[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.

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            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.

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    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 
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