honest with you, sir. When my
    Marines--especially the young ones, of which I have a great
    number of; 110,000 of my 156,000 are serving on one contract,
    less than four years of service, so they are not very
    experienced in life. They are experienced in the Corps,
    depending on how long they have been in the Corps.
        Yes, frankly, they visit an Air Force installation; they
    see installations and they see facilities that they would be
    proud of. However, they fully understand what they are going to
    receive, how they live, and they deal with it.
        Chief Master Sergeant Benken. But keep in mind, now, what
    he is talking about, the first term force and the turnover that
    they go through, versus where the Air Force tries to keep
    people long-term.
        Mr. Olver. What percentage----
        Chief Master Sergeant Benken. We try to keep 55 percent of
    the first term, 75 percent of the second term, and 95 percent
    of the career. So there is a difference in how we approach
    that, as well. So it is important to take that into
    consideration when you look at quality of life.
        Mr. Hobson. Robert.

                                 FAMILY HOUSING

        Mr. Alderholt. Yes. I had a question, just really
    concentrating on family housing. Several members of the
    committee had an opportunity a couple of weeks ago to visit
    some family housing, especially in Italy; we got to do a little
    bit of touring around that area, around Aviano. But if you had
    to narrow it down to one major complaint regarding family
    housing that you hear come up most often, what would that be?
        Sergeant Major Hall. From the Army, the most frequent
    complaint that I get on family housing is too long a waiting
    list, to get onto base, and inadequate quarters.
        Mr. Aderholt. I'm sorry, what?
        Sergeant Major Hall. Inadequate quarters. In the past we
    have not funded the Base Ops dollars and the real property
    management dollars that allow us to keep those quarters up to
    date.
        Mr. Hobson. If you're going to say that, how many houses
    did you ask for in CONUS this year, sir?
        Sergeant Major Hall. Sir, we asked for none in CONUS this
    year, because our primary effort in CONUS is privatization.
        Mr. Hobson. That is not what the law says, sir.
        Master Chief Herdt. I would just tell you that our concern
    is, again, availability, long waiting lists, too long to get
    in.
        Mr. Aderholt. It is much more desirable to live on base
    than to live on the economy.
        Master Chief Herdt. I don't know that you can say that,
    sir. I would just tell you that the waiting lists for housing
    are long--there are those that don't want to live on base, and
    quite frankly, I don't have any figures at my fingertips----
        Mr. Aderholt. But as a general rule?
        Master Chief Herdt. As a general rule, I think we have a
    certain population that wants to live on the economy, and a
    certain population that would like to live in housing, for
    whatever reason. The waiting list for those who would like to
    live in housing seems to always exceed the availability of the
    housing.
        Sergeant Major Lee. Sir, I think the major concern with the
    Marine Corps housing is the backlog of maintenance. That would
    be the major concern. And yes, we have requested significant
    funding to continue to decrease that backlog. In fact, we have
    had a lot of help out of the Congress the past four or five
    years, and we are on track to eliminate the housing
    revitalization and replacement backlog by the year 2012--which
    is a long ways out, but we are a lot better off than we were
    when we started.
        Chief Master Sergeant Benken. Availability would be number
    one.
        Mr. Aderholt. Thank you.
        Mr. Hobson. Ms. Granger?

                               housing allowances

        Ms. Granger. First of all, thank you for your service. We
    all appreciate it very much. Let me follow up on what Robert
    asked you.
        I have a joint reserve base in my district in Texas. It was
    an active Air Force base at one time, Carswell. And I have
    heard complaints about housing allowances. In Texas, housing is
    a bargain; you can do a lot with your money, but still, the
    housing allowance at that time was inadequate.
        What do you think is the problem? Is it the housing
    allowance?
        Chief Master Sergeant Benken. Well, the housing allowance,
    by law, is 85 percent, and then 15 percent out of pocket, and
    it has been running about 19 to 20 percent out of pocket, is my
    understanding. So if we get the 85/15 right, then we are okay,
    but in some areas it exceeds the amount.
        Master Chief Herdt. We are having trouble in the Navy,
    quite frankly, ma'am, because of the way the law is being
    implemented of the five- to six-year period since it was change
    that we made with the law incorporating BAQ and VHA. The Navy
    predominantly lives in relatively high cost of living areas,
    and as we are phasing this in we are gaining ground, but at the
    same time it is not happening very quickly. We have a number of
    areas--San Diego is probably the most notable--in which housing
    costs are increasing at a rate faster than we are able to
    increase the BAH. Now, we got a 16 percent increase in BAH
    difference last year; this next year, that will go up to 50
    percent of the difference. So we will grow through it, but
    right now we have a number of areas where the housing allowance
    does not cover what it ought to.
        Sergeant Major Lee. The same problem, location. In some
    places it is more than adequate; in some places, it is not
    adequate enough. Southern California is a good example.
        Sergeant Major Hall. The Army is no different. The basic
    allowance for housing VHA only covers 85 percent of the
    housing, and if you don't have a lot of disposable income, that
    additional 15 percent is tough.
        Mr. Hobson. I am going to ask one question here and then I
    am going to go back to the members.
        This year's military construction budget, just based on
    what you all have said, is down $3.2 billion, as requested by
    the Administration, or 37 percent from last year's enacted
    levels. This is mainly due to the Department's decision to use
    an incremental funding concept and defer $3.1 billion in
    funding to the year 2001.
        As a result of this approach, gentlemen, new construction
    for family housing improvements to existing units decreases by
    $576 million, or 74 percent. Troop housing decreases by $529
    million, or 74 percent. Medical constructions programs decrease
    by $155 million, or 75 percent. Child development centers are
    reduced by $31.8 million, with only two requested.
        In your opinion, what can be done about the lack of support
    and funding requests by the Department for these quality of
    life program's? And when can we expect to see a request for the
    funding? You all signed off on this, I assume, or your
    superiors did with your input. What's your view of this
    proposal?
        Sergeant Major Hall. We think, within the Army, we will be
    okay. Military construction funding is for a two-year period.
    The dollars are actually spent over a two-year period for the
    larger contracts.
        This provides about 15 percent of the money in the first
    year, which is what historically has been spent, and we think
    that within the Army we will be okay with this as long as you
    get advance appropriation and you get the full authorization,
    and you have reprogramming flexibility based on authorization.
        Mr. Hobson. What about the costs?
        Sergeant Major Hall. Large contracts, we don't think the
    costs will be so prohibitive that you can't afford them. On
    small contracts, the costs will go up.
        Mr. Hobson. Well, the testimony we have had is that all
    contracts are going to go up.
        Sergeant Major Hall. Yes, sir.
        Mr. Hobson. I mean, that's what the Engineers testified to,
    but----
        Sergeant Major Hall. I think it will go up, primarily--as I
    listen to that--because the contractors can't go out and order
    all the materials that they need on a one-time buy. They will
    also have to do theirs incrementally, and that will drive the
    costs up.
        Master Chief Herdt. Sir, I feel pretty much the same way
    that the Sergeant Major does, if we get the full appropriation
    over the two years. I don't have a great deal of concern----
        Mr. Hobson. You mean we're going to appropriate money that
    we don't have? Is that what you're telling us to do?
        Master Chief Herdt. What I am asking, sir, is that----
        Mr. Hobson. If I appropriate it and we don't get the
    allocation in the next year, what do we do, sir? You have 15
    percent of the contract done.
        Master Chief Herdt. That would be a risk, I understand, but
    at the same time if we don't do that--as you stated it, I think
    it would be a risk, but I don't believe that that would be
    necessarily the way that it would work.
        I would be concerned if we didn't do that, if we failed to
    do the full two-year business, what might fall off is going to
    affect our ability to continue to build the BEQs and the
    housing that we need, that we will fall a year behind if we
    don't do it that way.
        Mr. Hobson. I think you're going to fall a year behind,
    whatever you do.
        Anybody else?
        Sergeant Major Lee. Sir, I think you know more about the
    two-year thing than I do. I am satisfied with what we have
    requested in the budget; it is an improvement; it will make
    life better for a lot of our Marines.
        If you are wondering why we don't ask for more, sir, you
    have to look at the top line of our budget. We don't have any
    money, and we have other things that compete that are just as
    high that equate to quality of life for Marines, such as family
    housing, child care facilities, and things of that nature. Now,
    that's hard to say, but it's a fact.
        Chief Master Sergeant Benken. Sir, I think our strategy is
    sound, but I tend to agree with the top line analogy. I think
    it's kind of like your own personal checkbook where you don't
    have any rise in it for several years, and the car starts to go
    bad and the kids have to go to college and you have to write
    checks, within those things that you have to live with. I think
    that the Defense Department has been in that kind of scenario
    for a long time. Modernization, readiness, quality of life--you
    have to write the checks where you can write them and live
    within those constraints and strategize as best you can.
        Mr. Hobson. Okay.
        Mr. Olver.
        Mr. Olver. We need to go here, but I would like to go back
    and ask the several services to follow up on where we were a
    few minutes ago.
        Sergeant Major Lee, I think I understood you to say that
    you are driving for 18 percent of the people that you recruit
    staying with you for 20 years. Now, when Chief Master Sergeant
    Benken talked about the Air Force, he gave me three numbers,
    and I wasn't sure which one I should compare with that.
        Sergeant Major Lee. Fifty-five would be the----
        Mr. Olver. Fifty-five percent of the people you take in--
        Sergeant Major Lee. The first-termers that come in, we try
    to keep 55 percent, those that get through their first term,
    and we want them for a second term.
        Mr. Olver. But he's saying 18 percent are going to stay for
    20 years----
        Sergeant Major Lee. That's the difference in the services,
    sir.
        Mr. Olver. I understand, but I can't compare the services
    unless I have numbers that are with the same units of analysis
    here.
        How many people that you take in are you planning to hold
    for 20 years?
        Chief Master Sergeant Benken. Well, we try to keep--first
    of all, when you come in for a first term, four years, we try
    to keep 55 percent of those people. The second term people,
    those that go beyond the second term, we try to keep 75 percent
    of those people----
        Mr. Olver. Of the people who do stay for the first term and
    move on to the second term, you try to keep 75----
        Chief Master Sergeant Benken. After the second term, 75,
    and then to go for a full career, we try to keep 95 percent.
        Mr. Olver. Ninety-five percent of the 75----
        Chief Master Sergeant Benken. Of those who go beyond the
    second term.
        Mr. Olver. All right. I'd better stop because I need to
    figure this out.
        Mr. Hobson. I think you need to figure it out and then give
    it to us in writing.
        Chief Master Sergeant Benken. There are three categories of
    people that we try to keep: first-termers, second-termers, and
    then the career. Of the first-termers, we try to keep 55
    percent----
        Mr. Olver. I understand exactly what you said.
        Mr. Hobson. Let's get it in writing. We have four votes
    coming up in a row, and I would like to get this done if we
    can, but I want to give Mr. Edwards an opportunity.
        Mr. Edwards. In the name of time I will focus this on you,
    Sergeant Major Hall.
        If we gave you a pot of money, where are the greatest needs
    in terms of Army housing? Is it four- and five-bedroom houses
    for young enlisted families? Is it barracks renovation? Is it
    needing to build new family housing? If so, what size? Is it
    the renovation of run-down housing? I know we need to work on
    all of the above, but where are the priority problems? If we
    are taking a limited budget and putting it where it makes the
    most difference to contain those that you think we may be
    losing otherwise, where do we put that money?
        Sergeant Major Hall. I think right now, sir, our barracks
    are funded. It will take a while to get those in. Our problem
    is in family quarters, and that is sort of dependent on where
    you are. For instance, Fort Hood has about 5,500 sets of
    Government quarters; they are still short about 1,150 sets from
    what they need that they can support on base and off base. They
    need about 1,150 sets, and all of those are in the four-bedroom
    and five-bedroom category, and some of those are junior
    enlisted quarters that need four bedrooms. That's where it is
    now. But if you ask me where I would spend a pot of money, it
    would be Base Operations right now. I know that was not your
    question, but----
        Mr. Edwards. No, it's all part of one big picture.
        Sergeant Major Hall. I think I would put it in Base
    Operations, because if you don't fund Base Operations, then
    everything else has to come out from training and readiness and
    modernization to go into Base Operations dollars.
        Mr. Edwards. Thank you.
        Thank you, Mr. Chairman.
        Mr. Hobson. We have four votes coming up and that's going
    to take about half an hour to 45 minutes to get through all
    that. So unless somebody has a burning question to come back
    for, I don't want to make you gentlemen sit around. I'd rather
    have you out looking at how young folks are living out there.
        Allen, do you----
        Mr. Boyd. The retirement health care issue and how it
    affects your retention----
        Master Chief Herdt. I'd like to answer that if I might,
    sir. I think, as I mentioned before, you might be surprised at
    the rank of the people that are asking questions about health
    care. Again, it is not just senior folks, but also E-4 thru E-
    6--I mean, it affects the senior enlisted most immediately, but
    I would tell you, those folks that are trying to figure out
    whether they want to stay with us for the long haul are also
    asking the question about, ``Look how you're treating the
    retirees.''
        Mr. Boyd. So they know?
        Master Chief Herdt. They do know, and it is of concern. The
    system needs some work, quite frankly.
        Mr. Boyd. Thank you.
        Mr. Farr. Mr. Chairman, can I ask the gentleman from the
    Marine Corps one thing?
        What is never asked is what are the unique problems of
    single service members. We always talk about families. These
    are issues that we deal with mostly. Do you have any unique
    feel that the single soldier has some----
        Sergeant Major Lee. Relative to military construction, sir?
    Or in general?
        Mr. Farr. Yes, in general.
        Sergeant Major Lee. Sir, no. My single service people--
    again, they understand that they do what they are required to
    do. I mean, to stand here and tell you that one particular
    thing is an issue collectively among all of them, I can't do
    that, sir. I cannot do that. Are they paid enough? They will
    never be paid enough. Do they have enough support services?
    They never have enough support, or that's what they think.
    Actually, they are in pretty good shape.
        Gentlemen, you all do a pretty damn good job on behalf of
    our service people. Now, are there things that are bad that
    need to be fixed? Absolutely. But don't sell yourselves short.
    You have done a very good job of taking care of this country
    and the military people. At least you've done a damn good job
    of taking care of me for 31 years. Thank you.
        Mr. Hobson. And on that, I think we will stop.

        [Clerk's note.--Questions for the record submitted by Congressman
    Olver:]

        Question. It is my understanding that the Air Force's retention
    goals are for 55% of 1st term personnel to go onto a 2nd term, 75% of
    2nd term personnel to go on to a 3rd term, and 95% of 3rd term
    personnel to serve for twenty or more years. In other words, the Air
    Force strives to keep 39% of its 1st term personnel for ``life.'' Is
    this correct?
        Answer. No, in order to maintain the appropriate mix of experience
    within the enlisted force, we must retain 55% of those first term
    members who are eligible to reenlist, 75% of reenlistment eligible
    second term members, and 95% of the reenlistment eligible career
    members. Not all first term members complete their initial term and of
    those that do, not all are eligible to reenlist. Quality and
    performance standards must be maintained in order to be reenlistment
    eligible. Since FY91, an average of 15.4% of our enlisted accessions
    complete 20 years of service.
        Question. What were the Air Force's actual retention percentages
    over the last five years? (Please break answers down by 1st term
    personnel, 2nd term personnel, etc.) What was the actual retention
    percentage for 1st term personnel that stayed on for twenty or more
    years?
        Answer. Air Force enlisted retention rates, for those eligible to
    reenlist, by category (1st term, 2nd term, Career) for the last 5 years
    are provided below:

    ----------------------------------------------------------------------------------------------------------------
                                                                                      Category
                     Fiscal Years (In Percent)                 -----------------------------------------------------
                                                                  1994     1995     1996     1997     1998    1999*
    ----------------------------------------------------------------------------------------------------------------
    1st Term..................................................       59       63       59       56       54       45
    2nd Term..................................................       81       77       76       71       69       70
    Career....................................................       96       96       95       95       93       90
    ----------------------------------------------------------------------------------------------------------------
    (AF Goals: 1st Term = 55%, 2nd Term = 75%, Career = 95%).
    *(Fiscal Year 1999 data is as of 28 Feb 99).
    Note: AF reenlisting goals and rates are based on the percentage of the reenlistment eligible population in each
      category.

        Since Fiscal Year 1991, an average of 15.4% of our enlisted
    accessions complete 20 years of service.
        Question. What are the retention goals for the Army? (Please break
    answers down by 1st term personnel, 2nd term personnel, etc.) What are
    the overall retention goals of the Army for first term personnel to
    serve twenty or more years? Please compare the above figures with the
    actual retention rates for the Army over the last five years.
        Answer. Army retention goals or objectives are issued to field
    commanders in three distinct categories: initial term (soldiers on
    their first enlistment, regardless of years service), mid career
    (soldiers who have reenlisted at least once and have less than ten
    years active service), and career (ten or more years active service).
    Annual numerical objectives are based on the actual number of soldiers
    by category needed to achieve congressionally-mandated end strength and
    historic retention rates. For fiscal year 1999 (FY99), Army
    reenlistment goals by category are as follows: initial term--20,200;
    mid career--23,000; and career--21,800.
        Numerical goals are determined by the percent of retention-eligible
    soldiers needed to reenlist out of the entire number of soldiers in
    each category who have a separation date which falls within the
    reenlistment eligibility window (12 months prior to separation date)
    during the FY. The Army's goals pertaining to retention and soldiers
    continuing in the Army for a full twenty year career fluctuate based on
    the current retention behavior by category. Historically, an average of
    10 of 100 soldiers entering the Army in a given year pass through the
    various gates of attrition and reenlistment and ultimately serve a full
    twenty years. The retention objective, the retention accomplished, and
    the retention rate, by category, for FY94-98 are shown below:

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Initial Term                  Mid Career                     Career
                                                                      --------------------------------------------------------------------------------------
                               Fiscal Year                                               Ret. Rate                    Ret. Rate                    Ret. Rate
                                                                        Object   Accmp.  (percent)   Object   Accmp.  (percent)   Object   Accmp.  (percent)
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1998.............................................................    20542    21672      51.2     22912    23416      74.1     18671    17995        96
    1997.............................................................    23935    24312      54.4     29699    30209      75.4     26325    25043        97
    1996.............................................................    21433    21484      46.5     22671    23174      70.0     28966    28332        95
    1995.............................................................    20197    19996      45.6     24551    23699      72.8     27862    28432        97
    1994.............................................................    22600    24542      49.2     23000    24095      73.8     21400    21045        96
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. What are the retention goals for the Navy and Marines?
    (Please break answers down by 1st term personnel, 2nd term personnel,
    etc.) What are the overall retention goals of the Navy and Marines for
    1st term personnel to serve twenty or more years? Please compare the
    above figures with the actual retention rates for each service branch
    over the last five years.
        Answer. As presently estimated, Navy would like to improve
    retention trends to steady state profiles of 38%, 54% and 62% for 1st,
    2nd and 3rd term (career) by FY03 respectively. However, Navy retention
    goals for individual enlisted communities are not driven by these
    aggregated figures, but by each individual rating/skill area. There is
    much more to the Navy retention strategy.
        Navy enlisted end strength is spread across 94 different
    communities (skill areas). Each community has a different billet base
    (requirements) structure, career path, accession and training base.
    Some communities are comprised solely of 4-year obligors (4YO), some
    are a mix of 4- and 5-year obligors (5YO) and others have initial 6-
    year obligors (6YO) in the 1st term population as well. Initial
    obligations are primarily a function of the intensity and length of in-
    rate schoolhouse training required after basic training (Boot Camp). As
    such, 1st term retention goals will fluctuate across a very wide range,
    from as low as 30% for low intensity skills to almost 100% for critical
    6YO programs, such as our nuclear and advanced electronic trained
    Sailors. Therefore, a single aggregate retention goal provides only
    trending data, and does little in terms of explaining critical skill
    retention needs for Navy. Drawing any conclusions, or basing manpower
    and personnel decisions based on single aggregate percentages, could be
    misleading. Obviously it is preferable to retain nuclear engineers at a
    higher retention rate than our General Detail (GENDET) Seamen, Firemen
    or Airmen.
        The issue as to percentage of 1st term Sailors to serve 20 years
    has not been determined. Certainly Navy would like to keep a much
    higher percentage of our critical skills for a career. As Navy
    continues to develop a new methodology for determining enlisted
    community retention requirements in the post-drawdown era, our ability
    to better address this type of question will improve. The complexities
    of various retirement systems (50%, high-3 and REDUX) and their impact
    on continued military affiliation in a post-drawdown era will continue
    to challenge all Services trying to access retention needs and pay and
    compensation strategies required to satisfy a mixed population of
    enlisted personnel.
        FY94 through FY98 and FY99 year-to-date retention rates for Navy,
    USMC and other services are shown below. The slight drop in the Navy's
    career (or third term retention) in FY99 is attributable to the FY99
    TERA program (which, for fiscal considerations, requires all
    retirements to execute within the 1st and 2nd quarters). Long term
    steady state goals, presently under review, for Navy future fleet
    readiness are also shown.

    ----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal year
                                                    ----------------------------------------------------------------
                                                                                                            Desired
                                                       1994     1995     1996     1997     1998     1999    (Steady
                                                                                                             State)
    ----------------------------------------------------------------------------------------------------------------
    Navy:
        1st Term...................................     34.8     35.7     36.4     32.9     30.8     30.5         38
        2nd Term...................................     51.9     47.4     49.2     48.9     48.4     46.3         54
        Career.....................................     61.7     57.7     56.5     55.7     57.5     54.6         62
    Marines:
        1st Term...................................     17.2     19.4     20.5     22.0     21.4     21.8
        2nd term...................................     46.6     42.5     43.8     46.5     45.8     47.1
        Career.....................................     74.0     73.7     73.1     77.5     80.2     80.4
    Air Force: 1
        1st Term...................................       61       59       63       59       56       45
        2nd Term...................................       82       81       77       76       71       69
        Career.....................................       97       96       96       95       95       93
    Army:
        1st Term...................................     46.1     49.2     45.6     46.5     54.4     51.6
        2nd Term...................................     75.6     73.8     72.8     70.0     75.4     74.8
        Career.....................................     58.7     54.4     58.2     65.7     65.5     60.1
    ----------------------------------------------------------------------------------------------------------------
    \1\ The Air Force refers to these percentages as ``Retention'' as they measure it. Navy equivalent measure would
      be our Reenlistment Rate that is much higher than Retention Rate.
    \2\ The army calculates retention differently than Navy. The following table explains the Army methodology.

    1st term = serving on first enlistment regardless of years of service.
    2nd term = reenlisted at least once, but has less than 10 years of service.
    Career = more than 10 years of service.

        As indicated above, Navy is presently working on an improved
    retention methodology to better determine required retention rates,
    both in an aggregate sense, as well as across the 90+ skills in the
    Navy enlisted communities. In the interim, our desired retention
    profile across the remainder of FY99 and into FY00 would be one that
    begins to approach our current forecasts of steady state levels to be
    attained by FY03.
        A significant factor not reflected in Navy retention figures is the
    growing percentage of short term extensions. As measured against our
    at-risk population for the past 3 years, about 70% of our first term
    population actually continue their Navy career beyond initial service
    obligations. Since these extensions are of shorter duration (on avg 10
    mos) they do not count as a reenlistment decision in the retention
    equation. These short term extensions do add to the number of at-risk
    Sailors in the denominator of retention calculations. These ``stayers''
    are a major focus of Navy pay and compensation initiatives, as well as
    prime targets for the various bonus/continuation and incentive pays.
    Navy would like to start converting this population of short term
    ``stayers'' into long term ``careerists'' as we drive towards the
    aforementioned steady state goals for 1st, 2nd and 3rd term retention
    of 38%, 54% and 62%.
        Question. What are the retention goals for the Navy and Marines?
    (Please break answers down by 1st term personnel, 2nd term personnel,
    etc.) What are the overall retention goals of the Navy and Marines for
    1st term personnel to serve twenty or more years? Please compare the
    above figures with actual retention rates for each service branch over
    the last five years.
        Answer. Marine Corps reenlistment rates and goals are depicted in
    the following chart and tables. Each year, our First Term Alignment
    Plan (FTAP) establishes the number of first term reenlistments needed
    to sustain the career force. The fiscal year 94 through fiscal year 98
    first term percentages depicted in the chart and tables reflect 100
    percent achievement of our FTAP reenlistments. FY93 and FY94 figures
    reflect the post-Desert Storm drawdown.

                        REENLISTMENT RATES BY FISCAL YEAR
    ------------------------------------------------------------------------
                                     First term    Second term     Career
              Fiscal Year             (percent)     (percent)     (percent)
    ------------------------------------------------------------------------
    1993..........................       15            54            97
    1994..........................       19            56            96
    1995..........................       20            51            95
    1996..........................       21            58            95
    1997..........................       21            57            96
    1998..........................       22            58            95
    ------------------------------------------------------------------------

                                                   REENLISTMENT GOALS
    ----------------------------------------------------------------------------------------------------------------
                                                                   First term   First term  Second term
                             Fiscal Year                              goal        actual        goal     Career goal
    ----------------------------------------------------------------------------------------------------------------
    1993........................................................        3,264        3,218       \1\ NA       \1\ NA
    1994........................................................        4,004        4,006       \1\ NA       \1\ NA
    1995........................................................        4,057        4,061       \1\ NA       \1\ NA
    1996........................................................        4,296        4,300       \1\ NA       \1\ NA
    1997........................................................        4,600        4,611       \1\ NA       \1\ NA
    1998........................................................        4,627        4,709       \1\ NA       \1\ NA
    ----------------------------------------------------------------------------------------------------------------
    \1\ No reenlistment goals established.

    a.
    Fort Campbell........................  Physical Fitness                       6,000,000                  900,000
                                            Training Center.
    Walter Reed AMC......................  Physical Fitness                       6,800,000            1,020,000rn,s
                                            Training Center.
        Total............................  .......................              251,150,000               40,020,000
    ----------------------------------------------------------------------------------------------------------------
    a Authorized in FY99; remaining balance in FY01 is $13.5M to complete the project.

                          Additional Contractor Costs
        Qutestion. Will this year's incremental funding approach place
    increased risk on contractors? If so, could you explain to us how this
    increased risk could potentially drive up contract costs?Incremental
    funding should not place any increased risk on contractors if the
    budget is approved as requested. Incremental funding may limit what a
    contractor can reasonably accomplish in the first year of funding;
    smaller contractors may perceive added risk as a result of incremental
    funding and their bids might be increased to offset that perceived
    risk.
        Qutestion. How does the Army intend on dealing with increased
    contractor risk? (Incremental funding reduces contractor's ability to
    make large-scale advance purchases may preclude ordering long-lead
    equipment or supplies, and there is no guarantee of FY 2001 funding.)
        Answer. The budget tries to minimize any risk to potential
    contractors by requesting full project authorization in fiscal year
    2000 and advance appropriations for the fiscal year 2001 increments.
    Higher bids may be received because contractors would not be able to
    place material orders for the entire requirement; although the need for
    partial ordering may cause some higher costs, the bid environment is
    expected to remain competitive and projects should be awardable within
    the requested amounts. The Army National Guard may have to subdivide
    each project into increments and award separate contracts on each
    increment. This, however, may increase projects costs and will require
    additional engineering oversight and management.
        Qutestion. How will the Army avoid additional costs due to
    contractor claims for delays caused by lack of funds, or contract
    termination for lack of funds if advance appropriations are not
    provided?
        Answer. The bid documents will identify the limit of funds that the
    government can commit to each contract in fiscal year 2000. If advance
    appropriations are not provided, fiscal year 2000 awards will be
    carefully timed and managed in order to assure sufficient funds are
    available to bridge the gap between the two fiscal years; most projects
    would likely be awarded in the fourth quarter of fiscal year 2000. If
    advance appropriations are not provided, the Army National Guard may
    delay the FY2000 major construction project until FY2001 when funding
    is available. The other option would be to subdivide each project into
    increments. This, however, may increase project costs and will require
    additional engineering oversight and management.
             Family Housing Privatization--Emphasis on the Program
        Qutestion. The family housing privatization initiative was
    originally intended to be a supplement to the traditional housing
    program. We are seeing more and more emphasis on this program, which is
    still in a pilot stage. For fiscal year 2000, the Army did not request
    a single traditional family housing project in the United States.
    Additionally, the Army plans on privatizing 85,000 units, or 96 percent
    of current housing inventory, in the United States by 2005. Once again,
    this is a pilot program and the original intent of the legislation was
    that it be a supplement to the traditional housing program. Explain why
    the Army is placing such a high emphasis on this initiative when is has
    yet to complete a singly project under the current statutory
    authorities?
        Answer. We have already made adjustments to the RCI program in
    response to points raised through recent hearings and discussions with
    Congressional Members and staff. First, we intend to reevaluate RCI
    following the first test projects and determine the appropriate scope
    and pace of proceeding with privatization. Second, we intend to take a
    hard look at our CONUS housing program and determine how much must be
    added to support traditional MILCON projects. Third, we will monitor
    the MILCON funds that will be used for privatization activities
    carefully to ensure they are not lost. As explained, with few
    exceptions, we have not committed these funds irrevocably to
    privatization projects. Consequently, they can be redirected to support
    traditional MILCON projects. Finally, to avoid any confusion on this
    point, we should also acknowledge that we are only holding the funds
    necessary to support the privatization projects at the pilot sites. We
    have released the three projects at Forts Campbell and Bragg that were
    previously reserved to support the privatization projects at those
    locations.
            Family Housing Privatization--Family Housing Investment
        Question. Under current authorities, family housing privatization
    involves government contribution of land, facilities, infrastructure,
    mortgage guarantees, and differential lease payments to developers and
    financers. Wouldn't it be prudent to gain some experience with how well
    this program works, before making such a large commitment to turn over
    so many assets for a fifty-year term?
        Answer. The pilot program is a prudent way of gaining experience
    using possibly four installations (after Fort Carson), that are
    relatively diverse but representative. We are moving forward in a very
    deliberate fashion, taking advantage of lessons learned at every step.
        Question. It took us many, many years to build up these family
    housing assets. Tell us about some of the steps that the Army is taking
    to protect its investments under this program.
        Answer. The best protection is the choice of the development
    partner in each location. It is for this reason that Army has made
    strenuous efforts and taken deliberate precautions in developing an RFQ
    as the best method of attracting and selecting the most qualified
    developers. Private sector real estate experts will assist the Army in
    designing and executing the process and help us institutionalize the
    lessons learned afterwards. We have retained some of the best real
    estate experts in the industry to assist the Army in negotiating the
    contract with the developer to ensure that the project is financially
    feasible and that the developer has sufficient incentives to ensure
    long term quality. These incentives will align the developer's
    interests with the Army's performance goals, resulting in better
    housing services than are received today. In addition, escrow accounts
    will be established as appropriate to ensure funds are available for
    required maintenance. Finally, the underlying ground lease will give
    the Army the ability to recover the premises if the developer does not
    meet certain performance specifications.
                Family Housing Privatization--Delay in Execution
        Question. I'm concerned over the delay in execution of family
    housing construction projects for which funds have been appropriated.
    The Army is currently withholding approximately $110 million in
    previously authorized and appropriated funds to invest in proposed
    privatization projects. The Army has not executed a privatization
    project to date under the current authorities. First, why is the Army
    withholding such a large amount of funds for this program?
        Answer. We have already made adjustments to the RCI program in
    response to points raised through recent hearings and discussions with
    Congressional Members and staff. We are only holding the funds
    necessary to support the privatization projects at the pilot sites. We
    have released the $8.8M and $35.4M that were previously reserved to
    support the privatization projects at Forts Campbell and Bragg
    respectively.
        Question. Secondly, shouldn't the Army be using all available tools
    to address its family housing needs in an optimum manner?
        Answer. Yes. We intend to take a hard look at our CONUS housing
    program and determine how much must be added to support traditional
    MILCON projects.
             Family Housing Privatization--Where Do We Go From Here
        Question. The statutory authorities established for the Military
    Housing Privatization Initiative (MHPI) expire on February 10, 2001.
    How will the Army proceed with it housing program if these authorities
    are not re-granted?
        Answer. The Army is proceeding with a pilot privatization program.
    If the MHPI legislation is not extended, the Army will program MILCON
    funds to meet the total housing needs to the extend that is possible
    with budget limitations. The backlog of revitalization work ($6B) is so
    severe that we would have to program an additional $600M a year for 10
    years to meet Defense planning to eliminate all inadequate AFH by 2010.
                     Family Housing Privatization--Savings
        Question. Does the Army anticipate that there will be any
    significant financial savings from privatization as compared with the
    traditional program?
        Answer. We do not anticipate significant savings in the pilot
    projects; but we expect significant cost avoidance since we will be
    able to leverage appropriated funds and assets. Further, we expect
    better quality communities and better operations and maintenance
    services for those communities from the developer.
                   Family Housing Privatization--Coordiantion
        Question. Is the Army coordinating with personnel at the field
    activity level when developing housing privatization project?
        Answer. Yes. The installation and their respective Major Command
    have played and will continue to play key roles in the planning and
    procurement processes. The selected developer will work closely with
    key stakeholders as part of the preparation of the Community
    Development and Management Plan.
                   Family Housing Privatization--Future Plans
        Question. For the record provide a list of the 43 installations the
    Army plans to privatize under the Residential Communities Initiative by
    2005, including the number of units in the current inventory and the
    number of units to be privatized at each installation, as well as some
    indication of the value of the total government contribution at each
    installation.
        Answer. At this time, the Army expects to privatize all of the
    family housing located at each of the pilot installations. After Fort
    Carson, we are exploring the possibility of selecting Forts Hood,
    Lewis, Stewart and Meade as pilot projects. Therefore, ``current
    inventory'' and ``units privatized'' are the same. The total government
    contribution for these sites equals the amount needed for scoring.

    ----------------------------------------------------------------------------------------------------------------
                  Installation                Current inventory/units/privatized      Government contribution($M)
    ----------------------------------------------------------------------------------------------------------------
    Fort Carson.............................                               1,823                                  10
    Fort Hood...............................                               5,482                                  40
    Fort Lewis..............................                               3,590                                  11
    Fort Stewart............................                               3,159                                   5
    Fort Meade..............................                               2,862                                   8
    ----------------------------------------------------------------------------------------------------------------

            Family Housing Privatization--Family Housing Allowances
        Question. When Congress granted the authorities for the Family
    Housing Privatization initiative, we were concerned about the shift in
    costs from the family housing construction and O&M accounts to the
    personnel accounts. This year, the Army transferred $38 million from
    family housing O&M into the personnel accounts to cover necessary
    increases in housing allowances due to privatization, and additional
    transfers will be phased in. The Department is also requesting transfer
    authority between the two accounts--accounts that are in two different
    bills. First, last year we asked the Department to integrate the
    personnel and installation departments on this issue. Has the Army done
    this?
        Answer. Yes. The details of every transfer were coordinated between
    both organizations.
        Question. What assurances can you offer me that any family housing
    O&M reductions due to privatization will be reapplied to other family
    housing improvements and not transferred elsewhere?
        Answer. For every soldier that lives in privatized housing, we have
    to satisfy the increased MPA requirements. Funds have been transferred
    from the AFH account to MPA so adequate funding is available to pay
    soldiers' housing allowances. Soldiers will use housing allowances to
    pay rent to the private developer. The developer will use revenue
    toward family housing improvements.
        Question. Are the personnel accounts adequately budgeted in the
    Future Years Defense Plan (FYDP) for the increases in allowances due to
    the privatization initiatives?
        Answer. Yes, the personnel account has been resourced for the pilot
    sites.
        Question. Does this initiative become a ``zero-sum'' game, that is,
    will there be any savings or is it just a shift of costs?
        Answer. While we don't anticipate significant financial savings, we
    expect significant cost avoidance from privatization since we will be
    able to leverage appropriated dollars and assets. Also, we expect
    better quality communities, better maintenance and efficient operating
    services to sustain the communities.
        Question. Is there any assumption about the future funding levels
    for housing allowances?
        Answer. For Fiscal Year 1999 (FY99), BAH was assumed to grow at an
    annual rate of 2.8 percent and 3 percent for FY00 and beyond. However,
    the allowance funding levels depend on the amount of allowances
    authorized by Congress.
                        Privatization of Utility Systems
        Question. Describe in detail the Army's ongoing efforts to get out
    of the business of owning, operating, and maintaining utility systems
    where it makes good sense?
        Answer. Army installations have been privatizing utility systems
    since 1990 and the Army has been building a formal program to privatize
    utility systems since 1995. There are two reasons for privatizing these
    systems: (1) They have been chronically underfunded for years, and as a
    result they are obsolete and inefficient; and (2) They are not core to
    our mission; we want to be a customer rather than a provider.
        Since the 1998 Secretary of Defense's Reform Initiatives and the
    establishment of the Defense Energy Support Center (DESC), the Army has
    an agreement with DESC to help manage the program. DESC is also acting
    as a focal point for our Major Commands and the other Services and to
    provide on the ground support to execute the program. We are partnering
    with the Navy and Air Force and are looking for regional opportunities,
    as well as participating in a demonstration project in Texas to
    evaluate a Tri-Service approach. We hope to streamline the acquisition
    process and apply economies of scale.
        Question. How aggressively is the Army pursuing the utilities
    privatization effort? What is the estimated timeline for
    implementation?
        Answer. The Army fully intends to meet the Defense Reform
    Initiative goal to complete all utility privatization actions by 2003
    where economical. The Army plans to meet the DoD goals of determining
    by 2000 which systems will be privatized and issuing by 2001 the
    solicitations to contractors.
        Question. Has the Army developed a utilities privatization plan? If
    so, please provide it for the record.
        Answer. Yes, the Army provided its plan to the Office of the
    Secretary of Defense for privatizing all utility systems by fiscal year
    2003. The plan follows.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                        Privatization of Utility Systems
        Question. Why would a utility system be exempt from privatization?
        Answer. The Defense Reform Initiative guidance provides for two
    reasons for exemptions: (1) unique security reasons that would require
    retaining the system and (2) when the system would be uneconomical to
    privatize. The Army does not anticipate many exemptions of systems for
    security reasons. A system would be uneconomical to privatize when
    there is a demonstrated lack of market interest, or an analysis of
    responses to a solicitation determines that the long-term cost would be
    greater than the long-term benefits.
        Question. What efforts are being made by the Army to partner with
    the other Services in privatizing utility systems? Specifically, is
    there coordination between the Services in co-located areas?
        Answer. The Army is partnering with the Navy and Air Force and
    looking for regional opportunities. For example, the Army has three
    installations involved in the Defense Energy Support Center
    demonstration project in Texas to evaluate a Tri-Service approach.
        Question. Can the Army document any savings or avoided costs, in
    net present value, which will result from the utility privatization
    effort?
        Answer. Army anticipates potential, but as yet unverified, net cost
    savings or cost avoidance of approximately $80 million annually, once
    privatization goals are met at the end of fiscal year 2003. So far, the
    level of utility services for the systems privatized has improved, but
    no dollar savings have been realized.
        Question. What efforts has the Army made in examining alternative
    sources of purchasing energy?
        Answer. The Defense Energy Support Center (DESC) successfully
    conducted a demonstration of consolidated power procurement in
    California for all of the Services. The Army has partnered with DESC to
    provide single agency support in purchase of electrical power in the
    deregulating market.
    Alabama: Anniston Army Depot Ammunition Demilitarization Facility Phase
                                VII ($7,000,000)
        Question. What is involved in this phase of the project? The Form
    1391 states the construction is scheduled to be completed Feb 2000, is
    this date accurate? If not, what is the new estimated construction
    completion date?
        Answer. This project is the final increment of funding and is
    required to complete the on-going construction of the Anniston Chemical
    Disposal Facility. The contract will complete construction of the
    munitions demilitarization building, the pollution abatement system,
    the roads within the compound, and the intrusion detection system and
    perimeter fencing. Construction and plant systemization activities have
    been integrated to accommodate changes in the scope of work in both of
    these two phases. Construction of some plant subsystems will be
    completed beyond February 2000; some as much as four months. However,
    the start of plant operations (toxic agent disposal) remains as
    scheduled (2nd Quarter, Fiscal Year 2002).
      Alaska: Fort Richardson Whole Barracks Complex Renewal ($2,200,000)
        Question. The Form 1391 mentions a barracks that will be built in
    the next phase of the program. When is the Army planning the next
    phase?
        Answer. The next phase of the Fort Richardson Whole Barracks
    Complex Renewal is scheduled for fiscal year 2003 (FY03).
        Question. Upon completion of the second phase, will all
    unaccompanied enlisted personnel at Fort Richardson be provided with
    adequate living quarters? If not, what is the Army's plan (by fiscal
    year and dollar amount) to provide adequate living quarters at For
    Richardson?
        Answer. Upon completion of the second phase, all unaccompanied
    enlisted personnel at Fort Richardson will not be provided with
    adequate living quarters. A project is planned in FY05 for $18,000,000
    to complete the barracks modernization at Fort Richardson.
        Alaska: Fort Wainwright Emission Reduction Facility ($2,300,000)
        Question. How long has the Central Heating and Power Plant (CHPP)
    violated state and federal emission requirements, and what makes fiscal
    year (FY) 2000 the right year for the upgrade?
        Answer. The Fort Wainwright Central Heating and Power Plant has
    occasionally been out of compliance since 1992. The subject Military
    Construction, Army project was initially submitted to the Department of
    Army in 1996 for inclusion in a military construction program. Fiscal
    Year 2000 was the earliest budget year available that allowed
    sufficient time for all alternatives and technical concerns to be
    adequately evaluated, for the scope of the projects to be finalized,
    and for the necessary preliminary design to be accomplished.
        Question. The Army's goal is to privatize all utility systems,
    where it is economically feasible, by 2003. What efforts were made to
    privatize utility service at this installation, in part to avoid the
    need for this heat plant upgrade?
        Answer. An extensive study was made of the alternatives to
    modernizing the Fort Wainwright Central Heating and Power Plant (CHPP),
    ranging from refurbishing the CHPP to privatization. On a life cycle
    cost basis, the cost of refurbishing the existing plant and
    privatization would be about the same. Factoring in the potential loss
    of security and degradation in reliability of power and heat if
    privatized, especially with the extremes of weather in Alaska, the
    decision to retain the plant is the best option. A $15.5 million
    emission control project, of which this $2.3 million is the first
    phase, is required to reduce particulate emissions. Additionally, a $20
    million refurbishment project that is currently in the fiscal year 2000
    Operation and Maintenance, Army budget is also essential for the
    continued operation of this facility.
     Colorado: Peterson AFB US Army Space Command Headquarters ($3,700,000)
        Question. The fiscal year 2000 Air Force military construction
    program includes a project at Peterson AFB for USSPACECOM/NORAD
    Headquarters. Will that project and this project construct a single
    facility? If not, why not? Will the two projects be executed by a
    single contract to achieve construction cost savings?
        Answer. Yes, this a single facility consisting of two buildings;
    one Air Force and one Army will be constructed in the fiscal year 2000
    construction program. The U.S. Army Space Command mission support
    requirements, communications, shipping, receiving, and staging of
    tactical operations, do not lend themselves to consolidation with a
    building designed to support the headquarters planning mission of
    USSPACECOM/NORDAD. Yes, the two projects are being designed under a
    single Architectural Engineering contract to achieve construction cost
    savings. It will also be constructed under a single contract.
       Georgia: Fort Benning Whole Barracks Complex Renewal ($7,100,000)
        Question. According to the Form 1391, the remaining unaccompanied
    enlisted permanent party deficit will be 307 personnel upon completion
    of this project. What is the Army's plan (by fiscal year and dollar
    amount) to provide adequate living quarters at Fort Benning?
        Answer. A project is planned for fiscal year 2004 for $14,000,000
    to complete the permanent party barracks modernization at Fort Benning.
       Georgia: Fort Stewart Whole Barracks Complex Renewal ($7,000,000)
        Question. According to the Form 1391, this is phase two of a three-
    phase project. When does the Army have the next phase programmed?
        Answer. The next phase of the Fort Stewart Whole Barracks Complex
    Renewal is scheduled for fiscal year 2003.
        Question. After completion of phase three, will adequate living
    quarters be provided for all unaccompanied enlisted personnel at Fort
    Stewart? If not, what is the Army's plan (by fiscal year and dollar
    amount) to provide adequate living quarters at Fort Stewart?
        Answer. After completion of phase three, an additional requirement
    will remain at Fort Stewart. This requirement will be built by fiscal
    year 2008, however project level of planning for years from 2006 to
    2008 are not yet available.
           Hawaii: Schofield Barracks--Whole Barracks Complex Renewal
        Question. What is the estimate of savings in design costs by
    accomplishing this project using a standard or definitive design?
        Answer. Budget estimates of design costs are based on the projected
    effort required to prepare the designs. Since a standard design was
    available for this facility, design cost savings (approximately 5%)
    were reflected in the budgeted design cost.
        Standard designs also yield many benefits besides reduced design
    costs. For example, standard designs provide a starting point for
    predesign discussions with customers, greatly reducing the time spent
    to develop the preliminary layout. Other benefits include a reduced
    risk of design deficiencies, and assurance that designs will be
    consistent with Army wide missions and policy.
          Kansas: Fort Leavenworth Water Treatment Plant ($1,200,000)
        Question. The Army's goal is to privatize all utility systems,
    where it is economically feasible, by 2003. What efforts were made to
    privatize utility service at this installation, in part to avoid the
    need for military construction project?
        Answer. Fort Leavenworth has pursued privatization of its
    utilities. However, contractors were not responsive to a solicitation
    to privatize the water system. This project includes critical
    improvements that will make the plant compliant with state
    environmental requirements. It will enhance the potential to privatize
    the Fort Leavenworth water system in the future.
        Kentucky: Bluegrass Army Depot Ammunition Surveillance Facility
                                   ($900,000)
        Question. Would this work be required if there were no chemical
    demilitarization program?
        Answer. Yes, because this project is not associated with the
    chemical demilitarization program.
        Question. Is there any relationship between this project and the
    ``Phase I'' chemical demilitarization project that is programmed this
    year?
        Answer. No, there is no relationship. The ammunition surveillance
    facility is required for the inspection and surveillance of ammunition
    not mandated for destruction under the Chemical Weapons Convention. The
    ``Phase I'' chemical demilitarization project is required to
    demilitarize ammunition and chemicals mandated for destruction under
    the Chemical Weapons Convention.
              Kentucky, Fort Campbell--Sabre Heliport Improvements
        Question. Item 12 on the Form 1391 was not included in the
    justification book. Please provide a copy for the record?
        Answer.

    12. Supplemental data:
        A. Estimated Design Data:
            (1) Status:
                (a) Date Design Started.....................        Mar 1999
                (b) Percent Complete as of January 1999.....              0%
                (c) Date 35% Designed.......................       July 1999
                (d) Date Design Complete....................        May 2000
                (e) Parametric Cost Estimating Used to                   YES
                 Develop Costs..............................
            (2) Basis:
                (a) Standard or Definitive Design...........              NO
            (3) Total Design Cost (c)=(a)+(b) OR (d)+(e):
                (a) Production of Plans and Specification...        $750,000
                (b) All Other Design Costs..................         570,000
                (c) Total Design Cost.......................       1,320,000
                (d) Contract................................         950,000
                (e) In-house................................         370,000
            (4) Construction Start..........................    \1\ Aug 2000
            (5) Construction Completion.....................        Aug 2002
        B. Equipment associated with this project which will
         be provided from other appropriations: None.

    \1\ Land acquisition may occur earlier.

      Kentucky: Fort Campbell Physical Fitness Training Center ($900,000)
        Question. What is the estimate of savings in design costs by
    accomplishing this project using a standard or definitive design?
        Answer. Budget estimates of design costs are based on the projected
    effort required to prepare the designs. Since a standard design was
    available for this facility, design cost savings (approximately 5%)
    were reflected in the budgeted design cost.
        Standard designs also yield many benefits besides reduced design
    costs. For example, standard designs provide a starting point for
    predesign discussions with customers, reducing the time spent to
    develop the preliminary layout. Other benefits include a reduced risk
    of design deficiencies, and assurance that designs will be consistent
    with Army wide missions and policy.
        Maryland: Fort Meade Whole Barracks Complex Renewal ($2,700,000)
        Question. According to the Form 1391, the remaining unaccompanied
    enlisted permanent party deficit will be 180 personnmel upon completion
    of this project. What is the Army's plan (by fiscal year and dollar
    amount) to provide adequate living quarters at Fort Meade?
        Answer. In fiscal year 2004, there is a follow-on $18,500,000 Whole
    Barracks Complex Renewal project programmed for Fort Meade.
      New York: United States Military Academy Cadet Physical Development
                         Center Phase II ($28,500,000)
        Question. According to the Form 1391, this project submitted for
    fiscal year 1999 states phase three is programmed for fiscal year 2002
    for $44,000,000. Is this still accurate? If not, when does the Army
    have the next phase planned?
        Answer. Yes. The Cadet Physical Development Center Phase III is
    programmed in fiscal year 2002 for $44,000,000.
    North Carolina: Fort Bragg Whole Barracks Complex Renewal ($16,508,000)
        Question. According to the Form 1391, this is phase II of a
    standard-design barracks complex. When was phase I requested? Are any
    additional phases programmed? If so, list by fiscal year and dollar
    amount.
        Answer. Phase I was requested in fiscal year 1999. Phase II
    completes this complex. However, there are additional barracks
    requirements at Fort Bragg which are being programmed during the period
    fiscal years 2001-2008.
      South Carolina: Fort Jackson Emergency Services Center ($1,100,000)
        Question. Describe in some detail the six buildings to be
    demolished as part of this project?
        Answer. The facilities to be demolished as part of this project are
    six temporary World War II era wood buildings that have had no
    extensive remodeling since their initial construction in 1941. These
    facilities are described as follows:
              1. Building no. 7300 at 9,408 SF, Fire Station
              2. Building no. 1444 at 4,230 SF, Temporary Satellite Fire
            Station
              3. Building no. 9514 at 5,038 SF, Provost Marshall
              4. Building no. 9515 at 5,038 SF, Provost Marshall
              5. Building no. 9529 at 4,682 SF, Provost Marshall
              6. Building no. 9630 at 990 SF, Provost Marshall
        Question. Are these six buildings in the footprint of the new
    construction?
        Answer. These buildings are not within the footprint of the new
    construction but will be replaced by the new facility when it is
    completed.
        Question. In what year was the current inadequate fire station
    constructed?
        Answer. The current inadequate fire station was constructed in
    1941.
        Texas: Fort Bliss Air Deployment Facility Complex ($2,550,000);
       Ammunition Hot Load Facility ($1,700,000); Aircraft Loading Apron
                                  ($3,300,000)
        Question. Is it correct that all three of these projects are needed
    to support the Army's Strategic Mobility Program?
        Answer. Yes, these three projects support our strategic mobility
    program at Fort Bliss.
        Question. What is the future construction program for facilities to
    support the Army's Strategic Mobility Program at Fort Bliss?
        Answer. Two additional projects are planned: a Rail Deployment
    Facility complex in fiscal year 2001 and a Contingency Stock Warehouse
    in fiscal year 2002.
        Question. How can you assure us that operating schedules for these
    projects will be met under a two year construction program?
        Answer. If the budget is approved as requested with advance
    appropriation, full authorization, and reprogramming authority based on
    the authorization, the program can be executed and no significant
    impact is expected.
      Washington: Fort Lewis Physical Fitness Training Center ($1,850,000)
        Question. Does this project include the cost of demolishing all of
    the current physical fitness facilities at North Fort Lewis? If
    demolition of all the current facilities is not planned, what is the
    intended future use of these facilities?
        Answer. One of two existing physical fitness facilities will be
    demolished. The new facility will be an addition to the remaining
    building.
        Question. Will this project satisfy the total space requirement for
    fitness centers at North Fort Lewis? If not, are additional fitness
    center projects programmed? If so, in what fiscal year and at what
    cost?
        Answer. Yes, this project will satisfy the requirement for fitness
    centers at North Fort Lewis.
        Question. Will the use of this facility be limited to active duty
    military personnel assigned to North Fort Lewis? How many such
    personnel will be stationed at North Fort Lewis at the time this center
    becomes operational?
        Answer. The new facility will be available for use by all
    authorized personnel--active duty military personnel, dependent family
    members and Department of the Army civilian employees. At the time the
    new center becomes operational, approximately 5,000 active duty
    military personnel will be stationed at North Fort Lewis.

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

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

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

        Question. Is this about the maximum rate of tank trail erosion
    mitigation that can be accomplished at Fort Lewis without disrupting
    operations, $2,000,000 of work per year? If not, why is this project
    phased over a ten-year period?
        Answer. Weather limits the amount of time available for road
    construction in the Yakima area. Accordingly, the Record of Decision
    requiring mitigation phased that roadwork over ten years.
    Germany: Ansbach; Whole Barracks Complex Renewal ($3,150,000), Bamberg;
      Whole Barracks Complex Renewal ($1,400,000), Whole Barracks Complex
        Renewal ($1,230,000), Mannheim, Whole Barracks Complex Renewal
                                   ($675,000)
        Question. Outline the remaining Whole Barracks Complex Renewal
    program (by fiscal year, location, and dollar amount) in Germany,
    beyond these four U.S. funded projects.
        Answer. The following chart shows details of the barracks
    construction program for fiscal years (FY) 2001-2004. Project level of
    planning for FY 05-08, the last years of the program, is not yet
    available. In addition to the construction program, we plan to upgrade
    63 barracks buildings at various locations in Germany with real
    property maintenance funds between FY 00-05.

    ------------------------------------------------------------------------
           Year and  location                  Project           Amount $000
    ------------------------------------------------------------------------
    FY01:
        Ansbach.....................  Whole Barracks Complex          17,850
                                       Renewal.
        Bamberg.....................  Whole Barracks Complex          33,110
                                       Renewal.
        Darmstadt...................  Whole Barracks Complex          13,800
                                       Renewal.
        Mannheim....................  Whole Barracks Complex           9,225
                                       Renewal.
    FY02:
        Bamberg.....................  Whole Barracks Complex           9,500
                                       Renewal.
        Darmstadt...................  Whole Barracks Complex          13,700
                                       Renewal.
        Hanau.......................  Whole Barracks Complex           7,300
                                       Renewal.
        Heidelberg..................  Whole Barracks Complex           7,200
                                       Renewal.
    FY03:
        Darmstadt...................  Whole Barracks Complex           7,200
                                       Renewal.
        Hanau.......................  Whole Barracks Complex          14,900
                                       Renewal.
        Heidelberg..................  Whole Barracks Complex           6,800
                                       Renewal.
        Mannheim....................  Whole Barracks Complex          16,830
                                       Renewal.
    FY04:
        Bamberg.....................  Whole Barracks Complex           6,000
                                       Renewal.
        Heidelberg..................  Whole Barracks Complex          11,700
                                       Renewal.
        Kaiserslautem...............  Whole Barracks Complex           8,900
                                       Renewal.
        Mannheim....................  Whole Barracks Complex           5,500
                                       Renewal.
        Wuerzburg...................  Whole Barracks Complex           3,350
                                       Renewal.
    FY05:
        Various, Germany............  Whole Barracks Complex          52,200
                                       Renewal.
    ------------------------------------------------------------------------

        Question. For the record, explain why the Army will modernize these
    four World-War II era barracks rather than replace them with newly
    constructed barracks.
        Answer. The cost of renovation versus new construction averages
    about 60 percent in Germany. The barracks construction standard prior
    to World War II was solid masonry, sandstone and/or poured concrete.
    Therefore, these facilities are structurally sound and provide a good
    basis for renovation to the 1 + 1 standard. However, prior to
    programming a modernization project, each building is assessed to
    determine if new construction or renovation is more cost effective. In
    most cases, complete demolition of the facilities and subsequent
    replacement would not provide a better product, in addition to 40
    percent higher cost. Further, the necessity for hand sorting of
    demolished material for recycling mandates that buildings be gutted
    during demolition. There are savings if we can begin restoration when
    we reach the bare walls versus continuing to demolish and then building
    new. Other mitigating factors are the necessity to match existing
    architecture of the surrounding buildings whenever we construct and the
    lack of new real estate on which to construct. All these factors are
    considered before any decisions are made regarding the preferred course
    of action.
      Kwajalein: Kwajalein Atoll Power Plant, Phase II--Roi Namur Island
                                 ($35,400,000)
        Question. What is the current status of the first phase of this
    project?
        Answer. The Army has solicited bids for the first phase of this
    project. The Source Evaluation Board will complete its actions by April
    2, 1999 with contract award on schedule for April 17, 1999.
                   Korea: Camp Casey Physical Fitness Center
        Question. What is the current status of a new Physical Fitness
    Center at Camp Casey, and why are no funds requested for fiscal year
    2000 as the Committee directed in our report last year?
        Answer. The Physical Fitness Center at Camp Casey was added in
    fiscal year 1999 for $8,000,000. It is currently scheduled to be
    advertised in July 1999 and awarded in September 1999.
         Worldwide Various: Unspecified Minor Construction ($9,500,000)
        Question. Provide for the record a ten-year history of amounts that
    have been requested and appropriated for unspecified minor
    construction.
        Answer. The following provides a ten-year history of the Army's
    unspecified minor construction program:

    ------------------------------------------------------------------------
                  Unspecified Minor Military Construction, Army
    -------------------------------------------------------------------------
                                            Requested         Appropriated
                Fiscal year                ($millions)        ($millions)
    ------------------------------------------------------------------------
    1990..............................            $11.000            $11.000
    1991..............................              7.603              8.603
    1992..............................             11.000             11.000
    1993..............................              3.800              5.500
    1994..............................             12.000             12.000
    1995..............................             12.000             12.000
    1996..............................              9.000              9.000
    1997..............................              5.000              5.000
    1998..............................              6.000              7.400
    1999..............................             10.000             12.500
    ------------------------------------------------------------------------

              Worldwide Various: Planning and Design ($76,705,000)
        Question. Will this funding level meet the known requirements for
    the fiscal year 2000 program, including the necessary work on projects
    programmed for fiscal years 2001 and 2002?
        Answer. Yes, the fiscal year 2000 funding for planning and design
    will meet the known requirements for the fiscal year 2000 program.
        Question. This year's planning and design request is $18,886,000 or
    45 percent above the fiscal year 1999 request. What are the needs for
    this significant increase?
        Answer. Because of incremental funding, there will be a larger
    value of projects under design in fiscal year 2000.
              Worldwide Various: Host Nation Support ($21,300,000)
        Question. Provide for the record a table that will show the
    expected distribution of this amount among the three efforts--criteria
    package preparation, design surveillance, and construction
    surveillance--and that will also show the expected distribution by
    country.
        Answer. Distribution of the budget request for host nation support
    funds is--

                                                 [Dollars in thousands]
    ----------------------------------------------------------------------------------------------------------------
                                                      Japan      Korea     Okinawa    Germany      NATO      Total
    ----------------------------------------------------------------------------------------------------------------
    Criteria Package Preparation..................     $7,000       $400       $680         $0   \2\ $200     $7,880
    Design Surveillance...........................      3,800      \1\ 0        490        675          0      5,365
    Construction Surveillance.....................      4,900      1,400        630        815          0      7,745
    NATO Minor Works Program......................          0          0          0          0    \3\ 150        150
    Recoupment Activities.........................          0          0          0          0    \4\ 160        160
                                                   -----------------------------------------------------------------
        Total.....................................     15,700      1,800      1,800      1,490        510     21,300
    ----------------------------------------------------------------------------------------------------------------
    \1\ Korean Combined Defense Improvement Projects design is done by U.S. Army Corps of Engineers and is funded by
      the Republic of Korea, thus, no design surveillance is required.
    \2\ Funds are for the development of Capability Packages; an estimated $50K would be earmarked for work in Italy
      and $150K for work in Germany.
    \3\ For conceptual design efforts; an estimated $40K would be earmarked for work in Italy and $110K would be
      earmarked for work in Germany.
    \4\ Country-specific amounts can not be identified at this time although the majority of the effort involves
      projects in Germany and Italy.

                                    Barracks
        Question. Provide for the record a chart that will show the Army's
    barracks construction program at the time the ``one plus one'' standard
    was approved, and the current program through completion, broken out by
    locations in the U.S., in Germany, and in Korea.
        Answer. The ``one plus one'' standard was approved in fiscal year
    (FY) 1996. The comparison of the Army's original barracks construction
    program with the current plan is shown in the first chart below.
    Location specific program data for the program at the time of the
    approval of the standard and current program follows in the second and
    third charts. Project level planning detail for FY06-08, the last years
    of the program, is not yet available.

    ----------------------------------------------------------------------------------------------------------------
                    Location                      FY96 1+1 standard approved              FY00 current budget
    ----------------------------------------------------------------------------------------------------------------
    United States...........................                                FY20                                FY08
    Europe..................................                                FY20                                FY08
    Korea...................................                                FY20                                FY08
    ----------------------------------------------------------------------------------------------------------------

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                            Family Housing Inventory
        Question. Provide for the record a chart that will show the average
    number of family housing units supported for fiscal years 1997, 1998,
    and 1999, and those expected to be supported in fiscal year 2000,
    broken out into government owned (U.S. and foreign), leased (U.S. and
    foreign), and privatized under Public--Private Ventures.
        Answer. The following chart shows the average number of Army family
    housing units for the last three years and anticipated for fiscal year
    2000:

    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal years
                                                                     -----------------------------------------------
                                                                         1997        1998        1999        2000
    ----------------------------------------------------------------------------------------------------------------
    Owned--US.......................................................      93,066      89,699      87,309      82,128
    Owned--Foreign..................................................      29,303      28,717      28,119      26,656
    Owned--Total....................................................     122,369     118,416     115,428     108,784
    Privatized\1\--US...............................................           0           0           0       5,268
    Leased--US......................................................       4,200       4,199       4,285       4,285
    Leased--Foreign.................................................      10,793       9,734      10,033      10,080
    Leased--Total...................................................      14,993      13,933      14,318      14,365
    ----------------------------------------------------------------------------------------------------------------
    \1\ During Fiscal Year 2000, 14,054 units are scheduled to be transferred under privatization, but the effective
      average is 5,268 units over the year.

                             Cold Weather Building
        Question. Will this year's incremental funding approach present any
    problems with construction projects in cold weather areas?
        Answer. No. The use of incremental funding should not impact
    construction in cold weather areas as long as the budget is approved as
    requested.
                   NATO Precautionary Prefinancing Statements
        Question. Submit for the record a copy of the precautionary
    prefinancing statements that has been submitted to the NATO
    infrastructure committees for each European project for which funds
    were appropriated for fiscal year 1998, and for each project requested
    for fiscal year 1999.
        Answer. The fiscal year 1998 and fiscal year 1999 military
    construction program in Europe consisted of barracks projects and two
    child development centers. These types of projects are not eligible for
    NATO funding. Therefore, no precautionary prefinancing statements were
    submitted to the NATO infrastructure committees for these years.
        Question. Provide an explanation for any project for which
    statements have not bee submitted.
        Answer. The fiscal year 1998 and fiscal year 1999 military
    construction program in Europe consisted of barracks projects and two
    child development centers. These types of projects are not eligible for
    NATO funding. Therefore, not precautionary prefinancing statements were
    submitted to the NATO infrastructure committees for these years.
                  Previously Authorized and Appropriated Funds
        Question. For the record provide a list of all previously
    authorized and appropriated housing projects (both new construction and
    construction improvements) that the Army has not executed due to the
    pending approval of housing privatization projects. This list should
    include the location, fiscal year appropriated, account, dollar amount,
    and number of units.
        Answer. Army family housing projects not executed pending approval
    of housing privatization:

    ----------------------------------------------------------------------------------------------------------------
                                                Fiscal year                               Appropriation   Number of
                     Location                  appropriated            Account                 ($M)         units
    ----------------------------------------------------------------------------------------------------------------
    Fort Carson, CO..........................          1995  New construction...........          15.8           142
    Fort Campbell, KY*.......................          1999  Improvements...............           8.8           104
    Fort Meade, MD...........................          1998  New construction...........           7.9            56
    Fort Bragg, NC*..........................          1998  New construction...........          16.6           142
    Fort Bragg...............................          1999  New construction...........          18.8           170
    Fort Hood, TX............................          1998  New construction...........          18.6           130
    Fort Hood, TX............................          1999  New construction...........          21.6           154
    ----------------------------------------------------------------------------------------------------------------
    * Released on March 25, 1999 for execution.

                    Family Housing Construction Improvements
        Question. Provide for the record a ten-year history of amounts that
    have been requested and appropriated for post-acquisition construction
    of family housing.
        Answer. Family housing post-acquisition funding history for the
    past ten years is as follows:

                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                         Fiscal year                                Requested                   Appropriated
    ----------------------------------------------------------------------------------------------------------------
    1999................................................                       $28.629                      * 52.479
    1998................................................                        44.800                        86.100
    1997................................................                        33.750                       105.350
    1996................................................                        14.200                        48.856
    1995................................................                        49.760                        49.760
    1994................................................                        67.530                        77.630
    1993................................................                       143.660                        92.600
    1992................................................                        74.980                        74.980
    1991................................................                        44.100                        40.100
    1990................................................                        36.329                        40.000
    ----------------------------------------------------------------------------------------------------------------
    * Includes $4M approved in the Fiscal Year 1999 Emergency Supplemental Appropriation for Army Family Housing at
      Ft. Buchanan.

        Question. The Army's fiscal year 2000 family housing construction
    improvement request totals $5,303,000. For the record provide the list
    of projects including the number of units to be improved and the
    appropriation request for each individual project.
        Answer. Fiscal year 2000 family housing improvement projects are:

    ----------------------------------------------------------------------------------------------------------------
                          Location                               Number of units         Appropriation request ($M)
    ----------------------------------------------------------------------------------------------------------------
    Baumholder, GE......................................                           162                        $2.850
    Hanau, GE...........................................                            64                         1.150
    Wiesbaden, GE.......................................                           198                         1.303
    ----------------------------------------------------------------------------------------------------------------

                         BRAC Environmental Restoration
        Question. What is the Army's current estimate of the annual funding
    requirement for BRAC environmental restoration beginning in fiscal year
    2002?
        Answer. The following funds are programmed to support environmental
    restoration at BRAC installations ($ millions).
        FY2002--$147.0; FY2003--$155.0; FY2004--$67.0; FY2005--$56.0.
        Question. What is the Army's current estimate of annual funding
    requirement for BRAC other than environmental restoration beginning in
    fiscal year 2002?
        Answer. The Army will have completed all BRAC actions other than
    environmental restoration and property disposal by fiscal year 2001.
    The Army will manage these programs within resources programmed in the
    Operations & Maintenance, Army (O&MA) accounts.
                      Supervision Inspection and Overhead
        Question. What program budgeting and execution challenges does the
    annualization of SIOH present, if any?
        Answer. The Army's method of annualization SIOH should not create
    any challenges in program budgeting or execution. The Army elected to
    spread the SIOH over two years because the contract dollars are spread
    over two years. Since SIOH pays for contract oversight, this two-year
    annualization keeps the SIOH funding directly tied to its respective
    contract funding.
                                Housing Deficits
        Question. What is your current worldwide family housing deficit?
        Answer. The Army's family housing deficit is 10,442.
        Question. What are your three largest deficits, and how large are
    they?
        Answer. The three largest deficit locations are: Fort Bragg, NC,
    1,650 units; Fort Food, TX, 1,149 units; and Fort Campbell, KY, 982
    units.
                                 Waiting Lists
        Question. How many families are on waiting lists for government-
    provided family housing and what is the average waiting time?
        Answer. Historically, the Army has approximately 2,000 officer
    families and 18,000 enlisted families on waiting lists for government
    family housing. The average waiting time varies by location, depending
    on bedroom requirements. On the average, officer families wait no more
    than 10 months and enlisted families wait no more than 15 months for
    on-post family housing.
                           Chemical Demilitarization
        Question. Why does the Department, once again, propose transferring
    the Chemical Demilitarization program from the Military Construction,
    Defense-wide account to the Military Construction, Army account? What
    difference does it make whether this program is funded under the Army
    or under Defense-wide?
        Answer. As part of the Quadriennial Defense Review, the Office of
    the Secretary of Defense directed efficiencies be identified, staff
    downsized, and OSD focus on corporate-level tasks. Oversight of the
    chemical demilitarization program devolved in fiscal year 1999 to the
    Army thus streamlining management of the program. While fiscal year
    1999 chemical demilitarization construction funding was appropriated to
    the Defense-wide account, the overall responsibility for the program
    remained with the Army.
        There will be no change in the execution of the chemical
    demilitarization program whether funded under the Army or Defense-wide
    account. However, a change in current law is required. The Chemical
    Demilitarization Legislation must be amended to permit the Army to fund
    military construction for chemical demilitarization projects rather
    than OSD.
        Question. Has the Army's program been reduced to make room for the
    chemical demilitarization program, either this year or in the future?
        Answer. No, the Army's program has not been reduced as a result of
    the chemical demilitarization program. All funding for chemical
    demilitarization construction projects was transferred to the Army when
    the program funding responsibility devolved from the Office of the
    Secretary of Defense to the Army. It is not anticipated that the
    chemical demilitarization program will have an impact on the future
    Army military construction program as the chemical demilitarization
    program is expected to be completed in fiscal year 2004.
        Question. Submit for the record a chart, which will show
    unobligated balances available, by fiscal year and by location, and the
    maximum amount of construction that could be put in place at these
    locations through the end of fiscal year 2000. We would appreciate any
    comments you may wish to add.
        Answer. The following is a chart showing unobligated balances of
    MILCON funds as of the end of February 1999.

                                        UNOBLIGATED BALANCE, MILLIONS OF DOLLARS
    ----------------------------------------------------------------------------------------------------------------
                                           FY 95        FY 96        FY 97        FY 98        FY 99        Total
    ----------------------------------------------------------------------------------------------------------------
    Anniston..........................          1.9          0.0          0.0          9.0          0.0         10.9
    Umatilla..........................          0.0          0.0          0.0          9.6          8.8         18.4
    Pine Bluff........................          0.0          0.0         10.1          0.0          0.6         10.7
    Aberdeen..........................          0.0          0.0          0.0          0.0         26.5         26.5
    Newport...........................          0.0          0.0          0.0          0.0         11.5        11.5
    ----------------------------------------------------------------------------------------------------------------
    Note: the above amounts do not include the depot support projects.

        The maximum amount of construction that could be put in place and
    cover long lead construction material, equipment, supplies,
    subcontracts and the Army Corps of Engineers contract oversight costs
    at these locations through the end of fiscal year 2000 is as follows:

    ------------------------------------------------------------------------
                       Site                         (Dollars in Millions)
    ------------------------------------------------------------------------
    Anniston, Alabama.........................                         166.9
    Umatilla, Oregon..........................                         193.3
    Pine Bluff, Arkansas......................                         115.1
    Aberdeen, Maryland........................                          93.1
    Newport, Indiana..........................                          72.7
    Pueblo, Colorado*.........................  ............................
    Blue Grass, Kentucky*.....................  ............................
    ------------------------------------------------------------------------
    *On hold pending decision on Assembled Chemical Weapons Assessment
      technology.

        Question. For the record describe the ``P.L. 104-208 baseline
    restrictions'' and how they are being addressed.
        Answer. PL 104-208 prohibits the obligation of funds for the
    construction of baseline incineration facilities at the Pueblo, CO, and
    Blue Grass, KY, storage sites until 180 days after the Secretary of
    Defense submits a report on the effectiveness of each demonstrated
    alternative technology to incineration for destruction of assembled
    chemical munitions. The final report is scheduled to be provided to
    Congress in September 1999. Consistent with PL 104-208, the Program
    Manager for Assembled Chemical Weapons Assessment reports directly to
    the Under Secretary of Defense (Acquisition and Technology).
        Environmental permitting activities and documentation for
    incineration-based disposal facilities at Blue Grass and Pueblo are in
    abeyance pending results of the alternate technology demonstrations.
    The Congress is aware that the Army must proceed with the baseline
    incineration process by June 30, 1999, in order to meet Chemical
    Weapons Convention (CWC) disposal deadline of April 29, 2007, if no
    alternative emerges. Because of this conflict, the Army is working to
    define alternative options to ensure disposal completion by the
    mandated CWC date.
        Question. Please provide for the record a chart which will show the
    amounts (by location) and the timeline for the entire Military
    Construction cost of the Chemical Stockpile Disposal Program.
        Answer. The requested information is shown in the table below.

    ----------------------------------------------------------------------------------------------------------------
                                          Fiscal               Fiscal   Fiscal   Fiscal   Fiscal   Fiscal
                  Project               year 1998    Fiscal     year     year     year     year     year     Total
                                         & prior   year 1999    2000     2001     2002     2003     2003
    ----------------------------------------------------------------------------------------------------------------
    PM-Chem Demil; Training Facility..      16.1   .........  .......  .......  .......  .......  .......      16.1
    Tooele, UT Facility; Depot Support     186.2   .........  .......  .......  .......  .......  .......     186.2
      ................................      11.8   .........  .......  .......  .......  .......  .......      11.8
    Anniston, AL Facility; Depot           159.9   .........      7.0  .......  .......  .......  .......     166.9
     Support..........................
     .................................      14.3   .........  .......  .......  .......  .......  .......      14.3
    Umatilla, OR Facility; Depot           133.43      23.95     35.9  .......  .......  .......  .......     193.28
     Support..........................
                                            11.2   .........  .......  .......  .......  .......  .......      11.2
    Pine Bluff, AR Facility; Depot          49.0        9.0      61.8     34.4  .......  .......  .......     154.2
     Support..........................
      ................................      10.0   .........  .......  .......  .......  .......  .......      10.0
    Pueblo, CO* Facility; Depot         .........  .........     11.8     51.0     96.2     33.9      9.0     201.9
     Support..........................
                                             6.3   .........  .......  .......  .......  .......  .......       6.3
    Blue Grass, KY* Facility; Depot     .........  .........     11.8     51.0     01.1     30.7      9.0     193.6
     Support..........................
      ................................  .........  .........     11.0  .......  .......  .......  .......      11.0
    Aberdeen, MD Facility; Depot        .........      26.5      66.6     78.3     11.4  .......  .......     182.8
     Support..........................
      ................................  .........       1.85  .......  .......  .......  .......  .......       1.85
    Newport, IN Facility; Depot         .........      11.5      61.2     75.3     39.9  .......  .......     187.9
     Support..........................
      ................................  .........       2.0   .......  .......  .......  .......  .......       2.0
    Planning & Design.................  .........  .........  .......  .......  .......  .......  .......     114.5
                                       -----------------------------------------------------------------------------
          Total.......................     712.73      74.8     267.1    290.0    238.6     64.6     18.0   1,665.83
    ----------------------------------------------------------------------------------------------------------------
    * Funding requirement may change pending assessment of Assembled Chemical Weapon Assessment Program in
      consonance with Public Law 104-208.

        Question. What is the timetable and what are the milestones for
    completion of the chemical demilitarization program?
        Answer. Following is the Chemical Stockpile Disposal Program
    schedule and major milestones.

                                 [Fiscal years]
    ------------------------------------------------------------------------
                                                     Start of
               Location               Start of     systemization  Operations
                                    construction       ****
    ------------------------------------------------------------------------
    Johnston Atoll*..............  .............  ..............  3QFY90-4QF
                                                                   Y00
    Tooele, UT...................  .............  ..............  4QFY96-4QF
                                                                   Y03
    Anniston, AL.................  3QFY97         2QFY00          2QFY02-1QF
                                                                   Y06
    Umatilla, OR.................  3QFY97         3QFY00          2QFY02-3QF
                                                                   Y05
    Pine Bluff, AR...............  2QFY99         4QFY01          4QFY03-1QF
                                                                   Y07
    Pueblo, CO**.................  On Hold        ..............  ..........
    Blue Grass, KY**.............  On Hold        ..............  ..........
    Aberdeen, MD***..............  1QFY00         3QFY02          2QFY04-1QF
                                                                   Y05
    Newport, IN***...............  1QFY00         4QFY02          3QFY04-1QF
                                                                   Y05
    ------------------------------------------------------------------------
    * Full-scale operations began 2QFY94.
    ** Schedule on-hold as directed by Public Law 104-208 pending technology
      evaluation by Program Manager for Assembled Chemical Weapon
      Assessment.
    *** Schedule represents employment of neutralization-based technology.
    **** Some systemization activities are started in the construction
      phase.

        Question. Provide for the record a chart showing by location, the
    facilities and operational costs for the chemical demilitarization
    program.
        Answer. The requested information is shown in the table below.

                     [Current year, in millions of dollars]
    ------------------------------------------------------------------------
              Location            Facilities \1\  Operations \2\     Total
    ------------------------------------------------------------------------
    Johnston Atoll..............  ..............       1,472         1,472
    Tooele, UT..................         196           1,319         1,515
    Anniston, AL................         181           1,035         1,216
    Umatilla, OR................         204             988         1,192
    Pine Bluff, AR..............         164             868         1,032
    Pueblo, CO..................         208             846         1,054
    Blue Grass, KY \3\..........         205             704           909
    Aberdeen, MD \3\............         185             457           642
    Newport, IN.................         190             446           636
    CAMDS, UT...................  ..............         448           448
    PMCD Training Facility, MD..          16             120           136
    Programmatics...............  ..............       1,605         1,605
    CSEP (On-Post)..............  ..............         496           496
    (Off-Post)..................  ..............         741           741
    MILCON P&D..................         114.5    ..............       114.5
                                 -------------------------------------------
        Total...................       1,663.5        11,545        12,209.5
    ------------------------------------------------------------------------
    \1\ Facilities costs include the cost of designing, and constructing,
      equipping each of the chemical demilitarization and support
      facilities.
    \2\ Operational costs include all costs to test and operate each
      facility, training and all other support costs related to the
      operations of each facility to include environmental requirements and
      Chemical Stockpile Emergency Preparedness Program costs.
    \3\ Costs for these facilities may change as a result of evaluations/
      assessmets from the PM for Assembled Chemical Weapon Assessment (ACWA)
      as directed by PL 104-208. ACWA $374M is not included
    NOTE.--The above figures reflect FY99 Congressional reductions and the
      January inflation indices.

        Question. What is the timetable for the funding of all construction
    phases, for the obligation of funds, and for the construction and
    operation of the chemical demilitarization facilities at the locations
    for which military construction funds are requested--Anniston, Alabama;
    Pine Bluff, Arkansas; Pueblo, Colorado; Newport, Indiana; Blue Grass,
    Kentucky; Aberdeen, Maryland; and Umatilla, Oregon?
        Answer. The spreadsheet provided in response to Question 88
    identifies the scheduled funding for all sites. The obligation of funds
    is expected to be accomplished as follows:
              Anniston: Fiscal year 2000 funds are earmarked for funding
            construction changes, engineering during construction,
            supervision and administration, and accomplishment of as-built
            drawings and will be obligated as required prior to
            construction completion.
              Umatilla: Fiscal year 2000 funds will be applied to the on-
            going contract and are earmarked for funding construction
            changes, engineering during construction, supervision and
            administration, and accomplishment of as-built drawings and
            will be obligated as required prior to construction completion.
              Pine Bluff: Fiscal year 2000 funds will be applied to the on-
            going contract and obligated at that time. Obligation is
            expected in the first quarter of the fiscal year. A limited
            amount of funds will be retained for contingencies and will be
            obligated throughout the fiscal year to fund construction
            changes and engineering during construction.
              Aberdeen: Fiscal year 2000 funds will be applied to the on-
            going contract and obligated at that time. Obligation is
            expected in the first quarter of the fiscal year. A limited
            amount of funds will be retained for contingencies and will be
            obligated throughout the fiscal year to fund construction
            changes and engineering during construction.
              Newport: Fiscal year 2000 funds will be applied to the on-
            going contract and obligated at that time. Obligation is
            expected in the first quarter of the fiscal year. A limited
            amount of funds will be retained for contingencies and will be
            obligated throughout the fiscal year to fund construction
            changes and engineering during construction.
              Pueblo: Fiscal year 2000 funds will be obligated when the
            contract is awarded.
              Blue Grass: Fiscal year 2000 funds will be obligated when the
            contract is awarded.
        The construction and operation timetable of the demilitarization
    facilities follows:

    ------------------------------------------------------------------------
                                                        Operation status
                                    Construction  --------------------------
                                       status           Start          End
    ------------------------------------------------------------------------
    Anniston....................  Under            2nd Quarter      1st
                                   construction,    fiscal year      Quarter
                                   40% complete.    2002.            fiscal
                                                                     year
                                                                     2006
    Umatilla....................  Under            2nd Quarter      3rd
                                   construction     fiscal year      Quarter
                                   44% complete.    2002.            fiscal
                                                                     year
                                                                     2005
    Pine Bluff..................  Under            4th Quarter      1st
                                   construction,    fiscal year      Quarter
                                   3% complete.     2003.            fiscal
                                                                     year
                                                                     2007
    Aberdeen....................  Contract         2nd Quarter      1st
                                   awarded 10/98,   fiscal year      Quarter
                                   construction     2004.            fiscal
                                   begins 1st                        year
                                   quarter fiscal                    2005
                                   year 00.
    Newport.....................  Contract         2nd Quarter      1st
                                   awarded 2/99,    fiscal year      Quarter
                                   construction     2004.            fiscal
                                   begins 1st                        year
                                   quarter fiscal                    2005
                                   year 00.
    Pueblo......................  Treatment        Schedule on      Schedule
                                   method under     hold \1\.        on hold
                                   study.                            \1\
    Blue Grass..................  Treatment        Schedule on      Schedule
                                   method under     hold \1\.        on hold
                                   study.                            \1\
    ------------------------------------------------------------------------
    \1\ Pending demonstration of alternative technology for assembled
      chemical munitions; report to Congress on alternative technology
      scheduled for 4th quarter fiscal year 1999.

        Question. What is the total design life of each of these
    demilitarization facilities?
        Answer. Plant design is not driven by ``life'' criteria but rather
    by environmental and safety requirements to achieve maximum protection
    as required by law. This equates to a design life of five years of
    continuous operation. With prudent maintenance and equipment
    replacement, the facility's life can be extended significantly.
    However, the cost of extending the life of a facility is dependent upon
    local ambient weather conditions; for example, the warm salt air
    environment at the Johnston Atoll Chemical Agent Disposal System
    greatly accelerates corrosion of exposed equipment and structures.
        Question. Are the sums requested equal to the amount of
    construction that can be put into place during fiscal year 2000?
        Answer. Yes, for Anniston, Umatilla, Aberdeen, and Newport, the
    sums requested in fiscal year 2000 when added to the funds already
    appropriated total the cumulative amount of construction that can be
    put into place through fiscal year 2000. For Pine Bluff, the cumulative
    amount of construction through fiscal year 2000 is expected to be
    slightly less than funds available. For Pueblo and Blue Grass, the
    amounts that can be placed during fiscal year 2000 will be dependent on
    the selection of the technology to be used at the respective site.
        Question. What are the current costs of maintaining the stockpile?
        Answer. The current estimate for maintaining (storing) the chemical
    stockpile at all storage sites, including ancillary costs of treaty
    compliance and emergency preparedness is approximately $120 million.
        Question. What is the total ``sunk cost'' for the chemical
    demilitarization program through the end of fiscal year 1999?
        Answer. The Army projects that approximately $6.2 billion will be
    obligated for the Chemical Demilitarization Program by the end of
    fiscal year 1999. This figure includes $5.8 billion for the Chemical
    Stockpile Disposal Program and $0.4 billion for the Non-Stockpile
    Chemical Materiel Program.
        Question. No funds are requested for chemical demilitarization
    planning and design costs, which were funded in the past under the
    ``Defense-wide'' account. What is the current unobligated balance of
    previously appropriated funds, by fiscal year, and what is the plan for
    obligating these funds?
        Answer. A total of $15.024 million in planning and design funds
    remains unobligated. This amount includes $1.7 million in fiscal year
    1996 funds, $4.124 million in fiscal year 1997 funds, and $9.2 million
    in fiscal year 1998 funds. These funds will be used to accomplish
    designs required for the Pueblo and Blue Grass construction
    solicitations. The amounts of funds required are indeterminate since
    they are dependent on the technology selected and on the method of
    contracting to be used. Once these facilities are awarded for
    construction, all remaining planning and design funds will be returned
    to the Office of the Secretary of Defense for reprogramming as
    required.
                    Residential Communities Initiative (RCI)
        Question. Describe in some detail the differences between the
    Army's new Request for Qualifications (RFQ) process versus the Request
    for Proposal (RFP) process.
        Answer. Fort Carson is the Army's first pilot site and was
    solicited as a Request for Proposals (RFP). We propose to solicit
    Request for Qualifications (RFQ) for the remaining installations. The
    primary distinction between the approach employed for Carson and the
    approach employed at our remaining test sites is in developer selection
    and project planning. At Fort Carson, in the RFP process, the
    government develops explicit project requirements for execution of the
    project and then selects a developer based on this proposal and
    consideration of other factors such as experience and past performance.
    The RFP solicitation is a costly and time consuming document to
    prepare. At Fort Carson, it took about a year and approximately $1
    million for completion. Under the RFQ approach, the Army also
    communicates its requirements to interested developers and requests
    proposals. The RFQ differs from the RFP, however, in terms of the level
    of detail that is both communicated to and received from developers as
    part of the selection process. In the RFQ process, interested parties
    are required to submit an overall project concept rather than detailed
    technical proposals as is required under the RFP approach at Fort
    Carson. It is on the basis of the developer's overall project concept,
    along with information on the developer's qualifications and price for
    completing the project (treated generally as the developer's expected
    return) that developer selection is made. Perhaps of greater
    significance are the differences between the RFP and RFQ approaches to
    project planning. As noted, under the RFP approach, the Army solicits
    technical proposals from each developer. These proposals respond in
    detail to the specific requirements set forth by the Army for
    completing the work at Fort Carson, to include long-term maintenance
    and management of housing units. By contrast, under the RFQ approach,
    the Army and its selected developer work closely to craft a Community
    Management and Development Plan (CDMP) for the subject installation.
    During this process, the Army will work closely with the Congress and
    our agent consultant, LaSalle Partners, to ensure that the CDMP meets
    the Army's needs and is consistent with congressional intent in the
    MHPI legislation. No commitment to implement the project will be made
    at this stage. Rather, the intent of this stage is to provide the Army
    access to private sector information and expertise. The Army would only
    proceed to implement these projects if the Army and Congress were
    satisfied with the plan.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Question. Why will future projects be solicited under the (RFQ)
    process?
        Answer. The Army believes that there are many advantages to the RFQ
    approach. Specifically, this approach streamlines developer selection
    and project implementation. It maximizes an opportunity for an exchange
    of ideas between the developer and the Army. This approach provides the
    Army flexibility, input and oversight into the project planning
    process, as well as fosters innovation. The RFQ approach also promotes
    competition by lowering the cost of submitting industry proposals. The
    cost of submitting these proposals is lower because development of
    detailed technical plans is deferred until the project planning phase
    of the privatization process. A further attribute of the RFQ process is
    that it is low-risk and low-cost. We can forgo implementation without
    incurring significant costs, as the Army's exposure in the planning
    phase is limited to the payment to the developer for rights to the
    plan. Additionally, the Army retains the discretion to use the plan
    with other privatization developers or to untrack and proceed with a
    traditional MICON project. In the end, we believe use of the RFQ
    approach will result in superior project planning, project
    implementation, and ultimately a better housing product and living
    environment for America's soldiers and their families.
        Question. Does the Army expect to experience fewer developer
    protests under the new RFQ process? If so, why?
        Answer. Yes, we expect to have the same results as the Army's
    Community Family Support Center (CFSC), four privatization RFQ projects
    with no protests, and other agencies like the General Services
    Administration (GSA) and the Navy; few to none.
        Question. What are the minimum qualifications and experience
    requirements for a firm to be considered eligible as a developer for an
    Army housing privatization project under the Army's new RFQ process?
        Answer. In order to be found qualified to undertake the RCI
    program, the Army has established a requirement that the developer in
    the case of a single firm or primary developer or in the case of a team
    submission possess the following minimum experience:
              1. Served as a principal (with ownership responsibility) and
            developer of at least three completed major development
            projects, each of which included a residential component with
            at least 350 units and total development costs in excess of $35
            million.
              2. Taken a major development project, which included a
            residential component of at least 350 units, through a public
            approval, zoning, environmental, and/or other entitlement
            process.
        Question. In the prepared testimony, page 16, it states the ``RFQ
    process is faster, less costly to the developer, and provides more
    flexibility to develop projects that meet the needs of all parties
    concerned.'' What makes this process faster than the RFP process, and
    how much time will be saved as a result?
        Answer. In the RFQ process, the schedule is 16 months to develop
    the solicitation documents, select the developer, and structure and
    implement the Community Development and Management Plan (CDMP).
    Whereas, in the RFP process, the schedule is 24 months to develop the
    solicitation documents, receive proposals, evaluate proposals, select
    the developer, and implement the project. The time savings of RFP over
    RFP are anticipated to be eight months; achieved in the RFQ process
    through joint developer/Government dialogue in developing the CDMP.
    Whereas, in the RFP process the Government develops detailed
    specifications, and then solicits proposals in response to those
    specifications.
        Question. How will it provide more flexibility to develop projects
    that meet the needs of all parties concerned? Why didn't the RFP
    process provide this flexibility?
        Answer. In the RFQ process, the government expresses the goals,
    objectives, and expectations of privatizing and developing residential
    communities for Army soldiers and the families. In response, the
    selected developer takes the lead in developing a proposed Community
    Development and Management Plan (CDMP). This allows the Army a chance
    to work with the developer and to pursue refinements and innovations in
    the CDMP. In the RFP process, the selected proposal is based on fixed
    technical and non-technical requirements, which developer must base the
    proposal without additional dialogue with the government. This
    minimizes innovation opportunities in the proposal by the developer.
                       Illinois: Marseilles Training Area
        Question. Is the fiscal year 2000 appropriation request of
    $2,325,000 for this project adequate to begin meaningful construction?
    Describe in some detail the work to be accomplished in fiscal year 2000
    with this appropriation request.
        Answer. An appropriation of $2.3 million would allow the
    construction of the highest priority building. This project includes
    six (6) buildings and assorted infrastructure. The State of Illinois
    will not allow bidding the total project and awarding only a portion of
    it. Phasing may increase costs. In addition, bid documents are complete
    and will require additional A/E fees to phase. Illinois requires
    separate contractors for mechanical bids, thus phasing would double
    contracts to ten (10).
        Question. The form 1391 states ``Units that do not utilize the
    Marseilles Training Area (MTA) for NCOES and MOS training will lost
    valuable time and degradation of readiness due to the travel time to
    alternate training facilities.'' Where are the alternative training
    facilities located, and how far are they from the MTA?
        Answer. Fort Campbell, KY--400 miles, Fort McCoy, WI--250 miles,
    Camp Atterbury, IN--200 miles, Camp Grayling, MI--400 miles, Camp
    Riley, MN--450 miles.
        Question. How many units or Guard personnel of the Illinois Army
    National Guard currently utilize the alternate training facilities?
        Answer. All units of the Illinois Army National Guard currently
    utilize the alternate training facilities which equates to over 10,000
    soldiers.
                           North Carolina: Charlotte
        Question. Do the State of North Carolina statutes prohibit the
    award of Army National Guard Contracts if full funding of the project
    cost is not available? If so, how does the Army National Guard plan to
    execute these projects in fiscal year 2000?
        Answer. Yes, State statutes so prohibit, and North Carolina will
    not be able to award their contracts if full funding is not available.
    However, if informal reprogramming is based on the full authorization
    or if Congress approved formal reprogramming for the readiness center
    and the organizational maintenance shop, then these projects could be
    awarded in fiscal year 2000.
        Question. Will the Army National Guard use reprogramming
    authorities to shift funds between these two projects? What benefits
    may be derived by shifting funds between these two projects?
        Answer. Formal reprogramming is an option that the Army National
    Guard is reviewing. If approved we would have the funds to support the
    readiness center and the organizational maintenance shop.
                  Orlando, FL, Land Acquisition--Army Reserve
        Question. By what date must this land acquisition be accomplished
    in order to execute the Joint construction project programmed in fiscal
    year 2001?
        Answer. The Army Reserve has secured a $60,000 option to purchase
    the land necessary to execute the Joint project. This action was
    necessitated by the need to expedite the basis for design--the
    necessary geotectnical, environmental, and siting actions--for the
    project. As the option to purchase the land expires 31 December 1999,
    acquisition should be completed as soon as possible in fiscal 2000.
        Question. Describe in some detail the three U.S. Government owned
    facilities to be disposed of upon completion of this land acquisition.
        Answer. The Army Reserve and Navy Reserve have plans to dispose of
    the following facilities once the Joint project is completed:
              (a) An $85,000/year leased facility in Kissimmee, Florida.
            The units occupying the facility will be moved to the Joint
            facility upon completion of the project and lease will not be
            renewed.
              (b) A former Strategic Air Command alert facility at the
            Orlando International Airport. This building is currently used
            for administration space.
              (c) A US Naval Reserve structure on land leased from the city
            of Orlando in the Herndon Annex Area, northeast of the City.
              (d) An Aviation Support Facility, avionics shop, and parking
            near the Orlando International Airport. This facility is a
            former US Air Force defueling hanger and World War II wood
            administration facility converted for USAR use.
        Question. Why isn't this project incrementally funded like all
    other fiscal year 2000 Army Reserve projects?
        Answer. Land acquisition is different from construction. There are
    no phases or portions that are acquired. Negotiations to purchase land
    are generally contingent upon full payment of the purchase price at the
    closing of the land acquisition. The low dollar amount of this purchase
    would yield insignificant savings that could be applied to other
    projects if this purchase were incrementally funded. Additionally, the
    Army Reserve has purchased a $60,000 option to purchase this land; the
    option expires 31 December 1999. Failure to fully fund the land
    acquisition would cost the Army Reserve additional dollars for no
    benefit gained.
    Fort Dix, New Jersey, Centralized Tactical Vehicle Wash Facility--Army
                                    Reserve
        Question. Describe the economies that should result from the
    consolidation of tactical vehicle wash operations in a central
    facility.
        Answer. Currently Ft Dix employs six civilians that operate the
    four wash racks scattered across post at various locations. The
    proposed centralized wash facility will require three civilian
    personnel, resulting in a more efficient use of personnel. Contrary to
    the current wash facilities, the proposed centralized wash facility
    will be a closed system, meaning that all water, contaminants, etc.,
    will be cleaned and recycled within the system. Any discharge to the
    on-post sewer system will be environmentally clean. A similar system at
    Ft McCoy, WI, has resulted in savings of approximately 500,000 gallons
    of water daily during peak season, lowering operating costs and
    providing an environmentally clean solution.
                    Fort Hood, Texas, AMSA/ECS--Army Reserve
        Question. What is the payback period for this project, in avoided
    lease payments, shipping costs, and related transportation costs?
        Answer. The lease in Waco, Texas, for the Equipment Concentration
    Site is currently $309,000 annually. That lease expires in April 2002;
    if renewed the estimated lease cost will be approximately $360,000
    annually. Current operating costs for transportation and man-hours to/
    from Ft Hood-Waco is approximately $77,000 annually. Total savings from
    this project would be approximately $400,000 annually, meaning a
    payback period of seven (7) years.
                    Fort Hood, Texas, AMSA/ECS--Army Reserve
        Question. What is the estimate of savings in design costs by
    accomplishing this project using a standard or definitive design?
        Answer. To date the USAR has seen some savings in total design
    costs using standard designs due to a variety of factors that vary from
    project to project. Due to the low design costs for this project,
    projected savings associated with the design are insignificant. The
    site improvement costs for the project are higher than on other
    projects. An Equipment Concentration Site (ECS) is land intensive, thus
    requiring significant site improvement costs. The USAR has seen a
    slight reduction in design fees within the 5 foot envelope of the
    building.

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

        [Clerk's note.--Questions for the Record submitted by Congressman
    Tiahrt.]
                            Project Labor Agreements
        Question. Are you aware of the use of any labor agreements on Army
    Corps of Engineers contracts by the COE or any of its prime contractors
    contracted by the COE?
        Answer. The Corps of Engineers has not employed Project Labor
    Agreements of the type contemplated by President Clinton's 5 June 1997
    Memorandum, Use of Project Labor Agreements for Federal Construction
    Projects.
        Question. Additionally, please provide details on the cost and
    competitive effects of any such PLAs arising or potentially arising on
    those projects.
              The effect on the number of bidders, including the basis for
            that conclusion;
              The effect on the bid amount, including the basis for that
            conclusion;
              The impact/effect on small and emerging businesses in the
            locality of the worksite, particularly their ability to perform
            the work using their own workforce, including the basis for
            that conclusion.
        Answer. While, implementing guidance with respect to the 5 June
    1997 Memorandum has not yet been issued by the Office of Federal
    Procurement Policy, the Corps of Engineers is aware that many of the
    concerns raised by this question were also raised by the General
    Accounting Office in their 29 May 1998 Report on Project Labor
    Agreements. (B-277866).
                                              Thursday, March 11, 1999.

                             DEPARTMENT OF THE NAVY

                                   WITNESSES

    HON. ROBERT B. PIRIE, ASSISTANT SECRETARY OF THE NAVY (INSTALLATIONS
        AND ENVIRONMENT)
    REAR ADMIRAL LOUIS M. SMITH, COMMANDER, NAVAL FACILITIES ENGINEERING
        COMMAND

                           Statement of the Chairman

        Mr. Hobson. This hearing will focus on the Navy military
    construction program, including family housing, base
    realignment and closure, and the Reserves. Our witness today is
    Mr. Robert Pirie, Assistant Secretary for the Navy for
    Installations and Environment.
        Mr. Secretary, it is a pleasure to have you appear before
    the Subcommittee again this year. We look forward to your
    testimony and a good hearing on the construction program for
    the Navy and the Marine Corps.
        We are concerned with the overall reduction in funding, as
    you might have heard before. The budget request is down $3.2
    billion, or 37 percent, from last year's enacted level. The
    Navy's request is down $924 million, or 38 percent. These
    reductions are mainly due to the Department's use of an
    incremental-funding concept. Some people would call it other
    things. I will not get into that. I have done so before. You
    have already heard what I characterized it as before. Some
    people call it creative financing. Some people call it other
    things. It presents us with a very difficult challenge this
    year, and we have got to work closer than ever as a result of
    this.
        Another concern is the direction we are heading with the
    military housing privatization issue, and I am going to ask one
    question here, and then I am going to turn it over to Mr.
    Olver. I do not want you to answer this question now, and I do
    not want you to be thinking about it while he talks because I
    want you to listen to him, too, but maybe some of your staff
    out there might want to think about this.
        The Family Housing Privatization Initiative was originally
    intended to be a supplement to the traditional housing program.
    We are seeing more and more emphasis on this program, which is
    still supposed to be in a pilot-stage. For Fiscal Year 2000,
    the Navy did not request a single, traditional, family-housing
    project and only two construction-improvement projects in the
    continental United States.
        Additionally, the Navy currently plans on privatizing 78
    percent of its housing by 2003 and 2004. Once again, this is a
    ``pilot'' program, and the original intent of the legislation
    was just that, to be a supplement to the traditional housing
    program.
        Explain at some point in this hearing why the Navy is
    placing such a high emphasis on this initiative when it has yet
    to complete a single project under the current statutory
    authority--a single project anywhere under this pilot program,
    and you want to do 10,000 houses in one location, sir. So, with
    that, Mr. Olver.

                    Statement of the Honorable John W. Olver

        Mr. Olver. Thank you, Mr. Chairman. I think you are
    beginning to know me too well or something like that from the
    previous comments.
        Anyway, Mr. Secretary, we are very privileged to have you
    here to have someone of your distinguished military and
    civilian record here to testify before us today. I think all
    the members of this subcommittee are interested, I particularly
    perhaps, in the continuing efforts at housing and
    privatization, but I am also interested in improving the shore-
    side facilities. I am particularly interested in hearing how
    that kind of fits in with the administration's request, which I
    assume you support, for additional base closures and the need
    for those in the evolving military context.
        So we want to work together with you in approving the
    facilities where the men and women of the Navy and Marine Corps
    work and train and live, and I am very interested in hearing
    your testimony.
        Mr. Pirie. Thank you, sir. Mr. Chairman, do I have the
    ball?
        Mr. Hobson. It is all yours, sir.
        Mr. Pirie. Thank you.
        Mr. Hobson. We may whack it back at you, but you have got
    it right now. Did you bring your pads?
        Mr. Pirie. I have a longer statement, which with your
    permission, I will submit for the record----
        Mr. Hobson. Sure.
        Mr. Pirie [continuing]. And just make a few remarks in
    summary.
        [Prepared statement of Hon. Robert B. Pirie, Jr.]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                       Statement of Hon. Robert B. Pirie

        Mr. Pirie. I am pleased to appear this morning, Mr.
    Chairman, to discuss the Department of the Navy's Fiscal Year
    2000 budget for shore construction and military construction.
        In many ways the budget we are presenting this year is
    better than last year's. We project the backlog of maintenance
    and repair to grow more slowly as a result of real-property
    maintenance and demolition programs. We have a more robust
    MILCON proposal, with numerous piers, compliance projects, and
    quality-of-life projects.
        Our BRAC request is down, but that reflects the fact that
    we are coming to the end of four rounds of BRAC, and on the
    whole I believe that this year's budget is a good one, and we
    hope that you will continue to support us as you have in the
    past.
        I recognize the concern the administration's request for
    advanced appropriations may have caused. I can only refer to
    what has been said by Dr. Hamre and Mr. Lynn. This is a one-
    time expedient to allow the inclusion of high-priority
    readiness and modernization programs. It was undesirable but
    unavoidable. We expect to be able to execute the projects we
    have requested without undue delay or expense.
        Mr. Hobson. We need to put quotes around the last part.
        Mr. Pirie. Yes, sir.
        Mr. Hobson. Okay. Go ahead.
        Mr. Pirie. With respect to military family housing, the
    projects for public-private ventures we propose are not subject
    to the advanced appropriations. We expect to proceed with them
    in due course. For Fiscal Year 2000 we anticipate five projects
    affecting 2,196 homes. We currently have five other projects
    which may affect over 15,000 homes awaiting resolution of your
    concerns, Mr. Chairman, and the questions you have raised, and
    we hope that we will be able to resolve those and proceed with
    the projects soon.
        I would like to underscore that our PPV program is not
    about saving money and not about getting out of the housing
    business. It is about getting better, more affordable housing
    for our sailors and Marines and getting it sooner than we could
    using past practices. The Committee has been supportive of us
    in the past, and I hope that you will continue to do that, Mr.
    Chairman, particularly now that we are on a point of making
    some significant progress in this program, which, as I said
    last year, was exceedingly hard to get started.
        Mr. Hobson. When you turned on the spigot, you turned on
    the flood gates.
        Mr. Pirie. When we finally broke the logjam, everything
    collided at once, and I appreciate the concern it causes you.
        In the area of BRAC we are, as I said, approaching the end
    of the first four rounds. We have closed 165 out of 178
    affected facilities. It is important to know that closure is
    the point where significant savings begin to accrue. We still
    have major hurdles to clear in cleanup and conveyance of
    property. Cleanup is proceeding reasonably well, as you may
    note by reference to the table on page 12 of my full testimony.
        We have not delayed any phase of BRAC action because of
    cleanup. Conveyance is more problematical. In many cases
    communities are not willing or able to take title of the
    property when we are ready to turn it over. We are pursuing an
    aggressive policy of interim leasing in order to allow
    productive reuse of the property while all of the myriad
    details that go with conveyance are accommodated.
        We prefer to hand over the property earlier rather than
    later in this process. In this, as in other areas of base
    closure, we may be able to improve over the first four rounds,
    but I believe we should go forward, as is now requested by the
    administration. Thank you, Mr. Chairman.
        Mr. Hobson. Admiral, do you have anything else?
        RADM Smith. No, thank you, sir.
        Mr. Hobson. You do not want to get into this fray?
        RADM Smith. I think we will be in it soon enough, sir.
        Mr. Hobson. Well----
        Mr. Olver. Admiral Smith is here to answer all the hard
    questions.

                          family housing privatization

        Mr. Hobson. I asked one in the beginning there. Does
    somebody want to answer the question that I asked about the
    housing?
        Mr. Pirie. Well, let me try to take it on.
        Mr. Hobson. But I think we tried to forewarn you where you
    were going to----
        Mr. Pirie. Oh, yes. We do not feel sandbagged. Let me take
    it on from my perspective. I have said part of it already,
    which is that it took a long time to get all of the
    bureaucratic wickets that had to be negotiated in the
    Department lined up to start really producing projects that
    were advanced enough to bring to you for screening of the
    concept.
        So, unfortunately, they all arrived in a lump. As to
    whether this is a pilot project or not, in my recollection of
    the testimony that Secretary of Defense Perry and Assistant
    Secretary of Defense Gottbaum gave at the time, was that this
    was a request for new tools to the tool bag that would allow us
    to solve a problem that would take 10 years by MILCON and
    conventional means, in three years. And I think they laid that
    out perfectly clearly in the original testimony.
        Mr. Hobson. But that was not the original law that was
    written. What they decide and what the law is----
        Mr. Pirie. I understand.
        Mr. Hobson. Everybody is running to get under the wire, is
    what it looks like.
        Mr. Pirie. We are actually running to produce some projects
    so that we can at least justify the fact that we had them on
    authority in the first place. One of the complaints that we
    have heard from elsewhere--at least on this side of the river
    is that we have not done anything.
        Mr. Hobson. You took that to heart, sir. I understand that.
        Mr. Pirie. Now, we do have two projects, as you know, under
    different authorities, which are working reasonably well.
        Mr. Hobson. Well, there is some discussion over that, sir,
    because the one is not housing the kind of people that it was
    to be built for, and I think the Navy readily admits that.
        Mr. Pirie. Well, I think that buying down the rates will
    help us to rectify that as well, Mr. Chairman.
        Mr. Hobson. Yes, but to buy down the rates was not part of
    the original deal. So, in effect, this is going to cost us more
    money, and that is one of the concerns I have in all of this,
    is that, you know, you are talking about making a 50-year deal.
    I am an old real estate man; I talk about deals, and so I am
    going to talk about deals. These are 50-year deals, real estate
    deals that you are making.
        My exposure to the military in making real estate deals is
    that it has not been done very well. If you want me to list
    some in other services, I will--I do not want to really get
    into that now, but I will list them. We all know one where a
    contract had to be redone. There are other types of problems.
    They do not turn out to be what they are.
        In the case of San Diego, for example, we have put a lot of
    money into housing there. The proposal now is to give that away
    plus $66 million to get this additional housing. I want to look
    at that before I sign off on giving away all the money that
    this country has put into housing, and some of it I am going to
    go out and look at because I have not seen it, but I am told it
    is some of the better housing.
        Now, up the road I understand we have Marines living in
    quonset huts that were built in 1940-something or before. I do
    not think that is quite fair, to be frank with you, sir,
    although the Marine enlisted sergeant major said yesterday,
    ``by God, sir, we will do it,'' and they will. You can give the
    Marines nothing, and they are still going to do it. I
    understand that, but it is not right, and it is not fair.
        And I just want you to know, I am going to look at this
    real hard because I have a hard time giving away this country's
    money when we put a ton of money in there, and then $66
    million, when I know you are going to get additional housing.
    But I want to look at those numbers before I sign off on this
    deal, and I want to look at what we get, why we are doing it,
    and if we all feel as a Committee that it is the right thing to
    do.
        And we are going to look at these a little harder, and we
    have got some other people looking at them to make sure that--
    if you are making a 10-year deal, if you are giving it all
    away, I have got a problem; but on a 10-year lease, I do not
    have a lot of problems. I understand yours. You basically
    bought down your guarantee in the beginning by giving them all
    the stuff and the $66 million, and then they are in San Diego,
    so they do not need a guarantee.
        But I am also concerned in the one deal I have looked at
    that the Army has got, which they did not like, but they are
    now looking at it again.
        But it is a really simple deal. We do not put any money
    into it up front. They build better housing than we would
    normally ask them to build, and if we walk on the base, it is
    there, and they build it with private money.
        Those kinds of arrangements, I think, are really good for
    the Government because all we have, then, is a land lease at
    the time, which, you know, if we do not need any more, we are
    still going to get paid on the land. It is still our land.
        So I do not have as much trouble with that kind of thing,
    but when we are talking about giving all of the property that
    we have put money into plus $66 million, then entering into a
    lease, even though we do not--as I understand it, we do not
    guarantee it because it is San Diego, but there are other
    places where we not only do all that, but we guarantee it.
        So I just wanted you to know, I have tried to put everybody
    on notice that I am looking at this.
        Mr. Pirie. Well, not only do we not object, but we welcome
    any----
        Smith. Absolutely.
        Mr. Pirie [continuing]. Ideas that you have, and if we are
    about to make a mistake, we would appreciate your telling us
    about it because we will not, you know.
        Mr. Hobson. Well, I think, for example, the Army did a
    really smart thing finally. They went out, and they hired a
    group from the outside who are real estate experts, LaSalle
    Partners, and they brought them in to be their advocate when
    they negotiate with the developer, because they think like a
    developer.
        You know, with all due respect, Rear Admiral Smith thinks
    like a war fighter.
        Mr. Pirie. It is not an expertise we automatically build
    into Seabees. Yes, sir. That is right.
        Mr. Hobson. And so I think it is unfair, you know, you are
    going to fight with one arm off because those guys know how to
    get you. I know because I have--I mean, I do not deal with the
    Government because it is--I would not make money in any other
    way--and be better off.
        But the people that are in this business, they know how to
    make this deal so it is really a good deal for them, and the
    person last in line is the Government. An example of that is
    some of the deals we have done that have been done before, not
    necessarily yours, but the one they had to redo and a couple of
    others.
        So, with that, I think you have got the drift of where I am
    going with this.
        Mr. Pirie. Yes, sir.
        Mr. Hobson. I had the mayor of San Diego in complaining
    that I was holding stuff up and all this. Well, I do not care.
    We are going to look at it, and we are going to do our due
    diligence before we sign off.
        Mr. Pirie. We, in fact, are revising the San Diego
    proposal. We will have another revised proposal for you pretty
    soon.
        Mr. Hobson. Okay.
        Mr. Smith. It will be substantially----
        Mr. Hobson. Would anybody object if I allow our guest here
    to ask you some questions?
        Mr. Hoyer. Actually, Mr. Chairman, I would appreciate--I do
    not know whether--I do not know whether anybody objected. I
    will wait. I do not have a question. I share the chairman's
    concern, and I want to say that I know Mr. Olver, the ranking
    member on this subcommittee, shares this view, that Mr. Hobson
    being the chairman of this committee is a great benefit, I
    think, for the services and for the Congress in terms of his
    expertise and his application.
        He and I have talked about a project that he referenced up
    at Fort Meade in Anne Arundel County, which is actually Ben
    Gordon's district, but obviously my district surrounds it. And
    it is a win-win for everybody, I think, kind of deal and I do
    not mind the term ``deal'' personally. Particularly good deals,
    I like.
        But I want to say that, Mr. Chairman, I know you know this,
    but Secretary Pirie has been a delight to work with over the
    years, and I am very pleased that he did stay, contrary to what
    we thought was going to be the case, and I think his response
    to your question, if we are not doing it right, and you point
    it out, and we will change it.
        And I think that is the kind of attitude he has always
    displayed when I have dealt with him, and I think a very
    positive thing. And I appreciate Mr. Olver and Mr. Chairman,
    yourself, allowing me to participate in this hearing. I am
    learning a little bit more about what is going on.
        Mr. Hobson. John.
        Mr. Olver. Thank you. On this round I am going to be rather
    short because I think that----
        Mr. Hobson. We are going to have a vote at about ten-
    thirty.
        Mr. Olver. The chairman has already indicated in basic form
    the concern that we have in the area of privatization. And I
    share his concerns, I think we all do in various degrees. We
    have had a little bit of success in one of the earlier versions
    of the housing privatization, but it only came to a few hundred
    units of housing in the case of the Navy, and as the chairman
    had said, there has been no project taken to completion under
    the new authorization, which is almost ready to expire. And yet
    we have got a proposal for something like 40,000, 41,000, I
    think it is, units of housing in the next three years to go
    into privatization.
        Well, that is a growth rate that is a lot more
    characteristic of Internet companies, and I think that Internet
    companies, there is a certain amount of risk in that and a
    certain amount of wonderment in it, and I am not the least bit
    convinced that you are ready to do that. And I am, obviously,
    interested in, and will sometimes want to know exactly what
    goes behind a project that the gentleman from Maryland has
    mentioned, where one seems not to cost very much. It seems not
    to be of much interest to the Navy, so those are my comments on
    this area which you can respond to if you wish.
        Mr. Pirie. I do not think so.
        Mr. Olver. You do not think so. Okay.
        Mr. Pirie. I am, you know, looking for a hook, but we will
    certainly look to your concerns, and we want to resolve them,
    and we will work with you, I think, to make this as plain a
    case for what we propose as we can.
        Mr. Hobson. We are going to try to observe the five-minute
    rule among the members. And, Mr. Farr, then we will take people
    in the order in which they arrived. Mr. Farr, you are up first.

                     base realignment and Closure--Cleanup

        Mr. Farr. Well thank you very much. I have three questions,
    and I will try to get them under the five minutes. First of
    all, what I do not understand is when we leave our military
    bases--we are talking about quality of life and all the support
    systems we are giving to our troops, then when we close our
    bases we find out how dirty they are.
        Why are our bases so dirty? You have got in here that your
    Fiscal Year 2000 BRAC program is nearly all environmental
    cleanup. You are asking for $382 million for cleanup. This is
    44 percent above the Fiscal Year 1999 level. Why are our bases
    so dirty?
        Mr. Pirie. I think that I would not characterize them as
    being so dirty, but the fact that we have a BRAC and we have to
    turn them over means that you have to get on with the cleanup
    right now rather than spread it out over a number of years. The
    kinds of cleanups we are talking about on bases right now are
    mostly things like underground storage tanks, petroleum that is
    spilled into the ground and--
        Mr. Hobson. Well, a lot of them are old things, and we did
    things differently 50 years ago, or a lot of these bases go
    back to before that, Wright-Patterson has got all kinds of
    stuff like that.
        Mr. Farr. But, Mr. Chairman, a lot of it is because when
    the military builds, they just build from Washington; they do
    not build from local community standards, and some of those
    standards are tougher than Federal standards would require them
    to do it. Let us move on a little bit.

                           real property maintenance

        The other thing that you are talking about is the real
    property maintenance request of $1.5 billion. Why cannot more
    of the real property maintenance and the base public works and
    other municipal services be under local contract? Why not
    contract the municipalities to provide those services?
        Mr. Pirie. In many cases maintenance does use local
    contractors.
        RADM Smith. Sure, sure.
        Mr. Farr. Well, I do not think the military is doing enough
    of it. I mean, at the Naval Postgraduate School in Monterey,
    you have got a fire department with 23 people to essentially
    protect the one block, one building. You know, the Federal
    standards are different than the OSHA standards, at least as
    they are interpreted.
        If you go to a fire with Federal, you have got to have four
    people in the truck. The OSHA standards say when you enter a
    burning building you have got to have four people there. It
    does not say they all have to ride on the same vehicle. But we
    have different standards at the Federal level than they do at
    the state.
        But I think that we ought be doing more cost cutting by
    contracting out base operations with the local communities.
    Frankly, Navy has been ahead of the other services, and I
    appreciate that, but I still thing you could do more.

                                   education

        Lastly, and this is sort of a philosophical question that I
    have, and particularly to you, Mr. Pirie, because you have such
    an incredible education: the Naval Academy, a Rhodes scholar,
    Oxford University. You understand how a nuclear submarine
    works, which requires a whole cadre of education that other
    people do not get. It seems to me that where we are going in
    the world that the services are really underevaluating military
    educational training,
        And the Navy has the only post-graduate school in the
    services, and yet it seems to be not getting much attention.
    The priority things, there is no investment going into it. You
    have got an incredible engineering department there and yet
    lacking in investment. I just wondered what your feelings are.
    With your background in education, where is the Navy investing
    in its education?
        Mr. Pirie. Well, I think, as you know, these things come
    and go. They have a lot to do with whether you are downsizing,
    whether you are expanding, whether you are in a steady state.
    Some of the military departments in the past have viewed
    advanced education as being something that can be conferred on
    people who do not have more demanding duties. And I must say, I
    resonate to your view, as I take it, that the Naval Post-
    graduate School is a gem, and a rare asset to the country.
        That said, I do not think they have been getting an unfair
    shake in military construction over the past few years. It
    could be better, but----
        Mr. Farr. Their science lab needs beefing up. There is a
    lot of----
        Mr. Pirie. All of the installations in the country, I
    think, can find one or two things that could use beefing up. I
    wish we could do more. I wish we could do more generally. As
    you know, military construction tends to come last in line,
    particularly in a downsizing environment when you have trouble
    buying the ships and aircraft that we need, trouble supporting
    the troops in the way we really ought to support the troops,
    trouble maintaining their readiness.
        Mr. Farr. My philosophy, then--I am learning a lot, and I
    hope this Committee is--but I think we could do a lot more in
    saving money on maintaining our facilities and our housing.
    Actually, we ought to do more of our contracting out with
    housing authorities or joint venture with them. I think we
    ought to be a partner in these housing projects. We ought not
    to just try to be in the housing business. That is not what the
    military is designed for. We should let other people who know
    how to do that do it well.
        But one thing that I am keen on is I do not think we ought
    to contract out the seed corn of intellectual capability of the
    military. There is a discussion that we just ought to send our
    officers off to the civilian schools, and I just do not think
    that you are going to get the Esprit de Corps. You are
    certainly not going to get the mixture with the IMET program
    and extended IMET that is so valuable to our military
    readiness.
        So the intellectual capacity, I think, has to be
    maintained, and we need, the MILCON subcommittee needs, to make
    sure that the ability to keep our servicemen and women well
    educated, to keep them brighter than the rest of the world, and
    the facilities to do that are modern and the technology is
    there for them to do it. And I am going to be seeking ways on
    how we can extend the dollars by cost savings on base
    operations and putting that into education.
        Mr. Hobson. He is doing it for the Navy, and I am doing it
    for the Air Force, because I protected AFIT when the previous
    secretary wanted to send everybody off. And I will tell you,
    the other thing you need to look at on cost, you will find that
    there is a study that shows that the cost factors of sending,
    if you use apples to apples and do not play around with it,
    that training people at AFIT was not more expensive than
    sending them out when you add all the costs up when they go
    out, and a lot of people were playing games. And finally I got
    the right study done. I had the right language to get it done
    in the appropriate way.
        Mr. Pirie. This is part of a long, extended discussion
    about whether it is worth it to the country to have places like
    the PG School, like the Naval Academy and West Point, like the
    University of the Health Sciences. And it is pretty hard for
    the budgeteers sometimes to see the point.
        But the fact is that they add in perhaps intangible ways
    sometimes to the quality and the capability of the force
    ultimately. And you are investing in people for the long run in
    these places, for 20 and 30 years, and when you get 20 and 30
    years out of an electrical engineer or someone like that, that
    is a pretty good return on the buck.
        Mr. Hobson. One of the things you are facing, and I do not
    want to dominate this, but I want to say, for one,
    congratulations to you on something, but I also want to say,
    one of the things that we are facing in the Air Force and, I
    assume, the Navy, is that because of the way some of the Civil
    Service is set up and some of the other things, that we are
    going to have a brain drain because a lot of people are
    retiring, and we do not have the younger people in place
    because of the way you had to do things in the downsizing.
        And that is going to be a real problem because as they have
    shifted science and technology stuff around, we are going to
    have some problems maintaining the labs and the things that we
    had at all of the services.
        Mr. Pirie. In a lot of our shipyards we have difficulty in
    maintaining apprenticeship programs because each wave of
    downsizing hits the premises and so forth.
        Mr. Hobson. Absolutely.
        Mr. Farr. And then when more senior people retire in a
    wave, you do not have anything to fill in behind. So----
        Mr. Hobson. It is a real problem.
        Mr. Pirie. Yes, sir.
        Mr. Hobson. I am going to go to Mr. Boyd, but I want to say
    one congratulatory note to you, because sometimes all you hear
    is us complaining. But some of us were down--Mr. Tiahrt and Mr.
    Farr and I were down in Honduras over the weekend, and the
    Seabees, everything we heard, they were first class, down
    there, did their job, and I think we would all agree that they
    were a real asset to have down there.
        Mr. Pirie. Thank you very much.
        Mr. Hobson. We want to congratulate you when you do a good
    job.
        RADM Smith. Thank you, sir.
        Mr. Hobson. We ought to when we find something else, but
    right now those people were very thankful for what the Seabees
    did, and so are the other services, frankly, that we have
    talked about.
        RADM Smith. Thank you, sir.
        Mr. Boyd. Thank you, Mr. Chairman. Good morning. It is nice
    to have a chance to meet you all. I am a new member of the
    Committee. I know that the chairman--and I apologize for being
    late--because I know the chairman always talks about advanced
    appropriations funding, and I am sure that was done early in
    the meeting.
        But I just want you to know that there are other members
    that now are beginning to feel uneasy and squeezed as we see
    this whole budget issue unfolding. We know what happened in the
    Senate with the personnel markup over there. We now are having
    this philosophical debate in Congress about the discretionary
    funding caps, and it appears we may be headed down the road of
    leaving those caps in place, which I think just creates all
    kinds of problems. I know that it very well, probably will
    bring up this advanced funding idea again, if you care to
    comment on that.

                        florida--coastal systems station

        But, secondly, Coastal Systems Station in North Florida,
    since the last round of BRAC has become your major mine warfare
    center, and several additional responsibilities and new units
    have been transferred there over the years. A lot of those
    units are in trailers, temporary housing, and I know this must
    be a trend. There must be other examples of this around the
    country. Do you all have any kind of plan or timetable for
    fixing that in terms of the trailers?
        Mr. Pirie. I think it is the administrative space in
    Kissimmee. They have got nice, new BQs there.
        RADM Smith. Yes, sir. And it is the administrative action,
    and that is one of the things that is come out of BRAC, is we
    completed really the first part of BRAC, which is realigning
    and closing activities, and move into the second part, which is
    cleanup and disposing, which is also, I am sure, one of the
    reasons you see more money in cleanup at this point in BRAC, is
    that we are finding, okay, now what is the real loading on
    these bases? How are we going to satisfy that? There are some
    new BQs going.
        I know there are plans, and I would rather take that than
    trust my rapidly aging memory to remember exactly where in the
    program that is, but I know there are plans to get them out of
    those trailers. And I will tell you, as a public works officer,
    I have always hated trailers.
        Mr. Boyd. So that is not a problem that is just indigenous
    to CSS. I am sure it exists in other places around the country.
        RADM Smith. That is exactly right, sir. And we are
    resolving those as we get in there, and sometimes it is an
    intricate minuet on the base as we regionalize and consolidate,
    people move out of here, and someone else moves in there.
        Mr. Boyd. Right. But there is a plan.
        RADM Smith. Yes, sir. Yes, sir.
        Mr. Boyd. Okay. That is really all I have unless you have
    any comments different from what you shared earlier in the
    meeting that I missed about the caps and the funding problems.

                          base realignment and closure

        Mr. Hobson. You know, he brings up something that is of
    concern to all of us, I think, and that as we look to whatever
    happens in the BRAC, whether it is through the Congress or the
    defense secretary or whatever happens, I hope you all are not
    asking or putting a bunch of money into something that is going
    to be on your list so that--you can ask for it.
        But you had better have a way of backing out of it before
    you get to it because if we find out that we are putting a
    whole bunch of money into stuff that there is some paper back
    in there that says this is going to be one of them, and we take
    this precious money which has been cut, and we go and put this
    stuff in there, and then I am still going to--we are still
    going to be around here. You guys may be all gone, but, you
    know, you do not know this, and I know it does not make any
    difference to him, but I called up a general after he retired,
    because I told him I was going to do it on the BRAC. And I
    said, sir, you know it is been two years now, and that manning
    rule at Wright-Patterson Air Force Base that you said was going
    to be changed, they were going to save all of these million
    dollars that you could show me how my numbers are wrong, I said
    I want you to know, sir--it took me a little time to find him--
    it has never been changed, sir.
        And I know you are retired, and I told you you were going
    to be retired, but I am still living with what you did--tried
    to do, and fortunately I won. But I want you to know that it
    did not happen. And that is the kind of thing I worry about.
        For example, we held a building at AFIT for a number of
    years until it was determined that AFIT was going to stay open,
    and we did some other things like that. So I just hope you all
    are looking around at things like that. You can put things on
    hold. They may not work out. I would rather work out that the
    base stays open and you go ahead with it than you spend money
    and we close it and then we all look like--we look very
    foolish, all of us collectively.
        You are a smart guy. You guys are smart. You do not get to
    these positions without that. So I am just sending messages on
    that. There are other ears that listen to that, too.
        Mr. Boyd. Mr. Chairman, as a followup to that, these guys
    cannot mind-read. There is no list. We have been told that on
    numerous occasions. So we obviously----
        Mr. Hobson. Well, if you believe that, you believe in the
    tooth fairy.
        Mr. Pirie. Mr. Chairman, there is no list.
        Mr. Hobson. Let me put it this way. There are thoughts, and
    there are people who have ideas of things that will survive and
    will not survive, and there are discussions that go on. Maybe
    nobody has told you, has totally written it down somewhere
    where you can get your hands on it, but there are people who
    have thought about, and there are people thinking about, what
    our war capabilities have to be in the future, what types of
    facilities that we will have to have to fight the type of
    situation we are going to have in the future.
        Now, that may not come down to ``this is the BRAC list,''
    but they know what those capabilities are, where they are, and
    what ones they want to keep. Maybe the thing would be better to
    say, ``what are they going to keep.'' rather than ``what are
    they going to get rid of,'' because I think there is a good
    understanding of what we are going to keep. Let me give you an
    example.
        In Europe there will only be two Air Force bases in
    Germany. There will be the stuff that we are doing down in
    Aviano, and there will be, I think, two in England. That is it.
    That is where we are now. We know where we are going to be.
        I do not know the Navy stuff as well. I do not have any
    Navy bases in my district. I need to get the time.
        Mr. Pirie. Mr. Chairman, may I suggest that there is a
    danger . . . that is the converse of putting stuff into a base
    that is then closed . . . and that is starving a base on the
    assumption that it closes, and then it does not close.
        RADM Smith. Absolutely, absolutely.
        Mr. Pirie. And I am aware of cases now far enough in the
    past nobody here was involved in it where ``everybody knew''
    this place was going to close, and then it did not, and we were
    stuck with a miserable circumstance of then trying to live with
    a base that we had starved.
        Mr. Hobson. Did you come back and ask for MILCON on that?
        Mr. Boyd. Not more than one minute to finish up on this. It
    seems to me it should not be that difficult. It is not rocket
    science. I think in this area we are not anywhere in the
    maintenance or replacement of facilities doing more than 10
    percent of what we ought to be doing, not anywhere, in any of
    the services, as far as I can see.
        And with that kind of level being done in a year, we ought
    to be able to expect a very high degree of likelihood that the
    things that you do propose and ask under are going to be the
    ones that you can see are going to be critical in that long
    haul. I have other questions on this, but----

                                quality of life

        Mr. Tiahrt. I am a little concerned about the quality of
    life. As you know, we have people who are deployed too long,
    and it is hard on families, and because of that we have a lot
    of people who are leaving the service, and so we have
    recruiting problems.
        I think there are some things that we can do to try to keep
    out of more hot spots around the globe, if that is possible,
    but to try to improve the quality of life, at least for those
    who do decide to serve their country over a long period of
    time. And I know when they are deployed 18 months, and I travel
    on my job, and I know how difficult that is for my wife--she is
    at times a single parent, and that is one of the toughest jobs
    in America today, is a single parent.
        So I hope that we can do something to try to improve the
    qualities of life because it has a direct impact on the people
    in our services. And one of the things, of course, is again,
    that we can do to improve the quality of life is through our
    housing at our bases. And one of the things we have work we
    have worked with is privatization.

                             housing privatization

        Privatization has been, I think a good initiative, but
    there are a few things that I am curious about. One is, who
    owns these houses that are privatized? Is it the service or
    private investors, or is it a mixture of both? And if it is a
    good deal economically, why have we transferred about $41
    million from the family housing? Is it a good deal? Who owns
    these houses? Do you think it is going to be a worthwhile
    investment?
        Mr. Pirie. Well, we think it is a good deal because it does
    two things. It brings in a robust and efficient U.S. housing
    industry to actually build and manage our housing; and,
    secondly, it leverages private capital. They bring their
    capital into the deal. It depends upon the structure of the
    deal who actually owns the house, whether we are in a long-term
    lease situation or whether they actually own a house or whether
    it is on their property or our property. There are a huge
    variety of potential deals.
        But essentially what we are aiming to get is a situation in
    which we tap an industry that manages a house for $7,000 a year
    that would cost us, using our mechanisms, the Federal
    Acquisition Regulations and so forth, $15,000 a year. We are
    trying to make our money go further with this device. That is
    essentially it.
        Every location is different from every other location.
    Tolsto says every happy family is like every other happy
    family. Each unhappy family is unique to itself. Every housing
    location has got a different set of problems. In some cases it
    would be better to have the housing on base because of the
    deploying elements who leave their families. In other places it
    is both better and cheaper and socially better to have our
    people out in the community where they can be part of the
    community and they can see and be seen.
        Mr. Tiahrt. I do not think we have quite successfully
    structured a program where somebody who is in the service can
    buy a home and have an arrangement that if we do decide to
    transfer them to a location across the United States or
    someplace else on the globe that they have a confidence that
    there will be a buy-out or that some kind of confidence so they
    can get their houses taken care of.
        In the private sector when a company moves somebody from
    Dallas-Fort Worth to Wichita, Kansas, which I wish would happen
    tomorrow, they will buy their house or help them sell their
    house and give them some kind of an allowance to move, a moving
    allowance.
        I would like to see them figure out a structured way to
    give people confidence that they can own their own home and
    build equity for their retirement. Owning an American home is
    one of the great dreams everybody likes to have.
        Mr. Hobson. If I could interject, I had a guy give me a
    proposal to do that, and there are some problems with it. But
    yesterday when we talked to the enlisted people over here, that
    was a big--if we could figure out some way to let them get some
    equity.
        I think you might retain some people a little better, and
    they would feel a little more comfortable about what happens to
    them when they retire, and it might improve some of their
    quality of life along the way. It can present some problems,
    too, because the wife may want to go back--I understand the
    problem, but yesterday when the enlisted people were here, that
    was a common theme. Everybody was nodding.
        Mr. Pirie. Well, at least the buying can be part of the big
    deal.
        Mr. Tiahrt. Yes, sir, because it already is.
        Mr. Pirie. Give them the confidence that they can transfer
    it in the circumstances----
        Mr. Hobson. I need to look at that because I do not know
    that too well. We have got a fairly new subcommittee here, and
    we need to look.
        Mr. Tiahrt. Let me just say another thing is that as we
    move out of Panama we are looking at putting other construction
    in other locations to cover that we understand the presidential
    elections are in May, and possibly we could negotiate something
    with the new president. So do not commit this money too early
    until we know whether we can keep Howard Air Force Base,
    because that is really a good location.
        Mr. Hobson. The message we have got from Howard, we ought
    not give up.
        Mr. Tiahrt. That is all I have. Thank you, Mr. Chairman.

                              incremental funding

        Mr. Olver. Thank you very much. I want to follow a couple
    of different lines of questions here. Your proposal for this
    year is $2.6 billion in total, but $1 billion of it is deferred
    to the next year or advanced from appropriations from the next
    year, bringing it back to $1.6 billion for this year.
        Now, the BRAC and the housing aspects require something
    over a billion of that, so there is not much left. What would
    you do if this Congress--I agree that this appropriation
    mechanism is risky, as the gentleman from Kansas had said
    throughout. What do you do if we decide, ``okay, we are not
    going to do that. We are just going to give you whatever the
    amount of money is straight up for a regular, one-year check''
    What would you do if you got the $500 million straight up? How
    are you prepared to deal with that?
        Mr. Pirie. We would commit only to the projects that we
    could afford to finance.
        Mr. Olver. And you could prioritize that for us. And, of
    course, that, I would consider to be the greater wrong, in
    essence, because that, I think, would provide the established
    precedent for that downsized MILCON program over the future.
    That would be really tough. Let me go on----
        Mr. Pirie. I would be no happier about that than you would,
    sir.
        Mr. Olver. Well, let me go on to the other, because they
    are sort of interconnected. I do not know enough about this,
    and sometimes you say something that, I gather, may be wrong.
    You said something about under your BRAC comments that you had
    178 bases and had closed 165. Would you clarify that for me--
    what exactly did you mean?
        Mr. Pirie. Well, when I say ``facilities,'' it is not the
    necessarily major bases and so forth. It might in some cases be
    Reserve training centers, which is a single building or
    something of that kind. But over the four rounds of BRAC, 178
    separate locations, facilities, or entities were scheduled to
    be closed, and we have closed 165 of them to date.
        Mr. Olver. There are already 165 are gone. The other 13 are
    just carried over from the last part of the BRAC four.
        Mr. Pirie. We have until 2001.
        Mr. Olver. Okay. Now, in your written testimony you have--
    and I think your written testimony speaks very cogently to the
    need for more BRAC rounds. In fact, I will give a little quote
    here: ``While the number of ships and sailors were reduced by
    40 percent and 30 percent, respectively, since 1988, Navy shore
    infrastructure decreased by only 17 percent of PRV,'' which is
    the Plant Replacement Value.
        Mr. Pirie. Plant Replacement Value.
        Mr. Olver. Now, that suggests that our fixed costs in this
    system are remaining. We have kept the fixed costs while the
    variable costs have been brought down. That is exceptionally
    inefficient and would suggest that there needs to be
    considerably more done. But further, in your own written
    testimony, Mr. Secretary, you say that the Navy will have
    88,000 facilities, where you have defined a facility as a
    separate and individual building structure or other real-
    property improvement.
        That is one hell of a lot more facilities, because you used
    essentially the same definition. It could be one building on
    one location as one of the 178 that have closed, and surely 178
    is not anything like 17 percent of the 88,000. You speak of 400
    wharves and piers and 180 runways that are involved here, and
    then you go on with the Marine Corps, which has 38,000
    facilities by that definition, and a whole mess of piers and
    runways and so forth.
        I must admit that I am confused here by the numerology.
        Mr. Pirie. No. We are guilty. We used `facilities'' in two
    different senses, and I must say that when we debated that
    particular point, that is why the footnote is in there.
        Mr. Olver. You should put for me, if not for the rest of
    the Committee, what BRAC has done over four rounds, what you
    have actually done in BRAC compared with what you had in
    facilities by the one definition, and if you want to put it
    down in the other form, you need to let me see some way of
    seeing what the facilities are that relate to the numbers that
    you gave for what BRAC did close, 178 facilities and how that
    corroborates to the 17 percent.
        Mr. Pirie. Just put it down on paper.

                             public-private venture

        Mr. Farr. Do the other services have the public-private
    ventures, the PPVs, and have the other services created a
    limited liability company and limited partnerships as the Navy
    has, and do the other services, in the successful projects like
    you have built in Texas and in----
        Mr. Pirie. Everett, Washington.
        Mr. Farr. Everett, Washington, where you have access to the
    housing that allows the civilians to lease the remainder? Do
    the other services do that?
        Mr. Pirie. The other services have not so far produced a
    public-private venture. They have some proposals.
        Mr. Farr. We ought to get on the other services to do this.
    This is exactly what you and I have been talking about.
        Mr. Hobson. Yes. I think the Air Force has one.
        Mr. Farr. Just awarded one?
        Mr. Pirie. Just awarded one. We actually have houses with
    people in them.
        Mr. Farr. They did this back in 1996. And you have had
    success with them?
        Mr. Pirie. Yes. It is working well.
        Mr. Hobson. The funny part about it is you have not done
    enough. None of these other proposals that I have seen, I do
    not think, are that same way. San Diego is not that way.
        Mr. Pirie. That is right.
        RADM Smith. They are differently structured, yes.
        Mr. Hobson. So it may work. Let me ask you another
    question.
        Mr. Farr. Well, one is on base, and one is off base. Right?
        Mr. Pirie. Different authorities, yes.
        RADM Smith. Yes. What we have done already is housing off
    base, and that is characteristic of the Navy, is that most of
    our housing is not on the military reservation itself, but it
    is some place adjacent.
        Mr. Farr. But, see I think in San Diego, where you have
    already got Navy property there all of these years
    historically, and they are in their old homes, and they are
    great old homes, but that seems to me where contracting out for
    base operations and maintenance of those houses with the local
    community makes much more sense than maintaining our crew to do
    that.

                          family housing privatization

        Mr. Hobson. What the City of San Diego will tell you is
    that you fast shuffled them on a piece of ground, but I cannot
    get into that right now.
        When Congress granted the authorities for the Family
    Housing Privatization Initiative, we were concerned with the
    shift in costs from the family housing construction O&M
    accounts to the personnel accounts. This year the Navy
    transferred roughly $41 million from family housing O&M to the
    personnel accounts to cover necessary increases in housing
    allowances due to privatization.
        In addition, the Department is requesting transfer
    authority between the two accounts that are in two different
    bills. First, last year we asked the Department to integrate
    the Personnel and Installation Departments on this issue. Has
    the Navy done this? Are you, Mr. Secretary, coordinating with
    the Assistant Secretary of the Navy for Manpower and Reserve
    Affairs, Carolyn Becraft, on this issue?
        Mr. Pirie. We have. And you are quite right, Mr. Chairman.
    The first year, we were not consulted when that money was
    shifted. We were consulted on this particular amount.
        The theory is that the basic cost for housing is not jacked
    up because of privatization but that it is part of the cash
    flow that makes the deals work.
        Mr. Hobson. Okay. I may have some more questions. If you
    want to comment--okay. Five minutes.

                     california--lemoore naval air station

        Mr. Olver. Thank you again, Mr. Chairman. One of our
    colleagues from the other defense subcommittee, the other
    appropriations subcommittee, visited Lemoore Naval Air Station
    not too long ago and came away very concerned with the quality-
    of-life conditions at Lemoore. Particularly he was concerned
    that there were a number of people who were being moved there
    from the San Diego area, maybe other areas.
        And we spend a lot of money training pilots. We need to
    retain them, and I would like to know what the Navy's long-
    range view of plans for Lemoore Naval Air Station are? I think
    there are a couple of projects here in the near future for it,
    so you are doing something about it, and in a more general way,
    what is your view of how to retain the pilots, so that this may
    not be a one-location sort of a situation.
        Mr. Pirie. Well, it may have been a shock to the fighter
    pilots who were moved from Miramar and San Diego to Lemoore,
    which is not close to anything.
        It is not as good as we want. We have plans to
    substantially improve Lemoore over the next five to ten years.
    For example, it is got a walking gym. I can walk there.
        Mr. Hobson. That is a good question, because I have been
    asked the same question by some other people. We have got a
    series of votes, so I do not think it is fair to you guys to
    make you come back.

        Clerk's Note.--Questions for the record submitted by Chairman
    Hobson.]
             Family Housing Privatization--Emphasis on the Program
        The family housing privatization initiative was originally intended
    to be a supplement to the traditional housing program. We are seeing
    more and more emphasis on this program, which is still in a pilot
    stage.
        For Fiscal Year 2000, the Navy did not request a single traditional
    family housing project and only two construction improvement projects
    in the continental United States. Additionally, the Navy currently
    plans on privatizing 78 percent of its housing by 2003 and 2004.
        Question. Once again, this is a pilot program and the original
    intent of the legislation was that it be a supplement to the
    traditional housing program. Explain why the Navy is placing such a
    high emphasis on this initiative when it has yet to complete a single
    project under the current statutory authorities?
        Answer. The Department of the Navy's paramount goal is to ensure
    Sailors, Marines and their families are able to obtain suitable,
    affordable housing. The military housing privatization authorities
    provide a vehicle to leverage limited resources and construct, replace,
    or revitalize housing much quicker than we otherwise would through
    military construction (MILCON). For the last several years, we have
    been laying the groundwork for the implementation of these authorities.
    OSD and the Services have created the policy underpinnings and the
    process to implement this program. With these in place, we are poised
    to begin execution. It is for that reason that we have submitted seven
    Congressional notifications since October, 1998.
        We have gained valuable experience through our initial limited
    partnership projects in Texas and Washington. We have seen these
    projects through, not only the construction phase, but also through a
    portion of the property management stage. We have applied this
    experience to the next generation of privatization projects.
        We have preserved flexibility to pursue military construction, if
    necessary, in several respects. The larger privatization projects have
    been structured with options that give us the unilateral decision to
    expand privatization at a given installation. Secondly, we have
    retained appropriated construction funds within the Department If
    Congress approves the legislative change to allow us to transfer funds
    from the Family Housing Improvement Fund (FHIF) to Family Housing
    Construction (FHCON), this will give us the option to execute as FHCON
    if privatization is found to be not feasible.
            Family Housing Privatization--Family Housing Investment
        Under current authorities, family housing privatization involves
    government contribution of land, facilities, infrastructure, mortgage
    guarantees, and differential lease payments to developers and
    financiers.
        Question. Wouldn't it be prudent to gain some experience with how
    well this program works, before making such a large commitment to turn
    over so many assets for a 50-year term?
        Answer. The Department of the Navy has gained valuable experience
    through our initial limited partnership projects in Texas and
    Washington. We have applied the lessons we've learned through our
    experience to the next generation of privatization projects.
        We have taken a number of steps to protect our interests and
    investments. First, a number of projects will be structured with a base
    and options. In making an award, the Department of the Navy is only
    committed to the base deal. Exercise of successive options is at the
    sole discretion of the Department of the Navy. Secondly, we have
    implemented a two-step acquisition strategy. The first step screens
    potential offerors, through a Request for Qualifications (RFQ), for
    their experience and capabilities with projects similar to those the
    Navy is contemplating. Only the most qualified offerors are then
    invited to submit detailed technical and financial proposals. We have
    consultants on board, who are experienced in private sector development
    and public/private partnerships, to assist us through the process.
    Finally, we will insist on a number of provisions in any business and
    operating agreements that will protect our interests during the life of
    the agreement.
        Question. It took us many, many years to build up these family
    housing assets. Tell us about some of the steps that the Navy is taking
    to protect its investments under this program.
        Answer. The Department of the Navy's policy is that, if a careful
    analysis of economic, quality, and market factors conclusively
    demonstrates that military housing privatization is not feasible, we
    will turn to more traditional means of meeting our requirements. In
    order to be acceptable, privatization concepts must demonstrate that
    objectives for leverage and savings will be met.
        The Department of the Navy plans to implement a limited liability
    company (LLC), or similar, approach for deals involving the
    privatization of existing military family housing. The LLC is a
    flexible, self-sustaining, public-private partnership that provides
    protection for Department of the Navy-contributed assets (land and/or
    units), and offers both partners limited liability while, at the same
    time, providing the Department of the Navy a degree of control over
    certain key decisions of importance that will be made by the entity
    over the term of the agreement.
        Steps that the Department of the Navy is taking to protect its
    investment and interests include requirements that:
              Only the leasehold interest in Government-owned land and
            units contributed to the partnership will be used to
            collateralize debt;
              Any debt restructuring not present an increase in risk to the
            Government and the net proceeds from a restructuring stay in
            the project or are distributed in a pre-agreed fashion;
              The net proceeds from any proposed sale or disposition of LLC
            assets stay in the project, or are distributed in a pre-agreed
            fashion;
              The housing is properly cooperated and maintained, and the
            agreement provisions are complied with;
              Allocations and distributions of project cash flow not be
            altered from amounts described in the agreement;
              Performance bonds and personal and corporate guarantees are
            provided during the initial construction period;
              Department of the Navy funds are held in a trustee-managed
            escrow account, and are paid out upon submission of an invoice
            approved by an independent consulting architect;
              Responsibility for debt is separated from the property
            management function. The Department of the Navy may require the
            Managing Member to periodically re-compete the property
            management agreement;
              Navy consent is required for operating expenditures over
            budgeted amounts; and
              Amounts not expended flow directly to project
            Recapitalization accounts.
                Family Housing Privatization--Delay in Execution
        I'm concerned over the delay in execution of family housing
    construction projects for which funds have been appropriated. In your
    prepared testimony, page 11, it indicates $257 million in previously
    authorized and appropriated funs are being withheld to fund
    privatization projects.
        Question. The Navy has not executed a privatization project to date
    under the current authorities. First, why is the Navy withholding such
    a large amount of funds for this program?
        Answer. The urgent need to improve family housing for our Sailors
    and Marines leads us to do several Public/Private Ventures (PPVs)
    during this trial period using previously appropriated projects as seed
    money. We have used advice and counsel from private sector real estate
    development experts, as well as government experts to ensure that PPV
    business agreements are good for the Sailor and Marine, and good for
    the taxpayer. This applies not only in the up-front phase, where we get
    three times as much housing fixed, faster, but also during the whole
    lifecycle, where the Department of the Navy retains appropriate
    influence in the deal to ensure that Sailors and Marines are treated
    right and our assets are sell-maintained.
        Question. Secondly, shouldn't the Navy be using all available tools
    to address its family housing needs in an optimum manner?
        Answer. The Navy and Marine Corps are studying the feasibility of
    PPV at several continental U.S. sites and will pursue PPV only where it
    makes financial sense. When the decision is made not to pursue PPV at a
    specific location military construction (MILCON) funds are released and
    associated construction and improvement projects are executed
    expeditiously. For example, while the military construction funds from
    Fiscal Year 1996 for Marine Corps Base (MCB) Camp Pendleton are being
    held for privatization, the Fiscal Year 1997 and Fiscal Year 1998 funds
    at MCB Camp Pendleton were executed as military construction projects.
    The Department of the Navy has received a sum of $1.64 billion in
    Family Housing Construction Appropriations for the period of FY-1996
    through FY-1999. Of that amount, about $440 million, of 27 percent
    remains on hold for PPVs as of the date of this hearing.
        At the same time, we continue to repair houses overseas using
    regular MILCON. For example, the Fiscal Year 2000 President's Budget
    Submission includes the replacement of 100 units at MCB Hawaii, the
    revitalization of 113 units at Marine Corps Air Station (MCAS) Yuma,
    and the revitalization of 100 units at MCB Camp Pendleton through
    normal military construction. These projects demonstrate we are totally
    reliant on privatization to solve our problems.
        Additionally, we have a robust leasing program for special cases
    where government ownership is not a viable option. We are also
    expanding our housing referral services to help the 75% of service
    members who live in the community to find suitable housing.
             Family Housing Privatization--Where Do We Go From Here
        The statutory authorities established for the Military Housing
    Privatization Initiative (MHPI) expire on February 10, 2001.
        Question. How will the Navy proceed with its housing program if
    these authorities are not re-granted?
        Answer. If the military housing privatization authorities are not
    extended past February 2001, the Department of the Navy will continue
    its policy of reliance on the private sector as the primary source of
    housing for Navy and Marine Corps families. The Basic Allowance for
    Housing (BAH) and housing referral services are integral components of
    this approach. For that segment of our need that cannot be met by the
    private sector, we would continue to use a mix of strategies including
    leasing, military construction, and, where we can, innovative
    approaches such as the Virginia Housing Development Agency's creative
    financing programs that promote home ownership for Sailors.
        With respect to the replacement or revitalization of existing
    military family housing stock, we would rely on traditional military
    construction if the privatization authorities are not extended.
                     Family Housing Privatization--Savings
        Question. Does the Navy anticipate that there will be any
    significant financial savings from privatization as compared with the
    traditional program?
        Answer. Financial pro forma analysis leads us to believe that
    Public/Private Ventures (PPVs) will achieve approximately 10% life
    cycle cost savings and will also provide at least 3-to-1 up-front
    leverage allowing us to build and repair more units faster.
                   Family Housing Privatization--Coordination
        Question. Is the Navy coordinating with personnel at the field
    activity level when developing housing privatization projects?
        Answer. Yes. The housing Public/Private Ventures (PPVs) initiatives
    are a coordinated effort between the Naval Facilities Engineering
    Command, Engineering Field Divisions, Major Claimants, and the Navy and
    Marine Corps Base that will benefit from the PPV project. It is
    coordinated on a program-wide basis and for specifically approved
    locations as follows:
              a. Representatives from the Fleet and Force Master Chiefs,
            Activity Commanding Officers, Regional Commanders, and Fleet
            Commanders are involved in the formulation of each project.
              b. Program policies, principles, and expectations are
            developed by collective representation from all levels of Navy
            leadership.
              c. Field activity representatives are full participants in
            assessing projects, housing requirements, project feasibility,
            determining the PPV strategy, and providing the commercial
            market data underlying each project.
        Headquarters Marine Corps personnel coordinate very closely with
    personnel at the field activity level in the development of our housing
    privatization projects. The activity commanders and their staffs are
    the lead agents in determining which neighborhoods may be privatized,
    the paygrade and bedroom mixes of the new units, and how the financial
    aspects of the deal will be structured. This close coordination assures
    us of activity approval of the project before submitting the concept to
    the Secretary of the Navy.
                           Family Housing Allowances
        When Congress granted the authorities for the Family Housing
    Privatization initiative, we were concerned about the shift in costs
    from the family housing construction and O&M accounts to the personnel
    accounts. This year, the Navy transferred roughly $41 million from
    family housing O&M into the personnel accounts to cover necessary
    increases in housing allowances due to privatization. In addition, the
    Department is requesting transfer authority between the two accounts--
    accounts that are in two different bills.
        Question. First, last year we asked the Department to integrate the
    personnel and installation departments on this issue. Has the Navy done
    this? Are you, Mr. Pirie, coordinating with the Assistant Secretary of
    the Navy for Manpower and Reserve Affairs, Carolyn Becraft, on this
    issue?
        Answer. We recognize the inter-relationship on housing matters
    between the Offices of the Assistant Secretary for Installations and
    Environment and the Assistant Secretary for Manpower and Reserve
    Affairs. Our offices also coordinate on policy matters that fall under
    the purview of both organizations. Both Ms. Becraft and I sit on the
    Department of the Navy Program Strategy Board (DPSB) which approves the
    Navy and Marine Corps' Program Objective Memorandum and budget
    submissions. The transfer of family housing O&M funds to military
    personnel accounts to fund increased housing allowances associated with
    the privatization of existing family housing was fully vetted within
    the DPSB prior to the formulation of the Department's budget request.
    Ms. Becraft and I also are members of OSD's Quality of Life Executive
    Committee, which oversees the full range of housing issues across the
    Department of Defense.
        It is important to note that this same coordination occurs at the
    Service level during the programming and budget process. The level of
    investment in housing allowances and family housing programs are
    coordinated within each of the Services during the development of their
    Program Objectives Memorandum (POM) submissions. The Navy comptroller
    reviews cost estimates and program executability as part of the
    internal Navy budget review process. OSD reviews Service POM and budget
    estimates. This coordination ensures the preparation of a balanced
    housing program.
        Question. What assurances can you offer me that any family housing
    O&M reductions due to privatization will be reapplied to other family
    housing improvements and not transferred elsewhere?
        Answer. The Department of the Navy only funds Basic Allowance for
    Housing for Public/Private Ventures (PPV) with savings from the family
    housing operations and maintenance accounts resulting from the
    privatization of military family housing. Savings above those needed to
    fund PPV allowances are being used to eliminate the family housing
    repair and improvement backlog, primarily overseas, where privatization
    authorities are not applicable. While I can make no guarantee for the
    future, to date, all PPV savings have been reinvested in the housing
    area.
        Question. Are the personnel accounts adequately budgeted in the
    Future Years Defense Plan (FYDP) for the increases in allowances due to
    the privatization initiatives?
        Answer. Yes. In preparing the Fiscal Year 2000 budget, Family
    Housing, Navy funds shifted to the Navy and Marine Corps military pay
    accounts based on conservative projected dates for converting
    Department of the Navy housing units to Public/Private Ventures (PPV)
    units. The Department of Defense has requested legislation allowing
    this transfer of funds to take place at the time the PPV deal is
    signed, which makes it a much more accurate and timely transfer of
    funds. If the Department is able to move more aggressively on these
    conversions, additional funds may be needed during execution of the
    military pay accounts.
        Question. Does this initiative become a ``zero-sum'' game, that is,
    will there be any savings or is it just a shift of costs?
        Answer. Privatization will enable us to eliminate the
    unsatisfactory condition of homes and reduce the shortage of homes more
    quickly than if we were to continue to use only the traditional
    military construction approach. We expect life cycle savings of
    approximately ten percent, which will be reinvested in the housing
    program in order to fix more houses faster.
        Question. Is there any assumption about the future funding levels
    for housing allowances?
        Answer. The privatization concepts assumes a three percent per year
    growth rate for housing allowances. Each Public/Private Venture (PPV)
    will take into account the latest information available regarding the
    new implementation of the Basic Allowance for Housing (BAH).
                              Incremental Funding
        The Department has chosen to build an $8.5 billion Military
    Construction program and spread its funding over two fiscal years.
    Instead of requesting fully executable projects in Fiscal Year 2000,
    the Department has only requested funding for 10-25% of individual
    project costs. To support the completion of these projects, the
    Department is requesting advanced appropriations of $3.1 billion to
    become available in Fiscal Year 2001.
        Question. How does the Navy view this funding approach?
        Answer. Obviously, this is not what we in the installation business
    would have chosen as a desirable outcome. As I stated during the
    hearing, senior Department of Defense officials used this approach as a
    one-time expedient to allow the inclusion of high priority readiness
    and acquisition programs. They characterized it as undesirable but
    unavoidable.
        There has been little Congressional support for this funding
    approach, and I personally do not support it.
        Question. With this in mind and given the apparent fact limited
    funds will be available, is the Navy prepared to prioritize its
    projects or needs for Fiscal Year 2000? If so, what are the Navy's most
    pressing needs?
        Answer. As a general rule, we would assign greater weight to
    projects that met the following prioritized needs: (1) environmental
    and safety projects that meet statutory and regulatory standards and
    deadlines for compliance; (2) force protection; (3) operational
    necessities; (4) quality of life; (5) all other projects. That said, we
    would, as we have in the past, week to balance the overall program
    within available funds.
                                   Execution
        Question. What are some of the challenges facing the Navy in
    executing this budget?
        Answer. The challenges that face the Navy in executing this budget
    are centered on project and funds management. Successful execution of
    the program will depend on our ability to accurately project outlay
    streams for each project, and to optimize the allocation of funds for
    each project based on the projected outlay stream and on the date of
    award.
        Our projected outlay streams have to accommodate material
    procurement (including any long-lead time items), job phasing, work
    scheduling, etc. to accurately reflect optimum contractor performance
    as if funds were to be obligated for the full value of the contract.
        Projected outlay streams then have to be time-phased against
    projected dates of award and the date of the availability of the
    advance appropriations, in order to determine the appropriate level of
    funding to be obligated against the contract.
        In addition, actual work-in-place and contract expenditures must be
    monitored to ensure that sufficient funds are available throughout the
    year to preclude any work stoppages or contract terminations. Award
    dates for subsequent projects will have to be managed to maintain
    availability of sufficient funds for such purposes.
        Question. What additional authorities will be necessary?
        Answer. If we receive advance appropriations as requested, we do
    not foresee any need for statutory changes. However, in order to
    maintain current flexibility for execution of the program, we would
    request agreement from the House and Senate Appropriation Military
    Construction Subcommittees that project reprogramming thresholds would
    be based on the full amount appropriated for the project, to include
    both the regular annual and advance appropriation. If we do not receive
    advance appropriations as requested, we would request a change to 10
    U.S.C. 2853 to align cost variation thresholds with the authorized
    (rather than appropriated) amount of each project.
        We would also request agreement with the House and Senate
    Appropriations Military Construction Subcommittees that project
    reprogramming thresholds would be based on the full authorized amount
    of the project.
                                 BRAC Execution
        Question. Is the Navy BRAC budget request of $211.4 million in
    Fiscal Year 2000 adequate to fully execute the program with no impact
    on meeting the July 13, 2001 completion date?
        Answer. The Navy BRAC program is requesting authorization for the
    full program amount of $452.6 million in Fiscal Year 2000. The $211.4
    million referenced in this question is the appropriation requested
    amount. If provided the full authorization amount, the Navy can fully
    execute the program with no impact on meeting the July 13, 2001
    completion date. The Navy has already completed 93 percent (165 of 178)
    of all closures and alignments, and will complete an additional eight
    by the end of Fiscal Year 1999, four in Fiscal Year 2000, and one in
    Fiscal Year 2001.
                      Plus Ups Due to Incremental Funding
        Question. After the Department's implementation of the incremental
    funding approach, were any Navy projects moved forward to the Fiscal
    Year 2000 program?
        Answer. Yes, four Navy and eight Marine Corps projects moved
    forward to the Fiscal Year 2000 program.
        Question. If so, please provide a list of these projects with their
    associated dollar amount for the record?
        Answer. The Navy and Marine Corps projects are:

    ----------------------------------------------------------------------------------------------------------------
                                                                                                (In thousands of
                                                                                                    dollars)
                       Activity                     Proj.               Title              -------------------------
                                                     No.                                        Auth         Appr
                                                                                              request      request
    ----------------------------------------------------------------------------------------------------------------
    Administrative Support Unit, SW Asia.........     903  Operations Control Center......       34,770        8,550
    Administrative Support Unit, SW Asia.........     913  Bachelor Enlisted Quarters            24,550        6,230
                                                            (Security Force).
    Naval Training Center, Great Lakes, Illinois.     643  Bachelor Enlisted Quarters            31,410        7,700
                                                            ``A'' School.
    Naval Station, Norfolk, Virginia.............     099  Pier Replacement...............       40,000        8,600
    MCAS New River, North Carolina...............     645  Family Service Center..........        1,340          330
    MCAS Yuma, Arizona...........................     437  Child Development Center               2,620          640
                                                            Addition.
    MCB Camp Lejeune, North Carolina.............     935  Road and Utility Construction..        8,750        2,140
    MCLB Barstow, California.....................     920  Test Track/Text Pond Facility..        4,670        1,150
    MCB Camp Pendleton, California...............     022  Tactical Vehicle Maintenance           9,010        2,210
                                                            Facility.
    MCB Camp Pendleton, California...............     069  Bachelor Enlisted Quarters.....        9,740        2,390
    MCAGCC 29 Palms, California..................     619  Tactical Vehicle Maintenance          13,960        3,420
                                                            Facility.
    MCLB Albany, Georgia.........................     919  Engineering Equipment Shop.....        6,260        1,540
    ----------------------------------------------------------------------------------------------------------------

                          Additional Contractor Costs
        Question. Will this year's incremental funding approach place
    increased risk on contractors? If so, could you explain to us how this
    increased risk could potentially drive up contract costs?
        Answer. This year's incremental funding approach (i.e., a
    combination of regular annual and advance appropriations) will not
    significantly increase the risk on contractors. Full scope contracts
    will be awarded subject to a limitation of funds clause. The Fiscal
    Year 2000 regular annual appropriation will provide sufficient funds to
    meet contract outlays in Fiscal Year 2000. The Fiscal Year 2001 advance
    appropriation will provide the guarantee that sufficient funds will be
    made available at the appropriate time to cover the full contract cost
    of the contract. Contractor risk would be increased if the advance
    appropriations were not provided. For example, contractors would have
    to maintain the capacity to accomplish all work covered under the full
    scope contract, but would not have any guarantee that the Government
    would obligate funds for (or authorize the accomplishment of) any work
    beyond that which would be covered under the limitation of funds
    clause. This may increase bid prices and could deter some contractors
    from bidding.
        Question. How does the Navy intend on dealing with increased
    contractor risk? (Incremental funding reduces contractor's ability to
    make large-scale advance purchases may preclude ordering long-lead
    equipment or supplies, and there is no guarantee of Fiscal Year 2001
    funding.)
        Answer. If Congress provides the requested regular annual and
    advance appropriations for Fiscal Years 2000 and 2001, there will be no
    significant increased risk on contractors. As described in Question 14,
    the key elements for success in executing this program will be our
    project and funds management.
        Specifically, the accurate projection of outlay streams and the
    corresponding obligation of funds against each project should preclude
    risks associated with advance purchases and/or the procurement of long-
    lead time equipment, materials, or supplies. Due to the newness of this
    approach, especially with small contracts, there may be perceived risks
    in the contractors' minds, which we would try to minimize by
    communicating to the contracting community the previously mentioned key
    elements to be utilized for success.
        If Fiscal Year 2001 advance appropriations are not provided as
    requested, to complete the projects authorized in Fiscal Year 2000, the
    risk identified in Question 18 would likely result in increased costs.
        We discussed the potential for increased costs with the Association
    of General Contractors (AGC) and independent contractors. They were
    unable to quantify an across-the-board percentage, indicating instead
    that any increase will vary in amount depending on the size,
    complexity, and type of project.
        Question. How will the Navy avoid additional costs due to
    contractor claims for delays caused by lack of funds, or contract
    termination for lack of funds if advance appropriations are not
    provided?
        Answer. Regardless of whether or not requested advance
    appropriations are provided, avoidance of additional costs due to
    contractor claims for delay or contract termination will be dependent
    on our ability to project outlay streams against the project award
    dates to ensure that sufficient funds are available to preclude delays
    or termination. Advance appropriations will provide a guarantee that
    funds will be available on October 1, 2000. If the requested advance
    appropriations are not provided, we will have to conservatively
    estimate when we think funds may become available in Fiscal Year 2000.
    The result will be that we will have to obligate additional funds
    against each contract to avoid delays or terminations, possibly
    resulting in the short-term deferral of certain projects into Fiscal
    Year 2001.
                        Privatization of Utility Systems
        Question. Describe in some detail the Navy's ongoing efforts to get
    out of the business of owning, operating, and maintaining utility
    systems where it makes good sense.
        Answer. The Department of the Navy is implementing the Defense
    Reform Initiative Directive (DRID) #49 calling for privatization of all
    electric, natural gas, water and wastewater systems by September 2003.
    As a first step in the process, we are conducting market interest
    assessments as we work with the bases on the best strategy for
    completing the assessment, economic analysis, and Request for Proposal.
    Initial studies will begin this fiscal year, with the bulk of effort on
    this phase to be completed in Fiscal Year 2000. Detailed economic
    analysis of continued government ownership, in accordance with the
    Office of Management and Budget Circular A-94, will be assessed against
    proposals to determine if a privatization proposal meets the criteria
    for utility system privatization in 10 U.S.C. Section 2688 prior to
    approval of a utility privatization action.
        If a utility system is not privatized, a separate assessment may be
    made concerning outsourcing operations and maintenance under commercial
    activities programs.
        Question. How aggressively is the Navy pursuing the utilities
    privatization effort? What is the estimated timeline for
    implementation?
        Answer. In compliance with Defense Reform Initiative Directive
    (DRID) #49, the Department of the Navy intends to:
              Determine whether or not to pursue privatization of all
            utilities systems by September 30, 2000;
              Release all solicitations by September 30, 2001;
              Award all privatization contracts by September 30, 2003.
        Question. Has the Navy developed a utilities privatization
    implementation plan? If so, please provide it for the record.
        Answer. The Department of the Navy Utility System Privatization
    plan follows:

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                        Privatization of Utility Systems
        Question. Why should a utility system be exempt from privatization?
        Answer. Defense Reform Initiative Directive (DRID) #49 provides two
    reasons for exempting utility systems privatization: (1) national
    security, and (2) economically not feasible.
        Question. What efforts are being made by the Navy to partner with
    the other Services in privatizing utility systems? Specifically, is
    there coordination between the Services in co-located areas?
        Answer. Where possible and practical, the Department of the Navy is
    partnering with the other Services to pursue joint efforts that could
    result in savings that might not be attainable on an individual basis.
    For example, a partnering effort is underway between the Washington
    Navy Yard and Bolling Air Force Base.
        Question. Can the Navy document any savings or avoided costs, in
    net value, which will result from the utility privatization effort?
        Answer. No. Valid documentation would be a comparison of a final
    proposal and a life cycle cost analysis of government ownership. We
    have not yet reached that point in the process.
                    Alternative Sources of Purchasing Energy
        Question. What efforts has the Navy made in examining alternative
    sources of purchasing energy?
        Answer. The Department of the Navy is continuing to pursue
    competitive purchasing options in markets that have been deregulated.
    For example, our installations have participated in NAVFAC energy
    purchasing process initiatives and participated in the Defense Energy
    Support Center (DESC) California Electricity procurement. MCLB Barstow,
    Marine Corps Air Ground Combat Center (MCAGCC) Twentynine Palms, Marine
    Corps Recruitment Depot (MCRD) San Diego, and Marine Corps Base (MCB)
    Camp Pendleton participated with Navy installations and some Air Force
    and Army installations in California in a competitive power procurement
    ``demonstration'' conducted by the DESC in accordance with Defense
    Reform Initiative #21 that resulted in minimal savings.
                          Forward Operating Locations
        As part of the Counterdrug funding in the Defense Appropriations
    Bill there is $42.8 million programmed for the construction of three
    forward operation locations. This is part of the post Panama
    Restructuring. It is our understanding that these funds are held in a
    central transfer account and will eventually be allocated to the Air
    Force and Navy for execution.
        Question. Could you please provide us some detail on these proposed
    construction projects?
        Answer. The Navy currently operates P-3 surveillance aircraft out
    of Howard Air Force Base in Panama for counter drug operations. The
    Panama Canal Treaty requires the relocation of these assets to another
    forward operating location (FOL). The Navy has a military construction
    project P-113 for $6.7 million in Fiscal Year 2000 in the Department of
    Defense (DoD) Counter Drug appropriation to build an organization-level
    aircraft maintenance facility, parking apron, washrack, and taxiway.
    The DoD is working closely with the State Department to secure the
    necessary host nation agreement. Additional detail site surveys will be
    needed to refine the construction cost estimates once the specific
    location of the Navy FOL is confirmed. The DoD Counter Drug
    appropriation will fund all the necessary costs for the relocation.
         Arizona: Camp Navajo Navy Detachment Magazines Modernization
                                  ($1,910,000)
        The form 1390 for this project indicates that the Fiscal Year 2001
    program will include a request of $3,420,000 for Magazine
    Modernization. Also the form indicates that the Fiscal Year 2002
    program will include $4,680,000 for Magazine Modifications.
        Question. How do these two projects relate to this project?
        Answer. These projects are nearly identical in nature to the
    project in the Fiscal Year 2000 budget. They will modify additional
    magazines for storage of Trident I (C4) missile motors.
        Question. Why weren't these three projects programmed concurrently?
        Answer. The projects are timed to coincide with the delivery of the
    C4 components. Constructing all the projects in the Fiscal Year 2000
    time frame would result in some of the magazines being upgraded before
    they are needed for the C4 motors.
        Question. Could these three projects be executed by a single
    contract to achieve construction cost savings? If not, why not?
        Answer. There would undoubtedly be savings if the projects were
    executed in a single contract. However, most of the magazines would
    then lie empty one or more years prior to be being needed. The Navy
    believes it is more prudent to budget the follow-on projects in the
    appropriate years and use the Fiscal Year 2000 dollars for other
    important projects.
      Arizona: Yuma Marine Corps Air Station Land Acquisition ($3,650,000)
        Question. What are some of the challenges facing the Navy in
    executing this project?
        Answer. The challenges facing the DoN are the typical challenges
    associated with land acquisitions, e.g. negotiation with landowners.
        Question. How does the Navy plan on executing this incrementally
    funded land acquisition?
        Answer. Although the advance appropriation approach was applied to
    the entire military construction (MILCON) appropriation, it was not
    envisioned applying to each individual project. Since a land
    acquisition project would outlay at 100 percent, the DON would likely
    execute this at the authorized request. However, a number of possible
    alternatives are available, including the incremental purchase of
    separate parcels or the negotiated phasing or payments to the current
    landowners.
        Question. The form 1391 states that a fire station requires
    relocation. When and at that cost does the Navy plan to execute this
    relocation?
        Answer. The fire station is not yet a programmed military
    construction project, so there is no scheduled time or cost for the
    execution of the relocation. This is because the fire station
    relocation is part of a long-term conceptual plan for Marine Corps Air
    Station (MCAS) Yuma's facilities and infrastructure if the full 1,641
    acre parcel of land is acquired.
        Question. Will the new fire station be located on the newly
    acquired land?
        Answer. While the primary purpose of the land acquisition is to
    provide MCAS Yuma enough land to safely store and load its annual
    training requirement of ordinance without waivers, the additional land
    would also provide opportunities to more efficiently locate existing
    assets such as the fire station. The new fire station could be located
    on the southeastern corner of the new parcel.
    California: Camp Pendleton Marine Corps Base Integrated Communications
                                 Hub ($960,000)
        Question. How many facilities and total space will be vacated as
    part of this consolidation effort?
        Answer. Currently, there are six scattered buildings that are
    either fully or partially occupied by telecommunications personnel or
    equipment at Marine Corps Base (MCB) Camp Pendleton. After construction
    of this military construction project near two of the six buildings,
    the other four buildings, with communications-occupied spaces adding up
    to 26,987 square feet, will be vacated for other uses or demolition.
    The three buildings that ultimately make up the hub will reduce the
    square footage occupied by communications personnel and equipment from
    41,865 gross square foot (gsf) to 34,298 gsf.
        This project will demolish one facility.
        Question. What are the re-use plans for the other facilities or
    vacated space resulting from this effort?
        Answer. Of the six buildings currently occupied, four will be
    vacated for other uses or for demolition. Two of these four buildings
    are inadequate and will be demolished, but only one demolition will be
    accomplished under this military construction project. When the 4,056
    square feet (sf) occupied in the third building (which is 59,066 sf) is
    vacated, this space will be used to expand the existing Assistant Chief
    of Staff Manpower and Assistant Chief of Staff Comptroller spaces. When
    the 13,113 sf occupied in the fourth building (which is 49,982 sf) is
    vacated, this space will be used to expand the existing accounting
    functions and to relocate Force Service Support Group accounting and
    Base Staff Judge Advocate.
        Question. What year was the building to be demolished constructed,
    and briefly describe the condition of this facility.
        Answer. Building 2454, which will be demolished with this military
    construction project, is a 1,192 square foot semi-permanent, pre-
    engineered metal building constructed in 1950 and currently used as a
    communications maintenance personnel office. The temporary building was
    originally brought onto what will be the future hub site to relieve a
    shortage of administrative space in support of telephone installation
    operations. The building is now deteriorated beyond economical repair.
    The structure is also within the footprint of the proposed military
    construction project and will require demolition prior to the start of
    construction.
        The second structure, Building 2611, will be demolished at a later
    date using operations and maintenance (O&M) funding. Building 2611 is a
    4,626 square foot, semi-permanent, wood-frame building constructed in
    1942 as a warehouse and is now deteriorated beyond economical repair.
    The current plan to temporarily consolidate several Explosive Ordinance
    Disposal (EOD) organizations aboard Marine Corps Base (MCB) Camp
    Pendleton into Building 2611 and to delay demolition is justified
    because the warehouse-like facilities which the EOD units currently
    occupy are in much worse condition than 2611. Building 2611 will be
    demolished after a suitable replacement facility for the EOD units is
    located.
      California: Camp Pendleton Marine Corps Base Staff Non-Commissioned
                          Officer Academy ($1,640,000)
        The form 1391 indicates that the Academy is currently located in
    renovated facilities.
        Question. When and at what cost were these facilities renovated?
        Answer. Conversion of three existing 1966-vintage, open squad bay
    barracks into the interim Staff Non-Commissioned Officer Academy was
    completed in July 1998 at a cost of $2.7 million. The scope of work
    included extensive structural repairs in order to bring the 33-year-old
    buildings up to current seismic standards.
        Question. What are the re-use plans for the renovated facilities
    that will be vacated as a result of this project?
        Answer. The renovated facilities, once vacated by the Staff Non-
    Commissioned Officer (SNCO) Academy, will be backfilled by several
    schools which are currently in less than adequate facilities. These
    schools include the Corporals' School, the Instructor Management
    School, the Field Medical Service School, and an Automated Electronic
    Classroom. These units have a smaller personnel loading than the SNCO
    Academy, so the renovated facilities will adequately accommodate their
    needs. In addition, these schools can accomplish their training
    locally, unlike the SNCO Academy which frequently must transport its
    students 19 miles north to the field training areas.
    California: Camp Pendleton Marine Corps Base Bachelor Enlisted Quarters
                                  ($2,390,000)
        Question. What is the estimate of savings in design costs by
    accomplishing this project using a standard or definitive design?
        Answer. While other projects at Marine Corps Base (MCB) Camp
    Pendleton completed in recent years have used the design-build approach
    and realized savings in the overall project costs, design-build for the
    Staff Non-Commissioned Officer (SNCO) Academy Bachelor Enlisted
    Quarters (BEQ) is not appropriate. This project does not lend itself to
    using a standard design because of the site topography, other physical
    constraints of the selected site (e.g., proximity to an existing major
    thoroughfare and environmentally sensitive areas), and the need to be
    designed in harmony with the function and architectural elements of the
    academic instruction building, P-063.
        Question. Submit for the record a list of the planned projects to
    correct all existing barracks deficiencies at Camp Pendleton Marine
    Corps Base, by fiscal year programmed.
        Answer. The following projects are planned at Camp Pendleton Marine
    Corps Base to correct current existing barracks deficiencies.

    ------------------------------------------------------------------------
                  Program                    Project         Cost with SIOH
    ------------------------------------------------------------------------
    2000..............................              P-069             $9,740
    2002..............................              P-098             19,810
    2002..............................              P-093             15,558
    2002..............................              P-073             14,699
    2003..............................              P-043             12,140
    2003..............................              P-026             15,352
    2004..............................              P-044             10,971
    2004..............................              P-025             15,347
    2004..............................              P-017             18,368
    2005..............................              P-028              9,765
    ------------------------------------------------------------------------

       California: Corona Fleet Analysis Detachment, Measurement Science
                                   Laboratory
        Question.What is the current status of the Measurement Science
    Laboratory at the Corona Fleet Analysis Detachment, and why are no
    funds requested for Fiscal Year 2000 as the Committee directed in our
    report last year?
        Answer. The Measurement Science Laboratory project at Naval Warfare
    Assessment Station Corona is presently in the President's Budget Future
    Years Defense Program for Fiscal Year 2002 due to unresolved scope
    issues, and other higher priority projects.
        California: Lemoore Naval Air Station Aircraft Ordnance Loading
       Facilities ($3,010,000); Strike Fighter Weapons Training Facility
      ($1,000,000); Engine Maintenance Shop Addition ($600,000); Aviation
                         Armament Facility ($1,460,000)
        Question. Is it correct that all four of these projects are
    required solely due to the stationing of the F/A-18 E/F aircraft at
    Lemoore beginning in November of 1999?
        Answer. Three of the four projects are required solely for the
    stationing of F/A-18E/F aircraft. The fourth, Aircraft Ordnance Loading
    Facilities, fulfills a requirement that has existed since before the
    introduction of the F/A-18 program. It will eliminate explosive safety
    waivers and provide an appropriately sited area for ordnance loading
    and unloading.
        Question. How will this year's incremental funding concept
    potentially impact the completion of needed facilities for the F/A-18
    E/F aircraft prior to their arrival?
        Answer. The Fiscal Year 2000 incremental funding concept will not
    adversely affect completion of facilities in time to support the
    arrival of the F/A-18E/F aircraft.
        Question. How can you assure us that operating schedules will be
    met under a two-year construction program?
        Answer. While the incremental funding concept appropriates military
    construction funds over two fiscal years, construction projects will be
    contracted to the full authorized amounts in the first year. The 25-75
    percent split in appropriations will cover the typical funds outlay
    profile over two fiscal years. Operating schedules to support
    introduction of the F/A-18E/F at Naval Air Station Lemoore, California
    will not be affected by the incremental funding concept.
        Question. What is the future construction program for needed
    facilities to support the F/A-18 E/F aircraft program at Lemoore?
        Answer. Six military construction (MILCON) projects totaling $32.8
    million are required for operational facilities to support the F/A-18E/
    F program at Naval Air Station (NAS) Lemoore. Three were approved in
    Fiscal Year 1999 and three more are included in this year's budget
    request.
      California: North Island Naval Air Station, Berthing Wharf, Phase I
                                 ($40,760,000)
        Under this year's incremental funding concept, the Navy has
    programmed the majority of their projects at 25 percent of the total
    project cost in Fiscal Year 2000.
        Question. Why is this project funded at 75 percent of the project
    cost?
        Answer. This project was one of the three submitted to the
    Department of Defense (DoD) by the Navy as a phase-funded project
    because the cost was over $50 million. DoD did not apply the same
    outlay plan for these projects as it did for the majority of the other
    military construction projects when it developed the advanced
    appropriations concept. Therefore, it remains at the higher rate in the
    Fiscal Year 2000 budget submission.
     California: Port Hueneme Naval Surface Warfare Center Combat Systems
                                Integration Lab
        Question. What is the current status of the Combat Systems
    Integration Lab at the Port Hueneme Division of the Naval Surface
    Warfare Center, and why are no funds requested for Fiscal Year 2000 as
    the Committee directed in our report last year?
        Answer. The Combat Systems Integration Laboratory at the Port
    Hueneme Division of the Naval Surface Warfare Center is included in the
    President's Budget Future Years Defense Program for Fiscal Year 2002.
    The construction funds were not requested for Fiscal Year 2000 because
    of fiscal constraints, and the need to fund other, higher priority
    operational and quality of life projects.
     California: Twentynine Palms MCAGCC Bachelor Enlisted Quarters, P-495
                                  ($4,840,000)
        This project includes the cost of demolition of two buildings.
        Question. Are these buildings the existing quarters where Marines
    must be housed four to a room and the open bay barracks?
        Answer. The two buildings scheduled for demolition are 1950's
    vintage open squad bay structures that were renovated in 1978 into two
    and three man rooms. These rooms, however, due to significant
    overcrowding, are occupied by three and four Marines, respectively.
    Both inadequate structures still have community ``gang-head'' bathroom
    facilities.
        Question. Is this demolition in the footprint of the new
    construction?
        Answer. The demolition of the two buildings is not in the footprint
    of the new construction.
        Question. What this project designed using a standard or definitive
    design? If not, why not?
        Answer. This project will be executed as Design-Build using the
    standard Marine Corps 2+0 design criteria.
     Florida: Whiting Field Naval Air Station JPATS T-6A Trainer Facility
                                  ($1,200,000)
        This facility will house aircraft training devices valued at
    $33,000,000, to be provided from other appropriations.
        Question. Has this procurement been timed to correspond with the
    availability of this facility?
        Answer. Yes. First items (Training Integrated Management System or
    TIMS) are programmed for installation during Fiscal Year 2001.
        Question. Is Whiting Field Naval Air Station the only installation
    where the Ground Based Training System will be implemented, and will
    any other installation house flight simulators for the T-6A aircraft?
        Answer. No. As part of an overall system, Naval Air Stations Corpus
    Christi and Pensacola will also receive Training Integrated Management
    Systems (TIMS) during Fiscal Year 2001. Naval Air Station (NAS) Corpus
    Christi will receive simulators in Fiscal Year 2008 and NAS Pensacola
    in Fiscal Year 2011.
        Question. Is this the only project needed for the Fiscal Year 2001
    implementation of the Ground Based Training System? If not, what are
    the future requirements?
        Answer. Yes. This is the only Ground Based Training System (GBTS)
    project required.
        Question. How will this year's incremental funding concept
    potentially impact the completion of needed facilities for the Ground
    Based Training System prior to the equipment's arrival?
        Answer. No impact is anticipated as long as the balance of funds
    are made available in Fiscal Year 2001.
        Question. How can you assure us that operating schedules will be
    met under a two-year construction program?
        Answer. If funds are received on time, Design-Build contracting
    will allow better schedule control since the contractor is responsible
    for meeting both design and construction schedules for project
    completion. The scheduling includes all coordination of Training
    Integrated Management System (TIMS) installation and other equipment.
       Hawaii: Pearl Harbor Naval Station BEQ Modernization ($4,720,000)
        Question. In what year was the existing BEQ constructed?
        Answer. Building 1333, year 1969; building 1369, year 1970;
    building 1370, year 1970; and building 1490, year 1973.
        Question. How confident is the Navy in the structural soundness of
    the building?
        Answer. The buildings are structurally sound. They are concrete
    masonry units (CMU) on concrete slab construction, built on a stable
    foundation. Buildings do not show any signs of cracking or instability.
    This project will also include seismic upgrades to meet current
    requirements.
        Question. Upon completion of this rehabilitation, what is the
    estimated design life of the building?
        Answer. The buildings are of concrete masonry unit construction.
    Upon renovation, the design life of the buildings is in excess of 25
    years.
        Question. To what extent will this project reduce the backlog of
    real property maintenance requirements, which now totals $260,873,000
    for this location according to the form 1390?
        Answer. This project will reduce the backlog by the following
    amounts per buildings listed:

    Building                                                       Reduction
        1333................................................      $7,202,333
        1369................................................       3,772,238
        1370................................................       3,645,730
        1490................................................       2,203,639
                        --------------------------------------------------------
                        ____________________________________________________
                Total.......................................      16,823,940
       Idaho: Bayview Naval Surface Warfare Center Underwater Equipment
                            Laboratory ($2,540,000)
        Question. What is the current status of the ``Vision 21'' effort by
    the Department of Defense to consolidate its testing and evaluation
    centers and laboratories?
        Answer. Vision 21 has been placed on hold by the Department of
    Defense (DoD).
        Question. How does this project fit with this effort?
        Answer. The ``Vision 21'' effort will not affect the requirement
    for this project. The functions that are performed at Bayview are
    unique within the DoD, and are essential for future submarine design
    and development.
        Question. By what date must the land acquisition be accomplished in
    order to execute this project during Fiscal Year 2000?
        Answer. Delay of the land acquisition will not delay execution of
    the primary portion of this project in Fiscal Year 2000. The land
    acquisition is required to expand the current parking area to provide
    adequate parking and better access for large vehicles.
        Question. Describe in some detail the ``Special Construction
    Features'' included in the cost of this project.
        Answer. The ``Special Construction Features'' line item in this
    project includes a retaining/load bearing wall into the design and
    construction of the Underwater Equipment Laboratory. The Laboratory
    will be built into the side of a hill. The back wall of the building
    will serve as both a retaining and load bearing wall.
      Illinois: Great Lakes Naval Training Center Drill Hall ($2,830,000)
        Question. Will this project replace all four of the existing drill
    halls?
        Answer. No. This project (P-623) will replace only one of the drill
    halls (Building #1200). The project includes the demolition of one
    drill hall.
        Question. What are the plans for replacement or reuse of the
    remaining drill hall buildings which were constructed in 1942 as
    temporary buildings with an intended useful life of 5 years?
        Answer. There are four drill halls at the Recruit Training Command
    campus. Three of the drill halls are used for Drill Practice, Drill
    Inspection, Graduation Practice and Graduation Ceremonies. The fourth
    drill hall is used for Physical Education Training.
        Fiscal Year 2000 P-623 Drill Hall Replacement will replace and
    demolish one drill hall.
        Three future projects will replace the remaining three drill halls.
    Two of the projects will provide replacement drill halls, while the
    third project will provide a new physical training facility to replace
    the drill hall currently being used for that purpose. Each project will
    demolish one drill hall.
      Maryland: Indian Head Naval Surface Warfare Center Sewage Treatment
                              Plant ($10,070,000)
        The Navy is working hard to get out of the utilities business
    whenever possible.
        Question. What efforts were made to privatize utility service at
    this installation, in part to avoid the need for this military
    construction project?
        Answer. An economic analysis comparing Privatization of this
    utility system to in-house operation shows that it is more economical
    for the Navy to operate this system. The new construction and
    modifications provided by this project are required to eliminate
    numerous environmental violations. The modifications and new
    construction would be required before any other local government agency
    or private service provider could take possession of the existing
    system.
         Mississippi: Gulfport Naval Construction Battalion Center BEQ
                           Modernization ($3,260,000)
        Question. Will this project provide adequate living quarters to
    accommodate all unaccompanied personnel at Gulfport NCBC? If not, what
    are the Navy's plans (by fiscal year and dollar amount) to provide
    adequate living quarters at Gulfport NCBC?
        Answer. This project (P-759A), plus military construction (MILCON),
    P-774, also in the Fiscal Year 2000 Budget request, and future project
    P-763, currently programmed in Fiscal Year 2004, are required to
    satisfy the total unaccompanied housing requirements of Construction
    Battalion Center (CBC) Gulfport. MILCON P-774 will renovate an existing
    student Bachelor Enlisted Quarters (BEQ) to accommodate A-School
    students in adequate quarters.
        A Fiscal Year 1999 repair project in the amount of $4,880,000 will
    renovate and repair the last two existing BEQ. Military Construction
    Project P-763 will construct a new facility and complete the plan at
    CBC Gulfport to provide adequate living quarters for all entitled
    military personnel. This project will cost approximately $12,000,000.
        It should be noted that P-759A, P-774 and the repair project will
    modernize and/or repair existing BEQ at Gulfport. Like most
    modernization efforts, capacity is lost in the process of bringing a
    BEQ up to current standards. P-763 is new construction at a scope of
    approximately 214 spaces for junior enlisted Sailors.
    North Carolina: Camp Lejeune Marine Corps Base Physical Fitness Center,
                                  ($1,070,000)
        Question. Will this project satisfy the total space requirement for
    fitness centers at Camp Lejeune Marine Corps Base? If not, are
    additional fitness center projects programmed? If so, in what fiscal
    year and at what cost?
        Answer. Marine Corps Base (MCB) Camp Lejeune is a large base that
    encompasses 153,000 acres with a perimeter of approximately 127 miles.
    To facilitate the efficient training and support of MCB Camp Lejeune's
    population of over 90,000 active military, civilians, and dependents,
    the base is divided into seven smaller cantonment areas. Each
    cantonment area has some individual facilities requirements that cannot
    be efficiently shared with other areas. This includes fitness centers.
    As such, this military construction project for Camp Geiger, one of the
    seven cantonment areas, will not satisfy the total space requirement
    for fitness centers at MCB Camp Lejeune. There are currently two
    additional fitness center projects identified for MCB Camp Lejeune: one
    in Fiscal Year 2002 at a current cost $3.9 million for the Camp Johnson
    cantonment area; and one in Fiscal Year 2005 at a cost of $2.6 million
    for the Courthouse Bay cantonment area.
        Question. Will the use of this facility be limited to active duty
    military personnel assigned to Camp Lejeune Marine Corps Base?
        Answer. The physical fitness center will be open to active military
    personnel, their dependent family members, and retirees primarily
    associated with the Camp Geiger cantonment area of Marine Corps Base
    (MCB) Camp Lejeune. Camp Geiger is located 10 miles from the main base
    of Camp Lejeune, has no family housing, and is largely occupied by
    single Marines going through their initial Marine Combat Training.
        Question. How many such personnel will be stationed at Camp Lejeune
    Marine Corps Base at the time this center becomes operational?
        Answer. We expect that the new fitness center will primarily be
    used by the 5,021 Marines and Sailors that are projected to be assigned
    to Camp Geiger when the fitness center becomes operational.
        North Carolina: Camp Lejeune Marine Corps Base Maintenance and
                        Operations Facility (2,120,000)
        Question. Describe the economies that will result from the
    consolidation of operation, maintenance, and storage facilities in a
    central facility at this location.
        Answer. Currently, the 2nd Reconnaissance Battalion shares space in
    five different buildings scattered throughout the industrial area on
    mainside Marine Corps Base (MCB) Camp Lejeune and in the French Creek
    area of the base. The battalion was temporarily relocated to these
    areas after Hurricane Fran destroyed their permanent facilities on
    Onslow Beach in 1996. The 2nd Reconnaissance Battalion is now located
    some 10 miles form the Intracoastal Waterway, Onslow Beach, and live
    fire ranges where they do most of their training and operations. The
    relocation and consolidation of 2nd Reconnaissance Battalion to the
    Courthouse Bay area of Camp Lejeune will allow for significant
    economies in training, combat readiness, and quality of work
    environment. First, 2nd Reconnaissance Battalion, with missions that
    include SCUBA diving, beach, and riverine operations, will be located
    near the water. Second, 2nd Reconnaissance Battalion will be closer to
    the live five ranges. Third, 2nd Reconnaissance Battalion will be co-
    located with other units whose primary mission focus is also amphibious
    training. Finally, the move will get the unit out of the substandard
    1940's and 1950's vintage pre-fabricated and metal buildings and
    milvans that they now occupy.
        North Carolina: Camp Lejeune Marine Corps Base Road and Utility
                           Construction ($2,140,000)
        The Navy is working hard to get out of the utilities business
    whenever possible.
        Question. What efforts were made to privatize utility service at
    this installation, in part to avoid the need for the utility
    constructions portion of this project?
        Answer. The utility portion of this project provides utility
    systems required to support future live-fire range construction? The
    remoteness of these ranges along with the anticipated utility demands
    make it economically unattractive for commercial utility companies to
    construct the distribution systems that are needed. Marine Corps Base
    (MCB) Camp Lejeune, however, does tap into the commercial utility
    sources at the outer boundaries of the Greater Sandy Run Area (GSRA).
    Also the base is currently under study to privatize all utilities. If
    privatization proves to be cost-effective, then the utility
    distribution systems being constructed at the GSRA will be outsourced
    with all other base utility systems. Since a decision for utility
    privatization has not been made, we must continue to program for the
    construction of utility systems in support of live-fire ranges at the
    GSRA.
        Pennsylvania: Mechanicsburg Naval Inventory Control Point Water
                 Distribution System Improvements ($2,990,000)
        Question. What efforts were made to privatize utility service at
    this installation, in part to avoid the need for this military
    construction project?
        Answer. Privatization was considered during the economic analysis
    (EA) phase of this project. The EA determined that the existing age and
    condition of the water distribution system (requiring over $12,000,000
    to modernize) makes it unattractive for privatization. The option of
    privatizing the water distribution system (along with its maintenance)
    may be explored after modernization of the system.
         Virginia: Norfolk Naval Station Pier Replacement ($8,600,000)
        Question. Would the replacement pier be complete and usable without
    demolition of the existing pier?
        Answer. Partially. The replacement pier is being constructed 20
    meters south of existing Pier 2. The full south side of the new pier
    will be complete and usable without the demolition of the existing
    pier. However, due to the proximity of the existing pier to the new
    pier there would not be sufficient slip width to allow berthing on the
    north side of the new pier. Until the demolition of existing Pier 2 is
    accomplished under construction project P-533A, the new pier can only
    operate at 50% of its potential capacity.
        Question. Describe the scheduling adjustment in ship berthing that
    will be necessary to continue to operate while Piers 21 and 22 are
    being replaced.
        Answer. The replacement pier will be constructed approximately
    midway between existing Piers 21 and 22. During the construction phase
    of this project the north side of Pier 22 will remain active for the
    berthing of ships. The south side of Pier 22 will be available for
    berthing some of the time.
        Pier 21 will be unsuitable for ship berthing. The pier will be
    provided to the contractor for a construction material laydown area.
    During that period, ships that would have otherwise been berthed at
    Pier 21 will be berthed elsewhere at the Naval Station.
        The process will be a challenge for the Port Operations staff, will
    result in more frequent ship movements among berths, and may require a
    higher than normal level of ship nesting.
    Virginia: Norfolk Naval Shipyard Bachelor Enlisted Quarters Replacement
                                  ($4,460,000)
        Question. Is Dale Hall the building to be demolished as part of
    this project? If not, what is the Navy's plan for the utilization of
    Dale Hall?
        Answer. Dale Hall, Building #1439 will be demolished as part of the
    scope of this project.
        Question. What year was Dale Hall constructed, and how many
    enlisted personnel are currently housed in Dale Hall?
        Answer. Dale Hall was built in 1971. It presently houses 378
    enlisted personnel. The east wing has been closed due to structural
    deterioration and safety considerations.
        The form 1391 for this project states that ``this is the first of
    several planned to reduce the 1,086 transient personnel billeting
    requirements.'' Yet, the form 1390 only shows one Bachelor Enlisted
    Quarters project programmed in the out-years for the Norfolk Naval
    Shipyard.
        Question. When does the Navy plan on programming these several
    planned projects?
        Answer. There are several additional projects, not currently in the
    Future Years Defense Program (FYDP). These projects are presently in
    the planning phase and will be addressed during the next budget cycle.
        Question. What is the estimate of savings in design costs by
    accomplishing this project using a standard or definitive design?
        Answer. The definitive design used for this project is the standard
    modular layout for transient personnel, the 2+2 Bachelor Enlisted
    Quarters (BEQ) modules. This layout forms the basic building block from
    which the BEQ design is developed. Historically, this design
    methodology has resulted in a 30%-40% decrease in the actual design
    cost when compared with unique, one-of-a-kind designs.
     Virginia: Yorktown Naval Weapons Station Trestle Replacement and Pier
                              Upgrade ($6,330,000)
        Question. The form 1390 states, ``Band-Aid repairs to the south
    pier currently cost $1.4 million each year.'' Briefly describe these
    repairs.
        Answer. These repairs included deck re-surfacing, partial deck
    replacement, under-deck repairs, pile repairs (gunite and jacketing)
    and fender system repairs. These repairs were temporary in nature and
    served only as a ``holding action'' against the decaying of this 1941
    portion of the structure. This cost is an average cost over the period
    Fiscal Years 1989 through 1996.
          Washington: Puget Sound Naval Shipyard Dredging ($3,950,000)
        Question. What are the current depths of the CVN berths at piers 3,
    B, and D? also, what are the current depths of the turning-basin and
    inner channel?
        Answer. The current depths of the berths to be dredged are as
    follows:
              Pier 3: The current depth varies between -41 feet Mean Low-
            Low Water (MLLW) and -50 feet MLLW. The required depth is -46.1
            feet MLLW.
              Pier B: The current depth varies between -41 feet MLLW and
            -50 feet MLLW. The required depth is -46.1 feet MLLW.
              Pier D (East Side): The current depth varies between -41 feet
            MLLW and -44 feet MLLW. The required depth is -49.0 feet MLLW.
              Pier D (West Side): The current depth varies between -41 feet
            MLLW and -50 feet MLLW. The required depth is -49.0 feet MLLW.
              Turning basin and inner channel current depth vary between
            -37 feet MLLW and -39 feet MLLW. The required depth for the
            turning basin and the inner channel is -41 feet MLLW.
        Question. How long has the Navy been operating at these depths?
        Answer. Pier 3 and Pier B have been operating at their current
    depths since 1987 and Pier D has been operating at its current depths
    since 1995. The current situation limits flexibility for CVN
    maintenance functions. For the inner channel and turning basins, only
    maintenance dredging has been done since 1980.
        Question. Is a 5% contingency an adequate budget for any dredging
    activity in this area, with any environmental concerns and other
    unknowns?
        Answer. A 5% contingency is adequate for a dredging project in the
    area of Puget Sound Naval Shipyard. The project has taken into account
    the environmental concerns identified to date. The last dredging
    project performed in this area was a Fiscal Year 1995 project and a 5%
    contingency was adequate for that project. Environmental issues have
    been coordinated with regulating agencies and sediment disposal costs
    are based on the Fiscal Year 1995 dredging project, escalated for
    inflation.
     Southwest Asia Administrative Support Unit Bachelor Enlisted Quarters
                         (Security Force) ($6,230,000)
        This project constructs barracks to house 218 permanent party
    bachelor security personnel. According to the form 1391, the
    Administrative Support Unit's security department consists of 140
    personnel.
        Question. How will the Navy utilize the 78 additional barracks
    spaces?
        Answer. There will not be an additional 78 barracks spaces.
    Administrative Support Unit, Southwest Asia has two groups of primary
    Force Protection personnel, a Navy Security Force (NSF) with 140
    Sailors and a Marine Corps Security Force Company (MCSF) of 78 Marines
    for a total of 218 personnel. NSF provides physical security for the
    base including entry control, Intrusion Detection System monitoring,
    and normal police functions. MCSF is responsible for providing a ground
    defense, combat trained for immediate response in the event of a
    terrorist attack. In the event of an attack or emergency, these two
    groups provide the initial security response. All security personnel
    live on base to be readily available as a reaction force in the event
    of an emergency situation. This force is the primary initial response
    force to any threat on or near the base.
    Greece: Souda Bay Naval Support Activity Operational Support Facilities
                                  ($1,620,000)
        Question. Why is this project not eligible for NATO or host nation
    funding? Have precautionary prefinancing statements been submitted to
    NATO nonetheless?
        Answer. This project is not NATO eligible project since it supports
    a U.S. mission and is not a direct operational mission. No pre-
    financing statements have been submitted.
        Question. What are the cost savings that can be associated to the
    consolidation of operational support facilities at Souda Bay?
        Answer. The primary justification for this project is not based on
    potential cost savings associated with consolidation. The project is
    required to relocate personnel from inadequate facilities that do not
    meet seismic requirements. Six of the seven buildings being replaced
    are either temporary steel buildings or wood frame buildings with metal
    siding. The buildings were constructed over 30 years ago and would be
    completely destroyed during a significant seismic event, resulting in
    catastrophic injury to personnel.
        The reduction in electrical consumption associated with the project
    will result in savings of $40,000 per year. The potential savings in
    repair and maintenance costs have not be quantified.
       Italy: Naples Naval Support Activity Operational Support Facility
                                  ($7,370,000)
        Question. Why is this project not eligible for NATO or host nation
    funding? Have precautionary pre-financing statements been submitted to
    NATO nonetheless?
        Answer. This project is not a NATO eligible project since it
    supports a U.S. mission. No pre-financing statements have been
    submitted.
        Question. Describe in some detail the readiness and force
    protection concerns at this location, and how this project will address
    those concerns.
        Answer. This project will complete the approved Naples Improvement
    Initiative. Current operations are conducted in leased facilities that
    are located in and around the Agnano compound. Operational readiness
    and communication have been impacted by the relocation of the majority
    of Command functions from the Agnano site to Capodichino. The existing
    facilities do not meet current seismic codes and are subject to
    evacuation by order of the Government of Italy. In the event of a
    significant seismic event, the buildings may collapse and cause
    catastrophic injury to personnel. Also, the personnel stationed in
    Naples and working in Agnano are vulnerable to terrorist attack.
        This project will relocate remaining operational commands from
    Agnano to Capodichino. It will correct the problems associated with the
    fragmented operation and remove the associated readiness and
    communication impacts. The location and design criteria to meet current
    U.S. building codes for Seismic Zone 3 will also remove dangers
    associated with earthquakes and terrorist attacks.
         Worldwide Various: Unspecified Minor Construction ($7,342,000)
        Question. Provide for the record a ten-year history of amounts that
    have been requested and appropriated for unspecified minor
    construction.
        Answer. The amounts are listed below.
        FY90--$14.0 million; FY91--$13.3 million; FY92--$12.4 million;
    FY93--$5.0 million (+$5.3M reprogramming); FY94--$5.5 million (+$2.85M
    reprogramming); FY95--$7.0 million; FY96--$7.2 million; FY97--$5.1
    million; FY98--$11.5 million; FY99--$9.9 million.
              Worldwide Various: Planning and Design ($65,630,000)
        Question. Will this funding level meet the known requirements for
    the Fiscal Year 2000 program, including the necessary work on projects
    programmed for Fiscal Years 2001 and 2002?
        Answer. Yes, this funding level will be appropriate for known
    design requirements, taking into consideration projected savings from
    utilizing standard designs and site adapted designs for some bachelor
    quarters projects. The requested amount may not be sufficient, however,
    if significant unforeseen requirements materialize, such as projects
    added by Congress to the Fiscal Year 2000 program without an increase
    in the design funds appropriation.
        This year's planning and design request is $23,141,000, or 53
    percent, above the Fiscal Year 1999 request.
        Question. What are the needs for this significant increase?
        Answer. We do not agree that the difference between the Navy's
    Fiscal Year 1999 and Fiscal Year 2000 requests is $23,141,000. The
    Fiscal Year 1999 planning and design request was $58,346,000. The
    Fiscal Year 2000 request represents only a $7,284,000 or 12.5 percent
    increase. The increase is to support the more robust construction
    program planned in the Future Years Defense Program (FYDP) for Fiscal
    Year 2002 and Fiscal Year 2003.
                                    Plus Ups
        In the prepared testimony, page 4, it states ``Four Navy and eight
    Marine Corps projects totaling $200 million were added to the FY 2000
    program as a result of funds made available by Advance
    Appropriations.''
        Question. For the record, provide a list of these 12 projects by
    location, dollar amount, and original fiscal year programmed.
        Answer. The Navy and Marine Corps projects are:

    ----------------------------------------------------------------------------------------------------------------
                                                                               Auth req   Appr req   Original fiscal
                  Activity                 Proj No.           Title             ($000)     ($000)    year programmed
    ----------------------------------------------------------------------------------------------------------------
    Administrative Support Unit, SW Asia        903  Operations Control          34,770      8,550              2002
                                                      Center.
    Administrative Support Unit, SW Asia        913  Bachelor Enlisted           24,550      6,230              2001
                                                      Quarters (Security
                                                      Force).
    Naval Training Center, Great Lakes,         643  Bachelor Enlisted           31,410      7,700              2001
     Illinois.                                        Quarters ``A'' School.
    Naval Station, Norfolk, Virginia....        099  Pier Replacement.......     40,000      8,600              2001
    MCAS New River, North Carolina......        645  Family Service Center..      1,340        330              2001
    MCAS Yuma, Arizona..................        437  Child Development            2,620        640              2001
                                                      Center Addition.
    MCB Camp Lejeune, North Carolina....        935  Road and Utility             8,750      2,140              2001
                                                      Construction.
    MCLB Barstow, California............        920  Test Track/Test Pond         4,670      1,150              2001
                                                      Facility.
    MCB Camp Pendleton, California......        022  Tactical Vehicle             9,010      2,210      Unprogrammed
                                                      Maintenance Facility.
    MCB Camp Pendleton, California......        069  Bachelor Enlisted            9,740      2,390              2004
                                                      Quarters.
    MCAGCC 29 Palms, California.........        619  Tactical Vehicle            13,960      3,420              2002
                                                      Maintenance Facility.
    MCLB Albany, Georgia................        919  Engineering Equipment        6,260      1,540              2004
                                                      shop.
    ----------------------------------------------------------------------------------------------------------------

                                 Camp Pendleton
        In the prepared testimony, page 10, it states ``The Marine Corps
    issued a solicitation in November 1998 to privatize and revitalize 512
    on base homes, and construct 200 new homes on base at Marine Corps Base
    Camp Pendleton. The first part of this project would be funded with $20
    million in previously authorized and appropriated funds.''
        Question. In what fiscal year was this $20 million appropriated?
    Was it appropriated for the construction of family housing at Camp
    Pendleton? If so, how many units were to be constructed?
        Answer. The Camp Pendleton project in question was authorized and
    appropriated as part of the Fiscal Year 1996 Family Housing military
    construction (MILCON) program. The project was for $20 million to
    construct 139 deficit reduction units.
                  Previously Authorized and Appropriated Funds
        In the prepared testimony, page 11, it indicates $257 million in
    previously authorized and appropriated funds will help fund the Navy's
    share of the investment cost for 14 housing privatization projects.
        Question. For the record, provide a list of the projects (by fiscal
    year appropriated, location, dollar amount, and number of units) for
    which these funds were originally authorized and appropriated.
        Answer. The prepared testimony refers to 14 locations for which the
    Department of the Navy plans, this year, to provide notifications to
    Congress of our intent to issue solicitations. The list of projects
    comprising the $257 million is provided below:

    ------------------------------------------------------------------------
                                                     Dollars in     No. of
    Fiscal year      Location      Type of project    millions      units
    ------------------------------------------------------------------------
           1996  NC Norfolk, VA..  Replacement....        $34.5          320
           1996  NETC Newport, RI  Revitalization.          8.8           66
           1997  NC Jacksonville,  New                     10.0          100
                  FL.               Construction.
           1998  NC Jacksonville,  Revitalization.         10.7          200
                  FL.
           1999  USNA Annapolis,   Revitalization.          4.3           85
                  MD.
           1999  USNA Annapolis,   Revitalization.          4.3           80
                  MD.
           1998  NTC Great Lakes,  Revitalization.          2.9           27
                  IL.
           1998  NTC Great Lakes,  Revitalization.          7.7           64
                  IL.
           1998  NTC Great Lakes,  Revitalization.          8.1           68
                  IL.
           1999  NTC Great Lakes,  Revitalization.         12.5          102
                  IL.
           1998  NETC Newport, RI  Revitalization.         14.5          140
           1998  NSB Bangor, WA..  Revitalization.          5.4          141
           1998  NSB Bangor, WA..  Revitalization.          2.1           24
           1998  NSY Puget Sound,  Revitalization.          8.3          112
                  WA.
           1998  NAS Whidbey       Replacement....         16.0          102
                  Island, WA.
           1998  NAS Whidbey       Revitalization.          5.7           80
                  Island, WA.
           1999  NAS Whidney       Revitalization.          9.7          144
                  Island, WA.
           1997  NAS Meridian, MS  Revitalization.          6.6          160
           1998  MCAGCC 29 Palms   Construction...         23.9          132
                  CA.
           1997  MCAS Beaufort,    Construction...         14.0          140
                  SC.
           1997  MCB Camp          Revitalization.         10.1           94
                  Lejeune, NC.
           1999  MCB Camp          Revitalization.         17.4          222
                  Lejeune, NC.
           1998  MCAS Cherry       Revitalization.          6.0           83
                  Point, NC.
           1999  MCAS Cherry       Revitalization.         13.5          192
                  Point, NC.
                                                   -------------------------
        Totals.  ................  ...............        257.0         2878
    ------------------------------------------------------------------------

        This list supports new projects addressed in the testimony.
                                    Barracks
        Question. Provide for the record a chart that will show the Navy's
    barracks construction program at the time the ``one plus one'' standard
    was approved, and the current program through completion, broken out by
    locations in the U.S., in Europe, and at other overseas locations.
        Answer. Navy Bachelor Enlisted Quarters (BEQ) construction program
    at the time the 1+1 standard was approved: (Fiscal Year 1997-2001).

                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                      FY97      FY98      FY99      FY00      FY01
    ----------------------------------------------------------------------------------------------------------------
    CONUS+HI......................................................   117,182    65,770   171,520   102,200   100,940
    Europe........................................................    16,000  ........  ........  ........  ........
    Other.........................................................    24,100  ........  ........    30,280    15,900
                                                                   -------------------------------------------------
          Total...................................................   157,282    65,770   171,520   132,480   116,840
    ----------------------------------------------------------------------------------------------------------------

        Current Navy BEQ construction program (excludes FY-2001 Advance
    Appropriation tail): (Fiscal Year 2001-2005).

    ----------------------------------------------------------------------------------------------------------------
                                                             FY01             FY02        FY03      FY04      FY05
    ----------------------------------------------------------------------------------------------------------------
    CONUS+HI........................................       132,210           98,050      124,270   153,920   152,070
    Europe..........................................        25,840     ...............    25,540  ........  ........
    Other...........................................        14,960     ...............  ........     2,350    34,340
                                                     ---------------------------------------------------------------
          Total.....................................       173,010           98,050      149,810   156,270   186,410
    ----------------------------------------------------------------------------------------------------------------

        Marine Corps:

    ----------------------------------------------------------------------------------------------------------------
                                         FY95             FY00        FY05      FY10      FY15      FY20      FY36
    ----------------------------------------------------------------------------------------------------------------
    Previous (Reflects
     transition to 11,
     Jul 1995):
        1 per rm................             0            2,500        2,500     2,500     4,222     7,092    15,702
    Current Plan (Combination):
        11.............             0            1,922        2,666     2,666     2,666     2,666     2,666
        22 \1\.........        18,895           21,985       25,075    28,165    31,255    34,345    44,233
    ----------------------------------------------------------------------------------------------------------------
    \1\ Note.--The Marine Corps has a waiver to the Department of Defense (DoD) 11 standard to build
      20 room configured barracks. Under the 20 room configuration, the Marine Corps has an
      adequate existing inventory of 18,895 20 spaces throughout the timetable. Our current plan includes
      elimination of inadequate room configured barracks spaces by Fiscal Year 2005, and achievement of a two person
      room assignment by Fiscal year 2036.

                            Family Housing Inventory
        Question. Provide for the record a chart that will show the average
    number of family housing units supported for Fiscal Years 1997, 1998,
    and 1999, and those expected to be supported in Fiscal Year 2000,
    broken out into government owned (U.S. and foreign), leased (U.S. and
    foreign), and privatized under Public-Private Ventures.
        Answer. A chart showing the average number of family housing units
    supported for Fiscal Years 1997, 1998, and 1999, and protected for
    Fiscal Year 2000, broken out into government owned (CONUS, U.S.
    Overseas and foreign), leased (U.S. and foreign), and privatized under
    Public-Private Ventures (PPV) follows:

    ----------------------------------------------------------------------------------------------------------------
                                                                    FY 1997      FY 1998      FY 1999      FY 2000
    ----------------------------------------------------------------------------------------------------------------
    Navy:
        Government owned........................................       69,337       62,684       61,158       57,139
            CONUS...............................................       50,105       44,477       43,144       39,327
            U.S. Overseas.......................................       11,290       10,719       10,554       10,487
            Foreign.............................................        7,942        7,488        7,460        7,325
        Leased..................................................        4,847        4,900        5,727        6,708
            U.S.................................................        3,279        3,284        3,553        3,782
            Foreign.............................................        1,568        1,616        2,174        2,926
        PPV Units...............................................            0          585        2,345        6,725
    Marine Corps:
        Government owned........................................       25,351       25,569       24,197       22,729
            CONUS...............................................       24,814       25,009       23,584       22,064
            Foreign.............................................          537          560          613          665
        Leased (U.S.)...........................................          725          725        1,001        1,001
        PPV Units...............................................            0            0            0        2,475
    ----------------------------------------------------------------------------------------------------------------

                             Cold Weather Building
        Question. Will this year's incremental funding approach present any
    problems with construction projects in cold weather areas?
        Answer. No problems related to incremental funding are anticipated
    at cold weather locations. The projected outlay streams for each
    project will have to address the cold weather impact on work scheduling
    in order to accurately identify the appropriate amount to be identified
    in the limitation of funds clause in the contract.
                  NATO Precautionary Pre-financing Statements
        Question. Submit for the record a copy of the precautionary pre-
    financing statements that have been submitted to the NATO
    infrastructure committees for each European project for which funds
    were appropriated for Fiscal Year 1998, and for each such project
    requested for Fiscal Year 1999.
        Answer.
              Fiscal year 1998: P-123, DLA--Hydrant Refueling System,
            Sigonella, IT. Precautionary pre-financing statement noted
            during NATO infrastructure committee (IC) infra/SUS meeting
            (97) 190 on June 23, 1997.
              P-831, Sewage Treatment Plant, Souda Bay, GR. Precautionary
            pre-financing statement noted in IC meeting (98) 04 on January
            30, 1998.
              Fiscal Year 1999: (None).
        Question. Provide an explanation for any project for which
    statements have not been submitted.
        Answer. Fiscal Year 1998--P-196 Logistic Air Terminal, Capodichino,
    Italy is a U.S. Mission facility. P-718, Bachelor Enlisted Quarters
    (BEQ), Sigonella, Italy is not a direct operational mission facility.
        Fiscal Year 1999; P-172, Public Works Facility, Naval Support
    Activity (NSA) Naples, Capodichino, Italy is a public works support
    function for a U.S. Mission. P-726, BEQ, NSA Souda Bay, Greece is not a
    direct operational mission facility. P-101 Unspecified minor
    construction (UMC) Wastewater Treatment Plant (WWTP) Upgrade, NSA La
    Maddalena, Italy is not a NATO supported function and is a U.S.
    mission. P-640 (UMC) Water Treatment Plant, NSA Rota, Spain is an
    environmental project for a U.S. mission.
                    Family Housing Construction Improvements
        The Navy's Fiscal Year 2000 family housing construction improvement
    request totals $5,303,000.
        Question. For the record, provide the list of projects including
    the number of units to be improved and the appropriation request for
    each individual project.
        Answer. The Department of the Navy family housing construction
    improvement appropriation request for Fiscal Year 2000 totals $31.7
    million. A list of projects including the number of units to be
    improved and the appropriation request for each individual project
    follows:

    ----------------------------------------------------------------------------------------------------------------
                                                                                                  FY2001 advance
                   Location                      No. of homes         FY2000 appropriation     appropriation amount
                                                                         amount ($000)                ($000)
    ----------------------------------------------------------------------------------------------------------------
    Navy:
        NAWC China Lake, CA..............                      104                      822                    3,116
        NB San Diego, Ca.................                        8                      632                    2,399
        NB Pearl Harbor, HI..............                       28                      737                    2,797
        NP Pearl Harbor, HI..............                       19                      822                    3,116
        NB Pearl Harbor, HI..............                      112                    3,572                   13,542
        NB Pearl Harbor, HI..............                       25                      906                    3,436
        NAS Keflavik, Iceland............                      101                    3,158                   11,986
        NAF Atsugi, Japan................                        7                      272                      785
        NAF Atsugi, Japan................                       96                    2,568                    7,398
        NAF Atsugi, Japan................                       36                      721                    2,078
        NOF Sasebo, Japan................                       88                      169                      486
        NOF Sasebo, Japan................                      272                      110                      313
        PWC Yokosuka, Japan..............                      104                    2,776                    7,998
        PWC Yokosuka, Japan..............                       46                    1,120                    3,225
        PWC Yokosuka, Japan..............                        7                      348                    1,003
        NS Roosevelt Roads, Puerto Rico..                      294                    5,813                   22,054
        PWC Guam.........................                       72                    2,632                    9,987
                                          --------------------------------------------------------------------------
          Navy Totals....................                    1,419                   27,178                   95,719
                                          ==========================================================================
    Marine Corps:
        MARBKS 8th & I, Washington, DC...                        1                       36                      138
        MARBKS 8th & I, Washington, DC...                        1                       31                      120
        MCB Kaneohe Bay, HI..............                        1                       37                      145
        MCAS Cherry Point, NC............                      103                      397                    1,528
        MCAS Iwakuni, Japan..............                       44                       66                      228
        MCAS Iwakuni, Japan..............                       44                      397                    1,381
        MCB Camp Pendleton, CA...........                      100                      842                    3,385
        MCAS Yuma........................                      113                    2,724                   10,943
                                          --------------------------------------------------------------------------
          Marine Corps Totals............                      407                    4,530                   17,868
                                          --------------------------------------------------------------------------
          DON Totals.....................                    1,826                   31,708                  113,587

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

        The 2000 Appropriation amounts include a portion of annualized
    Supervision, Inspection, and Overhead (SIOH).
                         BRAC Environmental Restoration
        Question. What is the Navy's current estimate of the annual funding
    requirement for BRAC environmental restoration beginning in Fiscal Year
    2002?
        Answer. The Department of the Navy's BRAC environmental restoration
    requirements are currently estimated at $92.1 million in Fiscal Year
    2002, $59.5 million in Fiscal Year 2003, $38.0 million in Fiscal Year
    2004, and $38.0 million in Fiscal Year 2005.
                      Supervision, Inspection and Overhead
        Question. What program budgeting and execution challenges does the
    annualization of SIOH present, if any?
        Answer. With regard to both budgeting and execution, SIOH does not
    present any additional challenges. While SIOH costs are currently fully
    budgeted up-front, they are already managed and expended over a period
    of up to five years. As such, no additional administrative work is
    anticipated. However, to keep such administrative burdens minimized,
    rather than budget SIOH costs within the individual projects as has
    been past experience, SIOH costs are centrally budgeted in a single
    program similar to how planning and design costs. The back-up materials
    would detail the amount of SIOH for such specific project for a given
    year. That method is consistent with the financing of program support
    costs in all our other acquisition programs and maintains our
    flexibility as SIOH costs for various projects run over or under their
    computed values for a given year.
                           Child Development Centers
        Question. Bring us up to date with the Navy's efforts to outsource
    child development center services in San Diego.
        Answer. The Department of the Navy completed an A-76 Commercial
    Activities study of child care at 10 Navy bases and two Marine Corps
    bases in California and Nevada in September 1998. The study revealed
    that the government-managed operation was more cost-effective than the
    private sector. The government's Most Efficient Organization (MEO) for
    the San Diego region was $19 million less expensive over five years
    than the best value contractor.
        The Navy's Southwest Region (San Diego) is now in the process of
    implementing the government's management plan and has established a
    transition team, comprised of the regional management staff, to oversee
    the implementation process.
        The Navy is conducting additional A-76 child care studies in other
    locations to assess whether the private sector can meet Navy child care
    requirements at less cost to the government while preserving quality.
                                 Naples, Italy
        Question. Bring us up-to-date with the events of the past year and
    the current status of the Support Site Initiative in Naples, Italy, as
    well as the entire Naples Improvement Initiative (NII).
        Answer. The NII Program is nearing completion with 90 percent of
    the projects completed, under construction, or in design. For military
    construction (MILCON) at Capodichino, the C4I facility, Consolidated
    Club, Retail Facility, Gym, Dining Facility, Dispensary, two Bachelor
    Enlisted Quarters (BEQ), Bachelor Officers Quarters (BOQ), Chapel, Main
    Gate Complex, two Parking Garages, Utilities Infrastructure, two of
    three phases of the administrative facility, theater, library, Fire and
    Security, and Water Treatment Plan have been completed. The Child
    Development Center, Air Cargo, and Air Passenger Terminal projects are
    under construction. The Public Works Building is scheduled to be
    awarded in late April with construction starting in late June. The
    third phase of the Admin facility is a Fiscal Year 2000 option to the
    public works contract, and if approved, will be awarded late November.
    The last remaining MILCON project at Capodichino is P-201, a 118 module
    BEQ programmed for Fiscal Year 2001.
        Construction at the Aversa Support Site is progressing rapidly. The
    first increment, including an Elementary and High School, Utility
    Infrastructure Systems, and 504 Housing Units are completed. An option
    for an additional 372 housing units is now under construction and
    scheduled to complete in phases beginning in August of this year.
        The second increment, Community Support Facilities including a
    Child Development Center, Telephone Switch Building, Main Gate Complex,
    Fire Station will be completed in April, June, July, and October. The
    remaining facilities including the Village Forum, (Navy Lodge,
    Restaurant, Family Services Center, Youth Center and Chapel), Housing
    Welcome Center, Auto Hobby Shop, Public Works Building, Housing
    Maintenance Building, Armed Forces Radio and Television Building and
    MAR Storage Building will be competed by October 2000.
        Construction of the third increment for the Hospital started in
    February of 1999, with an estimated completion date of January 2. The
    project is being fast track constructed with foundation and structural
    work underway. Final design for the architecture and building systems
    will be completed this spring, with our pre-final scheduled for April
    19, 1999 in Norfolk, Virginia.
        The fourth increment, Community and Support Facilities including a
    Navy Exchange, Commissary, Physical Fitness Facility/Pool, Veterinary
    Clinic, Bowling Alley, and a 96 module BEQ. Proposals have been
    reviewed by the Source Selection Board and recommendations forwarded to
    the selecting official at LANTNAVFACENGCOM for approval. Assuming
    contract award in June 1999, estimated construction completion date of
    the facilities included in increment 4 is June 2002.
                                Housing Deficits
        Question. What is your current worldwide family housing deficit?
        Answer. The projected worldwide family housing deficit is 15,900
    homes for the Navy. The current Marine Corps family housing deficit is
    10,373.
        Question. What are your three largest deficits, and how large are
    they?
        Answer.

    Navy:                                                              Homes
        San Diego, California...............................           3,662
        Norfolk, Virginia...................................           1,924
        Everett, Washington.................................             689
    Marine Corps:
        Camp Pendleton, CA..................................           4,486
        Camp Lejeune, NC....................................           3,581
        Cherry Point, NC....................................             821
                                 Waiting Lists
        Question. How many families are on waiting lists for government-
    provided family housing, and what is the average waiting time?
        Answer. As of September 30, 1998, there were 20,600 Navy families
    on waiting lists for family housing. The average waiting times for
    assignment to family housing vary from a few months to several years
    depending on such factors as locations, time of year, and other
    factors.
        The Marine Corps currently has 5,176 families on government
    provided family housing waiting lists; the average waiting time is
    eight months.
    California: Camp Pendleton Marine Corps Reserve Center Reserve Training
                              Complex ($1,649,000)
        Question. Describe in some detail the ``Special Foundation
    Features'' included in the cost of this project.
        Answer. ``Special Foundation Features'' are reinforcing steel rods
    used under the pavement of the LAV (Light Armored Vehicle) parking ramp
    and in the maintenance bays. The steel reinforcement is necessary
    because the LAV (weighing as much as 29,000 lbs. fully loaded) exerts a
    greater pressure per square inch than normal pavement can withstand
    with normal use.
        Question. Describe in some detail the ``Additional Functional
    Features'' included in the cost of this project.
        Answer. ``Additional Functional Features'' are the following items:
              LAV-AD (Light Armored Vehicle--Air Defense) Sun Shelter. This
            is a steel framed structure with a concrete floor, no walls, a
            metal roof, and lighting. LAVs will be parked underneath the
            shelter so that routine maintenance can be performed on their
            exterior. When exposed to the sun, the LAV armor becomes too
            hot to allow safe and efficient maintenance (it is not uncommon
            for the surface of the LAV to reach 130 degrees Fahrenheit when
            exposed to the sun for a short period).
              Paint Booth with VOC (Volatile Organic Compound) controls.
            This is a vehicle bay equipped with an internal booth that will
            accommodate an entire LAV for painting. The booth incorporates
            emission control mechanisms to prevent the release of VOCs into
            the atmosphere and onto the soil. This is necessary to meet
            Southern California's strict environmental protection laws.
              Washrack & Oil/Water/Sand Separator (OWS). The Washrack is an
            elevated ramp used to wash military vehicles prior to
            performance of maintenance after field training. The OWS is a
            concrete tank system that separates and holds the resulting
            oil, water, and sand effluvia so that no hazardous wastes will
            enter the soil and leach into the water table.
              Gun Shed. This is a one story steel framed structure with
            concrete floor, wheel stops, metal siding at ends and back, an
            opened front, sloped metal roofing, and an interior lighting
            system. The main weapons on the LAV-25 (M242 25mm electric
            chain guns) are nine feet long--too large to fit into the
            armory for routine maintenance. The Gun Shed is necessary for
            routine weapons maintenance that cannot occur while exposed to
            the elements.
       Pennsylvania: Willow Grove Naval Air Station Hazardous Materials
                          Storage Facility ($320,000)
        Question. How long has the existing facility been out of compliance
    with applicable environmental and safety regulations?
        Answer. The existing facilities have been out of compliance with
    applicable environmental and safety regulations since 1992. In 1992,
    Naval Air Station (NAS) JRB Willow Grove signed a Federal Facilities
    Compliance Agreement with the Pennsylvania Department of Environmental
    Protection in which the command promised to comply with hazmat storage
    requirements. A deadline was not specified at the time, however, the
    Navy has made a concentrated effort to meet the requirements by
    programming a military construction Naval Reserve (MCNR) project as
    quickly as possible in a fiscally-constrained environment.
        Question. What makes the Fiscal Year 2000 the right year for
    replacement?
        Answer. Currently, one of the facilities being utilized is a corner
    of an active aircraft hangar. This situation is inherently dangerous to
    personnel for safety, environmental and operational reasons. Any delay
    in funding the project beyond Fiscal Year 2000 will continue to subject
    personnel to imminent danger and will also provide environmental
    regulators an opportunity to write Notices of Violation for
    noncompliance which may result in payment of costly fines and
    penalties.
        Question. When were the existing facilities built, and briefly
    describe these facilities.
        Answer. The existing facilities were constructed in the 1950's as
    an aircraft hangar and a warehouse.
        Question. What are the plans for re-use of the current facilities?
        Answer. Plans for reuse of the existing facilities are to revert
    them to their original use. These facilities were not designed for
    hazardous material storage, and are not economically convertible for
    that purpose. The existing facilities have not been fully used for
    their original intent as a result of the dire need to store hazardous
    material.
        [Clerk's note.--End of questions for the record submitted by
    Chairman Hobson.]
        [Clerk's note.--Questions for the record submitted by Congressman
    Olver.]
                Facilities Prior to Base Realignment and Closure
        Question. Prior to the four rounds of Base Realignment and Closure
    (BRAC), which will be completed in July 2001, how many facilities,
    piers and wharves, and runways did the Navy own and operate. Also,
    provide the same information for the Marine Corps.
        Answer. Table depicts Navy and Marine Corps data prior to the four
    rounds of BRAC.

    ----------------------------------------------------------------------------------------------------------------
                                                                   Facilities     Piers       Wharves      Runways
    ----------------------------------------------------------------------------------------------------------------
    Navy........................................................      127,582          362          225          196
    USMC........................................................       40,451            6            4           55
    ----------------------------------------------------------------------------------------------------------------

                   Long Range Facility Plans for NAS Lemoore
        Question. Submit for the record the Navy's long range plans for
    Military Construction, Family Housing, and Base Realignment and Closure
    at Lemoore Naval Air Station. Also, submit the Navy's long-range plans
    for Morale, Welfare, and Recreation (MWR) at this location.
        Answer. In addition to four projects included in the Fiscal Year
    2000 budget request, the Navy's long range (Future Years Defense
    Program) plans for military construction at Lemoore Naval Air Station
    include projects for three bachelor enlisted quarters, a fitness
    center, and a corrosion control facility.
        In addition to the Family Housing Improvement Fund replacement
    project that is included in the Fiscal Year 2000 budget request, there
    is a future Family Housing Improvement Fund improvement project to
    revitalize the remaining substandard homes. These two projects should
    satisfy all housing requirements for both suitability and inventory at
    Lemoore.
        There are no future Base Realignment and Closure construction
    projects planned for Lemoore.
        In regard to Morale, Welfare, and Recreation, the Navy has
    conducted a preliminary study of requirements and identified a number
    of conceptual projects. The study is currently under review by the
    major claimant and regional commander.
                     Housing Purchases Under Privatization
        Question. Submit for the record information on how Navy personnel
    will have preference to buy housing units at Everett, Washington.
        Answer. Preference will be given for buying housing units as
    follows: a unit shall first be offered for sale to current Navy tenants
    in the project. The offer to sell to an existing tenant shall contain
    the following purchase incentives.
              a. The purchaser shall receive a rent credit which shall
            reduce the unadjusted sales price by $200.00 per month for each
            month the tenant has rented the unit, up to a maximum of six
            months.
              b. For units sold ``as is'' without any warranties, the sale
            price shall be reduced by $5,000.00 in lieu of making any
            repairs to the unit.
              c. The purchaser shall be charged a real estate commission of
            not more than 4 percent. The sales price will be what the
            market will bear. This number includes, among other things, the
            normal 10 percent real estate commission, which is the amount
            specified in the Condominium Declaration filed by the General
            Partner on behalf of the partnership. This 10 percent
            commission will be included in the sales price for a unit sold
            to a non-tenant. If the unit is sold to a Navy tenant, the
            commission included in the sales price cannot be more than 4
            percent.
              d. The Partnership shall pay the purchaser's escrow closing
            costs or loan-closing costs in an amount not to exceed 1.5
            percent of the sales price determined after the preceding
            adjustments have been made.
              e. Current tenants will have 30 days within which to accept
            or decline the offer.
                  Construction Plans for Panama City, Florida
        Several units have been transferred to the Coastal Systems Station
    in Panama City, Florida and are currently working out of trailers.
        Question. Provide your plans to construct permanent facilities for
    the record.
        Answer. The station has submitted Military Construction Project P-
    372, Warfare Systems Engineering Facility, for the construction of
    permanent facilities. The project is currently planned in the
    President's Budget Future Years Defense Program for Fiscal Year 2002
    and will eliminate eight trailers.
        [Clerk's note.--End of questions for the record submitted by
    Congressman Olver.]
        [Clerk's note.--Questions for the record submitted by Congressman
    Porter.]
                            Expansion of PPV Efforts
        As you know, in Fiscal Year (FY) 1996, Congress enacted the
    Military Housing Privatization Initiative which granted the Department
    of Defense (DoD) new authority to enter into housing ventures with the
    private sector and established a five year housing privatization pilot
    program that is scheduled to expire in February of 2001. The intent of
    this initiative was to test the viability of using Public/Private
    Ventures (PPV) to overcome the DoD's housing deficit. In the FY 2000
    budget, the DoD is making an unprecedented request for a direct
    appropriation of $76.7 million to the Family Housing Improvement Fund
    (FHIF) for specific privatization projects. Included in this amount are
    Navy requests for nearly $61.6 million for PPV projects at five
    locations.
        Question. These funds, if appropriated, would represent a dramatic
    expansion of the privatization initiative. Why is the Navy seeking to
    dramatically expand its privatization initiative prior to the
    completion of the pilot program?
        Answer. From a business perspective, leveraging resources through
    PPV to reduce the housing backlog and deficit is a very strong
    motivation to apply privatization to the maximum extent possible.
    Additionally, privatization will establish self-sustaining
    revitalization accounts for future renovation requirements.
                         Comprehensive Housing Strategy
        As I am sure you are aware, in July of 1998, the General Accounting
    Office (GAO) released a report on the privatization of military housing
    which stated that the DoD must make a more concerted effort to
    integrate the privatization initiative into an overall housing strategy
    consisting of housing allowances and traditional military construction
    as well as private sector housing.
        Question. What steps have the Navy taken to formulate such a
    comprehensive housing strategy in response to this recommendation?
        Answer. Department of the Navy-owned housing is closely coordinated
    with Housing Allowances to ensure that Sailors and Marines are treated
    right, whether they are in government quarters or on allowances. During
    the budgeting process, housing managers and allowance analysts ensure
    that housing inventory increases/decreases are reflected in the budget
    estimates. This ensures that both accounts are appropriately funded.
        Regarding Public/Private Ventures (PPV), funds are transferred from
    the Family Housing, Navy appropriation to Military Pay Navy and
    Military Pay, Marine Corps appropriations during budget preparation to
    pay the allowances associated with Sailors in units to be privatized.
    The Department of Defense has requested legislation allowing this
    transfer of funds to take place at the time the PPV deal is signed.
    This would allow for a much more accurate and timely transfer of funds.
        Large amounts of money have been spent to fix houses using
    traditional military construction (MILCON) since the Marsh Panel plus-
    ups. The financial leverage provided by PPVs has allowed regular MILCON
    amounts to be increased to record levels in Pearl Harbor, Puerto Rico,
    and Guam where Sailors need special quality of life attention. A new
    Basic Allowance for Housing improvements is being phased-in over the
    next five years, and is being closely monitored to gauge their effect
    on the overall requirement for Navy-owned family housing.

           Effect of PPVs on Housing Supply and Maintenance Functions

        Great Lakes Naval Training Center is one of five privatization
    candidates in the Fiscal Year 2000 family housing program.
        Question. Can you expand for the record on what you are proposing
    for Great Lakes, how it would affect base operations and housing
    supply, and the implications for employees of Great Lakes?
        Answer. The Navy is considering a range of options prior to
    drafting a concept for the Public/Private Venture (PPV) of housing at
    Great Lakes. The options differ in which houses to include or exclude
    (e.g. historic homes), but it is expected that most of the housing at
    Great Lakes would be included.
        Many details of the proposed PPV concept have yet to be worked out
    and a variety of arrangements are possible. The Navy will ensure that
    government employees whose current jobs are affected by privatization
    will get consideration for reassignment to other government positions
    or employment by the developer selected for the PPV project.
        The housing office, some base operations support, and housing
    supply employees may be impacted if the private entity should provide
    similar services that are cost-effective and in the best interest of
    the station's mission. Government-run supply and material operations
    would most likely see less workload due as the PPV entity would likely
    retain its own supplier.
        Existing government and contracted maintenance and repair support
    provided by the Navy Public Works Center would also be impacted since
    the private entity would also normally provide its own maintenance and
    repair support services.

                          Effect of PPVs on Impact Aid

        The North Chicago School District #187, which serves Great Lakes
    Naval Training Center, receives Impact Aid payments for the costs of
    educating military dependents. The Mayor of North Chicago and school
    officials are concerned about how the privatization of military housing
    at Great Lakes could affect school revenues. It is my understanding
    that under some privatization pilot projects the subject properties
    remain as federal property while, in other cases, the property is
    itself privatized. Obviously, this determination has serious
    implications for operation of the Impact Aid program.
        Question. Please explain for the record how privatization
    initiatives affect Impact Aid generally. What steps are you taking to
    ensure that local school districts, and ultimately our military
    children, are not negatively affected by the privatization of military
    housing?
        Answer. The affects of Impact Aid were addressed in a Department of
    Defense (DoD) Office of General Counsel memorandum of February 9, 1999,
    subject: Impact Aid and the Military Housing Privatization Initiative.
    The Department of Education Prior attorney responsible for impact aid
    issues was consulted prior to the release of the DoD memorandum and
    concurred with it.
        The DoD OGC memorandum has two basic PPV conditions:
              Land transferred to the developer. Land transferred to the
            developer will be subject to full federal, state, and local
            taxes. With full taxes being paid to local communities on the
            land and improvements by the developer, affected school
            districts will receive the ``lower level'' of impact aid for
            the military children.
              Land leased to the developer. Land leased to the developer
            remains federal land. For these situations, federal, state and
            local taxes will not be paid on the land. As such, affected
            school districts will receive the ``high level'' impact aid for
            the military children.
        Consistent application of the DoD OGC guidance will ensure there is
    no degradation to the education opportunities for the military
    children.
                Impact Aid in North Chicago School District #187
        The North Chicago School District #187, which serves Great Lakes
    Naval Training Center, receives Impact Aid payments for the costs of
    educating military dependents. The Mayor of North Chicago and school
    officials are concerned about how the privatization of military housing
    at Great Lakes could affect school revenues. It is my understanding
    that under some privatization pilot projects the subject properties
    remain as federal property while, in other cases, the property is
    itself privatized. Obviously, this determination has serious
    implications for operation of the Impact Aid program.
        Question. Please explain with specificity how your proposal for
    Great Lakes would affect impact aid and North Chicago School District
    #187.
        Answer. Based on an opinion issued by the Department of Defense
    (DoD) Office of General Counsel, and the Government's intent to retain
    title to the land on which the houses stand, the property would not be
    subject to taxation by the state or any subdivision of the State. The
    local education agency, District #187 in this case, would therefore be
    eligible for the same level of impact aid they now receive.
                   Impact Aid Consultation for District #187
        The North Chicago School District #187, which serves Great Lakes
    Naval Training Center, receives Impact Aid payments for the costs of
    educating military dependents. The Mayor of North Chicago and school
    officials are concerned about how the privatization of military housing
    at Great Lakes could affect school revenues. It is my understanding
    that under some privatization pilot projects the subject properties
    remain as federal property while, in other cases, the property is
    itself privatized. Obviously, this determination has serious
    implications for operation of the Impact Aid program.
        Question. Has the Navy consulted with local school districts to
    analyze the impact of proposed privatization initiatives? Have you
    consulted District #187 on this issue? If not, do you intend to do so?
        Answer. The Navy has advised District #187 that the issue of Impact
    Aid is being worked at the highest levels within the Department of
    Defense (DoD). The Commander, Naval Training Center Great Lakes intends
    to consult with District #187 after receiving an update on the
    privatization on March 16, and will continue to consult with the City
    of North Chicago and District #187 routinely during the planning and
    acquisition process.
        [Clerk's note.--End of questions for the record submitted by
    Congressman Porter.]
        [Clerk's note.--Questions for the record submitted by Congressman
    Tiahrt.]
                       Labor Agreements on Navy Contracts
        As you may know, many in Congress strongly differ with the
    Administration's policy of ``strongly encouraging'' the use of union-
    only project labor agreements (PLAs) on federal construction projects.
        As an appropriator, I am particularly concerned about the
    discriminatory, anti-competitive and costly effects of the
    Administration's encouraged use of union-only project labor agreements
    on federal projects.
        Question. I would like to ask the Secretary if he is aware of the
    use of any labor agreements on Navy contracts by the Navy or any of the
    prime contractors contracted by Navy.
        Answer. As of this date, there has been non construction contract
    awarded that contained a contract requirement for ``Project labor
    Agreements.'' There has been no Naval Facilities Engineering Command
    (NAVFAC) construction project in excess of 5 million in which it has
    been determined that use of government-required project labor
    agreements would serve the goals set forth in the President's
    Memorandum of June 5, 1997 (and the guidance set forth in the Under
    Secretary of Defense (Acquisition & Technology's) memorandum of October
    2, 1997).
        There is no record available to determine the number of
    construction contractors subject to collective bargaining agreements.
    However, it is believed that a considerable number of NAVFAC
    construction contractors are signatory to collective bargaining
    agreements with various building trades unions. Within these signatory
    employers are contractors that have signed ``project labor agreements''
    (collective bargaining agreements) applicable to the project site and
    duration of the contract. These contractors have negotiated such
    agreements and perform NAVFAC contract work under those agreements
    without government mandate of intrusion on the bargaining process.
                      Cost and Competition Aspects of PLAs
        Question. Additionally, I would like to ask the Secretary to
    provide details on the cost and competitive effects of any such PLAs
    arising or potentially arising on those projects, including:
             The eff3ct on the number of bidders, including the basis for
            that conclusion;
             The effect on the bid amount, including the basis for that
            conclusion;
             The impact/effect on small and emerging businesses in the
            locality of the worksite, particularly their ability to perform
            the work using their own workforce, including the basis for
            that conclusion.
        Answer. There are no project labor agreement requirements in any
    Naval Facilities Engineering Command (NAVFAC)--awarded construction
    contract at present.
        There are no records available which would disclose whether or not
    a construction contractor was signatory to a collective bargaining
    agreement, nor whether or not such agreement was a ``project labor
    agreement.''
        If there were a contract in which the government required a PLA,
    there would not be recorded data that would reveal answers to the
    impact questions under Question 127 (effect on bidders, effect on bid
    amount, impact/effect on small and emerging businesses in the
    locality).

        [Clerk's note.--End of questions for the record submitted by
    Congressman Tiahrt]
        [Clerk's note.--Questions for the record submitted by Congressman
    Farr.]
                               Technical Literacy
        Current military requirements demand that today's Navy be highly
    advanced both scientifically and technologically, with the need for
    future technical literacy among Naval personnel increasing, not
    decreasing. These technical capabilities substantially increase the
    Navy's need for personnel who: Can comprehend the potential for
    warfighting that the new technologies bring, Understand both the
    opportunities and the limitations they present, Are able to chose among
    competing technological avenues, Can critically assess and lead
    technological development, and Can formulate practicable new
    technological visions.
        Question. I am concerned that the Navy doesn't highly regard
    technical literacy among its personnel. Please comment on this.
    Assuming there is a greater need for technical literacy among Navy
    personnel, why is the Navy pursuing the possibility of privatizing its
    only graduate institution that specializes in technology courses within
    a military environment?
        Answer. The Navy most certainly regards technical literacy among
    its personnel as highly important. This emphasis begins with the
    officer accession process. The U.S. Naval Academy curriculum includes
    both technical and liberal arts majors, but midshipmen taking liberal
    arts curricula are required to complete core curricula in math,
    science, and engineering that results in all midshipmen receiving a
    Bachelor of Science degree. In the Navy ROTC, the Navy specifically
    targets science and engineering majors as scholarship recipients. Post-
    commissioning schools for flight training, nuclear power training, and
    surface warfare have extensive technical requirements; hence, the Navy
    seeks personnel with the educational background to support its needs
    and continues to train and educate them throughout their careers.
        Study of privatizing the Naval Postgraduate School, is directed at
    ensuring cost-effective operating costs. Who provides academic
    instruction will not impact the degree to which technical subjects are
    emphasized. Curricula requirements are determined by the billet
    subsepcialty requirements and are not dependent on the school
    administration.
                       Short and Long-term Plans for NPS
        While there are many science and technology graduates, the courses
    of study available at both public and private institutions don't
    necessarily reflect Navy requirements. For instance, many applied
    sciences necessary for naval operations have decreased or been
    eliminated from academic science departments; in some cases reappearing
    in engineering departments, while many engineering departments have
    eschewed applications-oriented studies for science-based education.
        Question. The fraction of college students enrolled in calculus-
    base elementary physics has declined over the last 50 years, yet the
    military's need for individuals who can command such a discipline has
    expanded over this period, not declined. With this in mind what are the
    Navy's short- and long-range plans for NPS? Will NPS remain in
    Monterey? Will it continue to be a Navy organization headed by a Navy
    Admiral?
        Answer. The Navy continues to see the need for NPS at Monterey.
    Whatever the organizational structure, the School must be responsive to
    the Navy needs for education to meet specific billet subspecialty
    requirements. As a result, there will be substantial, direct Navy
    control over the School and its curricula. The Navy will evaluate
    options for the most efficient and cost-effective means for providing
    that education.
        Question. NPS has entered into informal partnerships with a number
    of other universities to conduct education and research programs. To
    realize the full benefit from these partnerships, NPS requires
    authority to grant academic credit and degrees in areas of study
    designated by NPS, to non-federal civilian students. Will the
    Department support legislation to provide this authority to NPS?
        Answer. There is clearly a benefit in having arrangements with
    civilian schools whereby NPS students can take selected courses at
    civilian institutions and civilian university students can take
    specialized courses at the Naval Postgraduate School (NPS). This will
    eliminate course redundancy among the institutions and make maximum use
    of highly qualified faculty. The Department of the Navy supports
    legislation to facilitate such interchange. In the case of NPS awarding
    degrees to non-federal civilian students, the need is less clear. NPS's
    mission is to provide subspecialty education and degrees in areas
    requiring defense-specific content. The need for such degrees for non-
    federal civilian students is not apparent. Such students would augment
    their civilian institution curricula by taking a limited number of
    specialized courses at NPS, receiving credit for the courses, but
    continue to receive their degrees from a degree-granting civilian
    school.
              MILCON Investments at the Naval Postgraduate School
        Question. What Milcon investments has the Navy made at NPS over the
    last 6 years? Does the Navy need additional Milcon funding above the
    President's budget request to address a cumulative shortfall in Milcon
    funding at the NPS? What Milcon projects are planned at NPS in FY 2000-
    01?
        Answer. the Navy's last military construction (MILCON) investments
    at the Naval Postgraduate School (NPS) were in Fiscal Year 1992 and
    included a $12 million project for the construction of the mechanical
    engineering building and a $2.9 million modernization/alteration to the
    fire protection building.
        The Navy does not have any requirement for additional MILCON
    funding above the President's budget request at the NPS.
        The Navy has no other MILCON projects currently programmed in
    Fiscal Year 2000-2001.
        [Clerk's note.--End of questions for the record submitted by
    Congressman Farr.]
                                               Thursday, March 4, 1999.

                FY2000 AIR FORCE MILITARY CONSTRUCTION PROGRAMS

                                   WITNESSES

    HON. RUBY B. DeMESME, ASSISTANT SECRETARY OF THE AIR FORCE (MANPOWER,
        RESERVE AFAIRS, INSTALLATIONS AND ENVIRONMENT)
    MAJOR GENERAL EUGENE A. LUPIA, HQ USAF, THE CIVIL ENGINEER, DEPUTY
        CHIEF OF STAFF, INSTALLATIONS & LOGISTICS
    BRIGADIER GENERAL CRAIG R. McKINLEY, DEPUTY DIRECTOR, AIR NATIONAL
        GUARD
    BRIGADIER GENERAL RALPH S. CLEM, DEPUTY TO THE CHIEF OF AIR FORCE
        RESERVE

                           Statement of the Chairman

        Mr. Hobson. The committee will come to order. Secretary
    DeMesme, it is a pleasure to have you appear before the
    subcommittee this year. This is your first appearance before
    the Subcommittee as Assistant Secretary of the Air Force for
    Manpower, Reserve Affairs, Installations and Environment, and
    frankly it is the first time you have been before this
    subcommittee since I have been here, although we have had the
    pleasure of meeting before.
        We look forward to your testimony and a good hearing on the
    construction program for the Air Force, Air National Guard and
    the Air Force Reserve.
        General Lupia, we have met before too. It is good to see
    you again. You have appeared before this Subcommittee on a
    number of occasions and I really look forward to your
    testimony. Generally I wouldn't talk to you now because I found
    out you are retiring this summer, and I don't like to talk to
    people who don't have more than a year but you are a good guy
    and we know you have done a good job and so we look forward to
    your testimony.
        I just want to make a couple of comments and then have my
    ranking member, if he chooses, make a couple of comments also.
        Frankly, concern with overall reduction in funding is
    universal with this Committee I think. The problem we are faced
    with is a big problem that I think you are all aware of and
    frankly it is going to cause us all to work even closer
    together than we have done in the past with this Committee.
        Overall the budget request is down $3.2 billion or 37
    percent from last year's enacted levels. The Air Force request
    is down $837 million or 36 percent. Advance appropriations
    requests total $3.1 billion and the Air Force portion of this
    request totals $686 million. This just sets the tone on some of
    the problems that we face because as Mr. Olver and I have
    travelled around the country, or around the world, there are
    some real problems out there that we all need to address
    jointly and not have a fight over but work together on and we
    look forward to doing that with you. Mr. Olver.

                    Statement of the Honorable John W. Olver

        Mr. Olver. Thank you, Mr. Chairman, and welcome Madam
    Secretary and General Lupia.
        We had a long discussion last week with the under Secretary
    of Defense, Dr. Hamre, and a long discussion about this whole
    deferred funding mechanism and its effects upon defense as a
    whole, so we are looking forward to hearing your views. As the
    Chairman has already indicated, we were very concerned about
    that. There is one additional party that I would like to just
    point to here in this first go-around. Various services have
    functioned by fits and starts on the business of privatization
    of family housing and I think that you have--and the Air Force
    has been a little bit more cautious about that, and I guess I
    am curious about the Air Force's view of how you make your
    decisions in the area of privatization and family housing and
    what your goals are along the way. Thank you very much for
    being here today and giving us your services' perspective.
        Mr. Hobson. Before you start, I just want to do one piece
    of housekeeping. Not all the members are here but their staffs
    are here.
        Our next hearing is going to be Wednesday, March 10th, at
    9:30. The subject will be quality of life in the military. We
    will hear the testimony of the senior enlisted members of each
    of the branches of the service and I want this to get on the
    record. Usually we do that at the end but you never know who is
    going to be around at the end.
        Madam Secretary, we would appreciate it if you would hit
    the highlights of what you want our Committee to hear and then
    we will open it up for some discussion, which I think will be
    enlightening hopefully to all of us.

                   Statement of the Honorable Ruby B. DeMesme

        Secretary DeMesme. Thank you, Chairman Hobson, Mr. Olver
    and members of the Committee. It is my pleasure to be here this
    morning.
        First of all, I would like to thank this Committee for its
    continuing support of our uniformed members and their families.
    You have already mentioned that you are aware of the fact that
    this has been a very difficult budget year for us. We worked
    hard to try to ensure some balance in our program funding,
    making sure that we can take care of our MILCON needs and other
    quality of life areas and also our readiness and modernization
    efforts.
        I have submitted a written statement for the record and I
    would like to take this time to kind of highlight some of the
    areas in the FY 2000 MILCON budget.
        We are striving real hard to maintain facilities and
    infrastructure to preclude the weakening of unit readiness,
    impairing mission accomplishment, or degrading our quality of
    life for the people.
        Our corporate strategy to accomplish these goals includes
    several things. Our MILCON program places emphasis on
    supporting new mission beddowns and current mission activities,
    ensuring that we have complete access to critical ranges and
    air space. It includes reinvesting in our remaining bases
    overseas, funding our critical environmental compliance
    projects and maintaining our operations and maintenance
    programs to protect the quality of life of our personnel and
    their families.
        We recognize the integral role the Air Reserve components
    play in our total force mission and our program assures that
    their construction needs are addressed along with those of the
    active component.
        Mr. Chairman, for the next few minutes I will, in very
    concise terms, review our total MILCON program to include
    military family housing and base realignment and closure.
        The Air Force total MILCON budget request for FY 2000 is
    $1.77 billion. Our current mission program includes our runways
    and ramp repair projects, additions and alterations to existing
    facilities, and two composite support complexes. It is
    important that our people operate in an environment that is
    designed to have them accomplish their missions.
        Our new mission support programs supports weapon system
    beddowns, such as the F22 fighter, the C-17 airlifter, and the
    B-2 bomber, the KC-135 tanker, and the Joint Primary Aircraft
    Training System or JPATS as well as the construction of the
    Enhanced Training Range in Idaho.
        In order to achieve and maintain military readiness, one of
    our highest priorities is people and while modern technology
    enables our forces to perform their missions more effectively,
    technology cannot substitute for high quality people, so to
    retain our people, we must meet their needs and our program
    funds enlisted dormitories, fitness centers, community support
    facilities at various locations because these are the things
    our people tell us that they want and need and that will help
    us retain them.
        We must also invest in our force protection, safety, and
    quality of life facilities in our overseas bases. We now have
    11 overseas main operating bases and regrettably the reduced
    MILCON investment, along with inadequate host nation funding,
    means that we cannot fully meet our overseas MILCON
    requirements. Family housing is one of our most important
    programs and we are very appreciative of this committee's
    continued strong support in this area. Our MILCON program
    reflects efforts to continue to revitalize or replace worn-out
    housing units that are no longer economical to maintain or can
    be utilized.
        Our BRAC request supports a 1995 decision to realign Kelly
    Air Force Base, Texas, as well as support the final design
    costs for the FY 2001 program. I also note that the Air Force
    strongly supports Secretary Cohen's request for two additional
    BRAC rounds.
        Despite the challenges we have a number of good news
    stories. For example, this past year we awarded the Department
    of Defense's first privatized housing project at Lackland Air
    Force Base, Texas. We are also the proud recipients of almost
    one-third of the Department of Defense's 42 environmental
    awards.
        In conclusion, Mr. Chairman, this committee's continued
    support is vital if we are to accomplish the program goals. Our
    MILCON submission reflects the corporate priorities supporting
    our weapons systems modernization, but it also provides our
    people and their families a safe and secure place to live,
    work, and to play.
        That concludes my oral statement, and we're ready to answer
    any questions or discussions that you might wish to engage in.
        [Prepared statement of the Honorable Ruby B. DeMesme
    follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hobson. Thank you for the brevity. That's very good
    because, you know, we always have a lot of questions.
        General, do you have anything you would like to add at this
    time?
        General Lupia. No. I would rather leave the time for you,
    sir.

                              incremental funding

        Mr. Hobson. Okay. Let me ask this question and I think we
    all have this concern with this new--I called it a gimmick
    yesterday--or creative financing or whatever you want to call
    it.
        You have chosen to build an $8.5 billion military
    construction program and spread its funding over two years or
    hopefully over two years; instead of requesting fully
    executable projects in FY 2000, you have only requested funding
    for 10 to 25 percent of individual projects. To support the
    completion of the program you have got this advanced funding of
    $3.1 billion which will become available in 2001.
        Would you explain what your--and I hope you will be very
    candid about what this is going to do to you. I know you have
    got to espouse the company line to a degree, but you have also
    got to talk about what this is going to do to the ability to
    get the programs and the quality of life programs and I also
    would like you, General, at some point to talk about what this
    is going to do to costs on some of these projects as you look
    at them, so I will let you, Madam Secretary, respond if you
    like and then General, I would like you to respond as to the
    challenges of this type of funding from a construction
    standpoint.
        Secretary DeMesme. Yes, sir. The funding that we are
    requesting in the 2000 budget is not the optimal way of doing
    business. However, we were faced with a situation of needing to
    fund part of our MILCON needs and meet some of our needs in
    readiness and other high priority modernization programs.
        With the limited resources that we had, we believe that the
    incremental funding--it can work if we must use it, but it
    poses a lot of challenges for us. But in order for us to start
    the construction that will be necessary to meet our quality of
    life needs, our family housing needs, dormitories, and have
    monies to put on those critical readiness programs that we
    need, this is the best way we can assure some balance across
    the needs of the Air Force.
        We recognize that there will be many challenges as we try
    to do this and we require the monies next year in order to make
    this work. It will not work without those funds.
        At the same time we are going to do our best to limit or
    minimize any impacts on readiness, minimize impacts on
    environmental responsibilities that we have, and yet meet some
    of our current and future beddown requirements.
        All this taken jointly will take a lot of discussions,
    planning and really constantly evaluating our budget to see
    what we can do, and we need your help, quite frankly, in order
    to make this work.
        It is not the way we would choose to do business. It is not
    the way we expect to do business in the future, but for this
    one year we believe that the way that we have planned our
    program gives us the most bang for the bucks in terms of taking
    care of several of our quality of life initiatives with
    military construction being one of our primary priorities.
        I'm going to let General Lupia follow on with some of the
    concerns we might have in specific construction areas.
        Mr. Hobson. General.
        General Lupia. Sir, for the Air Force the impact on our
    program is in military construction, where we were asking you
    for $699 million in authorization and $213 million in
    appropriation, and on the family housing side for new
    construction and improvements we are asking you for $328
    million in authority and only $102 million in appropriation.
        I will use the military construction side. The remainder,
    the delta between the $213 and the $699 is paid to us by the
    Congress in large part in the 2001 program and we hope for an
    appropriation that would be an additional $471 million on the
    first of October--the first day of the fiscal year, the next
    fiscal year, and then we have the remaining costs which are
    necessary for supervision, inspection and overhead of our
    program that stretch out with a commitment from the Congress to
    '02, '03, and '04, so the appropriation that would take care of
    this entire budget for us stretches out over five years, the
    majority of it in 2001.
        In my personal opinion that means to us that we will see an
    increase in costs in two different ways. One way we'll see an
    increase in costs is the execution of our projects because,
    quite frankly, industry has already given us that feedback--and
    we are going to ask them to assume some of the risk--and
    needless to say, when you assume risk you have to pay for it
    someplace.
        As I mentioned to you in your office the other day, the Air
    Force is not a design and construction agent. Here in the
    United States we do our work through the Army Corps of
    Engineers and through the Navy Facilities Engineering Command.
    Our colleagues in the Corps of Engineers have given us an
    estimate that says project costs would increase someplace
    between 10 and 30 percent. The Navy is on record at a hearing
    earlier this week as saying that in conversations with the
    Association of General Contractors and some leaders in industry
    that they have contacted they could not quantify the additional
    costs but they said there would definitely be additional costs
    for the construction of our projects because again they have to
    assume the risk.
        Additionally, I believe we will find some cost increases
    because we are going to have a more sophisticated bookkeeping
    system. The Navy in the case of the continental United States
    now charges us 6 percent for the work that they do for us and
    my good friend over there, Admiral Smith, has told me that he
    is not going to be able to keep the books and keep track of
    costs over five years without adding some more people to his
    staff, so I expect my costs for supervision, inspection and
    overhead to go up, in my personal opinion I think we will see
    cost increases in both of those areas, the cost to execute a
    project and the cost to take care of tracking our expenses and
    to be able to have our books open to any auditor that comes
    around.
        Mr. Hobson. But you are not going to have the project as
    fast as you might have otherwise?
        General Lupia. Sir, in order to do this the Air Force and
    the Services need from the Congress three things: we need the
    full authorization in FY2000, the $699 million in the case of
    the Air Force, we need the commitment from the Congress to
    advance appropriate the $471 million for us in 2001 at the
    beginning of the fiscal year, and we are also going to need
    some help with what we traditionally do today when we have cost
    increases on projects and we call it reprogramming, where we
    come over to you and ask you for authority to make some changes
    to a project.
        All of the reprogrammings in the past have been done based
    on the amount of the appropriation, not the amount of the
    authorization. And so now we would have a much, much smaller
    appropriation in 2000, and in order to be able to take care of
    problems, we are going to need some kind of language that will
    allow us to do reprogrammings based on the much higher
    authorization amount, as opposed to the appropriation amount.
    So those three things have to come together for us to be able
    to pull this off.
        Mr. Hobson. That may be how it all happened, this problem.
    And the other problem is, and I just want to serve notice on
    that, the other problem that I think you have opened up--I
    don't mean this personally when I say this, but what the
    Administration opened up to, is great mischief by the Congress,
    or greater mischief, let me put it that way, because if, for
    some reason, along the way, where we are fortunate enough,
    which I don't know can happen, that additional monies become
    available, now there is not going to be the commitment by the
    Congress to the Administration's proposals that were there
    before, that if he had asked for the whole amount, there is a
    tendency to try to hold as much of that as we can.
        Now, certain forces, I won't say where they come from, but
    I will privately tell you where I think they are going to be,
    most of them, will create mischief with this money, and you
    won't be as able to guide your destiny from your perspectives
    as well. And that, again, causes a problem in my mind as we try
    to execute the mission.
        I had a little discussion with Secretary Cohen about this
    issue yesterday, but it seems to me that we have been penny-
    wise and pound-foolish in how we put this together, and we have
    sought an easy place, at least initially, because MILCON is
    very dear to the Congress' heart, to fund these quality of life
    things. But the manner in which this was done allows more--I
    don't know how to put it gently, but a different distribution
    of the money than might have been otherwise, which is going to
    create additional pressures, and I wish you folks had not
    presented the opportunity for it to happen. But there isn't
    anything I can do about that now. I am just serving you notice
    that it is going to make it much more difficult.
        With that, Mr. Olver, as far as you are concerned, you can
    take as much time as you want, but I think in order for
    everybody to get in at least one--the rest of the members will
    try to do five minutes, and then we will keep going around till
    we get done.
        Mr. Olver. Thank you, Mr. Chairman. I just want to follow
    up, I think you can see the flavor of our distress at this mode
    of operation, although I would like to draw us through an
    individual project. I mean it seems to me that this argument of
    whether or not we are advancing, I mean we are advancing
    fundings from Fiscal 2001, we are deferring funding for Fiscal
    2000, and those of us who live very much in the present are
    much more inclined to view this as a deferral of funding, and
    the risk that goes along with the deferral of funding.
        For instance, in the Reserve program, in your Reserve
    program, you have only got five projects in the process at all,
    and four of the five are projects under $3 million. I don't
    know what, I mean what mischief or certainly confusion it
    causes in dealing with those tiny little projects which would
    be done in a matter of a few months and, surely, never more
    than a year. It seems to me that this--there may be more in
    perception than there is in reality in this difference, because
    it seems to cause confusion in contracting and some appearance
    of risk that may not actually be there, and some increase in
    costs that grow from the perception.
        And I don't know what that ends up leaving us, except take
    a project, project X, whatever project that may be, it seems if
    we follow the regular program as it has been done over the
    years, project X appropriated for 2000, for Fiscal 2000, would
    probably end up going to construction. It would be designed and
    probably end up going to construction, but not a lot of the
    construction costs would occur in the last quarter of 2000, and
    it would carry over, and most of that construction would occur
    in 2001, though all the money would have been appropriated in
    2000 and then carryover accounting and so forth.
        The proposal, as it is made, something in the range of 20
    percent to 30 percent or so of the actual money for many of
    these projects is appropriated in 2001, and then there is a
    promise of appropriation, a commitment of appropriation--or,
    excuse me, 20 percent is in 2000, and the commitment of
    appropriations is in 2001, and I don't know that what the end
    result of that project, in terms of what happens in its real
    time construction.
        I suspect that project is still going to essentially be
    designed, and with this split appropriation deal that is going
    on, that it is going to essentially go to construction in that
    last quarter of 2000 and be finished, the same project, be
    finished in 2001. So I don't know what the real difference is
    here except the confusion, and it is a little bit more cost and
    accounting problems and so forth have been created in the
    process. Please, tell me where--tell me if I am anywhere close,
    where I am wrong, and what is actually happening here.
        General Lupia. No, I think much of what you said, sir, is
    exactly right. The amount of money--would you like me to
    respond?
        Secretary DeMesme. Yes.
        General Lupia. The amount of money in the appropriation
    line comes really from three components, and it comes from the
    amount of money that has been historically outlaid for that
    project in the fiscal year of appropriation, and that is down
    around 15 percent. And then we added 5 percent for contingency,
    and then we add 5 percent way up front for what we are calling
    termination costs, in case we have to terminate the contract
    because the 2001 part of this doesn't come along.
        And so that's where you get this percentage, about 25
    percent of the authorization we are asking for in
    appropriations. And there's actually different formulas that
    were applied for the Reserve and for the Air National Guard,
    but, generally, we are in the same ball park.
        In the Air Force, in Fiscal Year 1998, of the money that
    was authorized and appropriated to us from the Congress, we
    awarded contracts for 99.8 percent of the line items in the
    fiscal year of appropriation. Best year we have ever had. We
    missed by one project at Grand Forks, where we had to have a
    reprogramming action, or we would have awarded our entire
    program in the year of appropriation. Now, the way you do that
    is you award a bunch of contracts in the first quarter, the
    second quarter, the third quarter, and then you work very hard
    in the fourth quarter to get those few hard ones awarded.
        I think what you would find, sir, I think what you would
    find in the way we are setting up this program is that we are
    going to award darn near our entire program in the fourth
    quarter, in order to be able to have that additional fiscal
    year's appropriation coming right behind it. So once a
    contractor mobilizes, once he gets on site, once we have given
    him the notice to proceed, he would do, in essence, the 15
    percent that we are paying him for in 2000, and be able to stay
    right there and continue when we get the 2001 appropriation on
    the 1st of October of calendar year 2000.
        Mr. Olver. What would you----
        General Lupia. So, in effect, we are going to extend the
    life of our project. Now, this becomes terribly important when
    you talk about a place with a very short construction season,
    Grand Forks Air Force Base, Minot Air Force Base, some of our
    bases in Alaska. This becomes a very dicey game because you
    don't want that contractor to mobilize and demobilize because
    you are going to pay him. And so if the construction season is
    short enough, he has got to get, in essence, boxed in, so he
    can do the rest of his work. He can't be pouring foundations in
    the middle of winter, he has got to get boxed in so that he can
    continue to work. So it is going to make the game a lot dicier,
    and somebody has got to pay for that risk along the way, and
    that was the Gene Lupia comment, in my personal opinion,
    somebody has got to pay industry to take some more of this
    risk.
        Mr. Olver. Yes, for the larger projects that you get done,
    get to contracting in the appropriation year, and finish in the
    next year. You may end up being thrown into the winter because
    you won't get them boxed in. Most people would get that project
    done in the latter half of the fiscal year of appropriation and
    then----
        General Lupia. And have the full construction.
        Mr. Olver. And by December whatever, they would have the
    whole thing boxed in so they could finish it up in the winter.
    Maybe that is a serious problem.
        General Lupia. Yes, sir.
        Mr. Olver. I can imagine that being a serious problem.
        It is interesting, in your program,--I guess your question
    if we were to not go on with this, and just appropriate
    straight up and just do a number of projects that fit into the
    appropriate, that was going to be done, that would be--that
    would cause additional mischief, of course, because your
    program has three-quarters of the total dollars are in the
    family housing. That's almost all appropriated monies in the
    appropriation year 2000. And all--so many of the projects are
    deferred at 10--at 20 to 25 to 30 percent, or so on. Would you
    be able to prioritize those projects?
        Mr. Hobson. I'll bet he has got a list.
        Mr. Olver. Pardon?
        Mr. Hobson. I will bet he has got a list somewhere.
        Mr. Olver. You think he has got a list.
        Mr. Hobson. I don't think he will give it to you.
        Mr. Olver. Oh, well. All right.
        General Lupia. And I will answer that for you.
        Mr. Olver. All right.
        General Lupia. It is going to be a difficult task for us
    because, under the scenario proposed, the way we are
    approaching this, and we have been asked for a list, should the
    appropriation be only $213 million, against the $213 million,
    where would you like full authorization and full appropriation?
    Well, $213 million in appropriation is not $213 million in
    construction.
        First, I have got to subtract the money that I need for
    planning and designing of my out-year programs. I have got to
    subtract--this is Guard, Reserve and active Air Force, I have
    got to subtract the money that I need for the urgent projects
    we call P341, the money we set aside to take care of
    emergencies as they come up throughout the year. And when I
    finish all the must-pays, I have some legal requirements. Some
    of our environmental projects are legally required, and I can't
    push them off for a year.
        My guess is that when I finish that, I have really got
    about 140 million dollars' worth of discretion to bring you a
    list for.
        And I have got to find a way to take--not I do, the
    corporate Air Force has to find a way to take $700 million in
    requirements and get them onto a $140 million list, and this is
    going to be very difficult for us. We will do it, sir, and we
    promised we would do it, and we will deliver the list, but it
    is not going to be an easy process. It will be approved by the
    Secretary of the Air Force and the Chief of Staff, and it is
    going to take some very difficult decision-making.
        Mr. Hobson. Thank you.
        General Lupia. The same thing in housing, Congressman. We
    have, as I mentioned to you, 102 in appropriation--and
    authorization only 328. So I have got to figure out which house
    is worse than what other house. Is a house in Florida better or
    worse than a house in California, better or worse than a house
    in North Dakota? Sort of a house that needs repair is a house
    that needs repair, and it is going to be very difficult for us
    to prioritize, within that project list that we have, which
    houses need repair the most.
        Mr. Hobson. But you don't run the increased costs on those
    projects that you will run with----
        General Lupia. That's correct. We have full appropriation,
    yes, sir.
        Mr. Hobson. What we are going to do is we are going to go
    by Member's order in which they showed up. Allen will be first,
    then Dan, and then Sam, and then Todd. Allen, five minutes,
    more or less.
        Mr. Boyd. Thank you, Mr. Chairman, I don't know where to
    start with only five minutes.
        Mr. Hobson. Well, you can talk about the Florida house, he
    brought it up.
        Mr. Boyd. Well, why don't we talk about that?
        General Lupia. I was looking over there at Congressman
    Boyd.
        Mr. Boyd. Let me shift gears, and I appreciate the tone of
    the big picture discussion and the one that, obviously, we are
    all very interested, and that Mr. Olver, and you have been
    engaging in. This probably won't surprise you, first of all,
    Secretary DeMesme and General Lupia, it may not be the first
    time you and I have crossed paths. I was looking at your bio
    and we may have crossed paths in Tan Son Nhut Air Base back in
    1971, I guess. [Laughter].
        General Lupia. That's exactly when I was there. Yes, sir.
        Mr. Olver. General Lupia was taller then.

                             environmental cleanup

        Mr. Boyd. I was in the country at that time, so we may have
    very well. This may not surprise you if I ask that we talk
    about environmental issues a little bit. And let me start by
    asking you a question, Secretary DeMesme. Can you tell me the
    environmental cleanup costs that were associated with the last
    four BRAC rounds were?
        Secretary DeMesme. The last four BRAC rounds. I don't have
    that specific information this morning, but I will make sure
    that I will get over to you.
        Mr. Boyd. Do you generally know the environmental cost,
    cleanup cost became a major issue associated with BRAC?
        Secretary DeMesme. Yes, it did. Environmental cost far
    exceeded what we originally thought it would because of the
    different requirements and the levels of cleanup that we are
    expected to accomplish. Those costs, of course, made it more
    difficult for us to realize savings as we began to close out
    the bases. We are still working with different agencies, with
    EPA and with the locals to make sure that we meet our
    requirements there. But I will get that specific number to you
    at a later time, sir.
        [The information follows:]

                              Environmental Issues

        The cost for BRAC environmental cleanup for the last four rounds as
    shown in the FY00/01 PB was $1,911,309,000 through FY 99.

        General Lupia. Sir, I would like to be sure that we
    explained to you, though, that the reason that we have
    increased environmental cost with base realignment closure is
    that we have to accelerate the work that we are going to do. In
    the process of deciding what is going to close or what isn't
    going to close, we pretty much take environmental costs as a
    wash, being you are going to have to clean it up whether the
    base stays open or clean it up whether the base closes. What
    happens in the closure is you accelerate that process so we can
    clean up and turn it over to the local communities.
        Mr. Boyd. Yes. One of the issues, though, has become that
    you don't have technology to deal with the waste. Having served
    in the state legislature and dealt with cleanup issues,
    underground storage tank issues, those kinds of things, it is
    constant battle to try to find technology that works in
    specific instances.
        Secretary DeMesme. I will find the exact method that used
    to clean up certain things. Sometimes there is more than one
    way to clean up and you have to work with the state regulators
    to determine exactly how you want to make that happen.
        What I can say is that we have developed good working
    partnerships with a lot of people in many different
    communities, and right now everything is on track. The total
    cost, I am not totally aware of. But we are on track with where
    we want to be in most of these areas.
        Mr. Boyd. Secretary DeMesme, in reading your statement for
    the record, you mentioned the new weapons systems that we all
    know will be here within a few years. Obviously, those weapons
    systems have some environmental waste issues associated with
    them. Would you concur with that, and what----
        Secretary DeMesme. The weapons systems?
        Mr. Boyd. Right.
        Secretary DeMesme. Having environmental waste?
        Mr. Boyd. Right. Right.
        Secretary DeMesme. All of them have environmental
    implications.
        Mr. Boyd. The F-117, F-22, B-2.
        Secretary DeMesme. They all have wastes, yes, sir. And, of
    course, we have to look at each one individually. And we have
    groups of experts out there looking at that. As we design and
    fund these programs, we are trying to ensure that we have
    incorporated the cost. But at this time I don't have a specific
    cost that would be associated with any particular project.
        Mr. Boyd. General Lupia knows where I am going. I notice he
    is writing a note to you.
        So, Mr. Chairman, I hate to be parochial, but I have been
    working on this issue for a long time now, and I am just going
    to be parochial today, but parochial in the big picture of a
    real issue we have to deal with in the Air Force facilities and
    Air Force weapons systems, and that is environmental cleanup.
        Secretary DeMesme. Yes.
        Mr. Boyd. Let me just get to the point here. Innovative--
    and from your statement, you are exploring, and I quote,
    ``innovative partnership arrangements with the industry to
    achieve real reductions in research, development, technology
    and evaluation infrastructure costs.'' That's on page 20 of
    your presentation.
        Let me say it again, you are ``exploring innovative
    partnership arrangements with industry to achieve real
    reductions in research, development, technology and evaluation
    is costs.'' Now, I realize that sometimes the right hand
    doesn't know what the left hand is doing, and the Air Force is
    not any different from other large corporate entities in that.
    However are you aware that the Air Force has already stated its
    plans to start RIFing civilian lab personnel this Friday at an
    environmental lab? You have?
        Secretary DeMesme. I am not totally aware that we have
    begun any RIFing procedures yet. I know that there was some
    thought as to how we would execute one.
        Mr. Hobson. There is going to be an announcement on Friday.
        Secretary DeMesme. But it hasn't been announced yet.
        Mr. Boyd. There will be an announcement on Friday.
        Secretary DeMesme. And, of course, what we have to do is
    give as much time as we can to those people who would be
    affected in order to minimize the impact on them and to get
    them placed.
        Mr. Boyd. But, Madame Secretary, in light of your statement
    that you are exploring innovative ways to involve industry, and
    that is really what most of these labs are, they are private
    sector folks who are contracting or working hand-in-glove with
    the Air Force. How do you justify making that statement in your
    presentation today and then, on the other hand, not keeping the
    commitment we have to the places that we already have
    operating, which are doing good work?
        Secretary DeMesme. Any time we want to take some
    innovations and realize efficiencies and explore new ways of
    doing business, unfortunately, we run the risk of impacting
    people at different locations. I don't know specifically all of
    the particulars that go into the Tyndall project, but what I
    can say for certain to you is that we will do the best we can
    to minimize the impact on people who are employed there by
    offering other possibilities of employment or training
    opportunities.
        It's difficult, and I believe that about 70 people will be
    impacted. In the past we have been able to mitigate some of the
    job loss of those people by retraining and helping them find
    employment elsewhere. We will use whatever tools are in the
    system to do that.
        Mr. Boyd. Well, the problem I am having----
        Mr. Hobson. Now,----
        Mr. Boyd. Five minutes?
        Mr. Hobson. No, you have longer. Are you talking about
    Tyndall, is that what you are talking about?
        Mr. Boyd. Yes, sir. And there are some others, too. Brooks.
        Secretary DeMesme. Brooks.
        Mr. Boyd. Brooks, there are some others in this issue.
        Mr. Hobson. Well, just for your information, we have got to
    get everybody in.
        Mr. Boyd. Right.
        Mr. Hobson. And we will get them.
        Mr. Boyd. My last question.
        Mr. Hobson. All right. Can we stop now? If you can stop
    now, we will come back, you can get another shot. We will stay
    here till you get another shot. Okay. Because I want to make
    sure everybody gets their shot.
        Sam, you are up because Dan left.
        Mr. Farr. Well, thank you very much, Mr. Chairman. As long
    as everybody is taking shots, we will just keep the barrage
    going here.
        I am very interested in following up Mr. Boyd's question on
    cleanup. Are you aware that the Department of the Army has just
    entered into an agreement with the Department of Justice to
    allow all the base cleanup process to go under a SuperFund
    process, including UXO? And do you have any idea what that is
    going to cost the Air Force?
        Secretary DeMesme. I personally am not aware of that, sir.
    General, Lupia, are you aware of that?
        Mr. Farr. Nobody seems to be aware of it. It is going to
    cost this country billions of dollars.
        General Lupia. I have to tell you, Congressman, I am not
    aware of what you are speaking about. My environmental expert
    here, Ms. Pohlman, tells me that it may involve the Formerly
    Used Defense Sites, what they call the FUDS program.
        Mr. Farr. It has to do with the cleanup at Fort Ord, which
    is the largest closed military base, and it has to do with all
    kinds of cleanup, not just UXO. Everything will now come under
    the SuperFund protocols, which is a much more elaborate, and
    extensive, and costly protocol.
        Well, you ought to check into it.
        General Lupia. I think we are going to have to----
        Mr. Hobson. If I can interject one thing at this point. I
    brought this up yesterday in the hearing on defense
    appropriations with the Secretary. He was not aware of it at
    this time. But I can take it to his level at this point.
        At this point, I understand it, it relates to one
    particular situation. I think the problem that he is raising is
    that if this is successful, it could then become a precedent
    used in other cases across the country, which will dramatically
    increase the cost. You will lose your control. And so that is
    why we are raising this question.
        I understand that it is new, but I think he is raising a
    valid point that if this gets in and becomes set in a pattern,
    even though it may be specific only to Fort Ord at this point--
    --
        Mr. Farr. It's the result of a lawsuit.
        Mr. Hobson. Yes. It will now become and be used as a
    precedent across the country, which you all need to be aware
    of. And I think he has done everything--in bringing it forward,
    because, as I say, I raised it to the Secretary and nobody was
    aware of it. So I just want you to know I did that.
        Mr. Farr. Thank you for doing that, Mr. Chairman, I really
    appreciate it. It is something that the Air Force and the other
    services are going to have to look at, because it is the
    settlement of a lawsuit, and, obviously, if any other community
    decides that they aren't satisfied, they could bring a similar
    lawsuit and it becomes legal precedent.

                       contracting with local communities

        The next thing I wanted to ask about is, you know, all of
    us represent communities, and we certainly know the value of
    that, what I call the corporate citizen in the community, the
    value to the economy of an area. But what I have really learned
    since I got into Congress is how little the military does with
    contracting for construction through the local community. What
    assurances do you have in all this money you are asking us to
    appropriate that local contractors will have any access?
        Secretary DeMesme. Sir, we have not always had large
    programs that we have contracted out, so we are just really
    venturing into this new area. We are looking very closely at
    local contracting. It saves us money and it gives us expertise
    at the level where the communities live and they certainly know
    the flavor of the community and they know the people in the
    community. So we are going to be working very closely with our
    locals to contract where we can get the best for our money and
    make the whole community thrive.
        Mr. Farr. I appreciate that. One of the things you are
    going to have to look at is in order to stand as a qualified
    bidder, the requirements for the bond capacity and so on are
    often so high, even for small projects, that local contractors
    can't compete. They can do the work, they just aren't
    qualifying under federal law to bid, and I would hope that you
    would look at that process and make it much more user-friendly
    and ensure there is some causal connection between the project,
    particularly base cleanup, and local contractors. We have these
    master contracts let out of Washington that affect bases all
    over the United States and at prevailing wages, that the local
    work force doesn't get any benefit from it because the out-of-
    state or out-of-community contractor comes in with his or her
    work force and does all the work.
        And, you know, when we are doing construction, we are doing
    a disservice to the attitude of the community towards the
    military when we are not engaging the local economy in helping
    the military build, and, I think, operate base operations. I
    think we ought to be moving a lot more to contracting with
    cities for police, fire protection, and maintenance and public
    works protection. I think we ought to be looking at housing
    authorities to run housing opportunities. I think that there is
    a better bang for the buck, and that the quality of life for
    the uniformed personnel will be better, because they would be
    like the rest of the community. In most cases, the
    communities----
        Secretary DeMesme. Your concerns are well noted, sir, and
    that is something that we will take under advisement, and we
    will energize our small business office to see if there is
    anything we can do in working these issues and we will be
    mindful of this when we work on it.
        Mr. Farr. Thank you. I will follow up with some questions
    and I would like to know the timeline you would want to have to
    implement it.
        Mr. Hobson. Mr. Tiahrt, five minutes.
        Mr. Tiahrt. Five minutes.
        Mr. Hobson. More or less. We are giving everybody a little
    leeway. We will come back.
        Mr. Tiahrt. It seems like we have, if I can use an analogy,
    10 pounds' worth of needs out here, and yet we are looking at a
    five pound sack.
        Mr. Hobson. I would say a one pound sack.

                              incremental funding

        Mr. Tiahrt. We are trying to put 10 pounds in a five pound
    sack by this forward funding. We are cutting MILCON by about
    36-40 percent, somewhere in that range. If we are going to do
    this forward funding for about two years, what waivers will you
    need in construction in order to accommodate this multi-year--
    style? Are there waivers that are needed? If so, what are they?
        Secretary DeMesme. Yes, sir, there are, and I am going to
    let General Lupia, who is more of an expert on that, discuss
    some of them with you.
        General Lupia. Actually, sir, what we probably need most is
    what I mentioned a little bit earlier about authority for
    reprogrammings. I believe that in the federal acquisition
    regulations, there are enough clauses that we could use today
    that basically tell anybody who would bid on a project that all
    this work is subject to the availability of funds in a future
    appropriation from the Congress, that being the Fiscal Year
    2001. I think those provisions already exist.
        What we do need, though, is a little bit more flexibility,
    actually, a lot more flexibility to be able to reprogram--if
    the Congress were to appropriate down near the 25 percent for
    each line item, we do need the authority to reprogram against
    the larger dollar amount, the authorization amount, as opposed
    to the appropriation amount. But as far as changes to the
    federal acquisition regulations and such, I don't believe we
    know of any that are required, and I say that based on my
    conversations with our construction agents in the Army and the
    Navy. We haven't identified any yet that really would need to
    be changed in legislation.
        Mr. Tiahrt. So you don't think you will need to ask for any
    statutory changes in order to accommodate this type of forward
    funding plan that you are going to venture out on?
        General Lupia. No, sir. Only the reprogramming part of it.
        Mr. Tiahrt. Will you reprogram money now?
        General Lupia. Yes, sir, but we reprogram against the
    appropriations. So, for example, we have a line item that might
    have a $23 million authorization but only a $5 million
    appropriation. Today, it would require me to reprogram against
    that $5 million appropriation as opposed to the $23 million
    authorization.
        At some point, if we award a contract, and we only have 25
    percent of the appropriation, and you subtract 5 percent of it
    for termination costs, and you subtract some for contingency,
    at some place along the way, if the '01 money doesn't come on 1
    October, the Army or the Navy, our agent, is going to have to
    tell a contractor shut down.
        Close up the project and that becomes expensive.
        Mr. Hobson. You've got to get the money from somewhere.
        General Lupia. On the other hand, if we have authority to
    transfer funds up to the full $23 million authorization it
    gives us more flexibility to keep that guy working all the way
    up to the amount of money we have in our hands.
        Mr. Hobson. You've got to get it from someplace----
        General Lupia. I have got to take it from other projects,
    yes, sir. I have got to move it from other projects.
        Mr. Tiahrt. The Administration is requesting two additional
    BRACs. I would venture to say that somewhere in military
    construction we are going to invest money later on a facility
    will be caught up in the base realignment and shut down--so
    that would be part of the termination clause?
        General Lupia. Yes, sir.
        Mr. Tiahrt. Are we increasing our risk when we know there
    is a pending BRAC with forward year funding?
        General Lupia. I am trying to think through whether there
    is a connection between the advanced appropriation and BRAC,
    whether it was a full appropriation or only a partial
    appropriation. I don't think it would make too much difference,
        I think we are in the same predicament either way in terms
    of its relationship to BRAC.
        Mr. Hobson. Frankly, we may be better off this way because
    you won't have as much at risk.
        Mr. Tiahrt. But if we obligate for future year funding, and
    then we terminate the facilities, where does that put us in the
    process? Would we have been better off to----
        General Lupia. I guess it would be you would take the money
    back----
        Mr. Hobson. In some form of rescission.
        Mr. Tiahrt. But I kind of feel we are robbing Peter to pay
    Paul which is over used, I know that if this forward funding is
    a good deal, why do we stop at two years? Some of these
    projects take more than one year to construct. Some are more
    than two years to construct. Why don't we take that forward
    funding five years, and then we can spend $50 million?
        It seems like the trend that we are going in seems too
    risky as far as our commitments given the pending BRACs; the
    changing in the scope of the missions--they seem to be moving
    towards more of an international police force than it does to
    protect us from a common threat.
        Is this forward funding good enough to extend it to five
    years instead of just two years?
        General Lupia. Sir, I don't believe anybody including the
    highest ranking members of the Department of Defense have
    testified that this is a good deal or it is a good idea.
        We recognize that we have a problem in 2000 that we have
    readiness and modernization initiatives which must be funded
    and this was a way to solve that problem, and I think the
    Department of Defense has brought this idea over clearly as
    required for one year. We make up the difference in 2001--we
    hope to make up the difference in 2001. In this $471 million
    for the Air Force in 2001 is on top of a fully-funded 2001
    program so we now begin to talk about 1.1 or 1.2 billion
    dollars for an 2001 program in terms of appropriation.
        Mr. Tiahrt. I'm glad that nobody thinks it is a good deal.
    I don't think it is a good deal either. I think it's poor
    planning on our part and in a year when we are projected to
    have, if you agree with--including the social security--a $130
    billion surplus, and when you look at the President's budget,
    which has an additional $150 billion in fees and additional
    taxes that we have to have a shortfall in military construction
    which directly affects the quality of life for voluntary
    military and which we are having trouble recruiting people and
    retaining personnel. This doesn't make sense to me. This seems
    like it has gotten the lowest priority in the budgetary
    process, and that is upsetting to me, especially in light of
    the current problems we are having in retaining pilots,
    retaining people 14-15 years into their career who are now
    leaving. And it revolves around short supplies of funding in
    construction and in the Department of Defense, so I am glad
    that nobody thinks it is a good thing. I agree.
        Mr. Hobson. Thank you. Since Mr. Walsh just arrived from
    chairing his other Committee, we are going to let him go right
    now.
        Mr. Walsh. Thank you, Mr. Chairman.
        Mr. Hobson. He hasn't had a chance to get in this round.
        Mr. Walsh. I have got a hearing going on so----
        Mr. Hobson. That I am supposed to be at.
        Mr. Walsh [continuing]. That you are supposed to be at.
    [Laughter.]
        Mr. Walsh. Anyway, thank you, Mr. Chairman and members of
    the subcommittee for allowing me to do this.
        Good morning--thanks for coming to the hearing.
        Secretary DeMesme. We'll be back. [Laughter.]

             real property maintenance funds for air national guard

        Mr. Walsh. I have an Air National Guard base in my
    district, 174th Fighter Wing, and they fly F-16s and in the
    past when I have visited them they have expressed concern that
    their facilities are deteriorating because they can't get
    enough real property maintenance funds.
        As I understand it, real property maintenance funds are
    used mostly for maintenance and repair of the infrastructure
    and very few minor new construction projects
        Could you explain to me how real property maintenance funds
    are allocated to the Air National Guard and how we can break
    the cycle of using these funds as bill of fares for those
    shortfalls.
        General Lupia. Sir, I will try to give you the umbrella
    answer and then ask the Air National Guard if they would like
    to provide any additional detail.
        In the Air Force we made a conscious decision last fiscal
    year and we will do it again in Fiscal Year 2000 to fund real
    property maintenance at 1 percent of plant replacement value.
        Real property maintenance for us in the Air Force is big
    business. It is $2.4 to $2.5 billion and any time I talk Air
    Force I am talking about the active and the guard and the
    reserves, the total force, and then we take that money, the
    $2.5 or so billion and we break it into two categories. One we
    call real property services. That is how we pay our utility
    bills and run our fire departments and do all the things we
    have to do to open the doors every morning.
        The other part is called real property maintenance and that
    is how we fix leaky roofs and take care of air field pavements
    and such.
        We then go into the Air Force model that has a plant
    replacement value for every command in the Air Force and we
    distribute the money based on one percent of their plant
    replacement value, so it is equitable, whether you are talking
    about Air Combat Command, Air Mobility Command, the Air Force
    Reserve or the Air National Guard.
        I would like to offer General McKinley an opportunity to
    talk about any specific real property maintenance problems the
    Guard has, but that is how it works from a big picture
    perspective.
        Mr. Walsh. One percent of the plant replacement values----
        General Lupia. Yes, sir.
        Mr. Walsh. That is about a replacement cycle of about 100
    years, right?
        General Lupia. Yes, sir.
        Mr. Walsh. This is--the money that actually replaces
    facilities comes from the military construction program, not
    from the real property maintenance program. The real property
    maintenance program really does what you said, maintenance and
    repair on existing facilities. It does not replace facilities.
        Mr. Walsh. Any other comments?
        General McKinley. Mr. Chairman, I am Brigadier General
    Craig McKinley, the Deputy Director of the Air National Guard.
    It's a pleasure to be here.
        Obviously, sir, RPM, for Air National Guard units, is a big
    quality of life issue to us. The Syracuse unit is much like all
    the other 88 flying units and our other geographically
    separated units, in that, if we don't upgrade our facilities
    and maintain them, then our traditional Guardsmen and women,
    those who serve, don't have adequate places to work.
        General Lupia is exactly right. General Clem for the Air
    Force Reserve and myself sit corporately with this team and
    rack and stack the greatest priorities. We have played along
    with them at the table.
        If we had more money, could we use it to do more? Yes,
    absolutely. The answer would be yes. We try to balance our RPM
    to the 50 states and the four territories that have units in
    the Air National Guard and we are concerned as you are that we
    continue to maintain our facilities.
        Right now we would like to have more money in the RPM
    accounts but presently this does not exist.
        Mr. Walsh. Thank you. Yes, sir?
        Mr. Farr. Would the gentleman yield?
        Mr. Walsh. I would be happy to yield.
        Mr. Farr. How much of a responsibility for the Air National
    Guard is borne by the states?
        General McKinley. Sir, unlike the Army National Guard,
    which has state matching funds used predominantly in the armory
    building business, the Air National Guard is Federal money.
        Mr. Farr. You get some payroll money.
        General McKinley. We have some payroll money but it is a
    much smaller percentage, sir, than the Army National Guard.
        Mr. Farr. Would the situation that Mr. Walsh talked about
    lend itself to local base ops support?
        General McKinley. No, sir. I think in the Air National
    Guard, particularly in the RPM accounts, this is a corporate
    process. We compete for the 1 percent replacement value and we
    would be able to take care of those types of issues for the Air
    National Guard.
        I can't speak to the Army Guard but I believe that the
    states have a much larger impact over Army Guard units than Air
    Guard units.
        Mr. Hobson. Let me interject something here though. I don't
    know about your base but most Guard bases tend to be on
    municipal airports.
        General McKinley. Or leased property.
        Mr. Hobson [continuing]. Or leased property. Let me put it
    that way.
        General McKinley. That's correct.
        Mr. Hobson. And therefore there is some, a little bit, but
    they do most of the work, my experience has been at my Guard
    base, which is a flying unit, they actually add a lot of
    facilities to that particular community, much more than they
    get back in monetary from that community, but there is some of
    that and I assume your base is probably--
        General McKinley. We are at the commercial airpoart.
        Mr. Hobson. Commercial airport, yes, and mine is at
    Springfield Municipal Airport.
        General McKinley. Yes, sir.
        Mr. Hobson. Now the Reserve on the other hand has been very
    good--Wright-Patterson--helped on a project in putting in some
    money so there was money that went in there. We had a little
    discussion where the money was coming from but the Reserve did
    step up and put some money into Wright-Patterson, which is
    again on, that is on a Federal facility, so there is this mixed
    blend.
        Mr. Walsh. Reclaiming my time then, General, I have been
    told there is a new communications unit about to be placed in
    my district at the Air Guard's base. Construction of a facility
    for it is not included in your fiscal year budget. Are there
    any other units in the same situation in other states that have
    new units or commissions which would require MILCON projects
    that were not included in your Year 2000 request?
        General Lupia. Again, sir, I'll give you sort of an
    umbrella answer and then ask General McKinley to give the
    specifics.
        The requests from our major commands including the Guard
    and Reserve for this year's military construction program was
    at $2.2 billion and as you see we brought a request for
    authorization for $699 million, so only one-third of what all
    of the major commands in the Air Force felt they needed in this
    fiscal year was able to be funded within the Air Force--was
    able to be authorized in his year's request, and so there are
    many, many, many shortfalls but the specifics I am sure General
    McKinley has.
        General McKinley. Sir--Congressman, you are referring
    obviously to the Roslyn to Hancock move. That was a late
    breaker that was not able to get into the funding program. We
    can provide a list for the record of the other units around the
    country that have similar situations, but suffice it to say, we
    want that move to occur. It is a good mission change. It is a
    good re-role of what we had done from a Cold War strategy to a
    21st century strategy for the Air National Guard, so we fully
    commit to getting that unit down in a proper manner but I would
    provide for the record the other issues which you are asking.
        [The information follows:]
                          Air National Guard Projects
        In addition to the deferred new mission MILCON project at Handcock
    Field, NY, the Air National Guard (ANG) has had to defer others due to
    constrained MILCON funding. Inefficient workarounds will be utilized
    until permanent facilities can be provided.

                      DEFERRED AND NEW MISSION REQUIREMENTS
    ------------------------------------------------------------------------
                        Project                               $(000)
    ------------------------------------------------------------------------
    Robins AFB, GA-B-1 Aircraft Beddown............                   $33.0M
        Munitions Maintenance and Training Complex.                    9,800
        Operations & Training Complex..............                    6,100
        Supply and Equipment Warehouse.............                    5,400
        Base Engineer Maintenance Complex..........                    3,200
        Vehicle Maintenance........................                    2,100
        Avionics Shop (not yet in FYDP)............                    6,900
    Kelly AFB, TX 1................................                    $6.5M
        F-16 Add/Alter Squad Ops/Flight Training                       3,400
         Facility..................................
        F-16 Squad Ops/Flight Training Fac (not yet                    3,100
         in FYDP)..................................
    Springfield ANGB, OH 1.........................                    $6.0M
        F-16 Add/Alter Squad Ops/Flight Training                       1,700
         Facility..................................
        F-16 Squad Ops/Flight Training Fac (not yet                    4,230
         in FYDP)..................................
    Atlantic City ANGB, NJ.........................                     1,4M
        F16-ADAL General Purpose Shops (not yet                        1,400
         FYDP).....................................
    Puerto Rico ANG, PR............................                    $1.6M
        ADAL Squadron Operations (not yet in FYDP).                      840
        ADAL Aerial Port (not yet in FYDP).........                      740
    Boise ANG, ID..................................                    $5.3M
        Add/Alter Base Supply Complex..............                    3,000
        Fuel Cell/Corrosion Control Facility.......                    2,300
    Jacksonville ANG, FL-F15 Conversion............                    $2.4M
        Add to Fuel Cell Hangar....................                    2,400
    Key Field, MS-New Communications Mission.......                    $6.4M
        Communications/Electronics Training Complex                    6,400
    Hancock ANG, NY................................                    $8.9M
        Communications/Electronics Training/.......                    8,900
        Aerospace Support Equipment Complex........                    8,900
    March ANG, CA..................................                    $3.6M
        KC 135 Add/Alter General Purpose Shops.....                    3,600
            Grand Total............................                    $75M
    ------------------------------------------------------------------------
    \1\ Note: Facility site survey identified additional requirements that
      increased the scope of the project. This change occurred after
      submission of the FYDP.

        Mr. Walsh. Are you concerned that these units will not be
    able to fulfill their mission without those new facilities?
        General McKinley. We certainly would like to get the new
    facilities up and running as quickly as possible but the Air
    National Guard has a strong tradition of getting the job done
    even with work arounds.
        The proper way, though, is to get the right adequate
    buildings at the right time.
        Mr. Walsh. I have several other questions but I will just
    ask one more, if that is all right with you.
        Mr. Hobson. Okay.
        Mr. Walsh. It seems that many of the Air National Guard
    program requests are small compared with the cost of
    construction these days. You only requested $2 million in the
    unspecified minor construction program.
        As I understand it, this money is used for construction
    that must be accomplished within a short timeframe and cannot
    wait for normal MILCON processes.
        Will this satisfy your requirements?
        General McKinley. Sir, we asked for about a little over
    twice that much and through the racking and stacking process
    this is what corporately we were able to get.
        Obviously we would be able to execute if additional funding
    in the unspecified accounts were made available.
        Mr. Walsh. Thank you. Thank you, Mr. Chairman, for allowing
    me to ask those questions.

                          Family Housing Privatization

        Mr. Hobson. Thank you. I am going to ask one and then we
    will go back to the next round, but this one may provoke some
    discussion from other members, because it is something that is
    of an overall concern to the entire Committee as we have
    grappled with this problem. It's something new.
        The family housing privatization initiative was originally
    intended to be a supplement to the traditional housing program.
    We are seeing more and more emphasis on this program, which is
    still in a, quote, ``pilot'' stage.
        For Fiscal Year 2000 the Army did not request a single
    traditional family housing project in CONUS. In contrast, the
    Air Force is implementing a more balanced program. Can you
    explain to us why the Air Force is taking a more cautious
    approach than the other Services?
        Secondly, does the Air Force anticipate that there will be
    any significant financial savings from privatization as
    compared with the traditional program? And lastly, the
    statutory authorities established for the military housing
    privatization initiative expire in February 2001. How will the
    Air Force proceed with its housing program if these authorities
    are not regranted?
        This may open up, I think, some more discussion as we go.
        Secretary DeMesme. First of all, sir, let me thank you for
    acknowledging the fact that we are taking a measured approach
    to family housing and privatization. This is a very serious
    issue for us because housing is one of our members most valued
    quality of life initiatives, and in order for us to maintain
    our ability to provide housing, not only for today, but for
    tomorrow, we thought it was necessary to develop a family
    housing master plan that would allow us to look across the Air
    Force, to deal with unique needs of different communities and
    to assure that any of the housing that we developed was, first
    of all, affordable, safe, and accessible to the bases where we
    needed our men and women to work.
        We have looked at a myriad of things in determining how to
    privatize. We are looking at different ways of doing it. We
    don't believe there is a one size fit all approach depending on
    where you are. Privatization is very essential for us because
    it allows us to provide housing now when people need it,
    wherein if we were to go the traditional budgeting round, it
    would take us many, many, many more years to have housing
    available.
        So, privatization, we believe will work. We will talk a
    little bit about our Lackland project, which is our first one
    to be approved in this matter. We are getting a lot more units
    than we would have otherwise. General Lupia is going to talk
    specifics in a minute. But I just wanted to say that this is a
    very serious initiative for us, and it means a lot to our
    people, a lot to recruitment, a lot to retention, and we
    thought that the tool that you gave us to go out and test this
    in a pilot program deserved our utmost conservative approach to
    making sure that we could do it right.
        So we have got Lackland on board, on track. We have got
    other housing that we are going to be looking at in different
    parts of the country. And General Lupia is going to give you a
    general idea of where those are and what is involved in
    conveying or leasing, or different kinds of partnerships that
    we are entering into with our private sector.
        Mr. Hobson. General.
        General Lupia. Sir, to specifically answer your question
    about the difference in the Services, the Air Force considers
    taking care of its people a core competency, recruiting airmen,
    retaining them and their families, and so family housing
    becomes terribly important to us, and we will not allow any
    commander in the Air Force to not take care of his or her
    responsibilities in terms of family housing. So, a very high
    priority for us because of our culture and the way we think.
        Our program in family housing is made up of three
    components. One is the privatization piece, the second is
    traditional military construction, which we asked you for a
    $328 million authorization for today, and the third component
    is what we are able to do within the operations and maintenance
    accountant in family housing, because if you look at the budget
    before you, you will see that the family housing budget for the
    Air Force is $1.2 billion. Only $310 million or so of that is
    in new construction and improvements. The vast majority of the
    money is the operations and maintenance part of housing where
    we have major projects that renovate houses and take care of
    them for us. As a matter of fact, the number one item on the
    Chief of Staff and Secretary of the Air Force's unfunded
    priority list for infrastructure is an increase of $200 million
    for family housing O&M.
        And so we can do large projects, I think you saw some of
    them actually in your trip through Europe, to take care of our
    family housing.
        Mr. Hobson. I am just worried about the process, as you
    know.
        General Lupia. Yes, sir. So, and I am ready to talk a
    little bit more than I was in your office the other day to talk
    about that. But, in any event----
        Mr. Hobson. You are beginning to get the message.
        General Lupia. In any event, this one piece, if we home in
    on the one piece called privatization of family housing, the
    Air Force program today, we have 77,000 houses in the CONUS,
    those are the only houses that are eligible for privatization.
    We are looking at privatization activities in terms of about
    10,000 houses at 12 different installations.
        I am proud to say that we are the only Service that has a
    contract award under the 1996 legislation that allows us to do
    this. That was at Lackland Air Force Base in Texas, where we
    parlayed $7.0 million of Air Force money, taxpayers' money, and
    put it together with $36 million of industry money to pull off
    a $42 to $43 million project. So we do have one contract award.
    Our sample is one here, but on a sample of one, a very good
    experience. A ribbon cutting for the first of those houses is
    scheduled for August of 1999.
        The second effort is at Robins Air Force Base right behind
    that, 600-plus houses. The third one, which I am hoping you
    will release to us today or tomorrow, is at Elmendorf Air Force
    Base in Alaska, over 800 houses.
        Mr. Hobson. You have to be realistic in how many you can
    build a year.
        General Lupia. Yes, sir. We have some very good answers for
    you, I believe, that are on their way back to you.
        Behind those, nine more projects. I would like to address
    specifically your question about, is there large cost savings
    here? And I think the very candid answer to that is it comes
    real close. And the reason for that is that if we take a
    typical project and we say on the one hand we avoid the large
    investment in military construction, as we build these houses
    and families move into them from what, in essence, used to be a
    base house, that has now been transferred to a developer, we
    have to pay those families their basic allowance for housing.
    And so the bill goes up on one side for basic allowance for
    housing, but the bill comes down on the other side for
    traditional military construction.
        And after a pretty fair amount of analysis, the financial
    management community has said, price-wise, long-term, life
    cycle costs, this comes out pretty close to a wash. The big
    advantage to us, though, sir, is that in the backlog of work
    that has to be done for family housing in the Air Force, we
    have got a 26 year cycle that we are on right now. It is 26
    years before we get back to a house to do a major renovation.
    We believe with the leverage that we receive from
    privatization, that we will cut that cycle from 26 years down
    to somewhere around 11 to 12 years, fully meeting the Defense
    guidance which says, get your housing inventory taken care of
    by the year 2010. And so that is our program in a nutshell.
        Mr. Hobson. Well, you know, we have a lot of problems about
    the shifting of those accounts.
        General Lupia. Sir, in the Air Force, there is no money
    shifting from the family housing account to the personnel
    account. The Air Force is, in its rebuilding of the POM,
    putting the money into the program to pay the additional basic
    allowance for housing, so that the family housing program
    remains $1.1 to $1.2 billion a year. The money that we are kind
    of calling savings from the privatization initiative stays and
    goes into the operations and maintenance part of that and
    builds up then the number of houses that we can take care of
    with that additional money. So, in the Air Force, there is no
    shift of money from the housing account to any personnel
    accounts to pay this additional basic allowance for housing.
        Mr. Hobson. Does anybody want to carry on with this?
        Mr. Olver. I would like to carry it just a moment. Lackland
    is under contract. How many is that?
        General Lupia. Yes, sir. Lackland, we are going to receive
    420 units of housing. We have paid for----
        Mr. Olver. Robins, is that funded--was that funded in 1999?
        General Lupia. Yes, sir. Robins, we have in hand proposals
    that were evaluated.
        Mr. Olver. And Elmendorf also was in 1999?
        Secretary DeMesme. In 1998.
        Mr. Olver. Ninety-eight.
        General Lupia. We call it 1998 because we gave it the
    fiscal year of the year we brought it to the Congress for
    approval, in essence. So we came to you----
        Mr. Olver. But, none of that is in the 2000 budget?
        General Lupia. No, sir. No, sir.
        Mr. Olver. Are there other projects besides Robins and
    Elmendorf that are already out there ready to go, previously
    appropriated?
        General Lupia. Yes, sir. Dyess.
        Mr. Olver. You have pointed out that you are the only one
    that has an actual contract out under the 1996 authorization.
        General Lupia. Contract award.
        Mr. Olver. Contract award.
        General Lupia. Yes, sir.
        Mr. Olver. I am just trying to get an idea of which others
    are ready to go in already appropriated funds.
        General Lupia. Okay, sir. Besides Robins and Elmendorf,
    Dyess, which seed money comes out of the 1998 and 1999 military
    construction program.
        Mr. Olver. And how many is that?
        General Lupia. Dyess Air Force Base is 402 units.
        Mr. Olver. Okay. What else?
        General Lupia. The next one is Mountain Home in Idaho, 1550
    units.
        Mr. Olver. And that is all already appropriated?
        General Lupia. Yes, sir. As a matter of fact, I am happy to
    tell you that you didn't have to appropriate as much for
    Mountain Home because we took the savings from Lackland and we
    reprogrammed them to Mountain Home. We actually had $17.7
    million from the Congress to do the Lackland deal, it turned
    out we only needed $7.0, and so we reprogrammed to cover the
    cost for Mountain Home, so we didn't have to ask for another
    $10.7 million from you.
        Mr. Olver. Does that complete the list of those that are
    already----
        General Lupia. No, sir. No, sir. Kirtland Air Force Base
    comes from earlier appropriations, that's 1890 units. Patrick
    Air Force Base, 999 units, which will eventually, in the end
    state, be only 552, because we demolish some and give some way,
    et cetera. Dover Air Force Base, 522 units, and Hurlburt Air
    Force Base, 573 units, but we have no military construction
    money to put up against that one. Wright-Patterson Air Force
    Base,----
        Mr. Hobson. Well, let's hear that.
        General Lupia. Wright-Patterson Air Force Base is probably
    the project we will be proudest of when this is all finished.
        Mr. Olver. You gave one through all kinds of obstacles to
    get there, so you will have to be very proud of it.
        General Lupia. I am certain that it won't be very long
    before we will be making a presentation to the Congress about
    the project. The project is for 1200 units, all enlisted
    housing. We have seed money of $5.6 million that came out of
    the 1999 military construction program. We are going to take,
    after the Chief of Staff's approval of our concept, we are
    going to take the concept to OSD this month, and then be
    prepared to release it to the Congress for notification shortly
    after that.
        Tinker Air Force Base, 730 units, and this is the first
    time you will see a request in 2000. We need some seed money to
    come out of 2000 for Tinker Air Force Base in Oklahoma, and
    then McGuire Air Force Base in New Jersey is our last project,
    999 units. I would be happy to provide that for the record and
    give you the details.
        Mr. Olver. So I was just sort of curious then, what is it
    that you are--what is in this '00 request for additional----
        General Lupia. In privatization, sir?
        Mr. Olver. In the privatization.
        General Lupia. For privatization, only the Tinker piece I
    mentioned to you. The rest of the $328 million is for
    traditional military construction to upgrade our housing as
    proposed under the request.
        Mr. Olver. So the request in the '00 budget is basically
    all to support the list that you have given?
        General Lupia. No, sir.
        Mr. Olver. No.
        General Lupia. The exact opposite. In the Fiscal Year '00
    authorization of $328 million, only $6 million at Tinker would
    be seed money for privatization. The rest of the money is for
    traditional military construction to improve housing or build
    new ones.
        Mr. Olver. Okay. So, again, I think what I was trying to
    get at was that there is no new base that is being brought into
    this list. What is in this 2000 budget for privatization just
    completes that list. And it only seems to be for Tinker that
    you are thinking----
        General Lupia. Yes, sir.
        Mr. Olver. And you end up reprogramming because you have
    saved so much in some other places. You did in Lackland that
    allowed you to move it to Mountain Home, or something like
    that. But there is no new base other than that list of about 10
    or 12 that are already out.
        General Lupia. One of the reasons is the legislation will
    expire, sir. The legislation was only for five years. So, now,
    if the Congress should decide to extend the legislation, then
    we would relook at----
        Mr. Olver. So you are hoping to get the contract before the
    authorization goes away.
        General Lupia. Yes, sir, we have to.
        Mr. Olver. The bunch of these in their entirety.
        General Lupia. Yes, sir. Yes, sir. And 2000 is pretty late
    to get the contract by 2001.
        Mr. Olver. And in the process, you will have actually
    gotten about 11,000, or you can probably come up with something
    like that out of your 75,000?
        General Lupia. Yes, out of 77.
        Mr. Olver. So, it is a privatization replacement of
    housing, it is not new and additional housing, but, basically,
    you will then have 65,000 or something like that under the old
    program, and 11,000 under the new program.
        General Lupia. Mainly for ones that you are calling under
    the new program will be today's existing houses that we will be
    divesting ourselves of, and a private developer will now have--
    --
        Mr. Olver. I realize that. But, in net, you are not going
    to have more houses.
        General Lupia. No, sir. No, sir.
        Mr. Olver. You may be tearing down really dilapidated,
    terrible stuff and replacing it with equivalent numbers under
    the privation program in one or another place.
        General Lupia. Yes. There are, as a part of some of the--
    part and parcel of some of these projects, there are some new
    houses we get. The example being Elmendorf Air Force Base in
    Alaska. We transfer 528 houses to the developer, and, in
    addition to the ones we transfer, the developer provides us
    300. So we do get 300 units of new housing, if I am giving you
    the right number here. We are building 300 units of new
    housing, with 56 dilapidated units being demolished, giving us
    a net gain of 244 units at Elmendorf, against a very big
    deficit of over 700 units.
        Mr. Farr. What happens to the 528?
        General Lupia. The 528 become the developer's, sir. We
    give--we divest ourselves of these houses to the developer. He
    owns them, operates them, maintains them, takes care of them
    for us--for himself, really.
        Mr. Farr. For you.
        General Lupia. On a 40 or 50 year lease.
        Secretary DeMesme. He will rent them to our people. It will
    be a direct lease arrangement.
        Mr. Olver. I was going to ask about what your criteria were
    for deciding, thinking that we had a bunch more projects that
    were coming along. But you have chose these, these are all at
    stages in the processing and contracting, so, whatever were
    your criteria, if you go into it, we have to get further
    authorization here, then that question would become really
    relevant perhaps as to what we learned about what criteria
    ought to be used for this sort of thing.
        Mr. Hobson. We'll see, and that's what, as I understand it,
    the original legislation was supposed to do, was to begin this
    program in a pilot stage so they could then sit back and
    breathe on what they have done and see how it works, and
    whether they needed to change, after they have done this, along
    the way, and not divest the Air Force of its entire housing
    program on something that they haven't--you know, we haven't
    really studied out. And it was to get this balance down from
    the 200,000 units that have to be replaced or revitalized by
    2010.
        General Lupia. 2010 under the Defense guidance.
        Mr. Hobson. 2010. And it was an ability to kind of enhance
    what we were doing, but it wasn't to turn over the housing
    stock into the privatization program.
        I mean I think the jury is still out as to whether this is
    the way they should be configured in the future or not.
    Everybody is going at it a little differently.
        Mr. Olver. I think that is my question about how you
    prioritize or how you decide what projects, what your criteria
    for deciding what projects should be privatized is really
    relevant still because you have really got 11 of these that are
    left to be contracted and you want to get them contracted in
    the next couple of years and it may not be possible to get them
    all contracted.
        General Lupia. Oh, we'll make it, sir.
        Mr. Olver. Okay.
        Mr. Hobson. He can say it because he is going to be gone.
        Secretary Demesme. We'll make it.
        Mr. Olver. As a general question, maybe you would give us
    something that is coherent about the criteria that you use in
    making these choices because if anything has to be triaged,
    those criteria ought to be part of such a context.
        Mr. Hobson. And I think you ought to do that for the record
    too. You can do a verbal short version if you want, but I think
    we would like something for the record. I don't know if anybody
    has done it, but when a member asks for something on the record
    rather than just putting it in the record as we all do, I would
    like you to give the members the courtesy of submitting pages
    to them so that it actually is jogged in their mind because
    sometimes these reports don't come back for a long time and in
    the interim it slips your mind, and I think this will be better
    for you and I want to do that generally in all of our hearings.
        If a member asks for something for the record, I hope that
    you will give the member the courtesy of pulling that page out
    or making the page for them and saying here it is.
        Secretary DeMesme. We will definitely do that, sir.
    Definitely.
        [The information follows:]

                                Milcon Projects

        The investment priorities in the MILCON Military Family
    Housing (MFH) program are requirements-based and designed to
    provide funding to installations using a ``worst first''
    priority. All housing privatization projects identified to date
    originated from existing housing revitalization projects in the
    traditional MILCON MFH program. In most of these cases, the Air
    Force developed an initiative to obtain maximum leverage of
    existing appropriated MILCON MFH funding to upgrade the ``worst
    units'' at the installation. Original project scope was
    increased to ensure 3 to 1 leveraging as a minimum. At two
    bases, additional funding was provided by OSD's Competitive
    Sourcing and Privatization Office (CS&P), previously known as
    the Housing Revitalization Support Office--HRSO) in order to
    have a sufficient amount of scoring dollars available for the
    desired scope. A second major criteria item is that the project
    should be self-sustaining such that the service members do not
    have any out-of-pocket expenses as a result of living in
    privatized housing. The first project at Lackland AFB took over
    two years to bring to fruition as all the implementation
    documents relating to the real estate transaction had to be
    developed. Subsequent projects are using these completed
    documents as starting points along with the lessons learned to
    bring the latter starting projects to closure much sooner than
    our first. Therefore, we expect to complete the original group
    within the five year test period.

        Mr. Hobson. But you were going to give a little----
        General Lupia. Just a short answer. First, we looked at
    what the requirements are, then we look at the second piece,
    which was where do we have some seed money in the military
    construction program from previous line items, and then the
    third piece was where can we make this work in terms of at
    least--at least the leverage of 3 to 1 in terms of payback.
        We tried it at a couple of places for example where we had
    a big requirement. We had money in the military construction
    program but we couldn't make the payback work--Columbus Air
    Force Base--as a matter of fact, we had two flops and they both
    happened to be in the state of Mississippi, which I was not
    overly enthusiastic about, and so we came over and briefed why
    they wouldn't work, for two bases in Mississippi.
        The fund stream just couldn't provide enough money for the
    developer to pay the mortgage is a simple way to say it.
        Mr. Olver. Just a final comment. Bearing that in mind, if
    we are in process and there are long contracts with these
    privatization projects that go 20 years or 10 years or 15 or
    whatever they may happen to be----
        General Lupia. 40 or 50.
        Mr. Olver [continuing]. You have the Administration's
    policy which the Secretary of Defense strongly supports of a
    couple more rounds of base realignments and closures and so
    forth and there is--hopefully the ones we are using are the
    ones that you see as important ones. I don't want to get into
    this discussion because I know there is not a list, but the
    money is very tight now and we want to put the money where it
    has to be over the long haul. I don't think that we would like
    much to see housing that we have just privatized a thousand
    units in the first couple years of a contract that has to be
    bought out because the risk has to be taken up to the developer
    and have those appear on any one of these later base closure
    lists.
        Mr. Hobson. And that is why there is one proposal out there
    I have seen, not in your Service, where there is a developer
    that says I don't need a guarantee. I will build better housing
    than you want and if you guys pull out I will take the risk and
    we will rent this stuff in the marketplace. We are building
    stuff not to your standards but to a market standard at the
    money cost and I would suggest that people ought to look at
    those kinds of things because those to me are the ones that if
    there is this kind of risk, which I think you all agree there
    is down the road, if you can find that type of thing and it
    meets the criteria it is a much better way to go into the
    privatization than the other.
        Allen, you have been very patient----
        Mr. Olver. I would hope, Mr. Chairman, that we would have a
    little discussion about that one. I would like to hear about
    that case. I have heard about it several times----
        Mr. Hobson. Okay----
        General Lupia. The Air Force has a project like that in
    Florida--Patrick Air Force Base in Florida where we are
    providing no guarantee at all to the developer who would
    commit----
        Mr. Hobson [continuing]. All the money?
        General Lupia. Yes, sir.
        Mr. Hobson. Good.
        Mr. Olver. Florida is growing so quickly----
        Mr. Hobson. And that is one of the problems I got with the
    Alaska proposal.
        Mr. Olver. No encroachment anywhere on any military
    facilities----
        Mr. Hobson. Allen, can you get back to where you were about
    half an hour ago?

                             science and technology

        Mr. Boyd. Okay. Thank you, Mr. Chairman.
        Let's go back to where we left off on the S&T, science and
    technology issues. I got a letter here from Delores Hedder, the
    Deputy Under Secretary of Defense for S&T in which she says in
    their final analysis the Air Force made a decision to eliminate
    funding for environmental technology development in FY 2002,
    the President's budget request.
        How many--what will that affect? How many environmental
    laboratories do we have in the country, in the Air Force?
        General Lupia. Off the top of my head I'm saying one at
    Brooks and one at Tyndall----
        Secretary DeMesme. Right. Wright-Patt has some.
        General Lupia. Are there any others?
        Secretary DeMesme [continuing]. Is it just three? I think
    we have three.
        Mr. Boyd. Laboratories, environmental laboratories?
        General Lupia. In the Air Force Structure.
        Mr. Boyd. Right.
        General Lupia. The other Services have some as well.
        We're meaning to take that for the record, sir. I am not
    sure we got them all in that.
        [The information follows:]

                                   S&T Issues

        The Air Force has one laboratory known as the Air Force
    Research Laboratory (AFRL) and is located at Wright-Patterson
    AFB. Under the AFRL, there are nine Research Sites conducting
    research on ten different functions. AFRL performs
    environmental Science and Technology (S&T) research under
    Appropriation 3600 (RDT&E) at Research Sites located at Tyndall
    AFB and Wright-Patterson AFB (WPAFB). The FY00 President's
    Budget zero's out the environmental S&T budget at Tyndall AFB,
    specifically affecting Program Elements (PE) 602202f (Human
    Effectiveness Applied Research), Project 1900 (Environmental
    Quality Technology) and PE 603723f (Environmental Engineering
    Technology), Project 2103 (Environmental Quality Advanced
    Technology). The environmental S&T program at WPAFB under PE
    602102f (Materials) is funded across the Future Years Defense
    Program (FYDP) to develop environmentally safe aircraft
    coatings. In addition to S&T research efforts, WPAFB performs
    environmental Testing and Evaluation (T&E), demonstration and
    validation, of pollution prevention technologies under PE
    605854f (Pollution Prevention) which is also fully-funded
    across the FYDP.

        Mr. Boyd. You may not have the answers but the other
    Services, do they have environmental laboratories? Do they do
    an environmental----
        Secretary DeMesme. Yes, sir, they do.
        Mr. Boyd. They do. I don't know that they have made a
    request to zero fund theirs also. Do you?
        General Lupia. I don't believe they have, no, sir. I think
    they have left money in their program for it.
        Mr. Boyd. Okay, and I'll be very brief, Mr. Chairman,
    because I know Mr. Farr wants to shift back to housing.
        Mr. Hobson. I want you to be on this, because this is of
    interest to me too, because, you know, the Air Force technology
    has always been one of the things that keeps you guys out front
    and if you start taking this kind of stuff out, I don't know
    where you are going to be, unless you are going to try to buy
    it from some other Service, which I don't think has the
    capability of picking up where you are.
        General Lupia. Sir, the difficulty in this program is
    pretty much the same as it is in a lot of programs is 10 pounds
    of requirements in a two-pound sack, and General Paul, who I
    know Congressman Boyd knows, wrote back to Congressman Boyd.
    The letter is dated the 2nd of March, Tuesday, basically saying
    that he has got all these requirements for S&T, for science and
    technology, and ``because of our emphasis of our activities in
    support of the development of an expeditionary aerospace force,
    a part of that restructure in the Air Force will increase
    emphasis on space technologies as it integrates air with space
    capabilities, and will decrease emphasis on other programs.
    While the Air Force has removed the funding from environmental
    technology development at Tyndall Air Force Base, the zero--
    zero program, the one that is in front of you, supports a
    higher priority air base operations technology development
    program at Tyndall as well.''
        So I don't know if that has actually gotten to your desk
    yet, sir?
        Mr. Boyd. Well, I am glad you brought that up because I
    have not seen that letter and that is the letter that is in
    response to the letter that I sent on January 21.
        General Lupia. Yes, sir.
        Mr. Boyd. Which I want to thank you for your timely
    response, dated 29 January, in which you said General Paul
    would answer the letter. General Paul and I have visited some
    environmental labs together and civil engineering labs
    together, and this has kind of caught all of us off-guard
    because of where we thought General Paul was on this issue,
    based on visits and discussions that we had in person and over
    the phone.
        You know, Mr. Chairman, we have the greatest military in
    the world today, really because of three reasons. One, we have
    the best trained personnel in the world. We have the best
    weapons systems in the world. We have the best logistical and
    support techniques in the world. Those don't come without a
    commitment to develop those techniques, whether they be a
    weapons system, whether it's training techniques, whether they
    be logistical and support techniques, and talking about a 10
    pound load in a 2 pound sack, when we get down the road 30 or
    40 or 50 years and we have deserted our environmental
    commitment, the environmental issues that we are going to be
    creating and we have deserted that, you really have got a 10
    pound load in a 1 pound sack then.
        I think it is just so short-sighted, so short-sighted to
    desert the research and development efforts at this stage of
    the game and I feel very strongly about that.
        Mr. Hobson. I agree with you. I raised this with the
    Secretary yesterday in the Defense Appropriations Subcommittee
    hearing again and I think the thing that has kept this country,
    especially the Air Force, in the forefront is its S&T and one
    of the members asked yesterday and said, you know, we're going
    to contract this stuff out and we hope that works. Well, if it
    doesn't work, what you have destroyed is a culture that you
    won't get back in a generation.
        If going out and buying it doesn't work, which they think
    they are going to try to do, you won't be able to bring these
    people back and you won't be building a culture up in the labs
    of the younger people coming along, which is a problem right
    now. You don't have the younger people that you are nurturing
    to bring into science and technology for the future. The Air
    Force especially of all the Services, in my mind, that have
    kept you in the forefront has been your great emphasis on
    science and technology, not all of which you reap the rewards
    for right now.
        Let me give you an example. We are trying to do technology
    transfer. We are trying to take composite materials from the
    labs at Wright-Patterson and make bridges out of them for
    highways, so that we don't have to replace bridges in the same
    way so that they don't deteriorate as fast. We are trying to do
    that. We are doing a thing with the hospitals now in the visual
    technology of what we have used in the Air Force for these new
    vision flight systems to use in operations in surgery and there
    is all this sort of thing going on there.
        A lot of that is going to be lost in the future and a lot
    of the lab work on these types of facilities that we did is
    going to be gone, and you're going to try to--you didn't make
    this decision, but what we're worried about is that you're
    robbing Peter to pay Paul and you're being penny wise and pound
    foolish in some of the things that we're doing on emotional
    reactions at the present time to some funding.
        I think that's a real problem, especially in the Air Force,
    and I think all the members are trying to send this message in
    the kindest and strongest way we can back to the Air Force, but
    it isn't going to be kind much longer, I don't think.
        Mr. Boyd. Thank you, Mr. Chairman.
        My one last question had to do with the letter and you very
    expeditiously answered that by handing me a copy of the letter
    I had been seeking since the 21st of January. So thank you very
    much.
        Secretary DeMesme. Let me say, sir, that we do appreciate
    your concern there. It is not an area that we have entered into
    lightly. We have a lot of competing interest right now and
    we're working real hard to meet those. S&T is one that's on the
    table: we're looking at it. We're not necessarily pleased with
    the decisions we've had to make, and we hope that in the
    future, we'll be able to get more funding for these programs.
    But right now, when we're trying to balance all of our needs.
    Something has to fall out, and sometimes it's not exactly what
    we want to fall out.
        I know that S&T is very much on my--the Secretary's--is in
    his area of interest and he's trying to address it as best that
    he can. General Paul's letter gives you a pretty good answer as
    to what's happening right now, but we still are searching for
    the best way to--if we can improve upon what we've done, we
    will.
        Mr. Boyd. Well, I understanding the competing interest, and
    when you study the Air Force S&T budget, you see what is
    competing in the S&T budget, it jumps out at you pretty
    quickly. You funded the space-based laser and the Discover 2
    programs out of that budget----
        Secretary DeMesme. Yes, sir.
        Mr. Boyd [continuing]. This year for the fourth time----
        Secretary DeMesme. Yes, sir.
        Mr. Boyd [continuing]. Which basically eliminated----
        Secretary DeMesme. It eliminated some of the other
    programs.
        Mr. Boyd. And that's the competing interest.
        Secretary DeMesme. Yes, sir.
        Mr. Boyd. And so I just want you to know that this is one
    member who really is not satisfied with that as----
        Secretary DeMesme. We don't take that lightly, and we are
    concerned as well.
        Mr. Boyd. Thank you very much.
        Mr. Hobson. Mr. Farr.
        Mr. Farr. Thank you, Mr. Chairman.
        I think you get mixed messages from Congress. Let me try to
    put it in some perspective. We have moved in the procurement
    pool to buy off-the-shelf technology.
        Secretary DeMesme. Yes, sir.
        Mr. Farr. You don't have to do new specs for every----
        Secretary DeMesme. Correct, sir.
        Mr. Farr [continuing]. Watch made anymore.
        We have not yet moved to that in the management of our real
    estate, and I think that's where this Committee is very
    interested in seeing what kinds of benefits we will have if we
    develop some housing. But the people who are in the Service,
    men and women who moved into the housing built by the private
    sector, when they walked in, they cried because they've never
    been able to live in a home as nice as that. They never dreamed
    they would be, and here they were in the Service living better
    than their family dreamed of.
        So I think that we're very interested and I'm very
    interested in seeing the military try to be more--we learned
    that you had to build, you had to move all your buildings
    through the local community in order to get some of the
    building codes. But we don't do that. We still build military
    stand-alone without local zoning. And then the problem that I
    find that is tragic is when we go and close a base, in often
    cases, the base isn't usable by anybody because the housing
    doesn't meet any building standards or code standards or
    earthquake standards or utilities, you know, they don't fit
    any, and then we have to put a lot of cleanup money in there
    that takes away from revenues just to clean up sort of mistakes
    we made by not listening to the local people.
        So I'm very interested in seeing how we can use the better
    process. Where I'm not interested in contracting out, and I
    think that's the message you hear today, is the intellectual
    capacity of the military should never be contracted out. The
    seed corn or talent, whether it be an environmental lab or a
    language lab or a post-graduate school or any of those kinds
    of--where the faculty is so talented that we ought never to try
    to go out and just buy that off the shelf. But I think we do
    need to move the building out.
        One of the questions I have is about the ongoing effort of
    the Air Force to get out of the business of owning, operating
    and maintaining utility systems. I mean, that to me is no
    rocket science. If the sewers and water and electricity work
    for the local community, why wouldn't they work for the
    military? Why shouldn't we just be buying it from the--going
    there and buying incredible cheap rates that we can bargain?
        Secretary DeMesme. I'm going to give you a general answer
    to that and let General Lupia follow on. But we are very much
    involved in privatization of utilities. We have over 400
    identified units so far where we will be able to do that, and
    we are studying more. We have 108 that we are looking at that
    we've maintained.
        We have some war time requirements that sometimes require
    that we have members who are trained and ready to do certain
    kinds of jobs so that they can be deployed and get things
    running immediately if we are to be at war, fighting situation.
    Many of our local contractors might not be able to do that.
    When you have a career field, there are certain things they
    have to do to keep their proficiency up and other kinds of
    things.
        We will privatize utilities where it makes sense. As I've
    said, we've already identified 460-some, I think.
        General Lupia. 463.
        Secretary DeMesme. 463, to do just that. We only have 108
    that we are still looking at.
        Now, there are some other concerns. We have to make sure
    that the local communities are ready to take on the capacity at
    the time we're ready to turn them over.
        There are also some very serious studies that must be done
    to determine how to do that best, and General Lupia and his
    people have been involved in that effort. We've got some good
    feedback so far, we've got some good partnership efforts
    already underway, and we're working together--this is an OSD
    initiative, so all the services are doing the same thing. We
    have timelines set up to accomplish this. I think by 2003, we
    want to have the whole thing done. We have some goals to meet
    in 2001.
        So I'm going to let General Lupia give you a little bit
    more about why some of those systems cannot be privatized right
    now--some of the problems we've run into when we dealt locally.
        Mr. Farr. I'd be interested in why you can't privatize. It
    seems to me that the best customer anybody would have would be
    the United States Government. It's going to pay its bills, it's
    not going away. I mean, you could have a close, but at least
    what's left, if you build it right, it's marketable. And that
    issue about risk, I mean, Mr. Chairman, I think we
    underestimate how good a customer we are.
        Mr. Hobson. Oh, no. I wrote a bill called the--that was
    going to privatize and get competitive stuff. It scared the
    heck out of some of the utility companies. They've gotten a lot
    better in negotiating since the Forestall bill got knocked down
    by OMB. Josh Gottbaum and I worked on it, along with a
    wonderful engineer that's retired. All these engineers retire.
    And they have been better, I think, at beginning to look at it,
    and I think utility companies have gotten a lot better because
    they've gotten a little frightened about the alternate energy
    sources that may be available to make some arrangements.
        As we do deregulation of utilities, one of the things you
    need to be thinking about along this line is that you don't
    lock yourselves into certain contracts that you won't have the
    ability later to gain some of the benefits from some of these
    different energy sources.
        Mr. Farr. California is deregulated. What the cities have
    done, interestingly enough, is now they've formed their bidding
    pool. All these small cities, and the utilities never thought
    about this, they formed joint partnerships around the state and
    they're all going to go in and bid for energy for the public
    purposes of those cities and be able to buy not as a little,
    tiny town of 5,000, but now as a customer representing millions
    and millions of people.
        Mr. Hobson. Co-ops do that.
        Mr. Farr. It seems to me the military is really in a great
    position to be able to do things like that.
        General Lupia. First of all, tell me when I've said enough
    because you're onto one of my favorite subjects, so I'll ramble
    here.
        Mr. Hobson. Well, we're at the end here because we're going
    to cut this off.
        General Lupia. But what I would love is the opportunity to
    meet with you, send my experts over or meet with you personally
    to walk through our utility privatization efforts, because I
    think you would be very impressed.
        Mr. Hobson. Would you submit something also for the record
    on that because I think there's a lot of people who have an
    interest in that as we----
        General Lupia. Yes, sir. I would be happy to.
        Mr. Hobson. Because it could be a great savings of money
    for the military as we look forward.
        General Lupia. First of all, when we talk about utilities
    in this particular privatization effort, I talk about four
    major systems: natural gas distribution systems, electrical
    distribution systems, water treatment plants and waste water
    treatment plants. Those are the four systems I'm talking about.
        In the Air Force, and again, I always talk about the total
    Air Force--active, guard and reserve--we have 168 installations
    that we're on around the world and a total of 638 systems.
    Sixty-seven of those are already privatized today.
        Mr. Farr. How many?
        General Lupia. Sixty-seven. Four-hundred and sixty-three
    are under analysis right now, and I'll give you a little bit
    more specifics. Fifty-five of them are actually under analysis
    today, and there are another 408 systems that will be analyzed
    in the next two years.
        Ms. DeMesme mentioned to you that 108 of them are kept in
    reserve for us to train our people on and in order to be able
    to have enough people in uniform to go fight two major theater
    wars, which is what our country asks us to do. And I'll circle
    back on that in a minute, if I could.
        Mr. Farr. The readiness issue and utilities, I don't
    understand the----
        General Lupia. Okay. I'll do it right now.
        Mr. Hobson. He was just in Bosnia. They've got to have
    utilities operations in those----
        General Lupia. The Air Force fights its wars differently
    than the other services. Specifically, the Navy goes to war in
    civil engineering in 26 Seabee battalions. The Army goes to war
    with combat engineering battalions. In the Air Force, we have
    just--again, total Air Force--we have six squadrons, only 2,800
    people total against 15,000 in the Army and a very large number
    in the Navy. I don't have it at my fingertips.
        My folks, who train everyday on our air bases, are the same
    exact people who go to war. They're not different. In the Army
    and in the Navy, their bases and their structure is run by
    people in public works centers who stay right here and do that
    during wartime. They're not combat troops. Civil engineers in
    the Air Force who take care of our electrical distribution
    systems are combat troops, they go to war with an M-16 in
    addition to their tool bag. So there has to be a place for them
    to train on an electrical distribution system.
        When we get to Bosnia or when we went to Somalia, we had to
    string all our own wire, we had to provide our own electrical
    distribution system. They've got to be trained somewhere, sir.
        Mr. Farr. Does each of the Services have to have--I mean,
    isn't that sort of a utility skill that we ought to be
    maintaining----
        General Lupia. The other Services don't have them on their
    forts and their Naval installations; they have them in combat
    units that are dedicated to that function. The Army moves its
    army forward with engineering battalions that build bridges and
    keep the land army moving.
        Mr. Farr. Who put the wiring in in Camp McGovern in Bosnia
    and maintained the energy there? We don't even know whether
    it's on the grid or not.
        General Lupia. I can't answer you specifically because I
    don't know, but it may well have been the Air Force, because we
    did a heck of a lot of the work in Bosnia.
        But those people have got to have a place to train back
    here because they've got to go to war.
        Mr. Farr. But does that mean training, though, that--this
    is where I have a hard disconnect, is the training. You've got
    the reserves people who are in utility businesses, you've got--
    is this a function where we have to maintain a private--a
    service utility on base in order to get that training? Is that
    the only place you can get it?
        General Lupia. Yes, sir. I can't come up with another--I
    can't come up with another alternative. And I'll tell you very
    specifically, I met with seven senior executives from the
    Southern Company out of Atlanta, Georgia, who have the
    Southeast part of our country, and I said, here's what we would
    like you to do. You take our utility system, you take our
    electrical distribution system and let my airmen train side by
    side with your professionals. And he said, are you crazy? What
    union do you think is going to let your airmen, who is paid $2
    an hour, train next to my union guy? How long do you think that
    will go on, General?
        And so when it all finished, they said, we'd be happy to
    take your airmen and send them to our schools for training. I
    said, I got my own school, Sheppard Air Force Base, to train
    mine on. I don't need to train them how to climb a pole. I need
    them to stay proficient in climbing a pole.
        Mr. Farr. Well, I've never been in a spot where war broke
    out, but I've been in a spot where a fire broke out in an area
    where there's no utilities, and I saw the California Department
    of Forestry and the United States Department of Forestry in
    less than 24 hours take a barren piece of land and turn it into
    a city of about 1,200 people, men and women, showers, food,
    lights.
        Mr. Hobson. You can do that faster?
        Secretary DeMesme. We can do that----
        General Lupia. Whatever that was, I can do it faster and I
    can do it better.
        Secretary DeMesme. But if we were to go to Bosnia, would
    they be there? Would they be where you needed them when you
    needed them? We're not saying that----
        General Lupia. And training, these people, I'm talking
    about training at Tyndall Air Force Base specifically----
        Mr. Hobson. I think the thing that is coming out of this is
    that they are moving in the direction that we would like in
    many areas----
        General Lupia. Absolutely.
        Mr. Hobson [continuing]. But they cannot give up the
    capability that they need totally to do that.
        Mr. Farr. I understand.
        General Lupia. Remember, I'm only keeping 108 out of 550 or
    560, and I've committed to the Secretary of the Air Force and
    to Ms. DeMesme that I would look at each one of those 108 and I
    would see if we couldn't make 108 come down to 100 or come down
    to 90.
        Mr. Hobson. Are you going to be able to do that before
    August?
        Mr. Farr. Can Mr. Boyd's base become a defense? I mean,
    every base--I think his question was phenomenal about the--do
    the different Services keep the environmental labs when all of
    the environmental work is essentially--I mean, why don't we
    just make those environmental labs defense labs instead of----
        Mr. Hobson. Let it go under the Department of Energy and
    then you will have a problem.
        Guys, we're going to have to get out of here in a few
    minutes, so----
        Mr. Boyd. To get to the civil engineering side, the civil
    engineering requirements for the Air Force are totally----
        Secretary DeMesme. Totally different.
        Mr. Boyd [continuing]. 100 percent different than the Army
    or the Navy. You know, these guys have to develop techniques to
    put in a runway in 24 hours or repair a runway in three hours,
    and the Army is not training its people to do runways, they're
    training them to do roads, and it's totally different. Nobody
    else is doing that.
        General Lupia. I can't bring anybody anyplace to build a
    bridge for you, sir. That's the responsibility of the United
    States Army. But I can bed down 4-, 5-, 7,000 people. We've
    done it back and forth to southwest Asia a number of times. We
    built ourselves an airbase in the desert, and you do it with
    Air Force civil engineers.
        Mr. Farr. But didn't you use private contractors?
        General Lupia. No, sir.
        Secretary DeMesme. No, sir.
        General Lupia. Absolutely not. The Air Force is committed
    to take care of its war-fighting requirements with organic,
    blue-suit airmen in the active guard and reserve. We do not use
    contractors for bedding down our forces for wartime. They can't
    get there fast enough.
        Secretary DeMesme. They can't get there.
        Mr. Farr. Well, I have a constituent who made a lot of
    money in the Vietnam war pouring concrete.
        General Lupia. And there are very good places, and the Air
    Force has companies under contract to take camps back apart, to
    put the tents back in their containers and such, but getting
    there and bedding our troops down is a responsibility of the
    Air Force.
        Mr. Hobson. Okay. I think we're going to stop right there.
    Thank you very much. We've all learned a lot today and I hope
    you've enjoyed it.
        Secretary DeMesme. Thank you.
        Mr. Hobson. Thank you, members.

        [Clerk's note.--Questions for the record submitted by Chairman
    Hobson.]
                                   Execution
        Question. What are some of the challenges facing the Air Force in
    executing this budget? What additional authorities will be necessary?
        Answer. Since construction will be limited to available funds less
    estimated termination costs, the Air Force must ensure sufficient funds
    are available on each project so construction can proceed as necessary
    to meet need dates. Changing the reprogramming base from the
    appropriated to the authorized amount will enable us to transfer funds
    as needed between projects in a timely manner. In order to minimize
    contractor risk and the associated potential for increased costs, we
    also need full project authorization in FY2000 and the balance of
    construction funds advance appropriated and available on 1 Oct, 2000.
                                 BRAC Execution
        Question. Is the Air Force BRAC budget request of $324 million in
    fiscal year 2000 adequate to fully execute the program with no impact
    on meeting the July 13, 2001 completion date?
        Answer. The FY2000 appropriated amount in conjunction with the FY01
    advance appropriation amount should satisfy our FY00 requirements with
    no expected impact on the mandated closure date.
                      Plus Ups Due to Incremental Funding
        Question. After the Department's implementation of the incremental
    funding approach, were any Air Force projects moved forward to the
    fiscal year 2000 program? If so, please provide a list of these
    projects with their associated dollar amount for the record.
        Answer. The following 7 projects were added due to advance
    appropriations.

    ----------------------------------------------------------------------------------------------------------------
                  State/Country                            Base                    Project title         Cost ($000)
    ----------------------------------------------------------------------------------------------------------------
    Arizona..................................  Davis-Monthan AFB..........  Aircraft Processing Ramp...         $7.8
    Arkansas.................................  Little Rock................  Vehicle/Base Engineer                8.7
                                                                             Maintenance Complex.
    New Jersey...............................  McGuire AFB................  Visiting Officers Quarters.         11.8
    Ohio.....................................  Wright-Pat AFB.............  Control Tower..............          4.0
    Washington...............................  Fairchild AFB..............  Survival Training Logistics          4.5
                                                                             Complex.
    United Kingdom...........................  RAF Mildenhall.............  Consolidated Corrosion              10.2
                                                                             Control/Maint Complex.
    Italy....................................  Aviano AB..................  Radar Approach Control               3.7
                                                                             Facility.
    ----------------------------------------------------------------------------------------------------------------

                    F-22 Military Construction Requirements
        Question. The Air Force is currently testing the F-22, and the
    first F-22 is scheduled for delivery in March 2002. How will this
    year's incremental funding concept potentially impact the completion of
    needed facilities for the F-22 prior to their arrival?
        Answer. We will work contract award and funding strategies with our
    design and construction agents to ensure the beddown and testing of the
    aircraft at Nellis AFB is not impacted by delayed facility
    construction.
        The F-22 is the Air Force's number one modernization priority. The
    three FY00 F-22 projects are required in order to meet the Mar. 02
    beddown for Follow-on Operational, Test and Evaluation. These projects
    must be funded in FY00 or beddown and testing will not be accomplished
    on time.
                           Mission Essential Projects
        Question. I am also concerned about other mission essential related
    projects, such as needed facilities for the beddown of the C-17
    airlifter, B-2 bomber, and KC-135 tanker. How can you assure us that
    operating schedules will be met under a two-year construction program?
        Answer. There are no assurances we will be able to meet the
    operating schedules. However, we will work contract award and funding
    strategies with our design and construction agents to minimize impact
    on the beddown for these weapon systems.
                          Additional Contractor Costs
        Question. How does the Air Force intend on dealing with increased
    contractor risk? (Incremental funding reduces contractor's ability to
    make large-scale advance purchases may preclude ordering long-lead
    equipment or supplies, and there is no guarantee of FY 2001 funding.)
        Answer. Full authorization in FY 2000 and advance appropriation of
    the remaining construction funds so they are available on 1 Oct. 2000
    will minimize contractor risk due to unavailability of funds. We are
    working with our design/construction agents to develop award schedules
    and funding strategies of construction can proceed as necessary to meet
    need dates and avoid costly delays. Changing the reprogramming base
    from the appropriated to the authorized amount will enable us to
    transfer funds between projects in a timely manner and ensure
    sufficient funds are available for each project.
        Question. How will the Air Force avoid additional costs due to
    contractor claims for delays caused by lack of funds, or contract
    termination for lack of funds if advance appropriations are not
    provided?
        Answer. If Congress does not provide advance appropriations, the
    increased potential for additional cost would be due primarily to the
    contractor assuming greater risk of contract termination due to
    nonavailability of funds. Even if advance appropriations are provided,
    the Air Force must still ensure there are sufficient funds available
    for each project so construction can proceed as necessary to meet need
    dates. We are working with our design/construction agents to develop
    the associated contract award and funding strategies. Changing the
    reprogramming base from the appropriated to the authorized amount will
    enable us to transfer funds as needed between projects in a timely
    manner.
                        Brooks ``City Base'' Initiative
        Question. As part of an effort to eliminate excess capacity at
    installations, the Air Force is developing a proposal at Brooks AFB in
    Texas where it would convey the entire installation to a private
    developer and lease back the active part of the base. Could you please
    discuss this proposal in further detail? Also, do you believe this is
    an effort to BRAC-proof a base?
        Answer. The Air Force has designated Brooks AFB as a ``Reinvention
    Lab'' to test and demonstrate new and innovative approaches to reduce
    its costs to provide quality infrastructure and base operating support
    to the DoD missions and people assigned to its installations. The goal
    is to reduce AF appropriation requests for both operating and capital
    requirements, while maintaining the quality of our installation
    support. The proposal seeks to achieve these cost reductions by
    employing techniques proven in the private sector to improve the
    efficiency of AF business processes and to manage AF capital assets
    more effectively. The AF proposed this initiative in response to the
    Secretary of Defense's ``Defense Reform Initiatives'' and his call for
    a ``revolution in business affairs'' within the DoD. Process efficiency
    will be improved through aggressive competitive sourcing of commercial
    activities (i.e., ``A-76'' competitions) to reduce labor costs, by
    technology insertion, and by other proven process re-engineering
    techniques.
        The initiative also seeks to promote more efficient use of existing
    capital assets (i.e., facilities, land, etc.), freeing up non-excess,
    but underutilized assets for use by public entities (such as the City
    of San Antonio) or private developers. In exchange for the use of its
    non-excess or underutilized assets, the AF would receive appropriate
    consideration, thereby reducing its appropriation requests for
    operating and capital requirements. That consideration could be in the
    form of cash rents; in-kind services for (e.g.) base operating support,
    facilities maintenance, and environmental protection; the construction
    or use of other facilities; etc. The envisioned transactions include
    sale, leasing and conveyance with lease-back of some or all of the
    capital assets at an installation under terms and conditions that are
    favorable to the AF and within the oversight conditions established by
    the OSD and Congress. OSD has determined that the substantial savings
    potentially available through aggressive and innovative leveraging of
    the Department's assets cannot be achieved within existing authorities,
    i.e., within the provisions of 10 U.S.C. 2667, as currently written.
    Therefore enabling legislation for this pilot-program at Brooks AFB is
    required and has been drafted. It will be submitted by OSD as a part of
    the FY00 Omnibus Bill. We believe the Brooks AFB proposal has excellent
    potential for demonstrating the significant savings that can be
    achieved at many installations within the DoD by employing capital
    asset management concepts and techniques that have proven successful in
    the private sector.
        This is definitely not an effort to ``BRAC-proof'' a particular
    base. It is an attempt by the AF to meet its inherent responsibility to
    use its assets as efficiently as possible and to accomplish its
    missions at the lowest cost. In preliminary discussions with
    representatives of both the public and private sectors, the AF has
    explicitly and repeatedly cautioned all concerned that these
    arrangements are not intended to ``BRAC-proof'' Brooks AFB and will not
    necessarily inhibit or preclude such a decision under a future round of
    BRAC. The community understands that these arrangements are independent
    of any BRAC determination. However, the community also clearly
    understands that it is in its own self-interest to partner with the AF
    to help the AF reduce its costs. If such partnerships are successful
    and the costs to operate and maintain Brooks AFB are reduced, this is
    likely to be a ``plus'' in any future BRAC assessment. If the base is
    not closed or realigned, the net effect will be ``jobs positive'' to
    the community. However, if (notwithstanding reduced operating and
    capital costs) a decision is taken to realign or close the base, these
    new developments/jobs will greatly mitigate the impact of the
    realignment or closure.
                          Family Housing Privatization
        Question. The statutory authorities established for the Military
    Housing Privatization Initiative (MHPI) expire in February 2001. How
    will the Air Force proceed with its housing program if these
    authorities are not re-granted?
        Answer. The Air Force will execute MHPI initiatives that have been
    awarded prior to expiration of the authorities and continue with a
    requirements-based investment strategy that provides traditional MILCON
    to bases and employs a ``worst-first'' prioritization.
                           Family Housing Allowances
        Question. Are the personnel accounts adequately budgeted in the
    FYDP for the increases in allowances due to the privatization
    initiatives?
        Answer. Yes, the personnel accounts are adequately budgeted in the
    FYDP for the increases in basic allowances for housing (BAH) due to
    privatization initiatives at installations where Congressional
    notification of solicitation has been provided. The remaining
    initiatives are in very early preliminary studies.
        Question. What assurances can you offer me that any family housing
    O&M reductions due to privatization will be reapplied to other family
    housing improvements and not transferred elsewhere?
        Answer. (DPG) for FY00-05 provides: ``Savings realized from
    leveraging resources with the private sector should be reinvested in
    housing projects instead of reducing programmed housing resources''.
    The Air Force will follow the DPG and reapply any program savings
    realized through privatization to revitalize other inadequate homes.
    The Air Force has neither transferred funds nor programmed transfer of
    funds from any family housing account due to projected reductions
    caused by privatization.
                        Privatization of Utility Systems
        Question. Describe in some detail the Air Force's ongoing efforts
    to get out of the business of owning, operating, and maintaining
    utility systems where it makes good sense.
        Answer. Defense Reform Initiative Directive (DRID) #49 directed the
    privatization of all utility systems, except those needed for unique
    mission/security reasons or when privatization is uneconomical, NLT 30
    Sep 03 with two interim milestones: 1 (complete feasibility analysis
    (``go/no-go'' decision) by 30 Sep 00 to determine whether or not to
    pursue privatization for each system (water, wastewater, electrical,
    and natural gas) and 2 (release all solicitations/requests for
    proposals (RFP) NLT 30 Sep 01. The Air Force utility system inventory
    includes 168 installations (includes Active Duty, Air National Guard
    and Reserve major/minor installations), 638 systems (67 already
    privatized, 108 exempted for readiness/mission impacts, and 463
    available for potential privatization).
        The Air Force developed a 3-phase process that analyzes each
    candidate system to include: Project Plan and Feasibility Analysis
    phase to reach a ``go/no-go'' decision; Comprehensive Analysis phase to
    provide a more comprehensive evaluation of the utility involving
    extensive analysis of its operations, impacts, and value in order to
    put together the deal to take to industry; and the Final Feasibility,
    Approval, and Implementation phase to determine the steps necessary to
    carry out the privatization effort selecting a contractor, validating
    that the proposed deal is more advantageous than keeping it in-house
    and beginning the transition. This is a 24-month process.
        During FY98, the Air Force provided $3.6M and the Defense Energy
    Support Center (DESC) provided $4.3M to support the privatization of 55
    systems. The Air Force is committed to funding FY99 requirements to
    execute 204 systems and has devised a plan to issue money as execution
    of the program demonstrates need. As of 15 Mar 99, the MAJOMs have been
    provided $21.3M while $6M remains set aside at the Headquarters. The
    need for additional FY99 funding will be evaluated at midyear. The
    estimated costs of the program during FYs 00-02 are fully funded as
    directed by Program Budget Decision 721 to cover the remaining 204
    systems.
        Question. How aggressively is the Air Force pursuing the utilities
    privatization effort? What is the estimated timeline for
    implementation?
        Answer. The Defense Reform Initiative to privatize utility systems
    by 30 September 2003 requires an aggressive program. The Air Force has
    developed a comprehensive program to support the Secretary of Defense's
    direction. To privatize our water, wastewater, electrical, and natural
    gas utility systems the Air Force, during Fiscal Year 1998, provided
    $3.6M and the Defense Energy Support Center (DESC) provided $4.3M to
    support the privatization of 55 systems. We will spread the execution
    and the cost of privatization for the remaining 408 utility systems
    over the next two fiscal years. The Air Force is committed to funding
    Fiscal Year 1999 requirements to execute 204 systems and has devised a
    plan to issue money as execution of the program demonstrates need. As
    of 15 March 1999, the MAJOMs have been provided $21.3M while $6M
    remains set aside at the Headquarters. The need for additional Fiscal
    Year 1999 funding will be evaluated at midyear. The estimated costs of
    the program during Fiscal Years 2000-2002 are fully funded as directed
    by Program Budget Decision 721 to cover the remaining 204 systems.
        The Air Force Implementation Plan complies with Deputy Secretary of
    Defense goals to complete all analyses by 30 September 2000, release
    all solicitations by 30 September 2001 and complete all privatization
    transfers by 30 September 2003.
        The Air Force is on track to meet the DoD deadlines for utility
    privatization.
        Question. Has the Air Force developed a utilities privatization
    implementation plan? If so, please provide it for the record.
        Answer. Yes (see attachment).

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                        Privatization of Utility Systems
        Question. Why would a utility system be exempt from privatization?
        Answer. Defense Reform Initiative Directive (DRID) #49 directed the
    privatization of all utility systems (water, wastewater, electrical,
    and natural gas), except those needed for unique mission/security
    reasons or when privatization is uneconomical.
        The Air Force screened its utility systems and assessed that 108
    utility systems should be exempt from utilities privatization.
        Analysis showed that privatization of these 108 utility systems
    would negatively impact the Air Force's ability to accomplish
    contingency operations. Air Force looked carefully at installations
    with mobility commitments/war time taskings and assessed, by career
    field, the authorizations available for privatization without impacting
    these commitments.
        Proficiency training is a critical readiness issue. We need systems
    for our craftsmen to train on during peacetime so they are proficient
    when called upon for their wartime skills.
        Question. What efforts are being made by the Air Force to partner
    with the other Services in privatizing utility systems? Specifically,
    is there coordination between the Services in co-located areas?
        Answer. The Air Force is pursuing partnerships in order to better
    expedite utility privatization. We have partnered with the Defense
    Energy Support Center (DESC) in the Texas Regional Demonstration to
    include the privatization of utility systems at all Texas Air Force
    installations. DESC provided $4.3M to implement the Texas regional
    demonstration project. Air Force awarded a $4.3M contract in Aug 98 to
    begin an initial utilities privatization assessment which included
    water, wastewater, electric and natural gas systems at Brooks AFB,
    Lackland AFB, Randolph AFB, Laughlin AFB, Sheppard AFB, Goodfellow AFB,
    but only the natural gas system at Dyess AFB due to readiness mission
    impacts.
        The demonstration has been expanded to include both the Army and
    Navy. The Army has 11 systems at 3 installations (Red River Army
    Ammunition Plan (AAP)--water, wastewater, electric, and natural gas;
    Lone Star AAP--water, wastewater, electric, and natural gas; Ft Bliss--
    water, wastewater, and electric) while the Navy has 4 systems at 1
    installation (Naval Air Station Joint Reserve Base (NAS JRB) Ft Worth--
    water, wastewate, electric, and natural gas).
        In addition to partnering with DESC, the Air Force meets regularly
    with the Army and the Navy to compare utility privatization
    implementation plans in order to determine the feasibility of joint/
    regional privatization initiatives. The Air Force is partnering with
    the Navy at Andersen AFB (Guam) and at Bolling AFB/Anacostia Naval
    Station (Washington, D.C.). The Air Force is working a joint effort
    with the Army in Colorado to privatize Cheyenne Mountain Air Station
    with Fort Carson. We are continually looking for additional
    opportunities.
        The Services meet on a monthly basis to coordinate utility
    privatization efforts and to crossfeed information.
        Question. Can the Air Force document any savings or avoided costs,
    in net present value, which will result from the utility privatization
    effort?
        Answer. The Air Force cannot, at this time, document any savings or
    avoided costs, in net present value, which will result from the utility
    privatization effort.
        Question. What efforts has the Air Force made in examining
    alternate sources of purchasing energy?
        Answer. Most states require the Air Force to procure electricity
    from the local utility. In states where electric deregulation has
    occurred, the Air Force conducts competitive procurement or works with
    GSA or Defense Energy Support Center (DESC) in aggregating electric
    loads. The Air Force closely monitors other state deregulation efforts
    and intervenes in state public utility company proceedings where
    necessary to protect base interests. Examples of alternate sources of
    purchasing electricity follows:
        California--Four Air Force bases and one Army base joined a GSA
    interagency agreement with Bonneville Power Authority in 1998 to
    competitively buy electricity in California. The Air Force is working
    with DESC on a demonstration project in California for competitive
    electricity procurement to aggregate Air Force, Army, and Navy loads.
        Massachusetts--Hanscom AFB is participating with GSA to aggregate
    federal loads in Massachusetts and purchase electricity in bulk. The
    Air Force has been buying competitive electricity at Scott AFB through
    a pilot program since 1996.
        Montana, Arizona, New Jersey--The Air Force is actively
    investigating options for competitively obtaining electricity in these
    states as they deregulate. We plan to aggregate loads where it makes
    economic sense.
        As for natural gas, many states permit the competitive procurement
    for retail customers. The Air Force takes full advantage of this
    opportunity, and when cost-effective, secures the gas through the DESC
    competitive bid process.
                          Forward Operating Locations
        Question. As part of the Counterdrug funding in the Defense
    Appropriations Bill there is $42.8 million programmed for the
    construction of three forward operation locations. This is part of the
    post Panama Restructuring. It is our understanding that these funds are
    held in a central transfer account and will eventually be allocated to
    the Air Force and Navy for execution. Could you please provide us some
    detail on these proposed construction projects?
        Answer. There are no details yet available on the proposed
    construction projects. The Air Force completed site surveys of
    potential locations in February 1999. Final approval of locations is
    dependent on agreement within the military services and between the
    Department of Defense, State Department and appropriate host nations.
       Alaska Eielson AFB: Repair KC-135 Parking Ramp ($941,000) Alaska-
                    Eielson AFB: Repair Runway ($3,334,000)
        Question. These two projects have been scheduled concurrently with
    a DLA Hydrant Fueling System project. This has been done to complete
    all three projects during a single runway closure. Is it absolutely
    necessary to complete these projects concurrently?
        Answer. Yes. It is essential to accomplish all of these projects
    concurrently during the brief, 135-day Arctic construction season to
    optimize construction economies of scale, sequencing of construction,
    and mission impact. Therefore, runway and ramp construction and fuel
    system installation should be accomplished concurrently. Flying
    operations will be relocated to nearby Ft. Wainwright and Fairbanks
    International Airport during the runway closure, imposing mission
    limitations such as takeoff weight restrictions for tankers at Ft.
    Wainwright. If not completed concurrently, construction costs will be
    higher and mission restrictions will be imposed over a longer period of
    time.
        Question. How will the runway closure impact mission readiness at
    Eielson AFB?
        Answer. The runway closure will limit Eielson AFB to contingency
    flying operations only, allowing only some fighter aircraft to be flown
    in for maintenance, using the parallel taxiway. All flying missions
    will be relocated to nearby air fields during construction, permitting
    assigned fighter and tanker missions to continue until the runway is
    reopened. Limiting runway closure to a single 135-day construction
    season will permit at least two of four FY00 Cope Thunder air combat
    training exercises to take place as scheduled.
        Alaska: Elmendorf AFB: Construct C-130 Parking Ramp ($3,995,000)
        Question. The form 1391 for this project describes the proposed
    construction as installing fuel hydrants and associated piping. Is the
    installation of fuel hydrants part of this construction project or the
    DLA FY'00 hydrant fueling system project?
        Answer. The new hydrants are part of the C-130 ramp construction
    project.
        Question. Is it mandatory to construct the C-130 parking ramp and
    install the hydrant fueling system concurrently? What would by the
    consequences if completed in separate fiscal years?
        Answer. The projects are designed to provide both hydrant refueling
    and apron parking as a single undertaking. This allows construction to
    be completed in the same year, relocates the C-130 aircraft from the
    transient parking apron to the C-130 squadron operations facility, and
    achieves construction cost savings by avoiding demolition of portions
    of a new parking apron to accommodate subsequent installation of the
    hydrant fueling system.
        Question. Another dormitory is programmed at Elmendorf AFB for
    fiscal year 2001. Will these two projects provide adequate living
    quarters to accommodate all unaccompanied enlisted personnel at
    Elmendorf AFB? If not, what is the Air Force's plan to provide adequate
    living quarters?
        Answer. No, these two projects will not provide enough adequate
    living quarters to accommodate all the unaccompanied enlisted personnel
    at Elmendorf AFB. The following table describes the planned projects to
    accommodate E-1 thru E-4 unaccompanied enlisted personnel at Elmendorf
    AFB:

    ----------------------------------------------------------------------------------------------------------------
                 Fiscal year                    Project title            Scope (Rooms)              Costs ($M)
    ----------------------------------------------------------------------------------------------------------------
    2000.................................  Dormitory..............                      144                     15.8
    2001.................................  Dormitory..............                      144                     16.5
    2002.................................  Dormitory..............                      144                     16.3
    Future...............................  Dormitory..............                      180                      TBD
    ----------------------------------------------------------------------------------------------------------------

                 Alaska: Elmendorf AFB: Dormitory ($3,727,000)
        Question. Does this project replace an existing dormitory? If so,
    does it replace the worst existing dormitory at Elmendorf AFB?
        Answer. No, this project does not replace an existing dormitory--it
    adds new rooms to the existing inventory to reduce the 658 room
    deficit.
       Arizona: Davis Monthan AFB: Aircraft Processing Ramp ($1,847,000)
        Question. The Form 1390 indicates that a future ``aircraft ramp''
    project is planned, at a cost of $6,900,000. How does that project
    relate to this project, and when is it programmed?
        Answer. There is no relationship between these two projects. The
    FY00 MILCON project, ``Aircraft Processing Ramp'' supports the
    Aerospace Maintenance and Regeneration Center mission that processes
    all DoD aircraft for presentation and reactivation. The future year
    (FY03) aircraft ramp supports additional ramp space for operational EC-
    130 aircraft assigned to this base.
        Question. Why weren't the two projects programmed concurrently?
        Answer. The two projects are in geographically separate portions of
    the installation, support different mission requirements and did not
    have the same priority when considered for the FY00 MILCON program.
          California: Beale AFB: Flightline Fire Station ($2,086,000)
        Question. The form 1391 states crash and structural fire station
    functions will be consolidated into one facility. How many facilities
    currently house these functions? Why does the project only demolish one
    of the current facilities? What are the plans for the facilities that
    will not be demolished?
        Answer. These functions are currently housed in three facilities.
    The existing structural fire station, a World War II era wooden
    structure is beyond economical repair with numerous life safety/health
    deficiencies and will be demolished as part of this project. The
    remaining two facilities are undersized for the current functions. They
    will be renovated and used for other base functions.
        Question. Describe the economies that should result from the
    consolidation of crash and structural fire station functions in a
    central facility.
        Answer. A consolidated fire/crash rescue station will provide one
    efficient facility and eliminates the need to man a flightline trailer
    during flying operations. The economies result from the operations and
    maintenance costs associated with one new efficient facility versus the
    use of a temporary trailer and a deteriorated and substandard
    structural fire station.
      California: Travis AFB: Add to Physical Fitness Center ($1,754,000)
        Question. Will this project satisfy the total space requirement for
    fitness centers at Travis AFB? If not, are additional fitness center
    projects programmed? If so, in what fiscal year and at what cost?
        Answer. No, a final project ($9M) to add to the fitness center will
    be programmed as part of a future year MILCON program.
       Colorado: Petersen AFB: USSPACECOM/NORAD Headquarters ($7,887,000)
        Question. The fiscal year 2000 Army military construction program
    includes a project at Peterson AFB for an Army Space Command
    Headquarters. Will that project and this project construct a single
    facility? If not, why not? Will the two projects be executed by a
    single contract to achieve construction cost savings?
        Answer. Currently, DoD and US Space Command are readdressing issues
    regarding the costs and benefits of a single versus separate
    facilities. Once this process has been completed we will be able to
    fully answer this question and will forward a final answer at that
    time.
        Question. Describe the economies that should result from
    constructing a headquarters facility to house USSPACECOM and NORAD.
        Answer. Tangible savings will be realized from eliminating off-base
    leased facilities and demolition of existing deteriorated and
    inefficient facilities, which will result in savings of energy and real
    property maintenance funds. An economical analysis was conducted
    comparing different options. Based on the net present value and
    benefits of the respective alternatives, new construction was found to
    be the most cost effective over the life of the project.
          Colorado: Schriever AFB: Physical Fitness Center ($929,000)
        Question. Will this project satisfy the total space requirement for
    fitness centers at Schriever AFB? If not, are additional fitness center
    projects programmed? If so, in what fiscal year and at what cost?
        Answer. Yes, this project will satisfy the space requirement for
    fitness centers at Schriever AFB.
           Colorado: Schriever AFB: Sanitary Sewer Line ($1,296,000)
        Question. The Air Force is working hard to get out of the utilities
    business whenever possible. What efforts were made to privatize utility
    service at this installation, in part to avoid the need for this
    military construction project?
        Answer. The existing wastewater treatment facility is out-of-
    compliance with the Clean Water Act. In order to comply with the Act,
    the Air Force must modify the existing treatment facility or contract
    with the local utility provider to connect the installation to the
    local treatment plant. The Air Force chose to contract with the local
    provider. Once connected to the local treatment plant, we will no
    longer operate the on-installation wastewater treatment plant.
    Additionally, we are in the process of assessing the potential for
    privatization of all utility systems at this installation, including
    the remaining portions of the wastwater collection system.
            Colorado: USAFA: Upgrade Academic Facility ($4,056,000)
        Question. The Form 1390 indicates that future projects are planned
    ``upgrade academic facilities'' at the Academy. There are two projects
    planned in the amounts of $11,217,000 and $6,131,000. How do those two
    projects relate to this project, and when are they programmed?
        Answer. The FY00 project primarily renovates the 6th floor faculty
    offices. The two future planned projects renovate cadet support areas.
    They are programmed for FY02 and FY04 respectively.
        Question. Why weren't the three projects programmed concurrently?
        Answer. The three projects were not programmed concurrently because
    the renovation of the cadet support areas could not be accomplished at
    the same time as the renovation of the 6th floor without a significant
    increase in interim facilities.
        Question. This project upgrades the sixth floor of Fairchild Hall.
    What are the future requirements for the upgrading of Fairchild Hall?
    If additional projects are needed, when are they programmed?
        Answer. Future work includes renovation of the lecture halls,
    audio-visual and training device areas, and the cadet library. This
    work includes installation of a fire protection system in these areas
    and elimination of life safety code deficiencies. In addition,
    replacement of worn-out elevators, replacement of central mechanical
    systems, and elimination of remaining life safety code deficiencies is
    required. This future work is programmed in FY02 and 04.
               Florida: Eglin Aux Field 9: Dormitory ($2,161,000)
        Question. What is the estimate of savings in design costs by
    accomplishing this project using a standard or definitive design?
        Answer. By site-adapting an existing design for the new dormitories
    at Eglin Auxiliary Field No. 9, the Air Force estimates the savings in
    design costs to be approximately $150,000. The Air Force accounted for
    these design savings in the FY99 planning and design budget request.
                   Florida: Eglin AFB: Dormitory ($1,635,000)
        Question. Will this project provide adequate living quarters to
    accommodate all unaccompanied enlisted personnel at Eglin AFB? If not,
    what are the Air Force's plans (by fiscal year and dollar amount) to
    provide adequate living quarters at Eglin AFB?
        Answer. No, the FY00 project will not provide adequate living
    quarters to accommodate all the unaccompanied enlisted personnel at
    Eglin AFB. The following table describes the planned projects to
    accommodate E-1 thru E-4 unaccompanied enlisted personnel at Eglin AFB:

    ----------------------------------------------------------------------------------------------------------------
                 Fiscal year                    Project title            Scope (rooms)              Cost ($M)
    ----------------------------------------------------------------------------------------------------------------
    2000.................................  Dormitory..............                      120                      7.0
    2003.................................  Dormitory..............                      120                      7.1
    Future...............................  Dormitory..............                      120                      TBD
    ----------------------------------------------------------------------------------------------------------------

         Florida: Patrick AFB: Air Freight/Passenger Terminal Facility
                                  ($1,967,000)
        Question. This facility will house material handling equipment to
    be provided from other appropriations. Has this procurement been timed
    to correspond with the availability of this facility?
        Answer. Yes, the material handling equipment is timed to correspond
    with the construction schedule of the air freight/passenger terminal
    project at Patrick AFB. We continue to work closely with the Corps of
    Engineers to ensure the material handling equipment design and
    installation dates are in concert with the availability of this
    facility.
         Florida: Patrick AFB: Base Supply/Traffic Management Complex
                                  ($2,238,000)
        Question. The form 1391 states that ``five additional buildings are
    to be demolished, as they are beyond economical repair and are located
    on the future site of the Defense Equal Opportunity Management
    Institute (DEOMI) facility.'' When is the construction of the DEOMI
    facility programmed?
        Answer. The DEOMI facility is proposed for the FY01 MILCON program.
        Question. When were the five additional buildings to be demolished
    built, and what functions or operations are currently performed in
    these buildings?
        Answer. All five facilities are small metal or concrete block
    sheds.

    ------------------------------------------------------------------------
             Building number              Year built           Function
    ------------------------------------------------------------------------
                    231                      1945         Hazardous material
                                                           storage.
                    305                      1982             Do.
                    306               1956..............      Do.
                    309               1953..............      Do.
                    316               1956..............      Do.
    ------------------------------------------------------------------------

        Question. Why was the cost of demolishing these five additional
    buildings included in the cost of this project and not the cost of
    constructing the DEOMI facility?
        Answer. When replacing existing deteriorated facilities, the
    military construction project typically includes the cost of
    demolishing the deteriorated facilities. This is intended to prevent
    installations from re-using substandard facilities for follow-on
    functions. These five facilities are part of the existing base supply/
    traffic management complex and are scheduled to be demolished after the
    new supply complex is completed. Similarly, when the new DEOMI facility
    is completed, we plan to demolish the existing DEOMI complex as part of
    the cost of construction.
        Question. This facility will house material handling equipment and
    prewired workstations to be provided from other appropriations. Has
    this procurement been timed to correspond with the availability of this
    facility?
        Answer. Yes, the material handling equipment and pre-wired
    workstation procurement is timed to correspond with the construction
    schedule of the base supply/traffic management complex at Patrick AFB.
    We continue to work closely with the Corps of Engineers to ensure the
    equipment and workstation design and installation dates are in concert
    with the availability of this facility.
        Georgia: Fort Benning: Air Support Operations Squadron Facility
                                   ($911,000)
        Question. Does this project include the cost of demolishing the
    current facilities? If demolition is not planned, what is the intended
    re-use of the current facilities?
        Answer. No, the demolition is not part of this project cost. All
    facilities occupied by the Air Support Operation Squadron (ASOS) will
    be returned to the Army for their use.
           Georgia: Robins AFB: KC-135 Simulator Facility ($789,000)
        Question. This facility will house a flight simulator device valued
    at $25,000,000, to be provided from other appropriations. Has this
    procurement been timed to correspond with the availability of this
    facility?
        Answer. Yes. The new Robins AFB KC-135 simulator facility will be
    available in June 2001. The existing KC-135 flight simulator will move
    into the new facility immediately following the facility's completion.
    The existing Robins AFB KC-135 simulator will be modified for Full
    Motion functionality in June 2003.
        Question. How many identical KC-135 full motion simulator devices
    does the Air Force have right now, and where are they?
        Answer. There are 5 identical full motion KC-135R simulator
    devices. Three are at Altus AFB OK, one is at Fairchild AFB WA, and one
    is at Grand Forks AFB ND.
        Question. What are the plans for re-use of the existing KC-135
    flight simulator facility?
        Answer. The facility will be reused as a crew alert facility which
    provides sleeping quarters, latrines, showers, administrative space,
    etc. to accommodate aircrews during local exercises and real world
    contingency operations.
             Hawaii: Hickam AFB: Fire Training Facility ($785,000)
        Question. Will this project meet all fire training requirements at
    this location?
        Answer. No. The project will meet all aircraft crash rescue fire
    training requirements in an environmentally safe facility. A future
    joint military-civilian initiative will provide a new structural fire
    training facility.
          Idaho: Mountain Home AFB: Enhanced Training Range, Phase II
                                  ($3,487,000)
        Question. This is Phase II of a three-phase project. The Department
    has stated that with this year's broad application of the advanced
    appropriation funding concept that projects which were previously
    phased have been fully funded in order to continue contract execution.
    Why is this phase-funded project incrementally funded? Will this have
    any impact on contract execution?
        Answer. The requirements for this effort were split into multi-
    phases due to cost and mission capability. Each phase was programmed as
    a complete and useable project. This project was incrementally funded
    as part of the overall FY00 MILCON program advance appropriation
    concept and will face the same execution challenges as any other FY00
    advance appropriated project. Construction in FY00 will be limited to
    available funds less an estimated termination liability.
         Mississippi: Keesler AFB: Student Dining Facility ($1,686,000)
        Question. What is the estimate of savings in design costs by
    accomplishing this project using a standard of definitive design?
        Answer. Utilizing a standard design resulted in an estimated
    $140,000 in savings compared to traditional design. The Air Force
    accounted for these design savings in the FY99 planning and design
    budget request.
           Mississippi: Keesler AFB: Student Dormitories ($4,679,000)
        Question. How far will these new student dormitories be located
    from the Training Support Facility, and how far will they be from main
    base operations?
        Answer. The dormitories will be collocated with the training
    support facility as part of the student campus. The campus area is
    located approximately one mile from the center of main base operations.
           Missouri: Whiteman AFB: Physical Fitness Center ($447,000)
        Question. Will this project satisfy the total space requirement for
    fitness centers at Whiteman AFB? If not, are additional fitness center
    projects programmed? If so, in what fiscal year and at what cost?
        Answer. Yes, this project satisfies the total space requirements
    for fitness centers at Whiteman AFB.
        Question. Will the use of this facility be limited to active duty
    military personnel assigned to Whiteman AFB? How many such personnel
    will be stationed at Whiteman AFB at the time this center becomes
    operational?
        Answer. The use of this facility will not be limited to only active
    duty military personnel assigned to Whiteman AFB. All categories of
    authorized patrons of Air Force morale, welfare and recreation
    activities will be authorized to use this facility. However,
    installation commanders may limit access among active duty members only
    when space is limited.
        For fourth quarter FY00, approximately 403 civilians and 3315
    military will be stationed at Whiteman AFB at the time the center
    becomes operational.
            New Jersey: McGuire AFB: Visiting Quarters ($2,765,000)
        Question. The form 1391 states that the requirement is 3,850 square
    meters, and the existing visiting quarters to be demolished offers a
    substandard 4,672 square meters. Will this net reduction in size be
    missed?
        Answer. The existing visiting quarters support 124 persons. The new
    construction provides space for 117 persons. The net reduction in
    square meters does not affect the base's ability to support transient
    personnel.
          New York: Rome Research Site: Consolidate Intelligence and
                     Reconnaissance laboratory ($3,002,000)
        Question. What is the current status of the ``Vision 21'' effort by
    the Department of Defense to consolidate its testing and evaluation
    centers and laboratories? How does this project fit with that effort?
        Answer. The Department of Defense ``Vision 21'' effort was
    discontinued in April 1997 with the understanding that RDT&E
    Infrastructure issues would be addressed in the Quadrennial Defense
    Review (QDR). Although this particular project no longer fits into the
    Vision 21 activities, it does point out the Air Force's continued
    commitment to reduce, restructure, and revitalize its RDT&E
    Infrastructure through outsourcing opportunities and a greater reliance
    on partnering with industry.
     Ohio: Wright Patterson AFB: Consolidate Avionics Research Laboratory
                                  ($3,230,000)
        Question. How many facilities will be vacated as part of this
    consolidation effort?
        Answer. Five facilities will be vacated as part of this
    consolidation.
        Question. The project will demolish one facility. What are the re-
    use plans for the other facilities or vacated space resulting from this
    effort?
        Answer. One of the facilities is being converted to a fitness
    center. The remaining three facilities will be renovated for existing
    research laboratories.
        Question. How does this project fit within the Department's
    ``Vision 21'' effort to consolidate its testing and evaluation center
    and laboratories?
        Answer. The Department of Defense ``Vision 21'' effort was
    discontinued in April 1997 with the understanding that RDT&E
    Infrastructure issues would be addressed in the Quadrennial Defense
    Review (QDR). Although ``Vision 21'' has been discontinued, this
    project is part of the Air Force's continued commitment to reduce,
    restructure, and revitalize its RDT&E Infrastructure.
                 Oklahoma: Tinker AFB: Dormitories ($1,602,000)
        Question. This project constructs a new dormitory and upgrades an
    existing dormitory. Additionally, there are dormitory projects
    programmed at Tinker AFB in fiscal year 2001, and in the outyears. Will
    this year's upgrade address the worst existing barracks at Tinker AFB?
        Answer. Yes, this year's project upgrades the worst existing
    barracks at Tinker AFB.
        Question. To what extent will this project reduce the backlog of
    real property maintenance requirements, which now totals $44,308,000
    for this location according to the form 1390?
        Answer. The existing dormitory requiring upgrades is not included
    in the Backlog of Real Property Maintenance (RPM) requirements.
        South Carolina: Charleston AFB: C-17 Corrosion Control Facility