[Senate Hearing 106-273]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 106-273
 
       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2000

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                                   on

                           H.R. 2465/S. 1205

    AN ACT MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION FOR THE 
 DEPARTMENT OF DEFENSE FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2000, 
                         AND FOR OTHER PURPOSES

                               __________

         Printed for the use of the Committee on Appropriations




 0Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

                                 ______


                     U.S. GOVERNMENT PRINTING OFFICE
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_______________________________________________________________________
            For sale by the U.S. Government Printing Office
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                           ISBN 0-16-059975-X





                      COMMITTEE ON APPROPRIATIONS

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

                 Subcommittee on Military Construction

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

                           Professional Staff
                              Sid Ashworth
                       Christina Evans (Minority)

                         Administrative Support
                            Mazie R. Mattson
                         Emelie East (Minority)




                            C O N T E N T S

                              ----------                              

                        Tuesday, March 16, 1999

Department of Defense:
    Department of the Navy.......................................     1
    Defense agencies:
        U.S. Special Operations Command..........................    39
        TRICARE Management Activity..............................    39
        Defense Logistics Agency.................................    39
        Personnel Support, Families and Education................    39

                        Tuesday, March 23, 1999

Department of Defense:
    Department of the Army.......................................    71
    Department of the Air Force..................................   113

                        Wednesday, July 14, 1999

Department of Defense: Forward Operation Locations (FOL) for 
  Counterdrug Operations.........................................   133


       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2000

                              ----------                              


                        TUESDAY, MARCH 16, 1999

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Conrad Burns (chairman) presiding.
    Present: Senators Burns, Stevens, and Murray.

                         DEPARTMENT OF DEFENSE

                         Department of the Navy

STATEMENT OF ROBERT B. PIRIE, ASSISTANT SECRETARY OF 
            THE NAVY (INSTALLATIONS AND ENVIRONMENT)
ACCOMPANIED BY:
        REAR ADM. LOUIS M. SMITH, COMMANDER, NAVAL FACILITIES 
            ENGINEERING COMMAND
        MAJ. GEN. GEOFFREY B. HIGGINBOTHAM, USMC, DEPUTY CHIEF OF STAFF 
            FOR INSTALLATIONS AND LOGISTICS, HEADQUARTERS MARINE CORPS
        REAR ADM. JOHN B. TOTUSHEK, CHIEF OF NAVAL RESERVE


                   opening statement of conrad burns


    Senator Burns. We will call the committee to order this 
morning.
    Thank you to the panel, we appreciate your delaying here 
just a little bit. We are going to talk about military 
construction and how it affects the United States Navy and the 
United States Marine Corps. First we will hear from the Navy.
    Secretary Pirie, it is nice to have you back again. I 
appreciate our working relationship, it has been very good, and 
I appreciate the efforts you have put into it. We hope that we 
can do some good things for our people in uniform. This is 
probably the fifth or sixth time you have been before this 
committee since I have been here. You are probably getting 
tired by now. But we appreciate your efforts.
    I have some concerns--and my statement will be very, very 
short--the way the Department of Defense is starting to deal 
with the military construction budget. I am very concerned 
about it. Incremental funding has risen. Some concerns have 
come up, that maybe that will slow our execution and what our 
mission is and what the eventual bottom-line cost to the 
taxpayers at the end of those projects will be. Also, it 
appears to me that we are assuming some risk that would not 
necessarily have to assume.
    Senior defense officials have told me that one-time-only 
funding technique advance appropriations of all projects. 
However, the same fiscal challenges that the Department faced 
putting together the fiscal year 2000 budget will still be 
there for years to come. We still have got a big challenge 
ahead of us. The danger will be that we begin not to fully fund 
military construction up front, but spread those costs over 2, 
3, and as many as 5 years.
    I tend to oppose incremental funding, and believe it is a 
wrong way that the Department should proceed. I think it will 
strike a major blow to revitalizing our aging infrastructure 
and improving the quality of life of our members that are in 
uniform, and their families. I can assure you that we will 
approach this situation with a great deal of care and 
consideration and with the cooperation of, Mr. Secretary, you 
and your staff that we have always enjoyed before. I think we 
can be very candid and very frank with one another on what your 
opinions are on this and how we should proceed and how we 
should work together on it, to make sure that the risk to the 
taxpayer and the total cost, bottom line, is taken into 
consideration before we go into such an action.
    The Navy has 12 bachelor quarters projects in its budget. 
The Marine Corps has three such projects, and that is a good 
start. We look forward to working with you, of course, on these 
critical requirements, because we are also very much aware of 
retention in our military. Where I see our biggest problem, or 
our biggest challenge, ahead of us, is that we are not building 
Non-Commissioned Officers (NCO's) like we did. NCO's are 
getting out of the service, and we need those people.
    I want to relate to you a story. We met with some Air Force 
people in the Middle East. Two women, in particular, really got 
my attention, one was a tech sergeant; one was a staff 
sergeant, skilled people--radar technicians on AWACS. Very, 
very important jobs, and they were going to separate themselves 
from the Air Force. And that, after gaining those ranks and 
obtaining those skills in very sensitive areas, concerns all of 
us in the retention of good people. And I, coming from the 
ranks of the enlisted, I am very concerned that we are not 
building NCO's, people who are really the backbone of our 
military.
    So, Secretary Pirie, we will look forward to your statement 
this morning. We will have some questions and discuss some of 
the ongoing projects, and also what you see on the horizon as 
far as how we tend to the quality of life, and also carry out 
our mission of national defense. We welcome you here this 
morning, and Admiral Smith, General Higginbotham, Admiral 
Totushek.
    I mentioned to Senator Biden at one time, I always thought 
it was a great talent that when you get to the weakest part of 
your argument you can elevate the volume on your speech, and 
you may have to do that this morning.
    So, thank you for coming this morning. We look forward to 
your statement. If you want to capsulize that, that is fine. 
Then we will have some questions.


                      statement of robert b. pirie


    Mr. Pirie. Thanks, Mr. Chairman. With your permission, I 
will submit my lengthy, formal statement for the record. And I 
just have a few summary remarks, if I may.
    Senator Burns. That is fine. Your full statement will be 
made a part of the record.
    Mr. Pirie. I am very pleased to be back here again, one 
more time, Mr. Chairman. And I appreciate your extremely kind 
remarks about our working relationship, which I think has been 
terrific from our point of view, and I look forward to 
continuing to get good things done together.
    As you said, Major General Higginbotham, Deputy Chief of 
Staff of the Marine Corps for Installations and Logistics, is 
here, on my right. On my left is Admiral Louis Smith, who is 
the Chief of the Naval Facilities Engineering Command. And on 
my extreme left is Admiral John Totushek, who is Chief of the 
Naval Reserve.
    Senator Burns. A good Irish name. His day is coming up, on 
the 17th. [Laughter.]


                          navy budget overview


    Mr. Pirie. As I said, I am pleased, Mr. Chairman, to be 
here to discuss the Department of the Navy's fiscal year 2000 
budget for shore infrastructure 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 got a more robust 
Military Construction (MILCON) proposal, with numerous piers, 
compliance projects, and quality-of-life projects.
    Our Base Realignment and Closure (BRAC) request is down. 
But that reflects the fact that we are coming to the end of 
four rounds of BRAC.
    On the whole, we think 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 that the administration's 
request for advanced appropriations may have caused. And I can 
only refer to what has been said by Dr. Hamre and Mr. Lynn: It 
is a one-time expedient to allow 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.
    With respect to the military family housing, the projects 
for public/private ventures that we propose are not subject to 
advance appropriations, and we expect to proceed with them in 
due course. For fiscal year 2000, we anticipate five projects, 
encompassing some 2,196 homes. And we currently have five other 
projects which may affect over 15,000 homes, awaiting 
resolutions of concern expressed by the House Appropriations 
Subcommittee on Military Construction. We hope to resolve the 
questions that they have raised, and proceed with the projects 
soon.
    But I would like to underscore that our Public/Private 
Ventures (PPV) program is not about saving money, it is not 
about getting out of the housing business. It is about getting 
better, more affordable housing for sailors and marines, and 
getting it sooner than we could using past practices. The 
committee has been very supportive of this in the past, and we 
hope you will continue that support now that we are on the 
point of making significant progress.
    In the area of BRAC, we are, as I said, approaching the end 
of the first four rounds, and we have closed 165 of 178 
affected facilities. It is important to note that closure is 
the point at which significant savings begin to accrue. We 
still have major hurdles to clear in cleanup and conveyance of 
the 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 to 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. But we would 
prefer to hand over the property earlier rather than later in 
the process. In this and other areas of base closure, we may be 
able to improve over the first four rounds, but I believe we 
should go forward now, as requested by the administration.
    Thanks, Mr. Chairman. That concludes my remarks.
    [The statement follows:]
               Prepared Statement of Robert B. Pirie, Jr.
    Good day, Mr. Chairman and members of the Committee, I am Robert B. 
Pirie, Jr., Assistant Secretary of the Navy for Installations and 
Environment. I appreciate the opportunity to speak to you today on the 
Department of the Navy's (DON) installations and facilities program.
    My statement today will cover a number of areas: Shore 
infrastructure challenges; The infrastructure budget in perspective; 
Program highlights for family housing, military construction, and Base 
Realignment and Closure (BRAC) and Infrastructure efficiency efforts.
                    shore infrastructure challenges
    Naval forces provide presence and project power around the world to 
preserve American security through peacetime engagement and deterrence. 
At any given time, more than 50,000 Sailors and Marines are deployed 
around the world aboard 100 ships. The Navy-Marine Corps team responded 
to a national tasking, on average, at least once every three weeks 
during 1998. This is a five-fold increase from the days of the Cold 
War.
    I am certain that members of this Committee will agree that in many 
respects, our shore infrastructure is the launch pad for the readiness 
of our military forces. Piers provide berthing, electrical power, and 
support facilities for ships in homeports. Runways support rapid 
deployment and transit of people, material and supplies. Hangars 
shelter valuable aircraft for maintenance and repair work. Training 
facilities and ranges allow Sailors and Marines to learn and hone their 
war fighting skills. Shipyards provide the industrial capability for 
ship repairs. Maintenance and operations facilities make our ground 
forces and their equipment combat capable. Laboratories transform 
science into new fleet technologies. Military housing and community 
facilities are the place our Sailors, Marines and their families call 
home. All provide a critical ingredient in our ability to deploy Naval 
forces when needed.
    U. S. taxpayers have made a considerable investment in our shore 
infrastructure. After BRAC is completed, the Navy will have over 88,000 
facilities,\1\ 400 piers and wharves, and 180 runways with a plant 
replacement value of $100 billion on 2.1 million acres of land. The 
Marine Corps will have over 38,000 facilities, 10 piers and wharves, 
and 50 runways with a plant replacement value of $25 billion on 1.6 
million acres. As we fund current shore operations, we must consider 
our stewardship responsibilities and invest in the maintenance and 
repair of these facilities to preserve their use for the future.
---------------------------------------------------------------------------
    \1\ A facility is a separate and individual building, structure, or 
other real property improvement.
---------------------------------------------------------------------------
    Yet, we face the twin challenges of needing to invest more in our 
facilities, while at the same time needing to rid ourselves of excess 
capacity. Most of our piers and wharves were built in the early 1940s 
and 1950s. Fifty-seven percent of the pier space and 40 percent of the 
wharf space is substandard \2\ or inadequate. Additionally, the Navy 
and Marine Corps has over 32 million square yards of runway paving, 48 
percent of which is substandard or inadequate. Our backlog of 
maintenance and repair (BMAR) continues to grow. The Navy's critical 
\3\ BMAR is currently $2.4 billion and increases to $2.9 billion in 
fiscal year 2003 before stabilizing. The Marine Corps BMAR is currently 
$689 million and stabilizes at $722 million in fiscal year 2003. The 
family housing BMAR is currently $2.2 billion for the Navy and $1.3 
billion for the Marine Corps. We are investing 1.8 percent of the Plant 
Replacement Value (PRV) of our facilities, compared to a rate of two to 
four percent recommended by a 1990 report of the National Research 
Council.
---------------------------------------------------------------------------
    \2\ Substandard means it is capable of supporting current use, but 
requires repair or modification; inadequate cannot be economically made 
adequate.
    \3\ Environmental, safety, mission, and quality of life projects 
that should not be deferred.
---------------------------------------------------------------------------
    Despite four rounds of base realignment and closure (BRAC), we 
continue to have excess capacity. While the number of ships and Sailors 
were reduced by 40 percent and 30 percent respectively since 1988 as a 
result of BRAC, Navy shore infrastructure decreased by only 17 percent 
of PRV.
    I know this Committee understands how high quality shore facilities 
bring out the best in our people. Our mutual goal is to provide quality 
shore facilities to support the current and future readiness of U. S. 
Naval forces. Let me describe the investment and efficiency solutions 
we are pursuing. Where appropriate, I will use metrics to display where 
we were at the end of fiscal year 1998, where we expect to be at the 
end of fiscal year 2000 based on this budget submission, and what our 
future goals are.
                the infrastructure budget in perspective
Financing the Fiscal Year 2000 Construction Program
    Before I explain our fiscal year 2000 budget request, I must first 
describe two new financing techniques that the DOD has instituted for 
the military construction accounts in fiscal year 2000. This change 
affects virtually all construction projects \4\ in the Military 
Construction, Navy: all projects in the Military Construction, Naval 
and Marine Corps Reserve; all Family Housing, Navy construction and 
improvements; \5\ and all BRAC.
---------------------------------------------------------------------------
    \4\ The only exception is MILCON projects above $50 million that 
are phased over several years.
    \5\ Family Housing PPV projects in the DoD Family Housing 
Improvements Fund (FHIF) are not affected.
---------------------------------------------------------------------------
    First, the fiscal year 2000 program requests authorization for the 
full program amount, which is shown throughout this statement. However, 
the fiscal year 2000 appropriation request is only for that portion 
expected to be actually spent in fiscal year 2000, plus an additional 
factor for unforeseen actions. The remainder of the construction 
portion of the project is included in a request for Advance 
Appropriations in fiscal year 2001.
    Second, the fiscal year 2000 DON budget also annualizes the cost of 
Supervision, Inspection and Overhead (SIOH) in military construction 
projects to align budgeted costs with expenditure trends over five 
years. The budget requests full authorization of SIOH, but 
appropriation for only that portion to support work to be done in 
fiscal year 2000.
    The following table displays the effect of both the Advance 
Appropriations and annualization of SIOH on our fiscal year 2000 
program.

                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                         Less 2001-                    Equals
                                             Fiscal Year   Less Fiscal      2005       Less Other    Fiscal Year
                                              2000 Auth     Year 2001    Annualized      Changes      2000 Appn
                                               Request    Advance Appn      SIOH                       Request
----------------------------------------------------------------------------------------------------------------
MCON......................................        $922.7        $496.6         $43.0     \6\ $63.3        $319.8
MCNR......................................          15.6          10.0           0.7  ............           4.9
FHCON.....................................         246.9         170.4          11.9  ............          64.6
BRAC......................................         452.6         254.7  ............     \7\ -13.5         211.4
                                           ---------------------------------------------------------------------
      Total...............................       1,637.8         931.7          55.6          49.8         600.7
----------------------------------------------------------------------------------------------------------------
\6\ Includes $76.0 million for phase-funded projects, for which advance appropriations are not sought, less
  $12.7 million completion of a project previously authorized.
\7\ This adjustment primarily reflects the transfer of $18.6 million for Homeowner's Assistance Program less $5
  million in anticipated land sales revenue.

    The use of Advance Appropriations and annualization of SIOH allows 
financing of critical DON readiness programs in fiscal year 2000. For 
example, Advance Appropriations was a one-time action that allowed the 
DOD to realign $3.1 billion to readiness and personnel needs in fiscal 
year 2000, while still initiating all planned construction projects 
envisioned under normal funding conventions. However, this is not the 
preferred method of financing the program, and DOD only intends to 
utilize this method for the fiscal year 2000 program. If the fiscal 
year 2000 Military Construction Appropriations Act provides the fiscal 
year 2000 appropriations requested in the President's Budget including 
the advance appropriations of funds for the fiscal year 2000 projects, 
it would provide all the funds (except the outyear SIOH tail) needed to 
complete the fiscal year 2000 projects. The Biennial Budget request for 
fiscal year 2001 fully funds all fiscal year 2001 projects (except the 
outyear SIOH tail).
    The military construction accounts also benefit from the use of 
Advance Appropriations. Four Navy and eight Marine Corps projects 
totaling $200 million (fiscal year 2000 appropriation of $50 million) 
were added to the fiscal year 2000 program as a result of funds made 
available by Advance Appropriations. These projects included a pier 
replacement, quality of life facilities including new bachelor enlisted 
quarters, maintenance facilities, and projects needed to improve 
readiness and training.
    I recognize that this new financing technique may be controversial. 
We will have to take some additional steps to make it work--we will 
have to place a ``limitation of funds'' clause on many construction 
projects to insure that obligations and outlays stay within the fiscal 
year 2000 appropriated amounts. It will also require much closer fiscal 
and acquisition management attention. Since the first year 
appropriation is more than sufficient to cover expected outlays, I 
expect no adverse impact on program execution. Full authorization and 
approval of the fiscal year 2000 and the fiscal year 2001 Advance 
Appropriations are the critical ingredients to the success of this 
approach. I ask that we work together on the merits of this approach.
Compared with Overall DON Fiscal Year 1999 Budget
    The Department of the Navy installation budget includes many 
appropriations: Military Construction, Navy (MCON); Military 
Construction, Naval and Marine Corps Reserve (MCNR); Family Housing, 
Navy (FHN); Base Realignment and Closure (BRAC); and Environmental 
Restoration, Navy. Base operations support and real property 
maintenance functions are included in the Operations and Maintenance 
accounts, Navy and Marine Corps, active and reserve. In aggregate, our 
fiscal year 2000 installation program totals about $8.1 billion, or 
about 9.7 percent of the DON fiscal year 2000 budget of $83.5 billion.
Compared with fiscal year 1999
    Our fiscal year 2000 installation program (MCON, MCNR, FHN, BRAC) 
of $2.6 billion is eight percent more than the fiscal year 1999 enacted 
level of $2.4 billion, and 13 percent more than our fiscal year 1999 
budget request of $2.3 billion.
    I am pleased to report that our fiscal year 2000 Military 
Construction, Navy Authorization request of $922.7 \8\ million is 
considerably larger than our fiscal year 1999 budget request of $468 
million, or the enacted level of $610 million. It is financed with a 
fiscal year 2000 appropriation request of $319.8 million and a fiscal 
year 2001 Advance Appropriations request of $496.6 million. Our fiscal 
year 2000 program, including Planning and Design and Unspecified Minor 
Construction, consists of 42 \9\ Navy projects totaling $688 million 
(fiscal year 2000 appropriation of $267.5 million) and 23 Marine Corps 
projects totaling $162 million (fiscal year 2000 appropriation of $52.3 
million). The fiscal year 2000 Military Construction, Navy and Marine 
Corps Reserve program of $15 million (fiscal year 2000 appropriation of 
$4.9 million) is similar to the fiscal year 1999 request, but below the 
fiscal year 1999 enacted level of $32 million. There are two Marine 
Corps reserve projects and one Navy reserve project.
---------------------------------------------------------------------------
    \8\ Includes full authorization of SIOH and multi-phase 
construction of a berthing wharf at San Diego, CA and CINCPAC 
headquarters building at Camp H.M. Smith, Hawaii.
    \9\ Includes $12.7 million Phase II of Norfolk pier upgrade 
authorized in fiscal year 1999.
---------------------------------------------------------------------------
    Our fiscal year 2000 Family Housing program is summarized in the 
following table. Beginning in fiscal year 2000, all Public/Private 
Venture construction and improvement projects are included in the DOD 
Family Housing Improvement Fund. Thus, our overall fiscal year 2000 
Family Housing program of $1,204 million ($1,142.0 million + $61.7 
million) is just slightly below the fiscal year 1999 enacted level of 
$1,224 million. Our Family Housing Operations and Maintenance request 
declines primarily due to inventory reductions of about 4,000 Navy and 
1,500 Marine Corps homes and reduced utility costs due to energy 
conservation measures. The increase in leasing is due to new leased 
units coming on-line at four locations in Italy.

                                            [In Millions of Dollars]
----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal Year                  Fiscal Year
                                                         Fiscal Year       2000       Fiscal Year       2000
                    Housing Program                     1999 Enacted  Authorization    2000 DoD    Appropriation
                                                           Program       Request         FHIF         Request
----------------------------------------------------------------------------------------------------------------
Construction..........................................        301.6          246.9          61.7           64.6
Replacement Construction..............................        [53.0]         [75.9]        [42.2]         [15.2]
Improvements..........................................       [233.0]        [153.3]        [19.5]         [31.7]
Planning & Design.....................................        [15.6]         [17.7]  ............         [17.7]
Operations & Maintenance..............................        788.3          749.1   ............         749.1
Leasing...............................................        134.6          146.0   ............         146.0
                                                       ---------------------------------------------------------
      Total Family Housing, Navy & Marine Corps.......      1,224.5        1,142.0          61.7          959.7
----------------------------------------------------------------------------------------------------------------

    Our fiscal year 2000 BRAC program of $453 million (fiscal year 2000 
appropriation of $198 million) is $122 million below the fiscal year 
1999 enacted level of $575 million. This reduction is due to the 
virtual completion of BRAC construction and realignment requirements. 
Our fiscal year 2000 BRAC program is now nearly all environmental 
cleanup. The fiscal year 2000 BRAC environmental program of $382 
million (fiscal year 2000 appropriation of $148.7 million) is 44 
percent above the fiscal year 1999 enacted level of $265 million.
    Our fiscal year 2000 Real Property Maintenance (RPM) request of 
$1.5 billion is essentially the same as the fiscal year 1999 enacted 
level. RPM funds in the Operations and Maintenance accounts fund 
repairs, preventative and recurring maintenance, minor construction and 
centrally managed demolition. To give special emphasis and provide more 
management flexibility, $643 million of DON RPM funds are included in 
the Quality of Life Enhancements, Defense account.
                             family housing
Basic Allowance for Housing
    We rely first on the private sector to provide housing for our 
Sailors, Marines and their families. Our bases have housing referral 
offices to help newly arriving families find suitable homes in the 
community. In fiscal year 1998, about 74 percent of Navy families and 
66 percent of Marine Corps families worldwide lived in a home they 
owned or rented in the community.
    Service members receive a monthly housing allowance when government 
quarters are not provided. Effective 1 January 1998, Basic Allowance 
for Housing (BAH) replaced both Basic Allowance for Quarters (BAQ) and 
Variable Housing Allowance (VHA). BAH rates are linked to the actual 
housing costs where a member is assigned. Members assigned to high-cost 
areas will have a higher BAH and will not be required to absorb a 
disproportionately higher share of their housing costs ``out of 
pocket.'' Once fully implemented in the next four years, members at the 
same pay grade and dependent status will pay the same monthly out-of-
pocket amount regardless of location.
    While BAH will equalize out of pocket expense across different 
locations, the national average out-of-pocket expense remains at 19.8 
percent, still considerably higher than the DOD goal of 15 percent. The 
fiscal year 2000 budget retains the current 19.8 percent out of pocket 
rate. Nonetheless, we believe that the new BAH will be particularly 
helpful to Navy and Marine Corps families, as many of our bases are 
located in urban and coastal areas where living costs are higher.
Fix What We Own
    Even with full implementation of BAH, there will remain many 
locations where there are not enough suitable\10\ homes in the 
community for our members. In such locations, we have used family 
housing funds to build or acquire additional homes. At the end of 
fiscal year 1998, the Navy had an inventory of 62,700 homes worldwide 
and the Marine Corps had 25,600 homes. We also lease homes both here in 
the U. S. and abroad. At the end of fiscal year 1998, we had about 
5,500 leased homes.
---------------------------------------------------------------------------
    \10\ Suitability is based on the following DoD criteria: location 
(within one hour commute); cost (rent meets DoD criteria); size 
(minimum square footage and number of bedrooms); condition (unit is 
well maintained and structurally sound). All owner occupied housing is 
deemed suitable.
---------------------------------------------------------------------------
    Our core family housing philosophy remains to first fix what we 
own. The Navy's Neighborhoods of Excellence, and the Marine Corps 
Family Housing Campaign Plan, embody the Department's efforts to 
revitalize major home components for an entire neighborhood, rather 
than piecemeal improvements on individual homes. We update electrical 
and plumbing systems, replace windows and doors, add insulation, 
modernize kitchens and baths, install new landscaping, and install 
better street lighting. Using traditional family housing funds, our 
fiscal year 2000 improvement program renovates 1,315 Navy homes at 9 
locations at a cost of $130 million (fiscal year 2000 appropriation of 
$27.2 million), and 407 Marine Corps homes at 6 locations at a cost of 
$24 million (fiscal year 2000 appropriation of $4.5 million).
    Our fiscal year 2000 family housing construction program has three 
replacement construction projects totaling 329 homes, all in Hawaii. 
Two projects are at Naval Base Pearl Harbor: 96 homes at Hale Moku for 
$19.2 million (fiscal year 2000 appropriation of $3.8 million); and 133 
homes at Pearl City for $30.2 million (fiscal year 2000 appropriation 
of $6.0 million). The remaining project is to replace 100 homes at 
Marine Corps Base Kaneohe for $26.6 million (fiscal year 2000 
appropriation of $5.3 million).
Public/Private Ventures
    A number of years ago, we realized that the pace of new and 
replacement construction and improvements would never let us solve our 
seemingly intractable backlog of repairs and shortage of homes. We 
worked closely with the Congress to establish ground breaking new 
authorities in fiscal year 1995 and fiscal year 1996 to use public/
private ventures (PPV) as a housing tool. Under a five-year test 
program which expires on 1 February 2001, we can provide cash, direct 
loans and loan guarantees, and differential lease payments (DLP). We 
can also convey land or lease existing land, housing and facilities to 
a developer in exchange for renovation or construction of homes for our 
military members and their families. As the Secretary of Defense 
announced, our objective was to use these tools to solve a 30-year 
housing problem in 10 years.

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                        FAMILY HOUSING SHORTFALLS
                   [As of the end of Fiscal Year 1998]
------------------------------------------------------------------------
                                           Navy           Marine Corps
------------------------------------------------------------------------
Repair Backlog....................     $2,200,000,000     $1,300,000,000
Deficit (homes)...................             13,600             10,400
------------------------------------------------------------------------

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

Completed PPVs
    The Navy successfully completed two PPV projects in late 1996 and 
early 1997. These projects were started under the 1995 authorities and 
completed under the 1996 authorities. In the south Texas area, the Navy 
invested $9.5 million, and the developer, Landmark Development Company, 
provided the remainder of the $32.5 million total project cost. 
Landmark constructed and manages 300 homes in a development called 
Bridge Pointe in Portland, TX to support personnel assigned to Naval 
Air Station Corpus Christi and Naval Station Ingleside. Landmark also 
constructed and manages 100 homes at a development called Hawks Landing 
in Kingsville, TX to support personnel assigned to Naval Air Station 
Kingsville. Both projects are located off base and are fully leased, 
with about 75 percent occupied by military members.
    At Everett, WA, the Navy invested $5.9 million in a limited 
partnership with Dujardin Development Company to construct and manage 
185 homes on private land. The total project cost was $18 million. 
Dujardin completed and manages a development called Country Manor at 
Smokey Point for personnel assigned to Naval Station Everett, WA. All 
units are leased to enlisted families.
PPVs--the next step
    We have traveled a long road since those early successes. We 
wrestled with a number of key concerns, including the future role of 
traditional military construction, construction standards, and occupant 
out-of-pocket expenses. We had extensive discussions with fleet 
commanders, base commanders, and those we aimed to serve--our Sailors, 
Marines and their families. We listened to what they had to say. Last 
year, I established a new DON policy on PPV to resolve these and other 
issues:
    Consider PPV first.--Where communities cannot meet our housing 
needs, we will rely first on PPVs, including replacement construction 
and whole-house revitalization.
    Regional scope.--We will evaluate our housing needs on a regional 
basis.
    Quality standards.--We will establish PPV housing quality standards 
comparable to what the private sector provides for civilians in similar 
income scales.
    Out-of-pocket expenses.--Our goal is no out-of-pocket expenses for 
members.
    Rent scale.--Rent scales are based on unit size and quality.
    Conveying land or units.--We will not convey land unless it is 
excess to our long-term needs.
    Allowing non-military occupants.--Service members will have 
preference. To ensure full occupancy, PPVs can accommodate civilian 
leases of limited duration.
    We established two new PPV groups at the Naval Facilities 
Engineering Command--one for management and another for acquisition. 
These groups will manage PPVs in close coordination with the fleet and 
base commanders. Our acquisition strategy has matured to applying two 
business models for PPV projects. A Limited Partnership will be used 
for terms up to 15 years for housing on private land where our equity 
contribution is limited to cash. A Limited Liability Company (LLC) will 
be used for a minimum 50-year term for housing on government or private 
land where our equity contribution includes privatizing existing 
government owned housing. Both include escrow accounts, performance 
bonds, insurance, and personal and corporate guarantees to ensure that 
our interests are protected during the construction phase and 
succeeding years. Both models minimize government liability while still 
giving us flexibility to address changing requirements over the long-
term as our needs, and local market conditions change. The longer term 
of the LLC led us to expand the use of cash reserves, participation in 
property management decisions, incentive clauses, and termination 
options for non-performance.
PPVs Now in Process
    We have undertaken an ambitious, but I believe attainable goal over 
the next three years of over 33,000 PPV units at 16 locations for the 
Navy and over 8,000 PPV homes at 9 locations for the Marine Corps. 
These figures include both existing units and construction of new 
housing. Each of these projects has the full support of the fleet and 
local commanders. These projects will provide our Sailors and Marines 
with better housing sooner much sooner. Communities will also benefit 
from the additional housing construction and increased tax base.
    Many PPV efforts have already met critical milestones. The Marine 
Corps is in the final stages of negotiations with a developer to 
exchange 419 existing homes and land located off-base for up to 160 new 
on base homes at Marine Corps Base Albany, GA. We expect to provide 
Congressional notification of the selection of a developer very soon.
    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.
    The Navy negotiated modifications to the existing agreements with 
Dujardin Development and Landmark Development to provide DLP on behalf 
of service members. Payments would be paid directly to the developer to 
buy-down the service member's out-of-pocket expenses (rent plus 
utilities) to the BAH rate. We expect to provide congressional 
notification of the contract award and intent to transfer funds to 
implement the DLP selection this summer.
    In January 1999, the Navy issued solicitations to competitively 
enter into two new limited partnerships for 300 townhouses near Naval 
Station Everett, WA, and 150 apartments and townhouses near Naval Air 
Station Kingsville, TX. The Navy envisions a mix of 2-, 3-, and 4-
bedroom homes on privately owned land for active duty enlisted 
personnel. Funding for the Navy share (including DLP) would come from 
$29 million in previously authorized and appropriated funds. We expect 
to notify the Congress of the selections later this year.
    In the last five months, we have provided Congressional 
notification to issue solicitations for PPV projects in South Texas; 
San Diego, CA; Lemoore, CA; Brunswick, ME; and New Orleans, LA. Each 
PPV project would privatize all or substantial portions of government 
owned housing, renovate or demolish inadequate homes, and construct new 
units on or off-base. We would fund our share of the investment using 
the equity of those housing assets and $114 million in previously 
authorized and appropriated family housing funds. These projects are 
currently on hold by the House Appropriations MILCON Subcommittee. We 
continue our discussions with the Subcommittee to resolve their 
concerns.
    We plan to provide Congressional notification to issue 
solicitations for seven more Navy and seven more Marine Corps locations 
during the course of this year. Our share of the investment cost for 
these projects would come from $257 million in previously authorized 
and appropriated funds, plus additional funds in the FHIF. Our fiscal 
year 2000 program includes nearly $61.6 million in the FHIF for PPV 
projects at five locations. These funds will also be combined with 
additional prior year and future year funds for additional PPV projects 
at some locations.

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

 DEPARTMENT OF THE NAVY FISCAL YEAR 2000 PPV PROJECTS IN FAMILY HOUSING
                            IMPROVEMENT FUND
------------------------------------------------------------------------
                                             Funds in
                Location                     Millions         # Homes
------------------------------------------------------------------------
NAS Lemoore, CA.........................           $20.1             406
MCAS Cherry Pt, NC......................            22.0             728
NTC Great lakes, IL.....................            14.4             885
NICP Philadelphia, PA...................             0.2               6
Parris Island...........................             4.9             201
                                         -------------------------------
      Total.............................            61.6           2,196
------------------------------------------------------------------------

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

                         military construction
    Our military construction program continues our approach of 
budgeting for only those projects that meet the highest priority 
readiness and quality of life needs of the Fleet and Fleet Marine 
Force, and their Reserve Components. The Navy convenes a Shore 
Facilities Programming Board and the Marine Corps convenes a MILCON 
Program Evaluation Group each year to consider, evaluate, and 
prioritize military construction projects. Projects are selected based 
on a number of different criteria, including fleet priorities and the 
most critical readiness, quality of life, and compliance needs.
    Military Construction policy, like Family Housing, focuses on first 
fixing what we own. To this end, 62 percent of the active and reserve 
military construction program for the Navy and 45 percent for the 
Marine Corps is dedicated to replacement and modernization projects.
    This budget expands our efforts begun last year to modernize our 
piers and wharves. Our construction program includes $168 million for 
five pier/wharf projects. Examples include:
  --Berthing Wharf at Naval Submarine Base Pearl Harbor, HI. This $29.5 
        million project (fiscal year 2000 appropriation of $7.5 
        million) replaces two wharves built in the 1940s that are now 
        deteriorated beyond repair and that do not have the structural 
        capacity to support heavier mobile cranes now used to service 
        new submarines.
  --Berthing Pier at Naval Station Norfolk,VA. This is the second phase 
        of a $45.5 million project to replace Pier 2, which is over 50 
        years old. Pier 2 now has limited deck space, inadequate power 
        supply, and lacks the structural strength to safely support 
        current ship classes. Full authorization and a $32.0 million 
        appropriation were provided in fiscal year 1999. This budget 
        requests the remaining $12.7 million to complete the 
        replacement of Pier 2, with a $0.8 million SIOH tail through 
        fiscal year 2004.
    Our construction program also funds 14 operational facilities 
totaling $35 million. Examples include:
  --Control Tower and Air Traffic Control Facility at Marine Corps 
        Base, HI. This $5.8 million project (fiscal year 2000 
        appropriation of $1.5 million) replaces an existing control 
        tower built that is deteriorated and lacks sufficient height to 
        meet safety and FAA regulations. The project also replaces 
        trailers installed in the early 80's that are too small to 
        install new equipment scheduled for installation in 2001.
  --Operational Support Facilities, Naval Support Activity, Souda Bay, 
        Crete. This $6.4 million project (fiscal year 2000 
        appropriation of $1.6 million) provides several new buildings 
        and an aircraft-parking apron to replace temporary trailers.
    There are 8 projects totaling $40 million to support military 
training functions. Examples include:
  --Strike Fighter Weapons Training Facility, Lemoore, CA. This $4.0 
        million project (fiscal year 2000 appropriation of $1.0 
        million) upgrades and expands an existing facility to support 
        the introduction of the F/A-18E/F aircraft to NAS Lemoore.
  --Staff Non-Commissioned Officer Academy, Marine Corps Base Camp 
        Pendleton, CA. This $6.5 million project (fiscal year 2000 
        appropriation of $1.6 million) provides an academic instruction 
        building, armory and warehouse complex to replace temporary 
        facilities that are located far from where the students do much 
        of their training.
    There are 17 maintenance and storage projects totaling $120 
million. Examples include:
  --Aircraft Acoustical Enclosure at Naval Air Station Oceana, VA. This 
        $11.5 million project (fiscal year 2000 appropriation of $2.9 
        million) provides a means to control noise generated during in-
        frame high power jet engine testing on F-14 and F/A-18 aircraft 
        engines.
  --Tactical Vehicle Maintenance Facility, Marine Corps Base Twentynine 
        Palms, CA. This $14.0 million project (fiscal year 2000 
        appropriation of $3.4 million) provides a maintenance facility 
        with an overhead crane, sunshades, and parking for tactical 
        vehicles used during Combined Arms Exercises.
    There are six environmental compliance and safety of life projects 
totaling $52 million. Examples include:
  --Sewage Treatment Plant, Naval Surface Warfare Center Division, 
        Indian Head, MD. This $10.1 million project (fiscal year 2000 
        appropriation of $2.6 million) would demolish 17 failing septic 
        systems and connect them to an upgraded treatment plant. The 
        current plant is in violation of the Clean Water Act and 
        Maryland Department of Environment standards.
  --Hazardous Materials Storage Facility at Naval Air Station Joint 
        Reserve Base Willow Grove, PA. This $1.9 million project 
        (fiscal year 2000 appropriation of $0.3 million) in the 
        Military Construction Naval and Marine Corps Reserve 
        Appropriation provides a facility to store hazardous and 
        flammable material in compliance with environmental and safety 
        standards. Existing facilities have been cited for non-
        compliance.
    The single most expensive project in our budget is an $86.0 million 
project (fiscal year 2000 appropriation of $15.9 million) to construct 
a new U. S. CINCPAC headquarters building at Camp H. M. Smith, HI. This 
project, to be constructed in three phases, would consolidate personnel 
that currently occupy portions of 25 different buildings, nearly all of 
which are deemed substandard or inadequate.

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

                             Navy BQ Goals
    Eliminate the 6,900 BQ spaces with gang heads by fiscal year 2008;
    Eliminate the $648 million BQ repair backlog by fiscal year 2004;
    Achieve the 1 + 1 standard by fiscal year 2013.
                         Marine Corps BQ Goals
    Eliminate 10,400 BQ spaces with gang heads by fiscal year 2005;
    Eliminate the $114 million BQ repair backlog by fiscal year 2004;
    Assign more than two Marines per room by fiscal year 2036.

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

Quality of Life
    There are a number of important quality of life projects included 
in our fiscal year 2000 budget. The single largest effort is for the 
construction and modernization of Bachelor Enlisted Quarters (BEQs).
    The DOD adopted a 1 + 1 construction standard in 1995 for permanent 
party personnel. This configuration consists of two individual living 
and sleeping rooms with closets, and a shared bath and service area. 
The Marine Corps has been granted a permanent waiver to use an 
alternate 2 + configuration for junior enlisted, i.e., two persons per 
room. This allows the Marine Corps to foster team building and build 
unit cohesion. These standards do not apply to recruits and A-school 
students. Overseas locations also have unique considerations.
    The Navy has 12 BQ projects totaling $205 million (fiscal year 2000 
appropriation of $51.4 million) in the fiscal year 2000 program.
  --Four projects are being built to the 1 + 1 standard for permanent 
        party E1-E4 personnel. They provide a total of 582 two-room 
        modules.
  --Three projects are being built to the 2 + standard for E1-E4 
        personnel. They provide a total of 405 single-room modules. One 
        of these projects is at a Marine Corps base where the 2 + 
        standard applies; another is in Southwest Asia; the third is at 
        Pearl Harbor as an interim step to the 1 + 1 standard due to 
        the large shortage of adequate spaces.
  --Four projects are being built to the 2 + 2 configuration for A-
        school students and transients. They provide a total of 484 
        two-room modules.
  --One open bay project, which provides space for 480 recruits at 
        Naval Recruit Training Center Great Lakes, IL.
    The Marine Corps has three projects totaling $50 million (fiscal 
year 2000 appropriation of $12.5 million) in the fiscal year 2000 
program. All three Marine Corps projects are being built to the 2 + 
standard. They provide a total of 592 single-room modules for junior 
enlisted personnel.
    Both the Navy and Marine Corps are on track to achieve their long-
range BQ goals. Navy BQ 1 + 1 and Marine Corps 2 + transition plans are 
nearing completion. Since moving to the new BQ construction standards, 
the Navy has completed thirteen 1 + 1 BQ projects providing 1,800 rooms 
and three 2 + BQ projects providing 600 rooms. The Marine Corps has 
completed three 1 + 1 BQ projects\11\ with 961 rooms and four 2 + BQ 
projects providing 804 rooms.
---------------------------------------------------------------------------
    \11\ These Marine Corps 1 + 1 BQ projects were initiated prior to 
the blanket waiver to the 2 + 0 standard.
---------------------------------------------------------------------------
    There are other quality of life projects in the fiscal year 2000 
program: the Navy has two multi-purpose fitness facilities, and the 
Marine Corps has a child development center, a family services center, 
and two fitness facilities.
                      base realignment and closure
Realignment and Closure Status
    We are implementing four rounds of base realignment and closure 
(BRAC), 1988 under Public Law 100-526 and 1991, 1993, and 1995 under 
Public Law 101-510. As a result of these decisions, we are implementing 
178 actions consisting of 46 major closures, 89 minor closures, and 43 
realignments. These closures and realignments include major Navy and 
Marine Corps installations in Philadelphia, PA; Charleston, SC; Orlando 
and Jacksonville, FL; Seattle, WA; San Francisco, Long Beach, San 
Diego, and Orange County, CA; Honolulu, HI; as well as other bases in 
Rhode Island, Alaska, and Guam.
    While this has been a complex challenge for the Department as well 
as for the communities that hosted our ships, aircraft, Sailors, 
Marines and their families for so many years, we have made substantial 
progress.
    As of the end of January 1999, we had completed the operational 
closure or realignment of 93 percent (165 of 178) of all BRAC actions. 
Operational closure means that all mission equipment and military 
personnel (with the exception of a small caretaker cadre) have been 
disestablished or relocated to a ``receiving'' site. We will complete 
eight more actions in 1999, four in 2000, and one in 2001. We will meet 
the statutory requirement to complete all BRAC closure and realignment 
actions by July 2001. As of the end of fiscal year-1998, we had 
obligated 98 percent of the $8.5 billion appropriated for DON BRAC 
actions.
BRAC Costs and Savings
    We have closed or realigned bases to make the Navy's shore 
infrastructure more proportional to its force structure and to provide 
resources to recapitalize our weapons systems and platforms. As of the 
end of fiscal year 1998, we had spent $8.5 billion on all four BRAC 
rounds to construct new or adapt existing facilities, move personnel, 
equipment, ships and aircraft to their new homeports, and clean up 
contamination. We will have saved $8.0 billion from no longer having to 
operate, maintain, and staff these bases. The result is a net cost of 
$471 million to date. However, at the end of this fiscal year, our net 
savings will exceed our net cost by $1.4 billion. And by the end of 
fiscal year 2001, when all four rounds will be completed, we project 
that the DON will have spent $9.9 billion and saved $15.7 billion, for 
a net savings of $5.8 billion. Beginning in fiscal year 2002, we will 
save an additional $2.6 billion each year. These net savings estimates 
have been validated by several independent sources.
Environmental Cleanup
    As we near the completion of BRAC-related construction, we are 
fully focused on finishing environmental cleanup and completing 
property disposal. We have already spent more than $1.0 billion through 
fiscal year 1998 on environmental work at our BRAC bases for 
environmental baseline studies to identify potential contaminated sites 
and assess the nature and extent of contamination to doing the cleanup, 
removing underground storage tanks, and closing hazardous material 
storage facilities.
    Each base has established BRAC cleanup teams composed of remedial 
managers from the Navy, States, and the Environmental Protection Agency 
to review, prioritize, and expedite the necessary cleanups consistent 
with reuse plans. We recognize the dynamics of reuse and stand prepared 
to phase our cleanup plans as needed to support changing community 
needs.
    One measure of our progress in cleanup of contaminated property is 
the number of acres that have become suitable for transfer under the 
Comprehensive Environmental Response, Compensation and Liability Act 
(CERCLA) and the Community Environmental Response Facilitation Act 
(CERFA). Properties in categories 1-4 are environmentally suitable for 
transfer. Cleanup was either completed or unnecessary in these areas. 
Property in category 5 indicates remedial investigations or cleanup is 
underway. Properties in category 6 require cleanup, but actions have 
not been started. Category 7 property has not yet been completely 
evaluated. The table shows the progress we have made moving property 
towards categories 1-4. Most of the environmental studies are nearing 
completion. Fully 70 percent of our fiscal year 2000 BRAC environmental 
effort is targeted towards actual cleanup.

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

                            ACRES (ALL BRAC)
------------------------------------------------------------------------
                                         September  September  September
                                            1996       1997       1999
------------------------------------------------------------------------
CERFA Cat 1-4..........................    107,833    143,100    147,119
CERFA Cat 5............................     11,260      1,596      3,193
CERFA Cat 6............................      7,572      6,395      5,831
CERFA Cat 7............................     39,194     14,768      9,716
                                        --------------------------------
      Total............................    165,859    165,859    165,859
------------------------------------------------------------------------

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

    There are 1,000 contaminated sites at 53 BRAC installations. A 
contaminated site crosses the ``cleanup finish line'' when it achieves 
Remedy-in-Place/Response Complete (RIP/RC) and the regulator 
subsequently concurs. As of the end of fiscal year 1998, we had 
achieved RIP/RC status at 44 percent of all BRAC sites. By the end of 
fiscal year 2001, when BRAC ends, we expect to have completed cleanup 
at 90 percent of all BRAC sites. Cleanup at the remaining sites will 
extend through fiscal year 2010.
    We are finding and continually searching for more ways to reduce 
cleanup costs. We are using promising cleanup technologies and adopting 
natural attenuation for low relative risk parcels at a number of our 
BRAC sites. We continue to work with regulators and communities to tie 
cleanup standards to realistic reuse needs. We use a BRAC Cost-to-
Complete (CTC) index as a measure of our efforts to reduce cleanup 
costs. At the beginning of fiscal year 1996, our BRAC CTC estimate was 
$2.8 billion. At the end of fiscal year 1998, it was $1.5 billion. The 
CTC reduction of $1.3 billion is the result of execution of $868 
million in appropriated funds and $441 million in cost avoidance, such 
as changes in risk based approaches to cleanup, new information on the 
nature and extent of contamination, and use of new technologies for 
study or cleanup.
Section 334 Early Transfer Opportunities
    Section 334 of the Fiscal Year 1997 Defense Authorization Act 
established a framework for the DOD to initiate an early transfer of 
contaminated property to the community. This authority allows DOD to 
defer the CERCLA requirement that all remediation actions have been 
taken before the date of property transfer.
    Section 334 requires that we first meet a number of conditions. We 
must obtain concurrence from the governor of the State where the 
property is located. If the property is listed on the National 
Priorities List, the Administrator of the U. S. Environmental 
Protection Agency must also concur with the early transfer. 
Furthermore, we must determine that the property is suitable for 
transfer for the use intended by the transferee. We may place 
restrictions in the deed limiting the use of the property if determined 
necessary to protection of human health and the environment. Also, we 
must submit a budget that adequately addresses cleanup of the property. 
This authority does not relieve us from full compliance with the 
provisions of CERCLA.
    We are pursuing several early transfer opportunities. All of them 
would conceivably expedite the conveyance of the property and may also 
reduce cleanup costs. Three early transfer opportunities are 
particularly promising.
  --At the former Naval Training Center San Diego, CA, the San Diego 
        Unified Port Authority has requested early transfer of a 51-
        acre site, which contains a former landfill. The parcel is 
        adjacent to San Diego's Lindbergh Field Airport and will be 
        redeveloped as a vehicle parking area. The cleanup remedy would 
        be integrated into construction of the parking area.
  --At the former Fleet Industrial and Supply Center Oakland, CA, the 
        Port of Oakland has requested early transfer of the entire main 
        site comprising 528 acres. The primary remaining cleanup action 
        involves a four-acre site where a dry cleaner shop was located. 
        The Port of Oakland is moving rapidly to transform this former 
        Navy base to expand the Port's container terminal and has 
        already demolished numerous structures to make way for their 
        new development.
  --At the former Naval Air Station Memphis, TN, the Millington 
        Municipal Airport Authority has requested early transfer of 537 
        acres for airfield operations at the municipal airport. The 
        site contains residual trichloroethylene groundwater 
        contamination from solvents used in past Navy aircraft 
        operations.
Property Reuse
    Under the mandate of the National Environmental Policy Act (NEPA) 
of 1969, we consider the potential environmental impacts of disposal 
and reuse of base closure property before we convey property. We 
evaluate issues involving historic preservation, air quality, noise, 
traffic, natural habitat, and endangered species. The NEPA process 
concludes with the issuance of a Record of Decision (ROD). In fiscal 
year 1998, we completed seven RODs. Eight more are planned for this 
fiscal year and 10 for next year.
    As the Local Redevelopment Authorities develop and refine their 
reuse plans, we want to support immediate reuse opportunities through 
Interim Leases and Leases in Furtherance of Conveyance. We must first 
prepare a Finding of Suitability to Lease (FOSL) document. At the end 
of fiscal year 1998, we had over 1,000 FOSLs in place covering nearly 
18,000 acres. This year, we plan to issue more than 40 more FOSLs 
covering 19,000 acres.
    At the end of fiscal year-1998, we had about 115 leases in place 
between the Navy and LRAs. Leased property is being used for a variety 
of purposes: port usage, movie production, steel fabrication, general 
manufacturing and repair, education, housing, childcare, shipbreaking, 
and police facilities. These leases have created several thousand jobs 
to help communities recover from the loss of the Navy and Marine Corps 
presence. The leases provide protection and property maintenance 
clauses and generate significant revenue for the LRA.
Property Disposal
    While leases are desirable, they are only an interim step to the 
ultimate BRAC goal of property disposal. The DON must dispose of 434 
parcels of land on 91 BRAC bases. Each BRAC base has a disposal 
strategy tailored for that base. It incorporates LRA reuse plans with 
environmental cleanup timetables, NEPA documentation, conveyance plans 
and schedules and transition requirements into a comprehensive business 
strategy for conveying the Navy property to another entity.
    Like the FOSL, a Finding of Suitability to Transfer (FOST) is 
needed before we actually convey property. Here again, we are making 
good progress. As of the end of fiscal year 1998, we had completed 64 
FOSTs covering nearly 29,000 acres. In fiscal year 1999, we plan to add 
more than 200 FOSTs covering 23,000 acres.
    Through the end of fiscal year 1998, we had conveyed through 
economic development conveyances, negotiated sales, public sales, or 
Public Benefit Transfer over 1,850 acres, and earned $10.2 million in 
revenue that is being reapplied toward BRAC cleanup. Our budget assumes 
we will receive about $5 million in land sale revenue during fiscal 
year 2000; these funds will be applied towards environmental cleanup of 
other BRAC property.
    In addition to expediting the communities' economic recovery, we 
want to dispose of BRAC property as soon as practicable so that we can 
avoid caretaker costs and focus on our core mission. The Navy 
recognized early on that the sooner a base closed and property was 
disposed, the sooner savings would be achieved. We have established 
cooperative agreements at many bases where the Navy has provided 
funding and the LRA has accepted responsibility for providing services 
such as fire, police, water, sewer, electricity, gas, and ground care 
as part of the property transition process.
    After a base closes, however, disposal of the base closure property 
presents the most complex challenge. In the disposal process, the Navy 
is guided by the President's Five-Part Plan for Revitalizing Base 
Closure Communities, which emphasizes local economic redevelopment of 
the closing installation and the creation of new jobs. The Navy is 
bound by a legal framework of property disposal and environmental 
statutes that govern each phase of the disposal process.
    The LRA's are central to the property disposal process. Their 
timely submission of a comprehensive, feasible reuse plan that will 
meet the standards of the National Environmental Policy Act of 1969 
(NEPA) and the broad range of Federal statutes that govern treatment of 
protected resources is fundamental to the Navy's ability to proceed 
with the disposal of the property. The LRA must present a request to 
acquire the property that is consistent with one of the four statutory 
methods available to the Navy to dispose of BRAC property. Often, the 
LRA's do not meet these statutory requirements and property disposal is 
significantly delayed. In certain instances, the LRA is not adequately 
equipped or financially capable of assuming the responsibilities of 
owning the property and conveyance of base closure property to the LRA 
lags far behind Navy schedules for disposal of the property. The 
quickest and most efficient way to dispose of BRAC property may be by 
direct public sale.
                   infrastructure efficiency efforts
Need for Two More Rounds of BRAC
    I have so far discussed our investment plans to improve our 
infrastructure. However, as I indicated previously, we still have 
significantly more infrastructure remaining after four BRAC rounds than 
needed to support the conceivable force structure of the future. The 
Quadrennial Defense Review, Defense Reform Initiative, and the National 
Defense Panel all concluded that more rounds of BRAC are required to 
further shrink the military infrastructure. An April 1998 DOD report to 
Congress, submitted in accordance with Section 2824 of the fiscal year 
1998 National Defense Authorization Act, analyzed capacity by types of 
bases for each military department and Defense Logistics Agency. The 
report concluded that the DOD has about 23 percent excess base 
capacity. The report also validated BRAC savings estimates, and noted 
that actual one-time implementation costs are close to or less than 
initial estimates.
    I again ask your support for DOD's request for two more BRAC 
rounds, beginning in fiscal year-2001.
Re-inventing Shore Infrastructure
    As we ask for two more rounds of BRAC, we have not been sitting 
idle. Under the leadership of the Secretary of Defense, the Secretary 
of the Navy, the Chief of Naval Operations and the Commandant of the 
Marine Corps, we have a multitude of initiatives well underway to make 
our infrastructure more effective and less costly.
    We have charted an ambitious course. The Navy has programmed $8 
billion in savings over the fiscal year 1998 to fiscal year 2005 
period; the Marine Corps has programmed $370 million over the same 
period. We also realize that these efforts require us to invest money, 
sometimes, significant sums of money up-front to do the necessary 
analyses. We are carefully evaluating proposals, and where the 
potential payback appears convincing, we are stepping up to the plate 
and putting money in the budget to pursue the most promising 
initiatives. Given the wide variety of initiatives, the Deputy Chief of 
Naval Operations (Logistics) has developed a strategic business plan 
that melds these myriad opportunities into a cohesive vision while 
still providing execution flexibility to Fleet and Base commanders.
    Here are but a few examples:
  --Competitive Sourcing.--We are reviewing all ``commercial 
        activities,'' i.e., those functions that are now performed by 
        military or DON civilians but that are also performed by the 
        private sector. Using the Office of Management and Budget 
        Circular A-76 process, we are competing to find who can best 
        perform such functions as food services, housing management, 
        grounds maintenance, facility maintenance, data processing, and 
        aircraft refueling--a ``most efficient organization'' of in-
        house personnel, or by contract to a private sector provider. 
        This single initiative holds promise to generate over $5 
        billion in savings by fiscal year-2005. We are still on the 
        front end of this effort. We have to date announced 
        competitions for about 21,000 Navy military and civilian 
        billets. The Marine Corps plans to announce their first 
        competitions later this year. A total of about 80,000 Navy and 
        5,000 Marine Corps billets are planned. Early results are 
        promising. The Navy has completed competition of 896 billets so 
        far, which have generated $9.4 million in annual savings.
  --Building Demolition.--The goal of the building demolition program 
        is to eliminate aging, unneeded and often unsightly facilities 
        and their associated operating and maintenance costs. The Navy 
        plans to demolish over 9.9 million square feet and the Marine 
        Corps 2.2 million square feet by fiscal year 2002. Both the 
        Navy and Marine Corps have centrally managed demolition 
        programs with funds included in Real Property Maintenance 
        Operations and Maintenance accounts. Through the end of fiscal 
        year 1998, we had invested $63 million to demolish 5.9 million 
        square feet and removed nearly $600 million in PRV from our 
        rolls. We are now investing about $40 million per year. Our 
        fiscal year 1999 program consists of 59 projects to demolish 
        534 structures.
  --Privatization of Utilities.--Defense Reform Initiative Directive 49 
        directed the Services to privatize all their natural gas, 
        water, wastewater and electrical systems except where 
        uneconomical or where the systems are needed for unique 
        security reasons. This is expected to reduce costs while 
        providing quality utility services. The Navy has 751 systems 
        and the Marine Corps has 135 systems worldwide to be examined 
        for privatization. We have budgeted $11.2 million in fiscal 
        year 1999 and $33.7 million in fiscal year 2000 to perform the 
        necessary studies to meet the first DOD milestone: a 
        determination by 30 September 2000 of which utility systems to 
        try to privatize. Subsequent milestones are to issue all 
        Requests for Proposals by 30 September 2001, and to award all 
        contracts by 30 September 2003.
  --Claimant Consolidation/Regionalization of Base Operating Support 
        (BOS).--Effective 1 October 1998, the Navy consolidated the 
        number of major commands with BOS responsibilities from 18 to 
        8. Regional BOS Commands have been established to manage the 
        BOS functions. This consolidation will allow smaller commands 
        to focus on their primary mission, and provide new 
        opportunities to optimize these functions under a single 
        commander in a Navy fleet concentration area. The Regional BOS 
        Commanders are now pursuing ways to develop more effective 
        business practices.
  --Smart Base.--Smart Base is an attempt to bring off-the-shelf modern 
        technology and business practices to Navy applications. A 
        variety of demonstrations are planned or underway that promise 
        to increase efficiency and reduce costs. One example is 
        Distributed Learning Centers (DLC), which provide classroom 
        skill training without the need to travel to a distant 
        schoolhouse. DLC is now deployed at 90 sites. Another example 
        is Small Procurement Electronic Data Interchange (SPEDI), which 
        provides paperless ordering of standard supplies and material 
        on-line.
                               conclusion
    In conclusion, I believe the DON infrastructure program is now 
stronger than it has been in recent memory. Some of the additional 
topline relief made available to the DON has been applied to our 
programs. I believe we have truly turned the corner on our housing PPV 
effort. We are investing more military construction funds to renew and 
upgrade critical waterfront, maintenance, operational, and training 
facilities, while staying on track with our plans to improve the living 
conditions of our single Sailors and Marines. We are proceeding with 
numerous promising initiatives to make our infrastructure more 
responsive and less costly.
    There is admittedly some concern and potential risk in delayed 
execution by financing our fiscal year 2000 construction program using 
Advance Appropriations. However, with the help of the Congress, I 
believe that we can safely manage this new effort with no real impact 
on construction time lines.
    That concludes my statement. I appreciate the support that this 
Committee and its Staff has given us in the past, and I look forward to 
continued close cooperation in the future.

    Senator Burns. Thank you, Mr. Secretary.
    We welcome our good friend, Senator Murray, from 
Washington, the ranking member on this committee. If you have 
an opening statement, we would like to hear from you now.

                  Prepared Statement of Senator Murray

    Senator Murray. Well, thank you, Mr. Chairman. I apologize 
for being late. I am trying to juggle several committee 
hearings this morning. I will just submit my statement for the 
record so that we can get to the questions for the panel. But 
just let me express my concern about the incremental funding 
plans, as you have as well, and I hope that we can work through 
that process and come to some good conclusions.
    So, thank you very much.
    [The statement follows:]
               Prepared Statement of Senator Patty Murray
    Thank you, Mr. Chairman, for scheduling this hearing to discuss the 
fiscal year 2000 construction program proposed by our navy and defense 
agencies.
    I share the concerns that you have raised regarding the incremental 
funding plan for military construction proposed by the defense 
department. I have not detected a great deal of enthusiasm for this 
scheme from any source, including those who devised it.
    Given the lukewarm endorsement of this plan by the services, I'm 
sure the chilly reception it has received on Capitol Hill comes as no 
surprise to any of our witnesses.
    It is clear to me that there are a number of risks associated with 
this plan.
    The services have indicated that they can execute construction 
projects under this incremental funding formula, and I have great faith 
in their ability, but they have also acknowledged that incremental 
funding could drive up costs, will definitely complicate oversight, and 
could result in schedule delays.
    This is not an auspicious start to preparing our services to meet 
the challenges of the New Millennium.
    The fact is, the infrastructure and quality of life programs that 
the Military Construction Appropriations Subcommittee oversees are 
crucial to the morale and readiness of our armed forces.
    This is not an area in which we can afford to cut corners.
    I have heard over and over again about the importance of quality of 
life issues to the men and women who serve in our military, and to 
their families. Deteriorating infrastructure at U.S. bases in this 
country and around the world is hampering our military's readiness at a 
time when the operating tempo is soaring.
    Increased deployments are putting an added strain on families at a 
time when military family resources--housing, schools, clinics, support 
services--are struggling just to keep up with demand.
    I note, for example, that ms. McGinn, in her prepared statement, 
says that the defense department is currently meeting only 58 percent 
of the total child care needs of the military members, and that the 
goal is to meet 65 percent by the year 2003. That leaves a huge gap in 
childcare services, which, as any working parent knows, is a necessity, 
not a luxury.
    While I appreciate the fact that the defense department is working 
to find a variety of solutions to meet child care demands, the fact 
remains that all the creative thinking in the world won't help families 
who need quality child care now.
    I am convinced that the military will never solve its recruitment 
and retention problems unless it pays significantly more attention--and 
commits a significantly larger proportion of its resources--to family 
needs. I am in no way attempting to imply that quality of life issues 
are more important than war fighting capabilities, but I do contend 
that both are essential elements of readiness, and both deserve our 
support. know that you take very seriously the responsibilities of this 
subcommittee, and I commend you for the fair and even-handed leadership 
that you have consistently demonstrated in your handling of the many 
demands placed before this panel.
    Given the budget constraints that we are facing, this is likely to 
be a more challenging year than usual. I wholeheartedly hope, in terms 
of proposals to finance military construction, that it is also an 
aberrant year, and that incremental funding proposals will not become a 
habit.
    Thank you, Mr. Chairman. I welcome our witnesses, and I look 
forward to hearing their testimony.

    Senator Burns. We are joined now with a little Alaska 
sunshine, Senator Stevens, the full chairman of the 
Appropriations Committee.

                      STATEMENT OF SENATOR STEVENS

    Senator Stevens. Thank you, Mr. Chairman.
    I, too, am worried about the problem of this deferred 
construction concept in the MILCON accounts, and I think we 
better find a middle ground fairly soon. We are trying to make 
some study to see whether this concept will drive construction 
costs up because of the risk factor involved in continued 
appropriations for some, as opposed to others.
    In tight budgets, people like to know, when they get a 
contract, think that the money is in the bank, literally. We 
have always believed that it got us a lower price when people 
knew they really had the money tied down. The contractors have 
not been heard yet on this. I think, Mr. Chairman, we ought to 
think about getting some contractors to come in and tell us, if 
it is possible, what impact this new process would have on 
these contracts.
    I remember once when Senator Stennis had a similar 
suggestion about starting a major naval vessel with a down 
payment and how he reacted. That was short-lived, and he was 
capable of making decisions and sticking to them.
    I think our problem now is that we do have a ceiling here 
for the year 2000. If I am right, we are going to get the wall 
between defense and non-defense spending back again in the 
congressional budget resolution when it is not in the 
administration's budget. That needs to be explored also, to see 
how confusing that is going to become as we try to avoid 
another train wreck, as we call it, having an omnibus bill at 
the end of this session.
    But, I do want to tell you I am grateful to you for your 
concept of leasing before final turnover of facilities. I am 
particularly concerned still with the Adak situation. Your 
people have been very willing to consider the concept of 
leasing prior to final turnover. I think there are some of 
those areas that ought to be accelerated, and they should 
consider additional facilities that could be leased, because 
currently the limitations are very great.
    In addition to that, there are some areas that are sort of 
out of bounds for the people who are trying to work there 
because of classification under the environmental concerns. 
Because environmental concerns have been expressed in some 
areas, I would like to have them reviewed. I think we are being 
too strict about that. If Navy personnel were able to operate 
there for the period since World War II on those properties 
without harm to the person, without extensive risks to the 
employees, I do not know why they should suddenly become out of 
bounds as far as successors in operation are concerned. They 
have expressed great consternation to me about that.
    Have you been out there lately, Mr. Secretary?
    Mr. Pirie. I have not been there in about 3 years, Mr. 
Chairman.
    Senator Stevens. I hate to tell you, I have not been out 
there in about that time, too. Why don't we take a trip out 
there some time this year and take a look? Because I keep 
getting reports that the future of that civilian takeover is 
going to be severely impacted if they do not get access to the 
properties they need to commence business operations, 
particularly going into fuel supply for the trans-Pacific 
airlines and air cargo carriers, and into some concept of pre-
port fabrication of materials brought through there by air 
cargo operations. If that does not get started soon, it will 
not be a possibility, with the longer- and longer-range 
aircraft being available to all the carriers.
    Thank you very much, Mr. Chairman.
    Mr. Pirie. I would be glad to work with you, Mr. Chairman, 
on those issues.
    Senator Stevens. I appreciate that. I am just dropping by. 
We have about five subcommittees meeting at the same time this 
morning. I think I have some questions I will submit for the 
record for you all. Thank you very much.

                          INCREMENTAL FUNDING

    Senator Burns. Thank you, Mr. Chairman. We appreciate your 
comments. And I will tell you that we started a review on some 
of this, Mr. Chairman, with the Secretary, and that continues. 
So, we appreciate that.
    Secretary Pirie, I am still concerned about the 
Department's plan to phase-fund military construction in 2000. 
I recognize that there is tremendous fiscal year pressures to 
realign money. We know where those pressures are coming from, 
and I am afraid that if the practice continues, it may have 
long-term implications on what we can do with this committee 
and the challenges we have had.
    Do you want to comment on that? Because the realignment of 
money this past year--this past 2 years, really--has been 
substantial.
    Mr. Pirie. Well, Mr. Chairman, I guess I share Senator 
Stevens' concern about the amount of risk that we are imposing 
on the people that we are dealing with and the effect that that 
is going to have on what they are going to have to charge in 
order for them to operate responsibly and for them to get 
access to financing. Admiral Smith looked into this and talked 
to some people about this. And I think he can expand on that.
    Senator Burns. Admiral Smith?
    Admiral Smith. Senator, as the head of the contracting 
agency for the Navy that executes the military construction 
program, when this concept was first broached, sir, I called in 
all of my attorneys and contract specialists, and we first went 
over the legalities of actually executing a program this way. 
And after we had determined that it could be done in accordance 
with the Federal Acquisition Regulations and with existing law, 
I then said, well, what is our risk here, what is it going to 
cost us? And, to be honest with you, we could not tell.
    So, I made a couple of phone calls. And I called the 
president of the Association of General Contractors, as well as 
the CEO of a major construction company in America. And I asked 
them specifically, if I put a clause in a contract that says, 
``subject to the availability of funds,'' will it cost me any 
money; and, if so, how much?
    In both cases, my friends said it will definitely cost you 
more money. However, it will vary with the contract. And it 
will vary with the project. And we cannot tell you it will be 
$10, a half a percent or 20 percent, because it will vary with 
the project. But it will be in there. And, oh, by the way, it 
may well restrict the number of people who are interested in 
doing government work, as opposed to the way it is now.
    Senator Burns. Admiral, were you successful in any way of 
determining our old conventional way of financing those 
projects, how much more that cost is going to be?
    Admiral Smith. No, sir. And I tried to press them on that, 
because they tend to be very, very detailed in their cost 
accounting, on what it costs them to do work. And they of 
course do work for the private sector, as well as the public 
sector. And they said, no, it is just a matter of introducing 
risk into a business deal, and we will put an extra percentage 
on the side. But it will vary with the job, so we cannot give 
you a singular answer.
    Senator Burns. Did that make you think that maybe this 
approach may have to be looked into further, though?
    Admiral Smith. Yes, sir. Again, I am always concerned about 
getting the best value in any procurement for the taxpayers. 
And if there would be extra administrative costs or uncertainty 
costs in here, from my perspective, personally, it certainly 
would be something that we would want to look at.

                                BARRACKS

    Senator Burns. Secretary Pirie, I understand that the Navy 
will not be able to implement the 1-plus-1 standard until 2013. 
That is 14 years out there. And, by the way, looking out into 
the future, the only time we talk about that is sort of with 
the budget. We do not look at the immediate needs. I can 
remember one time we held a hearing on Y2K in 1991. We did not 
get one drop of ink, and now everybody is in this crash program 
of Y2K.
    I am wondering, is the Navy allocating sufficient resources 
to solve this problem? And do you have a handle on that, when 
we spread that out that far, the total cost? I have a feeling 
it is going to cost us more.
    Mr. Pirie. I am not sure about whether it is going to cost 
us more, Mr. Chairman. We are putting about $120 million a year 
in MILCON for Navy Bachelor Quarters (BQ's) and $90 million for 
real property maintenance. Not making the 1-plus-1 by 2013 is 
not the whole question by any means. Because we have a 
succession of other kinds of standards which are going to 
improve quality of life for people other than the 1-plus-1's--
for example, the 2-plus-0's that we are putting in for the A 
schools and for transients or the barracks we are building for 
recruits.
    So, even though it takes us a long while to converge on 
getting 1-plus-1 for everybody, we are steadily improving the 
overall quality of our barracks housing for single sailors. And 
I think that goes for the marines, as well.
    Senator Burns. Yes, I want to hear from General 
Higginbotham.
    General Higginbotham. Sir, we have a little bit different 
challenge. And what we are looking to do, at least with the 
2000 money, is be able to get our marines out of gang head and 
open squad bays by the year 2005. But it is also going to take 
until 2037 just to get our marines in the two men per room. 
Now, that is not 2-by-0, that is just two men per room.
    Senator Burns. Do not plan on me being there to cut the 
ribbon. [Laughter.]
    General Higginbotham. Right. So, that is really reaching 
out there.
    What we have recently done, though, the Commandant and I 
have put together a 10-year plan that will improve those 
numbers. But to be able to do that is going to require some 
enhancement. And so what we would really like to be able to do 
is have two men per room by the year 2020. And so we have a 
plan that will get us there, but it is going to take a little 
help to do that. And so that is what we are striving to do.
    So, we have a very aggressive plan in terms of the money 
that we are putting into MILCON and quality of life is very 
aggressive at this point.
    Senator Burns. Tell me, is it such a big, important item in 
retention? Is that a major item in retention?
    General Higginbotham. Absolutely.
    Senator Burns. From your observations.
    General Higginbotham. Oh, absolutely it is. In fact, during 
this past month, I had the opportunity--I visited every one of 
our installations in the Marine Corps to look at all of our 
fiscal year 2000 MILCON projects. And in particular, I went out 
to Twentynine Palms, and I looked at one facility they had out 
there for students. And in one barracks, we have six students 
per room, inadequate lighting, no adequate desks. And so it is 
that kind of environment that we really have to do something 
about.
    And so these are our young marines that, even though it is 
a Permanent Change of Station (PCS), they are there for a year 
to undergo schooling, that is really inadequate. So, that is 
really what we are trying to do, is put money into readiness, 
do something about Bachelor Enlisted Quarters (BEQ's) and 
quality of life. And so that is a principal piece of our focus.

                        RETENTION AND RECRUITING

    And, Mr. Chairman, if I could just make one other quick 
statement here, because in your opening statement you talked 
about retention and recruiting. And so, your Marine Corps is 
doing very well as it relates to recruiting and retention. We 
have made those goals 44 months straight.
    Now, with that said, this is tough business. And so we 
truly have our best marines out there recruiting. But it takes 
leadership and hard work to do it. But we are doing very well 
at this point.
    Senator Burns. Any comment, Admiral Totushek?
    Admiral Totuschek. No, sir.
    Senator Burns. Secretary Pirie, did you want to respond?
    Mr. Pirie. Well, I was just going to say, as to the 
retention value of improving the BQ's, I mean the Marsh panel 
was unequivocal about how important it is. And in my talking to 
young sailors and marines, when they see the kind of new 2-
plus-0's and 1-plus-1's, they are absolutely delighted. So, I 
think it is important.
    Senator Burns. Well, I do, too. When we started down this 
road, and when Senator Murray and I assumed this subcommittee, 
we made that decision that we were going to do those things. 
However, I am still in an old buggy whip attitude. There were 
63 in my room in F-212, 3rd Marine Division [Laughter.]
    Senator Murray. Are you recommending that, Mr. Chairman?
    Senator Burns. No, I am not. [Laughter.]
    It caused some problems every now and again. [Laughter.]

                            BARRACKS FUNDING

    Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.
    Let me just quickly follow up on that last question. A 40-
year program, is that aggressive? I do not understand. You are 
describing a 40-year program to meet the housing needs. That 
does not feel to me like a very aggressive program.
    General Higginbotham. Well, the problem is it is all about 
money. And so what we have got to be able to do in the Marine 
Corps, in terms of our total obligational authority, is that we 
have got to balance that money with readiness--in this case, 
readiness, modernization and our military construction family 
programs. And so part of our challenge today is that we have 
aging equipment. As an example, our amphibious assault vehicle 
is now 27 years old. We are going to have to spend $309 million 
here in the next couple of years for an improvement program, 
that we call a Reliability, Availability, Maintainability and 
rebuild to standard (RAM/RS) program, to be able to extend the 
life of that vehicle out to 36 years, until the Advanced 
Amphibious Assault Vehicle comes on line.
    And so that is part of our significant problem today. And 
to be able to fund our spares today; our repairables has 
increased 104 percent in cost just during the last several 
years. And so we have gone from $82 for an average equipment 
repair order up to $190-some at this point in time.
    So, it is readiness that has taken more of our money. And 
so modernization certainly is the central theme to all of this. 
We have got to do something about that. But, clearly, the 
Commandant is committed to making sure that our marines have 
equipment that works, that it is ready, because that is the 
true indicator of quality of life, is to bring them home alive. 
And so we have got to be able to split that money out into 
those different pots.
    Senator Murray. Right, I understand. It is a difficult 
challenge, but it still has a lot to do with retention and 
morale. And we need to really, I think, aggressively go after 
it.

                          INCREMENTAL FUNDING

    Mr. Secretary, let me just ask you if you were consulted on 
the idea of incrementally funding the military construction 
program and, if so, did you recommend funding the plan?
    Mr. Pirie. I was not consulted prior to that decision being 
made. After it was made, we were consulted on how much of a 
safety factor might be appropriate to put in. But we were not 
given the opportunity to argue for the reversal of the 
decision.
    Senator Murray. Okay. Admiral Smith, let me just follow up. 
You were talking about talking with the general contractors, 
and they said that it was going to cost more money. Did they 
define exactly why for you, so we can understand that?
    Admiral Smith. Their concerns, of course, are, in any 
business deal, the uncertainty associated with it. And since of 
course we always pay them after they have done the work, they 
will generally have to go to a bank or some other lending 
institution to obtain financing. And of course the bankers tend 
to look askance at anything in their contract against which 
their borrowing the money that might not get them paid on time 
or might not get them the funds for the work that has been 
performed. So, again, from their perspective, it is more 
uncertainty in the deal than had historically been there.
    Senator Murray. So, there is not anything concrete except 
for perhaps financial loan interest?
    Admiral Smith. Yes, ma'am.
    Senator Murray. Okay. Mr. Secretary, if the fiscal year 
2000 military construction budget is restricted to $5.4 
billion, without incremental funding, it will obviously result 
in many projects going unfunded for at least a year. In your 
opinion, what impact is that going to have on retention and 
readiness and morale in the Navy and Marine Corps?
    Mr. Pirie. Well, it is pretty hard to quantify it exactly, 
Senator Murray. But it is not going to help it. It will not be 
good. And if we are not given the appropriations and 
authorization for what we have asked for in terms of 
appropriations, it is going to essentially defer the rest of 
those things 9 months to a year.
    Senator Murray. As you know, one of my primary concerns has 
been quality-of-life issues. And my concern is that these are 
going to be left behind, with very limited resources, if we 
prioritize pier modernization and environmental compliance or 
maintenance and repair. And I know that you can point to your 
plan to fund bachelor enlisted quarters, but those are very 
expensive projects. Assuming that we find this advanced 
appropriations notion untenable and find we have to fully fund 
projects at a much lower number than any of us want, how are 
you going to prioritize some of these quality-of-life issues?
    Mr. Pirie. I think, at the moment, we have provided a list 
in the order that they were originally developed at our 
planning board. And we will probably simply defer the rest of 
the projects that do not come under that funding cap until 
either very late in the fiscal year or the beginning of next 
fiscal year.
    General Higginbotham. Ms. Murray, may I make a comment 
about that?
    Senator Murray. Yes, General.
    General Higginbotham. We have 23 projects for the fiscal 
year 2000. And if we do not get the incremental funding, now we 
are going from $161.5 million down to $40.4 million, that 
means, out of 23 projects, perhaps we can fund maybe four, 
maybe five.
    Senator Murray. How are you going to prioritize those?
    General Higginbotham. We have a prioritized list at this 
point that we can provide for the record if you like.
    [The information follows:]

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                              Cumulative
                                                                                                Planning and Design               Authorized     Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   PLANNING AND DESIGN..........................      11,873      11,873
P-536..................................  MCAS New River, NC......................  AIRCRAFT TAXIWAY ADDITION....................         495      12,368
P-076..................................  MCB Camp Pendleton, CA..................  INTEGRATED COMMUNICATIONS HUB................       3,623      15,991
P-481..................................  MCAS Yuma, AZ...........................  LAND ACQUISITION.............................      13,731      29,722
P-495..................................  MCAGCC Twentynine Palms, CA.............  BACHELOR ENLISTED QUARTERS...................      18,195      47,917
P-063..................................  MCB Camp Pendleton, CA..................  ACADEMIC INSTRUCTION BUILDING................       6,155      54,072
P-568..................................  MCB Camp Pendleton, CA..................  MAINTENANCE/OPS FACILITY.....................       7,986      62,058
P-122..................................  MCB Hawaii..............................  CONTROL TOWER................................       5,486      67,544
P-935..................................  MCB Camp Lejeune, NC....................  ROAD AND UTILITY CONSTRUCTION................       8,339      75,883
P-022..................................  MCB Camp Pendleton, CA..................  TACTICAL VEHICLE MAINT FAC...................       8,573      84,456
P-413..................................  MCAS Beaufort, SC.......................  CORROSION CONTROL FACILITY...................       8,275      92,731
P-067..................................  MCB Camp Pendleton, CA..................  ARMORY.......................................       2,494      95,225
P-920..................................  MCLB Barstow, CA........................  TEST TRACK/TEST POND FACILITY................       4,445      99,670
P-619..................................  MCAGCC Twentynine Palms, CA.............  TACTICAL VEHICLE MAINT FAC...................      13,282     112,952
P-919..................................  MCLB Albany, GA.........................  ENGINEERING EQUIPMENT SHOP...................       5,960     118,912
P-478..................................  MCB Quantico, VA........................  BACHELOR ENLISTED QUARTERS...................      19,802     138,714
P-645..................................  MCAS New River, NC......................  FAMILY SERVICES CENTER.......................       1,271     139,985
P-437..................................  MCAS Yuma, AZ...........................  CHILD DEVELOPMENT CENTER ADDITION............       2,494     142,479
P-119..................................  MCB Camp Lejeune, NC....................  PHYSICAL FITNESS CENTER......................       4,026     146,505
P-069..................................  MCB Camp Pendleton, CA..................  SNCO ACADEMY, BEQ............................       9,266     155,771
P-285..................................  MCRD San Diego, CA......................  PHYSICAL FITNESS CENTER......................       3,044     158,815
P-384..................................  MCAS Beaufort, SC.......................  ARMY.........................................       1,700     160,515
P-535..................................  MCAGCC Twentynine Palms, CA.............  CAST TRAINER ADDITION........................       1,588     162,103
P-500..................................  MCAS New River, NC......................  PROPERTY CONTROL FACILITY....................       3,437     165,540
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Mr. Pirie. The budget submit lists these projects in order. 
So, that is the one we will work off for the moment, Senator 
Murray.
    General Higginbotham. But the point is that with that 
lesser amount of funding, that will have a serious impact on 
our ability to execute this 10-year plan that I am talking 
about now. But I also want to alleviate one of your concerns in 
terms of how we are committing our money. In the President's 
budget in 1996, we had identified $97.2 million for the fiscal 
year 2000, and we have committed $161.5 million. So, you can 
see that is an appreciable increase.
    And so General Krulak is very committed to funding quality 
of life and these construction programs. But we also feel like 
we need a little help to kind of improve our current status.

                          PUGET SOUND PROJECTS

    Senator Murray. Let me ask you one specific Washington 
State issue, which is a dredging project in the fiscal year 
2000 budget at Puget Sound and a D-5 missile support facility 
at the Puget Sound Shipyard. This is the first phase of a major 
project to modernize both the Trident fleet and the Submarine 
Base at Bangor. The Navy is also reportedly considering 
homeporting additional Trident submarines at Submarine Base 
Bangor. Can you tell me the scope and status of the proposals 
and what impact they are going to have on Kitsap County in my 
home State?
    Mr. Pirie. We can provide I think the detailed information 
for the record, Senator Murray. But it is true that we are 
doing considerable dredging and building a pier at Puget Sound 
Shipyard in support of carrier homeporting, and the Bangor 
construction project, as you know. As to the impact on the 
county, I will have to take that for the record.
    [The information follows:]

    The President's Fiscal Year 2000 budget includes a Puget Sound 
dredging project (MCON P-338, $14.85 million) and a D-5 missile support 
facility (MCON P-321, $6 million). MCON P-338 is sited at the Puget 
Sound Naval Shipyard in Bremerton to support CVN berth depth 
requirements and is not in any way connected with TRIDENT fleet 
requirements. The MCON P-321 project is sited at Bangor, not at the 
Puget Sound Naval Shipyard, and provides utility and site improvements 
to prepare for a limited D5 capability at Bangor.
    Regarding homeporting additional TRIDENT submarines at Bangor, the 
Navy is still studying final homeporting alternatives. However, the 
Navy has determined that the final number of TRIDENT submarines 
homeported in Bangor will not exceed the current number of 8.

    Senator Murray. Okay. I would appreciate getting that back. 
And I have some other questions that I would like to submit for 
the record, Mr. Chairman.

                         MILCON FUNDING LEVELS

    Senator Burns. Thank you, Senator Murray.
    Going back to what you said, General. You know, as near as 
4 years ago, I think this MILCON expenditure was between $10 
billion and $11 billion. Now we are down around $6 billion. 
That is what I alluded to a while ago in my statement, that the 
shifting of funds in the Department of Defense concerns me. Not 
only the mission of military construction, but then we are 
shifting those monies away. I am not real sure that our costs--
we may be putting more projects on line, but then are we, at 
this funding level, going to be able to fulfill those 
obligations in 3, 4 and 5 years?
    I see these costs starting to build up. Now, do you 
understand where I am coming from? I am probably not making 
myself too clear, but I am saying that it looks like we are 
going to run into a balloon-type of situation here in trying to 
maintain our funding levels.
    Mr. Pirie. Clearly, if we push a great deal of the 2000-
2001 appropriations into 2001, there is a substantial bow wave, 
yes, sir, Mr. Chairman.
    Senator Burns. Is that the way you see this?
    General Higginbotham. Yes, sir.
    Senator Burns. I just do not want to get us in a position 
to where we have to come back and it would be more costly just 
to complete the projects as we pushed them out. I would like to 
go back to put another billion dollars in here and take care of 
some obligations that we can pay for right now, and complete 
some of these projects, and still have a master plan of where 
we want to go.
    Do you have anything against that? I may have to wrestle my 
chairman a little bit.
    Mr. Pirie. Well, we can use all the help we can get, Mr. 
Chairman. [Laughter.]
    Senator Burns. I thought maybe that may be the answer.
    Mr. Pirie. I do not need to conceal my feeling about that.
    The projects that we have ongoing now are, by and large, 
fully funded. We have one or two incrementally funded projects 
and so forth. And those in fact were protected in this budget. 
That is, the full increments of the completion costs were 
protected.
    Senator Burns. But we have accelerated that, though, with 
this.
    Mr. Pirie. But there are others that have been pushed out, 
sir.

                  BASE REALIGNMENT AND CLOSURE [BRAC]

    Senator Burns. Yes. Now, tell me about--we have now 
completed, what, the fourth round of BRAC--savings there. There 
are some savings, I assume, from what you have told us. I am 
wondering, whenever we start crowding that out, what would be 
our future obligations if we have another round of BRAC.
    Mr. Pirie. Well, we will clearly have to put in the initial 
seed money up front to finance all of the expenses of BRAC, 
which include the moving of people, the buyouts and early 
retirements, and those kinds of programs, the building of new 
facilities at receiving installations that get activities from 
BRAC installations and so forth. And Admiral Smith has an 
eloquent line on how much you have to put up front to make the 
eventual savings and his concerns about how much we would have 
to put up for some additional rounds.
    Admiral Smith. Sir, in my previous position in the Navy, I 
was the Chief of Naval Operations' Civil Engineer. And so I was 
involved in the programming and the early project management of 
the first four rounds of BRAC. And in those first four rounds, 
the Navy expended something like a little over $10 billion to 
realize the annualized savings of about $2.5 billion a year. 
And we found that we stuck to our original projections pretty 
well in terms of the costs and the benefits.
    So, our estimate was about $4 up front for every dollar per 
year you would save over the long haul. And of course, those 
$2.5 billion a year in savings are in perpetuity. I mean we are 
no longer paying base operations costs to run the Naval Station 
in Charleston, that has been closed.
    As we go into the next round, since we of course picked a 
lot of low-hanging fruit in the first 178 realignments and 
closures, our estimate is it may cost us more, perhaps 4 and a 
half dollars, for every dollar per year of savings. So, we are 
watching that very closely as we go forward into hopefully 
another two rounds of BRAC in the future.
    Mr. Pirie. That means you recoup your initial expenses in 4 
and a half years. And, after that, everything that you get is 
free and clear.
    Senator Burns. And we are to complete those by what, 2001?
    Mr. Pirie. 2001 for the last round of BRAC, yes, sir.
    Admiral Smith. Yes, sir. And as Secretary Pirie correctly 
puts in his statement, the big savings are accrued when you get 
to the realign and close point. After that, the cleanup and 
dispose, which is where we are on many properties right now, 
most of your savings have already been realized when you come 
to that point.
    Senator Burns. Secretary Pirie, we had a hearing and we 
have discussed many times the cost of cleanup. And I assume 
that we are moving forward on that and we are staying within 
projected costs?
    Mr. Pirie. Yes, Mr. Chairman, we are. In fact, we have 
realized, over the course of the past few years, some 
significant savings over projected costs because of various 
kinds of efficiencies--negotiations with regulators to clean up 
to standards of use that the community is going to make rather 
than to national park standards, and other kinds of cost 
avoidances. So, we are on track to complete the projected 
cleanups.
    Admiral Smith.
    Admiral Smith. Yes, sir. No, I cannot really add anything 
to that. As a matter of fact, we have found that in working 
with the communities and the State and Federal regulators, we 
have actually been able to save money over original estimates 
on the cleanups.
    Senator Burns. Well, the reason I ask you about that is 
because, basically, we have incrementally funded BRAC accounts. 
We have done it in that respect. And we still have some 
obligations to pick up there between 2000 and 2001. I am still 
concerned about this incremental thing. That bothers me a lot. 
I just feel like we are going to get out there another 5 or 10 
years, and all at once we are going to be hit right between the 
eyes with a balloon-type thing. And I would like to prevent 
that or some problems down the line.

                           DEMOLITION PROGRAM

    Last year, we discussed the Navy's demolition program. It 
would appear that the program has been quite successful, from 
your reports. Do you have any idea how much we have saved on 
the demolition of some of those old buildings? Have you put a 
pencil to that? I know that is sort of a hypothetical question. 
It is probably into an area where you cannot. But how 
successful has it been, Admiral?
    Admiral Smith. Sir, I love the demolition programs. 
[Laughter.]
    Senator Burns. You just like to tear up things. [Laughter.]
    Admiral Smith. Yes, sir. I guess my mother would have told 
you that I was a destructive little boy.
    Mr. Pirie. Seabees with bulldozers, Mr. Chairman. 
[Laughter.]
    Admiral Smith. As you are probably aware, we have 
demolished over 6 million square feet of old buildings. And we 
have found a lot of things. We have found, almost 
serendipitously, that it has saved us a lot of money. For the 
most part, they were World War II or pre-World War II 
buildings. I would tell you, as an engineer, those temporary 
wood frame barracks buildings we built during the Second World 
War, that were only supposed to last 20 years, are still as 
sound as the dollar. I mean they are going wonderful. And I 
have no idea when they are going to come down.
    Senator Burns. Can you give us an idea of basically what 
are we talking about? What buildings? Give me an idea of which 
ones.
    Admiral Smith. If you will remember the barracks that we 
built during the Second World War, most of which have been--
they were two-story, wood frame structures, long, skinny, with 
central heads in them. Those convert to office spaces very 
well. And virtually all of them have been converted to office 
spaces now. Those are typical of the genre.
    We have also torn down production facilities, warehouse-
type facilities. It has really helped us in our consolidation 
efforts in the Navy. The unexpected benefit is not only do you 
get rid of an eyesore and a building that perhaps contains 
asbestos and other hazardous substances, but also now you do 
not have to run a steam line to it to heat it in the 
wintertime. And you do not have to replace that old building, 
so that the roof is now worth more than the building is.
    So, it has been an enormous success for us. It has helped 
us a very great deal. We are still scheduled to tear down about 
another 3 million to 4 million square feet over the next 2 
years. But if you go to some of our Naval stations, for 
example, the Naval Air Station at Breezy Point, it has really 
never looked better. We had forgotten how pretty our bases were 
until we tore down a lot of these old, unsightly buildings.
    Senator Burns. How much is out there yet to do?
    Admiral Smith. Our last Navy-wide survey said that we 
needed something like 10 million square feet demolished. I 
would tell you, sir, as an old public works officer, that 
people did not think they could get any money to do it, and 
they never really had the money to do it, so I do not think 
they really went as far in looking for demolition projects and 
candidates as they are now.
    If I could also go back to kind of your first opening 
statement. I have resisted the impulse to go and ask people how 
much money they have saved, because there are unscrupulous 
people out there in our budgeting process who would take those 
savings. And we are trying to encourage our base commanders, 
honestly, to use that money for other good things, because we 
worry they do not quite have enough. [Laughter.]
    So, maybe that is more candor than I should be showing 
here, Secretary Pirie. [Laughter.]
    Mr. Pirie. That is very subtlely stated. [Laughter.]
    Admiral Smith. Yes.
    Senator Burns. Very subtle. Would you like to respond to 
that, Mr. Secretary, in some way or other? That is a nice shade 
of red, by the way. [Laughter.]
    Mr. Pirie. I am not the budgeteer, sir. But I would point 
out that we also want to get these buildings down before they 
land on the Historical Register. [Laughter.]
    Admiral Smith. Absolutely.
    Mr. Pirie. Because that gives us some problems, as well.
    And, to be honest, it is not all World War II-vintage 
buildings. Some of the things we built in the sixties are 
looking pretty ugly now, too, and need to be done away with.
    General.

                    MARINE CORPS DEMOLITION PROGRAM

    General Higginbotham. Yes, sir, I would like to comment on 
it, as well. Since 1994, we have demolished 3.9 million square 
feet in our facilities. Last year, in 1998, 1 million square 
feet. This year, another 1.1 million square feet. And, by the 
year 2000, we will have demolished what we need to demolish.
    But we sort of look at it in terms of cost to savings. It 
is about a 5-to-1 ratio. And so, starting your sixth year, then 
you will realize cost savings associated with it.
    Senator Burns. I guess just to make the point, how many 
Quonset huts have you got left at Camp Pendleton?
    General Higginbotham. A whole bunch.
    Senator Burns. Have you?
    General Higginbotham. That is part of that $1 million this 
year. But when I talk about demolition, the buildings that we 
want to destroy, you know, that we no longer need.
    Senator Burns. Well, I still think we have got some at MCRD 
San Diego, do we not?
    Admiral Smith. Sure.
    General Higginbotham. Yes, sir, there are some.
    Admiral Smith. I believe there are some at Quantico, even, 
still.
    General Higginbotham. Right.
    Senator Burns. Well, Quantico, I do not worry too much 
about them. I just worry about Camp Pendleton and Marine Corps 
Recruit Depot [MCRD]. But I noticed when I was out there some 
time ago that most of them had been boarded up, though. They 
just have not been removed.
    General Higginbotham. Right.
    Senator Burns. And those will finally be removed?
    General Higginbotham. Yes, sir. In fact, if you go out to 
the Infantry Training School now, where historically you will 
see a lot of those old Quonset huts, we have new BEQ's being 
built as we speak. And so a lot of those buildings are in fact 
being replaced.

                            QUALITY OF LIFE

    Senator Burns. Any other comments? That is about the end of 
my questions. And I know we will probably have some more before 
we finally make it through this process. We would like just to 
keep the telephone lines open. But I think Senator Murray has 
expressed some concern, and I think it is a well-founded 
concern, on the incremental. I am not real sure I get a read 
from my own judgment. I cannot project out there, 5 and 6 and 
10 years from now, the problems that we may run into, 
especially how that will affect if we have another round or 
BRAC.
    I will tell you that I am going to go to the Armed Services 
Committee, and I am going to work very closely with Chairman 
Stevens, because the shift of funds and what we have to do and 
what we are expected to do in the quality of life, such as day 
care centers, we have pointed more to families than we ever 
have before, in medical facilities and medical care, those 
concern me greatly. And the shift away, to use that money 
somewhere else, even though it is in the Department of Defense, 
concerns me.
    Because I feel that we initiated a mission to improve that 
quality of life some 5 or 6 years ago, and with the help of 
Senator Murray. And I do not want to abandon that because we 
are shifting money away from our mission in military 
construction to other areas and what some would view as of 
doubtful expenditure. So, I am going to try to get you a little 
more money, to be right honest with you. I know we kind of beat 
up on you every now and again, but I think retention right now 
is utmost, and the morale of the troops. I know that is very, 
very important when you have to put together a fighting force. 
And that is what we have to maintain.
    So, I thank you for coming this morning.
    Do you have any other more questions?
    Senator Murray. No, thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Burns. Thank you. As we work on this, we will be 
working very closely with you. I thank you for coming this 
morning.
    Mr. Pirie. Thanks very much, Mr. Chairman.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                  Questions Submitted by Senator Burns
                              navy funding
    Question. Secretary Pirie, last year you informed me that the Navy 
spends approximately 1.7 to 1.8 percent of plant replacement value per 
year on facility maintenance. Has that number changed with the fiscal 
year 2000 Budget.
    Answer. The fiscal year 2000 budget request includes funds in Real 
Property Maintenance and Quality of Life Enhancements, Defense 
appropriations. Combining these accounts, the percentage remains 
essentially the same as the fiscal year 1999 enacted level.
                   navy public/private ventures (ppv)
    Question. Secretary Pirie, with respect to family housing 
privatization, I am concerned about Sailors and their families paying 
more to live in one of these projects than housing provided through 
traditional military construction. What assurances can you give me that 
they will not have out of pocket expenses?
    Answer. The Department of the Navy's goal for housing privatization 
projects is to ensure that rent plus costs associated with average 
utility consumption does not exceed the member's Basic Allowance for 
Housing (BAH). Privatization projects are being developed in accordance 
with this goal. Furthermore, safeguards will be incorporated to ensure 
that future rents to be paid by members will be linked with BAH growth. 
If a family consumes excessive utilities, they may incur out-of-pocket 
expenses.
    Question. What is the average lease period with the developers for 
these types of Navy privatization deals?
    Answer. Most projects involving the privatization of existing 
Government housing are anticipated to be 50-year deals. There may be 
some projects of shorter duration. The Navy is also using 15-year terms 
for Limited Partnership deals for housing on private land where our 
equity contribution is limited to cash. We remain flexible to consider 
other arrangements that would be mutually beneficial to all parties.
    Question. How will installations with family housing privatization 
ventures be treated in future rounds of BRAC?
    Answer. Installations with family housing privatization ventures 
will be treated no differently than any other installations (i.e., they 
will neither be penalized nor treated favorably). The Navy is 
developing its PPV plans in order to maintain the ability to terminate 
such agreements in the event it becomes necessary.
                      navy construction execution
    Question. Secretary Pirie, the Navy has greatly improved their 
construction project execution the past several years. How will advance 
appropriations and phased funding impact your execution?
    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.
                      navy construction execution
    Question. With some of the BRAC money split between fiscal year 
2000 and fiscal year 2001, how will that affect implementation of the 
1995 BRAC decisions?
    Answer. There will be no effect on the implementation of the 1995 
BRAC decision. The fiscal year 2000 appropriation request of $211.4 
million is only for that portion expected to be actually spent in 
fiscal year 2000, plus an additional factor for unforeseen actions. The 
Navy has already completed 93 percent (165 of 178) of all closures and 
realignments, and will complete an additional eight by the end of 
fiscal year 1999, four in fiscal year 2000, and one in fiscal year 
2001.
    Question. Explain the Navy's rationale for phasing the supervision, 
inspection, and overhead (SIOH) costs over a five-year period when the 
projects are phased in two years?
    Answer. SIOH annualization allowed the Department to realize a one-
time savings over the four-year implementation period by reducing the 
amounts of SIOH that are obligated but not yet expended.
    SIOH annualization was developed as a permanent change in the 
manner in which the Department will budget for such costs. Phasing the 
funding over five years aligns the SIOH funding with historic MILCON 
outlays. SIOH is obligated against a MILCON project based on the 
obligated amount of the contract or work order. SIOH is expended (or 
outlayed) from a project at the same rate as the construction contract 
or work order is outlayed.
    On the other hand, the use of advance appropriations to phase 
project costs over two years is a one-time effort to satisfy critical 
readiness shortfalls within the Department of Defense in fiscal year 
2000.
                                 ______
                                 
                Questions Submitted by Senator Hutchison
                  cleanup at dallas naval air station
    Question. It appears the successful redevelopment of the Dallas 
Naval Air Station (DNAS) is being threatened. Timing is particularly 
critical since the City of Dallas successfully completed a long-term 
lease agreement for a tenant corporation. This project has the 
potential to make DNAS one of the BRAC ``success stories'' by reusing 
the base and providing 1,500 jobs. Unfortunately, it could also become 
one of the BRAC ``horror stories'' if this opportunity is lost. In 
addition, some consideration should be given to the fact that most of 
the DNAS property has been leased from the City of Dallas for $1 per 
year for over 50 years.
    When will the Navy complete the environmental investigation and 
clean up work plan?
    Answer. The environmental investigation is complete and a clean-up 
schedule has been established which calls for cleanup to be completed 
in fiscal year 2001. The City of Dallas has been provided the 
opportunity to begin reuse of the leased property; in addition, the 
Navy is willing to work with the City on any specific case that may 
hinder redevelopment.
    The Navy continues to support the reuse efforts of the cities of 
Dallas and Grand Prairie and is committed to a successful transition 
from military to civilian use of the former Air Station.
                           timing of cleanup
    Question. The Navy is now scheduled to turn over the property on 
May 10, 1999. Is there any reason to think the Navy will not meet this 
commitment?
    Answer. The Navy is fully committed to terminating the lease for 
property at NAS Dallas by the date in question. Notification was given 
to the City of Dallas in a letter dated March 10, 1999 that the leased 
property would be returned to them by means of lease cancellation on 
May 10, 1999. The Texas Air National Guard (TANG) continues to occupy 
facilities at Dallas while construction of their new facilities is 
nearing completion at the Naval Air Station Joint Reserve Base Ft. 
Worth, Texas. The leased property cannot be terminated until TANG fully 
relocates which is scheduled for April 30, 1999. However, the Navy has 
notified the City of Dallas that a license can be issued to begin reuse 
for any facility not currently occupied by TANG.
                 clear zone at naval air station dallas
    Question. What is the Navy's plan for the ``clear zone?'' Since the 
commercial value of the whole property includes the clear zone (just as 
the Navy needed it for DNAS), will the Navy include the property in the 
land transfer to the City of Dallas? Is there any reason (or 
possibility) the Navy would instead offer the clear zone for open 
public sale?
    Answer. Because the Naval Air Station Dallas, Texas, was approved 
for closure under the Defense Base Closure and Realignment Act of 1990, 
Public Law, 101-510, as amended, the Navy must comply with prescribed 
federal real property and base closure disposal procedures under the 
Federal Property Management Regulations and applicable base closure 
statutes. BRAC law prohibits the Navy from including Navy owned ``clear 
zone'' property as part of the property being returned to the City of 
Dallas by means of lease termination. The cities can acquire the 
property by public benefit conveyance, negotiated sale, or if none of 
the previous methods are applicable, then through an economic 
development conveyance which allows a reduction of the sale price by 
incorporating discounts for certain development costs and job creation.
    The City of Grand Prairie has formally contacted the Navy and the 
Department of the Interior concerning a public benefit conveyance of 
the runway protection (clear) zone located north of Jefferson Boulevard 
for park and recreation purposes in order to protect the property from 
incompatible development. The City of Dallas is working with Grand 
Prairie for preservation of the lighting system and that will be 
addressed in the public benefit conveyance application. The Department 
of the Interior may recommend this conveyance at no cost.
    The City of Dallas has also notified the Navy that it is willing to 
pursue conveyance of other Navy-owned property of interest to the City 
via a negotiated sale. This method of acquisition requires a payment of 
fair market value to the Government. We are in the initial stages of 
this negotiated sale process and will be working with the City and the 
General Services Administration to facilitate the transfer.
                   perchlorate contamination expense
    Question. There is evidence of perchlorate contamination in surface 
and ground water around the Naval Weapons Industrial Reserve Plant 
McGregor, Texas. Although there is no current federally recognized safe 
limit of perchlorate, a draft Environment Protection Agency report 
recommended 32 parts per billion (ppb) as the limit for safe drinking 
water. It is my understanding that onsite and offsite testing found 
concentrations of the rocket-fuel oxidant as high as 22,000 ppb in 
onsite surface water and 5,500 ppb in boundary surface water. Sites 
toward Lake Belton measured 670 and 190 ppb. Fortunately, there is not 
yet any known contamination of the public drinking water.
    How extensive is the perchlorate contamination on and around the 
NWIRP?
    Answer. The perchlorate investigation began in August 1998. The 
ongoing investigation is very extensive and will identify the vertical 
and lateral extent of the perchlorate plume. Sufficient data should be 
available in the fall of 1999 to fully determine the extent of the 
perchlorate contamination.
    Question. What is the Navy's plan to monitor and clean up the 
contamination?
    Answer. To insure public protection, the Navy has sampled surface 
water at various locations on and off the facility property. No 
confirmatory sample analysis at the site where the earlier 
concentration of perchlorate was found to be 22,000 ppb was performed 
because the seep was dry, i.e., no flow. The Navy sampled and found no 
detectable concentration of perchlorate in all of the raw water 
intakes, located downstream on Lake Belton and Lake Waco, for the City 
of Waco's and the City of Temple's potable water systems.
    Perchlorate has been detected in water samples taken from the 
streams leaving the facility and flowing into Lake Belton and Lake 
Waco. In response, the Navy conducts monthly monitoring of the streams 
at strategic locations between the facility and the raw water intakes. 
In addition and contingent upon the property owner's permission, the 
Navy will also install wells within a 1-mile radius of the facility, as 
well as, along the watershed of each stream/creek flowing into Lake 
Waco and Lake Belton (Harris Creek, South Bosque River, and Station 
Creek). The Navy plans to conduct periodic sampling and monitoring of 
these wells to determine the concentration of perchlorate in the ground 
water.
    The technology for clean up of perchlorate is in its infancy. Two 
pilot projects for perchlorate clean up are actively being pursued for 
demonstration at McGregor under the Department of Defense Strategic 
Environmental Research and Development Program. In addition, an 
Interagency Perchlorate Steering Committee, comprised of EPA, DOD and 
industry representatives is conducting toxicity evaluations and cleanup 
technologies to establish realistic risk levels and exposure limits.
    Recently, the Navy discovered a perchlorate source in the soil 
within Area M on NWIRP McGregor. Samples are being taken to determine 
the vertical and lateral extent of contamination. During June, 1999, 
the Navy will begin cleanup of the site by removing the contamination 
source.
                     navy plans for mcgregor nwirf
    Question. Is there any impact on the Navy's program to decommission 
the site and cede it to the city of McGregor for industrial 
development?
    Answer. Prior to any property transfer, the extent and magnitude of 
all perchlorate and other contamination must be determined and a 
cleanup plan put in place. Perchlorate is one of many possible chemical 
contaminants being investigated. The existing perchlorate contamination 
and ongoing clean up is not expected to impact the property transfer. 
However, there are many other sites which may contain contamination 
sources that need to be investigated prior to property transfer. The 
Navy expects that all investigations will be completed during the year 
2001.
              navy cooperation with brazos river authority
    Question. How is the Navy cooperating with the Brazos River 
Authority, area health districts, water suppliers, and cities who have 
a valid interest in all aspects of this contamination?
    Answer. Yes. The Navy met with the Brazos River Authority, the 
Mayors of municipalities in Central Texas, EPA and Congressman Chet 
Edwards on March 9, 1999. The Navy also met with the Brazos River 
Authority, the City of Waco and the City of Temple on March 18-19, 1999 
and March 25, 1999. All meetings have been productive with the Navy 
providing full disclosure of all data they possess on perchlorate 
contamination. The Navy plans to continue its good working relationship 
with the Brazos River Authority and all stakeholders and provide all 
information concerning perchlorate contamination.
                                 ______
                                 
                 Questions Submitted by Senator Stevens
                    adak property disposal and reuse
    Question. Secretary Pirie, what is the status of the ordnance 
investigation of the former Naval Air Station, Adak?
    Answer. Navy has completed ordnance characterization of the main 
developed core (``downtown'') area, approximately 2,500 acres, and no 
further investigation or clearance of this area is required. The Navy 
has also completed the clearance of the only confirmed minefield site 
near Clam Lagoon. Other proposed minefield sites identified by World 
War II Island defensive plans have been investigated. No evidence of 
mines or other ordnance related items were discovered.
    The Navy has formulated a work plan for investigating other areas 
identified in World War II documentation as potential impact ranges, 
combat ranges, ammunition handling/storage areas, and gun emplacements. 
That work will be undertaken during 1999. The United States 
Environmental Protection Agency Region X, and the Alaska Department of 
Environmental Conservation have expressed concerns that the Navy work 
plan will not yield sufficient information to enable property transfer 
decisions. The issues involved are part of an emerging national policy 
discussion about the appropriate investigation and clearance of 
property with potential ordnance contamination. Discussions are 
underway with those agencies to attempt to resolve those concerns in a 
manner that would enable property transfer.
    Question. Will the Navy meet the necessary regulatory requirements 
in order to transfer the property to the Aleut Corporation or Local 
Reuse Authority by the end of the year?
    Answer. No. All environmental cleanup actions required by 
applicable regulations will be completed by the end of this year except 
ordnance issues outside the ``downtown'' area. There will not be a 
Record of Decision (ROD) for those issues until 2001 at the earliest.
    A ROD for Operable Unit A, which primarily addresses chemical and 
petroleum issues, but also includes ordnance within the ``downtown'' 
area, has been drafted and is pending signature by the Navy and 
concurrence by the United States Environmental Protection Agency Region 
X, and the Alaska Department of Environmental Conservation. This ROD 
will identify the remedial actions required pursuant to the 
Comprehensive Environmental Response, Compensation and Liability Act 
(CERCLA), as well as, a separate agreement between the Navy and the 
State of Alaska concerning petroleum cleanup issues. The remedial 
actions required by this ROD will all be completed, or, in the case of 
petroleum recovery systems, installed and operating properly by the end 
of this year.
    Operable Unit B consists of environmental cleanup of ordnance 
issues outside the ``downtown'' developed area. The Navy and the 
regulators have agreed on a proposed time line to complete a ROD for 
Operable Unit B, which shows completion in early 2001. However, the 
Navy and the regulators have not yet agreed that the Navy proposed 
approach to ordnance characterization is sufficient. Discussions are 
ongoing to attempt to resolve those differences.
    Question. What will be the cost of extending the island support 
services contract for an additional year while the ordnance situation 
is resolved?
    Answer. The cost of the current island services contract is 
approximately $15.7 million per year, and it is scheduled to terminate 
March 31, 2000. A one-year extension at the same scope would cost 
approximately the same.
    However, it will not be necessary for the Navy to operate the 
island support services at the current scope to support further 
ordnance characterization and/or clearance activities if required 
beyond the 1999 field season. In the event that additional field work 
is required, such work would be supported from vessels or from self-
contained base camps to the maximum extent possible due to the 
remoteness of the areas involved. Accordingly, the Navy is prepared to 
discontinue operation of island services at the current scope by the 
end of March 2000, and either turn such operations over to the Adak 
Reuse Corporation or reduce operations to the minimum required for Navy 
purposes.
    The Navy advised The Aleut Corporation (TAC) and the Adak Reuse 
Corporation (ARC) of these plans in November 1998. The Navy has had a 
number of transition planning meetings with TAC and ARC 
representatives, and has notified ARC that they should plan to assume 
operation of island support services by March 2000 in order to continue 
availability of such services to support reuse.
    Operation of island support services by the Navy at the current 
scope beyond the planned transition in March 2000 is not needed to 
support Navy requirements.
                                 ______
                                 
                 Questions Submitted by Senator Murray
                       washington state questions
    Question. The fiscal year 2000 budget includes a dredging project 
at Puget Sound and a D5 missile support facility at the Puget Sound 
shipyard. I understand that this is the first phase of a major project 
to modernize both the Trident fleet and the submarine base at Bangor. 
The Navy also reportedly is considering home porting additional Trident 
submarines at Submarine Base Bangor. Can you tell me the scope and 
status of the proposals, and what impact they will have on Kitsap 
County?
    Answer. The President's fiscal year 2000 budget includes a Puget 
Sound dredging project (MCON P-338, $14.85 million) and a D-5 missile 
support facility (MCON P-321, $6 million). MCON P-338 is sited at the 
Puget Sound Naval Shipyard in Bremerton to support CVN berth depth 
requirements and is not in any way connected with TRIDENT fleet 
requirements. The MCON P-321 project is sited at Bangor, not at the 
Puget Sound Naval Shipyard, and provides utility and site improvements 
to prepare for a limited D5 capability at Bangor.
    Regarding homeporting additional TRIDENT submarines at Bangor, the 
Navy is still studying final homeporting alternatives. However, the 
Navy has determined that the final number of TRIDENT submarines 
homeported in Bangor will not exceed the current number of 8.
    Question. Will the current work force at the Puget Sound shipyard 
be sufficient to carry out this work, or is it likely that the work 
force will have to be expanded? Do you have any estimate of the number 
of jobs this project could create?
    Answer. The dredging project at Puget Sound Naval Shipyard (NSY) is 
for CVNs. The modernization at SUBASE Bangor associated with the D-5 
missile system is primarily at the Strategic Weapons Facility Pacific 
and involves upgrades/changes to the handling and storage facilities, 
as well as, some work at the Explosive Handling Wharf (EHW). Although 
there are some major modifications, they will be relatively transparent 
to the rest of the base and will result in no personnel changes.
    There will be approximately $15 million in contracts awarded during 
fiscal year 2000-2005 for military construction and equipment 
installation associated with the D-5 project. Initial Operational 
Capability (IOC) for D-5 in Bangor will be May 2002.
    The current Navy plan will move two Atlantic Fleet SSBNs to SUBBASE 
Bangor in fiscal year 2003. This shift to Bangor will coincide with the 
removal from strategic service of two SSBNs currently at Bangor. 
Although the final disposition of the SSBNs removed from strategic 
service has yet to be determined, they will likely continue to be in a 
shipyard. The net result is that there will be no appreciable change in 
the number of industrial personnel assigned to SUBBASE Bangor.
    Based on current projections, the Puget Sound NSY current work 
force level will be sufficient to support the depot level maintenance 
requirements of Bangor homeported SSBNs. This includes a SSBN fiscal 
year 2000 Overhaul/D5 backfit and a SSBN fiscal year 2001 Overhaul/D5 
backfit.
    Question. What is the total military construction cost estimate and 
timetable for modernizing the Submarine Base at Bangor?
    Answer. Projects currently on the MCON FYDP for SUBASE Bangor are: 
fiscal year 2004 P-199 BEQ $20.7M and fiscal year 2005 P-188 Lower Base 
Fitness Facility $0.9M.
    Question. If additional submarines were homeported in Washington 
State, how many additional military personnel would be based at Bangor? 
What impact would that have on other military construction needs in the 
area, such as barracks, family housing, schools and the like?
    Answer. The Navy is still studying final homeporting alternatives 
in Washington State. However, the Navy has determined that the final 
number of TRIDENT submarines homeported in Bangor will not exceed the 
current number of 8. Any operational, personnel support, housing, and 
school facility impacts on Kitsap County due to homeporting changes 
would be analyzed as part of the National Environmental Policy Act 
(NEPA) process (if required) and required facilities would be 
identified, developed, and programmed through appropriate military 
construction projects.
    Question. Has a decision been made yet on where the Jimmy Carter 
nuclear submarine will be homeported? Is Bangor under consideration? 
When will a decision be made? With the dredging project in this year's 
budget, what other improvements would the Bangor Submarine Base need to 
accommodate the Jimmy Carter?
    Answer. A final decision on where to homeport U.S.S. Jimmy Carter 
(SSN 23) has not been made. With a limited number of submarine assets 
available to meet a variety of mission requirements, there are many 
factors that must be weighed prior to reaching a final homeport 
decision. Bangor is one of the Navy bases under consideration to be the 
homeport for Jimmy Carter. I expect a decision to be made during fiscal 
year 2000. The entire infrastructure must be evaluated to ensure that 
the homeport can adequately support the ship.
        advanced appropriations in milcon and its affect on bmar
    Question. Mr. Pirie, in your testimony you talk about the Navy and 
Marine's backlog of maintenance and repair. I know you've talked to 
this Subcommittee about your backlog concerns in the past, and your 
testimony indicates a genuine concern for the rate at which this is 
growing. How do you think the proposed budgetary gimmick of advanced 
appropriating will impact your backlog problem?
    Answer. There will be no impact on the Real Property Maintenance 
backlog if the Congress supports the Administration position on Advance 
Appropriation of Military Construction, or otherwise fully funds 
construction projects. The backlog will increase if any replacement/
modernization construction projects must be deferred.
                   backlog of maintenance and repair
    Question. As you know, I'm very concerned about the quality of life 
of our troops. I note that your backlog in family housing for the Navy 
is $2.2 billion and $1.3 billion for the Marines. Maintenance and 
repair takes on a much more human meaning when we're talking about the 
actual residences of our servicemen and women and their families. What 
would it take financially to actually begin chipping away at this major 
shortfall?
    Answer. Beginning in fiscal year 1994, the Navy began to make a 
significant investment in the revitalization of the unsuitable military 
family housing inventory. The Navy plans to eliminate the remaining 
backlog of existing unsuitable homes by the end of fiscal year 2005 
through replacement construction, improvement and repair projects and, 
where feasible, privatization initiatives in CONUS.
    The Marine Corps is chipping away significantly at the 
revitalization backlog and has implemented a plan that will eliminate 
this backlog by fiscal year 2012. This investment, coupled with the 
moderate implementation of the Military Housing Privatization 
Initiatives, will allow the Marine Corps to reduce the backlog by 66 
percent to $439 million at the end of fiscal year 2005.
                    quality of life-defense account
    Question. Mr. Pirie, I note in your fiscal year 2000 budget, $643 
million of the Navy's Real Property Maintenance funds are included in 
the Quality of Life Enhancements, Defense account. Can you tell the 
Subcommittee why you've made this change and what you expect the 
benefits will be?
    Answer. The Department of Defense followed recent Congressional 
practice and budgeted funds in Quality of Life Enhancements, Defense 
instead of the Operations and Maintenance appropriations. The action 
gives these funds special emphasis and encourages more management 
flexibility by providing them a two-year life.
                             family housing
    Question. Mr. Pirie, Everett, Washington was one of two public/
private venture projects that the Navy undertook in the last few years. 
The Navy invested $5.9 million in a limited partnership with Dujardin 
Development Company to manage 185 homes off base at an area called 
Country Manor. Could you tell me how you rate the success of this 
venture?
    Answer. The Navy's limited partnership in Everett, Washington 
successfully achieved the goals established for that project: 1) 
construction of quality units; 2) establishment of below market rents; 
and 3) minimize Navy's capital investment. The units are fully occupied 
by Navy enlisted families, and there is a waiting list for these units. 
While the rental rates for the units are less than the prevailing 
market rates, junior enlisted families, especially those who have a 
need for the three-and four-bedroom units, are absorbing a significant 
portion of the total monthly shelter cost (rent and utilities). To 
reduce the out-of-pocket cost burden for these families, the Navy 
notified Congress of our intent to modify the existing limited 
partnership agreement to include provisions for differential lease 
payments. The Navy anticipates submitting a notification for funds 
transfer and agreement modification in the spring of 1999.
    Question. What lessons has the Navy learned from its experience 
both here and at Naval Air Station Corpus Christi?
    Answer. The Navy gained valuable experience in structuring a 
public-private partnership during the execution of the projects in 
Everett, Washington, and the Corpus Christi area, Texas, including:
  --The importance of site location, desirability, environmental 
        conditions, availability of utilities and local zoning cannot 
        be overstated. The Navy's current projects require developers 
        to identify proposed sites at the Request for Qualification 
        stage, thereby providing more time to complete environmental 
        reviews and achieve any local approvals that may be required.
  --Local governmental jurisdictions have a role to play in most 
        privatization projects. The Navy will work with local 
        governments, early in the process, to address and resolve 
        issues that could affect development.
  --Financial risk and return analysis must be accurate and current 
        throughout the process as final agreements are negotiated. The 
        Navy's objective is quality, well--maintained and affordable 
        units. The developer's objective is profit. If the deal is 
        properly structured, both objectives can be met.
  --An active residual management/stewardship function is essential to 
        the overall continuing success of a Navy public/private 
        ventures (PPV) project. Detailed processes and procedures for 
        every aspect of our residual management responsibility have 
        been established, and are continuously being updated and 
        refined.
    Question. I understand we're to expect a Congressional notification 
regarding a new limited partnership agreement for Everett. Can you 
estimate when we'll be hearing from you on this?
    Answer. The Navy submitted a pre-solicitation notification for a 
follow-on Everett, Washington project on 1 October 1998. Proposals have 
been received and are currently under evaluation. The Navy anticipates 
submitting a funds transfer and project award notification in early 
fiscal year 2000.
    Question. In your testimony, you mention that the House MILCON 
Subcommittee is concerned with your intent to solicit PPV projects in 
Texas, San Diego, Lemoore, Maine and New Orleans. Can you comment on 
the nature of the House concerns?
    Answer. The House MILCON Subcommittee has expressed concerns about 
the scope and pace of the Navy's housing privatization plan. They are 
also concerned about how the Government's interests will be protected 
over the course of the privatization agreement.
    We are continuing to work with the Subcommittee to address their 
concerns.
    Question. Do you have any concerns that we are giving up too much 
control, or that there may be security concerns with having a private 
entity responsible for our military housing?
    Answer. The Navy proposes to leverage our units and land assets 
through a public-private entity (e.g., a Limited Liability Company 
(LLC)) that includes the Navy. The Navy will be a partner in the deal, 
and as such will be able to affect the key decisions made by the entity 
over the long-term. Navy and Marine Corps families occupy these units 
now, and will continue to do so for the foreseeable future. Given these 
long-term requirements, and our fiduciary responsibility to protect the 
Government's assets, it is our intention to remain actively involved 
and therefore retain a measure of control. We will include provisions 
in our privatization agreements that afford protection to the 
Government's interests.
    We do not envision any security concerns associated with the 
privatization of military housing. Most of the Navy's family housing 
units being evaluated for privatization are either located in the 
surrounding communities or at the perimeter of the Base. Given the 
possibility that exists if unforeseen manpower reductions at an 
installation cause the housing supply to exceed the military 
requirements, the Marines are structuring the agreements with the 
developer so only military members would be assigned to interior 
parcels and all civilians to off-base or perimeter parcels.
                            Defense Agencies

                    U.S. Special Operations Command

STATEMENT OF REAR ADM. RALPH E. SUGGS, USN, DEPUTY 
            COMMANER IN CHIEF

                      Tricare Management Activity

STATEMENT OF REAR ADM. THOMAS F. CARRATO, PHS, CHIEF 
            OPERATING OFFICER

                        Defense Logistics Agency

STATEMENT OF FREDERICK N. BAILLIE, EXECUTIVE DIRECTOR 
            OF RESOURCES, PLANNING, AND PERFORMANCE, 
            DEFENSE LOGISTICS SUPPORT COMMAND

               Personnel Support, Families and Education

STATEMENT OF GAIL H. MCGINN, ACTING DEPUTY ASSISTANT 
            SECRETARY OF DEFENSE
    Senator Burns. Now, we will hear from our second panel this 
morning, representing the Defense agencies. We will hear from 
Rear Admiral Ralph Suggs, Deputy Commander in Chief, U.S. 
Special Operations Command; Admiral Carrato, Chief Operating 
Officer of TRICARE Management Activity, and we certainly 
appreciate you coming this morning, the Executive Director of 
the Defense Logistics Agency, Frederick Baillie; and Ms. Gail 
McGinn, Acting Deputy Assistant Secretary of Defense for 
Personnel Support, Families and Education. And we appreciate 
what a mission you have, by the way.
    We will let the room settle down here just a little bit. 
Thank you. We appreciate you being with us today. I hope this 
testimony this morning will provide this subcommittee with an 
overview of your respective agency's proposals for the 2000 
budget. All your statements, if you have prepared statements, 
will be made a part of the record in their entirety, and if you 
want to capsulate, that is fine. We will do a dialogue up here.
    Senator Murray.
    Senator Murray. Thank you, Mr. Chairman. I welcome all the 
witnesses. I look forward to your testimony.
    Admiral Suggs. Good morning Senator Burns and Senator 
Murray. I am pleased to be here today to discuss the fiscal 
year 2000 military construction budget request for the United 
States Special Operations Command. I am Rear Admiral Ralph 
Suggs, the Deputy Command in Chief of the Special Operations 
Command. I just recently joined the Command, after commanding 
Carrier Group 6, known as the John C. Stennis Battle Group, 
returning from the Gulf last fall.
    I am accompanied this morning by Lt. Colonel Steve McCain, 
from our congressional liaison staff, as well as Mr. Steve 
Dwight, who is our command engineer.
    I will submit my formal statement for the record and 
present a brief summary this morning, if I could.
    Our military construction program has a direct, positive 
and enduring impact on our joint special operations capability, 
as you all know. The Command's Guard, Reserve and active duty 
soldiers, sailors and airmen possess highly specialized skills 
required to successfully execute the full range of joint 
special operations. The current military construction program 
is planned to provide essential--and I underline 
``essential''--facilities that preserve and improve force 
capability, increase the readiness of complex weapon systems--
which really means our people--and support demanding training 
needs.

                   SPECIAL OPERATIONS COMMAND (SOCOM)

    Our military construction budget request for fiscal year 
2000 is $58.6 million--$50.6 million for major construction, 
$2.3 million for unspecified minor construction, and $5.7 
million for planning and design for future projects. We feel 
this is fairly modest, relatively. Approval of this program is 
essential to the continued development of joint special 
operations forces, which support America's national security 
needs.
    This committee's support in prior years has greatly 
improved our operations capability. We look forward to working 
with you all to acquire the facilities needed by our people at 
USSOCOM, so that they can perform the mission that you expect.

                           PREPARED STATEMENT

    Thank you for the opportunity to meet with you all this 
morning, and I look forward to entertaining your questions.
    [Statement follows:]
           Prepared Statement of Rear Admiral Ralph E. Suggs
                              introduction
    Mr. Chairman and members of the committee, I am pleased to present 
the United States Special Operations Command (USSOCOM) fiscal year 2000 
Military Construction (MILCON) submittal. Our MILCON program has a 
direct, positive impact on our training and operational capabilities. 
The highly specialized skills and equipment required to successfully 
execute the full spectrum of special operations missions also demand a 
modern array of operations, training, maintenance and storage 
facilities.
                                purpose
    The long term goal of the USSOCOM facilities program, of which 
MILCON is one part, is to have all units and individuals working and 
living in adequate facilities in order to maximize training and 
operations capabilities. Facilities requirements are generated by the 
need to modernize and replace inadequate facilities and the need to 
support new weapons systems, force structure, and missions. The current 
program is planned to provide facilities that will improve force 
capability, increase readiness of complex weapons systems, and support 
diverse training needs. In particular, the program provides facilities 
to support the Special Operations mission to provide riverine training 
for our allies when the Naval Small Craft Instruction and Technical 
Training School (NAVSCIATTS) is transferred from Panama to Mississippi. 
It also replaces substandard facilities for the 75th Ranger Regiment 
and 4th Psychological Operations Group. These facilities will 
accommodate an improved and expanded special operations forces (SOF) 
capability. All of the individual construction requests are part of a 
component master construction plan. Component MILCON projects are 
integrated at the USSOCOM level to ensure that the most needed projects 
are constructed at the right place, on time, and with the highest 
return on investment.
    Your support in prior years has aided immeasurably in improving our 
operations capability. We look forward to working with your committee 
to acquire facilities needed by USSOCOM to perform it missions and 
ensure we have a fully trained and capable force in the future.
                             milcon program
    The six military construction projects in this program include two 
projects for the Army Special Operations Command, three for the Naval 
Special Warfare command and one for the Joint Special Operations 
Command. Our MILCON budget for fiscal year 2000 requests fiscal year 
2000 appropriations of $20.2 million for six major construction 
projects, plus $2.3 million for unspecified minor construction, and 
$5.7 million for planning and design. We are also requesting fiscal 
year 200 advanced appropriations in the amount of $30.4 million to 
provide for the completion of these fiscal year 2000 projects. The 
majority of our program supports replacement and renovation of current 
mission facilities. One project supports relocation of the Naval Small 
Craft Instruction and Technical Training School (NAVSCIATTS) from 
Panama to Mississippi. This budget request recognizes the need to 
balance construction requirements against acquisition programs and the 
high state of readiness required of all special operations forces.
    Following is a brief description of each of the six projects listed 
by state:
    NSWC Command and Control Facility Addition NAB Coronado, CA--
$6,000,000.--Construct a command and control administrative facility 
addition (including renovation of existing administration facility) for 
the Naval Special Warfare Command (NSWC). The existing facilities are 
not large enough to accommodate NSWC Command and Control Headquarters 
personnel. The number of NSWC personnel has doubled since original 
construction. Currently, temporary buildings (trailers) are being used 
to alleviate space deficiencies. The construction will provide adequate 
and safe facilities to support NSWC Command and Control Headquarters. 
Renovate the existing facility to include administrative support areas, 
physical conditioning areas, seventy-five person amphitheater/
auditorium and conference spaces.
    Regimental Command and Control Facility Fort Benning, GA--
$10,200,000.--Provides a regimental headquarters, reconnaissance and 
signal detachment facility, company operations, and training detachment 
building for the 75th Ranger Regiment. This headquarters currently 
occupies a dilapidated and antiquated Korean War era barracks building. 
The building is completely inadequate as a command and control 
facility. The facility's layout is inefficient and impeded smooth and 
synchronized operations. Work place quality of life of the soldiers is 
substandard. The regiment needs new facilities to replace an old 
barracks building it is currently using as a regimental headquarters. 
The Army has slated the old barracks for demolition. This project is 
required to provide permanent facilities for the consolidated command 
and control and supporting sophisticated intelligence, communications, 
and command and control systems which link the 75th Ranger Regiment to 
Army, joint, unified and national level systems and agencies.
    Small Craft Training Complex Mississippi Army Ammunition Plant, 
Stennis Space Center, Mississippi--$9,600,000.--Construct a Naval Small 
Craft Instruction and Technical Training School (NAVSCIATTS) complex 
for naval Special Warfare Center. The existing facilities are located 
in Panama and will be turned over to the Panamanian Government. The 
need to provide courses such as riverine operations planning, patrol 
craft weapons maintenance, outboard motor maintenance and overhaul 
still remains to be provided by the Naval Special Warfare community. 
Instruction to allied forces is a continuing need. The complex will 
provide adequate and safe instruction and training facilities to 
support NAVSCIATTS. Training facilities will include, instructional and 
mock training areas, classrooms, support areas, storage areas, 
conference spaces, instructors and administrative office rooms, student 
berthing and student support areas.
    Battalion Operations Complex Fort Bragg, NC--$18,600,000.--
Constructs two battalion headquarters and two company administration 
and supply buildings for the 4th Psychological Operations Group and 
96th Civil Affairs Battalion. New facilities are needed to replace old, 
deteriorated, undersized, WWII wooden buildings uneconomical to 
maintain or restore. Current substandard 4th POG facilities are 
undersized by 45 percent and are located in old, deteriorated World War 
II temporary wooden buildings. These buildings lack adequate 
electrical, heating, ventilating, air conditioning, and plumbing 
systems.
    Deployable Equipment Facility Fort Bragg, NC--$1,500,000.--
Constructs an 8,000 square-foot deployable equipment facility to be 
used by the Joint Special Operations Command (JSOC). JSOC personnel 
individual equipment (uniforms, boots, helmets, ruck sacks, protective 
vests, etc.) is stored, secured and packed for immediate deployment 
when the need arises. Currently, the equipment is stored in various 
work areas, hallways, stairwells and ad-hoc locker rooms that could be 
used more effectively. The new building will provide the required 
secure storage, which is essential to meeting mandated time lines for 
rapid deployments.
    Mission Support Facility FCTC-Atlantic, DAM Neck, VA--$4,700,000.--
Construct a single story building and a three story building to support 
Naval Special Warfare Ordnance operations. The existing facilities are 
temporary buildings that do not provide adequate space or ventilation 
for the safe use of materials and equipment needed to perform the 
mission. Material is store in milvans which do not provide adequate 
ventilation. Specialized equipment is left exposed to the corrosive 
salt water environment due to lack of storage facilities. A facility is 
required to provide a safe working environment for ordnance operations 
personnel involved in research, testing, and development of specialized 
ordnance procedures. Spaces for administrative support and planning are 
necessary for additional personnel being assigned to work in the 
ordnance mission support arena. Storage areas are needed for 
administrative materials, testing equipment and personnel gear.
                                summary
    Our proposed fiscal year 2000 MILCON budget for facility 
investments will significantly improve the operational and training 
capability of Special Operations Command. Approval of this program is 
essential to ensure the continued development of our nation's Special 
Operations Forces.

                      STATEMENT OF GAIL H. MC GINN

    Senator Burns. Secretary McGinn.
    Ms. McGinn. Thank you, Mr. Chairman. Mr. Chairman and 
members of the committee, it is indeed a privilege to appear 
before you today and report on the current status of a key 
component of our quality-of-life program, the Department of 
Defense education activity's construction program for fiscal 
year 2000.
    I have submitted my full statement for the record, and I do 
have some brief comments.
    I would like to thank the committee for your unwavering 
support and commitment to service members' quality of life. 
When ground is broken on our military installations, our 
community knows that we believe in the importance of sustaining 
and improving their quality of life. Our schools, along with 
our facilities, such as child care, fitness centers, family 
centers, and education centers, are critical components of our 
strategy to develop livable communities.
    Last year, with your support, we made great improvements in 
quality of life through military construction, including 12 
fitness centers, nine child care centers, three education 
centers, and six school projects. This year we are committed to 
continue to build upon this momentum by requesting over $1.5 
billion for quality-of-life construction projects. This is 
critical, since providing a good quality of life remains 
essential to sustaining U.S. forces.
    Having modern, safe and attractive facilities underscores 
our joint commitment. As a result of the fiscal year 2000 
construction program, the Department plans to construct or 
modernize 11 additional fitness centers for our military 
communities, two child development centers, one family service 
center, and six more schools--three in the United States and 
three overseas.
    Our school system is in good hands, and continues to make 
enormous strides to provide a quality educational opportunity 
for our military children, by improving the teaching and 
learning process and raising the standard of learning to ensure 
excellence, and creating greater accountability so that we 
reach our expected outcomes. In support of this, beginning in 
fiscal year 2000, we will be phasing in a full-day kindergarten 
program in all our schools and reducing pupil-to-teacher ratios 
in grades 1 to 3 to 18-to-1.
    The high educational standards we have set for our students 
and our teachers must be matched by our equal commitment to our 
school infrastructure. Clean, well maintained facilities send a 
clear message to our students and their parents that we are 
committed to providing a world-class education.

 DEPARTMENT OF DEFENSE EDUCATION ACTIVITY (DoDEA) FACILITY REQUIREMENT

    Last year we briefed the committee that we had developed a 
long-term strategy to address our facility requirements by 
focusing on the most urgent needs, with special emphasis on 
Guam and Camp Lejeune. I am pleased to report that we are on 
track with all of the 1999 projects. Our plan for this year 
will provide improvements to our school infrastructure, totally 
$84.3 million, almost double the amount of last year, and 
demonstrate our continuing commitment to modernize our schools.
    This year our plan calls for continuing improvements at 
Guam, at Anderson Air Force Base and Camp Lejeune, launching 
the overseas component of our modernization strategy at Rota, 
Spain, and at RAF Feltwell, in the United Kingdom, and 
addressing deficiencies, to include physical education 
facilities both at our school at Marine Corps Air Station 
Beaufort, South Carolina, and at RAF Lakenheath, in the United 
Kingdom.
    Our first project is on Guam. The Anderson Elementary 
School project will provide a permanent pre-kindergarten 
through eighth grade facility, and allow students to move out 
of current relocated leased facilities that have housed many of 
the school functions since 1997. Over the past 2 years, we have 
made great strides in our facilities on Guam. Not only have the 
schools been a great morale booster for our families, but they 
have had the added value of stabilizing the accompanied tour 
rate on the island.
    The Tarawa II Elementary School is in the second phase of a 
long-term plan to replace all the substandard school facilities 
at Camp Lejeune, North Carolina. These schools were hit hard by 
a hurricane in 1996. This project will replace a facility with 
serious structural problems that do not meet North Central 
Association or Department standards.
    The project at Naval Air Station Rota, in Spain, will 
provide an addition to replace most of the current elementary 
school complex, which is in need of significant renovations and 
upgrade work. Furthermore, since the current elementary school 
campus design is located in six separate buildings, this new 
project will enhance the quality of education by allowing us to 
consolidate many of the school activities for our students and 
faculty.
    The final three projects--Feltwell Elementary School, 
Laurel Bay Elementary and RAF Lakenheath Middle School--will 
allow us to move our students out of current substandard 
temporary facilities into modern ones that can properly support 
the rigors of a quality educational program. These projects 
will enhance our students' learning environment by providing 
them with new physical education facilities, appropriate-sized, 
multipurpose classrooms, and modern science and computer media 
labs.
    In conclusion, I want to thank the committee again for your 
support for our school system's military construction 
requirements, and, moreover, for all programs that support our 
troops and their families and the livability of our military 
communities. Quality-of-life programs, as you know, are not 
just nice to have, but, rather, provide the foundation of our 
corporate culture of taking care of people so they can focus on 
our mission.

                           PREPARED STATEMENT

    I look forward to working with you and the rest of the 
Congress on these challenges now and in the future. So, again, 
thank you very much, and I will be glad to answer any questions 
you have.
    [Statement follows:]
                  Prepared Statement of Gail H. McGinn
    Mr. Chairman and members of the Committee, it is indeed a privilege 
to appear before you today. I am pleased to report to Congress on the 
current status of a critical component of the Department's quality of 
life program, the Department of Defense Education Activity's (DODEA) 
construction program for fiscal year 2000. Let me begin by stating that 
the Department's school system is in good hands, focused on providing 
our children with a world class education designed to prepare them to 
compete in the global economy in the 21st Century. DODEA continues to 
make enormous strides to provide a better quality educational 
opportunity for our military children by improving the teaching and 
learning process--raising the standard of learning to ensure excellence 
and creating greater accountability to measure progress toward expected 
outcomes.
                          putting people first
    Providing a good quality of life for America's military and their 
families remains essential to sustaining U.S. military strength. 
Reflecting that reality, the Secretary is emphasizing our quality of 
life programs in this year's budget by putting people first. We never 
lose focus on our people--soldiers, sailors, airmen and Marines. They 
are the bedrock of our National Security strategy. We remain the 
world's preeminent military force because our people are highly skilled 
and motivated. The quality of our force is directly related to our 
strong and sustained commitment to their quality of life.
                         the military community
    Our military communities provide a healthy and secure environment 
in which to live, raise a family and educate children. Schools are the 
fabric of the military community and help to reinforce the livability 
and vitality of our overseas installations and many communities in the 
United States. At many installations, schools act as old fashioned town 
squares--where families come to meet and exchange the latest news and 
where the futures of their children are forged and everlasting 
friendships are cemented. Military personnel cannot choose where they 
live. They face long separations from their families, imminent danger, 
short-notice deployments and frequent relocations. Building a sense of 
community is important since military life imposes this particular set 
of burdens on families.
    Our schools along with other programs such as housing, child care, 
fitness centers and family centers are critical components of our 
strategy to develop livable communities. Last year with your support, 
we made great improvements in quality of life through military 
construction projects including 12 fitness centers, 9 child care 
centers, three education centers and six school projects. All projects 
authorized in the fiscal year 1999 program are on track and are either 
in the final stages of design or contract award. Before fully 
addressing the specific requirements for each DODEA project submitted 
with this year's budget, let me briefly summarize some of the other 
priorities, programs and associated construction projects that we have 
submitted this year to enhance military community quality of life.
        fiscal year 2000 community quality of life construction
    Military construction is a high impact morale booster at the 
community and individual level. There is no more demonstrable way to 
show support for quality of life, than when the brick and mortar starts 
going up at a base. The perceived quality of programs and commitment of 
leadership is often judged by the condition of the installation 
infrastructure. Having modern, safe and attractive facilities 
underscores our joint commitment to the standard of living of our 
Service members and their families.
    Our fiscal year 2000 quality of life construction program of over 
$1.5 billion reflects that commitment. As part of this MILCON request 
for military community quality of life, we will construct or modernize 
11 community physical fitness centers, two child development centers 
and one family service center (attached at the end of this statement).
                            fitness centers
    A major goal within the Department is the modernization and 
upgrading of fitness facilities. Fitness centers not only rank as the 
top morale, welfare and recreation program, they are also the program 
used by the most people. A recent survey of fitness facilities found 
that 24 percent of 576 facilities were in excellent condition; however, 
22 percent were in poor condition requiring renovation or replacement. 
Recently, the Department launched Operation Be Fit, a special 
initiative to improve fitness programs and increase individual 
participation in fitness activities. The Services supported improvement 
in fitness facilities with facility renovations, equipment upgrades, 
increases in operating hours, and development of Service-specific 
operating standards. This year our plans call for over $63.7 million 
for 11 fitness construction projects for our military communities (see 
following chart).

                                            [In Thousands of Dollars]
----------------------------------------------------------------------------------------------------------------
                 Service                             Location                       Project              Amount
----------------------------------------------------------------------------------------------------------------
Army.....................................  Ft. Campbell, KY............  Physical Fitness Training         6,000
                                                                          Center.
                                           Walter Reed Army Med.         Physical Fitness Training         6,800
                                            Center, DC.                   Center.
                                           Ft Lewis, WA................  Physical Fitness Training         6,200
                                                                          Center.
Navy.....................................  Norfolk Naval Station, VA...  Waterfront Athletic Complex.     10,890
                                           San Diego Marine Corps.       Physical Fitness Center           3,200
                                            Recruit Depot, CA.            Addition.
                                           Camp Lejeune Marine Corps.    Physical Fitness Center.....      4,230
                                            Base, NC.
Air Force................................  Travis AFB, CA..............  Add to Physical Fitness           7,500
                                                                          Center.
                                           Schriver AFB--Falcon AFS, CO  Physical Fitness Center.....      3,900
                                           Mac Dill AFB, FL............  Physical Fitness Center.....      5,500
                                           Whiteman AFB, MO............  Physical Fitness Center.....      1,900
                                           Osan AB, Korea..............  Adal Physical Fitness Center      7,600
                                                                                                      ----------
    Total................................  ............................  ............................     63,720
----------------------------------------------------------------------------------------------------------------

                          child care programs
    The Department appreciates your continuing support of our child 
care program. The availability of accessible, affordable, high quality 
child care is critical to the maintenance of our workforce. We are 
currently meeting about 58 per cent of the total child care needs of 
our members. Our goal is to meet 65 per cent by 2003. For fiscal year 
1999, we have nine projects in progress. Of these two provide expanded 
capability to meet the local need and seven replace temporary or 
substandard structures that are no longer cost effective to maintain or 
adequate for delivering child care. In fiscal year 2000, we have two 
projects scheduled, one at Yuma Marine Corps Air Station, Arizona for 
$2.6 million and a second at RAF Lakenheath in the United Kingdom for 
$5.8 million. Both are new facilities to expand capacity and replace 
existing inadequate or substandard structures.
    Our efforts to increase capacity through contracting initiatives 
have provided mixed results. The Navy competed their entire child care 
program for the San Diego area under the A-76 competitive sourcing 
authority and won the competition. The Army competed child care 
programs at three locations and only received a competing civilian bid 
in one case which the Army won. The Navy tested expanding capacity by 
buying down the cost for space in civilian child care centers so 
members would pay the same as they would at a military center. They 
found that there was little to no availability of space for children 
under age two and those spaces that were contracted were only used if 
the civilian center was convenient to the military installation. 
Through the Defense Logistics Agency we're also testing third party 
management of government built child care centers.
    We have the RAND Corporation studying the potential for outsourcing 
military child care. The study is looking at whether outsourcing is a 
feasible approach to expand our capacity and whether outsourcing of any 
type can reduce the cost per space to DOD. We expect the study to be 
completed in about a year. We plan to continue the use of contracting 
options, but we're also going to target efforts to expand the in-home 
family child care component of our program. We believe we can expand 
our in-home care capacity by expanding our use of subsidies to in-home 
providers and establishing licensing agreements with state and local 
licensing agencies to allow those military spouses living off-base to 
provide in-home family child care.
    We appreciate your support of our child care construction programs 
and we know that we must look for as many low cost options as possible. 
We support a balance of program delivery models including outsourcing 
at each installation. No one option will provide the entire solution to 
the need for military child care.
                             family support
    Family support programs are a lifeline for families in an unstable 
environment during deployments, frequent moves, and long work hours. 
The stresses of the military life require an ongoing commitment to 
families' quality of life. The 284 DOD family centers deliver an 
extensive array of human and social services to promote healthy 
personal and family life. The centers also help members and their 
families adapt to the unique challenges of military life. Various 
programs provide assistance in relocation, spouse employment, 
parenting, financial management, deployment and family separation, 
crisis or unexpected contingency, and other areas. This year we are 
requesting $1.34 million for a project at New River Marine Corps Air 
Station in South Carolina. Family support is an integral part of the 
Department's strategy to maintain a ready force and a major determiner 
of retention.
            department of defense education activity (dodea)
    Now, I'd like turn to our school system, the Department of Defense 
Education Activity (DODEA). The education of the children of our 
Service men and women is key to recruitment and retention. The 
Department operates the 21st largest school system in the nation, 231 
schools worldwide--161 schools serve more than 80,000 children in 14 
foreign countries, and 70 schools serve more than 35,000 students in 
the United States. To be sure that students are properly prepared and 
ready for the 21st century, our schools must provide a world class 
educational standard and be safe and modern places to in which to 
learn. These schools of the future need to be safe, clean, 
appropriately sized and equipped with computer capability, new media 
and state-of-the-art science labs.
                         educational standards
    At the core of our community strategic plan is the need to have 
rigorous educational standards in the classroom to challenge our 
students to be productive members of society. Strong schools with clear 
and high standards of achievement and discipline are essential to our 
children and our society. These standards of excellence are important 
to help instill the excitement, knowledge and basic values, such as 
hard work, that will set our children on the right track. The 
Department is committed to leading the way by providing an educational 
program that compares favorably with the best U.S. public school 
systems and one that prepares students to compete in a global economy. 
We have fully adopted the National Education Goals, we are implementing 
a plan to link all schools to the Internet; and in the year 2000, we 
are launching several new initiatives:
    Presidential Initiatives.--Our budget for fiscal year 2000 supports 
continued work toward improving the quality of education to include 
funding to reduce the pupil-teacher ratio in grades one through three, 
and to begin implementation of full-day kindergarten in overseas 
schools. It also provides for a pilot summer school program. These 
initiatives respond to program priorities identified by our senior 
commanders in the field and support the President's educational 
priorities.
    Technology.--Technology continues to receive a major emphasis in 
order to ensure that all schools are connected to the Internet and that 
students are computer literate and well prepared for the information 
age. We are systematically increasing hardware and software 
procurement. All schools will have Internet access by the year 2000 and 
have an average student-to-computer ratio of 4:1.
    Military Community and Parental Involvement.--We are committed to 
including the military command, organizations, and groups throughout 
the military community in the education process of budget, curriculum, 
and school policies development.
              fiscal year 2000 dodea construction projects
    We have set high educational standards for our students and our 
teachers but we cannot expect our children to learn and our teachers to 
foster learning on a crumbling foundation. In order to keep faith with 
our children, we must ensure that our schools are prepared for the next 
century. Clean, well-maintained, up-to-date facilities send a clear 
message to our students: ``You are important to us! We take your 
education seriously.'' To this end, we began an aggressive plan in 1999 
to revitalize our school infrastructure by focusing on the most urgent 
requirements. First was the construction of permanent school facilities 
to serve students on Guam and second was a long overdue, replacement of 
aged stateside schools to include Camp Lejeune and other serious 
facility requirements in the coming budgets. I am pleased to report 
that we are on track with all of these projects. Our program for fiscal 
year 2000, calls for continued improvements for Guam and at our 
stateside schools at Camp Lejeune, North Carolina. Our next priorities 
launch the overseas component of our strategy with projects at NAS Rota 
in Spain and at RAF Feltwell in the United Kingdom. Our final two 
projects in this year's request are Laurel Bay Elementary School at 
Marine Corps Air Station Beaufort, South Carolina and at RAF 
Lakenheath, United Kingdom.
    Specifics on each project in the fiscal year 2000 DODEA request are 
as follows:
Construct Andersen Elementary School, Andersen AFB, Guam
    DODEA established schools on Guam beginning with the 97-98 school 
year. At that time classes were held in temporary facilities in a 
variety of base-owned buildings on Andersen AFB. In 1998, classes were 
moved to relocatable buildings leased until the permanent facility came 
on line. This project will provide a 177,000 square foot complete 
elementary school complex to house students in grades PK-8.
Replace Tarawa Terrace II Elementary School, Camp Lejeune, North 
        Carolina
    DODEA has initiated a long-term project to replace substandard 
school facilities on Camp Lejeune which will include replacement of 
several of the schools there. This project will replace a facility in 
need of major infrastructure upgrades which cannot support the current 
educational programs. It includes 86,000 square feet to support 690 
students in grades PK-8.
Renovations and Additions, NAS Rota, Spain
    This project provides a 102,000 square foot addition to replace 
most of the current elementary school complex at Rota. The elementary 
school campus is comprised of a number of buildings constructed at 
various times throughout the past thirty years, all of which are now in 
need of significant renovations and upgrade work to remain in use. This 
project will provide facilities which meet the current educational 
requirements of the students, which cannot be met at the present 
school.
Construct Addition, Feltwell Elementary School, RAF Feltwell, United 
        Kingdom
    This project will replace temporary facilities constructed in the 
early 90s in response to an increased enrollment at the Lakenheath and 
Feltwell schools due to a realignment of military forces in Europe. 
This project will construct an 11,000 square foot multipurpose addition 
with 8 general purpose classrooms, a computer lab, media center, and 
multipurpose room.
Construct Addition, Laurel Bay Elementary School, Marine Corps Air 
        Station Beaufort South Carolina
    This project provides a 23,000 square foot facility which will 
provide a new gymnasium, music and general purpose classrooms, science 
and computer labs, and an expansion of the current media center. The 
current facility does not provide adequate general purpose classroom 
space, the media center is too small, and there is no gymnasium. 
Completion of this project will allow the elementary school to vacate 
substandard temporary facilities now in use.
Construct Gymnasium, Lakenheath Middle School, RAF Lakenheath, United 
        Kingdom
    This project will provide a new 15,000 square foot physical 
education facility for the middle school students at Lakenheath. 
Physical education activities for the middle school are currently held 
in a converted World War II hangar. This building is now in need of 
major renovations, and does not provide proper facilities to support 
the physical education program.
    In conclusion, I want to thank the committee again for your support 
for the military construction requirements of our schools and, 
moreover, for all programs that support our troops and their 
families'and the livability of our military communities. Quality of 
Life programs are not just ``nice to have'', but rather they provide 
the foundation of our corporate culture of taking care of people so 
they can focus on the mission. Quality of life is key to preserving 
individual and family well-being and solidifying military and societal 
core values in our forces, while concomitantly contributing to a 
trained and ready force. Your support is essential to maintaining and 
upgrading these programs, services and facilities. I would like to 
thank this committee for your steadfast support of these important 
programs over the years. I look forward to working with you and the 
rest of the Congress on these challenges now and in the future. Thank 
you.

                 FISCAL YEAR 2000 MILITARY CONSTRUCTION PROGRAM SELECT QUALITY OF LIFE PROJECTS
                                            [In Thousands of Dollars]
----------------------------------------------------------------------------------------------------------------
                 Service                             Location                     Project                Cost
----------------------------------------------------------------------------------------------------------------
DODEA....................................  Anderson AFB, Guam Anderson  Elementary School..........       44,170
                                           Camp Lejeune Marine Corps.   Tarawa Terrace II                 10,570
                                            Base, NC.                    Elementary School.
                                           NAS Rota, Spain............  Elementary School..........       17,020
                                           RAF Feltwell, UK...........  Elementary School..........        4,570
                                           Marine Corps. Air Station    Laurel Bay Elementary              2,874
                                            Beaufort, SC.                School Addition.
                                           RAF Lakenheath, UK.........  Lakenheath Middle School...        3,770
ARMY.....................................  Ft. Campbell, KY...........  Physical Fitness Training          6,000
                                                                         Center.
                                           Walter Reed Army Med.        Physical Fitness Training          6,800
                                            Center, DC.                  Center.
                                           Ft. Lewis, WA..............  Physcial Fitness Training          6,200
                                                                         Center.
NAVY.....................................  Norfolk Naval Station, VA..  Waterfront Athletic Complex       10,890
                                           Yuma Marine Corps. Air       Child Development Center           2,620
                                            Station, AZ.                 Addn.
                                           San Diego Marine Corps.      Physical Fitness Center            3,200
                                            Recruit Depot, CA.           ADDN.
                                           Camp Lejeune Marine Corps.   Physical Fitness Center....       4 ,230
                                            Base, NC.
                                           New River Marine Corps. Air  Family Service Center......        1,340
                                            Station, NC.
AIR FORCE................................  Travis AFB, CA.............  Add to Physical Fitness            7,500
                                                                         Center.
                                           Schriever AFB--Falcon AFS,   Physical Fitness Center....        3,900
                                            CO.
                                           Mac Dill AFB, FL...........  Physical Fitness Center....        5,500
                                           Whiteman AFB, MO...........  Physical Fitness Center....        1,900
                                           Osan AB, Korea.............  Adal Physical Fitness              7,600
                                                                         Center.
                                           RAF Lakenheath, UK.........  Child Development Center...        5,800
----------------------------------------------------------------------------------------------------------------

                FISCAL YEAR 2000 MEDICAL MILCON PROGRAM

    Senator Burns. Admiral Carrato, good morning.
    Admiral Carrato. Mr. Chairman, Senator Murray, thank you 
for the opportunity to present the Department of Defense's 
fiscal year 2000 medical military construction program budget 
request. This committee has been very supportive of our medical 
construction program in the past, and I look forward to working 
with you.
    I would like to present this morning a brief overview of 
our fiscal year 2000 medical military construction program and 
provide a longer written statement for the record.
    Our mission is to protect our forces before, during and 
operational deployment, as well as provide health care services 
to other eligible beneficiaries of the Department of Defense. 
Our fiscal year 2000 program requests fiscal year 2000 
appropriations of $60.38 million for 23 major construction 
projects, as well as $3.587 million for unspecified minor 
construction. We are also seeking $9.5 million for planning and 
design efforts to complete designs on fiscal year 2001 projects 
and to commence design on projects identified for fiscal year 
2002.
    The total request for this appropriation is $73.467 
million. We are also requesting fiscal year 2001 advanced 
appropriations in the amount of $101.37 million, excluding Fort 
Wainright funding, to be enacted in the fiscal year 2000 
Military Construction Appropriations Act, in order that we may 
have the funding needed to complete projects begun in fiscal 
year 2000.
    The hospital replacement project at Fort Wainright, Alaska, 
will be funded over 5 years, beginning in fiscal year 2000, and 
being completed in fiscal year 2004. The fiscal year 2000 phase 
one project request for appropriations is for $18 million.
    Our fiscal year 2000 budget request includes a total of 23 
projects: two projects for hospital addition, alteration, life 
safety upgrades, and support infrastructure; one project for 
medical training mission support, nine medical readiness-
related projects, nine clinical replacement, addition, 
alteration-type projects, and two medical logistics warehouses. 
All of these projects will either improve the departmental 
mission of readiness or the efficiency and productivity of our 
providers, and thus, ultimately, quality of life for our 
beneficiaries.
    We are constantly working to right-size and reengineer DOD 
medical facilities to support the changing practices of health 
care delivery. No portion of the overseas medical projects--one 
at RAF Lakenheath, United Kingdom, and the other at Ramstein, 
Germany--are eligible for Northern Atlantic Treaty Organization 
(NATO) funding or host nation funding. The hospital project at 
Yongsan, Korea, is, however, eligible for host nation funding.

                           PREPARED STATEMENT

    This concludes my overview statement of the fiscal year 
2000 medical military construction budget request. The program 
stands as a testament to our commitment to maintain our medical 
readiness and provide quality health care services to the men 
and women of the armed forces. Thank you for the opportunity to 
present our budget, and I welcome your questions on any aspect 
of the budget. Thank you.
    [The statement follows:]
              Prepared Statement of Radm Thomas F. Carrato
    Thank you Mr. Chairman and Members of the Subcommittee. I am RADM 
Thomas F. Carrato, Chief Operating Officer of the TRICARE Management 
Activity, Office of the Assistant Secretary of Defense for Health 
Affairs.
    On behalf of Dr. Sue Bailey, the Assistant Secretary of Defense for 
Health Affairs and Dr. James Sears, the Executive Director, TRICARE 
Management Activity, I thank you for the opportunity to present the 
Department of Defense's fiscal year 2000 Medical Military Construction 
Program budget request.
    I'd like to present a brief overview of our fiscal year 2000 
Medical Military Construction Program this morning. The Appropriations 
Committee has been very supportive of our Medical Construction Program 
in the past and I look forward to working with you.
    Our mission is to protect our forces before, during and after 
operational deployment as well as provide preventive health care 
services to other eligible beneficiaries of the Department of Defense. 
Our fiscal year 2000 program requests fiscal year 2000 appropriations 
of $60,380,000 for 23 major construction projects. We are also seeking 
$3,587,000 for unspecified minor construction and $9,500,000 for 
planning and design efforts to complete designs on fiscal year 2001 
projects and to commence design on projects identified for fiscal year 
2002. The total request for this appropriation is $73,467,000. We are 
also requesting fiscal year 2001 advanced appropriations in the amount 
of $101,370,000 (excluding Fort Wainwright funding) to be enacted in 
the fiscal year 2000 Military Construction Appropriations Act in order 
that we may have the funding needed to complete projects begun in 
fiscal year 2000.
    The attached table lists the total fiscal year 2000 program funding 
requirement, the fiscal year 2000 funding request and fiscal year 2001 
advanced appropriations request for each project (with the exception of 
Fort Wainwright):

    STATE LIST OF PRESIDENT'S FISCAL YEAR 2000 MILITARY CONSTRUCTION
                     PROJECTS' FUNDING REQUIREMENTS
                        [In Millions of Dollars]
------------------------------------------------------------------------
                                               Regular        Advanced
       Location/Project         Authorized  Appropriation  Appropriation
                                  Request      Request        Request
------------------------------------------------------------------------
Ft. Wainwright, AK: Hospital       133.000       18.000    .............
 Replacement (Ph 1)...........
Davis-Monthan AFB, AZ:              10.000        2.400          7.600
 Ambulatory Health Care Center
 Add..........................
Los Angeles AFB, CA: Medical/       13.600        2.400         11.200
 Dental Clinic Repl...........
Travis AFB, CA: WRM Warehouse/       7.500        2.000          5.500
 Engg Sup Fac.................
Jacksonville NAS, FL: Branch         3.780        0.780          3.000
 Med/Den Clinic Add/Alt.......
Patrick AFB, FL: Medical             1.750        0.200          1.550
 Logistics Facility Repl......
Pensacola NAS, FL: Aircrew           4.300        1.300          3.000
 Water Survival Training
 Facility.....................
Moody AFB, GA: WRM Warehouse/        1.250        0.200          1.050
 BEE Facility.................
Ramstein AB, GE: Dental Clinic       7.100        2.550          4.550
 Add/Alt......................
Yongsan, KO: Hospital Add/Alt.      38.570        9.570         29.000
Yongsan, KO: Medical Supply/         2.550        2.300          0.250
 Equip Stor Whse..............
Ft. Riley, KS: Consolidated          6.000        1.060          4.940
 Troop Medical Clinic.........
Andrews AFB, MD: Med Log Fac         3.000        2.000          1.000
 Add/Alt......................
Patuxent River NAS, MD:              4.150        1.200         2 .950
 Aircrew Water Survival
 Training Facility............
Cherry Point MCAS, NC: Aircrew       3.500        1.000         2 .500
 Water Survival Training
 Facility.....................
Wright-Patterson AFB, OH:            3.900        2.800          1.100
 Occupational Health Clinic/
 BEE Repl.....................
Sabana Seca NSGA, PR: Med/Den        4.000        1.120          2.880
 Clinic Repl..................
Ft. Sam Houston, TX Veterinary       5.800        0.600          5.200
 Instructional Facility.......
RAF Lakenheath, UK: Dental           7.100        1.000          6.100
 Clinic Add/Alt...............
Cheatham Annex, VA FHSO              1.650        0.500          1.150
 Container Holding Yard.......
Norfolk NAS, VA Aircrew Water        4.050        1.150          2.900
 Survival Training Facility...
Ft. Lewis, WA N. Ft Lewis,           5.500        4.950          0.550
 Dental Clinic Repl...........
Whidbey Island NAS, WA Aircrew       4.700        1.300         3 .400
 Water Survival Training
 Facility.....................
                               -----------------------------------------
      Total Major Construction     276.750       60.380        101.370
                               =========================================
Planning & Design.............       9.500        9.500    .............
Unspecified Minor Construction       3.587        3.587    .............
                               -----------------------------------------
      Grand Total Fiscal Year      289.837       73.467    .............
       2000 MILCON............
------------------------------------------------------------------------


    The hospital replacement project at Fort Wainwright, Alaska will be 
funded over five years, fiscal year 2000 through fiscal year 2004. The 
fiscal year 2000 Phase I project request for appropriations is for 
$18,000,000.
    The hospital addition/alteration project at Yongsan, Korea requires 
a total of $38,570,000 in military construction appropriations--
$9,570,000 this year and the remainder next year. This project will 
have a companion $40,000,000 O&M funding spread over several years and 
Host Nation funding of $7,800,000. This project replaces one wing and 
provides heavy renovation of the remainder of this facility. The 
central portion of this facility is a 1940's Japanese constructed 
building. A series of four separate buildings constructed between 1959 
and 1990 have been attached to it for the provision of healthcare. This 
project brings the hospital into compliance with the Life Safety and 
Fire codes and standards.
    This budget request includes the following nine medical readiness 
related projects:
  --A War Readiness Material Warehouse/Engineering Support Facility at 
        Travis Air Force Base, California;
  --A War Readiness Material Warehouse/Bioenvironmental Engineering 
        Facility at Moody Air Force Base, Georgia;
  --A Medical Supply/Equipment Storage Warehouse at Yongsan, Korea;
  --A Fleet Hospital Support Office Container Holding Yard and Wash 
        Platform at Cheatham Annex, Virginia; and
  --Five AirCrew Water Survival Training Facilities at Pensacola Naval 
        Air Station, Florida; Patuxent River Naval Air Station, 
        Maryland; Cherry Point Marine Corps Air Station, North 
        Carolina; Norfolk Naval Air Station, Virginia; and Whidbey 
        Island Naval Air Station, Washington.
    Our budget request also includes nine clinics that are either 
replacements or additions/alterations. They are:
  --An Ambulatory Health Care Center Addition/Alteration at Davis-
        Monthan Air Force Base, Arizona;
  --A Medical/Dental Clinic Replacement at Los Angeles Air Force Base, 
        California;
  --A Branch Medical/Dental Clinic Additional/Alteration at 
        Jacksonville Naval Air Station, Florida;
  --A Dental Clinic Addition/Alteration at Ramstein Air Base, Germany;
  --A Consolidated Troop Medical Clinic at Fort Riley, Kansas;
  --An Occupational Health Clinic/Bioenvironmental Engineering 
        Replacement Facility at Wright-Patterson Air Force Base, Ohio;
  --A Medical/Dental Clinic Replacement at Naval Security Group 
        Activity Sabana Seca, Puerto Rico;
  --A Dental Clinic Addition/Alteration at Royal Air Force Lakenheath, 
        United Kingdom; and
  --A Dental Clinic Replacement at North Fort Lewis, Washington.
    The Veterinary Instructional Facility at Fort Sam Houston, Texas 
will enhance the Medical Training Mission. In 1980, Congress 
disestablished the Air Force Veterinary Services and directed the Army 
to procure, train and provide veterninary missions for the entire 
Department of Defense. Reorganizations within the Army and the BRAC 88 
closure of Letterman Army Medical Center have centrally located this 
training at Ft. Sam Houston, Texas.
    We are also requesting funding for two medical logistics warehouse 
projects. The first is a Medical Logistics Facility Replacement project 
at Patrick Air Force Base, Florida, and the second is a Medical 
Logistics Facility Addition/Alteration project at Andrews Air Force 
Base, Maryland.
                               conclusion
    This concludes my overview statement of the fiscal year 2000 
medical military construction budget request. The program stands as a 
testament to our commitment to maintain our medical readiness and 
provide quality health care services to the men and women of our Armed 
Forces. I thank you for the opportunity to present our budget and I 
welcome your questions on any aspect of the budget before you now.

    Senator Burns. Thank you, Admiral.
    Mr. Baillie, welcome back.

                   STATEMENT OF FREDERICK N. BAILLIE

    Mr. Baillie. Good morning. Thank you for remembering, Mr. 
Chairman. When I first moved down here in 1995, testifying 
before this committee was one of the first challenges I got to 
do, and I have looked forward to it ever since. So, again, it 
is good to be here, Mr. Chairman, Senator Murray.
    Since you have already agreed to include the prepared 
statement, I will just have some brief oral remarks.

                  DLA FISCAL YEAR 2000 MILCON PROGRAM

    The Defense Logistics Agency's (DLAs) fiscal year 2000 
military construction request for authorization is $115.3 
million for seven projects. DLA continues its emphasis on 
sustaining and enhancing the Department's fuel storage and 
distribution infrastructure. Five of those seven projects are 
fuel related and support the Joint Chiefs of Staff and the 
services' operational requirements. All of our fuel projects 
are hydrant fuel systems, which support strategic mobility at 
critical military installations. Our fuel projects at Eielson, 
Anderson, Elmendorf, Moron, and Fairchild Air Bases will 
improve America's strategic en route refueling capability.
    In our other business areas, we are continuing our program 
to construct hazardous waste storage facilities that conform 
with the requirements of the Resource Conservation and Recovery 
Act.
    And, finally, at one of DLA's remaining distribution 
depots, we will replace a World War I fire station and 
consolidate in a single, modern facility police, physical 
security and safety functions that protect over 2,400 military 
and civilian personnel, their families, and over $5 billion in 
government material.
    In summary, our military construction program reflects the 
DLA vision to be America's premier logistics combat support 
agency by providing vital facilities that enhance the services' 
warfighting capability.

                           PREPARED STATEMENT

    Mr. Chairman, this concludes my oral statement. Thank you 
again for asking me to be here. And if you have any questions, 
I will be glad to respond.
    [The statement follows:]
               Prepared Statement of Frederick N. Baillie
    I am Frederick N. Baillie, Executive Director of Resources, 
Planning, and Performance, Defense Logistics Support Command, at the 
Defense Logistics Agency (DLA). I am pleased to have the opportunity to 
provide information about DLA's fiscal year 2000 Military Construction 
request.
                     military construction request
    The Defense Logistics Agency has requested $115.3 million in 
authorization, $24.1 million in fiscal year 2000 appropriations, and 
$91.2 million in fiscal year 2001 advanced appropriations to support 
our fiscal year 2000 Military Construction program. This program 
consists of seven projects that will enhance strategic en route fueling 
capability, increase mission responsiveness, reduce environmental 
hazards, and improve facility readiness at our activities in support of 
the Agency's missions. This request includes:
  --$101.4 million for replacing deteriorated, obsolete hydrant fuel 
        systems, or providing new systems, at five critical Air Force 
        bases.
  --$8.9 million for constructing conforming storage facilities at 
        various locations for the disposal of DOD-generated hazardous 
        waste.
  --$5.0 million for the replacement of an existing fire station to 
        consolidate public safety functions at DLA's Defense 
        Distribution Depot in New Cumberland, Pennsylvania.
                         advance appropriation
    In order to free up resources required to address high priority DOD 
modernization and readiness requirements, the entire fiscal year 2000 
DOD MilCon program, including DLA's, is funded through a combination of 
regular fiscal year 2000 appropriations and fiscal year 2001 advance 
appropriations, both of which we are requesting to be enacted in the 
Fiscal Year 2000 MilCon Appropriations Act. However, this is not the 
preferred method of financing the program, and the Department only 
intends to utilize this method for the fiscal year 2000 program.
    We are requesting full authorization for all the fiscal year 2000 
projects but only a portion of this amount for appropriations we expect 
to spend in fiscal year 2000. On average, the appropriation amount is 
approximately 20 percent of full authorization amount of the projects. 
This provides sufficient budget authority to cover the first year 
outlays and obligations required to ensure that program execution is 
unaffected by the change from full, upfront that we have used in the 
past to full funding through advance appropriations that we are 
proposing for the fiscal year 2000 program.
                   new fuel mission responsibilities
    In fiscal year 1996, DLA assumed new responsibilities for 
programming fuel-related MILCON projects for bulk and intermediate fuel 
storage and hydrant fuel systems at the Services' installations. The 
Office of the Secretary of Defense approved this responsibility 
transfer from the Services in fiscal year 1992 in its Plan for the 
Integrated Management of Bulk Petroleum. In carrying out this 
responsibility, we are requesting approval of 5 fuel-related projects 
at $101.4 million, which is 88 percent of our total program request. 
All of these projects (at the Eielson Air Force Base, AK; Elmendorf Air 
Force Base, AK; Andersen Air Force Base, GU; Moron Air Base, SP; and, 
Fairchild Air Force Base (AFB), WA) are priorities of the Joint Chiefs 
of Staff to provide critical fuels infrastructure to support strategic 
en route mobility.
                          hydrant fuel systems
    Our proposed investment to replace old and deteriorated hydrant 
fuel systems, or provide new systems at critical bases, is $101.4 
million. As mentioned previously, these projects all support strategic 
en route mobility requirements.
    We propose to construct a hydrant fuel systems at Eielson AFB, AK. 
The $26.0 million project will provide a system of 20 modern, 
pressurized fuel hydrant outlets. Wide-bodied aircraft are currently 
fueled by refueler trucks or a small Type III hydrant system of five 
outlets built by the Air Force in 1995. The existing hydrant system, 
which will remain in operation, can accommodate neither the number of 
aircraft refueled for peacetime operations nor those expected during a 
contingency. Refueler trucks, which accomplish at 75 percent of 
aircraft refuelings at the base, are highly susceptible to mechanical 
failure in subzero temperatures and severe arctic conditions. In 
addition, this slow, manpower-intensive operation reduces the base's 
ability to meet its demanding refueling requirements and aircraft 
turnaround times. The base will close the runway during fiscal year 
2000 construction season to accommodate this project and two Air Force 
runway projects.
    We propose to replace a hydrant fuel system at Elmendorf AFB, AK. 
The $23.5 million project will provide a system of 15 modern, 
pressurized fuel hydrant outlets. This project provides the second of 
two hydrant fuel systems needed to meet a total requirement of 30 
hydrant outlets. The first system was approved in the fiscal year 1999 
DLA MILCON program and is currently under construction. The existing 
hydrant system, built in the 1950s, is technologically obsolete and 
incapable of supporting current wide-bodied aircraft refueling 
requirements. Repair parts, which are no longer available, must be 
individually fabricated or salvaged from other inoperable systems. 
Moreover, the deteriorated system is at the point of failure; it has 
already leaked several times over the past several years, and will 
continue to pose a future environmental hazard.
    At Andersen AFB, Guam, we will replace an existing hydrant fuel 
system for wide-bodied aircraft supporting strategic en route mobility 
requirements in the Pacific with a modern, pressurized fuel hydrant 
system of 20 outlets for $24.3 million. This project provides one of 
four hydrant systems needed to meet a total requirement of 67 hydrant 
outlets. Currently, the base operates a 45-year-old hydrant system that 
is failing and cannot support peacetime missions or en route mobility 
requirements in contingency or wartime operations. Due to the potential 
for environmental contamination and inability to provide replacement 
components, one of three existing pumphouses has already been taken out 
of service. Six other outlets (of a total of 20) are also out of 
service. As with other obsolete hydrant systems elsewhere, repair parts 
are no longer commercially available and must be salvaged from other 
similar systems or individually fabricated. In addition, the 
underground piping system lacks cathodic (corrosion) protection. The 
new hydrant system will include features to protect it from the 
corrosive marine environment and will employ a leak detection system. 
The existing hydrant system will be demolished.
    At Moron Air Base, Spain, we propose to continue with the second of 
two projects for the replacement of the hydrant fuel systems at a cost 
of $15.2 million. The first system was approved in the fiscal year 1997 
DLA MILCON program and is currently under construction. The existing 
1950's hydrant system also suffers from the obsolescence and lack of 
repair parts as highlighted previously. This project is not yet 
eligible for funding by the NATO Security Investment Program. However, 
NATO has approved a precautionary prefinancing statement to facilitate 
future U.S. recoupment of the cost of this project when eligibility is 
established. This second replacement project provides a new hydrant 
fuel system, storage tanks and support facilities constructed to 
current standards.
    At Fairchild AFB, WA, we propose to construct a new $12.4 million 
hydrant fuel system to improve the base's capability to quickly refuel 
wide-bodied aircraft used to support strategic en route mobility 
requirements. Currently, refueler trucks or a hydrant system that uses 
40-year-old underground fuel storage tanks and equipment are used to 
refuel these aircraft. Aircraft must be towed into parking positions to 
be refueled using the existing outlets. Low pumping rates and long 
turnaround times to refill the required six-to-seven truckloads of fuel 
per aircraft make use of refueler trucks unsatisfactory. The proposed 
project extends the system and constructs an additional 10-outlet 
hydrant fuel system to decrease refueling times and reduce dependence 
on refueler trucks. Existing underground fuel storage tanks will be 
demolished.
               distribution and supply center investments
Distribution Depots
    At our Defense Distribution Depot in New Cumberland, PA, we propose 
a $5.0 million Public Safety Center to replace a World War I wooden 
fire station and consolidate police, physical security, and health-and-
safety personnel. These activities are now scattered in six locations 
at two separate installations, 18 kilometers apart. The existing fire 
station was built in 1919 and is too small for existing fire fighting 
equipment, nor does it contain satisfactory specialized space for 
current around-the-clock operations common with these facilities. The 
proposed facility will increase responsiveness to an operation 
providing essential 24-hour protection to over 2400 active duty and 
civilian personnel.
Conforming Storage
    Since 1980, DOD has tasked DLA with disposing of hazardous waste 
generated by DOD components. Before disposal, DLA must store this 
hazardous waste in conformance with federal and state environmental 
regulations implementing the Resource Conservation and Recovery Act 
(RCRA). In fiscal year 2000, we are requesting $8.9 million to build 
conforming storage facilities at several of our Defense Reutilization 
and Marketing Offices to comply with these environmental requirements. 
We will proceed with those projects that receive RCRA permits from 
state regulators--a process that is lengthy and somewhat unpredictable. 
Consequently, as in prior years, we are requesting single-line-item 
funding for this program so that we may award projects as we received 
these permits. We will continue to notify the appropriate committees 
before construction of each project.
                                summary
    DLA's fiscal year 2000 Military Construction request reflects our 
efforts to support military readiness, protect the environment, and 
provide safe and adequate working conditions for our military and 
civilian work force. Five of the seven projects provide vital fuel 
facilities to support the Services' warfighting requirements. The 
remaining two are needed to meet the Agency's non-fuel mission 
requirements to sustain operations into the 21st Century. With the full 
authorization and advance appropriations requested, we can fully 
execute our program. Thank you, Mr. Chairman, for this opportunity to 
present our fiscal year 2000 Military Construction program.

    Senator Burns. Thank you, Mr. Baillie. We appreciate your 
testimony and we appreciate your hard work on this.
    Admiral Suggs, I have one specific question, the movement 
of the Small Craft Instruction and Technical Training School 
from Panama to Mississippi.
    Admiral Suggs. Yes, sir.
    Senator Burns. Have you the numbers on that and the 
requirement that you are going to need to make that move?
    Admiral Suggs. Well, Mr. Chairman, as you saw in our 
proposal, we are looking for about $9.6 million this year as 
directed by the Program Budget Decision (PBD) 715 to move the 
school and that training from Panama, which closed down at the 
end of last year, up to Stennis. We feel that will be adequate 
for the next year or so.
    As you know, that is very much a success story, as we 
support our Central and South American allies and friends in 
the Southern Command Theater. It is a real winner for us and 
for that Command. We are looking downstream, sir, in at 2001, 
to complementing the school with a range, to allow the training 
to be exercised in that part of the country, which is really 
perfect for riverine training. We currently have to go up to 
Kentucky to use some of the rivers and ranges there.
    But if we can get this approved for 2001, it is going to be 
in the neighborhood of about $3.3 million, sir, to provide a 
360-degree range to support the training up there, the live 
fire, the safety, the security, all the things that we need to 
do to complement training and the schoolhouse syllabus that 
will be done down at the center itself. You will be seeing that 
a little later on, sir.

                          INCREMENTAL FUNDING

    Senator Burns. Give me an idea, do you think that the 
method of advanced appropriations and the incremental funding, 
do you think that will slow down the execution of these 
projects?
    Admiral Suggs. Well, sir, we had the opportunity--and we 
appreciate that--to sit in on your earlier discussions this 
morning with our friends from the Navy. And we heard your 
comment, and we certainly are aware of a lot of the record 
comments that Dr. Hamre and Mr. Lynn have provided. We share 
everybody's concern for this approach.
    In a perfect world, if we got a plus-up, we would very much 
like to go into fiscal years 2000 and 2001 with the $50 million 
that we requested, which we feel is really modest and very 
carefully planned for these programs. However, we agree that we 
need to get on with the recapitalization with these six 
projects, which have tremendous implications both in readiness 
and especially the work place environment--the quality of life 
if you will.
    We at the Special Operations Command, we are very familiar 
with risk management--on all our operational missions, we 
approach them very critically from a risk management 
perspective. We know that because of this incremental approach, 
if approved, it provides some risk which may result in some 
additional cost and other problems. But we have a very small 
command, and we have some very talented, dedicated people 
running these projects. And we have enjoyed a very successful 
track record in executing the small amount of funds that we 
have gotten. And we think that we can execute this program like 
we have all the others in the past, and minimize that risk.
    Certainly, we understand that it is there. But when you 
look at what we are getting from the Special Operations 
Command, as you all know, we are only about $3 billion in total 
when compared to the rest of the budget. When you take out the 
military pay, we are less than 1 percent of the total DoD 
budget. So, this is a very modest, proposal. And I can only 
promise you, from the Command in Chief and everyone associated, 
that we will put the same critical approach to this risk 
management for construction as we do in our operational 
management. But certainly there is some risk here, and we 
appreciate that.
    Senator Burns. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.
    Admiral Carrato, on your list of medical military 
construction projects, you list both the authorization request 
and the advanced appropriation request. And I see that Fort 
Lewis Dental Center, the total request is $5.5 million and the 
appropriation is just a little over a $500,000. And the total 
request for the Whidbey Island Training Facility is $4.7 
million while the appropriation request is $3.5 million. Can 
you tell me how you arrived at the appropriated level and what 
your criteria were for determining which projects were 
appropriated at a higher percentage compared to the 
authorization request?
    Admiral Carrato. Yes, ma'am. The process was one where it 
was very inclusive. We included the services, since they are 
execution agents. And we looked at what would be an appropriate 
level, where we could actually execute the program in 2000. And 
we believe we do have budget levels that would be executable. 
And we did involve the services in determining those amounts 
that would be necessary.
    Senator Murray. So, the appropriation level is what you 
believe can be done?
    Admiral Carrato. Yes, ma'am.

                FISCAL YEAR 2000 ADVANCED APPROPRIATION

    Senator Murray. Okay. Mr. Baillie, in your testimony, you 
mention that this advanced appropriation proposal in the fiscal 
year 2000 budget is not the preferred method of financing your 
programs. Can you talk a little bit about what your concerns 
are with that?
    Mr. Baillie. I think my concerns would echo the speakers 
who have gone before me. As the Admiral said, this is a 
calculated risk. From a business perspective, the Department is 
certainly attempting to make best use of the funds that you 
appropriate to us. There are down sides and risks to that, and 
I think we did discuss some of them this morning, as far as 
impact on contractors and if money does not get subsequently 
appropriated.
    Specifically, as far as the DLA program, it is a relatively 
small program. We also have been very successful in executing 
it. We believe that if we are given the advanced appropriations 
requested, the 2000 program could go ahead as planned.
    Senator Murray. Okay, thank you.
    Ms. McGinn, the Senate report accompanying the fiscal year 
1999 military construction appropriation bill called for a 
study on the condition and the adequacy of school facilities, 
both those that are federally owned and those that are part of 
the local district that support military installations. That 
report was due February 15th. Can you tell me what the status 
of that report is?
    Ms. McGinn. Senator Murray, that report is currently in the 
planning and preparation stages. We find that it will be quite 
a large undertaking, and we have begun to scope it out.
    I do regret that we have not sent you an interim report on 
that. I apologize for that. But efforts are underway, and I 
have asked for more priority on it, to get it done in a time 
frame----
    Senator Murray. Can you give us a time line at all when you 
expect to have that to us?
    Ms. McGinn. I think the nature of the report is such that 
we probably have to do a contracted effort. And so I would say 
9 months to a year probably.
    Senator Murray. More, before we see it?
    Ms. McGinn. Yes.

                        BANGOR ELEMENTARY SCHOOL

    Senator Murray. Okay. The Senate report also directed DOD 
to allocate not less than $1 million for the design of an 
elementary school to serve the Bangor Submarine community. Can 
you tell me the status of that project and when you anticipate 
requesting construction funds for that?
    Ms. McGinn. I may have to take that one for the record, 
ma'am.
    Senator Murray. Okay. I would appreciate getting a response 
back on that. It is one that we have been working closely with 
the community on, and I really would like to know.
    [The information follows:]

    We understand the need to support the Central Kitsap school 
district in providing quality education facilities for students of 
military members stationed at Bangor Submarine Base. Last year, the 
Department of Defense Education Activity met with representatives of 
the Central Kitsap district to discuss the impact on the district from 
military dependents, including special needs students enrolled in their 
schools as a result of Bangor's designation as a compassionate 
assignement post, and we continue to wor with them on this issue.
    The Central kitsap School District has indicated a need for 
$982,000 to complete design and related cost and environmental analyses 
to prepare for construction of the new school. Discussions within the 
Department indicate that military construction funds are not the 
appropriate source for funding a school facility owned by a local 
education agency. Regrettably, even if DoD can identify the appropriate 
source of funds, funding for this expenditure has not been programmed. 
Spending $1 million for the Bangor Submarine community would 
significantly impact our ability to execute the program at other 
locations.

    Senator Murray. Let me ask you a general question on child 
care needs. I noticed that you said that you are trying to meet 
65 percent of the total child care needs 5 years from now.
    Ms. McGinn. Correct.
    Senator Murray. And from your position, is that an adequate 
request?
    Ms. McGinn. Well, if you visit the field, you will hear 
that we do not have enough child care.
    Senator Murray. I hear it all the time.
    Ms. McGinn. And we do need to expand the availability and 
accessibility of child care. We have been working on that since 
1989, when the Military Child Care Act was put into effect. And 
we have been making progress. It has not been as rapid as we 
would like.
    We have recently identified some ways to speed up the 
access to child care by improving the way we manage our family 
child care program, by putting more family child care in place. 
And that would be where a military spouse would take care of up 
to six children in their quarters. We can do that by 
subsidizing that. We have also discovered that we can create 
memorandum of agreement with civilian communities, so that we 
can license people in off-base housing, as well.
    So, we think that that particular approach will increase 
the availability of care, probably faster than anything else.
    Senator Murray. So, that would be on top of 65 percent that 
your goal is, that you would look at military, on-site 
families, to subsidize--how would you do that?
    Ms. McGinn. No. That would be to help us get to the 65 
percent.
    Senator Murray. That is part of the 65 percent?
    Ms. McGinn. Right.
    Senator Murray. So, there is still a 35-percent unmet need 
5 years from now?

                      DOD CHILD CARE REQUIREMENTS

    Ms. McGinn. Well, our overall goal was to go to 80 percent 
of the need. Because we believe that there are people who, 
because of shift work or other kinds of preferences, or 
familial care, even though we identified them in our formula, 
would not actually come forward for military child care. So, we 
set our overall goal at 80 percent, and then set our immediate 
goal, for budgetary purposes and programming purposes, at 65 
percent.
    Senator Murray. What tools would you need to make that 
happen faster?
    Ms. McGinn. I think that the primary tool is really to 
enhance, as I said, the family child care component of this. 
That is the part of the program which appears to be growing the 
most. It is the quickest way to get care out there, and 
particularly if we can start to use the off-base resources, 
both of licensing our people who live off base and then perhaps 
licensing people who are off base to provide care for us, as 
well. And that is what we are really going to be pursuing to 
the greatest extent possible.
    Senator Murray. Okay. Ms. McGinn, while I have you I have 
to ask you a non-related issue. It is on the military funeral 
honors for veterans. We are supposed to have a study back by 
March 31st. Can you tell me if we will have that in hand?
    Ms. McGinn. We will be close.
    Senator Murray. How close?
    Ms. McGinn. Our goal is to get it there by March 31st.
    Senator Murray. You will not tell me 9 months later?
    Ms. McGinn. No, ma'am. We have worked through the concept 
within the Department of Defense. We have been out, and we have 
discussed it with 20 separate veteran service organizations in 
a one-on-one, consultative manner, to get their input. We are 
putting the final pieces of that together right now for 
coordination purposes. And we would like to come over and brief 
your staff later in the month.
    Senator Murray. I would very much appreciate that. We are 
waiting for that report back. And as you know, veterans are 
dying very quickly. And the most time that goes by, the fewer 
of them have military honors. And I think we really need to 
move aggressively on that.
    Mr. Chairman, thank you for your time. I do have to go to 
another committee hearing, but I really appreciate your work on 
this, and I look forward to working with you.
    Senator Burns. Thank you very much, Senator Murray.

                    MEDICAL FACILITY IN SOUTH KOREA

    Admiral Carrato, I am very interested in the new medical 
facility in South Korea. Could you describe that project? It is 
a fairly robust project, I understand. Is that correct?
    Admiral Carrato. Yes, sir. The project is to replace a 
1940's era hospital built under Japanese construction. And it 
is a fairly major renovation of that facility. It is a critical 
project for us, given its location, and fairly comprehensive, 
replacement, addition, life safety upgrade.
    Senator Burns. Now, did we raze part of that and then are 
starting from the ground up, or is it strictly all renovation 
of the existing structure?
    Admiral Carrato. It is a combination. We will be doing some 
renovation within the existing walls. And then there will 
actually be some additions that we will be constructing, as 
well.
    Senator Burns. We have, as you know, passed a bill a couple 
of weeks ago dealing with pay and retirement and also health 
care. Could you give me your overview; is TRICARE working?
    Admiral Carrato. Yes.
    Senator Burns. Now, I get a few complaints every now and 
again. I get a letter or two. I would just like it if you could 
give me an overview of that. And I know maybe that does not 
fall under your area of expertise.
    Admiral Carrato. Actually, sir, it does. Let me give you 
the short version of, is TRICARE working. As you know, TRICARE 
is a major overhaul of the military health system. And any time 
you have such a large undertaking, which TRICARE is, there are 
going to be some growing pains.
    We began TRICARE on the West Coast--California, Oregon and 
the State of Washington--and where it has had a chance to 
mature, we see the beneficiaries are very satisfied with the 
program. In our more current start-ups, on the East Coast, we 
have had some difficulties. And most of the difficulties fall 
really into three major categories. One is claims processing. 
And we did have some hearings last week, where that was a major 
focus of both the House and Senate Armed Services Committees. 
And we believe that we are taking steps to simplify that claims 
processing process, working with our contractors, who are 
actually performing that function for us. We think we are on 
the right track to addressing that issue.

                         TRICARE RESPONSE TIME

    And I am happy to report that our audited claims processing 
performance numbers as of February of this year, all of our 
claims processing contractors are meeting or exceeding our 
standards.
    The other area is telephone, beneficiaries calling up and 
being put on hold, not getting accurate information. And, 
again, I think that is a symptom of a complex program, a 
symptom of a program where we have to hire literally hundreds 
of staff to attend to those telephones. And they also have to 
be trained on a fairly complex program.
    Senator Burns. Not on this automated dial system--in other 
words, dial one if you want a flu shot and dial two if you need 
an appendix taken out?
    Admiral Carrato. We actually do have that, sir. Our 
telephone standards are that there must be an automated 
response unit that acknowledges a phone call within two rings. 
That is easy to do. You can purchase one of those off the 
shelf. Our standard to get to a human being, though, is 90 
percent of telephone calls have to be connected to a human 
within 2 minutes. And we have had some difficulty meeting that 
standard. Again, I am happy to report we now are meeting that 
standard, on average.
    We will have some issues in our newer regions. And it is 
isolated with some Monday morning. Again, it is a behavior 
change for our customers, our providers, et cetera.
    Senator Burns. I just hate those things. I just absolutely 
hate them.
    Admiral Carrato. Sometimes they are necessary.
    Senator Burns. I know.
    Admiral Carrato. The other issue that we hear mentioned--
and this actually is an issue that I know was raised in the 
State of Montana--is as we bring managed health care to areas 
of the country where managed health care has not been 
introduced before, in some rural areas, we will have issues 
associated with developing adequate networks to support our 
TRICARE Prime program. And that is another area that we 
continue to work on, is to look at how we can enhance the 
delivery system in some of those rural areas.
    But I guess that is a very long-winded answer. The short 
answer is TRICARE is working. If you look at the more mature 
regions, I think it is working quite well. Customer 
satisfaction is quite high. We still have some growing pains in 
some of our newer regions. And we are working aggressively to 
fix it. We are certainly aware of the impact that it could have 
on readiness, retention and quality of life.
    Senator Burns. But it is not without its warts?
    Admiral Carrato. It is not without its warts, no, sir. But 
we are working to remove the warts, and working aggressively.
    Senator Burns. The reason I asked you about that is 
specifically about Montana. We deal with great distances up 
there, as you well know. We have got a lot of light between 
light bulbs, or a lot of dirt between light bulbs. So, we have 
to do that.

                         DOD SCHOOL ELIGIBILITY

    Ms. McGinn, I am interested in education. Those families 
that are located off base, in the first place, they can either 
send their children to school on base or can they send them to 
the public schools of that particular area?
    Ms. McGinn. If they are located off base, they generally go 
to the public schools surrounding the base. If they are on base 
on those installations where we have Department of Defense 
schools, then the children are eligible to attend the schools 
on base. If they are off base, they are not.
    Senator Burns. In other words, if they live off base, then 
they are prohibited from sending their children to school on 
base; is that correct?
    Ms. McGinn. Yes, I believe that is correct.
    Senator Burns. Okay. I did not know how that was set up. 
Because I am very familiar with impact aid. We have Malstrom 
Air Force Base in Great Falls, and of course, that impact aid 
is part of that.
    Mr. Baillie, I see that there are five projects in the 
fiscal year 2000 budget request to replace existing hydrant 
fuel systems. Give me an update on that. How is it coming? I 
know we have had a few problems in the past, but that 
infrastructure is very, very important.

                      DOD FUEL SYSTEM REPLACEMENT

    Mr. Baillie. Absolutely, Senator. And you are correct, five 
of our seven projects are fuel system replacements. What we are 
talking about are systems that, for the most part, are at least 
40 years old, that are not only operationally incapable of 
meeting the needs of wide-bodied jet refueling, but, quite 
frankly, in many cases, posing several environmental hazards. 
There is no leak protection. There is no use of state-of-the-
art materials. A lot of the projects in this year's program are 
in places like Alaska, with severe environmental conditions. A 
lot of the plumbing, if you will, for these systems is exposed 
to those elements.
    In addition, at the other temperature spectrum, Guam is a 
little bit warmer, but it is very much subject to corrosion 
from saltwater. So, what we are attempting to do is, working 
with the Joint Chiefs of Staff, to prioritize those systems, 
both from operational and environmental areas, that need to be 
replaced. We have come from about 44 systems in 1992, when DLA 
was first assigned the fuels mission in this area, down to, I 
believe, about 18 projects left. And at this point, the DLA 
Program Objective Memorandum (POM) for the outyears will 
address all those remaining projects.
    Senator Burns. You are satisfied with the progress we are 
making?
    Mr. Baillie. Yes, sir, very much so. And we appreciate the 
support of this committee in that.
    Senator Burns. Tell me a little bit about--there has been 
some concern raised among my colleagues, the emphasis on 
privatization and the impact that it has on logistics. I happen 
to be one of those people that think logistics is--used to be 
just a little office, way down at the end of the building, but 
logistics now is very important. I think that was highlighted 
in 1991, how important they can be, not only with the ability 
to carry out a mission in support of ours--it is like General 
Higginbotham said, it is not only deploying people, but 
bringing them back home again. Logistics plays a tremendous 
role in that.
    When we start privatization, and some areas have been, in 
your opinion, has that impacted our ability to carry out our 
mission in the area of logistics?

                           DLA PRIVATIZATION

    Mr. Baillie. I agree, Senator. When I first started work 
with what was then the Defense Supply Agency, in a warehouse in 
Pennsylvania, logistics was ``get the boxes out the door.'' It 
has now evolved into supply chain management. It is very much 
more complicated.
    The DLA concept of privatization goes back to risk 
management, if you will. We like to believe that we are still a 
military organization using business tools rather than a 
business-type organization. We do some things that Sears 
Roebuck, notwithstanding, does not do.
    The concept with which we have attempted to approach 
privatization says we need to find the best value source using 
sound business case approaches. Our three distribution depots--
Columbus, Ohio; Warner-Robbins, Georgia; and Barstow, 
California--that are in the process of going up for 
privatization review, were chosen as representative samples so 
that we could learn from them. We are getting some very good 
feedback from the San Antonio, Texas base, which is currently 
being operated by a contractor as part of the base closure 
process. Costs are well within the contract, and the 
performance statistics rival government-operated depots.
    That is not to say that you are not correct, sir. There are 
concerns here. We are venturing into uncharted waters, if you 
will. We have never, in DOD, or at least DLA, let an entire 
depot go. We have taken small sub-functions of that. But when 
we looked at it from a business proposition, talked to academia 
and the private sector, they felt that to get that best value, 
we really needed to not carve up a process into sub-functions, 
but to take the entire operation itself.
    So, we are taking--whether it is with the distribution 
depots, the property disposal offices or even some of our fuels 
operations--we are taking a very measured, phased approach. We 
want to learn up front. And then, from both our successes and 
failures, move out where it makes sense, keeping in mind that 
the DLA purpose for being is to support that warfighter. And we 
need to do what we need to do as far as being a good business, 
but whatever we do, we cannot afford to risk the warfighter's 
support.
    Senator Burns. The ability to warehouse fits your ability 
for distribution? Do we still have needs in warehousing?

                           DISTRIBUTION SPACE

    Mr. Baillie. At this point, Senator, we have, quite 
frankly, an excess of distribution space. There is about right 
now 375 million attainable cubic feet. Attainable cubic feet is 
less aisle space and offices and sprinkler clearances and 
things like that. We have about 260 million, right now, 
occupied cubic feet. We would very much like to see support for 
at least one, and hopefully two, more rounds of BRAC. Because 
that really is the only way that we can get at those kinds of 
excesses.
    The excess that I talked about is spread over 19 different 
depots. In order for us to truly eliminate the excess to match 
our attainable with our occupied, we are probably going to need 
to get out of at least one, if not more, of those depots.
    Senator Burns. Okay. I think that is about all the 
questions that I have. I think there will be other questions 
from other members of this subcommittee. I want to thank the 
witnesses this morning for their being candid with us. We want 
to work with you as we implement this, understanding the 
mission that we have in front of us.

                     ADDITIONAL COMMITTEE QUESTIONS

    If there are other questions by other committee members, we 
would ask you to respond to those Senators and to the 
committee.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                  Questions Submitted to Admiral Suggs
                  Questions Submitted by Senator Burns
                          incremental funding
    Question. Will this method of advance appropriations and 
incremental funding slow down the execution of these projects?
    Answer. We will be able to execute the United States Special 
Operations Command (USSOCOM) military construction program, but clearly 
this adds risk in the execution of our MILCON program. This method of 
advance appropriations and incremental funding will require a higher 
level of management oversight to ensure there is no slow down in the 
execution of these projects.
    To execute our construction program under incremental funding we 
will need from the Congress: full authorization for each project, 
advance appropriations for fiscal year 2001 and the necessary 
reprogramming flexibility. We need full authorization to allow for 
award of the full project scope in one contract. The advance 
appropriation for fiscal year 2001 will ensure the money is available 
on the first day of the new fiscal year and allow construction to 
proceed into the second year without interruption. We need the 
reprogramming flexibility, based on the ``authorized'' amount, to 
transfer the limited funds provided in fiscal year 2000 between 
projects as work progresses. This flexibility is required because some 
projects may proceed faster due to construction schedule variations or 
the need to start early to meet mission priorities.
    Question. What will be the impact to your MILCON program if the 
Congress does not provide advance appropriations?
    Answer. Advance appropriations are the key to providing a 
continuous funding stream for each construction contract across the 
fiscal year divide. If advance appropriations are not available, we 
anticipate more fourth quarter awards in order to assure that we have 
funds on hand to bridge the gap between fiscal years. We also 
anticipate higher contractor costs due to funding uncertainties.
                                 ______
                                 
                 Questions Submitted by Senator Murray
                  stennis small craft training complex
    Question. Admiral Suggs, in your fiscal year 00 budget you have 
identified 6 projects for funding. It appears that the appropriated 
amount requested, as opposed to the total authorization request, has 
been spread evenly between all of the projects except for the Stennis 
Small Craft Training Complex. Can you tell the subcommittee why this 
project is fully funded while the others have to await advance 
appropriations?
    Answer. Instructions that instituted incremental funding predated 
the decision to relocate the Naval Small Craft Instruction and 
Technical Training School (NAVSCIATTS) to Stennis. Subsequently, the 
Department directed USSOCOM to establish the school and provided the 
necessary MILCON funds. Since the NAVSCIATTS decision was directive in 
nature, we did not incrementally fund the construction project to 
insure an expeditious completion of the required facilities.
    Question. Will any of the other 5 projects significantly suffer 
without advanced appropriations?
    Answer. Advance appropriations are the key to providing a 
continuous funding stream for each construction contract across the 
fiscal year divide. If advance appropriations are not available, we 
anticipate more fourth quarter awards in order to assure that we have 
funds on hand to bridge the gap. We also anticipate higher contractor 
costs due to funding uncertainties.
                                 ______
                                 
                 Questions Submitted to Admiral Carrato
                  Questions Submitted by Senator Burns
                          incremental funding
    Question. Admiral Carrato, we often incrementally fund big medical 
projects because of the size and cost. However, with split year funding 
for all projects contained in the budget--regardless of their size, 
what challenges are you anticipating as you execute these projects?
    Answer. There are numerous challenges in executing split year 
funded versus fully funded projects due to uncertainty about the amount 
and timeliness of the second year funding. We believe we can 
successfully execute the fiscal year 2000 Medical Military Construction 
Program, as submitted in the President's Budget, if the advanced 
appropriations authority for fiscal year 2001 is enacted in the fiscal 
year 2000 Military Construction Appropriation Act as requested. This 
advanced appropriations authority will assure us and the contractor 
community that we will have the funding needed to complete the projects 
begun in fiscal year 2000. Our construction agents tell us that there 
is some risk involved with increased cost of construction due to delays 
in awarding contracts in the latter part of the year. We cannot totally 
avoid this risk but we will work diligently to minimize it. Failure to 
receive the requested fiscal year 2001 advanced appropriations 
authority in fiscal year 2000 will cause us to defer much needed 
projects by as much as one year until we receive the remainder of funds 
in fiscal year 2001 Appropriation Bills.
    Question. Admiral Carrato, you have a fairly robust medical 
military construction program in fiscal year 2000. What is the backlog 
of your medical/dental con struction/renovati on requirements ?
    Answer. This program reflects our minimum medical facilities 
construction requirements within the constraints of the overall 
Departmental requirements for fiscal year 2000. This is based on the 
fact that we currently have a backlog of over $2 billion in military 
construction alone for construction/renovation of our medical/dental 
facilities.
                                 ______
                                 
                 Questions Submitted by Senator Stevens
                         bassett army hospital
    Question. Admiral Carrato, I understand that the first phase of 
funding for the Bassett Army Hospital is in the fiscal year 2000 
budget. What is the department's funding strategy for this project and 
when is it to be completed?
    Answer. The Bassett Army Community Hospital is slated to start 
construction in fiscal year 2000 based on the following funding 
strategy:

                          [Dollars in millions]
------------------------------------------------------------------------
                                               Phase          Amount
------------------------------------------------------------------------
Fiscal year 2000........................               1             $18
Fiscal year 2001........................               2              56
Fiscal year 2002........................               3              34
Fiscal year 2003........................               4              20
Fiscal year 2004........................               5               5
------------------------------------------------------------------------

    We have requested a full authorization of $133 million for this 
project in fiscal year 2000. The construction of the project is 
expected to be complete in the summer of 2004.
    Question. Is there funding in the budget or in the Future Years 
Defense Plan (FYDP) to demolish the existing Bassett Hospital located 
at Fort Wainwright, Alaska?
    Answer. Yes. The funding for the demolition of existing Basset Army 
Community Hospital at Fort Wainwright, Alaska, is included in the last 
two phases (Phases 4& 5) of the project in fiscal year 2003 and fiscal 
year 2004.
                                 ______
                                 
                   Questions Submitted to Mr. Baillie
                  Questions Submitted by Senator Burns
                        dla hydrant fuel systems
    Question. Mr. Baillie, I see that there are five projects in the 
fiscal year 2000 budget to replace existing Hydrant Fuel Systems. 
Please describe the long-term plan to replace the aging DOD fuel 
infrastructure?
    Answer. Starting with the fiscal year 1996 MILCON program, DLA 
assumed additional funding responsibilities from the Services for base-
level and intermediate petroleum storage and hydrant systems. The 
majority of the fuel facilities DLA inherited were deteriorated, 40- to 
50-year-old systems. From fiscal year 1996 through fiscal year 1999, 
DLA has aggressively replaced this decaying infrastructure by investing 
$278 million in new and revitalized fuel systems. However, the current 
estimated backlog of needed fuel projects remains at over $1 billion.
    In the current DOD Future Year Development Plan (FYDP; fiscal year 
2000-2005), DLA plans to invest an additional $630 million for 
strategic en route mobility projects to enhance the Nation's 
warfighting capabilities, for environmental compliance and protection, 
and for other operational projects to replace aging fuel systems. This 
proposed plan will fund the remaining 21 strategic en route fuel 
projects by fiscal year 2005 and all currently identified projects to 
correct non-compliant environmental conditions at our fuel activities
    Nevertheless, the remaining backlog of fuel infrastructure 
requirements will continue to be a significant challenge that must be 
addressed in future FYDPs. With this in mind, DLA and the Military 
Services are aggressively pursuing alternate sources to military 
construction funding. These alternatives include seeking host-nation 
funding, privatizing fuel functions, or developing maintenance and 
repair projects instead of MILCON. These initiatives are expected to 
result in a modest reduction in fuel MILCON requirements.
                          incremental funding
    Question. Mr. Baillie, will incremental funding of these projects 
slow down their ultimate execution and increase their cost?
    Answer. As we mentioned in our verbal testimony, we know that 
incremental funding, if approved, provides some risks. We expect the 
projects will be slowed to a limited extent. But with the relatively 
small program we have and talented, dedicated people running these 
projects, we think we can continue to successfully execute these 
projects. Our past performance shows we have a solid record of project 
execution in previous years.
                                 ______
                                 
                 Questions Submitted by Senator Stevens
                         dla projects in alaska
    Question. Mr. Baillie, I understand that there are two Alaska 
projects in your fiscal year 2000 budget submission. Can you explain 
why these two projects are so important to our national military 
strategy?
    Answer. The Commanders In Chief's (CINCs) have identified numerous 
strategic airlift en route support fuel infrastructure shortfalls as a 
result of a Joint Warfighting Capabilities Assessment (JWCA) review. 
This review revealed that with reduced overseas presence, enhancements 
were required to the remaining enroute refueling infrastructure to 
support the National Military Strategy. The two projects in Alaska are 
key locations for a CONUS to Far East deployment of forces based on 
weather, route vulnerability, airfield support, and other factors.
                          incremental funding
    Question. Mr. Baillie, will incremental funding of these projects 
slow down their ultimate execution and increase the cost?
    Answer. As we mentioned in our verbal testimony, we know that 
incremental funding, if approved, provides some risks. We expect the 
projects will be slowed to a limited extent. But with the relatively 
small program we have and talented, dedicated people running these 
projects, we think we can continue to successfully execute these 
projects. Our past performance shows we have a solid record of project 
execution in previous years.
                                 ______
                                 
                 Questions Submitted by Senator Murray
                            funding formula
    Question. Can you explain the formula you used to arrive at the 
fiscal year 2000 appropriated amount you are requesting for the five 
hydrant fuel system projects in your budget? It appears to me that you 
are looking for a down payment ranging from as little as 11 percent to 
as much as 35 percent. Why the spread?
    Answer. We did not apply a set percentage for determining the 
fiscal year 2000 funding request for each project. Rather, we applied 
the amount allocated to us by the Department based on project 
priorities and site-specific factors that will influence expected 
outlays in fiscal year 2000. These factors include the start and 
duration of diverse construction seasons, expected material ordering 
and transportation lag times, and constraints due to adjacent 
construction projects at some of these sites. The fiscal year 2000 
program request was ultimately based on engineering judgement and the 
variable effects of these factors on the projects and funds available.
                                 ______
                                 
                   Questions Submitted to Ms. McGinn
                  Questions Submitted by Senator Burns
                         dod dependent schools
    Question. Ms. McGinn, I am pleased that DOD has begun an initiative 
to improve the condition of the DODDS schools. Many are inadequate and 
need serious attention. Please describe your backlog of construction 
and renovation projects?
    Answer. The following is a list of projects critical to DODEA 
(DODDS/DDESS) that are not funded in the fiscal year 2000 budget, but 
that are included in the Future Years Defense Plan. The total is 
approximately $174.7 million as shown below.
                                                            In Thousands

Construct Hohenfels HS, Wuerzburg, GE.........................   $13,100
Replace Russell ES, Camp Lejeune, NC..........................     7,100
Classroom Addition, Lakenheath ES, UK.........................       533
Classroom Addition, Mannheim ES, Heidelberg, GE...............       700
Classroom Addition, Ramstein ES, GE...........................       700
Classroom Addition, Ernest J. King ES/MS, Japan...............       769
Classroom Addition, Wetzel ES, Kaiserslautern, GE.............     1,163
Classroom Addition, Schweinfurt ES, Wuerzburg, GE.............     1,207
Classroom Addition, Shirley Lanham ES, Japan..................     1,076
Classroom Addition, Lincoln ES, Ft Campbell, KY...............       768
Classroom Addition, Tarawa II ES, Camp Lejeune, NC............       513
Classroom Addition, Antilles ES, Ft Buchanan, PR..............       769
Classroom Addition, Freddie Stowers ES, Ft Benning, GA........       513
Classroom Addition, Barkley ES, Ft Campbell, KY...............     1,003
Classroom Addition, Jackson ES, Ft Campbell, KY...............     1,003
Construct Lakenheath MS, UK...................................    16,298
Construct Addition, Ramstein HS, GE...........................     1,900
Additions & Renovations, Sigonella E/MS, Italy................     7,200
Construction Addition, Mark Twain ES, Heidelberg, GE..........     2,200
Additions & Renovations, Rota HS, Spain.......................    15,500
Construct Seoul MS, Korea.....................................    17,480
Replace Berkley Manor ES, Camp Lejeune, NC....................     7,550
Additions & Renovations, Delalio ES, Camp Lejeune, NC.........     3,900
Additions & Renovations, Stone Street ES, Camp Lejeune, NC....     5,100
Replace Tarawa I ES, Camp Lejeune, NC.........................     6,466
Replace Russell ES, Quantico, VA..............................     6,600
Addition to Wassom ES, Ft Campbell, KY........................     4,350
FY02 Construction for PTR/Kindergarten initiative-various 
    locations.................................................    20,300
FY03 Construction for PTR/Kindergarten initiative-various 
    locations.................................................    20,200
FY01 Unspecified Minor Construction...........................     2,691
FY03 Unspecified Minor Construction...........................     4,800
FY04 Unspecified Minor Construction...........................     1,236
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................   174,708
                            fitness centers
    Question. How do fitness centers equate to and impact quality of 
life for service personnel and their families? Why is it important 
these facilities be located on the bases and installations?
    Answer. It seems there is greater attention placed on quality of 
life facilities, such as fitness centers in the fiscal year 2000 
budget. Maintaining a physically fit military force is important to 
readiness. In addition, having an active military community, including 
both Service members and their families, forms a major part of health 
promotion activities. Further, it helps keep health costs down and 
productivity up. Service members and their families tell us in survey 
after survey that fitness centers are their number one Morale, Welfare 
and Recreation (MOOR) and leisure activity.
    The Marsh Commission Quality of Life report identified significant 
fitness facility deficiencies. The Task Force concluded that fitness 
centers aided recruiting, retention, readiness and productivity and 
were important to overall quality of life--particularly among single 
junior enlisted personnel. This report also indicated that fitness is 
the most important MWR program having a positive effect on retention. 
As in the civilian community, successful recreational activities must 
be located where people live, work, and play. Our installations are the 
hub where Service members and their families build a sense of 
community. Fitness centers must be on installations because it makes 
their use by members more convenient, thereby encouraging regular and 
frequent exercise and the adoption of healthy, positive lifestyles. 
Maintaining physical fitness is part of the daily work requirement for 
our military force. Members are required to partake in some form of 
fitness training or activity on an ongoing basis to maintain high 
fitness levels and combat readiness. Easy accessibility to fitness 
centers is critical because many junior enlisted lack the private 
transportation required to travel significant distances to exercise. 
The best time for many Service members to exercise is during noon meal 
time or directly after work; the quality and duration of one's workout 
is directly affected by the distance.
                         fitness center backlog
    Question. What is the backlog for building and renovating fitness 
centers within the military services?
    Answer. In 1997, the Department launched a major initiative that 
focused on improving physical fitness. This initiative, called 
``Operation Be Fit,'' includes 5 major actions aimed at improving 
fitness activities. One of those actions is to address the serious 
facility deficiencies cited in the Marsh Commission report. As part of 
this facility improvement action, OSD conducted a survey of the 
Department's fitness facilities. This installation level survey 
identified 122 fitness facilities that were in poor condition. The 
survey instrument specifically instructed the installation to have the 
local engineer determine if the fitness facility was in excellent, good 
or poor condition, according to engineering criteria. These 122 poor 
facilities represented almost a quarter of all fitness facilities that 
our people used to stay fit and for recreation. The number of poor 
facilities has been reduced and will be reduced further if the eleven 
facilities requested in the fiscal year 2000 MILCON are approved.
    The following is a list of projects critical to the Services' 
fitness centers, that are not funded in the fiscal year 2000 budget, 
but are included in the Future Years Defense Plan. The total is 
approximately $363 million as shown below.
                                                             In Millions

Bamberg, GE....................................................... $6.00
Ft. Knox, KY......................................................  6.20
Ft. Bragg, NC (Ctr 1).............................................  6.20
Camp Stanley, KR..................................................  6.00
Ft. McNair, Wash D.C..............................................  7.80
Weisbaden, GE.....................................................  6.00
Ft. Hood, TX......................................................  6.20
Ft. Bragg, NC (Ctr 2).............................................  6.20
Kaiserslautern, GE................................................  6.00
Camp Kyle, KR.....................................................  6.00
Ft. Benning, GA................................................... 10.00
Atlanta, GA.......................................................  2.92
WPS Charleston, SC................................................  4.83
Diego Garcia......................................................  5.55
Dahlgren, VA......................................................  5.87
Roosevelt Roads, PR...............................................  7.29
ASW San Diego, CA.................................................  3.46
Monterey, CA......................................................  3.87
Navy Replacement Projects.........................................  1.96
HAS Norfolk, VA...................................................  9.44
Newport, VA.......................................................  8.76
Athens, GA........................................................  2.67
Corry Station, FL (Ctr 1).........................................  1.66
Fallon, NV........................................................  4.80
Port Hueneme, CA..................................................  5.63
Lemore, CA........................................................  5.44
Dam Neck, VA......................................................  1.85
Gulfport, MS......................................................  3.03
Corry Station (Ctr 2).............................................  1.11
E1 Centro, CA.....................................................  4.79
Bangor, ME........................................................  0.92
Davis Monthan AFB, AZ.............................................  7.60
McGuire AFB, NJ................................................... 10.50
Dover AFB, DE.....................................................  5.00
McChord AFB, WA...................................................  5.40
Lackland AFB, TX..................................................  3.00
Little Rock, AR...................................................  7.50
Anderson AFB, GU..................................................  8.20
Tinker AFB, OK....................................................  4.10
Scott AFB, IL.....................................................  7.75
Dyess AFB, TX.....................................................  6.45
RAF Mildenhall....................................................  5.00
Shaw AFB, SC......................................................  1.50
Hanscom AFB, MA...................................................  4.00
Minot AFB, ND.....................................................  4.25
Beale AFB, CA.....................................................  6.65
Seymour-Johnson AFB, NC...........................................  5.50
Ramstein AFB, GE..................................................  6.00
Hickam AFB, HI.................................................... 10.00
Charleston AFB, SC................................................  1.90
Elmendorf AFB, AK.................................................  1.70
Randolph AFB, TX.................................................. 10.20
Nellis AFB, NV....................................................  2.00
Moody AFB, GA.....................................................  3.20
Eielson AFB, AK...................................................  9.90
Andrews AFB, MD...................................................  9.00
Spangdahlem, AFB, GE..............................................  1.70
Bolling AFB, Wash D.C.............................................  9.00
Quantico, VA......................................................  7.90
Lejeune, NC (Ctr 2)...............................................  3.95
Pendleton, CA (Ctr 1).............................................  4.72
Cherry Point, NC..................................................  3.31
Miramar, CA.......................................................  4.15
Pendleton, CA (Ctr 2)............................................. 11.69
Yuma, AZ..........................................................  0.83
Lejuene, NC (Ctr 3)...............................................  2.58
Kaneohe, HI.......................................................  8.38
                                                                  ______
      Total.......................................................362.96

                          SUBCOMMITTEE RECESS

    Senator Burns. The next hearing of the subcommittee will 
take place on March the 23, when we will hear from the Army and 
the Air Force. We certainly appreciate your cooperation this 
morning and your good work. We appreciate all that you do.
    [Whereupon, at 11:30 a.m., Thursday, March 16, the 
subcommittee was recessed, to reconvene at 11 a.m., Tuesday, 
March 23.]


       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2000

                              ----------                              


                        TUESDAY, MARCH 23, 1999

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 11 a.m., in room SD-116, Dirksen 
Senate Office Building, Hon. Conrad Burns (chairman) presiding.
    Present: Senators Burns, Craig, and Murray.

                         DEPARTMENT OF DEFENSE

                         Department of the Army

STATEMENT OF MAHLON APGAR, IV, ASSISTANT SECRETARY OF 
            THE ARMY (INSTALLATIONS AND ENVIRONMENT)
ACCOMPANIED BY:
        MAJOR GENERAL MILTON HUNTER, DIRECTOR OF MILITARY PROGRAMS, 
            U.S. ARMY CORPS OF ENGINEERS
        MAJOR GENERAL ROBERT L. VAN ANTWERP, JR., ASSISTANT CHIEF OF 
            STAFF FOR INSTALLATION MANAGEMENT
        BRIGADIER GENERAL JAMES R. HELMLY, DEPUTY CHIEF, ARMY RESERVE, 
            OFFICE CHIEF, ARMY RESERVE
        BRIGADIER GENERAL MICHAEL J. SQUIER, DEPUTY DIRECTOR, ARMY 
            NATIONAL GUARD

                           opening statement

    Senator Burns. We will call the committee to order.
    This morning we will hear testimony of the Military 
Construction, Family Housing, the Base Realignment and Closure 
(BRAC) and Reserve component programs from both the Army and 
the Air Force. I welcome all of you here this morning. We will 
first hear from the United States Army.
    I am pleased to have before us the Assistant Secretary of 
the Army for Installations and Environment. Is that Mahone?
    Mr. Apgar. Mahlon.
    Senator Burns. Mahlon----
    Mr. Apgar. I am called Sandy, sir, please.
    Senator Burns [continuing]. Apgar.
    Mr. Apgar. Correct.
    Senator Burns. I will tell you that we have quite a lot of 
concern, as you well know, on military construction and the way 
that we are funding our 2000 military construction budget. 
Incremental funding over the last two-year period will slow 
execution of these critical projects, in my estimate.
    Ultimately, it will cost the American taxpayer more money, 
as we expect contractors to assume more of the risk associated 
with building facilities for the Department. I am not all that 
big of a fan of it, but yet we are not written in stone, and we 
will listen to what you have in mind. Senior Defense officials 
tell me that this is a one-time-only financing technique, 
advanced appropriations for all projects; however, the same 
fiscal challenges that the Department faced in putting together 
the fiscal year 2000 budget will still be there in years to 
come.
    I think the danger will be that we begin not fully funding 
military construction up front but spread the costs over two, 
three, and even five years, and I have some concern with that. 
How do we deal with BRAC if there is future base closings, and 
that may be a distinct possibility. So I am not a big fan of 
incremental funding, and believe this is the wrong way for the 
Department to proceed.

                          PREPARED STATEMENTS

    I will forego the rest of my statement, and I will enter my 
statement and Senator Murray's statement into the record.
    [The statements follow:]
                  Prepared Statement of Senator Burns
    The Subcommittee will come to order. This morning we will hear 
testimony on the Military Construction, Family Housing, BRAC and 
Reserve Component programs for both the Army and the Air Force.
    We will first hear from the Department of the Army.
    We are pleased to have before us this morning, the Assistant 
Secretary of the Army for Installations and Environment, Mahlon Apgar.
    I remain concerned with the way the Department of Defense has 
funded the fiscal year 2000 Military Construction budget.
    Incremental funding over a two-year period will slow execution of 
these critical projects. Ultimately, it will cost the American 
taxpayers more money as we expect contractors to assume more of the 
risk associated with building facilities for the department.
    Senior defense officials tell me that this is a one-time only 
financing technique--advance appropriations of all projects. However, 
the same fiscal challenges that the department faced in putting 
together the fiscal year 2000 budget will still be there in years to 
come.
    The danger will be that we begin not to fully fund Military 
Construction up front but spread the costs over two, three or even five 
years.
    I could foresee a time when we have many projects on the books but 
not enough money to begin construction on any of them.
    I oppose incremental funding and believe it is the wrong way for 
the department to proceed.
    It will strike a major blow to revitalizing our aging 
infrastructure and improving quality of life for service members and 
their families.
    I can assure you that we will approach this situation with great 
care and consideration we decide how to proceed with this budget.
    I want to commend you and the Army for your continued commitment 
toward improving the quality of life for single soldiers. However, I am 
concerned with the absence of funding in the budget for family housing 
for the Army, not only in the fiscal year 2000 budget but also in the 
out year. We will discuss this later when we get to questions.
    We look forward to working with you to ensure that the Army's most 
critical requirements are met in this budget.
    Secretary Apgar, I would ask you to keep your statement brief 
because we will also hear from the Air Force later this morning.
    Please be advised that your statement will be included in its 
entirety for the record.
    Sir, before we proceed, would you introduce the representatives 
that are with you today from the Army?
    I would like to turn to the ranking member, Senator Murray, for any 
comments that she might like to make at this time.
    Secretary Apgar, please proceed.
                                 ______
                                 
                  Prepared Statement of Senator Murray
    Mr. Chairman, thank you for scheduling this hearing to discuss the 
Fiscal Year 2000 Military Construction programs of the Army and Air 
Force. I welcome our witnesses, and I look forward to hearing their 
testimony.
    This is a crucial year for the programs that our subcommittee 
oversees. The Congress has heard a steady drumbeat of testimony from 
military and civilian defense leaders over the past several months 
regarding threats to the readiness of our armed forces.
    Pay and retirement benefits are said to be inadequate. Recruitment 
and retention are down, maintenance and repair costs are up, and morale 
among the troops is strained.
    The Defense Department responded to these pressures by seeking a 
substantial increase in the defense budget for fiscal year 2000, part 
of which is to be financed by stretching out the funding for fiscal 
year 2000 military construction projects over two years.
    While I am sure it is well-intentioned, I also believe that this is 
a very risky strategy. We have heard from previous witnesses before 
this subcommittee that incremental funding could have a detrimental 
effect on the pace of Military Construction. Contractors are expected 
to view this system with skepticism, construction costs are likely to 
increase, and at least some projects are going to end up behind 
schedule.
    Given these potential drawbacks, I have serious reservations about 
incremental funding and the impact it could have on absolutely 
essential Military Construction projects and quality of life programs.
    I have heard time and again from witnesses before this subcommittee 
about the importance of quality of life projects to the men and women 
who serve in our armed forces. I have visited the military bases in my 
state of Washington and elsewhere in this country. I have seen first-
hand examples of crumbling infrastructure and inadequate facilities. I 
have seen first-hand the need for barracks, family housing, child care 
facilities, schools, clinics and other family support services.
    These items are crucial components of military readiness, and we 
cannot afford to shortchange them or delay them.
    I fear that whether we go with some kind of incremental funding 
program or whether we fully fund a reduced number of projects, the 
result will be the same--vital military construction projects will go 
begging, and the men and women who serve in our military will see a 
further decline in the quality of life that we provide for them and 
their families.
    Clearly, we have our work cut out for us. We must work within 
existing budget constraints.
    We must accept the fact that Military Construction is but one 
element of a complex and comprehensive defense program.
    We must set priorities. We must allocate our resources carefully. 
But, for the good of our military and the benefit of our national 
security, we cannot afford to lose our focus on essential quality of 
life improvements.
    I commend our witnesses today, and indeed all of the services, for 
the recognition that they have given to the importance of quality of 
life initiatives, and for their efforts to improve quality of life 
programs in the face of severe budget pressures from readiness and 
personnel accounts.
    I appreciate the emphasis that the chairman of this subcommittee 
has placed on quality of life improvements.
    I commend our witnesses today, and indeed all of the services, for 
the recognition that they have given to the importance of quality of 
life initiatives, and for their efforts to improve quality of life 
programs in the face of severe budget pressures from readiness and 
personnel accounts.
    I appreciate the emphasis that the chairman of this subcommittee 
has placed on quality of life improvements.
    Through his efforts, he has made a direct and significant 
contribution to the lives of many of the men and women who are serving 
in the U.S. military today.
    I thank him for his support, and I look forward to working with him 
and with the services to find the best possible solution to meeting the 
myriad of Military Construction and other needs of the armed forces.
    Thank you Mr. Chairman.

    Senator Burns. This morning we have General Antwerp, 
General Hunter, and General Squier, and General Helmly. We 
welcome you this morning, and we would welcome your statements 
at this time.
    Mr. Secretary, thank you for coming this morning.

                       STATEMENT OF MAHLON APGAR

    Mr. Apgar. Thank you, Mr. Chairman. It is an honor to 
appear before you and the committee to discuss the Army's 
budget request for fiscal year 2000 and our military 
construction program. This is my first appearance before the 
committee, and I pledge to work closely with you in addressing 
the many challenges in our Military Construction (MILCON) 
programs. I hope you will call me at any time with your 
concerns or questions you may have about our policies and 
programs.
    My written statement provides in-depth details of our 
military construction budget request. In it we balance Army 
objectives for modernization, readiness, and quality of life, 
and support our highest priorities, barracks and family 
housing, strategic mobility, reserve component construction, 
real property maintenance, and base closures and realignments, 
and with your permission, Mr. Chairman, I will submit the full 
statement for the record and make some brief comments to 
highlight our progress.
    Senator Burns. All of your statements will be made part of 
the record.
    Mr. Apgar. Thank you, sir. First, barracks modernization is 
a major success. With your support, 53 percent of our single-
soldier housing is funded to meet or approximate the new one-
plus-one standard, and while we still have some way to go, 
especially overseas, we are on schedule to complete Army-wide 
barracks modernization by 2008.
    Our budget also emphasizes strategic mobility; that is, the 
platform for Army readiness. These force projection projects 
will provide the necessary infrastructure, specifically rail 
and airfield improvements, to facilitate movement of our troops 
and their equipment to essential air and sea ports. The budget 
also supports reserve component construction.
    For the Army National Guard we have budgeted for a 
readiness center, three maintenance support facilities, and one 
training facility. For the Army Reserve, we have three new Army 
Reserve centers, a regional maintenance training facility, and 
other critical projects.
    Real property maintenance is our primary account for 
maintaining the Army's infrastructure. Because these resources 
protect the facilities that your committee approves, your 
support of the funding levels we have requested in our 
operations and maintenance budget will reinforce our MILCON 
programs. We hope you will endorse this funding.
    In our current base closure and realignment program, three 
out of four rounds of base closures will be completed by the 
end of this fiscal year, and we will complete the final round 
of closures and realignments by the end of fiscal year 2001. We 
continue to believe that the BRAC process is the best way to 
dispose of unneeded infrastructure and to reshape our 
installations.
    We will achieve nearly a billion dollars a year in annual 
savings once our current program is fully implemented, but we 
must do more to reduce the costs of maintaining excess 
infrastructure and to redeploy these resources for our critical 
readiness requirements.
    Finally, I would like to clarify our intent and plans 
concerning the Army's housing privatization program. This is a 
major Administration priority, and it is one of the main 
reasons I was asked to take this office, but it has become the 
subject of some controversy in recent weeks. I have come to 
realize that we have not discussed our concepts and plans with 
you and others in Congress as much as we should have.
    So I want to underscore my commitment to forging a closer 
dialogue with you in the coming months on this critical 
program.
    As you know, the Army has an acute family housing problem. 
A huge backlog of substandard houses must be renovated, a 
substantial housing deficit, especially for junior enlisted 
soldiers, must be eliminated, and a large ongoing maintenance 
requirement must be satisfied.
    It is imperative to attract and maintain a trained and 
ready Army and sustain the selfless service of our soldiers. 
They demand that we solve this complex problem by providing 
their families with better places in which to live. I consider 
this basic institutional responsibility as my most important 
professional and personal challenge in this office and, 
accordingly, have pressed forward in the past eight months with 
great urgency to design and test an Army privatization program 
that I believe will substantially help the Army, our soldiers, 
and their families.
    I am pleased to report that the home building and 
development industry has shown a great interest in the program, 
and the Army leadership has expressed its support.
    Shortly after taking office last June I visited Forts 
Carson and Lewis with senior Army military and civilian 
executives to see the problems firsthand through the eyes of 
soldiers and their families, and to gauge the priorities and 
concerns of the local commands, and since then have done the 
same at ten other installations in the U.S., and Korea, 
including Forts Hood, Meade, Shafter, and Schofield Barracks.
    Frankly, I was appalled at some of the conditions I saw, 
but I was also impressed with the dedication of the troops, the 
understanding of their families, and the resolve of the local 
command teams to help them.
    In response, we mustered a task force of Army and private 
sector experts to help us forge a strategy designed both to 
attract private capital to fund improvements, and to enlist 
private enterprise to revitalize our residential neighborhoods.
    In my judgment, sufficient private capital will be 
available to achieve our objectives if we maximize the Army's 
advantage of scale in using the privatization tools Congress 
has given us, but privatization means more than capital. 
Capital alone is not enough. We have to engage the four E's.
    I call them the entrepreneurship, the energy, the 
efficiency, and the expertise of the world's most effective 
home building and real estate industry to help us house the 
world's best Army in the quality communities they deserve. That 
is why we renamed our housing privatization program from 
Capital Ventures Initiative (CVI), which focuses on financing, 
to Residential Communities Initiative (RCI), which emphasizes 
our overriding goal, to enhance the quality of life for 
soldiers and their families by creating and sustaining 
attractive, affordable residential communities on Army posts.
    RCI uses the tools provided by Congress to achieve this 
goal, by leveraging the experience and creativity of the 
development industry, as well as their capital. We believe that 
most Army family housing needs in the U.S. can be met through 
RCI, but at this time we would like to test our concept at five 
installations. We will continue to use traditional MILCON to 
fund all of those projects in the U.S. where privatization is 
not feasible, and all housing projects overseas, where the 
privatization authorities do not apply.
    As part of our pilot program we are pursuing three changes 
in policy and practices. First, our management focus is 
shifting from housing production to community development.
    Each project will include the features and amenities that 
most Americans enjoy in their neighborhoods, such as extensive 
landscaping, community centers, recreation facilities, and 
ongoing maintenance of public space as well as housing 
renovation and construction.
    The second change is transforming our business 
relationships from contracting to partnering. In traditional 
military construction projects the Army is the developer. We 
provide the funds, take the risks, and bid the contracts, but 
when the houses are built, the contractor is finished, and the 
Army maintains and manages the completed project usually 
through separate contractors.
    In RCI, the Army will become a partner with private 
developers. Each developer will arrange the project financing 
for private investors, take the business risks, hire and manage 
the contractors, and provide ongoing services with specific 
performance measures that align the developer's goals with the 
Army's.
    The third major shift, from procuring the contractor, 
through a request for proposal, to selecting a partner through 
a request for qualifications, is a consequence of the first two 
changes, and is itself an important reform of the procurement 
process.
    In the typical request for proposal (RFP) the Army details 
the requirements for executing a project and selects the 
contractor based on his bid proposal. The contractor cannot 
suggest improvements to these specifications until the contract 
award is made, but by then he has no incentive to do so and 
would only delay the project.
    In our proposed request for quote (RFQ), the Army will 
define the qualifications for selecting the developing partner, 
experienced track record, financial resources, management 
capabilities, and so on, and then the Army and selected 
developer together will jointly prepare the best plan for 
project execution, and then submit that plan for congressional 
review.
    The RFQ process will enable the Army to benefit from the 
industry's creativity and experience, encourage the developer 
to innovate wherever possible throughout the project, and 
eliminate delays in execution. We designed the RFQ specifically 
to broaden competition by making it easier and cheaper for 
developers to enter the program. Those who responded to the RFP 
in Fort Carson, for example, have told us that they spent 
anywhere from $300,000 to over $1 million.
    The RFQ tests we have done suggest that people can enter--
experienced, qualified developers and managers can enter for 
sums in the range of $10,000 to $25,000. That factor alone, 
together with the simplicity, will greatly broaden competition.
    The RFQ process is basically an inexpensive way for the 
Army to acquire information and especially insights from 
experienced developers, and then to determine the boundaries of 
a long-term business relationship.
    The dialogue between the developer, the Army, and other 
stakeholders will result in a plan for each installation that 
shows how much will be invested, how many houses and other 
facilities will be built and renovated, and how maintenance and 
other operations will be managed to meet our critical housing 
needs and create family communities for which we can all be 
proud.
    In closing these opening comments, Mr. Chairman, may I 
reaffirm my commitment to work closely with you and your staff 
to make the Residential Communities Initiative succeed.

                           PREPARED STATEMENT

    Thank you. We will be pleased to respond to your questions.
    Senator Burns. Thank you, Mr. Secretary.
    [The statement follows:]
               Prepared Statement of Hon. Mahol Apgar, IV
    Mr. Chairman and members of the subcommittee, it is a pleasure to 
appear before you to discuss the Active Army and Reserve Components' 
military construction request for fiscal year 2000. This request 
includes initiatives of considerable importance to America's Army, as 
well as this committee, and we appreciate the opportunity to report on 
them to you.
    Our statement is in four parts:
  part i--military construction, army family housing, army homeowners 
                        assistance fund, defense
    I am pleased to present the Active Army's portion of the Military 
Construction budget request for fiscal year 2000. This budget provides 
construction and family housing resources essential to support your 
Army's role in our National Military Strategy.
    The program presented herein requests fiscal year 2000 
appropriations of $656,003,000 for Military Construction, Army (MCA) 
and $1,112,083,000 for Army Family Housing (AFH); also requested is an 
advance appropriation of $659,536,000 for MCA and $43,991,000 for AFH. 
The companion request for authorization in fiscal year 2000 includes 
$1,117,505,000 for MCA and $1,158,980 for AFH. The fiscal year 2000 
request for authorization of appropriations is $656,003,000 for MCA and 
$1,112,083,000 for AFH. There is no request this year for the 
Homeowners Assistance Fund, Defense.
    America's Army is the most capable Army in the world today. The 
soldiers of the active component, the National Guard, and the Army 
Reserve, are joined by the civilian employees and family members to 
form the ``Total Army.'' The Army stands ready today, as our 
predecessors have for over 223 years, to fight and win our Nation's 
wars. We are currently conducting operations throughout the world to 
shape the international environment and to promote peace and 
prosperity. On any given day in fiscal year 1998, over 28,000 of our 
soldiers were deployed away from their home stations to more than 70 
countries around the world, conducting operations in support of the 
National Military Strategy.
    We must be ready to respond wherever our interests are threatened 
around the world. To do this, we must maintain sufficient forces, 
sufficient strategic air and sealift to project power rapidly, 
sufficient prepositioned assets to cut down deployment times for 
initial response forces, and sufficient installations from which to 
project our forces.
    The requirements of military service demand unique sacrifices from 
military members, their families and the civilians who work with them. 
One of the imperatives to maintaining a trained and ready Army is 
taking care of our soldiers and families. People are the defining 
characteristic of a quality force and are the nucleus of our Army. High 
caliber quality of life programs are essential to ensuring that the 
Army continues to attract and retain the soldiers necessary to maintain 
the Total Army. We must continue to focus on issues important to these 
men and women who so bravely serve the nation. Programs that provide 
our soldiers and their families better places to work and live are key 
to our focus. The commitment to taking care of soldiers benefits our 
Nation by fostering strong families and safer communities.
    Now, I would like to discuss the Army's facilities strategy for 
fiscal year 2000 and beyond.
                          facilities strategy
    A world-class Army deserves world-class facilities. The Army's 
vision is to provide comprehensive, adaptable power projection 
platforms with the quality facilities, infrastructure and services that 
are integral to the readiness of the force and the quality of life of 
our soldiers and their families.
    The Army's facilities strategy is threefold. First, we must focus 
our investment on the most important facilities because our resources 
are limited. To do this we must identify required facilities, 
infrastructure and support services, and then focus our resources on 
those to assure the desired level of readiness. Second, we must divest 
all unneeded real estate. Third, we must reduce the total cost required 
to support our facilities and related services, including maintenance 
of our real estate inventory.
    As part of our effort to better focus our investment, we have 
developed a decision support tool, the Installation Status Report (ISR) 
to help formulate and monitor our facilities strategy. We use it to 
assess the status of our facilities' condition. This identifies 
critical areas to consider in resource allocation. Also, it assists in 
condition assessment of our facilities essential to the installation's 
mission and quality of life.
    We are reducing our requirement by rigorously eliminating excess 
facilities. Our current facilities reduction program and base 
realignment and closure process will result in disposal of over 200 
million square feet in the United States by 2003. We continue to 
demolish one square foot for every square foot constructed and began 
reducing our leasing costs in fiscal year 1998 by $13,900,000. By 2003, 
with our overseas reductions included, the Army will have disposed of 
over 400 million square feet from its fiscal year 1990 peak of 
1,157,700,000 square feet.
    We are looking for innovative ways to reduce the cost of our 
facilities, including privatization or outsourcing of certain 
functions. One example is installation utilities systems. Our goal is 
to privatize all utility systems, where it is economically feasible, by 
2003, including those supporting reserve components and overseas, 
except those needed for unique security reasons. Privatization is also 
being considered to provide better housing for soldiers and their 
families while reducing the Army's inventory. Partnering with civilian 
communities around an installation to provide some facilities is also a 
viable alternative to Army owned facilities.
    Over the period 2000-2005, the Army plans to achieve over $3 
billion in estimated savings from our Major Commands with United States 
installations to provide additional resources for force modernization 
and other high priorities. These reductions are based on estimated 
savings derived from performing A-76 cost competition studies of 
commercial activities comprising about 73,000 positions during fiscal 
years 1997-2002. The Army's primary challenge is to accomplish these 
cost-effective measures as soon as possible.
    Next, I will discuss the highlights of the budget.
                         advance appropriations
    In order to free up resources required to address serious 
requirements in readiness funding, the fiscal year 2000 construction 
program has been incrementally funded by authorizing each project and 
requesting advance appropriations to fund it.
    We are requesting full authorization for all new fiscal year 2000 
projects, but only the appropriations that can be spent in the first 
year. In most cases, this amounts to approximately 15 percent of the 
project. For the Army, the percentage is based on historical, first-
year outlay rates and includes an additional percentage for risk and 
flexibility. We are also requesting fiscal year 2001 advance 
appropriations for the balance of the funding requirement.
                   military construction, army (mca)
    We are focusing on four major categories of projects: mission 
facilities; quality of life; support programs such as infrastructure 
and environment; and chemical demilitarization. I will explain each 
area in turn.
                           mission facilities
    In fiscal year 2000, there are thirteen mission facility projects, 
including the Army's Strategic Mobility Program (ASMP), and the 
Simulator Facility Program. We are requesting full authorization of 
$171,650,000, with appropriations and authorization of appropriations 
of $42,510,000. Advance appropriations for the balance of the projects 
are requested for fiscal year 2001.
Army Strategic Mobility Program
    Our budget request continues the program to upgrade our strategic 
mobility infrastructure enabling the Army to maintain the best possible 
power projection platforms. We are requesting full authorization of 
$161,050,000 with appropriations and authorization of appropriations of 
$40,910,000. Advance appropriations for the balance of the projects are 
requested for fiscal year 2001. The fiscal year 2000 projects will 
complete 68 percent (based on authorization) of the Strategic Mobility 
program that is scheduled for completion in fiscal year 2003.
    Our fiscal year 2000 request includes the second phase of the 
railhead loading facility at Fort Hood that was fully authorized last 
year. We are requesting an appropriation and authorization of 
appropriations of $14,800,000 to complete the project.
    In addition to the above project we are planning to construct two 
other projects at Fort Hood: a fixed wing aircraft parking apron and a 
deployment ready reactive field. At Fort Bliss, we are constructing an 
air deployment facility complex, an aircraft loading apron, and an 
ammunition hot load facility. We are continuing to upgrade the 
facilities at Fort Bragg by constructing a heavy drop rigging facility. 
Additional projects include a rail and containerization facility at 
Fort Sill, an ammunition holding area at Fort Benning and an ammunition 
surveillance facility at Sunny Point Military Ocean Terminal.
    We are continuing to improve our depot capability with a rail yard 
infrastructure improvement project and ammunition road infrastructure 
project at McAlester Army Depot, an ammunition surveillance facility at 
Bluegrass Army Depot, and an ammunition containerization complex at 
Letterkenny Army Depot.
    Simulator Facility Program.--One project is included in this year's 
budget for the Wolverine/Grizzly Simulator Facility. This project will 
enhance engineer soldier training at Fort Leonard Wood by using a group 
of fully interactive, networked simulators and work stations to 
replicate actual vehicles, weapons systems, and command and control 
elements. This is the only simulator facility required for engineer 
training. Our budget requests full authorization of $10,600,000 with 
appropriations and authorization of appropriations of $1,600,000. 
Advance appropriations for the balance of the project are requested for 
fiscal year 2001.
                        quality of life projects
    The quality of life of our soldiers, their families and civilians 
has a significant impact on readiness. Therefore, our budget reflects 
substantial funding levels for quality of life programs to support our 
goal to get soldiers out of gang latrine type barracks and to provide 
new or upgraded barracks for our requirement of 137,000 single 
soldiers. Additionally, we are requesting other quality of life 
facilities that will improve not only the life style of our soldiers 
but also the readiness of the Army. We are requesting an authorization 
of $454,550,000, with appropriations and authorization of 
appropriations of $85,423,000 for quality of life projects this year. 
Advance appropriations for the balance of the projects are requested 
for fiscal year 2001.
    This substantial effort, as well as increased out-year funding, 
accelerates our barracks program by building new or renovating all 
barracks worldwide by 2008, rather than 2012 as previously planned.
    Whole Barracks Renewal Initiative.--Modernization of barracks 
continues to be the Army's number one facilities priority for military 
construction. It provides our single soldiers with a quality living 
environment that is comparable to living off the installation, or that 
enjoyed by our married soldiers. Our new or renovated barracks include 
increased personal privacy and larger rooms, closets, upgraded day 
rooms, all new furnishings, adequate parking, and landscaping, in 
addition to administrative offices, which are separated from the 
barracks.
    In fiscal year 2000, we are planning seventeen projects. This 
includes five projects in Europe and one project in Korea. Our budget 
also expands and funds the Fort Campbell barracks complex that was 
authorized in fiscal year 1999 and the Fort Stewart barracks complex 
that was authorized in fiscal year 1998. We are requesting an 
additional $7,000,000 authorization to complete the Fort Stewart 
project, due to an increased price estimate of the total cost to build 
the barracks complex. We are requesting full authorization of 
$434,300,000, with appropriations and authorization of appropriations 
of $81,273,000. Advance appropriations for the balance of the projects 
are requested for fiscal year 2001.
    After completion of the fiscal year 2000 program, 60 percent of our 
soldiers requiring housing will be housed at the new standard. Our plan 
is to invest an additional $5.2 billion (including host nation support) 
to fix barracks worldwide to meet our goal of providing improved living 
conditions to our single soldiers by fiscal year 2008. Between fiscal 
year 1994 and fiscal year 1999, we have already invested $3.0 billion 
in improving barracks and thus the quality of life of our single 
soldiers.
Physical Fitness Training Centers
    Physical fitness facilities have a positive impact on morale, 
physical welfare, soldier fitness and recreation. The overall condition 
of our existing fitness training facilities prompted us to include 
three projects in fiscal year 2000: one each at Fort Lewis, Fort 
Campbell and at Walter Reed Army Medical Center. The request for full 
authorization is $19,000,000, with appropriations and authorization of 
appropriations of $3,770,000 for these projects. In addition, advance 
appropriations for the balance of the projects are requested for fiscal 
year 2001. This is the first phase of an effort to improve the 
condition of our physical fitness training centers.
Chapel
    Our fiscal year 2000 budget includes a small chapel at Fort McNair, 
to serve the spiritual needs of the residents, employees, staff and 
students. This project also must be designed with the unique 
requirements of one of the Army's most important historic posts. Full 
authorization of $1,250,000 is requested with appropriations and 
authorization of appropriations for $380,000. Advance appropriations 
for the balance of the project are requested for fiscal year 2001.
                            support programs
    This category of construction projects provides vital support to 
installations and helps improve their readiness capabilities. In our 
budget, we have requested twenty-five projects with full authorization 
request of $193,000,000, and appropriations and authorization of 
appropriations request of $169,465,000. Advance appropriations for the 
balance of the projects are requested for fiscal year 2001.
    Our budget includes eight projects that will improve soldier 
training. Three projects were authorized by Congress in fiscal year 
1999: Phase 2 of the Military Operations in Urban Terrain (MOUT) 
training complex at Fort Bragg, Phase 2 of the soldier development 
center at Fort Hood, and Phase 2 of the Fort Knox multi-purpose digital 
training range. In addition, we have included a MOUT range and Sabre 
heliport improvements at Fort Campbell, a multi-purpose training range 
at Fort Stewart, an ammunition supply point facility for Yakima 
Training Center and a rotational unit facility maintenance area at Fort 
Irwin.
    We are also revitalizing our infrastructure by budgeting eleven 
projects that affect the efficient and safe operations of our 
installations. These projects include a tank trail upgrade for erosion 
mitigation at Fort Lewis, Yakima Training Center, a heat plant upgrade 
at Fort Wainwright, a water treatment plant at Fort Leavenworth, a 
water system upgrade and an electrical system upgrade in Korea. We also 
included a military police station and a fire station at Fort Belvoir, 
a fire station at McAlester Army Ammunition Plant, and an emergency 
service center at both Fort Myer and Fort Jackson. In addition, we are 
completing the power plant for Roi Namur on Kwajalein Atoll that was 
fully authorized in fiscal year 1999.
    Construction of the United States Army Disciplinary Barracks, begun 
in fiscal year 1998, will be completed with this final phase, with an 
appropriations and authorization of appropriations request of 
$18,800,000. Phase 2 of the United States Military Academy Cadet 
Physical Development Center, begun in fiscal year 1999, is also 
included. We are requesting appropriations and authorization of 
appropriations of $28,500,000 for this phase. The entire project was 
authorized in fiscal year 1999.
    The budget also includes projects at Westover Air Force Base and 
Fort Meade for the construction of military entrance processing centers 
that will permit us to vacate costly leased facilities and move onto a 
military installation. The United States Army Space Command 
Headquarters will be constructed at Peterson Air Force Base, with the 
approval of this budget, which also permits us to vacate leased 
facilities and to co-locate with other similar commands, thus providing 
an additional economic advantage. Also included is a request for a 
classified project.
                      ammunition demilitarization
    The Ammunition Demilitarization (Chemical Demilitarization) Program 
is designed to destroy the U.S. inventory of lethal chemical agents, 
munitions, and related (non-stockpiled) materiel. It also provides for 
emergency response capabilities, while avoiding future risks and costs 
associated with the continued storage of chemical warfare materiel.
    The Office of the Secretary of Defense devolved the Chemical 
Demilitarization program to the Department of the Army in fiscal year 
1999. Although Congress authorized and appropriated funding for the 
fiscal year 1999 Chemical Demilitarization construction program to the 
Department of Defense, the overall responsibility for the program 
remained with the Army and we have included it in this year's Army 
budget.
    An appropriations and authorization of appropriations request for 
$267,100,000 is included in the Army's fiscal year 2000 budget to 
continue the Chemical Demilitarization projects previously authorized. 
Full authorization of $206,000,000 is requested for two new projects at 
Blue Grass Army Depot. The first Blue Grass project is a support 
project which improves road access and security control. It also 
provides utility linkage to the construction site, vehicle parking, and 
a facility for contamination control. The second Blue Grass project is 
the Ammunition Demilitarization Facility, which provides the structures 
required to safely handle, process, and dispose of lethal chemical 
agents and munitions. Table 1 summarizes our request:

                                 TABLE I
                           [Fiscal Year 2000]
------------------------------------------------------------------------
           Installation                     Type              Amount
------------------------------------------------------------------------
Aberdeen Proving Ground, MD.......  Ammun Demil Facility     $66,600,000
Anniston Army Depot, AL...........  Ammun Demil Facility       7,000,000
Blue Grass Army Depot, KY.........  Ammun Demil Facility  \1\ 11,800,000
Blue Grass Army Depot, KY.........  Ammun Demil Support       11,000,000
                                     Facility.
Newport Army Depot, IN............  Ammun Demil Facility      61,200,000
Pine Bluff Army Depot, AR.........  Ammun Demil Facility      61,800,000
Pueblo Army Depot, CO.............  Ammun Demil Facility      11,800,000
Umatilla Army Depot, OR...........  Ammun Demil Facility     35,900,000
------------------------------------------------------------------------
\1\ Authorization request of $195,800,000.

                          planning and design
    The fiscal year 2000 MCA budget includes $60,705,000 for planning 
and design. This request is based on the size of the two succeeding 
fiscal years' military construction programs. The requested amount will 
be used to complete design on fiscal years 2000 and 2001 and initiate 
design of fiscal year 2002 projects. The size of the fiscal year 2000 
request is, therefore, a function of the construction programs for 
three fiscal years: 2000, 2001 and 2002.
    Host Nation Support (HNS) Planning and Design (P&D).--The Army, as 
Executive Agent, provides HNS P&D for oversight of Host Nation funded 
design and construction projects. The United States Army Corps of 
Engineers oversees the design and construction to ensure the facilities 
meet our requirements and standards. Lack of oversight may result in an 
increase in design errors and construction deficiencies that will 
require United States dollars to rectify. Maintaining the funding level 
for this mission results in a payback where one dollar of United States 
funding gains $60 worth of Host Nation Construction. The fiscal year 
2000 budget request for $21,300,000 will provide oversight for 
approximately $1 billion of construction in Japan, $50 million in Korea 
and $50 million in Europe. The budget includes $2,800,000, which is 
dedicated to the oversight of facilities associated with the Government 
of Japan (GOJ) funded initiative to consolidate and relocate United 
States Forces on Okinawa.
    Let me show you the analysis of our fiscal year 2000 MCA request.
                        budget request analysis
Summary
    The fiscal year 2000 MCA budget includes a request for 
appropriations of $656,003,000 and companion authorization of 
appropriations request of $656,003,000 and advance appropriations of 
$659,536,000.
    Authorization Request.--The request for authorization is 
$1,117,505,000. The authorization request is adjusted for those 
projects previously authorized in fiscal years 1998 and 1999. These 
projects include the third phase of the U.S. Disciplinary Barracks, the 
second phase of the Railhead Facility and the Force XXI Soldier Support 
Center at Fort Hood, phase two of the West Point Cadet Physical 
Development Center, the Multi-purpose Digital Training Range at Fort 
Knox, the Power Plant at Roi Namur, and the remainder of the Whole 
Barracks Renewal Complex at Fort Campbell and Fort Stewart. 
Additionally, it is modified to provide full authorization of 
$195,800,000 for the Bluegrass Army Depot Ammunition Demilitarization 
project. Only $11,800,000 in appropriations is required for the first 
phase of this project.
    The fiscal year 2000 request for authorization and appropriations 
for fiscal year 2000, by investment focus, is shown in Table 2:

                                           TABLE 2.--INVESTMENT FOCUS
                                        [Appropriations Fiscal Year 2000]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Percent
                            Category                               Authorization   Appopriations  Appropriations
----------------------------------------------------------------------------------------------------------------
Quality of Life/Barracks........................................    $454,550,000     $85,423,000            13.0
Mission/Strategic Mobility......................................     171,650,000      42,510,000             6.5
Support.........................................................     193,000,000     169,465,000            25.8
Planning & Design/Minor Construction............................      91,505,000      91,505,000            14.0
                                                                 -----------------------------------------------
      Subtotal Army MILCON......................................     910,705,000     388,903,000            59.3
Chemical Demilitarization.......................................     206,800,000     267,100,000            40.7
                                                                 ===============================================
      TOTAL PROGRAM.............................................   1,117,505,000     656,003,000           100.0
----------------------------------------------------------------------------------------------------------------

    Table 3 shows the fiscal year 2000 distribution of the 
appropriations request among the Army's major commands:

                        TABLE 3.--COMMAND SUMMARY
              [Military Construction Army Fiscal Year 2000]
------------------------------------------------------------------------
                                          Appropriations    Percent of
                 Command                      ($000)           Total
------------------------------------------------------------------------
        INSIDE THE UNITED STATES

Forces Command..........................         103,463            15.8
Training & Doctrine Command.............          45,200             6.9
Army Materiel Command...................         272,490            41.5
Military District of Washington.........           6,110             0.9
Military Traffic Management Command.....             550             0.1
United States Military Academy..........          28,500             4.3
Space & Missile Defense Command.........           3,700             0.6
United States Army, Pacific.............          18,700             2.9
Classified Project......................          36,400             5.5
                                         -------------------------------
      SUB-TOTALS........................          15,113            78.5

        OUTSIDE THE UNITED STATES

Space & Missile Defense Command.........          35,400             5.4
Eighth, United States Army..............           6,670             1.0
United States Army, Europe..............           7,315             1.1
                                         -------------------------------
      SUB-TOTAL.........................          49,385             7.5
                                         ===============================
      TOTAL MAJOR CONSTRUCTION..........         564,498            86.1

                WORLDWIDE

Planning and Design.....................          82,005            12.5
Minor Construction......................           9,500             1.4
                                         -------------------------------
      SUB-TOTAL.........................          91,505            13.9
                                         ===============================
      TOTAL APPROPRIATIONS REQUESTED....         656,003           100.0
------------------------------------------------------------------------

    Advance appropriations.--With full authorization, a single contract 
can be awarded. Advance appropriations allow the Army to construct all 
phases of a project as a continuous project and minimizes any impact to 
the contractor due to incremental funding. With advance appropriations, 
the scope of the contract is not limited, but the work to be performed 
by the contractor is limited by the amount available for obligation in 
a given year. fiscal year 2001 advance appropriations of $659,536,000 
are requested for the balance of the fiscal year 2000 construction 
projects.
    Now, I will explain our Army Family Housing request.
                          army family housing
    No single quality of life measure is more important than adequate 
housing for soldiers and families. The family housing program provides 
a major incentive necessary for attracting and retaining dedicated 
individuals to serve in the Army. Yet, adequate housing continues to be 
the number one soldier concern when we ask them about their quality of 
life. Out-of-pocket expenses for soldiers living off post in the United 
States are approximately 20 percent of the total cost of their housing. 
Maintaining or finding adequate, quality housing for our soldiers and 
families is one of the Army's continuing challenges
    DOD has set a goal to eliminate inadequate family housing by 2010. 
Currently, 76 percent of Army's housing needs to be upgraded. Not 
taking action would leave our program underfunded by about $400 million 
per year, or $6 billion by 2010. Therefore, we intend to privatize Army 
Family Housing (AFH) in the United States, provide adequate 
revitalization resources to overseas locations and divest or demolish 
unneeded houses.
    In the United States, the Army plans to use the 1996 Military 
Housing Privatization Initiative (MHPI) authorities in a program we are 
calling the Residential Communities Initiative (RCI) to privatize AFH. 
MHPI allows the Services to leverage housing dollars to obtain private 
sector interest, expertise and capital to improve military housing. We 
plan to privatize 85,000 units at 43 installations in the United States 
by fiscal year 2005. Fort Carson, solicited under the Request for 
Proposals (RFP) process, is the first to be privatized, with an award 
expected in July 1999. Future projects will be solicited under the 
Request for Qualifications (RFQ) process, wherein the government 
selects a private housing and community developer based on the firm's 
qualifications and experience; jointly develops a Community Development 
and Management Plan with that developer; and negotiates a development 
agreement with the developer to implement that plan. 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. The 
emphasis is on partnering with the private entity to develop 
residential communities. The first RCI project to be executed under the 
RFQ process will be Fort Hood, and is scheduled for award in February 
2000. Forts Lewis, Stewart, Meade, and other installations will follow. 
Minimal maintenance and repair (M&R) funds will be used to sustain 
housing in a safe and habitable condition in the United States until 
privatized. Thirty-eight million dollars has been transferred from the 
Army Family Housing program in fiscal year 2000 to the Military Pay 
Account to cover the cost of the first RCI projects. An additional $9 
million of fiscal year 2000 AFH has been transferred to the OSD Family 
Housing Improvement Fund (FHIF) for OMB ``scoring.'' The majority, but 
not all, of AFH construction requirements in the Continental United 
States (CONUS) will be accomplished through the privatization program. 
Only in unique instances where privatization is not feasible is it 
expected that traditional MILCON will be necessary for AFH in CONUS.
    Because the Services do not own the houses or the land in foreign 
areas, they are unable to ``leverage'' Military Construction funds or 
attract new capital as they do in the United States. Moreover, the MHPI 
authorities do not apply in foreign areas, so we will increase the 
funds for the revitalization of our family housing in foreign areas to 
meet the DOD goal by fiscal year 2010.
    Our fiscal year 2000 request for appropriations and authorization 
of appropriations is $1,112,083,000, while the authorization request is 
$1,158,980,000. Additionally, we are requesting $43,991,000 for advance 
appropriations. Our request includes a modest new construction program 
to alleviate housing shortages in Korea; a revitalization program for 
our aging foreign housing inventory, which is 92 percent inadequate; 
and planning and design programs for future construction projects. Like 
the Military Construction, Army program, we are requesting full 
authorization for all new fiscal year 2000 projects, but only the 
appropriations that can be spent in the first year. In most cases, this 
amounts to approximately 15 percent of the project. For the Army, this 
percentage is based on historical, first-year outlay rates and includes 
an additional percentage for risk and flexibility. We are also 
requesting fiscal year 2001 advance appropriations for the balance of 
the funding requirement. Funding for the annual costs of operating, 
maintaining and leasing family housing for fiscal year 2000 is 
$1,098,080,000. Table 4 summarizes each of the categories of the Army 
Family Housing program.

                                          TABLE 4.--ARMY FAMILY HOUSING
                                               [Fiscal Year 2000]
----------------------------------------------------------------------------------------------------------------
                                                               Authorization                Appropriations
                   Facility Category                   ---------------------------------------------------------
                                                             Dollars       Percent        Dollars       Percent
----------------------------------------------------------------------------------------------------------------
New Construction......................................        24,000,000          2         4,400,000         <1
percent Post Acquisition Const........................        32,600,000          3         5,303,000          1
Planning and Design...................................         4,300,000         <1         4,300,000         <1
Operations............................................       185,620,000         16       185,620,000         17
Utilities.............................................       220,952,000         19       220,952,000         20
Maintenance...........................................       469,211,000         40       469,211,000         42
Leasing...............................................       222,294,000         19       222,294,000         <1
Debt..................................................             3,000         <1             3,000         <1
                                                       ---------------------------------------------------------
      TOTAL...........................................     1,158,980,000  .........     1,112,083,000  .........
----------------------------------------------------------------------------------------------------------------

    Advance appropriations--With full authorization, a single contract 
can be awarded. Advance appropriations allow the Army to construct all 
phases of a project as a continuous project and minimize any impact to 
the contractor due to incremental funding. With advance appropriations, 
the contract is not limited, but the scope of the work to be performed 
by the contractor is limited by the amount available for obligation in 
a given year. fiscal year 2001 advance appropriations of $43,991,000 
are requested for the balance of the fiscal year 2000 construction 
projects.
                      family housing construction
    The fiscal year 2000 request continues the Whole Neighborhood 
Revitalization (WNR) initiative to revitalize the housing units, while 
concurrently improving neighborhood amenities. This successful approach 
addresses the entire living environment of the military, and we 
appreciate the support that has been provided by the Congress in past 
years. The projects recommended for this program, all in foreign areas, 
are based on life-cycle economic analyses and will provide units that 
meet adequacy standards. Foreign area funding requests, where RCI does 
not apply, are being increased in order to bring all inadequate units 
up to current adequacy standards by fiscal year 2010. We are requesting 
full authorization of $60,900,000, with appropriations and 
authorization of appropriations of $14,003,000. Advance appropriations 
for the balance of the projects is requested for fiscal year 2001.
New Construction
    The fiscal year 2000 new construction program provides a project to 
construct 60 units at Camp Humphreys, Korea, where there is a 
continuing requirement for new housing, including the supporting 
infrastructure. The new construction project is requested to provide 
family housing in Korea where adequate off-post family housing is not 
available and no on-post family housing exists. These units are for 
command sponsored personnel currently living in substandard, off-post 
quarters and for those personnel who are unaccompanied due solely to a 
lack of adequate family housing.
Post Acquisition Construction
    The Post Acquisition Construction program is an integral part of 
our housing revitalization program, and is limited to foreign areas. In 
fiscal year 2000, we are requesting funds for improvements to 424 units 
at three locations in Europe. Also included within the scope of these 
projects are efforts to improve supporting infrastructure and energy 
conservation, and to eliminate environmental hazards.
                       operations and maintenance
    The operations, utilities, maintenance and leasing programs 
comprise the majority of the fiscal year 2000 request. The requested 
amount of $1,098,080,000 for fiscal year 2000 is almost 95 percent of 
the family housing authorization request and nearly 99 percent of the 
authorization of appropriations request. This budget provides for the 
Army's annual expenditures for operations, municipal-type services, 
furnishings, maintenance and repair, and utilities. Because of the 
privatization program in the United States, maintenance and repair 
funds for units scheduled to be privatized will be reduced to a level 
that sustains the houses in a habitable condition, but defers major 
repair projects until the RCI program is implemented at our 
installations.
    The family housing utilities' request reflects our success in 
reducing our energy consumption and supports the Army's energy 
conservation goal of a one and one-half percent reduction in overall 
facility energy requirements. This request is the minimum necessary to 
operate and maintain our family housing throughout the world.
                                leasing
    The leasing program provides another way of adequately housing our 
military families. We are requesting $222,294,000 in fiscal year 2000 
to fund existing Section 2835 project requirements, temporary domestic 
leases in the United States, and over 10,000 units overseas.
                       real property maintenance
    In addition to MCA and AFH, the third area in the facilities arena 
is the Real Property Maintenance (RPM) program. RPM is the primary 
account in installation base support funding responsible to maintain 
the infrastructure to achieve a successful readiness posture for the 
Army's fighting force. Installations are the power projection platforms 
of America's Army and must be properly maintained to be ready to 
support current Army missions and any future deployments.
    RPM consists of two major functional areas: Maintenance and Repair 
of Real Property and Minor Construction. The Maintenance and Repair of 
Real Property account pays to repair and maintain buildings, 
structures, roads and grounds, and utilities systems. The Minor 
Construction account pays for projects under $500,000 for the erection, 
installation or assembly of a new facility, and for the addition, 
expansion or alteration of an existing facility. It also funds projects 
under $1 million which are intended solely to correct a life, health or 
safety deficiency. This year we have requested funds for our RPM 
program in the Operation and Maintenance, Army (OMA) account, as well 
as a portion of the funds being requested in the Quality of Life 
Enhancement, Defense (QOLE,D) account. When the OMA RPM funding of $828 
million is combined with the QOLE,D funding of $626 million, the 
resulting total funding will be $1,454,000 in fiscal year 2000.
    Within the RPM program, there are two areas to highlight: our 
Barracks Upgrade Program (BUP) and the Long Range Utilities Strategy. 
At the completion of the fiscal year 1998 program, 48 percent of our 
requirement for permanent party barracks will meet or approximate the 
new DOD 1+1 barracks standard. Our Whole Barracks Renewal Program, 
using Military Construction funding, will revitalize or replace 27 
percent of the barracks. The remaining 25 percent of the barracks can 
be modified to an approximate 1+1 standard using RPM resources. In 
fiscal year 1999, Congress provided Army an additional $137 million in 
Quality of Life Enhancements, Defense (QOLE,D) funding for repair of 
facilities key to improving the quality of life of our soldiers in 
CONUS. We allocated these funds to bring more of our VOLAR-era barracks 
inventory to the 1+1 standard within the Barracks Upgrade Program. 
Starting in fiscal year 1999, and through the completion of the 
program, the Army committed approximately $150 million per year to 
continue the efforts to upgrade our single soldier's quality of life. 
The Barracks Upgrade Program, when combined with the Military 
Construction, Army Whole Barracks Renewal program, is reducing 
significantly the amount of time required to improve the living 
conditions of our single soldiers to the current DOD standard. We 
expect that all barracks for permanent party soldiers will have been 
revitalized or replaced by the year 2008.
    The second area to highlight within the RPM program is our Long 
Range Utilities Strategy to provide reliable and efficient utility 
services at our installations. As discussed earlier, privatization or 
outsourcing of utilities is the first part of our strategy. We are 
maximizing our efforts to partner with the local communities' utility 
departments and private utility companies to provide utility services 
that are more efficient and reliable. The second part of the strategy 
is the utilities modernization program to help upgrade those utility 
systems that are not viable candidates to be privatized, such as 
central heating plants and distribution systems. We have programmed 
$60,000,000 per year for utility modernization projects in fiscal years 
1998 through 2002. Utility systems at unique or remote installations 
are particularly reliant on these modernization projects. While we are 
able to make progress in upgrading barracks and improving utility 
services, the basic maintenance and repair of Army facilities is funded 
at only 78 percent of the requirement, including those funds in the 
Quality of Life, Defense, appropriation. At the current funding levels, 
Army commanders will only be able to fix what breaks. The Installation 
Status Report (ISR) shows Army facilities are rated C-3 (not fully 
mission capable) due to years of under-funding. At the end of the last 
rating period, 24 percent of the Army's facilities were ``red''--
unsatisfactory, 47 percent were ``amber''--marginal, and only 29 
percent were ``green''--good.
                  homeowners assistance fund, defense
    The Army is the executive agent for the Homeowners Assistance 
Program. This program provides assistance to homeowners by reducing 
their losses incident to the disposal of their homes when the military 
installations at or near where they are serving or employed are ordered 
to be closed or the scope of operations reduced. For fiscal year 2000, 
there is no request for authorization of appropriations and 
appropriations. Requirements for the program will be funded from prior 
year carryover, revenue from sale of homes, and anticipated authority 
to transfer monies from the Base Realignment and Closure Account. 
Assistance will be provided to personnel at approximately 25 
installations that are impacted with either a base closure or a 
realignment of personnel, resulting in adverse economic effects on 
local communities.
                                summary
    Mr. Chairman, our fiscal year 2000 budget marks a change from our 
normal budget. It is a balanced program that permits us to execute our 
construction programs; provides for the military construction required 
to improve our readiness posture; and provides for family housing 
leasing, operation and maintenance of the non-privatized inventory, and 
privatization of approximately 14,100 owned units through fiscal year 
2000. This request is part of the total Army budget request that is 
strategically balanced to support both the readiness of the force and 
the quality of life of our personnel. Our long-term strategy can only 
be accomplished through balanced funding, divestiture of excess 
capacity and improvements in management. We will continue to 
streamline, consolidate and establish community partnerships that 
generate resources for infrastructure improvements and continuance of 
services.
    The fiscal year 2000 request is for appropriations is 
$1,768,086,000 and authorization of $2,276,485,000 for Military 
Construction, Army and Army Family Housing. Further, the program allows 
us to rely on the RCI program for the U.S. and redistribute scarce 
resources to Europe and Korea to meet the departmental guidance to 
eliminate inadequate family housing Army-wide by fiscal year 2010. 
Thank you for your continued support for Army facilities funding.
          part ii--military construction, army national guard
    Next, I will present the Army National Guard's Military 
Construction Program for fiscal year 2000.
    The program presented requests fiscal year 2000 appropriation of 
$16,045,000 for military construction, Army National Guard. The 
companion request for authorization is $57,402,000. Also requested is 
an advance appropriation of $41,357,000 in fiscal year 2001.
    The Army National Guard is America's community based, dual use 
reserve force. They are missioned across the spectrum of contingencies, 
and structured and resourced to accomplish State and Federal missions 
when called. Army National Guardsmen are trained citizen-soldiers 
committed to preserving the timeless traditions and values of service 
to our Nation and communities, and, by statute, an integral part of the 
first line defense of the United States. The National Guard is balanced 
and ready. It is manned with over 361,000 quality soldiers in over 
2,700 communities nationwide.
    Greater reliance has been placed on this community based component 
of America's Army. We are fully engaged in joint operational support, 
host nation support, military-to-military contact with emerging 
democracies, and preventive deterrence to hedge against aggression. The 
Army National Guard's equally vital role is providing assistance and 
support to our 54 States and Territories during domestic and community 
support missions. We have been an active participant in every major 
American conflict around the world. Last year we provided close to 
400,000 emergency response State missions and provided over one million 
Federal man-days in support of global missions.
                          facilities strategy
    The goal of the Army National Guard is to provide state-of-the-art, 
community based facilities that facilitate communications, operations, 
training and equipment maintenance in which to station, sustain and 
prepare the force for deployment. Our objective is to have the maximum 
number of units that are manned, trained, equipped, resourced and 
missioned for Federal as well as State and/or domestic requirements.
    In order for the Army National Guard to ensure that it will 
continue to be able to provide the forces needed to meet the needs of 
the community, the Army and the nation, it is a necessity that we have 
quality facilities. To do this, we intend to design, implement, operate 
and maintain our facilities using private sector business practices, 
21st century technologies, and commercial off-the-shelf facilities 
software. Some examples that demonstrate this comprehensive program 
are:
Education
    An extensive real property management and real estate training 
program for our facilities' managers continues to progress. Energy 
training at the manager and executive level has been a beneficial 
addition to the program.
Master Planning
    A new State-wide development planning initiative was adopted by an 
additional twelve States in fiscal year 1999, bringing the total to 
thirty. Master Planning establishes the foundation for the management 
and development of installations; provides the framework for analyzing 
and justifying maintenance and repair resource allocations; helps 
justify all peacetime and mobilization construction and development 
activities; forms an important management tool to ensure the efficient 
assignment, utilization, and disposal of real property assets; and 
provides a decision-making tool to identify requirements and 
alternatives for resolving real property deficiencies and excesses. 
This system will provide the user with a spatial decision support 
system which uses geographic information and computer automated design 
technology. An additional twelve States are planned to be on-line each 
year until 2001 when all fifty-four States and Territories will have 
completed their Development Plans.
Energy Management
    State-of-the-art energy efficient facilities are being constructed. 
We are also upgrading existing facilities to current energy efficient 
standards by funding energy projects from current operating funds, 
using Energy Savings Performance contracts, developing military 
construction Energy Conservation Investment Program projects, and 
implementing energy improvement projects funded by utility companies. 
We manage an active energy audit program performing audits in seven to 
eight States per year. The State energy managers are empowered to 
execute an aggressive energy management program.
Data Analysis
    In fiscal year 1999, we continued to refine the computerized 
systems that allowed cost analysis of budget projections. The Army 
National Guard installations program focuses on the future, investing 
to provide efficiencies and not just to repair past mistakes. An 
example is the Infrastructure Requirements Plan that has allowed the 
Army National Guard to better prioritize its future construction 
requirements.
Building Management System
    We are currently in the implementation phase of the Smart Building 
Demonstration Project. This undertaking links several independent 
Direct Digital Controls for the operation of heating, ventilating, and 
air conditioning systems within a facility.
Demand Lighting Technologies
    The Demand Lighting Technologies (DeLiTe) system consists of 
intrusion detection sensors, working in conjunction with exterior 
lighting, CCTV and existing alarm systems. The system was developed to 
enhance security, reduce security guards and decrease energy costs. At 
this time, we have facilities in Ohio and Maryland that are 
operational.
Military Construction, Army National Guard (MCNG)
    Within our military construction request, we focus on five 
investment areas: training site modernization, maintenance support 
shops, readiness centers, minor construction, and planning and design. 
These projects are mission focused and are centered on the quality of 
life of our soldiers.
                           mission facilities
    In fiscal year 2000, there are five mission facility projects. The 
amount of $11,145,000 will be used to begin their construction. 
Essential mission facilities include several initiatives such as 
maintenance support shops, a readiness center and a training site 
complex.
Training Site Modernization
    Fiscal Year 2000 continues the slow process of adapting existing 
State operated training sites to training strategies for the 21st 
century. We have included the Marseilles Training Complex, at 
Marseilles, Illinois, to our training site modernization program. 
Current training is being conducted in field tents that provide limited 
temporary supply, administrative, housing and hygiene facilities. This 
training complex will greatly enhance readiness, as well as quality of 
life for the soldier.
Maintenance Support Shops
    In fiscal year 2000, we have included three replacement projects. 
We will replace a Maneuver Area Training Equipment Site at Yakima, 
Washington; a Maneuver Area Training Equipment Site/Combined Support 
Maintenance Shop at Anchorage, Alaska; and one Organizational 
Maintenance Shop at Charlotte, North Carolina. These facilities are 
over two decades old and cannot support the mission of maintaining the 
larger and more sophisticated vehicles and equipment. The construction 
of these facilities will greatly enhance the readiness posture of 
equipment in the State, increase crew proficiency, and will provide a 
safe working environment for our soldiers.
Readiness Centers
    A critical focal point for quality of life is the soldiers' 
Readiness Center, of which there are about 3,200 nationwide. This is 
where America may have its first and only exposure to the military. The 
Readiness Center of yesterday, today, and tomorrow is a place where the 
public can meet for community events and find refuge in times of need. 
Therefore, in fiscal year 2000, we have included in our budget request 
a readiness center at Charlotte, North Carolina. This project will 
permit the community to demolish a facility built in 1956, and allow 
for an expansion to the local airport. The community, in return, has 
plans to provide the site for construction of this readiness center.
                        budget request analysis
    This MCNG budget request includes a request for appropriation of 
$16,045,000, an authorization of appropriation of $16,045,000, and 
authorization of $57,402,000 in fiscal year 2000.
    Table 5 shows the Fiscal Year 2000 request, by investment focus.

                                    TABLE 5.--INVESTMENT FOCUS APPROPRIATIONS
----------------------------------------------------------------------------------------------------------------
                                                                                                      Percent
                            Category                              Authorizations  Appropriations  Appropriations
----------------------------------------------------------------------------------------------------------------
Maintenance Support Shops.......................................     $34,463,000      $7,316,000            45.6
Readiness Center................................................       7,087,000       1,504,000             9.4
Training Site Facilities........................................      10,952,000       2,325,000            14.5
Minor Construction..............................................         771,000         771,000             4.8
Planning and Design.............................................       4,129,000       4,129,000            25.7
                                                                 -----------------------------------------------
      TOTAL.....................................................      57,402,000      16,045,000             100
----------------------------------------------------------------------------------------------------------------

    Table 6 shows the fiscal year 2000 distribution of the 
appropriations request among the fifty-four States and Territories:

                                            TABLE 6.--FUNDED PROGRAM
                                               [Fiscal Year 2000]
----------------------------------------------------------------------------------------------------------------
                                                                                     Appropriations   Percent of
                    Location                                Project Title                Request        Total
----------------------------------------------------------------------------------------------------------------
Charlotte, NC..................................  Readiness Center..................     $1,504,000           9.4
Marswilles, IL.................................  Tng Site, Battalion Complex.......      2,325,000          14.5
Anchorage, AK..................................  Combined Support Maintenance Shop/      2,940,000          18.3
                                                  Manvr Area Tng Equip Site.
Yakima, WA.....................................  Maneuver Area Trng Equip Site.....      3,464,000          21.6
Charlotte, NC..................................  Operational Maintenance Shop......        912,000           5.7
Various........................................  Planning and Design...............      4,129,000          25.7
Various........................................  Minor Construction................        771,000           4.8
      Total Appropriations Requested...........  ..................................     16,045,000         100.0
----------------------------------------------------------------------------------------------------------------

                       real property maintenance
    The States will continue to prudently manage their existing 
facilities, despite the challenges of age and shrinking real property 
support funding. They are committed to executing the programs you 
authorize as expeditiously and as efficiently as possible. Facilities 
built during the last decade have played major roles in meeting force 
structure changes, accomplishing quality training, maintaining 
readiness, and improving soldier quality of life.
    The operation and maintenance of our physical plant is an issue of 
concern. The replacement value of all National Guard facilities is 
almost $19 billion. Their average age is over thirty-four years. States 
take care of these facilities, using the limited resources in Real 
Property Maintenance accounts, as authorized and appropriated by 
Congress.
    They do so, however, in a way appropriate to their unique Federal/
State status. The National Guard Bureau does not own, operate or 
maintain these facilities. The States and Territories perform these 
functions. The National Guard Bureau transfers to the States money that 
Congress authorizes and appropriates for this purpose. This money 
supports critical training, aviation and logistical facilities. For 
almost half of these facilities, the States and Territories must 
contribute at least 25 percent of operations and repair costs.
    The States and Territories then pay the utility bills, hire those 
reimbursed employees necessary to operate and maintain these 
facilities, buy the supplies necessary for operations and maintenance, 
and contract for renovation and construction projects. They also lease 
facilities when required. The Construction and Facilities Management 
Offices are making a herculean effort to operate and maintain all 
National Guard facilities.
                                summary
    The fiscal year 2000 request is for appropriation of $16,045,000 
and an authorization of $57,402,000 for military construction.
    The National Guard is a critical part of America's Army. Today's 
challenges are not insurmountable and the National Guard will continue 
to provide the best facilities with the resources made available. As we 
look forward to another successful year in Army National Guard Military 
Construction, we must thank you for your continual support of our 
program.
             part iii--military construction, army reserve
    It is now my privilege to present the Army Reserve's military 
construction budget request for fiscal year 2000. This budget provides 
essential military construction resources to address the Army Reserve's 
highest priority projects, and it will allow the Army Reserve to 
continue to successfully operate in a resource constrained environment. 
Like all of America's Army Reserve programs, the military construction 
will focus Resources to Readiness.
    The program presented requests fiscal year 2000 appropriations of 
$23,120,000 and advance appropriations of $54,506,000. The companion 
request for authorizations in fiscal year 2000 is $81,215,000.
    The Army Reserve, which is on duty in 76 countries around the 
world, is an integral part of, and an essential and relevant partner 
in, America's Army. This fact is clearly evidenced by the Army Reserve 
units and personnel who comprise 65 percent of the Reserve Component 
forces and 71 percent of the Army Reserve Component Forces serving in 
Operation Joint Forge. In addition to relying on Reserve forces to 
deploy and support major worldwide contingencies and warfighting, the 
Army is increasingly dependent on its Army Reserve for support of a 
wide variety of daily, ongoing missions at home and abroad during 
peacetime. This includes an expanding role in commanding and 
controlling Army installations and providing regional base operations 
support. Those missions include the provision of trained and ready 
combat support /combat service support units to rapidly mobilize and 
deploy; providing trained and ready individual soldiers to augment the 
Army; and projecting the Army anytime, anyplace to achieve victory. 
Army Reserve units and soldiers will continue to respond to national 
security needs and domestic missions into the 21st century. To ensure 
readiness, we must have the minimum essential facilities resources in 
which to train, support, and sustain our forces.
                          facilities strategy
    The organization, roles and missions of the Army Reserve dictate 
the need for a widely dispersed inventory of facilities. It provides a 
military linkage in 1,315 communities throughout America, its 
territories, and over-seas locations. Those facilities have an average 
age of about 37 years. The six Army Reserve operated installations have 
an average age of facilities of about 48 years. The Army Reserve 
military construction strategy relies on its demonstrated capability to 
convert the precious resources authorized and appropriated by Congress 
into quality facilities that support the readiness of soldiers and 
units. Since 1981, the Army Reserve has executed more than 300 military 
construction projects that represent a $1.3 billion investment by the 
Nation.
    To effectively carry out its stewardship responsibilities toward 
the facilities inventory, the Army Reserve has adopted priorities and 
strategies that guide the application of resources focused on 
readiness. The essence of our program is straightforward: provide 
essential facilities to improve readiness and quality of life, preserve 
and enhance the Army's image across America, and conserve and protect 
the facilities resources for which we are responsible. Our priorities 
are: provide critical mission needs of Force Support Package units; 
address the worst cases of facilities deterioration and overcrowding; 
pursue modernization of the total facilities inventory; and carefully 
manage Reserve operated installations. Our strategy for managing the 
Army Reserve infrastructure in a resource constrained environment rests 
on six fundamentals: eliminate leases when economical; dispose of 
excess facilities; consolidate units into the best available 
facilities; use Base Realignment and Closure (BRAC) enclaves where 
practical; use the new Modular Design System (MDS) to achieve long term 
cost savings in construction and design costs; and, finally, to pursue 
economies and efficiencies in installation management, base operations 
support, and facilities engineering.
    Significant benefits have been realized from BRAC. The Army Reserve 
acquired facilities from all Services, as well as the Active Army, 
which offset military construction requirements. The facilities 
acquired through BRAC provided a military construction cost avoidance 
of $123.3 million. Other facilities acquired through the BRAC process 
permitted the Army Reserve to relocate units from leased property to 
quality, Government-owned centers. That effort allowed the Army Reserve 
to reduce its lease costs by $6.07 million.
                           program highlights
Readiness
    Army Reserve construction program requirements are quite different 
from those of the Active Army. Army Reserve forces are community based, 
not installation based, requiring that forces and facilities be 
dispersed in hundreds of cities and towns across the Nation. This 
dispersion of forces and facilities reduces the opportunities for 
regional consolidation and wholesale reductions in facilities 
inventory. Facilities must be located in the communities where soldiers 
live and where their units are based. They must be sufficient to meet 
the readiness training requirements of the units stationed in them. 
Reserve facilities serve as locally based extensions of the Army's 
power projection platforms by providing essential and cost effective 
places to conduct training, maintenance, storage of contingency 
equipment and supplies, and preparation for mobilization and deployment 
that simply cannot be accomplished elsewhere. The Reserve operated 
installations support mission essential training for thousands of 
soldiers each year.
Quality of Life
    Quality, well maintained facilities provide Army Reserve units with 
the means to conduct necessary individual and collective training; to 
perform operator and unit maintenance on vehicles and equipment; and to 
secure, store, and care for organizational supplies and equipment. 
These facilities also provide other important benefits. Fully 
functional and well maintained training centers have a positive impact 
on recruiting and retention, unit morale and the readiness of the full 
time support personnel who work in the facilities on a daily basis. In 
addition to supporting the quality of life of units and support staffs, 
Reserve facilities project an important and lasting image of America's 
Army in the local community.
Modernization
    The plant replacement value (PRV) of Army Reserve facilities and 
installations is approximately $10.6 billion. The budget request for 
fiscal year 2000 addresses the Army Reserve's highest priorities for 
modernizing and revitalizing the inventory and for providing new 
facilities in response to new and changing missions.
Installations and Base Support
    The Army Reserve continues to undergo significant change as 
America's Army continues to shape itself for the 21st century. One of 
these changes is the growing mission to command and control former 
Active Army installations. These installations serve as high quality, 
regional training sites for forces of both the Reserve and Active 
Components of the Army, as well as the other Services; provide sites 
for specialized training; and offer a variety of supporting facilities. 
To fulfill this important mission, we must be able to fund projects 
that support critical training, mobilization and quality of life 
requirements at the installations. Our military construction program 
for both fiscal years 1999 and 2000 includes one project at Fort Dix, 
New Jersey, one of the Army's fifteen power projection platforms. That 
project directly supports training and readiness of the force and 
environmental stewardship. The Army Reserve is also assuming greater 
responsibilities nationwide in managing base support operations and 
facilities engineering activities, using the command, control, and 
management capabilities of its Regional Support Commands. This mission 
reinforces the Army Reserve's relevance and value to the total Army as 
a provider of combat service support and other essential infrastructure 
support in both peacetime and wartime.
                        budget request analysis
    The fiscal year 2000 Military Construction, Army Reserve (MCAR) 
budget includes a request for appropriations and authorization of 
appropriations of $23,120,000 and advance appropriations of 
$54,506,000. This budget request for fiscal year 2000 provides 
essential funds for our highest priority requirements, while it is in 
line with our commitment to operate successfully in an environment of 
constrained resources. It also reflects the realities of maintaining 
near term force readiness and still meeting critical requirements for 
military construction that directly supports that readiness. The MCAR 
appropriation includes three categories of funding: Major Construction, 
Minor Construction, and Planning and Design.
    Major Construction.--Our fiscal year 2000 requests funding for the 
construction of three new Army Reserve centers in Georgia, Guam and 
Puerto Rico to accomplish essential facility replacements; a Regional 
Maintenance Training facility at Fort Hood, Texas; a Tactical Vehicle 
Wash Facility at Fort Dix, New Jersey, that supports training and 
environ-mental requirements; revitalization of existing facilities in 
New York; and land acquisition to support a future joint services 
project in Florida.
    Unspecified Minor Construction.--These funds provide for 
construction of projects not otherwise authorized by law, and which 
have a funded cost of less than $1,500,000. Unspecified minor 
construction may include construction, alteration or conversion of 
permanent or temporary facilities. The program provides an important 
means to accomplish small projects that are not now identified, but 
which may arise during the fiscal year, and that must be accomplished 
to satisfy critical, unforeseen mission requirements. The fiscal year 
2000 budget includes $1,416,000 for Unspecified Minor Construction.
    Planning and Design.--These funds provide for a continuous, multi-
year process of designing construction projects for execution in the 
budget years and beyond. Planning and design activities include the 
preparation of engineering designs, drawings, specifications, and 
solicitation documents necessary to execute major and unspecified minor 
construction projects. Planning and design funds are also required to 
support the Army Reserve's share of the costs of the continued 
development of the Modular Design System as an effective and cost and 
time saving facility design tool. Our budget request for planning and 
design is $8.5 million for fiscal year 2000.
    Real Property Maintenance (RPM).--Another important issue that is 
directly linked to the Army Reserve's overall ability to be good 
stewards of its facilities and installations, is that of funding for 
real property maintenance (RPM). Although provided separately by the 
Operation and Maintenance Army Reserve (OMAR) appropriation, these 
funds complement military construction (MILCON) funds to round out the 
Army Reserve's total resources to manage its facilities inventory. Long 
term resource constraints in both military construction and real 
property maintenance have a combined effect of increasing the rates of 
aging and deterioration of our valuable facilities and infrastructure. 
We are applying available resources to only the most critical 
maintenance and repair needs. We solicit your support of real property 
maintenance as an essential adjunct of construction.
                                summary
    In summary, as the national military strategy has changed to meet 
the challenges of the next century, the Army Reserve will grow in its 
importance and relevance in the execution of that strategy. The men and 
women of the Army Reserve have consistently demonstrated that they can 
respond to the missions and challenges assigned to them. Our Reserve 
facilities and installations are valuable resources that support force 
readiness and power projection, while serving as highly visible links 
between America's Army and America itself.
    The fiscal year 2000 request is for appropriations of $23,120,000 
and authorization of $81,215,000 for Military Construction, Army 
Reserve. We are grateful to the Congress and the Nation for the support 
you have given and continue to give to the Army Reserve and our most 
valuable resource, our soldiers.
              part iv--base realignment and closure (brac)
    Our facilities strategy strives to meet the needs of today's 
soldiers, while also focusing on the changes required to support the 
Army of the 21st century. This budget represents the Army's final two 
year budget required to implement the first four rounds of BRAC. In 
fiscal year 1999, the Army is saving $839 million and will save $953 
million annually upon completing these first four rounds of BRAC. 
Although these savings are substantial, we need to achieve even more, 
and bring our infrastructure assets in line with projected needs. We 
must reduce the total cost required to support our facilities and 
manage and maintain our real property inventory. BRAC has significant 
investment costs, but the results bring to the Army modern and 
efficient facilities at the remaining installations. The resulting 
savings are critical to modernization, sustainment, infrastructure and 
quality of life improvements. Therefore, we support the Secretary of 
Defense's request for two additional rounds of BRAC in 2001 and 2005.
    The BRAC process has proven to be the only viable method to 
identify and dispose of excess facilities. The Army is in the process 
of closing 112 installations and realigning an additional 27 as a 
result of the first four rounds of BRAC. We are now in the final three 
years of the 13-year process to implement these first four rounds. By 
implementing BRAC, the Army is complying with the law while saving 
money that would otherwise support unneeded overhead. These closed 
assets are now available for productive reuse by local communities and 
the private sector.
    BRAC savings do not come immediately because of the up front costs 
for implementation and the time it takes to close and dispose of 
property. The resulting savings are not as substantial as originally 
anticipated because potential land, facilities and equipment revenues 
are being made available to support local economic opportunities that 
create jobs and expand the tax base. Environmental costs are 
significant and are being funded up front to facilitate economic 
revitalization. The remaining challenges that lie ahead are 
implementing the final round, BRAC 95, ahead of schedule, disposing of 
property at closed bases, cleaning up contaminated property and 
assisting communities with reuse.
    In fiscal year 2000, we remain focused almost exclusively on BRAC 
1995, the last of the four rounds, along with the conveyance of 
properties to local communities for conversion to non-military reuse. 
The fiscal year 2000 budget is important because it contains the 
resources needed to fully fund the final six major construction 
actions. These projects are scheduled for award early in fiscal year 
2000, and are required to complete the BRAC 95 actions. This budget 
also supports unit movements that will allow us to complete the closure 
and realignments as scheduled. Additionally, the Army remains committed 
to environmental cleanup of BRAC properties. This budget includes the 
resources required to support projected reuse in the near term and to 
continue with current projects to protect human health and the 
environment. The Army will employ full funding through advance 
appropriations for contracts begun during fiscal year 2000. This will 
provide the mechanism to stretch the fiscal year 2000 funds and execute 
the fiscal year 2001 program early in the fiscal year. Therefore, we 
request that Congress approve appropriations and authorization of 
appropriations of of $155,400,000 in fiscal year 2000 and approve 
advance appropriations of $196,091,000 for fiscal year 2001.
    The Army is accelerating all BRAC actions to obtain savings and 
return assets to the private sector as quickly as available resources 
will allow. In fiscal year 1998, we closed Fort Ritchie, Maryland and 
Fort Indiantown Gap, Pennsylvania. We completed the disestablishment 
and realignment of the Aviation and Troop Command from St. Louis, 
Missouri, to four other locations in December 1997. In fiscal year 
1999, we are on schedule to complete the movement of the military 
police and chemical schools to Fort Leonard Wood, Missouri, and close 
Fort McClellan, Alabama. The Army also plans to close East Fort Baker, 
California, and move the Concepts Analysis Agency from leased space in 
Bethesda, Maryland, to a new facility at Fort Belvoir, Virginia. These 
actions will nearly complete all planned closure actions, except for 
the three that are scheduled for fiscal years 2000 and 2001.
    The President's Five Part Community Reinvestment Program, announced 
on 2 July 1993, speeds economic recovery of communities where military 
bases are closing by investing in people, investing in industry and 
investing in communities. The Army is making its bases available more 
quickly for economic redevelopment because of the additional 
authorities we now have. During fiscal year 1998, the Army conveyed 
properties at Detroit Arsenal and the Materials Technology Lab in 
Watertown, Massachusetts, and leased property at Letterkenny Army 
Depot. These actions helped local communities create new private sector 
jobs that lessened the impact of the base closure actions.
                 base realignment and closure--overseas
    Although the extensive overseas closures do not receive the same 
level of public attention as those in the United States, they represent 
the fundamental shift from a forward deployed force to one relying upon 
overseas presence and power projection. Without the need for a 
Commission, we are closing about seven of ten overseas sites in Europe. 
Reductions in infrastructure roughly parallel troop reductions of 70 
percent. In Korea, the number of installations is dropping from 104 to 
83, or 20 percent.
    On 18 September 1990, the Secretary of Defense announced the first 
round of overseas bases to be returned. Since that time, there have 
been a total of 22 announcements. On 14 January 1993, DOD announced it 
will withdraw all United States military forces from the Republic of 
Panama and transfer all facilities by 31 December, 1999. Of the 13 
sites in Panama announced for closure, twelve have been returned. Table 
7 shows the total number of overseas sites announced for closure or 
partial closure is 667:

 Table 7.--Total overseas sites announced for closure or partial closure

        Location                                           Installations
Germany...........................................................   575
Korea.............................................................    30
France............................................................    21
Panama............................................................    13
Netherlands.......................................................     6
Turkey............................................................     6
United Kingdom....................................................     5
Greece............................................................     4
Italy.............................................................     4
Belgium...........................................................     3
                                                                  ______
    Total.........................................................   667

    Additional announcements will occur until the base structure 
matches the force identified to meet United States commitments. At this 
time, we do not see the need for many more overseas closures.
    Most of the 188 million square feet (MSF) of overseas reductions 
are in Europe, where we are returning over 600 sites. This is 
equivalent to closing 12 of our biggest installations in the United 
States--Forts Hood, Bragg, Benning, Stewart, Leonard Wood, Lewis, 
Bliss, Carson, Gordon, Meade, Campbell and Redstone Arsenal. 
Unquestionably, these reductions are substantial and have produced 
savings to sustain readiness.
    The process for closing overseas bases is much different than in 
the United States. First, unified commanders nominate overseas sites 
for return or partial return to host nations. Next, the Joint Staff, 
various DOD components, National Security Council and State Department 
review these nominations. After the Secretary of Defense approves them, 
DOD notifies Congress, host governments and the public. The Army ends 
operations by vacating the entire installation and returning it to the 
host nation. If we only reduce operations, we retain a portion of the 
facilities.
              base realignment and closure program status
    The Army has completed all realignment and closure actions from the 
BRAC 88 and BRAC 91 rounds. The work of property disposal and 
environmental remediation at eighteen installations will continue for 
several years. The Army continues to work with local communities to 
make properties available for economic redevelopment. Introduction of 
economic development conveyances and interim leasing have resulted in 
accelerating property reuse and jobs creation at installations that 
were previously unavailable, pending completion of environmental 
restoration efforts.
    The Army continues to accelerate the implementation of the BRAC 93 
and BRAC 95 rounds. BRAC 93 is complete, with the exception of the 
realignment of Fort Monmouth, which is scheduled for fiscal year 1999. 
The Army is in the fourth year of the implementation of BRAC 95, after 
which twenty-six of the twenty-nine closures and four of eighteen 
realignment actions will be complete. Interim leases and economic 
development conveyances are making properties at these installations 
available to the local communities earlier in the process. The Army 
completed interim leases with local communities at Letterkenny Army 
Depot and Detroit Arsenal to make industrial facilities available for 
reuse in 1998. The former Fitzsimons Army Medical Center is now being 
converted to a University Medical Center. Negotiations and required 
environmental restoration continue at other installations, and 
additional conveyances are likely in the near future.
    For the period 1989 through 1998, the Army has spent $3,991,976,000 
to implement the first four rounds of BRAC. The Army has realized a 
total of $3,337,200,000 in savings during the implementation period 
through the end of fiscal year 1998, and will realize an additional 
$838,900,000 in annual recurring savings in fiscal year 1999. Upon 
implementation of all actions from the first four BRAC rounds, the Army 
will achieve annual savings of $953,000,000 beginning in fiscal year 
2002.
    The Army has completed environmental actions at 1,032 of a total of 
1,944 BRAC environmental cleanup sites through fiscal year 1998. 
Environmental restoration efforts were complete at 68 BRAC 
installations through fiscal year 1998, out of a total of 122 
installations. The Army remains focused on supporting environmental 
cleanup actions required to support property reuse and will continue to 
fund environmental cleanup actions that are required in support of 
property transfer and reuse.
                                summary
    Closing and realigning bases saves money which otherwise goes to 
unneeded overhead, and frees up valuable assets for productive reuse. 
These savings permit us to invest properly in the forces and bases we 
keep to ensure their continued effectiveness. Continuation of 
accelerated implementation requires the execution of the fiscal year 
2000 program as planned and budgeted. We request your support by 
providing the necessary BRAC funding for fiscal year 2000.
    We remain committed to promoting economic redevelopment at our BRAC 
installations. We are supporting early reuse of properties through 
economic development conveyances as well as the early transfer and 
interim leasing options made possible by Congress last year. Real 
property assets are being conveyed to local communities, permitting 
them to quickly enter into business arrangements with the private 
sector. Local communities, with the Army's support and encouragement, 
are working to develop business opportunities that result in jobs and 
tax revenues. The successful conversion of former Army installations to 
productive use in the private sector is something all of us can be 
proud of.
    Mr. Chairman, this concludes my statement. Thank you.

    Senator Burns. We have been joined by Senator Craig, of 
Idaho, a member of this committee, who has some pressing needs. 
Did you want to offer a statement or ask some questions?

                        STATEMENT OF LARRY CRAIG

    Senator Craig. Thank you very much, Mr. Chairman. Let me 
ask unanimous consent that my whole statement be a part of the 
record.
    I would only say that this year's military construction 
plan calls for authorization and a partial, approximately 25 
percent appropriation for certain areas. In my opinion, this 
approach is penny wise and pound foolish. To stretch out an 
entire year's worth of projects will likely cost more in the 
long run and delay construction of essential projects and 
installations. I think we are calling this full approach phase 
funding.
    Certainly, at Mountain Home Air Force in Idaho, it does not 
make good sense for us, and I do not think it makes good sense 
for anybody else.
    I have talked with some of the contractors in Idaho, and I 
will tell you that those who have done the quality work we have 
seen on the base are less likely to bid these kinds of 
contracts, if we deal with that kind of thing. It is just an 
unrealistic way of getting around some of our budget problems. 
Let us face it, Mr. Chairman, fund the appropriate ones fully, 
do it the right way instead of this less than creative way I 
have seen proposed.

                           PREPARED STATEMENT

    With that I will ask that my statement be made a part of 
the record.
    Senator Burns. Thank you, Senator Craig.
    [The statement follows:]
               Prepared Statement of Senator Larry Craig
    Military Construction is Important.--Military construction helps 
our troops to better perform their missions, and it supports our 
service members with the facilities that contribute to their quality of 
life and that of their families. Unfortunately, I continue to be 
concerned about funding for crucial construction projects. For fiscal 
year 1998, the Administration requested funding levels below both the 
fiscal year 1996 and fiscal year 1997 levels. And this year's budget 
request, in my mind, is even more of a set back.
    Problem of this Year's Proposed Phase Funding.--This year's 
military construction plan calls for full authorization and a partial 
(approximately 25 percent) appropriation. This approach is penny wise 
and pound foolish. To Stretch out an entire year's worth of projects 
will likely cost more in the long-run, and will delay construction of 
essential projects at our installations. Let me also point out that 
I've heard from contractors in Idaho, and they have made it clear they 
don't want to bid for projects funded at 25 percent of the cost. Who 
can blame them?
    Impact on Mountain Home Air Force Base, Idaho.--The impact of phase 
funding, if carried out, is very real. There are important projects in 
the budget request that I believe deserve full authorization and 
appropriation this year. For example:
  --The $14.6 million Enhanced Training Range project will provide the 
        improvements needed by aircrews to fly against realistic 
        targets under battlefield conditions. Completing the range is a 
        multi-year project already. Allowing this project to slip 
        another year will adversely impact the readiness of the pilots.
  --I also plan to request money for a couple of other projects, not 
        currently listed in this year's budget request, that I believe 
        belong there. One project is an Aircraft Parking Apron to 
        replace an inadequate ramp at Mountain Home. The current 
        situation is unacceptable. The ramp is constructed with only 
        four inches of asphalt. Aircraft can, and do sink into the 
        asphalt, particularly during the hot summer months. This ramp 
        needs to be constructed with 14 inches of reinforced concrete.
  --Airmen's Dining Hall: Another example is the airmen's dining hall. 
        This facility, opened in 1978, is plagued with serious roof 
        leaks that disrupt compliance with sanitation requirements. The 
        mechanical and electrical systems are outdated, and it is 
        increasingly difficult to find parts for continued maintenance. 
        The hall doesn't meet Air Force or ACC standards.
  --These difficulties are two good examples of how both mission 
        readiness and quality-of-life are impacted by military 
        construction. I will look for your assistance in the coming 
        months to help address these concerns.
  --As a fiscal conservative, I take seriously the responsibility of 
        working within the framework of a balanced budget as we make 
        decisions about program funding. However, it is also important 
        to keep in mind that there are sometimes potential savings from 
        improving infrastructure at military facilities.
    Mr. Chairman, once again, thank you for your work and efforts, and 
I look forward to continually working with you and the Committee, so 
that our men and women in uniform receive the support and facilities 
they deserve.

    Senator Burns. I think there are a lot of us who have been 
on this committee for quite a while still concerned about the 
quality of life and we are very, very concerned about 
retention.
    I come out of the enlisted ranks, and I see we are not 
building NCOs like we used to build, and maintaining and 
keeping those NCOs and skilled positions, especially with an 
Army that is quite different than the one that I knew back in 
the fifties. So everything has changed. I was making $62 a 
month and sleeping in barracks with 60 others, and I did not 
see anything wrong with that.
    Of course, if you cowboyed for a while and got used to 
sleeping on the ground, well, the barracks looked pretty good 
to me. I probably had more money then than I have now, but 
nonetheless, we know the times have changed. I realize that we 
have budgetary problems. We have had to shift some money. That 
concerns me also, because we have lost some of the money out of 
MILCON that has been put over to readiness, and also to fund 
operations around the world to make sure that we fulfill those 
commitments, and I can understand that.
    But now we are down to the point where I do not know 
whether this committee has any more money to give to that kind 
of a situation, if we are going to attend to everything in the 
infrastructure.
    Now, we have moved better than 50 percent of our military 
capabilities in the Reserves and Guard, and when we started to 
do that, we found that infrastructure on Reserve and Guard was 
lacking around the nation. A lot of states were lacking in 
their infrastructure to house, to educate, and to train 
soldiers, sailors, marines, and airmen. So we have shifted--I 
have tried to shift a little more money to those areas if we 
are going to maintain readiness, and in the Reserves and the 
Guard I do not believe that--I think those young men and women 
have to be trained and have to be--their edge has to be just 
as--or should be equal to those who are on regular duty.
    I am concerned about recruiting, to attract young people to 
the military. I sort of fall into the category where we may 
have to look at--we may have to look at some folks--at the 
draft again in order to fill the ranks and to do some things.
    We need to talk about this money and new programs to 
furnish housing. I am a great supporter of the one plus one 
standard, and now I am saying as far as the Army is concerned 
there still is great value to barracks life, especially in 
fighting units.
    There is a cohesiveness, there is teamwork, and then 
whenever you move up and you have your own room, well, in order 
to make buck sergeant, well, there was some incentive to 
advance in grade so that your living conditions probably could 
be a little bit better. I think we have to have some incentives 
and the right of passage, and, of course, that is the reason I 
was a marine. There were lower qualifications back in the 
fifties to be in the marine corps, and we survived it.
    Mr. Secretary, why is the Army relying on housing 
privatization exclusively to satisfy its housing requirements 
in the United States rather than a combination of privatization 
and military construction? It seems like we are totally going 
towards privatization.

                      FAMILY HOUSING PRIVATIZATION

    Mr. Apgar. Mr. Chairman, that is my responsibility, and 
frankly, we have not communicated as well our true intent. The 
objective was never to replace military construction, but 
rather, frankly, to use the privatization authorities to their 
fullest extent, and that is because of a financial reality 
which struck me very hard coming into the government from the 
private sector last summer, looking at a $6 billion backlog, on 
a streamlined basis, knowing that it would take $600 million a 
year for ten years in new funds that simply are not available, 
and would divert funds from more critical readiness priorities.
    I looked at those privatization authorities, and frankly, 
the genius of those in the legislation that Congress passed in 
1996 is that it allows leveraging of public dollars with 
substantial private dollars. In fact, in the five pilot 
projects that we have analyzed, the lowest amount of leverage 
is eight to one. The highest is over forty to one.
    By any measure that is a very significant and very 
attractive potential capability in a situation where we cannot 
depend on a flow of fresh funds to make a real dent, much less 
solve our total revitalization needs. So we are driven by, 
first, the huge backlog that we have; second, the very tight 
budgetary constraints under which we are operating, as you well 
know better than me, and third, the potential for a balanced 
program, which does use these new authorities to the fullest 
extent we can.

                             PILOT PROGRAMS

    Now, at this point, we have only committed, as a matter of 
policy, to a pilot program, which includes five installations, 
one of which is already in the procurement process, I am sure 
you know, Fort Carson, through the traditional RFP method; four 
of which, Forts Hood, Lewis, Stewart, and Meade, we are 
proposing for pilot testing. The reason we are proposing that 
group is very important.
    They represent a diversity of situations. Fort Hood, an 
enormous post in a somewhat remote setting, with a limited 
local private housing market; Forts Lewis and Meade, by 
contrast, are in urban markets with significant private sector 
outside. Fort Stewart is a more specialized post in a medium-
sized city area.
    Between those four, we hope to not only test the full range 
of authorities, not just one method, but all seven of the 
tools, plus the conditions of adapting housing to a private 
market standard in those areas, a very important innovation in 
the legislation, in my view, and at the same time represent 95 
percent-plus of all of the conditions in Continental United 
States (CONUS) installations.
    By using this pilot as a test bed, both for design and 
execution, and not just for the financing tools, but for all of 
the methods of working with the private sector, we then will be 
in a better position, as will you, to judge how far 
privatization can go.
    I take full responsibility for promoting the fact from last 
summer when I came on that we should, in my personal view, move 
as aggressively as possible because of these constraints.
    I recognized, however, as I said in my opening statement 
that that view is not shared either by many in Congress or even 
by some within the Defense Department, and because of that, I 
certainly want to temper that to limit our focus to the pilot 
programs over the next 18 to 24 months, and then be able to 
come back with facts, results, comments from our development 
partners, and as appropriate then, look ahead to a much more 
balanced program.
    Senator Burns. Just explain to me added costs. It has to 
cost more to finally complete all of the projects that we have, 
it is going to cost us more money, it sounds like to me. When 
you spread that out over five years, the contractors take a 
risk, there are financing costs, there are all these things 
that we will have, and then the situation, what if we have 
another round of BRAC? What is our obligation on the end of 
that?
    Mr. Apgar. If I may, sir, I think you may now be referring 
to the incremental funding----
    Senator Burns. Yes. Yes.
    Mr. Apgar [continuing]. And I was commenting on 
privatization, so let us shift to the incremental funding 
situation.
    Senator Burns. Basically, that is where we are going, the 
privatization, we are going to use the incremental funding to 
move into that privatization, am I not correct on that?
    Mr. Apgar. No, sir, we are really separating now two 
different strategies. Incremental funding is, as I believe you 
said earlier, a one-time strategy driven by the Department of 
Defense (DOD) policy to manage the fact that we have tight 
budget constraints and have to be able to move as quickly as 
possible on critical priority projects.
    Housing privatization, we see as a completely separate 
strategy specifically for housing and specifically with those 
1996 tools. It is not incremental funding. It is long-term 
recapitalization of the housing----
    Senator Burns. I see.

                          INCREMENTAL FUNDING

    Mr. Apgar. So to respond to your question on incremental 
funding, we are providing through this one-time incremental 
funding strategy critical projects in a situation which is not 
ideal, but is manageable.
    We expect that all the projects can be executed within the 
fiscal year, but we are requesting that the reprogramming 
baseline be raised to the highest amount of the project, and 
that you approve advanced appropriations, because as you and 
Senator Craig both commented on, the private sector does need 
the assurance in order to price well, and if the assurance is 
there through advanced appropriations, then our ability to 
negotiate and manage good deals is still there.
    Perhaps, General Hunter, you might wish to comment as the 
execution agent.
    General Hunter. Sir, good morning.
    Senator Burns. Good morning.
    General Hunter. I am the Director of Military Programs at 
the Headquarters of the Corps of Engineers. As we have looked 
at the strategy for executing an incrementally funded program, 
we have looked at several things that I think are necessary, 
too. Secretary Apgar mentioned full authorization.
    I think we would also need advanced appropriation and 
reprogramming authority. That is one set of tools that can help 
us manage that program in building some assurances for the 
contracting community. The other point I would like to make is, 
if we do not have those tools then we are looking at a strategy 
of moving a number of projects probably to the final quarter, 
to sort of bridge the gap between fiscal years.
    Senator Burns. In the privatization, General Hunter, 
satisfy my curiosity on another round of BRAC. What are our 
obligations to the holders of that housing?
    General Hunter. For housing?
    Senator Burns. Yes. If that base is closed up, what is our 
obligation?
    General Hunter. Sir, I defer that to the Secretary.

                      FAMILY HOUSING PRIVATIZATION

    Mr. Apgar. First, in the way each privatization project is 
structured, the legislation does enable us to provide 
guarantees against closures, but the need for that and the 
degree to which guarantees will be needed is situational, and 
it has to be approached case by case.
    For example, in a market like Fort Meade, Maryland, just up 
the road here, in my professional view, not an official one at 
this moment, if you will forgive me, there should not be a need 
for extensive guarantees, if any, because the market itself is 
so vibrant. The location of the installation is so central in a 
growing market area that the developer should be able to build 
and manage housing projects that can be absorbed in the local 
market should that installation ever be closed, and that is a 
critical factor. It is precisely why one cannot take a one-
size-fits-all approach in this, but we have to look at it case 
by case, location by location.
    The other factor is the enabling power to build to local 
market standards. The more that we use those authorities built 
into the privatization legislation, the less the developer 
needs to move from the military construction housing 
specification (MILSPEC), which might not be saleable or 
reliable in the local market, to a much more marketable 
commodity. Those two factors working together, frankly, will 
limit, but we have the degree to which the government is liable 
or exposed. We do have to recognize that in remote markets, for 
example, there will have to be some form of quid pro quo to a 
developer for a situation that he has no control over and does 
not represent a real business risk. It is a government action.
    Senator Burns. Talking about the standards of local 
builders, look at my house. I live in the meanest pile of junk 
you ever saw in your life. I have done more work on it since I 
got it brand new that I should have bought some old junk and 
fixed it up. The stewards of the taxpayers' dollars. I think 
you answered most of this.
    What leverage will we have to ensure the standards are met, 
number one, and if disputes arise, how do we settle?
    Mr. Apgar. First, in the development agreement, that is, 
the long-term agreement with the development partner selected 
in each location, performance standards will be established 
both for construction and for operations. Even more important 
than those purely contractual provisions, we intend to build in 
incentives for performance, a technique which has long been 
used in the private sector and in the development industry to 
ensure that it is not a question of adversarial relationships. 
We have a contract, we are there to enforce it, but rather, 
aligning the goals of the development partner with ours for 
performance.
    Those techniques are well established. We are not inventing 
them. We are adapting them to this situation. Our best 
guarantee, Mr. Chairman, is really the selection of the 
development partner and why we put so much attention into 
reforming the procurement process.
    As you well know, if you are in a business relationship 
with a partner for the long term, you have a very different 
type of problem-solving dispute resolution process than you do 
if you are in a purely contractual adversarial process. The 
Corps of Engineers, as executing agents, and all of us involved 
believe strongly that by moving to a partnership mode of 
operation and establishing good performance criteria, and 
incentives to deliver them, that we should get a much better 
long-term result.

                         BARRACKS MODERNIZATION

    Senator Burns. Over in your barracks modernization, will 
the shift of this housing standard that you are talking about, 
privatization, improve the quality of life for soldiers? Will 
the privatization affect what we do with our bachelor 
personnel?
    Mr. Apgar. No, sir. At present, the privatization program 
only applies to family housing.
    Senator Burns. I know, but the way we allocate our dollars, 
how are we coming out on one-plus-one, are we--will that help 
us maybe accelerate our one-plus-one renovation plans?
    Mr. Apgar. Yes, it should, because--well, family housing 
has its own budget structure, but we are placing a high 
priority on completing the one-plus-one barracks modernization 
program. As I mentioned earlier, we are more than half-way 
through to our goal. We are pursuing it with maximum, both 
budget support and leadership support. General Van Antwerp, 
would you like to comment on that?
    General Van Antwerp. Our plan right now is to buy out the 
barracks by 2008, and then we are going to start a program in 
2001 for the trainee barracks. They are separate, but the one-
plus-one barracks are for permanent party.
    The timing of that has to do with allowing the swing space, 
because you have to move those soldiers into other space. So 
the program is on about as fast a track as--in fact, we pulled 
it in from 2012 into 2008. It is about $600 million a year, and 
I think the program is well on track. I do not think that it 
will take any funds from Army family housing to continue at 
this pace.
    Senator Burns. In other words, you can maintain a schedule.
    General Van Antwerp. Yes, sir.
    Senator Burns. I still think we ought to set out and visit 
about that, and we will try to put together some kind of an 
appointment where we can sit down and walk me through that when 
we have a little more time and can probably have a better 
exchange on just exactly what we are looking at then.

               MILCON FUNDING--CHEMICAL DEMILITARIZATION

    Last year, Congress realigned the MILCON funding for the 
chemical demilitarization program from the Army to the Defense-
wide account. In this 2000 budget submission, the military 
construction funding is back in the Army's budget. If the 
program encounters problems or has cost overruns, does that put 
the Army at risk?
    Mr. Apgar. Although, Congress authorized and appropriated 
the funding, the overall responsibility for the program 
remained with the Army and we have included it in this years 
army budget. Does anyone else have a further explanation?
    General Van Antwerp. I think the responsibility for 
construction remained in the Army. I guess there would be some 
risk passed to the Army if things went wrong with the program. 
I think that as the program has been executed in the past, 
though, it is small risk. The Corps of Engineers has done an 
excellent job with the execution of this program.
    Senator Burns. Do you have $61 million in the budget for 
this demilitarization construction this year, is that a correct 
figure?
    General Van Antwerp. I am showing the appropriation had 
$267 million, is what my number reflected.
    Senator Burns. Okay.
    General Van Antwerp. I can get back with you on that.
    Senator Burns. All right. We talked about, on your 
contract, housing, and a lot of that has been privatized, and 
off-base contractors are contracted to do that. Why are we not 
doing that ourselves? General, I will ask you.
    General Van Antwerp. Why are we contracting out a lot of 
our O&M work?
    Senator Burns. Yes.

                          COMPETITIVE SOURCING

    General Van Antwerp. The privatization program and the 
competitive sourcing program, this really falls into 
competitive sourcing, where we would be the contract holders, 
but we would get someone to do, in that case, operation and 
maintenance work that is done readily on the outside.
    It is done a lot by commercial activities. There are ample 
people to bid on it. We would say in many cases it is a back 
office function for the Army, it is not a Corps function. So we 
have a program to compete these things.
    If the government can do it more economically in-house, 
then it stays in the government, and we put together what we 
call a most efficient government organization. If a private 
sector contractor can do it more efficiently, and a lot of 
times if it is a bigger contract, if it is like for a whole 
base, where they are able to reduce overheads and things, a lot 
of times the private sector can do it more economically than we 
can.
    Senator Burns. Why can we not be teaching young men and 
young women who come into the Army and have very few skills, 
and when they leave they will have a skill?
    General Van Antwerp. This program is essentially for things 
that are not done with military labor. The military labor of 
the part that we are competing is very, very small. In fact, 
what we would like to do is get the uniformed members back into 
the force and out of these commercial-type activities.
    We are talking, our program is 73,000 positions to study 
for competitive sourcing. Only about 6,000 of those spaces are 
uniformed members, and the idea would be to take those 
uniformed members, put them back in the force, and use the rest 
of it by the civilian.
    Senator Burns. You might teach one of them to be a 
carpenter, so he can do something when he comes out. I am 
sorry, I left off Van Antwerp.
    General Van Antwerp. Antwerp puts me at the head of the 
alphabet. I am usually last in line. [Laughter.]
    Senator Burns. I will tell you that we have a very, very 
solid neighborhood of Hollanders, in Bozeman, Montana, and I 
will tell you a neat story.
    One of them is an old friend of mine, his name is Van 
Heisen, and he is in the sweet potato business, grows sweet 
potatoes. They are very frugal, as you well know. They are 
great people. He is 80 years old, and he has cancer, and he 
does not have very long to live, so I went to visit him, and we 
have known each other for a long time.
    At the end of the visit he said, he told his wife to go get 
the checkbook, and said, ``Write this boy a check, because he 
is running for reelection,'' and I said, ``John, that is not 
the purpose of this visit.'' He said, ``I know it, but,'' he 
said, ``in 30 days I am not going to be here and she is pretty 
close with her money, you might not get nothing.'' [Laughter.]
    They are terrific people.
    There will be some more questions. I am sure Senator Murray 
will have some questions, Mr. Secretary. This privatization, we 
are going to continue to visit with you.
    I would like to set up a private appointment before we 
finally make our decision on this, because we have not gotten 
our full allocations, as you know, as of yet, so we do not know 
exactly what our allocations are going to be, but I do want to 
sit down, because I guess we are going into an area of which I 
have the least knowledge, and when you have the least 
knowledge, you have more fears, and I want to go over this with 
you kind of around the table, and if takes an hour or so, why I 
think I will either come to your place or you can come to my 
place, it does not make any difference.
    My concern right now is readiness, and our soldiers, 
especially in the enlisted level, where we are having 
tremendous problems of retention and retention of skilled 
people, and we cannot continue to lose those people if we are 
going to have a solid planning force. I have a lot of respect 
for young men and women who choose to wear the uniform of the 
United States of America, and I think we have an obligation to 
them, and we also have an obligation to the taxpayers.
    I think we are taking some risks here maybe that we would 
not have to take or should not take. So I would want to visit 
along those lines, if you would probably allow me, and I would 
be happy to work with you in any way we can to make sure that 
we are both heading in the same direction, and we can have an 
understanding regarding this point.

                     ADDITIONAL COMMITTEE QUESTIONS

    I appreciate you coming this morning and answering these 
questions for the record, and I look forward to our second 
meeting.
    General Van Antwerp. Thank you.
    Mr. Apgar. Thank you very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                 Questions Submitted to Secretary Apgar
                  Questions Submitted by Senator Burns
                             funding level
    Question. Secretary Apgar, I am concerned about the Department's 
plan to phase fund military construction (MILCON) in fiscal year 2000. 
I recognize that there were tremendous fiscal pressures to realign 
money. However, if this practice continues into the future, what would 
be the long-term implications to your MILCON program?
    Answer. Incremental or phase funding of military construction is a 
one-time initiative to fund critical readiness requirements. There is 
no intent to continue the practice in the future. Continuation of the 
practice would reduce the Army's ability to program future construction 
due to the commitment of future year funds to pay the balance on prior 
years' incrementally funded work.
    Also, while incremental funding is appropriate for large-scale 
construction projects, such as hospitals and chemical demilitarization 
facilities, it is not conducive to small projects. Small projects which 
are incrementally funded generally require delayed award or notice to 
proceed and may be subject to higher bids. For the Army National Guard, 
projects would have to be subdivided into segments because State 
statutes prohibit the award of contracts without all Federal dollars 
being present. This would require the use of separate contracts on each 
increment and would potentially cost more money.
    Question. If we decide to pursue this strategy of advance 
appropriations, will this slow down execution of the projects and 
potentially increase their costs?
    Answer. No. Advance appropriations, along with full authorization 
and greater reprogramming flexibility, will allow the fiscal year 2000 
program to be executed (awarded) within the initial fiscal year of 
funding with little impact on project costs.
    Question. What does the Army spend each year on Plant Replacement 
Value per year on facility maintenance? At this rate, what is the 
replacement cycle for Army infrastructure for each component?
    Answer. In fiscal year 2000, the Army proposes to spend $1,748 
million for facility maintenance ($828 million, Active; $78 million, 
Guard; $116 million, Reserve; plus $726 million with Quality of Life 
Enhancements, Defense (QOLE,D)). These totals include funding for 
sustainment maintenance and about 20 percent for recapitalization 
initiatives or $361 million. The grand total is approximately 77 
percent of the required funding needed to maintain our facilities in 
their current condition. The replacement cycle based on MILCON funding 
for Army infrastructure in fiscal year 2000 is approximately 160 years.
                residential communities initiative (rci)
    Question. Did you look at other methods to close the housing gap 
and privatize housing? What were they? Why did you select the RCI 
process?
    Answer. Yes, the Army has considered a wide range of alternatives 
to address the severe, persistent funding shortfall and resulting 
revitalization (construction and major maintenance and repair) backlog, 
recently re-verified to be $6B. This shortfall is the backlog of work 
needed on existing units to bring them up to current standards. This 
$6B backlog does not include any costs to alleviate the family housing 
deficit, estimated at more than 10,000 units. During the mid-1990s, 
studies by several agencies [e.g., Marsh Quality of Life Task Force, 
Army Science Board, Congressional Budget Office (CBO), the General 
Accounting Office (GAO), and others] all came to the same conclusion 
that family housing could not be revitalized using traditional MILCON 
but that the Department would need to privatize to leverage scarce 
appropriated funds and assets (housing and land) to solve the military 
housing problem.
    In fiscal year 1994, the Army developed a strategy consisting of 1) 
the protection of Army Family Housing (AFH) appropriated fund budgets 
to stop further deterioration until a long-term solution could be 
developed; 2) the demolition of unneeded, uneconomically-repairable 
housing; and 3) the transition of housing management to a business type 
operation or privatization. The Army's success in implementing this 
strategy has been mixed. Due to budgetary constraints, we were not able 
to significantly reduce further deterioration of the inventory because 
of the large backlog of work. However, the Army has succeeded in 
continuing to demolish unneeded AFH units and has demolished over 4,500 
such units since fiscal year 1993. As a step toward fulfilling the 
long-term portion of its housing strategy, the Army implemented the 
Business Occupancy Program (BOP) in 1996 to house more soldiers on 
installations by funding housing offices according to the number of AFH 
occupied by military families, not total inventory. Further, the Army 
proposed for consideration within the Executive Branch legislation for 
an Army Housing Corporation (in 1994) to operate AFH as a business and 
supported the Department's Military Housing Corporation initiative in 
1996. Ultimately, however, these initiatives were not pursued for 
implementation. In short, the Army considered many other approaches 
before settling on an RCI-style privatization as the solution to the 
AFH problems in the U.S. We should stress, however, that RCI is itself 
a pilot program designed to experiment with the authorities available 
to the Army under the Military Housing Privatization Initiative 
legislation.
    The focus of the Army's efforts will be on utilizing these 
authorities to increase or leverage the rate of return on government 
resources dedicated to support the Army's housing needs. We do not, 
however, believe that privatization will prove appropriate or feasible 
at all installations. Consequently, even if after consultation with 
Congress, the Army proceeds with privatization beyond the RCI pilot we 
would expect to rely on traditional military construction methods to 
address some portion of our soldiers' and their families' housing 
needs.
    Question. With respect to family housing privatization, I am 
concerned about soldiers and their families paying more to live in one 
of these projects than housing provided through traditional military 
construction. What assurances can you give me that they will not have 
out of pocket expenses?
    Answer. The Army Leadership has continued to stress that any 
privatization project for family housing on an installation will be 
``invisible'' to the soldiers and family members in that out-of-pocket 
costs for all soldiers living in on-post housing (whether privatized or 
government owned) will be the same. Under the current policy, there are 
no out-of-pocket costs associated with on-post housing. Consequently, 
soldiers will pay no more than their Basic Allowance for Housing (BAH) 
for the rent and utilities of the RCI housing that is privatized on an 
Army installation.
    Question. What is the average lease period with the developers for 
these types of Army privatization deals?
    Answer. Fort Carson is the Army's first project and is currently in 
the evaluation phase. Fort Carson was solicited as a Request for 
Proposal and the contract term is a 50-year contract with an additional 
25-year option. Under the Request for Qualifications procurement 
process, the term of the lease will be determined during the 
development of the Community Development and Management Plan.
    Question. How will installations with family housing privatization 
ventures be treated in future rounds of BRAC?
    Answer. All installations will be treated the same. That is, under 
the recently proposed Base Realignment and Closure legislation, all 
installations would be treated equally and evaluated against identical 
criteria, regardless of whether housing on the installation is 
government owned or privatized. The new legislation, like its 
predecessor which authorized BRAC rounds in 1991, 1993, and 1995, would 
require that each of the Military Departments evaluate installations on 
the basis of a force structure plan and a set of approved selection 
criteria, that would be published and reviewed by Congress. In 
addition, every recommendation under the new BRAC round, along with 
supporting data, would be certified and reviewed by the independent 
Base Realignment and Closure Commission, the General Accounting Office, 
and the Congress.
    Question. I have heard that the Army continued letting contracts 
for consultants even after the Congress asked the program be put on 
hold until you received their clearance. Have you let any contracts? 
What are they for and for how much money? How was it determined who 
would be invited to bid on the contracts? Who received the contracts 
and why?
    Answer. Yes. The contracting process was already in process when 
the Army's privatization initiative was put on hold. To have canceled 
the solicitation and re-competed would have caused substantial delays 
in executing the pilot privatization projects.
    The solicitation was announced publicly in the Commerce Business 
Daily. The Government awarded a single Performance Based Compensation, 
Firm-Fixed Price-Labor Hour, Indefinite Delivery/Indefinite Quantity 
type contract from this solicitation. The contract was awarded to 
LaSalle Partners, Inc. (now Jones Lang LaSalle) and was awarded 
competitively after full and open competition. The contract is for 
services to provide professional administrative and management support 
services. The guaranteed minimum award per year during the base year 
and one option period is $100,000. Maximum award over the total two-
year period is approximately $7.5 million. The Government expects to 
make minimal contractual payments during the time the program is on 
hold.
                         barracks modernization
    Question. Secretary Apgar, explain to me the Army's policy 
regarding barracks modernization.
    Answer. The Army builds or renovates barracks to the one-plus-one 
standard for permanent party single soldiers in grades E-1 through E-6. 
The current requirement is for 137,000 soldiers. Included in the 
program is the removal of company and higher administrative facilities 
and dining facilities from the barracks buildings. To achieve the 
fiscal year 2008 buyout, we use a combination of MCA, O&M, host nation 
support, and residual value funding. Decisions on construction versus 
renovation are based on detailed building assessments and economic 
analyses.
    Question. I understand that the Army will implement the 1+1 
standard in fiscal year 2008. How were the decisions made on 
prioritizing which bases came first? Would you provide the subcommittee 
the Army's barracks master plan for the record?
    Answer. Prioritization is based on requirements, age and type of 
existing facilities and the installation's ability to execute projects. 
Further, emphasis is placed on minimizing the impact of construction 
and renovation on providing accommodations for single soldiers while 
still achieving the buyout goal. Location specific program data are in 
the chart that follows. Program level planning detail for fiscal year 
2006-2008, the last years of the program, is not yet available.

                                            [Fiscal years 1996-2005]
----------------------------------------------------------------------------------------------------------------
                  State                              Location                      Prjection             Amount
----------------------------------------------------------------------------------------------------------------
                   1996

AZ.......................................  Ft Huachuca.................  WholeBarracks Complex           $16,000
                                                                          Renewal.
CO.......................................  Ft Carson...................  WholeBarracks Renewal            20,000
                                                                          Complex (Ph I).
DC.......................................  Ft McNair...................  WholeBarracks Complex             5,500
                                                                          Renewal.
GA.......................................  Ft Benning..................  WholeBarracks Complex            33,000
                                                                          Renewal.
HI.......................................  Schofield Bks...............  WholeBarracks Complex            30,000
                                                                          Renewal (Ph I).
KS.......................................  Ft Riley....................  WholeBarracks Renewal (Ph I)      7,000
KY.......................................  Ft Campbell.................  WholeBarracks Complex            10,000
                                                                          Renewal (Ph I).
MD.......................................  Ft Dietrick.................  Unaccompanied Enl Pers Hsg..     17,500
NC.......................................  Ft Bragg....................  WholeBarracks Complex            18,500
                                                                          Renewal.
OK.......................................  Ft Sill.....................  48-Person Barracks Complex..      8,000
SC.......................................  Ft Jackson..................  WholeBarracks Complex            32,000
                                                                          Renewal.
TX.......................................  Ft Hood.....................  WholeBarracks Complex            17,500
                                                                          Renewal.
TX.......................................  Ft Bliss....................  WholeBarracks Complex            48,000
                                                                          Renewal.
TX.......................................  Ft Hood.....................  WholeBarracks Complex            15,000
                                                                          Renewal (Ph I).
TX.......................................  Ft Bliss....................  Dining Facility.............      4,900
VA.......................................  Ft Eustis...................  WholeBarracks Complex            11,000
                                                                          Renewal.
KR.......................................  Cp Hovey....................  WholeBarracks Complex             7,300
                                                                          Renewal.
KR.......................................  Cp Stanley..................  WholeBarracks Complex             6,800
                                                                          Renewal.
KR.......................................  Cp Pelham...................  WholeBarracks Complex             5,600
                                                                          Renewal.
KR.......................................  Cp Hovey....................  WholeBarracks Complex             6,200
                                                                          Renewal.
KR.......................................  Korea.......................  Dining Facility.............      4,150

                   1997

CO.......................................  Ft Carson...................  WholeBarracks Complex            13,000
                                                                          Renewal(Ph II).
GA.......................................  Ft Benning..................  WholeBarracks Complex            44,000
                                                                          Renewal.
HI.......................................  Schofield Bks...............  WholeBarracks Complex            10,600
                                                                          Renewal.
KS.......................................  Ft Riley....................  WholeBarracks Complex            26,000
                                                                          Renewal.
KY.......................................  Ft Campbell.................  WholeBarracks Complex            35,000
                                                                          Renewal(Ph II).
KY.......................................  Ft Knox.....................  WholeBarracks Complex            10,000
                                                                          Renewal-Ph I.
MO.......................................  Ft Leonard Wood.............  Ft. McClellan relocation....     58,000
TX.......................................  Ft Hood.....................  WholeBarracks Complex            35,000
                                                                          Renewal (Ph II).
WA.......................................  Ft Lewis....................  WholeBarracks Complex            49,000
                                                                          Renewal.
GY.......................................  Taylor Bks..................  Barracks Restoration........      9,300
GY.......................................  Spinelli, Bks...............  Barracks....................      8,100
KR.......................................  Cp Red Cloud................  WholeBarracks Complex            14,000
                                                                          Renewal.
KR.......................................  Cp Casey....................  WholeBarracks Complex            16,000
                                                                          Renewal.

                   1998

AZ.......................................  Ft Huachuca.................  WholeBarracks Complex            20,000
                                                                          Renewal.
GA.......................................  Ft Stewart (HAAF)...........  WholeBarracks Complex            13,400
                                                                          Renewal, Ph I.
GA.......................................  Ft Gordon...................  WholeBarracks Complex            22,000
                                                                          Renewal.
HI.......................................  Schofield Bks...............  WholeBarracks Complex            44,000
                                                                          Renewal.
KS.......................................  Ft Riley....................  WholeBarracks Complex            18,500
                                                                          Renewal.
KY.......................................  Ft Campbell.................  WholeBarracks Complex            37,000
                                                                          Renewal.
KY.......................................  Ft Knox.....................  WholeBarracks Complex            22,000
                                                                          Renewal--Ph II.
NC.......................................  Ft Bragg....................  WholeBarracks Complex             9,800
                                                                          Renewal.
OK.......................................  Ft Sill.....................  WholeBarracks Complex             8,000
                                                                          Renewal.
TX.......................................  Ft Sam Houston..............  WholeBarracks Complex            16,000
                                                                          Renewal.
VA.......................................  Ft Myer.....................  WholeBarracks Renewal.......      8,200
WA.......................................  Ft Lewis....................  WholeBarracks Complex            31,000
                                                                          Renewal.
GY.......................................  Tompkins Bks................  Barracks Renovation.........      7,600
GY.......................................  Taylor Bks..................  Barracks Renovation.........      5,400
GY.......................................  Katterbach..................  Barracks Renovation.........     19,000
GY.......................................  Kaiserslautern..............  Whole Barracks Renewal......      5,200
KR.......................................  Cp Red Cloud................  WholeBarracks Renewal.......     22,000
KR.......................................  Cp Stanley..................  WholeBarracks Renewal.......      6,400
KR.......................................  Cp Castle...................  WholeBarracks Renewal.......      7,700
KR.......................................  Cp Humphreys................  WholeBarracks Renewal.......     29,000
KR.......................................  Cp Casey....................  Dining Facility.............      5,100

                   1999

DAK......................................  Ft Wainwright...............  WholeBarracks Renewal.......     16,000
GA.......................................  Ft Benning..................  WholeBarracks Complex            28,600
                                                                          Renewal.
HI.......................................  Schofield Bks...............  WholeBarracks Complex            47,500
                                                                          Renewal.
KY.......................................  Ft Campbell.................  Whole Barracks Complex           41,000
                                                                          Renewal.
NC.......................................  Ft Bragg....................  Whole Barracks Complex           47,000
                                                                          Renewal.
NC.......................................  Ft Bragg....................  Whole Barracks Complex           10,600
                                                                          Renewal.
OK.......................................  Ft Sill.....................  Whole Barracks Complex           20,500
                                                                          Renewal.
TX.......................................  Ft Sam Houston..............  Whole Barracks Complex           21,800
                                                                          Renewal.
VA.......................................  Ft Myer.....................  Barracks Renovation.........      6,200
VA.......................................  Ft Eustis...................  Whole Barracks Complex           36,531
                                                                          Renewal.
  .......................................
GY.......................................  Schweinfurt Modernize.......  Barracks Building...........     18,000
KR.......................................  Cp Stanley..................  Whole Barracks Renewal......      5,800
KR.......................................  Cp Casey....................  Whole Barracks Complex           13,400
                                                                          Renewal.
KR.......................................  Cp Castle...................  Whole Barracks Renewal......     18,226
KR.......................................  Cp Humphreys................  Whole Barracks Renewal......      8,500
KR.......................................  Cp Casey....................  Whole Barracks Renewal......     29,000
KR.......................................  Cp Hovey....................  Whole Barracks Renewal......     20,000

                   2000

AK.......................................  Fort Richardson.............  Whole Barracks Complex           14,600
                                                                          Renewal.
GA.......................................  Fort Benning................  Whole Barracks Renewal           47,000
                                                                          Complex.
GA.......................................  Fort Stewart................  Whole Barracks Complex            3,500
                                                                          Renewal w/Dining.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           95,000
                                                                          Renewal.
KS.......................................  Fort Leavenworth............  Whole Barracks Complex           26,000
                                                                          Renewal.
KY.......................................  Fort Campbell...............  Whole Barracks Complex            4,800
                                                                          Renewal, Ph II.
MD.......................................  Fort Meade..................  Whole Barracks Complex           18,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           74,000
                                                                          Renewal.
PA.......................................  Carlisle Barracks...........  Whole Barracks Complex            5,000
                                                                          Renewal.
TX.......................................  Fort Hood...................  Whole Barracks Complex           29,000
                                                                          Renewal.
VA.......................................  Fort Eustis.................  Whole Barracks Complex           39,000
                                                                          Renewal.
GY.......................................  Ansbach.....................  Whole Barracks Complex           21,000
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            5,700
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            9,300
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            8,200
                                                                          Renewal.
GY.......................................  Mannheim....................  Whole Barracks Complex            4,500
                                                                          Renewal.
KR.......................................  Camp Casey..................  Whole Barracks Complex           31,000
                                                                          Renewal.

                   2001

AK.......................................  Fort Richardson.............  Whole Barracks Complex           12,400
                                                                          Renewal.
CA.......................................  Fort Irwin..................  Whole Barracks Complex           25,900
                                                                          Renewal.
GA.......................................  Fort Benning................  Whole Barracks Renewal           39,900
                                                                          Complex.
GA.......................................  Fort Stewart................  Whole Barracks Renewal           39,000
                                                                          Complex w/Dining.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           80,800
                                                                          Renewal.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           35,900
                                                                          Modernization.
KS.......................................  Fort Riley..................  Whole Barracks Complex           25,900
                                                                          Renewal.
KY.......................................  Fort Campbell...............  Whole Barracks Complex           27,200
                                                                          Renewal.
KY.......................................  Fort Campbell...............  Whole Barracks Complex           45,900
                                                                          Renewal, Ph III.
MD.......................................  Fort Detrick................  Whole Barracks Complex           14,200
                                                                          Renewal.
MD.......................................  Fort Meade..................  Whole Barracks Complex           15,300
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           57,392
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           22,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           59,800
                                                                          Renewal.
NJ.......................................  Fort Monmouth...............  USMA Prep School Barracks...     11,800
PA.......................................  Carlisle Barracks...........  Whole Barracks Complex            4,250
                                                                          Renewal.
VA.......................................  Fort Eustis.................  Whole Barracks Complex           33,200
                                                                          Renewal.
GY.......................................  Ansbach.....................  Whole Barracks Complex           17,850
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            7,900
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            6,970
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            4,840
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            4,100
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            9,300
                                                                          Renewal.
GY.......................................  Darmstadt...................  Whole Barracks Complex            6,800
                                                                          Renewal.
GY.......................................  Darmstadt...................  Whole Barracks Complex            7,000
                                                                          Renewal.
GY.......................................  Mannheim....................  Whole Barracks Complex            3,825
                                                                          Renewal.
GY.......................................  Mannheim....................  Whole Barracks Complex            5,400
                                                                          Renewal.
KR.......................................  Camp Casey..................  Whole Barracks Complex           26,350
                                                                          Renewal.
KR.......................................  Camp Humphreys..............  Whole Barracks Complex           14,400
                                                                          Renewal.
KR.......................................  Camp Page...................  Whole Barracks Complex           20,900
                                                                          Renewal.
KW.......................................  Kwajalein...................  Unaccompanied Personnel          19,900
                                                                          Housing.

                   2002
WI.......................................  Schofield Barracks..........  Whole Barracks Complex           49,000
                                                                          Renewal.
KS.......................................  Fort Riley..................  Whole Barracks Complex           40,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           39,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           40,000
                                                                          Renewal.
VA.......................................  Fort Myer...................  Whole Barracks Complex            4,500
                                                                          Renewal.
WA.......................................  Fort Lewis..................  Whole Barracks Complex           49,000
                                                                          Renewal.
WA.......................................  Fort Lewis..................  Whole Barracks Complex           49,000
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            9,500
                                                                          Renewal.
GY.......................................  Darmstadt...................  Whole Barracks Complex            6,800
                                                                          Renewal.
GY.......................................  Darmstadt...................  Whole Barracks Complex            6,900
                                                                          Renewal.
GY.......................................  Hanau.......................  Whole Barracks Complex            7,300
                                                                          Renewal.
GY.......................................  Heidelberg..................  Whole Barracks Complex            7,200
                                                                          Renewal.
KR.......................................  Camp Carroll................  Whole Barracks Complex            9,000
                                                                          Renewal.
KR.......................................  K-16 Airfield...............  Whole Barracks Complex           25,000
                                                                          Renewal.

                   2003

AK.......................................  Fort Richardson.............  Whole Barracks Complex           18,500
                                                                          Renewal.
CO.......................................  Fort Carson.................  Whole Barracks Complex           47,000
                                                                          Renewal.
GA.......................................  Fort Stewart (HAAF).........  Whole Barracks Complex           20,000
                                                                          Renewal.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           49,000
                                                                          Renewal.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           29,000
                                                                          Renewal.
KS.......................................  Fort Riley..................  Whole Barracks Complex           35,000
                                                                          Renewal.
KY.......................................  Fort Campbell...............  Whole Barracks Complex           24,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           41,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           32,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           12,000
                                                                          Renewal.
TX.......................................  Fort Hood...................  Whole Barracks Complex           41,000
                                                                          Renewal.
GY.......................................  Baumholder..................  Vehicle Maintenance Facility     11,600
GY.......................................  Darmstadt...................  Whole Barracks Complex            7,200
                                                                          Renewal.
GY.......................................  Hanau.......................  Whole Barracks Complex            7,400
                                                                          Renewal.
GY.......................................  Hanau.......................  Whole Barracks Complex            7,500
                                                                          Renewal.
GY.......................................  Heidelberg..................  Whole Barracks Complex            6,800
                                                                          Renewal.
GY.......................................  Mannheim....................  Whole Barracks Complex            4,250
                                                                          Renewal.
GY.......................................  Mannheim....................  Whole Barracks Complex            5,300
                                                                          Renewal.
GY.......................................  Mannheim....................  Whole Barracks Complex            7,280
                                                                          Renewal.
KR.......................................  Camp Bonifas................  Whole Barracks Complex            9,000
                                                                          Renewal.
KR.......................................  Camp Coiner.................  Whole Barracks Complex           20,000
                                                                          Renewal.

                   2004

AK.......................................  Fort Wainwright.............  Whole Barracks Complex           13,000
                                                                          Renewal.
GA.......................................  Fort Benning................  Whole Barracks Complex           14,000
                                                                          Renewal.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           49,500
                                                                          Renewal.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           34,000
                                                                          Renewal.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           16,600
                                                                          Renewal.
KS.......................................  Fort Riley..................  Whole Barracks Complex           34,500
                                                                          renewal.
KY.......................................  Fort Campbell...............  Whole Barracks Complex           10,600
                                                                          Renewal.
MD.......................................  Fort Meade..................  Whole Barracks Complex           18,500
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           57,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           12,000
                                                                          Renewal, USASOC.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           16,000
                                                                          Renewal.
VA.......................................  Fort Story..................  Whole Barracks Complex           15,000
                                                                          Renewal.
WA.......................................  Fort Lewis..................  Whole Barracks Complex           49,000
                                                                          Renewal.
GY.......................................  Bamberg.....................  Whole Barracks Complex            6,000
                                                                          Renewal.
GY.......................................  Heidelberg..................  Whole Barracks Complex            4,600
                                                                          Renewal.
GY.......................................  Heidelberg..................  Whole Barracks Complex            7,100
                                                                          Renewal.
GY.......................................  Kaiserslautern..............  Whole Barracks Complex            8,900
                                                                          Renewal.
GY.......................................  Mannheim....................  Whole Barracks Complex            4,200
                                                                          Renewal.
GY.......................................  Mannheim....................  Whole Barracks Complex            1,300
                                                                          Renewal.
GY.......................................  Wuerzburg...................  Whole Barracks Complex            3,350
                                                                          Renewal.
KR.......................................  Camp Carroll................  Whole Barracks Complex            9,000
                                                                          Renewal.
KR.......................................  Camp Walker.................  Whole Barracks Complex           20,000
                                                                          Renewal.

                   2005

AK.......................................  Fort Richardson.............  Whole Barracks Complex           18,000
                                                                          Renewal.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           34,000
                                                                          Renewal.
HI.......................................  Schofield Barracks..........  Whole Barracks Complex           46,600
                                                                          Renewal.
KS.......................................  Fort Riley..................  Whole Barracks Complex           40,000
                                                                          Renewal.
KY.......................................  Fort Campbell...............  Whole Barracks Complex           35,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           12,000
                                                                          Renewal.
NC.......................................  Fort Bragg..................  Whole Barracks Complex           54,000
                                                                          Renewal.
VA.......................................  Fort Myer...................  Whole Barracks Complex            6,000
                                                                          Renewal.
VA.......................................  Fort Myer...................  Whole Barracks Complex            6,200
                                                                          Renewal.
WA.......................................  Fort Lewis..................  Whole Barracks Complex           49,000
                                                                          Renewal.
GY.......................................  Various, Germany............  Whole Barracks Complex           21,500
                                                                          Renewal.
GY.......................................  Various, Germany............  Whole Barracks Complex           30,700
                                                                          Renewal.
KR.......................................  Camp Stanley................  Whole Barracks Complex           10,000
                                                                          Renewal.
KR.......................................  Various Korea...............  Whole Barracks Complex            9,500
                                                                          Renewal.
KR.......................................  Yongsan.....................  Whole Barracks Complex           20,000
                                                                          Renewal.
----------------------------------------------------------------------------------------------------------------

    Question. Will the shift to this housing standard improve quality 
of life for soldiers? Will it impact retention?
    Answer. Without a doubt, the one-plus-one standard improves the 
quality of life for single soldiers. Investment in the one-plus-one 
standard is expected to promote the retention of highly trained and 
experienced first-term soldiers. One-plus-one is not only a room 
configuration but a whole community that covers all living and working 
aspects of a soldier's life while in garrison. Commanders in the field 
who have troops living in the new barracks and working in the new 
support facilities are the strongest supporters of the program. The new 
barracks complexes have improved troop morale, while at the same time 
enhancing efficiency of garrison functional operations and readiness.
                       chemical demilitarization
    Question. Mr. Secretary, last year the Congress realigned the 
MILCON funding for the Chemical Demilitarization Program from the Army 
to the Defense-wide account. I see that in the fiscal year 2000 budget 
submission, that the military construction funding is back in the 
Army's budget. If the program encounters problems or cost overruns, 
does that put the Army at risk?
    Answer. All known Chemical Demilitarization Program requirements 
were fully funded at the time of the transfer to the Army; as such, the 
Army's topline was commensurately increased to adequately resource the 
Program through completion. The Army is totally committed to manage 
this program within the approved life-cycle cost estimate (LCCE). 
However, if unexpected circumstances result in cost exceeding the LCCE, 
other Army programs are potentially at risk.
    Question. There is approximately $261 million in the budget for 
Chem-Demil construction. Can you execute that much funding in one year? 
Does that entail double or triple shifts of construction workers? Would 
you provide for the record how the Corps will execute those contracts 
for $60 million and above?
    Answer. Yes, we expect all the MILCON funds requested for fiscal 
year 2000 to be required during that fiscal year. Based on current 
execution plans, all of the programmed construction funds will be 
placed during fiscal year 2000 with the exception of a limited amount 
of funds. These funds will be retained for contingencies for unknown 
construction changes and associated supervision, inspection, and 
overhead, for engineering during construction, and for the development 
of as-built drawings. The facilities at Anniston and Umatilla will be 
completed during fiscal year 2000. The construction of the facilities 
at Pine Bluff, Aberdeen, and Newport will be continuing and is expected 
to proceed at near or at full capacity during the fiscal year.
    Umatilla is the only facility where the contractor is working 
double shifts instead of single shifts. This is expected to continue 
until construction completion in the third quarter of fiscal year 2000.
    Each of the seven demilitarization facilities is being constructed 
using a single, incrementally funded construction contract. The fiscal 
year 2000 budget requests funding increments in excess of $60 million 
for Pine Bluff, Aberdeen, and Newport. For Pine Bluff, construction in 
fiscal year 2000 will include completion of the site work, the 
Personnel Support Complex, the Medical Maintenance Building, the Entry 
Control Facility, and the Process and Utility Building, while 
construction will continue on the Munitions Demilitarization Building. 
For Aberdeen and Newport, construction at each site in fiscal year 2000 
will include finishing the design, doing site work, and starting 
construction of the Chemical Disposal Building, the Process Auxiliary 
Building, the Utility Building, the Standby Generator Building, the 
Laboratory, the Personnel Support Building, the Entry Control Facility, 
the Gas Mask Storage Facility, and the Site Storage Facility.
                    military construction execution
    Question. Secretary Apgar, all components of the Army have greatly 
improved their construction project execution the past several years. 
How will advance appropriations and phased funding impact your 
execution? If we permanently adopt such a phased funding mechanism for 
military construction, what would be the long-term impact on the Army?
    Answer. If the budget is approved as requested, the fiscal year 
2000 program is fully executable (awardable) within the initial fiscal 
year of funding.
    The broad use of incremental funding of military construction, 
however, is a one-time initiative to fund critical readiness 
requirements. There is no intent to continue the practice in the 
future. Continuation of the practice would reduce the Army's ability to 
program future construction due to the commitment of future-year funds 
to pay the balance on prior years' incrementally funded work.
    Also, while incremental funding may be appropriate for certain 
large-scale construction projects, such as hospitals and chemical 
demilitarization facilities, it is not necessarily conducive to small, 
short-duration projects. Experience with incrementally funding smaller 
dollar value contracts is limited. In the long term, the availability 
of only limited funds in the initial fiscal year awards and 
solicitations may be subject to higher bids because of restrictions on 
ordering materials and on the perception by smaller contractors of 
added risk due to incremental funding. For the Army National Guard 
incremental funding will impact on the first year execution of some 
projects. Some States are prohibited by state statute from awarding 
contracts without full funding being immediately available. These 
States would delay execution to the second year of appropriation. For 
the same reason, other States, while not prohibited from contracting, 
would probably delay execution to fourth quarter to ensure continuous 
funding.
                             brac execution
    Question. With some of the BRAC money split between fiscal year 
2000 and fiscal year 2001, how will that affect implementation of the 
95 BRAC decisions? How much money was realigned from fiscal year 2000 
to fiscal year 2001?
    Answer. The fiscal year 2000 President's budget includes adequate 
funds to fully implement all remaining closure and realignment actions. 
The Army has requested advance appropriations of $196 million in fiscal 
year 2001 for the Army BRAC program.
                                 ______
                                 
                 Questions Submitted by Senator Stevens
                  replacement of bassett army hospital
    Question. Secretary Apgar, the Army intends to build a new hospital 
at Fort Wainwright in my state, beginning in fiscal year 2000. What is 
the Army's funding strategy for this project and will it be completed?
    Answer: The Defense Medical Military Construction Program submitted 
the new Fort Wainwright hospital in the fiscal year 2000 President's 
Budget for $133,000,000. The project was requested to be appropriated 
over 5 years with the phases being fiscal year 2000--$18,000,000; 
fiscal year 2001--$56,000,000; fiscal year 2002--$34,000,000; fiscal 
year 2003--$20,000,000; fiscal year 2004--$5,000,000. This project is 
estimated for construction completion by the summer of fiscal 2004.
    Question. Is there funding in the budget to demolish the existing 
Bassett Hospital located at Fort Wainwright?
    Answer. Yes. The funding for demolition of existing Bassett Army 
Community Hospital at Fort Wainwright, Alaska, is included in the last 
two phases (Phases 4 and 5) of this project in fiscal year 2003 and 
fiscal year 2004.
                 army guard and reserve milcon funding
    Question. Secretary Apgar, over the past several years, the 
committee has worked with the Army to ensure that they provided a 
minimum level of funding for the Army Guard. We agreed upon $50 million 
each year. This year the Army has only provided the Army Guard $16 
million under this phased-funded scheme. Can you explain to me why the 
Army did not honor its commitment to the Committee?
    Answer. Just like the other DOD components, the Army Guard MCNG 
program was incrementally funded. The Army Guard authorization remains 
in excess of $50 million, but to meet funding guidelines, only $16 
million of the appropriation was requested in fiscal year 2000, with 
the balance requested as an advance appropriation.
    Question. What kind of message does the Army send to its Reserve 
Components when it provides them less than $40 million in total for all 
of their infrastructure requirements?
    Answer. Readiness requirements have been addressed and improved in 
fiscal year 2000. The Army National Guard budget request contains the 
full authorization in recognition of Congressional interest. However it 
seeks only $16 million in appropriation, because that was all that was 
available under the circumstances. Funds garnered by MILCON incremental 
funding were used as part of this readiness plus-up. The Army Reserve 
received some of this readiness enhancement and supports that. The Army 
Reserve also understands that it has not been singled out as a bill 
payer, and they received cuts consistent with the other components. The 
key is OSD's assurance that the balance of the incremental funding will 
be provided in fiscal year 2001. Funds to maintain the Army Reserve's 
current infrastructure has not been decremented in fiscal year 2000.
                                 ______
                                 
                 Questions Submitted by Senator Murray
                    army national guard and reserve
    Question. Mr. Apgar, when I compare the funding levels from last 
year to this year for both the Guard and Reserve, I'm very concerned. 
For the Army Reserve, funds are decreasing from $102 million to a 
requested $23 million. Likewise, the National Guard funds are 
decreasing from $145 million to $16 million. How on earth are you going 
to be able to sustain the Guard and Reserve with these minimal levels 
of funding?
    Answer. The decrease in funding is a one time special event. For 
the Army Reserve, an authorization request of $81,215,000 and an 
appropriation request of $23,120,000 was all that was affordable under 
the circumstances. The Army Reserve believes that there will be no 
significant impact to Reserve Component facilities. The Army National 
Guard fiscal year 2000 MILCON submission was in keeping with the DOD 
plan for incremental funding. An authorization request of $57,402,000 
and an appropriation request of $16,045,000 was all that was affordable 
under the circumstances.
    Question. Will the Yakima MATES project be capable of construction 
with only $3.5 million out of $16 million being appropriated this year, 
according to your request?
    Answer. Not under the current appropriation request. State statutes 
prohibit partial funding and the Washington Army National Guard will 
not be able to award the contract if full funding is not available. 
However, if informal reprogramming is based on the full authorization 
or if Congress approved formal reprogramming for the Yakima MATES, then 
this project could be awarded in fiscal year 2000.
    Question. General Helmly and General Squier, can you tell me what 
input the Reserve and Guard had in the decision to seek incremental 
funding for MILCON projects? Are you comfortable with this plan?
    Answer. The U.S. Army Reserve did not provide any input into the 
decision to seek incremental funding for fiscal year 2000 MILCON 
projects. We feel comfortable with our plan to execute the fiscal year 
2000 MILCON projects if Congress approves the budget as submitted and 
provides full authorization, advance appropriations, and an increase in 
reprogramming threshold. The Army National Guard also had no input into 
the decision to submit MILCON projects for incremental funding. The 
Army National Guard supports this concept as submitted on a one-time 
basis and will find ways to make it work as directed.
    Question. Mr. Apgar, in recent years, Congress has had to do the 
heavy lifting on providing adequate MILCON funding for the Guard and 
Reserve. Given the importance of the Guard and Reserve to our national 
security, I would expect to see an effort to increase MILCON funding 
again this year. How would you recommend that any additional projects 
be funded this year--additional incremental funding, full funding, or 
what?
    Answer. The Army recommends that any additional projects for fiscal 
year 2000 that are added to the Guard or the Reserves be fully funded. 
This would provide the infrastructure upgrades that are desperately 
needed in the Reserve Components.
                            budget questions
    Question. In your overview of funding, it becomes clear that 
Chemical Demilitarization ends up on top for the requested 
appropriations amount compared to mission projects and quality of life 
projects. Can you explain to the Committee how you prioritized when 
recommending your appropriations levels compared to your authorized 
levels for fiscal year 2000?
    Answer. Some projects, such as Chemical Demilitarization; are 
already being executed under incremental funding. The appropriation 
request in fiscal year 2000 for these projects represents a higher 
level of funding required to meet contractual obligations. Also, 
smaller projects with short construction duration were funded at 
approximately 30 percent to ensure projects are not held up for lack of 
sufficient funds due to rapid construction execution. All other active 
Army projects are funded at approximately 15 percent of the contract 
amount, based on historic first year execution. The Army Reserve funded 
projects between 6 and 36 percent while the National Guard funded all 
projects at 21 percent.
    Question. The Fort Lewis physical fitness center is one of the 
quality of life projects you list, and is slated to receive $1.85 
million this year. Can you comment on the status of this project in 
light of the advanced appropriations? Similarly, can you comment on the 
support project at Fort Lewis, the Tank Trail Erosion project?
    Answer. The Fort Lewis physical fitness center's estimated 
construction contract award is in January 2000. The requested advanced 
appropriations and reprogramming authority will ensure the project is 
executed without disruption or delay due to funding constraints.
    The Tank Trail Erosion project is the fifth phase of a ten phase 
project. The fifth phase is fully funded, as were the previous four 
phases, and will not require advanced appropriations for completion of 
this phase.
                      Department of the Air Force

STATEMENT OF RUBY B. DEMESME, ASSISTANT SECRETARY OF 
            THE AIR FORCE, MANPOWER, RESERVE AFFAIRS, 
            INSTALLATIONS AND ENVIRONMENT
ACCOMPANIED BY:
        MAJ. GEN. EUGENE A. LUPIA, HEADQUARTERS, USAF, THE CIVIL 
            ENGINEER, DEPUTY CHIEF OF STAFF, INSTALLATIONS AND 
            LOGISTICS
        BRIG. GEN. CRAIG R. MCKINLEY, DIRECTOR, AIR NATIONAL GUARD
        COL. RICHARD R. KOEPP, DIRECTOR, INSTALLATIONS AND LOGISTICS, 
            OFFICE OF AIR FORCE RESERVE
        THOMAS W L. MCCALL, JR., DEPUTY ASSISTANT SECRETARY 
            (ENVIRONMENT, SAFETY, AND OCCUPATIONAL HEALTH)

                       INTRODUCTION OF WITNESSES

    Senator Burns. We will next hear from the United States Air 
Force, Ruby B. Demesme, Assistant Secretary of the Air Force, 
Manpower, Reserve Affairs, Installations and Environment. Thank 
you for the visit the other day.
    We also have General Lupia, The Civil Engineer, Deputy 
Chief of Staff, Installations and Logistics; Brigadier General 
Craig R. McKinley, Deputy Director, Air National Guard; and 
Colonel Richard R. Koepp, Director, Installations and 
Logistics, Office of Air Force Reserve. We welcome you this 
morning.
    Secretary Demesme.
    Ms. Demesme. Good morning, Senator. I will take just a few 
minutes to highlight our Military Construction (MILCON) 
program.
    The Air Force is striving to maintain facilities and 
infrastructure to preclude weakening unit readiness, impairing 
our mission accomplishments, or degrading our peoples' quality 
of life; therefore, our corporate strategy is to accomplish 
these goals by ensuring that the MILCON program places emphasis 
on supporting our new mission beddowns, our current mission 
activities, ensuring continued access to critical ranges and 
air space, reinvesting in the few remaining bases overseas, 
funding our critical environmental compliance projects, and 
maintaining and operating our 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 force.
    Mr. Chairman, for the next few minutes I will in very 
precise terms review our total force MILCON program, to include 
military family housing and base realignment and closure.
    The Air Force total MILCON budget request for fiscal year 
2000 is $1.85 billion. Our current mission program includes 
runway 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 designed to 
help them accomplish their mission; so, therefore, our new 
mission program supports our weapons system beddowns, such as 
the F-22 fighter, the C-17 air lifter, the B-2 bomber, the KC-
135 tanker, the joint primary aircraft training system, or 
JPATS (Joint Primary Aircraft Training System), and the 
construction of the enhanced training range in Idaho.
    Achieving and maintaining military readiness is extremely 
difficult, but it is our utmost priority. 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, 
therefore, our program plans enlisted dormitories, fitness 
centers, and community support facilities at various locations.
    We must also invest in force protection, safety and quality 
of life facilities, and our overseas bases. We now have 11 main 
operating bases overseas. Regrettably, the reduced MILCON 
investment, along with inadequate host nation support and 
funding, means that we are not fully meeting our MILCON program 
overseas needs.
    Family housing is one of our most important programs, and 
we are extremely appreciative of this committee's strong 
support. Our MILCON program reflects efforts to continue to 
revitalize or replace worn-out housing units that are no longer 
economical to maintain.
    Our Base Relignment and Closure (BRAC) request supports the 
1995 decision to realign Kelly Air Force Base, Texas, as well 
as supports our design costs for the fiscal year 2001 program. 
I also note the Air Force strongly supports Secretary Cohens 
request for two additional BRAC rounds.
    Despite the challenges we have a number of good news 
stories. For example, using the new legislation, this past year 
we awarded the Department of Defense's first privatized housing 
project at Lackland Air Force Base, Texas. We also are 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 for us to accomplish our program goals. Our 
MILCON submission reflects the corporate priorities that 
support weapons systems modernization, and also provides a fair 
and equal, safe and secure, environment for our people to work 
and play.

                           PREPARED STATEMENT

    I am ready to discuss any issues that you have, or answer 
any questions that you might have for us at this time.
    [The statement follows:]
                 Prepared Statement of Ruby B. Demesme
                              introduction
    Mr. Chairman and members of the committee, good day. I appreciate 
the opportunity to appear before you today to discuss the Department of 
the Air Force fiscal year 2000 Military Construction (MILCON) program. 
While this is my first appearance before the committee, I am 
nonetheless appreciative of your continuing support for our uniformed 
members and their families.
    Mr. Chairman, we are cognizant that the Air Force could not 
maintain the quality of any of its facilities, and the advantages they 
provide, without the strong support we have always received from this 
committee, for which we are most appreciative.
Overview
    As we adjust to ever changing world conditions and revise our 
mission, plan, and structure to meet our responsibilities, both at home 
and those associated with peacekeeping and other deployments abroad, it 
is imperative that we establish and maintain standards to provide an 
adequate quality of life for our people. Since people have been and 
remain the most important weapon system in our inventory, we must 
listen to what they tell us they need if we want to keep them in 
uniform. Well, we've asked, and we've listened, and we are now trying 
to respond to their stated desires for safe, accessible, and affordable 
housing, health care facilities, child development centers, and work 
environments. Meeting all of these demands is no easy task, yet we've 
made every effort to balance these needs with those of modernization. 
The fiscal year 2000 MILCON budget request reflects the results of our 
strategy.
    As we merge operations into an Expeditionary Aerospace Force (EAF), 
it is more important than ever that the interface and mutuality between 
the active and reserve components be seamless. This means ensuring the 
Air National Guard (ANG) and Air Force Reserve (AFR) receive adequate 
MILCON funding along with the Active forces. This budget also addresses 
their needs.
    The Total Force concept enables the Air Force to aggressively 
manage the most formidable obstacles to troop retention and readiness--
heavy taskings and tough fiscal constraints. Despite these challenges, 
we must balance MILCON needs across the total force, to include our 
very capable Ready Reserve and Guard units, as we transition the Air 
Force into the 21st Century.
    Support operations for our EAF concept must become better and less 
expensive: better, because quality infrastructure contributes to 
quality of life, which improves morale, retention, and the readiness of 
the force: and less expensive in order to free up funds for the high 
priority weapon systems modernization we need to maintain battlefield 
dominance.
    We are continually examining internal operations and support 
activities to determine where we can leverage our resources. We are 
taking actions to right-size, to consolidate like functions, to 
demolish excess facilities, and to enhance joint use of facilities 
between service components and government agencies (such as the 
National Aeronautics and Space Administration), and to embrace better 
business practices. These initiatives focus on improving the efficiency 
and performance of the Air Force facility support structure.
    The reality is that, in order to fund higher priority programs, the 
Air Force is underinvesting in installation programs. Each year we 
balance installation support operations against other Air Force 
priorities, which results in a funding stream based on an acceptable 
level of risk. This means that our installation programs continue to be 
underfunded.
    The maintenance and repair of facilities and infrastructure at Air 
Force installations are essential to our core competencies in support 
of national strategies and the Quadrennial Defense Review. We are 
striving to maintain facilities and infrastructure where Air Force 
people work and live to preclude weakening unit readiness, impairing 
mission accomplishment, or degrading quality of life. Consequently, the 
Air Force corporate strategy for the installation support program 
includes:
  --Maintaining our operations and maintenance programs to preserve the 
        quality of life of our personnel and their families.
  --Ensuring that our MILCON program places emphasis on supporting new 
        mission beddowns and current mission necessities, to include 
        redirecting limited capital investment to our most pressing 
        requirements.
  --Ensuring continued access to critical ranges and airspace.
  --Reinvesting in the few remaining overseas bases, which, even after 
        host-nation burdensharing, have numerous facility needs 
        critical to Air Force core competencies.
  --Incorporating environment, health and safety cost considerations 
        into core business practices to lower cost and to improve 
        performance while continuing to fund critical environmental 
        projects to meet compliance requirements.
    The Air Force continues to look at our installation facility 
requirements with a view towards leaner operations. We are continuing 
to embrace better business practices by considering private sector 
business ventures for everything we do. This allows us to leverage our 
limited resources by incorporating new innovative ideas. These new 
ideas will continue to shape the templates for installations in the 
21st Century.
    Mr. Chairman, I now would like to proceed to discuss the major 
programs in our fiscal year 2000 MILCON budget request. I will review 
the total force MILCON program, to include discussion of the Military 
Family Housing (MFH) program. Finally, I will address the Air Force 
perspective on the Department of Defense request for funding of the 
Base Realignment and Closure (BRAC) accounts.
Air Force Military Construction Budget
    The Air Force MILCON program consists of five principal areas: New 
Mission; Current Mission; Planning & Design and Unspecified Minor 
Construction; Environmental; and BRAC. New Mission construction 
supports the beddown of new weapons systems and force structure 
realignments. Current Mission construction revitalizes existing 
facilities and infrastructure, and builds new facilities to correct 
existing deficiencies. Planning & Design and Unspecified Minor 
Construction includes funds to design our construction projects and to 
fund a small program to handle urgent, unforeseen construction 
requirements. The environmental program consists of those regulatory 
compliance projects, which must be accomplished by law, or to avoid 
increased health or safety risks to people on or off our installations. 
The BRAC program supports the beddown of realigned missions.
    The Air Force proposes financing its fiscal year 2000 MILCON 
program through a combination of regular appropriations and advance 
appropriations. We are requesting $315 million in fiscal year 2000 
appropriations and $686 million in appropriations for fiscal year 2001 
to enable completion of the fiscal year 2000 program. This one-time 
financing methodology enables the Air Force to fulfill its commitment 
to providing quality facilities, while maximizing the use of fiscal 
year 2000 resources for other readiness and modernization needs. The 
Air Force has added the $686 million needed to complete the fiscal year 
2000 projects to its fiscal year 2001 program. The use of advance 
appropriations for fiscal year 2000 projects has no impact on the Air 
Force's planned MILCON for fiscal year 2001 through 2005. This is not 
the preferred method of budgeting for construction projects, but we 
expect to execute the fiscal year 2000 program without delays or added 
costs provided Congress approves full authorization and advance 
appropriations for the projects requested.
    For fiscal year 2000, we are requesting a program of $1.85 billion 
for MILCON. This request includes $1.75 billion for active duty MILCON 
($597 million for traditional MILCON and $1.150 billion for MFH); $73 
million for ANG; $29 million for AFR; and $4.7 million for BRAC MILCON.
The Total Air Force Military Construction Program
    Similar to last year, the Air Force's fiscal year 2000 MILCON and 
MFH programs were developed using a facility investment strategy with 
the following objectives: Maintain what we own; Accommodate new 
missions; Maintain quality of life investments; Optimize use of public 
and private resources; Continue demolition programs; Reinvest overseas 
and Continue environmental leadership.
Program Overview
    Given the success of the corporate Air Force process, we continue 
to consider the Air Force total obligation authority as one pot of 
money. These funds are distributed based on the most urgent, corporate 
needs of the total force. The strategy for allocating these funds is 
inextricably tied to major commands (to include the AFR and ANG), Chief 
of Staff, and Secretary of the Air Force priorities.
    To determine priorities, each major command submits a prioritized, 
unconstrained list of its construction requirements. The MILCON 
integrated process team, then uses a weighted matrix to establish a 
cross-cutting investment program. This results in an integrated 
priority list based on the most urgent needs of the total Air Force. 
The list integrates new mission, current mission, and environmental 
projects for active, ANG, and AFR components. This priority list is 
presented to the corporate leadership structure, to include the Chief 
of Staff and the Secretary of the Air Force, for final review and 
approval.
Current Mission
    ``Maintain what we own'' is the investment strategy underlying our 
current MILCON program. This concept results in identifying the minimum 
requirements to sustain readiness and quality of life while attempting 
to reduce the requirements via privatization and demolition. This 
strategy ensures that we exercise the stewardship entrusted to us for 
maintaining eighty-seven major installations.
    Our fiscal year 2000 current mission MILCON program consists of 54 
projects totaling $467 million. These projects include a variety of 
facilities at a number of installations to include: runway and ramp 
repair projects at Eglin Auxiliary Field 9, Florida; Davis-Monthan Air 
Force Base, Arizona; Pope Air Force Base, North Carolina; and Elmendorf 
and Eielson Air Force Bases, Alaska; addition and alteration to the Air 
Force Reserve Headquarters facility at Robins Air Force Base, Georgia; 
and constructing two composite support complexes for the Air National 
Guard at Kulis, Alaska and Savannah, Georgia. These projects are 
critical to maintaining aircraft readiness and to enhance the work 
environment of the consolidated functions, thereby improving overall 
efficiency and reducing costs associated with stress and the 
frustration of system failure.
    We will continue our emphasis on the effective use of available 
resources to determine what we need, to care for what we own, to 
renovate or replace worn out facilities, and to look for opportunities 
to consolidate functions in retained facilities.
Accommodate New Mission
    It is important that our people are able to operate in an 
environment designed to accomplish their missions. The Air Force 
modernization programs is designed to enhance the unique capabilities 
embodied in our specialized core competencies. These competencies 
provide the rapid, precise, global response that enables our combatant 
commanders to respond quickly to regional conflicts in support of the 
national strategy.
    We need MILCON to support weapon system beddowns, such as the F-22 
fighter, C-17 airlifter, B-2 bomber, KC-135 tanker, Joint Primary 
Aircraft Training System (JPATS), and to improve aircrew proficiency 
training by constructing, for example, the Enhanced Training Range in 
Idaho (Juniper Butte Range). Our entire MILCON program needed to 
support new mission requirements consisting of 23 projects totals $154 
million.
F-22 Raptor
    The F-22, our #1 modernization priority, is the Air Force's next 
generation air superiority fighter being developed to counter threats 
posed by advance surface-to-air missile systems and next generation 
fighters. The proposed location for the F-22 follow-on operational test 
and evaluation and the weapons school beddown is Nellis Air Force Base, 
Nevada. The fiscal year 2000 MILCON includes three F-22 projects at 
Nellis Air Force Base totaling $19 million.
C-17 Globemaster III
    The C-17 Globemaster III aircraft is designed to replace our aging 
fleet of C-141 Starlifters, which currently are operating beyond their 
intended design life. The C-17 provides rapid global mobility by 
combining the C-141 airlift capabilities, the C-5 capability to carry 
oversize cargo, and the C-130 capability to land directly on short, 
forward-located airstrips.
    McChord Air Force Base, Washington, was designated as the second 
operational base for the C-17. We had already identified Charleston Air 
Force Base, South Carolina, as the first operational base, and Altus 
Air Force Base, Oklahoma, as the C-17 training base. Since then, we 
have identified Jackson International Airport, Mississippi, as the 
proposed Air National Guard C-17 operating location. To support this 
program, the fiscal year 2000 MILCON request includes Active and AFR 
facilities at McChord Air Force Base, Washington, and a corrosion 
control facility at Charleston Air Force Base, South Carolina.
                               b-2 spirit
    The B-2 is a multi-role bomber capable of delivering both 
conventional and nuclear munitions. The bomber represents a major leap 
forward in technology and is an important milestone in the U.S. bomber 
modernization program. Our fiscal year 2000 MILCON program includes one 
$23 million project at Whiteman Air Force Base, Missouri.
                          kc-135 stratotanker
    The KC-135 principal mission is refueling. This asset greatly 
enhances the Air Force's capability to accomplish its mission of Global 
Engagement. We have four projects in the fiscal year 2000 MILCON to 
support the KC-135 totaling $19 million. The projects are: flight 
simulator facilities at Robins Air Force Base, Georgia and RAF 
Mildenhall, United Kingdom; repair parking ramp at Eielson Air Force 
Base, Alaska; and a squadron operations and aircraft maintenance unit 
at McConnell Air Force Base, Kansas.
             joint primary aircraft training system (jpats)
    JPATS is a joint Air Force and Navy primary trainer. The JPATS T-6A 
Texan II aircraft replaces existing fleets of Air Force T-37s and Navy 
T-34s. The aircraft will be used to train entry-level pilots, 
navigators, and naval flight officers. The fiscal year 2000 MILCON 
includes one JPATS project at Laughlin Air Force Base, Texas for $3 
million.
            enhanced training range in idaho (juniper butte)
    The Air Force is building a training range on Bureau of Land 
Management and Idaho state lands in Southwest Idaho, and modifying 
airspace for local training use by Mountain Home Air Force Base, Idaho, 
crews. The range will simulate real-world scenarios and will allow 
aircrews to plan and practice complex missions. This project will 
balance realistic local training with careful consideration of 
environmental, cultural, and economic concerns. In addition to 
providing realistic training, the range's close proximity to Mountain 
Home Air Force Base increases efficiency by allowing crews to convert 
time currently spent in transit to a distant range into actual training 
time. The new range will include a 12,000-acre drop zone site; a 640-
acre and four 5-acre no-drop zone sites; simulated target areas; and 10 
one acre and twenty quarter acre emitter sites. This multi-year range 
program request includes $15 million in fiscal year 2000 for phase II, 
and $2 million for a defense access road project.
Quality of Life
    Achieving and maintaining military readiness is our number one 
priority. While modern technology enables our forces to perform their 
missions more effectively, it cannot substitute for high quality 
people. People, our most treasured resource, are the critical 
components of readiness. It is imperative that we maintain a highly 
motivated and trained fighting force to effectively respond to the 
demands placed on them. We have 95,000 military members forward 
stationed or deployed and we urgently need to fund quality improvements 
that address our troops' top concerns: retirement pay; fair and 
competitive compensation; safe, affordable, and adequate housing; 
quality health care; balanced tempo; robust community and family 
programs; and expanded educational opportunities. These are the 
initiatives that commanders, first sergeants, and airmen say are 
important to them.
    The quality of life of our people must be commensurate with the 
sacrifices we ask them to make. Addressing these concerns has enabled 
us to better manage recruiting and retention challenges. Offering an 
attractive living environment to those aspiring to serve this great 
country results in improved quality of life for our personnel, and 
that, Mr. Chairman, translates into enhanced readiness.
    The MILCON program improves quality of life by renovating or 
constructing dormitories and community support facilities. Our three-
step dormitory investment strategy, as outlined in the Air Force 
dormitory master plan, is as follows: (1) the buy-out of all permanent 
party central latrine dormitories, now complete given the generous 
congressional support in fiscal year 1999; (2) the elimination of 
shortages; and (3) the replacement of our worst remaining dorms.
    We balance dormitory investment against additional requests for 
community support facilities. This year 's MILCON program funds eight 
enlisted dormitory projects at eight stateside installations, and one 
project overseas, for a total of $90.5 million. In addition to the 
dormitories, the MILCON program funds a child development center at RAF 
Lakenheath, United Kingdom; a dining facility at Keesler Air Force 
Base, Mississippi; visitors quarters at McGuire Air Force Base, New 
Jersey; and new or modified fitness centers at Travis Air Force Base, 
California; Schriever (formerly Falcon) Air Force Base, Colorado; 
MacDill Air Force Base, Florida; Whiteman Air Force Base, Missouri; and 
Osan Air Base, Korea, for a total of $51 million.
Optimize Use of Public and Private Resources
    As the Air Force operationalizes its EAF concept, we must free up 
precious funds for modernization. To do this, we continue to adopt 
modern business practices, e.g., eliminating redundancy; using 
competition to improve quality and to reduce costs; and reducing 
support structures to free up resources for other higher priority 
needs. Nonetheless, we must keep in mind that the purpose of our 
competitive sourcing and privatizing initiatives is the preservation of 
the ``tooth'' and streamlining the ``tail.''
                        military family housing
    We awarded our first housing privatization project last summer at 
Lackland Air Force Base, Texas. While the contracting process took 
longer than we would have liked, it was necessary to develop the new 
documents, policies, and procedures that will allow us to eliminate 
many hurdles on future projects.
    The Air Force continues to solicit advice from national real estate 
and financial institutions on how to improve our performance in 
privatization. We firmly believe that through privatization we can 
provide new homes to our airmen in less time than using the standard 
MILCON process.
                               utilities
    Meanwhile, we are embracing a defense reform initiative that places 
us primarily in the energy management business, which will reduce our 
role in the infrastructure business. Our goal is to privatize utility 
systems where it makes economic sense and does not negatively impact 
national security.
    To date we have identified 463 utility systems for potential 
privatization, and analysis for 55 of these systems is currently 
underway. We have also programmed 204 systems for analysis in fiscal 
year 1999, and the remaining 204 systems in fiscal year 2000. As a 
result, the Air Force will be able to meet the goals established by the 
Department of Defense to privatize all utility systems by 2003.
                       laboratory infrastructure
    We are also exploring innovative partnership arrangements with 
industry to achieve real reductions in Research, Development, 
Technology & Evaluation (RDT&E) infrastructure costs through mutually 
beneficial use of Air Force-owned land and facilities. By working with 
local communities and government entities at the Air Force research 
sites, we are confident we can develop more efficient operations. One 
example is the joint proposal being negotiated between our Rome 
research site and the state of New York. Through a combined funding 
source consisting of MILCON, state and local government funds, and a 
bond issue, the Rome research site will be able to divest themselves of 
14 old and expensive-to-maintain buildings in order to acquire one new 
building with greatly reduced operations and maintenance costs. 
Additional savings in manpower will come through reduced requirements 
for security, facility management, and maintenance. The innovative 
lease arrangement will substantially reduce the costs to the government 
while guaranteeing payback to the bond holders.
    Another example of an innovative approach to infrastructure 
requirements is the proposal for Brooks Air Force Base, the home of our 
Armstrong research site. The Brooks ``city base'' concept is being 
explored with the city of San Antonio and the State of Texas. This 
concept would allow us to retain a research campus while turning the 
rest of the base infrastructure over to the local government and to 
private contractors. It also would allow the local community to have 
access to the facilities currently at Brooks, and would provide a 
valuable place for future industrial and commercial development while 
retaining areas for parks and recreation. As with the Rome research 
site in New York, the city base at Brooks would greatly reduce 
infrastructure costs to the government since it would no longer be 
responsible for the upkeep of the support facilities and would need to 
maintain only the facilities actually used for research. These types of 
partnerships with the local communities have great potential and may 
become models for future Air Force infrastructure plans.
Demolition
    While we strive to increase our maintenance dollar for 
infrastructure or new facilities; we must continue to demolish worn out 
or obsolete facilities in order to reduce recurring operations and 
maintenance costs. Over the past three fiscal years, we have demolished 
over nine million square feet of obsolete facilities.
Overseas Military Construction
    We must also invest in force protection, safety, and quality of 
life at our overseas bases. We now have eleven overseas main operating 
bases, of which six are to the East: two in England, two in Germany, 
one in Italy, and one in Turkey; and five bases in the Pacific: three 
in Japan and two in Korea. After years of base closures and force 
reductions, we have achieved stability in the overseas arena. However, 
the reduced MILCON investment coupled with inadequate host-nation 
funding does not meet our overseas requirements. Consequently, while we 
are actively pursuing NATO funding, increased host-nation funding, and 
payment-in-kind, our quality of life improvement needs remain greater 
than available burden-sharing funding can satisfy.
    Our fiscal year 2000 MILCON program for our European and Pacific 
installations totals $77 million. The program consists of a 
consolidated corrosion control and maintenance complex, a KC-135 flight 
simulator facility, and an operations facility at RAF Mildenhall; and a 
consolidated support complex at RAF Lakenheath, United Kingdom. Also in 
the program are a $2 million global positioning system control station 
on Ascension Island, and a $2 million project for apron security 
lighting at Lajes Air Base, Portugal. As mentioned earlier, there is 
one overseas dormitory project; an addition/alteration to the physical 
fitness center, at Osan Air Base, Korea; and a child development center 
at RAF Lakenheath, United Kingdom. We ask for your support of these 
important operational and quality of life projects that represent 
critical requirements for our airmen and their families located 
overseas.
    We are sending a precautionary prefinancing statement to the NATO 
infrastructure committees for all NATO-eligible European projects. 
These statements will permit recoupment from the NATO infrastructure 
program if eligibility is subsequently established.
Environmental Military Construction
    As our record shows, we are dedicated to enhancing our already open 
relationships with both the regulatory community and the neighborhoods 
around our installations. We strive to ensure that our operations meet 
all environmental regulations and laws, and we seek out partnerships 
with local regulatory and commercial sector counterparts to share ideas 
and to create an atmosphere of trust.
    Our continuing campaign to foster an environmental ethic within the 
Air Force, both here in the US and abroad, has enabled us to enhance 
operational readiness, be a good neighbor, and leverage our resources 
to ensure that we remain a leader in environmental compliance, cleanup, 
and pollution prevention.
    As a result of these cooperative efforts over the past two years, 
the Air Force environmental program has received top honors in almost 
one-third of the 42 awards recognized by the Department of Defense. We 
were recognized for overall environmental quality, pollution 
prevention, and recycling. Additionally, our measure of merit targeting 
no-enforcement actions is paying dividends. We have reduced our open 
enforcement actions from 263 in fiscal year 1992 to just seven in the 
first quarter of fiscal year 1999.
    Our major environmental stewardship projects are the renewal of the 
Barry M. Goldwater Range in Arizona and the Nellis Range in Nevada. We 
anticipate submitting renewal legislation to Congress in late summer. 
Our environmental compliance MILCON request for fiscal year 2000 totals 
$27 million for eight, class-1 ``must pay'' compliance projects. Our 
program primarily focuses on projects for fire training facilities, 
which are closed due to fuel contaminated land and potential ground 
water contamination. These fire training facilities are located at 
Hickam Air Force Base, Hawaii; an ANG fire training facility at 
Savannah International Airport, Georgia; and an AFR fire training 
facility at Homestead Air Reserve Station, Florida. We also have two 
wastewater treatment facility projects at RAF Feltwell and RAF 
Molesworth, United Kingdom; a hazardous material storage facility at 
RAF Mildenhall, United Kingdom; a sanitary sewer line project at 
Schriever Air Force Base, Colorado; and a project to close the landfill 
at Andersen Air Force Base, Guam.
    All of these projects satisfy class-1 requirements. (Class-1 
compliance requirements refer to conditions or facilities currently out 
of compliance with environmental laws or regulations, including those 
subject to a compliance agreement.)
Unspecified Minor Construction
    We have requested $15 million in fiscal year 2000 for unspecified 
minor construction, which will provide the total Air Force with a 
primary means of responding to small, unforeseen facility requirements 
that cannot wait for normal MILCON. From fiscal year 1994 through 
fiscal year 1998, a total of $6 million was reprogrammed into the 
account to fund urgent requirements. The fiscal year 1994 through 
fiscal year 1999 accounts are fully obligated, or committed, to valid 
projects.
Planning and Design
    Our request for fiscal year 2000 planning and design is $35 
million. These funds are required to complete design of the fiscal year 
2001 construction program and to start design of our fiscal year 2002 
projects.
Construction Supervision, Inspection and Overhead
    The Air Force active and Reserve forces will annualize its 
appropriations for construction supervision, inspection and overhead 
over five budget years based on fiscal year 1993-97 outlay rates. This 
defers total obligation authority in the initial budget year , and 
budgets for supervision, inspection, and overhead funds as needed, as 
opposed to maintaining unobligated balances.
Military Family Housing
    As in years past, we consider family housing to be one of our most 
important programs. We are convinced that no other facility program so 
greatly influences the performance and commitment of our people as much 
as having quality homes for our families. Maintaining our 
responsibility to the family housing program is even more important in 
this era of major force reductions and increased frequency and length 
of deployments. Because these factors are so stressful for military 
families, it is imperative that we continue to emphasize quality of 
life issues to mitigate the stress. Consequently, we have developed, 
consistent with the corporate priorities of the Air Force, a housing 
program to best serve our families.
    Due in large part to strong congressional support, our MFH 
investment program has been sustained during recent force structure 
changes. As of this fiscal year, the average age of our housing 
inventory is 35 years and 61,000 of our 110,000 units require 
revitalization.
    Our MFH investment has three prongs: the replacement/ improvement 
program, the operation and maintenance program, and the leverage we can 
obtain through a balanced privatization program. The $328 million 
fiscal year 2000 MFH replacement/improvement program will replace 1180 
worn-out units at 15 separate locations, and will improve 1334 units at 
15 locations. The housing operations & maintenance program totals $822 
million. It supports ``must pay'' requirements such as refuse 
collection, snow removal, utilities, leases, and critical housing 
maintenance tasks. These are essential repairs that must be done to 
keep the houses in good condition. Finally, we will use privatization 
at selected locations to leverage our funds. Privatization is a tool 
which allows us to accelerate the buyout of repairs to adequate homes 
and we ask for your continued strong support for our requested 
investment levels to ensure we have sufficient capital to accelerate 
the repair of our inadequate housing.
Housing Improvements
    The Air Force ``whole house/whole neighborhood'' improvement 
concept has proven extremely successful. Under this concept, we upgrade 
older homes to contemporary standards by updating worn-out bathrooms 
and kitchens, replacing obsolete utility and structural systems, 
providing additional living space as permitted by law, and, at the same 
time, accomplishing required maintenance and repair. The result is a 
cost effective investment that extends the life of these houses 25 
years. In addition, the ``whole neighborhood'' program provides 
recreation areas, landscaping, playgrounds and utility support systems 
to give us attractive and functional living environments.
    Our fiscal year 2000 improvement request is $124 million. This 
amount revitalizes 1334 homes at 15 bases. This includes $74 million 
for 903 homes stateside, $49 million for 431 homes overseas, and $1.2 
million for two neighborhood improvement projects.
                          housing construction
    We are requesting $186 million for fiscal year 2000 projects, with 
$173 million at 14 stateside bases to replace 1105 existing houses, and 
$13 million at one overseas base (Lajes) to replace 75 existing houses 
that are no longer economical to maintain.
                 operations, utilities and maintenance
    Our fiscal year 2000 request for family housing operations, 
utilities, and maintenance is $703 million. These funds are necessary 
to operate and maintain the 110,000 homes in the Air Force inventory. 
Approximately 41 percent of this request represents the Air Force's 
obligation as the landlord for items such as utilities, refuse 
collection, and other key services. The remaining 59 percent of the 
funds is for maintenance for the homes and infrastructure.
                    planning and design and leasing
    We have requested $136 million for planning and design, and for 
leasing. This includes $17 million for planning and design of new 
construction and improvement programs, and $119 million for leasing 
approximately 4,100 domestic and 3,900 foreign homes. The leasing 
program supports critical missions in non-traditional locations, such 
as foreign sites where family housing is not available, and for 
recruiters not located near military installations in the US.
    Our fiscal year 2000 MFH budget request reflects our policy to 
ensure that our families have access to safe, affordable and adequate 
homes; and mirrors our strategy to modernize on-base housing by 
improving our worst first. We are committed to improving retention by 
providing our Air Force families with homes and communities that are 
comparable in design and amenities to private sector housing. Our 
``whole house-whole neighborhood'' concept for developing a housing 
community plan for each installation continues to put our people first 
by fostering a sense of community and supporting neighborhood identity. 
We seek to achieve a pride of ownership mentality within our family 
housing community.
Base Closure Accounts
    The Air Force BRAC fiscal year 2000 MILCON request is $4.7 million 
for 3 construction projects supporting the BRAC 1995 decision to 
realign Kelly Air Force Base, Texas, and for final design costs of 
fiscal year 2001 BRAC construction. The projects are a communication 
facility addition, and a maintenance facility, at Kelly Air Force Base, 
Texas, and a civil engineering shop addition, at Lackland Air Force 
Base, Texas.
    The Air Force requirements included in the Department of Defense 
fiscal year 2000 budget request for the BRAC accounts are designed to 
support the President's Five-Part program by continuing to transfer 
property at closure installations as quickly and efficiently as 
possible to communities for economic reinvestment at the earliest 
opportunity. As part of the defense budget, the Air Force request 
reflects a thorough review of all remaining requirements and careful 
budgeting to fulfill validated requirements to the greatest extent 
possible within the budget constraints.
    The Air Force continues to be committed to timely environmental 
restoration that is protective of human health at our closure bases. In 
addition to converting bases to civilian use, we continue the 
realignment beddown process at remaining installations to ensure that 
base closure neither disrupts our operational requirements nor 
adversely affects quality of life. We appreciate the support of this 
committee in helping us meet these objectives.
    Our successes in base conversion are numerous. The Environmental 
Protection Agency recently highlighted the Air Force fast-track cleanup 
program at the former Bergstrom Air Force Base, Texas, designed to meet 
the Austin-Bergstrom International Airport opening date. We intend to 
apply our many lessons learned to future base conversions should the 
Congress approve additional rounds of closures.
    One final comment on BRAC. Reductions in Air Force manpower and 
force structure have outpaced those in infrastructure, which results in 
commanders spending scarce resources on unneeded infrastructure. 
Consequently, the Secretary of Defense has requested, and the Air Force 
supports, two additional rounds of base closures. Further BRAC actions 
are necessary to ensure we have the proper force structure and topline 
for modernization necessary to properly execute our mission and to 
maintain day-to-day activities. We need BRACs now, because the Air 
Force has more bases than it needs and any delay in this process delays 
the realization of critical cost savings. As previously stated by 
Acting Secretary of the Air Force F. Whitten Peters, ``simply put, base 
realignment and closure is tomorrow's readiness decision that we must 
begin planning today.''
Conclusion
    In conclusion, Mr. Chairman, I thank the committee for its strong 
support of the Air Force MILCON program, which contributes immeasurably 
to the Air Force's readiness, retention, recruiting, training and 
quality of life programs.
    Our fiscal year 2000 Air Force MILCON submission reflects the 
corporate priorities supporting the total Air Force vision to continue 
our position as the world's best and most respected air and space 
force, while working to maintain our aging physical plants. Our 
installations are crucial factors in Air Force readiness. We rely on 
our bases to serve as our launch platforms to effectively project U. S. 
air and space power, as well as places where our people live and work. 
This budget submission reflects our commitment to maintain the quality 
of Air Force installations.
    Thank you Mr. Chairman and members of the committee.

                         ENVIRONMENTAL CLEANUP

    Senator Burns. Thank you very much. I will just pull one 
out of the blue. Thank you for that statement.
    Environmental cleanup, as a result of BRAC, in other words, 
closing some of our facilities, tell me about that, and the 
amount of money that you are spending. I do not know if anybody 
has those figures. That was kind of a question that just popped 
into my head, the progress that we are making on environmental 
cleanup as a result of BRAC.
    Ms. Demesme. Yes, sir. As you know, environmental cleanup 
has cost a little bit more than we envisioned when we went into 
the BRAC rounds, but as we have gotten into it, we are doing it 
better. We partnered with a lot of the environmental agencies 
to try to do it even more succinctly in the future.
    Right now, we have a $291 million program for fiscal years 
2000 and 2001. I have with me my environmental deputy assistant 
secretary, who could give you some more figures on that, Mr. 
McCall.
    Senator Burns. Just give me a little bit of a progress 
report, Mr. Secretary.
    Mr. McCall. We spent approximately $1.9 billion to clean 
up, and we are more than halfway through that. We will have 
most of our sites completed by 2001. It will be well over 90 
percent of our sites completed, but we will have a few sites on 
some installations that still have not been done.
    Part of these have been discovered as we have gone along, 
and there will be some minor adjustments, but they are not 
going to impact our ability to transfer property or to be 
timely.
    The one base that stands out different from all the rest is 
McClellan, which will take us longer, probably to about 2016. 
We are timing our cleanups to support property utilization so 
that we will not impact the ability to reutilize. That is the 
state of our program.
    Senator Burns. Tell me about a base that was as large as 
McClellan. Can one sector be cleaned up, or one part of that 
base, and that be moved into private hands.
    Mr. McCall. Yes, it can.
    Senator Burns. Is that the way we are doing that?
    Mr. McCall. Yes, it is.
    Senator Burns. Thank you very much. We were concerned about 
that, because BRAC, I think all the time we were going through 
the process of the BRAC, we really did not know what figure was 
going to pop up when you talked about environmental cleanup 
before we could move those properties. Last year we had a 
little hearing, in fact, with regard to that, and finding some 
problems, and you are right, there are a lot of things that are 
discovered, and it becomes a surprise.
    General Lupia. Senator, I want to make a comment, if I 
could, on environmental cleanup, not related to BRAC, though. I 
wrote you a letter this morning to let you know that Malmstrom 
Air Force Base is about to be recognized for the best 
environmental cleanup program in the Air Force at an awards 
ceremony on the 26th of April, which we have invited you to.

                     OVERSEAS MILITARY CONSTRUCTION

    Senator Burns. Well, thank you very much. Now, you 
mentioned being behind in some of your overseas installations. 
Would you mind telling me where you consider you have 
shortages, what those shortages are, and why?
    Ms. Demesme. We have shortages in Korea. I think some of 
our worst places are in Korea. We are not getting the level of 
support in terms of burden sharing with Korea as we are with, 
let us say, Japan. We have dorms situations there that we need 
replaced. We have fitness centers that we need. We have housing 
that we need in that particular location.
    We also have housing needs in Europe, and we have some, of 
course, in Japan. General Lupia, you might want to give the 
Senator a better idea of what we are planning in those areas.
    General Lupia. Sir, when I was assigned as the programmer 
in Europe in the mid-eighties we had 26 big operating bases 
throughout Europe. In the early nineties, as we decided to 
downsize and lower the number of our forces in Europe, we made 
a conscious decision in the Air Force to stop asking the 
Congress for money for construction until we could decide where 
we would be.
    Now, the result of that is, we are in six bases in Europe 
today, and only six, two in the United Kingdom, two in Germany, 
one in Italy, and one in Turkey. Because of the pause, I might 
say, of three to four years, the bases overseas got even 
further behind than they were to start with. We have two bases 
left in Korea, down from a very much larger amount, just at 
Osan and Kusan today, and three bases in Japan.
    We asked the Congress and Senate for very little help in 
Japan, because we do get a lot of burden-sharing money from the 
Japanese. In recent years the Koreans have continued to give us 
more and more. At Osan Air Base, we are asking you for help 
with the dormitory, because it is where the highest number of 
our people live off base and are exposed--in the force 
protection area are exposed to the dangers of terrorism, et 
cetera.
    NATO has picked up a very large share of the construction 
in Aviano, I know you saw that while you were there. We have a 
great deal of non-appropriated funds we invested in there for 
the commissary and the base exchange (BX), a new complex, and a 
new DOD school, but it still left us a requirement to build and 
pay for dormitories, for example, and for many of our other 
U.S.-owned facilities.
    Senator Burns. If I remember, there was just limited 
dormitory space.
    General Lupia. Yes, sir. In our program, and the Congress 
has been good to us, we have been able to build dormitories, 
one-plus-one dormitories, over the last couple of years to buy 
out our deficit there as well.
    Senator Burns. General, did we ever get an agreement with 
the Italian government on some sort of permanence at Aviano?
    General Lupia. Yes, sir. The length of it, I do not recall 
off the top of my head, but we do have--we got that entire area 
they call the Zappala area, from the Italian Air Force. That is 
where we are building the commissary and the BX, and have a 
military construction line item for roads, et cetera. But the 
answer to your question is yes. The length of the agreement or 
the terms of the agreement I am not familiar with.
    Senator Burns. South Korea is going through some very 
difficult financial times as a country, and we are part of 
almost the total collapse of the economic community of the 
Pacific rim. Are they rebounding now to where they are more 
amenable for burden sharing there?
    Ms. Demesme. They are more stable than they were last year 
at this time, but we still are unable to increase the amount 
that we can expect them to assist us with.

                            MILITARY HOUSING

    Senator Burns. We just talked to the Army about their 
privatization and their leveraging the money. We still have 
members of Congress, that is what they are asking us on these 
programs. Are you approaching your housing problems the same 
way that the Army is?
    Ms. Demesme. No, sir, we are not. We have a three-pronged 
approach to housing. We are looking at traditional MILCON, 
privatization and operation and maintenance (O&M). We still 
have a lot that we need to do with O&M money as well. We are 
taking a very measured approach to housing. We have agreed that 
it is important to look at not just the needs for the day, but 
how we are going to sustain those needs in the future.
    We are looking at out-of-pocket expenses to our members to 
make sure that we are keeping it within their housing 
allowance, because they are already spending between 15 and 20 
percent out of pocket, and we do not want to increase that. So 
our contracts will ensure that their housing allowances will 
take care of utilities in the privatization market.
    We are also looking at whether we should lease the land or 
if we should convey it, whether it is on base or off base, and 
to that end, we are in the process of developing a family 
housing master plan.
    We are going to continue to move slowly on this, because we 
want to make sure we do it right. We want the housing to be 
there. This gives us the opportunity to provide housing today 
when people need it rather than postpone it until tomorrow, but 
at the same time we want to be able to make sure that the 
housing we developed for our people will meet their needs and 
will not cost them a lot of extra money, and will continue to 
meet the quality that we think our people deserve.

                              ONE-PLUS-ONE

    Senator Burns. Tell me about one-plus-one.
    Ms. Demesme. One-plus-one is very important, sir. We highly 
endorse it. I listened to your earlier talk about being in the 
Army. I was not in the Army, and the Marine Corps is only 
looking for a few good men, but I did go to college, and I can 
recall in my college dormitory, I had a room with four people 
with a central latrine.
    I could not have anybody in my room. If I wanted to study I 
had to go someplace else. If I wanted to take a bath, I was not 
always able to do so. We all had the same daytime duty, to go 
to school, so we did not have the shift work. So when I think 
about our young people, I realize----
    Senator Burns. Well, we did, but we did not write about it.
    Ms. Demesme. We did, but we accepted what we had to at that 
time.
    Senator Burns. That is right.
    Ms. Demesme. But the difference was, I had a place to go 
home to. I could go home to my family during holidays and 
summers, that was just the place that I was going to school. 
With our young men and women, this is their home, this is where 
they work, this is where they sleep. They need their privacy. 
They need their ability to get up tomorrow and go out on that 
tarmac and turn the wrenches on the planes.
    They need to be able to forecast weather, and all those 
things that require concentration, where they need to have the 
ability to think and to just be by themselves once in a while 
if that is what they need, but it does not take away from their 
integrity, because the living units are still in the buildings 
together, and they will still be training together, they will 
still be doing teamwork in lots of areas.
    I think privacy is the number one issue for our young men 
and women. It is not that they are going to college, and they 
are going to go out later on and have fun, this is a real life-
and-death situation, and I think it is important that they have 
a safe place to sleep.
    Senator Burns. You have a master plan on----
    Ms. Demesme. We have a master plan. First, we focused on 
getting rid of our gang latrine. We have done that a little 
ahead of schedule. Next, we are implementing new assignment 
standards that govern how we use our existing dormitories. Over 
the next three years, fiscal years 2000 to 2002, we intend to 
provide private sleeping rooms to our current dormitory 
occupants, wherever possible. We will continue buying out our 
room deficit through fiscal year 2009 according to the master 
plan.
    That will be our own base capability and sometimes we are 
going to be leasing or having people move off base, and by 2009 
we hope to have completed our master dormitory project. We are 
on track, we are doing well, and it means a lot to our men and 
women.
    Senator Burns. I know we have talked and, of course, I am 
very much concerned about, as I said, with the Army, we are 
going to stop building NCO dormitories. We visited with, I 
think they were all probably majors and below in the Middle 
East, and Senator Inouye, Senator Stevens, and I were out 
there.
    What struck me, there were two young women, one was a staff 
sergeant and one was a tech sergeant, and they are leaving the 
Air Force, and that concerns me a lot. They were very bright 
young women, and they were technicians on the AWACS, skilled 
positions.
    We just absolutely have to retain those people, if we 
possibly can. They are the best we have. That was kind of a--
the living conditions there--and this was their tenth or 
eleventh trip over there since 1991. So that concerns me a lot.
    I do not have any other questions other than I think your 
approach is correct, and I want to thank you for the visit. It 
was a very good visit. I enjoyed that a lot. We are going to 
visit some more on this privatization thing, and I do not know 
which direction you-all are going in the Air Force, and we do 
not have all of our allocations yet, and as soon as we get our 
allocations, we will come down and be in very close 
consultation with you, and work with you as we work through 
some of those problems in the appropriations.
    Ms. Demesme. Well, we appreciate your support. We look 
forward to working with you. If we can assist in any way, if 
you are visiting different locations, or need timely 
information, please let us know.
    Senator Burns. Well, I have a couple of trips to make, and 
look forward to those. I like a working relationship, and that 
is the most important thing.
    Ms. Demesme. This is General Lupia's last appearance.
    Senator Burns. Really?
    General Lupia. Yes, sir.
    Ms. Demesme. He is thinking about retiring. I am not sure 
if we can allow that to happen.
    Senator Burns. We are not going to let you out. We need to 
retain generals, too, you know. [Laughter.]

                        MALMSTROM AIR FORCE BASE

    General Lupia. Sir, I have been at this for 32 years, and I 
think it is time to give somebody else a chance. I told you I 
was not going to retire until we got the Malmstrom Air Force 
Base Red Horse Unit stood up.
    Senator Burns. I have to tell you, that has been a pretty 
nice success story out there. We are using some reserve and----
    General Lupia. Guardsmen.
    Senator Burns [continuing]. And guardsmen, along with 
regulars.
    General Lupia. Yes, sir. We reached full operating 
capability last October 1st, as we said we would. We had 200 
members of the squadron deployed for the first real genuine 
deployment down to Guatemala, to help with the recovery of 
Hurricane Mitch, and I am happy to tell you that our active 
guardsmen, 200 of them, guys and gals, have now come back. 
Today another group of guardsmen from Montana have returned to 
Guatemala to continue helping restore critical systems and 
utilities.
    They asked me today while I was here, if I would get a 
chance to see you, and I said it is for sure I will get a 
chance to see you, if I could present you with one of their 
819th squadron coins. It says on the back, ``A horse with 
wings, unity, teamwork, and commitment.'' So on behalf of the 
members of the 819th, I would like to present this.
    Senator Burns. Thank you very much. Tell them thank you. I 
am pretty proud of them out there, because that was kind of an 
experiment----
    General Lupia. Yes, sir.
    Senator Burns [continuing]. To see if we could integrate 
those two sections, and it has been--I hope it has been fairly 
successful anyway.
    General Lupia. A big success.
    Senator Burns. I do not know all the ins and outs about 
it----
    General Lupia. A big success, sir.
    Senator Burns [continuing]. But it has the appearance of a 
lot of success, and we want to continue to do those things. I 
am sure that Senator Murray will have some questions, and if 
you could respond to her and the committee, we would deeply 
appreciate it. She is down at the White House, and they are 
talking Kosovo, and I certainly understand that.

                     ADDITIONAL COMMITTEE QUESTIONS

    We appreciate your patience, and coming before the 
committee, and we look forward to working with you.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                   Questions Submitted to Ms. DeMesme
                  Questions Submitted by Senator Burns
                             funding levels
    Question. There has been a steady decline in Military Construction 
funding within DOD. This year the Department migrated $3.1 billion from 
the MILCON bill to replenish personnel and readiness accounts within 
the Department. DOD did not cut any military construction projects as a 
result of this reduction. Rather they requested only a small down 
payment on each project, and spread the funding over two years.
    This decline will result in gradual erosion in the ability of the 
Air Force to adequately maintain and replace their base infrastructure, 
as well as protect quality of life initiatives.
    The fiscal year 2000 Air Force budget funds real property 
maintenance at the Preservation Maintenance Level which represents the 
resources necessary to accomplish periodic maintenance required to 
sustain real property facilities and infrastructure. This is one 
percent of the current physical plant. This represents almost 80-100 
year replacement cycle.
    Madame Secretary, I am concerned about the Department's Plan to 
Phase Fund Military Construction in fiscal year 2000. I recognize that 
their were tremendous fiscal pressures to realign money. However, if 
this practice continues into the future, what would be the long-term 
implications to your Milcon program?
    Answer. Since advance appropriations is proposed as a one-time 
action, we are not sure what the long-term implications would be. The 
Department and our design/construction agents will have to create new 
mechanisms to accurately track project costs over multiple 
appropriation years. Right now a project has a single year of 
appropriation to track project increases, reprogramming thresholds and 
scope adjustments. All of these elements become more difficult to track 
and potentially more costly if this practice continues. Any long-term 
approach would perpetuate the additional workload needed to develop 
award and funding strategies that ensure adequate funding is available 
on each project so construction can proceed as necessary to meet need 
dates.
    Question. If we decide to pursue this strategy of advance 
appropriations, will this slow down execution of the projects and 
potentially increase their costs?
    Answer. Although advance appropriations does not support optimal 
program execution, it does not preclude 100 percent execution in the 
year of appropriation. We will continue to work award and funding 
strategies with our design/construction agents to ensure sufficient 
funds are available on each project so construction can proceed as 
necessary to meet need dates.
    The potential for cost increases can be minimized if Congress 
provides full project authorization in the year of appropriation, 
changes the reprogramming base from the appropriated to the authorized 
amount to enable the transfer of funds between projects in a timely 
manner, and advance appropriates the balance of construction funds so 
they are available at the start of the next fiscal year.
    Question. What does the Air Force spend each year on plant 
replacement value on facility maintenance? At this rate, what is the 
replacement cycle for infrastructure for each component?
    Answer. In fiscal year 2000, the Air Force is spending one percent 
of the plant replacement value in the Operation and Maintenance 
appropriation for facility maintenance. At this rate, there is no 
recapitalization of facilities.
                      family housing privatization
    Question. Because of the tremendous backlog of new and replacement 
family housing construction, the Department of Defense sought new 
authorities to use public/private ventures as a housing tool. Under a 
five-year test program which expires February 2001, the Air Force can 
provide cash, direct loans and loan guarantees, and differential lease 
payments. They can also convey land or lease existing land, housing and 
facilities to a developer in exchange for renovation or construction or 
homes.
    The Air Force is cautiously proceeding with family housing 
privatization. They have awarded a contract at Lackland AFB, Texas, and 
are scheduled to make an award for Robins AFB, Georgia later this year. 
There are seven additional projects underway this year. They are 
working to streamline the acquisition process to spread the process.
    Madame Secretary, would you describe the Air Force approach to 
family housing privatization and the projects currently underway?
    Answer. The Air Force is using a measured approach to military 
family housing privatization during the five year test period that ends 
in February, 2001. We will test the range of authorities that are 
contained the 1996 legislation. The Air Force is accomplishing housing 
privatization through real estate deals using a request for proposal.
    The Lackland AFB project for 420 units was awarded August 1998. The 
Robins AFB project is currently in the solicitation evaluation stage 
with contract award projected for August 1999. The Elmendorf AFB 
project solicitation was issued to the public on 25 March 1999. Nine 
other initiatives are at various stages of concept development in our 
approach towards housing privatization during this five year test 
period.
    Question. I noticed the Air Force is continuing to budget for 
traditional MILCON for family housing. Why have you chosen a 
combination of privatization and military construction for family 
housing?
    Answer. The Air Force sees privatization as a tool, in addition to 
MILCON and O&M, to provide quality housing to our service members. The 
Air Force is taking a measured approach during the test period of these 
privatization authorities. Privatization will be considered where 
economically viable and in the best interest of our military families.
    Question. I remain concerned that Air Force personnel and their 
families may pay more to live in one of these projects than housing 
provided through regular MILCON. What assurances can you give me that 
they will not have out of pocket expenses?
    Answer. The Chief of Staff of the Air Force and the Secretary of 
the Air Force have directed that housing privatization initiatives 
should not cause service members to pay out of pocket expenses. 
Therefore, any housing privatization project that results in out of 
pocket expenses for military members will not be implemented.
                      fort belknap training range
    Question. The Montana Air Guard is working a proposal through the 
Air Force to create a weapons training range on the Fort Belknap Indian 
Reservation. The Montana Air Guard briefed some of Ms. Demesme's staff 
on their concept in late February. In order to move this proposal 
forward, the Montana Guard must have the approval of the Fort Belknap 
Tribal Counsel.
    This range will provide the Montana F-16s a bombing range in the 
state, rather than having to travel long distances to practice bombing 
and air-to-ground gunnery. This will facilitate the Air Guard's shift 
in mission from an air defense role to a general-purpose mission. 
Receiving Air Force approval for this range is critical for this 
concept to move forward.
    Madame Secretary, I understand that the Montana Air Guard is 
pursuing a concept of a weapons training range in Montana. Does the Air 
Force anticipate any problems with this Initiative?
    Answer. The Air Force supports the effort to establish a range in 
Montana. Currently we do not anticipate any problems with this 
initiative
    Question. How Will this Range Facilitate Training for the Montana 
Air Guard?
    Answer: Efforts to establish an air to ground range in Montana are 
in the very early conceptual stages. If this range were to be 
developed, its close proximity to the Montana Air National Guard 
(MTANG) home base would provide greater training opportunities. 
Compared to flying to the closest range currently available, our 
preliminary analysis shows we could save approximately one hour and 
twenty minutes of flying time per training flight. This transit time 
could be put to better use accomplishing other required training. 
Additionally, the cost savings per year could total $2,600,000.
    Question. What is the status and associated time line of this 
proposal?
    Answer. Since this range concept is in early conceptual stages, no 
timelines have been established. If a formal proposal should develop 
from this concept, timelines would be established consistent with 
standard Air Force directives.

                 Questions Submitted by Senator Stevens
          milcon projects for eielson afb in fiscal year 2000
    Question. Madame Secretary, I understand that Eielson AFB has four 
major MILCON projects in the fiscal year 2000 budget. It is my 
understanding that the two runway projects and the defense fuel project 
were linked in order for construction to occur at the same time. What 
impact will incremental funding have on the execution of these 
projects?
    Answer. The Air Force must consider the limited construction season 
due to the arctic climate and the need to limit runway closure when 
determining the funding required for this project so construction can 
proceed as necessary. We will work contract and funding strategies with 
our design and construction agents to ensure the potential impact of 
advance appropriation on these projects is minimized.
    Question. When and for how long do you anticipate the runway will 
be closed at Eielson AFB as a result of these projects?
    Answer. We anticipate the runway will be closed for approximately 
135 days, beginning in May of calendar year 2000.
                                 ______
                                 
                 Questions Submitted by Senator Murray
                              total budget
    Question. After looking over the numbers for the active Air Force 
and subtracting all the ``must-haves,'' it appears you only have $143 
million for new construction this year, and will need $471 million in 
fiscal year 2001 to meet your total program request. Is $143 million 
going to be adequate, particularly if Congress decides this advanced 
appropriation formula isn't acceptable? How will you prioritize your 
projects?
    Answer. If Congress decides advanced appropriation is not 
acceptable, $143,000,000 will not be adequate for our major 
construction requirements in fiscal year 2000. The Air Force requires 
$699,000,000 to execute the fiscal year 2000 MILCON program without 
advanced appropriation. The Air Force's major commands submitted 
$2,200,000,000 in requirements for fiscal year 2000 including new 
mission beddown, operational facilities, control towers and fire 
stations, dormitories, infrastructure projects, and quality-of-life 
facilities (physical fitness centers, dining facilities, child 
development centers, etc.).
    A reduction of this magnitude would require a complete reassessment 
of the Air Force's most urgent needs.
    Question. In your active current mission projects, there are three 
required to be done by Congress in fiscal year 2000; (1) the Beale 
flightline fire station for $9 million; (2) the McConnell KC-135 squad 
ops for $10 million; and (3) Rome lab for $13 million. Will these 
requirements of $32 million then reduce the $143 million available for 
new projects to $111 million?
    Answer. A reduction of this magnitude would require a complete 
reassessment of the Air Force's most urgent needs.
    Question. I notice that your active quality of life projects total 
$140 million this year. Again, given the funding constraints, how will 
these projects be prioritized compared to your current mission 
requests?
    Answer. They will be prioritized very high. However, a reduction of 
this magnitude would require a complete reassessment of the Air Force's 
most urgent needs.
                   c-17 globemaster iii--mc chord afb
    Question. McChord Air Force Base in Washington State has been 
identified as the second operational base for the C-17. In your fiscal 
year 2000 budget, there are both Active and Reserve facilities funded 
at McChord to address this need ($8 million for squad operations 
active, and $3 million for squad ops reserve). My concern is what will 
happen to these projects as a result of the incremental funding 
proposal. How much do you anticipate will get done this year compared 
to next year. What happens if Congress does not approve advance 
appropriations? Where are these projects on your priority list?
    Answer. As a result of the Department's request for advance 
appropriation, we will continue to work award and funding strategies 
with our design/construction agents to ensure sufficient funds are 
available on each project so construction can proceed as necessary to 
meet need dates. Although advance appropriation does not support 
optimal program execution, it does not preclude the MILCON projects 
from being awarded in fiscal year 2000. The potential for cost 
increases and job stoppage can be minimized if Congress provides full 
project authorization in the year of appropriation, changes the 
reprogramming base from the appropriated to the authorized amount to 
enable the transfer of funds between projects in a timely manner, and 
advance appropriates the balance of construction funds so they are 
available at the start of the next fiscal year. These changes would 
help keep the McChord projects on schedule, as if advance appropriation 
did not exist.
    If Congress decides advance appropriation is not acceptable, the 
$213,000,000 of appropriation requested will not be adequate for our 
construction requirements in fiscal year 2000. The Air Force requires 
$699,000,000 to execute the fiscal year 2000 MILCON program without 
advance appropriations.
    The Air Force does not have a prioritized listing of projects based 
on a $213,000,000 funding level. If advance appropriation is not 
approved, a reduction in funding of this magnitude would require a 
complete reassessment of the Air Force's most urgent needs.
    Question. Will the proposed changes in the force structure of the 
Air Force have any impact on Air Force operations and future military 
construction requirements in Washington State?
    Answer. No. Bases identified in the force structure announcement 
have enough infrastructure to support additional personnel and 
materiel.
                            quality of life
    Question. Ms. DeMesme, in your testimony you have strong words of 
support for the importance of quality of life initiatives. As you may 
know, I too am a strong advocate of improving the quality of life for 
our troops. When I talk to men and women on our air force 
installations, I find it is the little things, like fitness centers, 
day care, and quality of housing, that matter the most to them and 
invariably affect their decision to stay in the service. Now given the 
advanced appropriation situation facing us this year, and given the 
very real possibility that this funding proposal will not survive the 
appropriations process, how would you prioritize the Air Force's 
quality of life initiatives?
    Answer. The Air Force's quality of life initiatives will remain a 
very high priority. However, a reduction of this magnitude would 
require a complete reassessment of the Air Force's most urgent needs in 
the MILCON arena.
                                 ______
                                 
                  Questions Submitted to General Lupia
                 Questions Submitted by Senator Murray
                                housing
    Question. General Lupia, we understand that it is more cost-
effective for the Air Force when enlisted men and women live on base as 
opposed to off base. Is the Air Force taking any steps toward either 
reducing this extra expense for living off base or toward promoting on-
base housing? What impact do you think the uncertainty surrounding the 
incremental funding proposal will have on your effort to reduce housing 
costs?
    Answer. Actually, it is more cost effective for the Air Force when 
enlisted men and women live off-base. This fact has been documented in 
General Accounting Office and Congressional Budget Office reports. For 
this reason, OSD has a policy that communities near military 
installations are relied on as the primary source of housing for DOD 
personnel.
    The Fiscal Year 1998 Defense Authorization Act initiated housing 
allowance reform and established a goal that housing out-of-pocket 
expenses should be 15 percent. Currently, service members living off-
base pay on average 20 percent out-of-pocket for housing expenses; some 
pay more, some less depending on location. There are two initiatives to 
address this problem. First, OSD in January 1998 began implementing a 
six- year program to equalize out-of-pocket expense percentages for all 
locations to 20 percent. Second, the Air Force is working an initiative 
that would accelerate the transition period of the OSD program and 
decrease the out-of-pocket expenses to the Congressional target of 15 
percent.
    Access to safe, affordable housing for our people is a key quality 
of life priority. As long as our members continue to experience the 
present level of out-of-pocket expenses, we can expect there to be a 
high demand for on-base housing, especially from our junior enlisted 
airmen. Currently, 47 percent of our E1-E7 Air Force families live in 
base housing.
    Although advanced appropriations does not support optimal program 
execution, it does not preclude 100 percent execution in the year of 
appropriation. We will continue to work award and funding strategies to 
ensure sufficient funds are available on each project so construction 
can proceed as necessary to meet need dates. The potential for cost 
increases can be minimized if Congress provides full project 
authorization in the year of appropriation, changes the reprogramming 
base from the appropriated to the authorized amount to enable the 
transfer of funds between projects in a timely manner, and advance 
appropriates the balance of construction funds so they are available at 
the start of the next fiscal year.
                         utility privatization
    Question. In an effort to meet the requirement by DOD to privatize 
all utility systems by 2003, you have programmed 204 systems for 
analysis in fiscal year 1999 and the remaining 204 systems for fiscal 
year 2000. Is it going to be possible to meet this fiscal year 2000 
requirement? What is the status of the 204 systems currently being 
evaluated this fiscal year?
    Answer. Yes, the Air Force will meet its fiscal year 2000 
requirement. Of the 204 systems currently being evaluated during fiscal 
year 1999, 85 systems are under analysis. The remaining 119 statements 
of work are being developed and will be awarded long before the end of 
fiscal year 1999.
                     unspecified minor construction
    Question. I notice your unspecified minor construction amount for 
the Air National Guard has decreased by $2.25 million. What is the 
reason for this deduction?
    Answer. The original Air National Guard request for unspecified 
minor construction was reduced by $2,550,000 during the budget cycle 
due to under execution of the fiscal year 1998 program. The program 
included a joint project for a medical facility at McGuire. The Guard 
portion of this Active/Guard/Reserve initiative was $1,500,000. Bids 
exceeded the threshold and negotiations were unsuccessful in achieving 
an awardable project so it was cancelled late in the year. Two 
additional projects were substituted, but their combined cost did not 
fully execute the P-341 program leaving an unobligated balance. The 
joint medical project at McGuire is still a valid requirement for the 
Guard and Reserve and is included in our FYDP.

                          SUBCOMMITTEE RECESS

    Ms. Demesme. Thank you very much.
    Senator Burns. This hearing is recessed.
    [Whereupon, at 12:05 p.m., Tuesday, March 23, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


 DEPARTMENT OF DEFENSE/MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL 
                               YEAR 2000

                              ----------                              


                        WEDNESDAY, JULY 14, 1999

                                       U.S. Senate,
          Subcommittees of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittees met at 10:03 a.m., in room SD-192, 
Dirksen Senate Office Building, Hon. Ted Stevens (chairman of 
the Defense Subcommittee) presiding.
    Present: Senators Stevens, Domenici, Burns, and Inouye.
    Also present: Senator Roberts.

                         DEPARTMENT OF DEFENSE

      Forward Operating Locations (FOL) for Counterdrug Operations

STATEMENTS OF:
        GEN. CHARLES E. WILHELM, COMMANDER IN CHIEF, U.S. SOUTHERN 
            COMMAND, U.S. MARINE CORPS
        HON. WALTER B. SLOCOMBE, UNDER SECRETARY OF DEFENSE (POLICY)

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. Good morning, Mr. Slocombe and General. 
This morning we want to hear from you about the establishment 
of military operating locations in Latin America. I do want to 
thank Senator Burns for joining us, and Senator Roberts.

                        new Military facilities

    This proposal to open up four new military facilities in 
Aruba, Curacao, and Costa Rica impacts the work of both 
subcommittees, the Defense Subcommittee and Military 
Construction Subcommittee, and has implications on future year 
funding.
    Last month, Senator Inouye and I notified Secretary Cohen 
that the Defense Subcommittee was not in a position to approve 
the request for $45 million to commence the establishment of 
these new bases in operating locations at the time the 
Department was seeking the authority to close additional bases 
in the United States, and our forces face expanded overseas 
contingency deployments.
    We believe the committee needed to review the proposal in 
greater detail to understand the fiscal and operational 
implications. Senator Inouye and I noted in our letter to 
Secretary Cohen this subcommittee has consistently increased 
fundings available for the defense counterdrug missions over 
the levels sought by the President in the budget request.
    For the fiscal year 2000, the bill passed by the Senate, we 
added $54 million directly for the DOD counterdrug operations. 
General Wilhelm, in your testimony you rightly note the Coast 
Guard is the lead U.S. agency for drug interdiction. In light 
of that role, however, the subcommittee increased defense 
funding for the Coast Guard counterdrug operations, adding $200 
million to the Coast Guard allocation for the fiscal year 2000.
    In the Kosovo emergency supplemental passed in May, the 
subcommittee added a further $200 million for 1999 for the 
Coast Guard to enhance counterdrug roles. These considerations 
led us to seek a better understanding of why new military 
facilities were needed overseas at a time when operational 
stress is resulting in some of the lowest personnel retention 
figures since the establishment of the all-volunteer force.
    There is no question that the military has an important 
contribution to make in our national effort to stop the flow of 
drugs into the United States. The appropriate role for the 
military in that effort must take into account other missions 
faced by the Armed Services, especially the unprecedented pace 
of long-term overseas deployment.

                          Infrastructure costs

    I will defer to Senator Burns, and I am sure Senator Inouye 
also, on the implications of the infrastructure costs 
associated with the new locations.
    For the fiscal year 2000 the Armed Services and 
Appropriations Committees of the Senate judged that the 
permanent infrastructure costs should be funded through the 
military construction budget rather than through the defense 
appropriations bills as sought in the budget. This hearing 
affords both subcommittees the benefit of your views on the 
matter as we proceed to act on reprogramming requests that are 
still pending and the funding sought for fiscal year 2000.
    Both of your prepared statements will be inserted into the 
record in full. I want to turn to my colleague, Senator Inouye, 
and then if Senator Burns does not mind, Senator Roberts is in 
the chair at 10:30, and I want to see if he has any comments 
before he leaves.

                   statement of Hon. Daniel K. Inouye

    Senator Inouye. Thank you very much. Mr. Secretary and 
General Wilhelm, we appreciate your presence here this morning.
    No one questions the importance of the counterdrug mission, 
and I do not believe that that is an issue here this morning. 
What is at issue is how the Department of Defense interprets 
its authority to conduct overseas operations in advance of 
receiving congressional approval.
    Also, the subcommittee needs to understand what the impact 
of establishing four new temporary overseas facilities will 
have on family separations, readiness, retention, et cetera, 
and there are questions regarding how long we will be operating 
from these new bases.
    DOD keeps insisting that we need to reduce infrastructure 
to consolidate bases here in the United States, but with this 
plan we see the possibility of establishing new overseas 
locations that will be manned by U.S. military personnel.
    These are some of the questions that many of us have, and 
why our chairman has called this hearing, and so we look 
forward to your testimony to explain this approach.
    I thank you very much, Mr. Chairman.
    Senator Stevens. Thank you, Senator. Senator Burns, do you 
object to turning to Senator Roberts?
    Senator Burns. No.
    Senator Stevens. Senator Roberts.

                     statement of Hon. Pat Roberts

    Senator Roberts. Thank you, Mr. Chairman. Thank you for 
your indulgence. I thank my colleague from Montana for his 
patience. I plan to maintain my status as an honorary member--
that is not ornery member, that is honorary member--of the 
Appropriations Committee. I am on good behavior, sir, and will 
make my remarks as short as I possibly can.

                            Emerging threats

    I am chairman of a new subcommittee on the Armed Services 
Committee called Emerging Threats and Capabilities. We have an 
obligation to take a look at the emerging threats that we think 
are of vital interest to our national security. We have had six 
hearings. Most of those hearings dealt with weapons of mass 
destruction, cyber threats--that is, information warfare--
terrorism, and down on the list, and I do not mean that in 
terms of priority, but also down on the list is the problem of 
drugs.
    I was invited by General Wilhelm to come to the Southern 
Command. I went down and talked to General Wilhelm at length, 
and I must say that I had my eyes opened. My horizon was 
broadened, because I think in terms of the Southern Command and 
what is entailed in 32 nations down there, 360 million people, 
and the stakes involved, that it is terribly, terribly 
important.
    When I became the chairman of the Emerging Threats and 
Capabilities Subcommittee, I tried to make a concerted effort 
in the hearings that we held to the future and the security 
environment, rather than that of the past. One of the 
conclusions we reached is that Latin America will either be a 
source of great strength for the United States or it will be a 
principal weakness, and we want to make sure that it is a 
strength.
    Now, what am I talking about? What are the stakes? In my 
prepared remarks I go into the energy situation, the Panama 
Canal, our trade interest compared to other theaters, to the 
regional threats in regards to a very fragile area in regards 
to democracy and the terrorism problem, also the drug problems, 
the corruption problem, narcotrafficking, but I just made a 
list this morning.
    We do not want to reverse the success that we have had in 
the eighties in this region, Mr. Chairman. Thirty-one out of 
thirty-two nations now have democracy in this very crucial part 
of the world. It is a tremendous success story. I do not know 
of too many people who have really written the history of what 
we went through in the eighties and where we are today.
    Three hundred sixty million people, average age about 17, 
18 years old, a lot of very crucial needs. With 31 out of 32 
nations now having democracy, obviously the only one remaining 
is Cuba.
    There could be a threat to our Nation's oil supply. 
Venezuela does supply approximately 18 percent of our oil 
supply. With a situation in Colombia and unrest there and 
rebels dedicated to interests that are not in our vital 
interest, that could be a real problem, and so consequently I 
do not think we want to see gas lines and oil price inflation. 
That is a situation that could occur.
    This is a situation where we must maintain a presence 
because of our world's leading trading partners, Mr. Chairman. 
I was over in Brussels talking with the European Union, trying 
to get some progress in regards to the World Trade Organization 
talks. I must tell you that I do not think the potential or the 
prospects for trade in that part of the world are very good.

                              Food safety

    We have a food safety situation over in Europe, where sound 
science is being tossed out the window. Eighty-five percent of 
the subsidies paid on agriculture today come from the European 
Union. Where must we look? We must look south.
    Again, 360 million people who need a good, nutritious diet. 
We can export those bulk commodities. The Appropriations 
Committee will be considering on down the road an emergency 
bill in regards to agriculture probably totalling $5, $6, $7, 
$8 billion. If we had fast track now in place, and we were in a 
competitive situation with our competitors overseas, the 
Southern Command, the southern area is where we should go.
    It has a lot of ramifications for the Kansas wheat farmer 
out there now, saying I get $2 a bushel for my wheat. That is 
the kind of individual relationship that we have with our 
constituents in regards to their economic livelihood.
    We are going to have a hearing on down the road in the 
Emerging Threats Subcommittee on the weapons of mass 
destruction. John Deutch is in charge of a commission. There 
has been some press about it. We are going to have him in there 
for a hearing.
    I asked General Schumacher what would be the easiest way to 
introduce a weapon of mass destruction and nuclear device into 
this country. Guess what, in a shipment of cocaine. That would 
be the easiest way to get it into this country, and so in terms 
of our vital national interest in that kind of a threat, why, 
this region is all-important.
    I know the General will mention that we are into a culture 
of the Americas and not an American culture any more. I know 
the General will mention the problems with immigration, the 
fact that by 2010 the Hispanic Americans will represent the 
largest minority population of the United States.

                      Forward operating locations

    I think with some kind of presence, Mr. Chairman, whether 
it's the forward operating locations--I will go out on a limb. 
I think the situation with Howard Air Force Base was a mistake. 
I think we ought to have some kind of a lease-back arrangement. 
I know that is probably not possible, and I am not sure what 
kind of format it will take with the forward-operating 
locations, but I will tell you, sir, that I think that on a 
cost basis we could do it about half the cost in regards to the 
cost of Howard.
    So how that works out, obviously, sir, that is your 
responsibility, that of the Department of Defense. I just 
wanted to go on record in saying that as chairman of the 
Emerging Threats Subcommittee, strategically, geopolitically, 
with a whole range of issues, this part of the world is 
extremely important.
    We have had a success story, but the history of foreign 
policy and involvement in that part of the world is that when 
we have success we tend to draw back, and then we get into real 
problems.
    With that, Mr. Chairman, I want to thank you for the 
opportunity to come before the committee. I am an admirer of 
General Wilhelm. He has certainly opened up my eyes. I would 
encourage every member of the committee to go down there to the 
Southern Command and let him walk you through some of the 
obligations and the missions.
    This is just not about drugs. Drugs are very important, but 
I think from the standpoint of our strategic interests it is 
exceedingly important.
    I want to thank the General for the job that he does, and I 
thank you, Mr. Chairman, for the opportunity to make a 
statement.
    Senator Stevens. Thank you.
    General, Senator Roberts demonstrates there is no such 
thing as an ex-marine. [Laughter.]
    Senator Burns.

                     statement of Hon. Conrad Burns

    Senator Burns. I would concur with that. There are only 
farmers and whatever. Thank you, Mr. Chairman, and thank you 
for holding these hearings.

                  North American Free Trade Agreement

    I also want to footnote on what Senator Roberts has just 
revealed to us as far as not only from a drug interdiction and 
security in the area, from the trade point of view also. There 
is a great success story down there, and the European Union has 
made overtures already to include South America in their plans 
of an extended, what we call our North American Free Trade 
Agreement. We have been trying to expand, so there is much more 
at stake here than just military security and drug 
interdiction.
    There is a possibility and a future of an extended 
relationship in the Americas that I think will be very 
beneficial to everybody that lives here both in North America 
and in South America.
    My questioning will go along the lines of what we have in 
existence there as far as facilities are concerned. Also the 
requests that have been made here through military 
construction, because any time we have any expansion we are 
dealing with a finite amount of money that is being stretched 
almost to the breaking point. Mr. Chairman, as you know, you 
have wrestled in your full committee with all of these 
appropriations, and you know how we have to set our priorities 
on where we can get the best, where they should be used.
    We did not really know about this until we had already 
marked up our bill this year. The administration made no 
revelation to us the amount of money that they were going to 
request to construct facilities for the fiscal year 2000 
budget, and we just found out about it. Now we are trying to 
scramble to get our house in order where we may at least 
facilitate or help facilitate our presence there and the 
mission that we have ahead of us.
    The committee did not receive detailed justification for 
these projects until June of this year. So we want to better 
understand the requirement of these bases as well as the 
justification to spend $122 million in these overseas areas, 
especially when we have existing bases, and some would judge 
might be able to support these missions.
    So I look forward to the testimony this morning, and again 
I want to thank the chairman for these hearings.
    Senator Stevens. Senator Domenici, do you want to make a 
statement?
    Senator Domenici. No, thank you, Mr. Chairman.

                             Reprogramming

    Senator Stevens. Mr. Slocombe and General, I just want to 
relate two things to you. First, this reprogramming was from 
operating funds to military construction, and we did not 
approve it partially for that reason, and second, when we went 
to Kuwait and visited with General Pate after the President 
increased the deployment to Kuwait, I inquired where the money 
came from, and how we started this base that was there. That 
was not an air base. It was Army, as I recall, and General Pate 
told me he was building a base for 50 years.
    When we looked at King Sultan Airfield, which until Aviano 
was the largest Air Force base for our military, it was never 
really a subject of an authorization. I was told that when we 
appropriated funds for the account which had been mentioned in 
the statement that would be a field there to replace after the 
Khobar Towers, as I recall, in Iran, and the problem of Iran. 
It was viewed as an implicit approval of the new bases that 
were to be established.
    Now, I just do not want to see a situation where we 
implicitly are approving bases, and I hope that the Congress 
will agree with us on that. As I said in my statement, the 
issue before us is not your judgment about whether they should 
be there.
    The issue really is, what is the deterrent today to the 
reenlistment of our people? Only 29 percent of our pilots who 
are up for retention reenlisted this last year, and I believe 
that is the result of extensive overseas deployments and 
unaccompanied tours.
    I hope you will tell us, will these be unaccompanied tours, 
and how long will these tours be, and are we setting up three 
more bases that will take people away from their families for 
4, 5, 6 months of a year and lead to further problems as far as 
retention is concerned?
    Mr. Slocombe, who wishes to go first?
    Mr. Slocombe. Mr. Chairman, with your permission, I suggest 
that General Wilhelm go first to outline the details of the 
proposal and its relation to both our counterdrug effort and 
our broader interest, and then I will have a short summary of 
my statement afterwards.
    Senator Stevens. General.

                  statement of Gen. Charles E. Wilhelm

    General Wilhelm. Mr. Chairman, distinguished members of the 
committees, I welcome this opportunity to appear before you 
this morning to discuss and testify about what I consider to be 
the single most important issues that confronts United States 
Southern Command today.
    Mr. Chairman, I took notes during the very powerful and 
direct opening statements which you made and the members of the 
committee made, and I have made some notes to myself prior to 
coming in here this morning as to some points that I might 
raise in my opening statement.
    I certainly do not want to waste the time of the committee, 
and I think that you have defined very clearly the path you 
would like for this testimony to take, so I am going to pick my 
way through my notes and try to really just hit those points 
that are of concern to the committee.

                    Post Panama theater architecture

    As we withdraw our forces from Panama, as we must under the 
provisions of the 1977 treaties, reestablishing the United 
States Southern Command theater architecture in a way that will 
enable us to perform our missions in the 21st century has 
become for me the single most important task that I will 
perform during my tenure in command, and I have made that 
statement to Secretary Cohen, and he has agreed with the 
direction that I have decided to go.
    I will tell you it has been a difficult task. It has been 
made more difficult by the very short time that has been 
available to make these arrangements.
    To be very honest, Mr. Chairman and members of the 
committee, when I assumed command at Southern Command in 
September 1997, I did so with about a 99 percent expectation 
that we would succeed in our negotiations with Panama for the 
creation of a multinational counterdrug center there and as a 
part of that I really contemplated a residual presence of about 
2,500 to 3,500 U.S. personnel to do many of the things that we 
need to do in the region to preserve the financial and other 
equities that members of the committee have already mentioned.
    As I mentioned, we have done pretty well. In my formal 
statement I have given you a brief recap of where we are in our 
repositioning and relocation efforts. With the help of this 
committee, with the help of some of your staffers--Mr. Cortese, 
Ms. Ashworth are here today. They have been very helpful with 
the things that we have done on Puerto Rico, which has really 
in a great many ways assumed the role that Panama did in the 
past.
    This morning, as I see it, we have got one major task that 
remains to be performed, and that is to identify a network of 
forward operating locations that will enable us to perform the 
missions that we previously performed from Howard Air Force 
Base in Panama, and I would hasten to add that as important as 
it is, the counterdrug mission is only a portion of this.
    Senator Roberts in his statements made some comments about 
the growth of democracy in this region, the fact that 31 out of 
32 countries are now ruled and governed by people who are in 
office based on the wishes of the populace, and these countries 
have free market economies, and I think all members of the 
committee are aware of the directions that our financial 
dealings with this part of the world have taken since 1990.
    Our exports to Latin America have more than doubled, as I 
have mentioned in other statements. Today we do more business 
with Chile, a country of 14.5 million people, than we do with 
India, with 952 million. We do more business with either Mexico 
or Brazil than we do with China, with 1.3 billion, and the list 
goes on.

                       Forward operating location

    I believe that the forward operating location concept that 
we have developed provides an efficient and a very cost-
effective way to perform the missions that we previously 
performed from Howard Air Force Base. Just to very quickly 
review the bidding on the cost, the numbers cited by the 
chairman are precisely correct.
    In fiscal years 2000 and 2001, we have a requirement for a 
total of $122.5 million, not to build bases, but simply to 
improve existing facilities in Ecuador, in Curacao, and Aruba, 
and to bring them to a state where they meet safety and 
operating standards that are acceptable to the United States 
Air Force and the U.S. Customs Service.
    I really need to make that distinction. We are not 
intending to build bases, simply to improve the operating 
conditions at these existing host nation facilities which we 
have negotiated access to and that will permit us to carry out 
important counterdrug and other engagement missions.
    I have taken a little bit longer-term view of this, and I 
think it is important that we put these outlays into a 
meaningful context. The cost of annual operations at Howard Air 
Force Base was $75.8 million. After we complete these upgrades 
that I have mentioned, we estimate that the annual operating 
cost for the forward operating locations will range somewhere 
between about $14 to $18 million, and so if we look at this 
over a 10-year operating horizon, operations from the forward 
operating locations will actually cost only 40 percent of what 
we would pay if we continued to conduct these operations from 
Howard.
    I really think that to fully understand the importance of 
the FOL's and to make the important distinction that these are 
really a network of facilities, geography is very instructive. 
Mr. Chairman, if you do not mind, I would like to refer to a 
chart.
    Senator Stevens. Yes, sir.

    [GRAPHIC] [TIFF OMITTED] T02JY14.000
    

    General Wilhelm. Sir, to walk you through the chart, the 
pink circle in the middle depicts the operating range of an E-3 
AWACS aircraft operating out of Howard Air Force Base.
    Senator Stevens. General, is it possible to turn that 
around so people out there can see the same thing and we can 
see it, too?
    General Wilhelm. Yes, sir, we probably can.
    Senator Stevens. We had the charts. They do not have the 
charts. If you could just move it around so people out there 
can see it, too.

                                 AWACS

    General Wilhelm. Again, the circle in the center in pink 
depicts the operational reach that an AWACS, an E-3 AWACS 
aircraft would have operating from Howard Air Force Base. These 
two operating circles here in blue and overlapping in pink 
depict the same coverage that we would get from the same 
aircraft operating from the forward operating location at 
Manta, Ecuador, here to the northeast.
    This operating radius depicts the coverage we would get 
from the AWACS operating from Curacao or Aruba.
    I should make the point that this reflects 2 hours transit 
time out to the mission area, 8 hours on station, and 2 hours 
back. That is the standard profile for an AWACS mission, and 
the range of the arc depicts the range of the radar on the 
aircraft itself.
    Now, there are some important points to be made here. It 
has been suggested that perhaps we could realize significant 
savings if we did not operate the full family of detection 
monitoring and tracking assets, to include the AWACS from 
Manta, Ecuador. I need to draw something on the map, because 
this is the most important order that we contend with when we 
look at the counterdrug mission and more and more regional 
stability, and I will sketch it right on, sir.
    This is the border here, between Colombia and Peru. This is 
the air bridge that we worked so hard and devoted so many 
resources to interdict starting in the earlier part of this 
decade, and in my statement I think you saw, if you will pardon 
the phrase, the body count that we have achieved on 
narcotrafficking aircraft, over 123 aircraft since 1995 shot 
down, forced down, seized or confiscated as a result of our air 
bridge interdiction operations.
    What is important is the operating arc coming out of Aruba 
and Curacao does not reach the border between Peru and Ecuador. 
We could stand to lose what we worked so hard to gain.
    On the positive side, looking at Aruba and Curacao, it does 
provide us very favorable coverage over the Eastern and Central 
Caribbean. Ecuador is extremely important for two reasons: one, 
again, very, very short reach to the Peru-Colombia border, and 
it provides us excellent coverage of this portion of the 
Eastern Pacific, which at this point in time has largely been 
an open back door, feeding narcotics up toward Mexico through 
the Sea of Cortez into Mexico's specific ports and then over 
our Southwest border.
    And as you know from other testimony by General McCaffrey 
and others, 59 percent of the drugs get here over those routes, 
so this needs to be considered as a network of facilities which 
will provide us the operational reach or coverage that we need 
to fully address the challenge.
    Now, I have added in this final arc which reflects the 
positioning of a Central American forward operating location. 
For the purposes of this chart we have placed the center part, 
the star over northern Costa Rica, roughly where the Liberia 
Air Base is. As to whether or not we can negotiate an FOL 
agreement with Costa Rica at this point is perhaps problematic, 
but if not Costa Rica, I am very confident that we could 
negotiate an access agreement with another country in Central 
America.
    As you can see, this arc then provides us complete coverage 
of all of Central America and the balance of the Eastern 
Pacific transit routes headed up toward the coast of Mexico.
    I felt it very important to try to put this entire issue 
into a geographic context, because I think only when we regard 
the FOL's as a network do they really make strategic and 
operational sense.
    Thank you, sir. I appreciate your patience with the 
chartology.

                           prepared statement

    Mr. Chairman, members of the committee, I had a number of 
things I was going to say about the nature of the drug threat, 
about what it has done and is doing to the societies in our 
region, and what it has done to our own society, but as Senator 
Inouye stated, you are very much aware of that, so I think it 
would not be a good use of the committee's time for me to cover 
ground that has already been pretty well trod upon, and so I 
would like to terminate my opening statement at this point, 
sir, and I look forward to your questions and the questions of 
the members of the committee.
    Senator Stevens. Thank you, General.
    [The statement follows:]
             Prepared Statement of Gen. Charles E. Wilhelm
                              introduction
    Mr. Chairman, distinguished members of the committees, I welcome 
this opportunity to discuss with you the plans and concepts that will 
enable us to sustain a strong Department of Defense contribution to the 
crucial struggle against illicit drugs. As we complete the withdrawal 
of United States military forces from Panama, the Forward Operating 
Locations (FOLS) we are establishing in the Caribbean and Latin America 
become a critical means of access to the region, providing the U.S. an 
efficient and cost-effective alternative to Howard Air Force Base for 
the execution of critical counterdrug missions. Moreover, in addition 
to enabling Southern Command to meet its responsibilities under 
Presidential Decision Directive 14 (PDD-14) and Goals 4 and 5 of the 
U.S. National Drug Control Strategy, the FOLs will emerge as a vital 
component of our cooperative regional engagement strategy.
    Over the last two decades, regional stability has been a key 
element in fostering economic growth and democratization throughout the 
Caribbean and Latin America. However, drug trafficking and its 
relationship with organized crime are seriously threatening the 
hemisphere's potential to achieve long-term stability, peace, and 
economic prosperity.
    The complete withdrawal of United States forces from Panama is 
challenging our ability to sustain necessary levels of effort in 
countering this threat. Up until now, DOD and other interagency 
organizations provided the majority of support in the fight against the 
illegal drug trade from U.S. military facilities in Panama. To offset 
the loss of basing rights in Panama, we are aggressively executing a 
plan to realign and rebalance the theater architecture to sustain 
counterdrug efforts in support of PDD-14 and The National Drug Control 
Strategy. An interlocking network of FOLs is an essential element of 
this new architecture.
    In this statement I will present my assessment of this region's 
importance to the United States, followed by an overview of the 
transnational threats that jeopardize our regional interests. I will 
conclude with a discussion of the FOL concept, the FOLs themselves and 
the absolutely pivotal role they will play in our regional engagement 
and counterdrug strategies.
                      the importance of the region
    Growing economic interdependence and the wave of democratic reform 
that has swept over this region, as well as shifting cultural and 
demographic trends have significantly elevated the importance of the 
Caribbean and Latin America to the United States.
    Latin America is our fastest growing export market. Today, 44 cents 
of every dollar that the 411 million inhabitants of the region spend on 
imports are for goods and services from the United States. Statistics 
can be instructive. It is meaningful to note that our annual trade with 
Chile, a nation of 14.5 million people, exceeds our trade with India 
with a population of 952 million. With almost 1.3 billion inhabitants, 
China is the most populous nation on the earth, yet we do more business 
with our 98 million next-door-neighbors in Mexico. By 2010, trade with 
Latin America is expected to exceed trade with Europe and Japan 
combined, and if the Free Trade Area of the Americas (FTAA) initiative 
is in place by 2005, we can expect to see additional growth in 
hemispheric economic interdependence.
    The influence of Latin America is also reshaping America's cultural 
and demographic landscapes. What was once an ``American Culture'' is 
rapidly becoming a ``Culture of the Americas.'' Today, the United 
States is the fifth largest Spanish speaking country in the world. By 
2010 Hispanics will become our largest minority population and by the 
mid-point of the 21st century demographers project that 100 million 
U.S. citizens will be of Hispanic descent.
    Along with these trends, the dramatic expansion of democracy and 
resolution of intra-regional disputes and rivalries provides visible 
evidence of a hemisphere that has taken important first steps toward 
the achievement of long term peace and stability, at least at the 
state-to-state level. In the last twenty years, the paradigm of coups, 
military dictatorships, communist-inspired insurgencies, border 
disputes, and economic crises has gradually given way to elected 
governments and militaries that are subordinate to civilian leadership 
and support democratic processes. These are nations that are resolving 
disputes without resorting to the use of force. As an example, last 
October, we witnessed a watershed event--the resolution of Peru and 
Ecuador's longstanding border dispute with the historic signing of a 
peace agreement between the two countries.
    Viewed through the prism of the national security strategy of 
engagement and enlargement there is no better success story for U.S. 
Foreign policy. On the other hand, history has demonstrated that 
success is many times harder to sustain than failure is to fix, and 
these positive trends must be nurtured, encouraged and reinforced.
                               the threat
    Despite positive cultural, economic, and political developments, 
there is a pervasive sense of unease in the region regarding security 
issues. Our enemies are not well known, our challenges are unclear, 
dangers are not always obvious and responses are frequently difficult 
to formulate. It has been suggested that uncertainty is the norm and 
apprehension the mood. Some of the region's democracies remain fragile; 
facing economic adversity, rapid population growth, and proliferating 
transnational threats. Out of area powers have shown increased interest 
in our next-door neighbors. Under these circumstances it is reasonable 
to anticipate setbacks, particularly when fledgling democracies are 
confronted with chronic corruption, narco-financed insurgencies, and 
deeply rooted organized crime. United States presence within the 
hemisphere demonstrates our commitment to the region, prevents the 
creation of a security void, and provides engagement opportunities to 
counter emerging threats to regional security and prosperity.
    Today, I believe the primary threat to the region can be summed-up 
in a single word--corruption. Corruption in all its forms eats at and 
stunts the growth of young democracies. In Latin America, at the heart 
of most forms of corruption are the corrosive effects of the drug 
trade. Drugs and the people who grow, produce and sell them, are 
aggressively challenging the ability of many governments to provide 
long-term stability and economic prosperity. Illegal drugs are killing 
and sickening the people, sapping productivity, draining economies, 
threatening the environment, and undermining democratic institutions. 
We are not immune to these problems--far from it. In the United States 
in 1996 alone, drugs and drug related illness and violence claimed the 
lives of 14,843 Americans. In an historic context that equates to 88 
percent of our losses in the Korean Conflict! Each year, illegal drugs 
send a half million Americans to emergency rooms, turn our urban 
neighborhoods into battle grounds, and for many of our youth turn the 
American dream into an American nightmare. No nation, not even one as 
powerful as ours can afford such devastating social, health and 
criminal consequences. Because this tragedy has been with us for years, 
and because it kills and disables our citizens one at a time, I 
sometimes fear that we've developed a tolerance for it. If we 
experienced these kinds of losses in a day, a week or even a month, 
they would simply not be tolerated. By my definition, illegal drugs are 
a ``weapon of mass destruction,'' and should be treated as such.
    The countries of the Caribbean and Latin America have grown to 
accept and understand the drug threat as a shared challenge and they 
are now more ready than ever to join us in the fight. However, they 
need our help and encouragement for the long struggle ahead. SOUTHCOM 
and DOD play a supporting role in this fight through both theater 
engagement and counterdrug operations. Presidential Decision Directive 
14 and goals 4 and 5 of the National Drug Control Strategy provide the 
foundations for Southern Command's counter-drug campaign.
                      forward operating locations
    An adequate operational presence in our theater of operations is 
absolutely essential for the full and successful implementation of our 
counterdrug and regional engagement missions. While executing our 
counterdrug campaign plan, forces strategically placed in the theater 
give us flexibility and allow us to be proactive rather than reactive 
in confronting narcotraffickers. Our goal is to force them into a 
defensive posture. The past two years have witnessed significant 
reductions in coca cultivation in Peru and Bolivia. During the past 
year alone cultivation has been reduced by 26 percent in Peru and 17 
percent in Bolivia, while production of coca base has been reduced by 
about 25 percent in both countries. These successes are attributable to 
a combination of effective host country eradication and alternative 
development programs and aggressive U.S. and host country efforts to 
interdict the air bridge that previously linked cultivation sites in 
Peru and Bolivia with processing and production laboratories in 
Colombia.
    The Air Bridge Denial Program has employed forward-deployed U.S. 
aircraft to provide intelligence, surveillance, reconnaissance, 
airborne early warning, and tracking support to host nation forces. 
Last year, with U.S. support, host nation interceptors shot down, 
forced down, seized or destroyed 26 narcotrafficking aircraft, bringing 
the total to 123 narcotrafficking aircraft taken out of action since 
1995.
    As a result, we have observed a shift in trafficking patterns. The 
cost of cocaine base in Peru and Bolivia plummeted to unprofitable 
levels as pilot fees skyrocketed. As a consequence, more illegal drug 
shipments were diverted to the rivers. To compensate for setbacks in 
Peru and Bolivia, Narcotraffickers increased their cultivation of coca 
by 28 percent in Colombia and further streamlined their operations by 
consolidating cultivation and production. We are now supporting efforts 
by Colombia and its neighbors to effectively counter these revised 
trafficking patterns.
    Continued forward presence by our forces is mandatory if we are to 
sustain the progress that has been made. The combination of U.S. 
detection, monitoring and tracking aircraft and host country 
interceptors has proven to be an effective team; one that strikes an 
appropriate balance between U.S. and host nation capabilities and roles 
in pursuit of end games. Continued forward presence under the FOL 
concept will enable us to continue this support, and provides an 
efficient and cost-effective alternative to the permanent bases that we 
previously occupied.
                         alternatives to panama
    Historically, DOD support for source zone countries has been 
provided from military facilities in Panama--over 2,000 counterdrug 
flights per year originated from Howard Air Force Base. From Panama, we 
also supported transit zone interdiction operations, pier-side boarding 
and searches, and training for U.S. and host country counterdrug units.
    The Panama Canal Treaties of 1977 mandate a complete withdrawal of 
U.S. Military Forces not later than December 31, 1999. The departure of 
forces does not, however, alter Southern Command's mission 
responsibilities or requirements. When negotiations with Panama for a 
Post-1999 presence were terminated, Southern Command conducted a 
strategic analysis and determined that a series of Forward Operating 
Locations (FOLs) would be necessary to provide the capabilities 
required to achieve our counterdrug mission objectives.
    FOLs have become an integral part of SOUTHCOM's theater 
architecture for the next century. While they will allow us to remain 
fully engaged in the multilateral effort to combat narcotrafficking, 
they are not bases to be constructed at U.S. expense nor are they 
intended to replace Howard Air Force Base. Rather, FOLs are intended to 
replace the counterdrug operational capability that was provided by 
Howard Air Force Base without incurring the expense of base 
construction and at reduced annual operating cost. In simple terms, 
FOLs are agreements between the United States Government and Host 
Nations whereby the United States will be granted access to existing 
facilities that are owned and operated by the host nation. These sites 
will provide a 24-hour, seven-day per week, operational capability. 
U.S. Aircraft will rotate in and out of FOLs as mission needs dictate. 
Each site must be night and all weather capable with an air traffic 
control facility, an 8,000-foot runway with the capability to support 
small, medium and heavy aircraft. Each FOL must also have refueling and 
crash/fire rescue capabilities and minimum ramp, hangar, office, 
maintenance, and storage space.
    Numbers of support personnel will vary depending on numbers and 
types of aircraft deployed and the availability of host nation support. 
We envision a requirement for 8-12 permanently assigned personnel at 
each FOL. Depending on mission requirements, FOLs will be required to 
support as many as 200 temporarily deployed personnel.
    Three FOLs are needed to maintain the optempo and area coverage 
that we previously enjoyed from Howard AFB; one in South America for 
source zone operations, and one each in the Caribbean and Central 
America to support transit zone and northern source zone operations. 
Three FOLs also provide the flexibility that is necessary to contend 
with weather patterns and changes in trafficking routes. Initial access 
agreements have been negotiated and operations are currently underway 
from FOLs in the Caribbean and South America. Site surveys at each 
location have identified improvements that are needed to support full-
scale operations and to upgrade host nation facilities to U.S. safety 
and operational standards.
    In close consultation with host nations, we have devised a three-
phase program for FOL development. Phase one, which commenced on 1 May, 
coinciding with the termination of flight operations from Howard Air 
Force Base, consists of what we have termed ``expeditionary 
operations.'' This entails use of facilities in ``as is'' condition. 
Phase one operations are in progress at Curacao, Aruba and Manta, 
Ecuador, albeit at reduced operational tempo. The second phase will 
begin in fiscal year 2000 with the initiation of MILCON projects that 
will increase the operating capacities of the FOLs and bring them up to 
U.S. standards. During the third phase in fiscal year 2001, MILCON 
projects will be completed and we will attain full operational capacity 
and capabilities. At the end of phase three we will achieve operational 
reach or area coverage that will equal or exceed that which we had from 
Howard at roughly 25 percent of annual recurring operating costs.
                             manta, ecuador
    The FOL at Manta is critical for adequate support of operations in 
the crucial source zone. Operations are now underway from Eloy Alfaro 
International Airport in Manta. This site allows forward-deployed 
intelligence, surveillance, and airborne early warning aircraft to 
monitor key narcotics trafficking routes deep in the source zone and 
over the Eastern Pacific--a pipeline that feeds Mexico, and ultimately 
the U.S.
    The USAF, as DOD executive agent for this FOL, recently sent a Site 
Activation Task Force to survey Manta facilities. The team concluded 
that the runway was suitable for most counterdrug aircraft but would 
require upgrades to accommodate AWACS, a critical asset for execution 
of our source zone strategy. The task force also recommended 
construction of various maintenance and other support facilities.
    Ecuador has been an eager and gracious host. The local Air Force 
commander has worked tirelessly to correct deficiencies at the airfield 
and to provide the safest possible operating environment.
    The footprint at Manta is expected to consist of five to eight 
aircraft and six to eight permanently assigned staff personnel. As 
previously discussed, when full capabilities are attained, the numbers 
of DOD and interagency personnel temporarily assigned to Manta will 
fluctuate based on missions and numbers and types of aircraft deployed.
                           aruba and curacao
    The airfields on the islands of Curacao and Aruba are approximately 
45 miles apart; therefore, they must be improved and managed 
separately. These two airfields are well situated and together they 
provide adequate capacity to support operations in the Caribbean 
Transit and Northern Source Zones. Operations by DOD and U.S. Customs 
Service aircraft have commenced from Hato International Airport in 
Curacao and Reina Beatrix International Airport in Aruba under 
diplomatic notes negotiated and exchanged with the Kingdom of the 
Netherlands. The Site Activation Task Force identified requirements for 
improvements to ramps and taxiways at Curacao and Aruba. For longer-
term operations, their report recommends construction of maintenance 
and operations facilities at both sites.
    The footprint in Curacao is expected to consist of seven to nine 
aircraft, 12 to 15 permanently assigned staff personnel and as many as 
200-230 temporarily deployed operations and maintenance personnel. In 
Aruba, the footprint is expected to consist of four U.S. Customs 
aircraft, with approximately 15 permanently assigned staff and 20-25 
deployed operations and maintenance personnel. As in the case of Manta, 
the numbers at Aruba and Curacao will be small initially and will grow 
incrementally as we improve existing facilities to accommodate more 
deployed aircraft and personnel.
                       the cost of doing business
    My Air Force Component Commander, Lieutenant General Lansford 
Trapp, has visited all three sites and has reviewed the findings of the 
Site Activation Task Force. To achieve Southern Command's strategic 
goals and to meet requisite safety and operational standards, he 
assesses the MILCON requirement to be $122.47 million for Manta, 
Curacao and Aruba. For purposes of comparison, our most recent annual 
operating costs at Howard Air Force Base were $75.8 million. Once 
deficiencies are corrected at the three FOLs, we estimate that annual 
operating costs will be in the neighborhood of $14 million to $18 
million. Based on 10 years of operations, FOL costs would be 
approximately 40 percent of those we would have incurred over the same 
period at Howard with permanently assigned forces.
                               conclusion
    The departure of United States military forces from Panama has 
created unique and difficult challenges for U.S. Southern Command. In 
the space of less than one year we have been required to recraft a 
theater architecture that was almost a century old. The end of this 
task is in sight. Our Theater Special Operations Command has 
successfully displaced its headquarters from Panama and is now 
conducting full-scale operations from its new home in Puerto Rico. U.S. 
Army South will haul down its colors at Fort Clayton in Panama on the 
30th of this month and raise them over a new command post at Fort 
Buchanan in Puerto Rico. We have already successfully merged Panama-
based Joint interagency Task Force (JIATF) South with its counterpart 
organization JIATF East in Key West. This consolidated organization is 
now planning and overseeing execution of counterdrug operations in both 
the transit and source zones. With support from the government of 
Honduras we have increased our presence at the Soto Cano Air Base 
absorbing urgently needed helicopter assets previously based in Panama. 
These actions, coupled with the earlier relocation of our Headquarters 
from Panama to Miami, have resulted in a leaner United States Southern 
Command, but a Southern Command that is nonetheless properly postured 
to conduct its regional engagement and counterdrug missions in the 21st 
century. The Forward Operating Locations are the final pieces of the 
future theater architecture. In this statement I have emphasized how 
crucial this final element is, and I am not alone in this assessment. 
On June 30th I attended an interagency meeting at the White House. 
Included among those present were National Security Advisor Berger, 
Office of National Drug Control Policy Director McCaffrey, Assistant 
Secretary of State for Western Hemisphere Affairs Romero, Special Envoy 
for Latin America McKay, Commandant of the Coast Guard and United 
States Interdiction Coordinator Admiral Loy, representatives from the 
Departments of Transportation and Justice and others. We discussed the 
FOLs and the requirements for them. There was unanimous support and 
universal acknowledgment that the FOLs are essential for the continued 
prosecution of an effective supply-side counterdrug campaign. I 
concluded my presentation to this interagency gathering with the simple 
and direct statement that without the FOLs, United States Southern 
Command would be unable to effectively confront the threat postulated 
in Presidential Decision Directive 14, and we would be incapable of 
carrying out missions in support of goals 4 and 5 of the National Drug 
Control Strategy. We at Southern Command are grateful for the support 
and encouragement we have received from the Congress as we have gone 
about the difficult business of resetting our theater architecture. 
Timely implementation of the FOL concept is the final step in this 
process. For a modest investment the FOLS will enable us to safely and 
efficiently carry out vital missions without the costs and other 
encumbrances associated with overseas bases.

                  statement of Hon. Walter B. Slocombe

    Senator Stevens. Mr. Slocombe.
    Mr. Slocombe. Thank you, Mr. Chairman. It is as always an 
honor to appear before this committee and to address your 
concerns and the programs of the Department of Defense, 
particularly in this case with regard to Latin America and the 
counterdrug effort.

                      Forward operating locations

    General Wilhelm has explained the operational necessity for 
the three planned forward operating locations. I would just 
like to add a couple of points. Everybody recognizes the 
importance of the counterdrug mission, and certainly the 
Department of Defense. We recognize and appreciate the 
consistent support from this committee and from the Congress as 
a whole.
    The surveillance and detection in the areas that would be 
covered by these aircraft operating out of these locations is a 
key part of our overall counterdrug effort, but I want to make 
the point that it is a relatively small part, a very small part 
of the overall Government effort, which just at the Federal 
level alone is something like $17 billion, and quite a small 
part even of the Defense Department effort, which is just under 
$1 billion annually, about a quarter of that for source zone 
operations.
    Second, I think General Wilhelm's presentation has 
explained the geography, which makes it so clear that it is 
essential to have operating locations within the region, and 
that it is not practical to conduct these operations from bases 
either in the United States or Puerto Rico or Guantanamo, just 
because of distance.
    There is another consideration, and this goes in a sense to 
what Senator Burns and Senator Roberts said. We have a broader 
interest in a presence and influence in Latin America. In 
particular, a consistent and vigorous U.S. effort to deal with 
the transit and source zone problem are essential to our 
credibility in getting the countries in the region to take 
actions in their own interests and ours, particularly with 
respect to their own counterdrug efforts, an area where there 
is still a lot to do but where a fair amount of progress has 
been made.
    Third, I want to underscore the point that we recognize 
that this committee has always given especially rigorous 
scrutiny to military construction and other capital 
expenditures by the U.S. military on facilities overseas. This 
is as it should be, not only because we are trying to reduce 
the burden of unneeded infrastructure both overseas and in the 
United States, but because of the concerns that you, Mr. 
Chairman, in particular have raised about our long-term ability 
to sustain the level of operations that we now maintain.
    As General Wilhelm's statement I think makes clear, these 
are not the construction of new bases. To build new bases in 
this region to replace Howard would simply dwarf by many times 
the amounts of Milcon money we are talking about here. These 
are necessary measures on what I think is a pretty austere 
basis to bring these facilities up to the standards that we 
need to be able to operate from them.
    It is an efficient approach. It makes use of existing 
foreign airports and foreign facilities. Indeed, one of the 
main purposes of the FOL concept is to do this important 
mission with the smallest footprint possible. Over the long 
run, the forward operating locations will actually cost less 
than Howard would have cost had we continued to operate there 
and maintain that facility, had we been able to reach agreement 
with the Panamanian Government.
    And third, we are in this area, as I hope is the case 
everywhere, trying to accomplish the mission in a way that is 
most efficient not only from the point of view of dollars spent 
on military construction and operation, but burden on our 
people. General Wilhelm can give the details, but these will be 
relatively short tours for the air crew involved. The permanent 
presence will be extremely limited, something like a dozen 
people at each facility.
    As a part of recognizing the many pressures on the budget, 
but more important the pressures on our people and on key 
assets, we scrub very carefully every request to undertake a 
mission like this, and particularly because this is primarily 
surveillance aircraft, which are in heavy demand in other 
theaters. That is particularly the case here.

                        reduction in Deployments

    We believe we have struck an appropriate balance in 
allocating both the available inventory of surveillance 
aircraft and the pace at which they operate. As part of this 
effort, we are reviewing a number of our current overseas 
activities. Secretary Cohen yesterday was in Bosnia and 
indicated the very real prospect that we will be able to make 
substantial reductions in our deployments and our allies' 
deployments there in Bosnia, and we are reviewing both the size 
and, indeed, the need to continue our operations in a number of 
other areas.

                           prepared statement

    In summary, this is, as the committee--and we fully 
understand you know this--this is a very important mission. It 
can, under current circumstances, be conducted only from bases, 
facilities in the region, and we believe that we have put 
forward a proposal which is an efficient and, indeed, an 
austere one to get this critical job done at a minimal cost to 
the taxpayer and, equally important, at a minimal impact on the 
burden on our military service personnel who will have to carry 
out the mission.
    I look forward to answering the committee's questions.
    [The statement follows:]
                 Prepared Statement of Walter Slocombe
    Mr. Chairman, as always it is an honor to appear before this 
committee to discuss the Department of Defense's role in United States 
counterdrug activities, how these activities support our national 
security interests, and specifically the importance of Forward 
Operating Locations in an environment shaped by our changed 
relationship with Panama. I particularly welcome the opportunity to 
address these issues with General Wilhelm who, as CINC SOUTHCOM has 
personal responsibility for the counterdrug operations at issue. I want 
to thank both subcommittees for their support of the counterdrug 
program in general. Congressional support enables us to counter some of 
the drug threat, which costs our nation over 14,000 lives and billions 
of dollars each year.
The Threat
    We as a nation face a comprehensive threat from drugs and must, as 
a nation, carry out a comprehensive response. Treatment and suppression 
of demand are critical elements, and are up to domestic law enforcement 
and other agencies. But dealing with the source of drugs must also be a 
key element of our effort.
    Nearly all the cocaine and most of the heroin consumed in the 
United States is produced from crops in Colombia, Bolivia, Peru and 
Mexico--the ``source zone.'' Drug traffickers transport the cocaine to 
the United States in a multi-step process by air, and over sea and land 
through a ``transit zone'' consisting of the Caribbean, Central America 
and the waters of the eastern Pacific. Areas through which illegal 
drugs flow into the United States and its immediate environs are termed 
the ``arrival zone,'' where DOD as well as federal, state and local law 
enforcement agencies cooperate to apprehend drug traffickers. While 
global seizures of cocaine average 270 metric tons per year, the 
current annual production capability of 550-650 metric tons continues 
to be sufficient to meet current user demands in the United States, 
Europe and South America. The bottom line is that while our progress 
has been significant, the threat remains very, very potent.
DOD's Role in Counterdrug Activities
    The U.S. Government's role in counterdrug initiatives has evolved 
from disparate activities conducted by a various agencies to a unified 
mission characterized by joint military and civilian collaboration--a 
mission that was established by Congress and which has received 
consistent Congressional support. Congress passed the Anti-Drug Abuse 
Act of 1986, which gave the Executive Branch more authority to fight 
the tide of illegal drug shipments. Also in 1986, the President issued 
National Security Directive 221, which declared drug trafficking to be 
a threat to U.S. national security. Two years later, the Congress 
enacted another anti-drug abuse act in order to establish a coherent 
and comprehensive national policy to unify the efforts of the more than 
thirty Federal agencies and numerous state and local agencies engaged 
in counterdrug activities. The National Defense Authorization Act for 
Fiscal Year 1989 proved a watershed for Congressional interest in 
counterdrug activities conducted by the U.S. military, assigning 
primary responsibility for the detection and monitoring of aerial and 
maritime transportation of illegal drugs into the United States to the 
Department of Defense.
The National Drug Control Strategy
    The 1999 edition of the National Drug Control Strategy embodies the 
1989 Act's mandate that the Department take the interagency lead in 
drug detection and interdiction. The Strategy states that our domestic 
challenge is to reduce illegal drug use while ensuring individual 
liberty and the rule of law. Our international challenge is to develop 
effective, cooperative programs that respect national sovereignty and 
reduce the cultivation, production, trafficking, distribution and use 
of illegal drugs while supporting democratic governance and human 
rights.
    The Strategy highlights the critical need to ``[s]hield America's 
air, land and sea frontiers from the drug threat,'' by interdicting the 
international flow of drugs in the transit and arrival zones. Yet, even 
in 1989, when the Department was first assigned the lead in aerial and 
maritime detection and monitoring, we knew that defending Americans 
from the influx of drugs in the arrival and transit zones represented 
only part of the solution. Going beyond the transit zone and into the 
source zones to break foreign and domestic sources of supply was and 
remains a key element of our integrated strategy. DOD pursues this 
element by working with source zone nations in both civilian and 
military capacities to provide intelligence, training and other 
building-blocks of national self-sufficiency regarding counterdrug 
activities. Under General Wilhelm's leadership, and in concert with the 
U.S. embassy country teams, the Southern Command has aggressively 
pursued these contacts with cooperative source zone nations.
    Consistent with Congressional direction, we have devoted 
significant resources to this endeavor, and we believe we have achieved 
significant successes. It is the Department's commitment to this 
Congressionally-directed mission that brings General Wilhelm and me 
before the subcommittees today. Our success to date has depended on 
effective aerial surveillance and interdiction of key drug transit 
routes. We need to reach beyond the transit routes and deep into the 
source zones to continue this fight. Quite simply, from both a military 
and policy perspective, we cannot continue to execute this mission that 
Congress has given us without the Forward Operating Locations. We must 
be able to project our own assets, our own detection and monitoring 
resources well into the transit and source zones. Without this ability 
to meet the threat where it originates, the Department will not be able 
to fully execute the mandate it has been given by Congress. Moreover, 
we will not be able to sustain the effort to convince the governments 
of producing nations to cooperate in regional, integrated efforts.
Successes
    There have been some notable successes. Howard Air Force Base in 
Panama provided a key staging area for counterdrug missions into both 
the transit and source zones. Among other achievements, this capability 
helped U.S. assets support Peruvian interdiction efforts that disrupted 
the movement of cocaine base from Peru to Colombia by air. Peru's 
airborne interdiction of several dozen drug-trafficking aircraft over a 
three-year period resulted in the significant disruption of the 
traditional north-south airbridge between Peru and Colombia. As a 
result, Peruvian coca cultivation exceeded traffickers' transport 
capabilities and drove down coca prices. Depressed coca prices from 
1996 to 1998 dramatically reduced coca base production in Peru from 
more than 450 metric tons to 240 metric tons annually. In addition, 
coca cultivation declined substantially in Bolivia in 1998 as the 
result of ground interdiction efforts in the Chapare region and 
controls on processing chemicals.
    The net impact of these gains was offset by the increased coca 
cultivation in Colombia during the same period. Significantly, it is 
the Colombian production in particular that can be addressed by U.S. 
assets deploying from Forward Operating Locations. We are working with 
the Colombians and others in the region to address movement of cocaine 
hydrochloride--the ``finished product''--by air from local laboratories 
to transshipment points on the north and west coasts of Colombia. It is 
from these locations that cocaine is smuggled into Mexico and the 
United States. The infrastructure supporting the smuggling of cocaine 
by air has been the key to efficient operation of the cocaine industry. 
We cannot begin to attack this infrastructure--figuratively and 
literally--without the operational flexibility provided by the FOLs. In 
particular, the FOL at Manta, Ecuador allows us to reach this 
infrastructure deep in the Colombia source zone, Peru, as well as the 
increasingly popular eastern Pacific transit zone, although this 
facility requires improvements to realize its full potential.
The International Dimension
    Regrettably, the option of continued operation from Howard Air 
Force Base in Panama is not available. The United States and Panama 
discussed at length the possibility of a continued U.S. military 
presence beyond the effective date of the Panama Canal Treaty but 
agreement was not possible. As a result, counterdrug operations from 
Howard Air Force Base ceased as of May 1, 1999.
    The importance of the counterdrug operation and the need for a 
forward-based U.S. presence to sustain it led SOUTHCOM to develop the 
current Forward Operating Location concept. The FOL concept, explained 
in detail in General Wilhelm's statement, uses existing airport 
facilities owned and operated by host nations that are made available 
under bilateral agreements. Indeed, the concept has already proven its 
value as U.S. aircraft have continued their detection and monitoring 
missions on an interim basis from the newly established Forward 
Operating Locations in the Netherlands Antilles/Aruba and from Ecuador. 
SOUTHCOM was able to put its FOL contingency plan into effect after 
closure of the Howard AFB runway on May 1.
    The Department of Defense will spend $247 million in fiscal year 
1999 on counterdrug activities in source zone countries this fiscal 
year, focusing on cocaine production and movement in Peru and Colombia. 
The Department will work with other U.S. agencies to dismantle the 
cocaine cartels and the cocaine ``business,'' and with the Peruvian and 
Colombian governments to break traffickers' air transit routes. The 
concentration of traffickers in this area, and their dependence on air 
routes, makes the source zone a special focus of our near-term efforts. 
The value of military presence options afforded by FOLs for this 
mission, specifically the additional location at Manta, Ecuador, cannot 
be overestimated. However, continued detection and monitoring efforts 
in the source and transit zones using the FOLs depend on Congressional 
support. Funds are needed both for operations and for construction of 
minimum essential upgrades to facilities. The inability to reprogram 
fiscal year 1999 operating funds, or a shortfall in fiscal year 2000 
construction funds, will force us to continue operating the Aruba and 
Curacao FOLs on an interim basis, deploying our personnel as 
expeditionary units: quality of life and efficiency will suffer 
drastically.
    On April 16, 1999, the Air Force was designated ``Executive Agent'' 
for the FOLs. In this capacity, the Air Force will implement necessary 
upgrades and maintain the three planned FOLs. The Air Force determined 
that a total $122.5 million in MILCON funding is required to augment 
existing host-nation FOL facilities during the fiscal year 2000-2001 
period. This funding will support upgrades to facilities in Curacao, 
Aruba, and Manta so that the Department can continue to execute its 
statutorily mandated counterdrug mission.
Conclusion
    The Department is firmly committed to meeting the goals of the 
National Drug Control Strategy as well as its congressionally-mandated 
leadership role in detection and monitoring. The key to continued 
effective execution of this mission is the ability to operate in the 
source zones. We cannot extend our reach in this manner without the 
Forward Operating Location strategy. I join General Wilhelm in urging 
your support and we look forward to working with you.

                    Forward operating locations cost

    Senator Stevens. Thank you very much.
    Mr. Slocombe and General, our attention was called to an 
Inside the Pentagon report on May 27. I am sure you must have 
seen it, and the real problem as pointed out in this, in many 
ways, and I am quoting, the Manta location alone was found 
earlier this year by a site survey to need such substantial 
modifications that it may eat up at least twice the $50 million 
in funds budgeted to start up the three initial FOL's.
    Each of the Caribbean islands was judged by the military 
site surveyors to require $50 million in long-term 
improvements. Concrete is deteriorating--I am just going down 
this--the debris is dangerous, lighting is substandard, the 
base has an emergency power supply but it is broken, and cable 
is deteriorating. As a result, the United States will have to 
build a power base, I guess. Something is missing here. The 
base water is not potable. It provides only 50 percent of the 
current demand. Air traffic control tower is antiquated.
    The Manta airfield, security at the airfield is plentiful. 
Wildlife abounds. Bird activity is horrendous. Off-base medical 
care substandard, should be avoided. It will take 6 months to 
improve the airfield, and office space for military personnel, 
and it goes on, is very critical.
    But the main point that was raised to me, though, is we 
would be replacing Howard, which was an accompanied tour base, 
with three forward locations where our people once again will 
be deployed without their families, and it just seems to me we 
ought to have some review of that.
    Now, General, you mentioned the savings over a 10-year 
period. I question whether there should be an agreement signed 
for 10 years without approval of Congress in any event, but 
beyond that, those savings are the savings from not having 
families with our people. That is the difference.
    As a matter of fact, I think if you put forward, operating 
on the FOL's, and if you put the cost of full family 
deployment, it would cost more for three bases than it did for 
Howard, so are we not redeploying this at the cost of the 
burden on our personnel by going to forward locations to 
operate without their families year after year after year? Is 
that not what this is all about?
    General Wilhelm. Senator, I do not think so. I think that 
this is a manageable proposition. As Mr. Slocombe mentioned in 
his testimony and in his opening statement, our personnel 
structure would be quite different. His numbers were correct. 
We project about 8 to 12 personnel permanently assigned to each 
one of these locations to handle the day-to-day management and 
contracting tasks that would be necessary to sustain operations 
at the FOL's.

                              Deployments

    The deployments of the aircraft themselves, based on past 
patterns, these would not be lengthy deployments. Probably 2 
weeks up to 1 month at most. I think the shorter term 
deployments are things that most of our men and women in 
uniform have become pretty accustomed to. It is the long 4, 6-
month deployments, the remote tours of 1 year, where families 
do not accompany their sponsors, that we really fracture the 
harmony and the cohesiveness of families.
    I personally have lived with these short deployments. Many 
of them are simply categorized as necessary training to 
maintain either a unit or individual readiness. Senator, very 
honestly I believe that is a manageable challenge.
    You are quite correct, the principal savings associated 
with a forward operating location as opposed to a base is the 
lack of a necessity to develop what we call a vertical 
infrastructure, schools, child development centers, 
commissaries, and PX's. But again, sir, given the short periods 
of deployments, I think these are very manageable challenges, 
and I think the services can cope with that.
    Sir, I did also read with considerable interest the article 
that you referred to in Inside the Pentagon. That article was 
published before the results of the site activation task forces 
were made available to me. Quite frankly, I challenge off most 
of that article. I visited Manta last week. The conditions that 
are cited in that report are quite frankly significant 
exaggerations.
    The local base commander, the Ecuadorean base commander has 
already corrected many of these shortfalls. In terms of foreign 
debris that was on the runways, the vegetation that had grown 
up around the runways has been cut back. Many of the 
deficiencies on lighting and other issues cited in the report 
have already been corrected, not by us but by the Ecuadoreans.
    A squadron operations building has already been freed up by 
the Ecuadoreans for us. It has been repainted. I toured the 
space in its entirety. I visited the Oro Verde Hotel, toured 
the entire facility right down to the main air conditioning 
unit with the manager of the hotel.
    In short, sir, I think that report was misleading, and I 
would note that a staff delegation went to Manta. I believe 
Senator Grahams' senior staffer was present, I think Ms. 
Hatheway, one of Senator DeWine's staffers were present. I 
believe the total delegation was about six to eight strong.
    They came back to Miami and gave me a completely different 
debriefing of what they found. The Customs Service 
representative there indicated that the facility was in a far 
better state of repair than he had been led to believe, and 
they essentially took the same exceptions that I did with the 
article that appeared in the Inside the Pentagon. I do not 
regard that as a credible piece of journalism.
    Mr. Slocombe. Mr. Chairman, could I add one point?
    Senator Stevens. My time is up. It is Senator Inouye's 
time.
    Senator Inouye. Thank you very much.

                      Forward operating locations

    Mr. Secretary, you have tried to describe to us the 
difference between the forward operating location and a base on 
the basis of cost. How long do we plan to operate out of these 
temporary locations?
    Mr. Slocombe. There is no reason that we could not continue 
to operate on this basis for an indefinite period of time. I am 
afraid we are going to have the drug problem for a long time. I 
think realistically we are going to have to operate from 
somewhere in that region for a considerable period.
    Senator Inouye. Then it would be appropriate for us to 
assume that it would be a long-term presence there, not 10 
years, but more than that.
    Mr. Slocombe. Even 10 years is a relatively short time, 
given the scale and the persistence of this problem. I am 
afraid we are going to have to be concerned about the import of 
illegal drugs into the United States from Latin America for a 
long time.
    One of the reasons why this is an attractive approach is 
that it means that at least the lower foreign cost of operating 
from the foreign bases in the long-term justifies the initial 
cost to bring the facilities up to standard.
    Senator Inouye. Whatever it is, if we are going to be there 
for several decades you will have to appropriate additional 
funds to maintain our presence there.
    Mr. Slocombe. There is no question we will have to 
appropriate funds both to conduct the operations and to 
maintain the facilities.
    Senator Inouye. In our negotiations with the host nations, 
have we set down specific time periods and, if so, what are 
they?
    Mr. Slocombe. The current arrangements run about 1 year, 
and will be renewed, and we look forward to having an agreement 
for a long-term presence and long-term use of the facilities. 
The precise duration has not been agreed yet.
    I have to say, we found both in the case of the Ecuadorean 
and the Dutch Government, who have responsibility for Curacao 
and Aruba, that they understand the importance of the mission 
and have been supportive of the idea of our using the 
facilities.
    Could I just make one point, going back to the issue--my 
understanding is that the crews for the aircraft that did the 
surveillance out of Howard often were not personal change of 
station (PCS). Their families were often not with them in all 
cases. Those are the people who will be going on a temporary 
basis to these airfields to operate. The people who are there 
on a permanent basis, the dozen or so may well take their 
families with them. That is an issue to be worked out.
    Senator Inouye. What is the so-called temporary assignment 
time period? How long can they expect to be there?
    General Wilhelm. Sir, that is a decision that is normally 
made by the services. As a practical matter, looking as Mr. 
Slocombe mentioned, it was truly the temporary duty (TDY) air 
crews that did most of the work out of Howard.
    The normal deployments, based on my observations, were 
about 2 weeks to 6 weeks, but I would like to run the line on 
that, sir, and provide you a precise answer through the 
quadrennial defense review (QFR), sir. I will give you a good 
profile on exactly what our deployment time lines were for TDY 
people to Howard. I think I am probably fairly safe in saying 
that I think you would see it parallel at the forward operating 
locations. So, sir, if I might, I will get back to you on that.
    Senator Inouye. I thank you.
    Mr. Secretary, in your statement you note the quality of 
life and the efficiency of our forces will ``suffer drastically 
if Congress fails to approve your reprogramming request.'' Does 
this mean that if Congress denies this request DOD will still 
proceed with the establishment of the FOL's anyway?
    Mr. Slocombe. No. We will not do what we do not have the 
authority and money to do, but we will have to find some other 
way to execute the mission.
    Senator Inouye. Under what authority would you be operating 
these FOL's?

                              FOL concept

    Mr. Slocombe. We believe, and this actually goes back to a 
point about the reprogramming. The reprogramming is not for 
money for Milcon. It is for funds out of an operating, in 
effect a holding account for the counterdrug money to use for 
the operations at the FOL's.
    We believe we have authority, and it has been the 
consistent practice that we can operate on the basis of using a 
facility and pay the operating costs out of operating funds. 
That is what we are doing now.
    We believe that we can make a case and that we are 
confident that we will be able to carry forward on the FOL 
concept. Just how we would manage if we were not able to do 
that, we would have to work with the committee and work with 
the Congress and work with the services and the command to 
figure out some other way to do it.
    I think it would be more expensive in the long run, and it 
would almost certainly have a bigger impact on the people.
    I am informed that the specific authority for the FOL's and 
for the operation is section 1004 of the National Defense 
Authorization Act for Fiscal Year 1991, but in general it is 
our authority to conduct these counterdrug operations.
    I emphasize the point that the reprogramming has to do with 
operating money, and not with Milcon money.
    Senator Inouye. General Wilhelm, in your statement you 
stated that out of Howard there were 2,000 missions, and out of 
these new bases, how many do you anticipate, the same level of 
activity?
    General Wilhelm. Sir, assuming that we would get roughly 
the same commitment of resources, we would hope to achieve 
about the same level of activity. That was 2,000 missions out 
of Howard each year, and on a normal day we have 21 aircraft of 
various types, models, and series committed to the counterdrug 
mission.
    Yes, sir, I would hope we could maintain a steady state for 
resource commitment and could roughly duplicate that tempo of 
operations from the forward operating locations.
    Senator Inouye. The question that the chairman asked on the 
cost difference related to a family accompanying and not, I 
hope you can provide that to us, what would be the difference 
if families were there.
    General Wilhelm. In terms of the cost factor, sir, if we 
had to recreate and build an entire base, I suspect the cost 
would be very large indeed.
    Senator Inouye. Can you provide that to us?
    Mr. Slocombe. We can try to provide an estimate, at least. 
Without doing a comprehensive survey it would be hard to tell 
what it would cost to build a full-up permanent base in one of 
these countries.
    You and the chairman are right, the cost probably somewhere 
is paid because the schools, the housing, the support of the 
family, it will be paid somewhere, presumably, but it will be 
in the United States, but the operating cost will be 
substantially lower.
    General Wilhelm. Senator, there is no question about it, 
the recreation of a Howard Air Force Base like facility in 
Latin America would be an enormously expensive proposition, 
there is no question about it.
    Mr. Slocombe. And also, running Howard for 10 years would 
be an expensive proposition.
    Senator Inouye. Thank you.
    Senator Stevens. Senator Burns.

                               Retention

    Senator Burns. Senator Stevens and I had an opportunity to 
go on a trip to the Middle East. He mentioned retention, and as 
I visit our different military personnel and facilities around 
the world, I am increasingly concerned about our ability to 
build noncommissioned officers (NCO's) and to obtain skilled 
people.
    We met with a group and Senator Inouye was there in Saudi 
Arabia where Air Force personnel, tech sergeants, staff 
sergeants, men and women who had been, say, in the Air Force 
for some 8 to 14 years were on their eleventh trip to the 
Middle East since 1991, and were leaving the Armed Services.
    They were highly skilled people. They were AWACS, they were 
radar technicians on AWACS, and that continues to I think 
bother and concern our chairman whenever we start talking about 
the nuts and bolts of really operating an efficient military 
organization, and that is my concern.

                      Aruba and Curacao operations

    General, you have recommended Aruba and Curacao. They are 
only 10 miles apart. What is the difference in their 
operations, and can that operation be combined?
    General Wilhelm. Sir, the operation cannot be combined, and 
the problem is the capacity of the two airfields. As you point 
out, the two islands are approximate to each other, but if you 
look at the ramp space to park aircraft, if you look at the 
capacity to make launches and recoveries, they are relatively 
small facilities.
    You need both to get the full coverage that we require, and 
the breakout that we have done thus far in an operational 
context would primarily place customs assets at Aruba, 
principally their P-3's, where our Air Force assets would 
operate out of Curacao, but neither base on its own is 
sufficiently large to handle the numbers of aircraft that we 
need to conduct the mission, so that is the reason for the two.

                  consideration of alternate Locations

    Senator Burns. In the overall picture of this, did we 
consider Honduras, Puerto Rico, or Guantanamo? Were any of 
these facilities considered in the overall scheme of things?
    General Wilhelm. Senator, they certainly were. We took a 
close look at Honduras, but as you know we have had a 
continuous presence there since 1983, so we are pretty familiar 
with what that base will support, and what it will not support.
    We really ran into a series of really three constraining 
factors there. First, there was some reluctance on the part of 
the Government of Honduras to open Soto Cano up for large-scale 
counterdrug operations.
    Second, Senator, I really needed to find a home for the 
Army helicopters coming out of Panama, and we already had 
rotary wing aviation assets on the ground at Soto Cano, so it 
made good sense to marry those aircraft up with the ones that 
were already there. That way we did not have to duplicate 
maintenance supply and other structures at some other place.
    Third, and probably most important, is geography. There are 
some high elevations in and around the airfield at Soto Cano 
that make it impossible for many of our aircraft to take off 
with a full fuel load, so they end up with constrained time on 
station and a lot of our counterdrug aircraft are not 
configured for aerial refueling, so that was really a hard 
constraint against wholesale use of Honduras.
    As far as Puerto Rico is concerned and Guantanamo Bay, 
those facilities are being used. The Coast Guard, as I think 
you are aware, Senator, uses the Borinquen facility very 
heavily in Puerto Rico to conduct many of its counterdrug and 
other operations in what we refer to as the transit zone.
    As we have come out of Panama I have identified airfields 
in Puerto Rico as the basing locations for our theater airlift 
assets, so we have put our C-130's in there to support our 
other regional engagement missions.
    Sir, as you know, our facilities at Guantanamo are somewhat 
limited, and it is a tough runway to get in and out of with the 
air space restrictions. Again, the Coast Guard and the Navy use 
that probably just about up to the limits of its capacity, and 
it does support many of our operations in the transit zone, so 
sir, we really did look at just about every option we had in 
the region.

                                 FOL's

    Senator Burns. Mr. Slocombe, would you give the committee 
an update on negotiation with these countries for a permanent 
presence there, and I say that because we are going to make 
some capital expenditures, and I would like to know the status 
of the negotiations of the recommended FOL's.
    Mr. Slocombe. The short answer is, we are discussing with 
both the Netherlands, who as I say have responsibility for the 
Netherlands Antilles in this area, although they have to talk 
to the local Governments as well, and with Ecuador, for long-
term arrangements which would provide the status of continued 
eligibility, I guess, continued agreement to our use of the 
facilities, and in particular continued, the equivalent of a 
status of forces agreement.
    It is not formally a status of forces agreement, but it 
provides protection for our people against jurisdiction by the 
local courts for official acts, the kind of issue which is 
important if you are going to have people operating, even on a 
temporary basis, out of a location, and in practice we will not 
make investments, we will not do the construction until we have 
a long-term commitment. I do not necessarily mean a commitment 
forever, but a long-term commitment.
    There is a meeting with the Netherlands tomorrow, the 15th, 
and a meeting with the Ecuadoreans within a couple of weeks, 
and the indications are that we will be able to work out our 
arrangements. The progress is going forward, and in any event 
we are confident on the point we will not spend the money.
    Senator Burns. Mr. Chairman, with your indulgence, I have 
one more question along those lines.
    I understand a major issue remains as to whether or not 
U.S. forces have the authority to operate and bear arms at 
forward operational locations to protect our deployed assets. 
Give me an idea, or would you comment on that issue for the 
committee, and the status of those discussions with those host 
governments?
    Mr. Slocombe. My understanding is the host governments are 
agreeable to U.S. personnel having firearms for security 
purposes. They do now, and this should not be an issue as far 
as we understand.
    Senator Burns. Thank you, Mr. Chairman.
    Senator Stevens. I thank you.
    Gentlemen, I am informed that our special operations forces 
deployed to 152 countries, foreign countries, foreign 
territories included, with 123 counterdrug missions in 22 
countries last year.
    We have got people in Haiti and in Kuwait and Saudi Arabia. 
We have got people in Iceland. We have got people in Bosnia. We 
have got people in South Korea. Two of those are accompanied, 
all the rest are not.
    Now, when you look at this, we travel a lot, probably too 
much, and we ask too many questions. I remember two pilots that 
visited me in Britain, I think it is 18 months or 2 years ago, 
roughly. They had been with their families 3 months out of the 
last 3 years, each year. They had been deployed to Kuwait, and 
then redeployed to Bosnia, they had been deployed elsewhere, 
and they were getting out.
    Now, that is what I see is what is happening here now. We 
are going from an accompanied tour to an unaccompanied tour 
status in the war on drugs, which we support, but it does not 
seem to me to have been thought through very well about 
personnel.
    What about security, General? This is probably one of the 
most violent places in the world today because of the drug 
activities. We are going to have 15 to 20 people in, what, 
three different, four different locations. Are you going to 
have an extra marine detachment there to protect them? Who is 
going to protect them?

                            Force protection

    General Wilhelm. Sir, the issue of force protection I will 
tell you right up front is job one for the United States 
Southern Command. That is the first thing we look at before we 
deploy any force for any period of time to any location.
    The security of the force, as you would expect, normally 
comes from one of two sources. Either the host nation provides 
security forces, or we provide augmenting security forces.
    Senator, that is really one of the foremost tasks that I 
levy against my intelligence organization, and that is to stay 
dead on top of the security situation at every location where 
we have troops deployed in Latin America and the Caribbean.
    I have told them, I do not want information day to day, I 
want it from minute to minute about the security conditions 
there. For example, we received a report that one of the young 
men, one of our first deployers to Ecuador, had been accosted 
outside of his hotel room in Manta. He had been confronted by 
two knife-wielding assailants. They took his billfold with $20 
and a hand-held radio. We are working on that right now with 
the Ecuadorean authorities.
    We are very conscious of the fact that we need a buddy 
system when people on liberty, or are at and around town. We 
are working with the Ecuadoreans to get better security around 
our billeting locations. This was a criminal act, sir. I only 
bring that up anecdotally to let you know how much importance I 
place on that. Sir, we will never blink our eyes where force 
security is concerned.
    Senator Stevens. Do you think these four bases are secure 
without an occupational security force?
    General Wilhelm. Sir, I believe these are secure locations. 
Yes, sir, I do.

                AWACS/retractable over the horizon radar

    Senator Stevens. Apparently AWACS are part of the key to 
this. What happened to that over-the-horizon radar we took from 
Manchikta and put in Puerto Rico for this purpose? Are you 
using it?
    General Wilhelm. Yes, sir. Not the Puerto Rican radar quite 
yet. Senator, as I think you know, the initial operational 
capability for the relocatable over-the-horizon radar in 
Vieques, Puerto Rico, is in fiscal year 2000.
    The two radars that we have right now that give us the deep 
look and broad area coverage are the ROTHR's in Virginia and 
Texas. When we stand up the third radar in Puerto Rico it will 
improve our coverage particularly of the deep source zone. The 
issue here, sir, is that the radars do different jobs.
    Senator Stevens. I understand that, but are they going to 
take some of the pressure off the AWACS? You need three AWACS 
now, rather than one.
    General Wilhelm. Sir, we actually use two AWACS. That is 
the asset level that is assigned to us by the Joint Chief of 
Staff (JCS). We have not had two.
    Senator Stevens. You had three circles?
    General Wilhelm. No, sir. Those were the operating radius 
out of the three FOL's. We would not necessarily have an AWACS 
at each one of those. In fact, we would probably have no more 
than two at any given time, because that is the asset ceiling 
that has been assigned by JCS. Those circles simply depicted 
the operational coverage that we could achieve from each of the 
three FOL's.
    Again, it is our duty to make clear that the ROTHR's 
provide us with the initial tipper. They let us know that an 
aircraft has taken off. The locating data is not precise. Ten 
to 20 miles is about as close as we get.
    We do not get altitude. That is when the AWACS, when the P-
3 domes come in. They add more precision to the locating data 
on the contact, its direction of flight, its altitude, and that 
is how we start to build a case toward a track of interest. But 
all of the radars have to work together to make this happen.
    Senator, I am sorry if the chart created confusion. We 
actually rate only two AWACS assigned Southern Command for this 
mission, and since the crisis in Kosovo we have only had one.
    Senator Stevens. I went down and rode the P-3 out of Key 
West into this area, and was briefed on what they were doing to 
support the counterdrug activities. Why is it we cannot use 
some portion of these forces out of Key West, from our own 
soil?
    General Wilhelm. Sir, we do fly some missions out of Key 
West.
    Senator Stevens. I know, I flew in them, but why don't you 
use that location rather than these?
    General Wilhelm. Sir, the operational reach from Key West 
would not get into either the southern source zone nor--our 
southern transit zone, excuse me, nor would it even touch the 
source zone. It is simply too far away. We would end up 
covering only really the northern and central regions of the 
Caribbean. We could not cover Central America from there, and 
we would get no coverage of the Pacific movement vectors.
    Senator Stevens. Mr. Slocombe, would you give the committee 
the estimate of the total numbers of military personnel 
deployed overseas in fiscal years 1998, 1999, and projected for 
2000, please?
    Mr. Slocombe. I have the numbers, if you will bear with me 
for a second.
    Senator Stevens. You can give those for the record, if you 
like.
    Mr. Slocombe. Let me give them for the record.
    [The information follows:]

               Excerpt From Joint Staff Information Paper

    Subject: Under Secretary of Defense for Policy Testimony 
Regarding Overseas and Long Term Contingency Deployments
    Purpose.--To respond to a Deputy Assistant Secretary of 
Defense for Drug Enforcement Policy and Support request for 
information.
    Total number of military personnel deployed overseas.--This 
number is best presented by the average number of active duty 
U.S. military personnel deployed, not stationed, on any given 
week overseas in support of contingency operations. This number 
does not include those deployed in a temporary duty status or 
those deployed for exercises.
    [Deleted.]
    Fiscal year 2000--Estimate not available.

    Senator Stevens. I sort of am going back where Senator 
Burns was. It does seem to us that the two, Aruba and Curacao, 
are so close together in terms of the availability of the other 
two sites, that the necessity of having four sites in this area 
is stretching our capability more than we should stretch it. I 
would urge you to take a look again as to whether we should 
spend defense funds for the infrastructure and base operations 
on a site that is for the Customs Service.
    I have been trying to get people to do that in California 
and in Arizona and New Mexico for years, but we will not do it, 
but here we are spending money outside of our country for the 
same operations to protect South American countries. I think we 
need to develop a real definite United States policy of what we 
are going to do with military assets in terms of the war on 
drugs, but we are not currently using them to protect our own 
borders.
    When we were down on the Arizona border 2 weeks ago, there 
were almost as many people coming into Arizona daily as there 
are going into Albania from Kosovo, straining a whole operation 
down there as far as immigration, customs, and border patrol.
    In this area that you are operating in, the military takes 
the full brunt of the whole operation, but you will not take 
any in the United States. I really see the development of some 
very inconsistent policies in terms of the use of military 
force to support the war on drugs, and I hope to have that 
reviewed by another committee.
    Senator, do you have any further questions?
    Senator Inouye. No, thank you.
    Senator Stevens. Senator Burns.
    Senator Burns. I guess I am concerned about our expenditure 
further out than just, here we are, we have got a request now 
for a reprogram of funds, and how we are going to move some of 
those dollars around, and we have yet to figure out how we are 
going to do that, General. We are supportive of the drug 
intervention program down there, let there be no doubt about 
that.
    There will always be drug flow into this country for the 
simple reason this country has got the money to buy them, and 
that is it. You are never going to stop drugs coming into this 
country until we run out of money, and that is just a fact, and 
of course you have a terrific mission ahead of you.
    But you know, I think the stabilization, the security of 
the area also has far-reaching yields in the best interests of 
this country. I am just wondering, have you given any thought 
what we are going to need, say, past this initial investment in 
capital expenditures, what it is going to take in the next 5 
years?
    I guess I am an old county commissioner. We really did not 
get the efficiency of our county down until we did a 5-year 
budget, and what we did this year affected what we could do 5 
years down the road. I would kind of like to get ahead of the 
hounds a little bit. Have we had any kind of a projection or 
demand on our funds in that respect?

                          Five-year projection

    General Wilhelm. Senator Burns, that is a wide-ranging 
question, of course, and I will take it on in that context, if 
I might.
    Senator Burns. You might just give a thumbnail, because I 
know you cannot be too precise. I understand that.
    General Wilhelm. I think probably one of the most often-
used statements when we talk about the drug struggle is that 
there is no silver bullet, and that is quite correct. I think 
that we can have a very powerful impact on this problem, but we 
are going to have to do it in a variety of ways, and I will 
just work from south to north, and I will do this very quickly.
    I encounter a lot of frustration, and sometimes the feeling 
that this is mission impossible. I do not agree. There are 
three countries, really, that produce drugs. They are Peru, 
Colombia, and Bolivia, and we are winning the war in two of 
those countries today. Cultivation was down 26 percent in Peru 
last year, 17 percent in Bolivia, and their production of base 
was down 25 percent in both countries.
    The problem was the 28 percent increase in Colombia, but we 
are doing some pretty vigorous things right now with Colombia 
to help them more effectively counter the drug threat in their 
country. It is going to take some time, but I am one of those 
that is cautiously optimistic--not many of us, but I am 
cautiously optimistic about Colombia, its national resilience, 
and its ability to overcome its problems.
    So two out of three is the way I look at it in the source 
zone, and I think we have got some pretty good programs to do 
that.
    We knocked off 147 metric tons of dope in route to the 
United States last year. That is not too bad. I would like to 
get 200 metric tons this year.
    In his national drug control strategy, General Barry 
McCaffrey has created some hard goals for us to achieve, 10 
percent reduction by 2002, and about a 20-percent reduction by 
2007. We are going to work hard to make that happen and, of 
course, that is nipping the stuff before it gets to the 
frontiers of the United States.
    Again, Senator, things like the forward operating locations 
are absolutely indispensable if we want to do this. I am an 
infantryman. I always want----
    Senator Burns. Primarily you are a rifleman first and then 
everything else comes later.
    General Wilhelm. Absolutely, sir, and you always want to 
defeat the enemy as far forward from your main battle position 
as you possibly can. I would like to win as much of this war as 
we can in the source zone, pick up the bleeders in the transit 
zone, and then, as Senator Stevens and Senator Inouye 
suggested, we probably need to buttress the defenses right 
along our own borders, right in the wire, so to speak.
    But I view my job as fighting the deep fight, going down 
and bloodying their nose in the source zone, try to give them 
two black eyes in the transit zone, and make them weak before 
they get to the arrival zone.
    If we do all these things, eradication, interdiction, 
alternative development, the things that State and the rest of 
the interagency do, sir, we can win this thing.
    Senator Burns. Mr. Chairman, I know most that my Ranking 
Member, Senator Murray of Washington, would probably have some 
questions this morning. She is involved in other issues, and if 
she has questions of either of you, I would appreciate if you 
would respond both to the committee and to Senator Murray out 
of respect, and I appreciate you having this hearing this 
morning.
    Senator Stevens. Yes. She is on the floor. May I ask, 
Senator, have you received the supplemental for the $122.5 
million for Milcon?
    Senator Burns. We have not.
    Senator Stevens. We have seen an outline of it. When are we 
going to receive it?
    General Wilhelm. Senator, I know that--I think the document 
is called a 1391. I am looking at Steve Cortese. He knows these 
kinds of things. I know that those documents were cut for the 
$122.5 million, sir. I do not know where they are, but I am 
sure between Mr. Slocombe and I we can find them.
    Senator Stevens. We have not seen the projection. As 
Senator Burns mentioned, we normally do get a 5-year 
projection. We got the $45 million reprogramming, and then we 
understood there is another sum coming for the year 2000, 
$122.5 million, and we do not know, and that was for augmenting 
facilities at the existing sites, and we were told that there 
would be further funds for the increases in operational 
maintenance and personnel cost, and we have not seen those. I 
think it would be helpful if we could see those.
    Are you operating planes out of these four bases now?

                          FOL funding concerns

    General Wilhelm. Sir, we are, out of all of them, out of 
Curacao, out of Aruba, and out of Manta, that is correct.
    Senator Stevens. You have made some changes, I assume, out 
of your operating accounts for that.
    General Wilhelm. Yes. Well, this was money that was 
previously in the accounts to conduct counterdrug operations, 
and as I mentioned in response to a previous question, we have 
done the things that we could do on the ground at Manta to 
correct the deficiencies that were there, and we have gotten a 
thumbs up from the Customs Service and from Navy, who have 
operated the P-3's, that it is an acceptable base from an 
operational and safety standpoint.
    Sir, if I could clarify one point, the Milcon requirements 
are for $42.8 million in 2000 with the balance in 2001, so it 
is not all in fiscal year 2000.
    And if I might return to one point for just a second, 
because I am confused right now about the reprogramming action. 
That reprogramming action was for fiscal year 1999. That was 
$45 million, and all of that was in the O&M accounts, and 
Senator, only $6.1 million of that was related to the forward 
operating locations. The majority of those reprogramming funds 
were to support other consolidations, and movements that were 
associated with the closure of our bases in Panama.
    I do not quite know what happened here.
    Senator Stevens. We did not approve it. The main reason 
was, it seemed to me, and I consulted with Senator Inouye, it 
looked like we were going to implicitly approve the creation of 
four new bases overseas without any congressional hearings at 
all, and after our experience in Haiti and in King Sultan and 
Kuwait, it was just not the thing to do in our opinion. We 
think the public should have knowledge if we are going to start 
a new series of bases overseas, they are going to be ongoing 
for a period of time, and Mr. Slocombe was correct when he says 
that 10 years it is going to be a short time on this.
    Now, if this is a new policy to replace Howard and replace 
it with four bases instead of one, the public ought to know. 
That is one of the costs of the Panama Canal agreement, but it 
is also one of the costs of the war on drugs, and this time it 
is coming all out of defense. It is the first time I have seen 
it come all out of defense, General.
    In the past, with the Coast Guard, we transferred some 
money to the Coast Guard, and the counterdrug funds were 
transferred to the Coast Guard, and the P-3 I flew on was 
reimbursed by the Coast Guard, or by the drug operations to the 
Coast Guard. This, you are not seeking any reimbursement from 
the other funds. This is using defense funds now for 
counterdrug activity straight up, and I think there should be a 
record on that, and we should understand what you are doing.
    I am not dissatisfied with your explanation. I am not too 
happy about it, but I think you have answered our questions, 
and we will consult with the committee to see what we will do 
about the reprogramming, but it just did not seem to us that we 
ought to approve a reprogramming of operation and maintenance 
(O&M) funds for the counterdrug activities in a fashion that 
you could implicitly assume that we had approved the concept of 
replacing Howard with four different bases.
    General Wilhelm. Senator, I can completely appreciate your 
concerns. The reason I wanted to mention it, sir, was I read 
your letter of, I believe June 28, and the issues that are 
addressed in there I had a hard time correlating with the real 
purpose for the $45 million reprogramming action.
    Senator Stevens. We did not get the breakdown of how you 
were going to spend the $45 million until after I sent the 
letter. Then we were told the specifics.
    The reprogramming request was not specific. It was just for 
use in four locations overseas of O&M money for the drug 
operations, and we just wanted to have a record on it, and now 
that we have it, as I said, I am not too happy about what I 
see, because I see further stress on the forces from 
unaccompanied tours for a period of time ahead of us that is 
going to lead to worse statistics as far as reenlistment is 
concerned.
    I do not know the answer to it. I am sure you do not know, 
either, but I am getting to the point where every time I talk 
to these young pilots--it is particularly pilots that we have a 
real shortage of now. Do you have any knowledge of what the 
shortage of the AWACS pilots is now?
    General Wilhelm. Sir, I do not know.
    Senator Stevens. We will have to track that down.
    Senator Burns. Well, Mr. Chairman, I just want to make a 
point. We sat there, all three of us sat there and listened to 
those young folks, among NCO's. I mean, these are the skilled 
people that I think are the nuts and bolts of making this thing 
operate, and that was very enlightening, that day we spent, and 
we threw everybody out of there and just had a very frank 
conversation with those folks, so that is a concern.
    I thank the chairman.

                     Additional committee questions

    Senator Stevens. We did that in Kuwait, at King Sultan.
    Thank you very much, gentlemen. We appreciate it.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted by Senator Conrad Burns
      dod forward operating locations for counter drug operations
    Question. Why did the Department not request military construction 
funding for these forward operating locations as is the normal practice 
for constructing military facilities overseas?
    Answer. The request was based on what was believed to be the 
established precedent concerning MILCON and the DOD's Counterdrug 
Central Transfer Account (CTA). The precedence was the Department's 
fiscal year 1995 CTA request, which included $10,000,000 in MILCON 
funding for the construction of a Relocatable Over-the-Horizon Radar 
(ROTHR) in Puerto Rico. The Congress appropriated this MILCON amount as 
a part of the CTA in Public Law 103-335.
    Question. It appears that there are additional funding requirements 
for these bases over the next several years. Will the military 
construction budget for fiscal year 2001 include these additional 
projects?
    Answer. Yes, the military construction funding for the remaining 
requirements at the FOLs will be forwarded as a part of the fiscal year 
2001 MILCON budget.
    Question. What will be the legal basis for U.S. deployed or 
stationed personnel in both the Netherland Antilles and Ecuador?
    Answer. All personnel will be at the Forward Operating Locations 
pursuant to bi-lateral access agreements with the respective countries. 
They will be deployed to fulfill our 10 U.S.C. 124 detection and 
monitoring mission.
                         fol negotiation status
    Question. What is the status of negotiations with these countries 
on securing a more permanent agreement to base our forces?
    Answer. The status of FOL negotiations are fluid. Ambassador Brown 
is doing a superb job in securing these agreements and is in the best 
position to provide you a current status of the negotiations. I am 
confident that these agreements will be secured in the near future.
                         concept of operations
    Question. Could you begin by describing how you envision the 
concept of operations for each of the three bases in Aruba, Curacao, 
and Ecuador?
    Answer. These sites will replace the capabilities lost with our 
departure from Panama but without the overhead costs of building a 
base. This is achieved through forward operating location (FOL) 
agreements.
    FOL agreements with host nations enable us to use their existing 
facilities, upgraded to U.S. standards, for the conduct of counterdrug 
operations throughout the source zone and to do so at considerably less 
expense than our operations from Howard Air Force Base.
    The Caribbean sites of Curacao and Aruba are to focus on the 
transit zone and the northern portion of the source zone. Light and 
medium aircraft (C-550, C-130, F-16 and P-3) will fly from these sites 
in support of our detection and monitoring mission. Curacao will also 
be capable of hosting heavy aircraft (E-3 AWACS and KC-135).
    Manta, Ecuador, will be capable of hosting all three weight classes 
of aircraft and is the most critical of the three sites. Manta provides 
the flexibility to conduct intelligence-cued operations throughout the 
deep source zone with little or no warning to narco-traffickers. The 
necessity to maximize the use of limited assets, like the AWACS, makes 
Manta the right place. No other FOL provides the flexibility to direct 
this strategic asset against the shifting patterns of the narco-
traffickers in Colombia, Peru, and Bolivia.
                               facilities
    Question. What is the current state of facilities and 
infrastructure at each of these locations?
    Answer. Facilities and infrastructure at the Forward Operating 
Locations (FOLs) is generally good but will require approximately 
$122.5 million in upgrades to meet U.S. operational and safety 
standards. To reduce costs, we will use host-nation facilities to the 
maximum extent consistent with U.S. operational, safety, and quality of 
life considerations. The Aruba Airport Authority currently provides 
adequate office space inside the airport terminal and sufficient ramp 
space adjacent to the main commercial ramp. Renovation on the Aruba 
airport terminal, scheduled to begin on 1 November 1999, will require 
construction of temporary office facilities. In Curacao, the host-
nation government and the Dutch military allocated sufficient aircraft 
ramp space and assigned temporary office facilities. In Manta, host-
nation military facilities are supporting limited operations. Local 
civilian establishments are providing billeting and messing support at 
all three locations.
    Question. Describe the type of facilities that Southern Command and 
the Air Force agree are needed for each of the locations?
    Answer. To meet U.S. operational and safety standards, all three 
Forward Operating Locations (FOLs) require additional aircraft ramp 
space, adequate aircraft maintenance facilities, and permanently 
assigned office spaces. To reduce costs, we will use expeditionary 
facilities at each location where possible. Manta Air Base (AB) 
requires more upgrades to meet U.S. operational and safety standards 
than Curacao and Aruba international airfields. Manta requires moderate 
upgrades to crash/fire/rescue capability, bulk fuel storage capacity, 
and billeting/messing facilities. We estimate the total construction 
cost for all three FOLs to be $122.5 million.
                    military construction estimates
    Question. Finally, what are our military construction estimates for 
each of the bases in Aruba, Curacao and Ecuador?
    Answer. For the sake of clarity, Forward Operating Locations (FOL) 
are not bases. FOLs are host nation facilities where the U.S. is 
granted use and access for the purpose of conducting counterdrug 
operations. Military construction is limited to those areas necessary 
to support U.S. counterdrug operations.
    For fiscal year 2000 we must receive $42.8 million of which $10.8 
million will be used for consolidated planning and design of all three 
FOLs, with the remainder being used for airfield pavement/site 
improvements at Manta, Ecuador. Manta will require the bulk of the 
expenditure to enhance the parking ramp, runway and taxiways. The 
upgrades will allow us to accommodate four large aircraft (E-3, AWACS 
and KC-135) and four medium (E-2, P-3, C-550, C-130, and ARL) aircraft.
    In the following fiscal year the remaining $79.7 million is needed 
to complete upgrades in all three sites ensuring adequate, safe and 
mission essential facilities from which to operate.
                  construction of temporary facilities
    Question. It appears that we plan to construct permanent facilities 
at each of these forward operating locations. Why not use more 
temporary facilities?
    Answer. We are using host nation facilities to the maximum extent 
possible at each of the locations. We will only build essential 
facilities that we cannot obtain from the host nation. In the initial 
stages of developing the forward operating locations, temporary 
facilities were used, and where temporary facilities can support the 
operation, we will retain those temporary facilities.
    Temporary facilities, however, like the Air Force's ``Harvest 
Bare'' camps, are currently being used for interim facilities which 
will continue until more permanent facilities can be completed. These 
types of facilities (tents and prefabricated structures) are effective, 
but have a limited useful life. After 18-24 months they require 
replacement or significant maintenance.
    Permanent support facilities will be constructed using materials 
and methods which will result in the least cost, both in terms of 
initial construction and routine operations and maintenance. 
``Expeditionary'' type facilities (pre-engineered buildings, K-spans, 
etc.) will be considered where practical.
                        operational requirements
    Question. What are the operational requirements for Aruba and 
Curacao installations?
    Answer. The operational requirements for Forward Operating 
Locations in Aruba and Curacao are:
  --An operational capability of twenty-four hours per day, seven days 
        per week.
  --Night and all weather landing/takeoff capability with manned air 
        traffic control facilities.
  --Runway length of at least 8,000 feet, with a load bearing capacity 
        for AWACS and C-141 aircraft.
  --Refueling/Defueling capability.
  --Crash, Fire and Rescue services.
  --Ramp, Hangar, Office and Storage space.
  --Communications capability to support aircraft maintenance 
        requirements, and connectivity with command and control 
        organizations such as Joint Interagency Task Force East (JIATF-
        E).
                alternative forward operating locations
    Question. Did the department consider our facilities in Honduras, 
Puerto Rico and in Guantanamo Bay to conduct these operations? Please 
explain why these are not being used rather than new locations?
    Answer. Yes, and all three locations continue to support 
counterdrug operations just as they did prior to the closure of Howard 
Air Force Base.
    Soto Cano Air Base, Honduras, is the home for a majority of Army 
aviation assets in theater. These assets support counterdrug operations 
such as CENTRAL SKIES as well as many non-counterdrug missions. 
Although the topography of the region limits Soto Cano's use as a 
Forward Operating Location, it can be used to support surge operations 
in the Eastern Pacific and in Central America.
    The geographic location of Guantanamo Bay, Cuba, and Naval Station 
Roosevelt Roads, Puerto Rico, allow Department of Defense, Coast Guard, 
and Customs Service detection, monitoring and tracking assets to 
continue supporting counterdrug operations in the Caribbean transit 
zone. These locations, however, do not provide the required operational 
reach into the South American source zone and large portions of the 
Eastern Pacific.
                  construction of temporary facilities
    Question. How long is it anticipated that our forces will remain at 
these forward operating locations?
    Answer. We anticipate a network of interlocking Forward Operating 
Locations (FOLs) will be necessary until we have achieved the targets 
and goals directed in Presidential Decision Directive 14 and the 
National Drug Control Strategy. Ongoing negotiations are for an 
agreement that allows U.S. access to FOLs for 10 years with an option 
for an additional 5 years.
                          host nation support
    Question. General Wilhelm, what if any contributions are the host 
nations providing for the construction of these forward operating 
locations?
    Answer. The host nations of Ecuador and the Netherlands are 
contributing significantly to our efforts to establish forward 
operating locations.
    At all three locations, the host nations have provided temporary 
ramp space at no charge. The same holds true of office space, 
maintenance facilities, and hangar space provided on a temporary basis 
within their capability. In Curacao, the Royal Netherlands Navy will 
provide, on a permanent basis, sufficient ramp space for two P-3 and 
one E-2 aircraft along with co-use of their maintenance hangar. In 
Manta, the Ecuadorian Air Force has provided several buildings for use 
on a permanent basis. The Ecuadorian Air Force also conducted extensive 
excavation of brush and existing obstructions around the runway 
environment so counterdrug operations could commence in June. This 
action was performed to meet U.S. air safety standards--the Ecuadorian 
fighter wing at Manta did not require this safety enhancement.
    These gratuitous actions, along with the host nations' 
contributions to overcoming day-to-day obstacles, have convinced me of 
their sincere desire to participate in our collective counterdrug 
mission.
                     military construction funding
    Question. The Department requested $42.8 million in fiscal year 
2000 Southern Command military construction funding for the forward 
operating locations. The total program requirements are $122.37 
million. What are the priority projects for fiscal year 2000?
    Answer. Fiscal year 2000 military construction program funding of 
$42.8 million for Forward Operating Locations (FOLs) will provide $10.8 
million for consolidated FOL planning and design and the remainder will 
be used for parking ramp enhancements and runway/taxiway repair to 
accommodate four large aircraft (E-3, AWACS and KC-135) and four medium 
(E-2, P-3, C-550, C-130 ARL) aircraft in Manta, Ecuador. These funds 
will also provide the means to repair an existing ramp for three medium 
aircraft.
                          supporting aircraft
    Question. General, the Congress had earlier been briefed on the 
forward operating locations that these facilities were to support 
transit aircraft on a mission required basis. However, the 
documentation that the committee has received indicates that the F-15s 
or F-16s will be the only aircraft permanently assigned to Curacao. Is 
this a change to the initial intent of the program and what is the 
justification for the permanent assignment of these aircraft?
    Answer. There has been no change in our original concept of 
operations at the Curacao, Aruba or Manta Forward Operating Locations 
(FOLs). Air National Guard units, from throughout the United States, 
rotate every six weeks and crews rotate at 15-day intervals. As a new 
unit arrives, the previous unit departs. This rotation achieves near-
continuous presence with temporarily deployed personnel and equipment.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
                   forward operating locations (fols)
    Question. Mr. Chairman, I would like to preface my question by 
commending General Wilhelm for his leadership and dedication to the 
Defense Department's counter narcotics mission. As the head of the U.S. 
Southern Command, he has mounted a determined and aggressive campaign 
to stem the flow of illegal drugs from the Caribbean and Central 
America and to promote stability and democracy in the region. His is an 
enormous task, and a vitally important one. We are all well aware that 
it is crucial that he succeeds.
    On that note, I cannot help but think that a coordinated battle 
plan is a necessary ingredient of success, but what this Committee is 
being presented appears to be more of a scattershot, almost piecemeal 
approach. One day, we receive a relatively vague reprogramming request 
for $45 million for Forward Operating Locations. Another day, we are 
asked to shift $42.8 million into military construction for the FOL's. 
Later, we are told that a total of $122 million will be needed for 
construction at these locations in fiscal years 2000 and 2001. At the 
same time, Southern Command is significantly increasing its presence in 
Puerto Rico, and Congress is being urged to acquire the headquarters 
site that SOUTHCOM currently leases in Miami. I understand that all of 
these actions were precipitated by the closing of Howard Air Force Base 
in Panama, but I am concerned that in the haste to relocate the 
missions that had been based at Howard, we may be so focused on short 
term fixes that we lose sight of our long term goals.
    I understand that SOUTHCOM is currently operating some missions out 
of the proposed Forward Operating Locations, so my first question, for 
both General Wilhelm and Mr. Slocomb, is this: what would the impact on 
the counter narcotics mission be if SOUTHCOM were to complete a long-
range master plan, as the Senate Subcommittee on Military Construction 
has directed, before investing $122 million in overseas military 
construction projects? How quickly could you complete such a plan and 
submit it to Congress.
    Answer. The Department of Defense long-range plan for Forward 
Operating Locations has been developed and was briefed to the Senate 
Subcommittee for Military Construction in August. Because of the many 
variables that have an impact on these plans, they are always being 
updated and adapted in order to have the greatest impact on our 
mission. The Department of Defense and U.S. Southern Command stand 
ready to provide updates or answer your questions at any time.
           deployments to forward operating locations (fols)
    Question. General Wilhelm, you have indicated that the majority of 
deployments to the FOLs would be short term--a period of weeks as 
opposed to months. In responding to the Committee on the specific 
lengths of tours, would you also indicate for the record how frequently 
a service member would be rotated into this duty. In other words, how 
many times a year could a service member expect to be assigned to this 
duty, and what would be the total amount of time during the year that 
he or she would have to spend away from their families?
    Answer. Each Service establishes deployment timelines consistent 
with their overarching personnel tempo (PERSTEMPO) criteria. All our 
Forward Operating Location (FOL) deployments will be short duration 
temporary duty (TDY) assignments. FOLs provide Services the flexibility 
to tailor their PERSTEMPO criteria to support our mission requirements. 
The frequency with which individual Service members would be assigned 
to these missions is a Service determination.
                            quality of life
    Question. In your opinion, how will these assignments affect the 
quality of life and operating tempo concerns that are having such a 
severe impact on Air Force retention levels? What steps are you taking 
to mitigate the impact of any quality of life concerns caused by this 
duty on the service members and their families?
    Answer. Forward Operating Location (FOL) deployments have a 
positive impact on morale and retention. Counterdrug operations are 
actual missions against actual targets. Aircrews respond favorably to 
these challenges and gain a sense of accomplishment from performing 
these missions. Guard personnel support many of the Air Force 
deployments, easing the operating tempo on the active force. For 
example, Guard F-15s/F-16s fly Coronet Nighthawk deployments, typically 
deploying from various home units to Curacao every six weeks and 
rotating crews at 15-day intervals.
    Service personnel tempo (PERSTEMPO) is further reduced by 
contracting as much base operating support as possible. We selected, 
from available sites, those airfields that best meet U.S. operational 
requirements, safety standards, and adequate personnel support 
facilities. We will upgrade these facilities to U.S. standards during 
the next two fiscal years. The quality of life needs of military 
personnel and their families will be provided by the Services.
                    home bases of deployed personnel
    Question. General Wilhelm, would you provide for the record the 
home bases from which the personnel would be deployed to the Forward 
Operating Location missions.
    Answer. The designation of units and personnel to support 
counterdrug requirements at the Forward Operating Locations is Service 
responsibility. I defer to the Services to answer this question.
                         security arrangements
    Question. General Wilhelm, you indicated that, in your opinion, the 
proposed FOLs are secure locations. Would you elaborate for the record 
on the specific security arrangements that will be made for U.S. 
personnel assigned either permanently or temporarily to these sites, 
who will provide the security on and off base, and what the security 
arrangements will cost the U.S.
    Answer. The assessed terrorism threat levels at Forward Operating 
Locations (FOLs) are NEGLIGIBLE for Curacao and Aruba and LOW for 
Ecuador. The assessed threat levels for crime is MEDIUM for Curacao and 
Aruba and HIGH for Ecuador. Threat level assessments are updated on a 
daily basis. Host nations provide security at the FOLs, to counter the 
assessed terrorism and criminal threat levels.
    As our executive agent for FOLs, U.S. Air Forces South (USSOUTHAF) 
is responsible for the security of permanent and temporary duty (TDY) 
Department of Defense (DOD) and U.S. Customs Service personnel located 
at the FOLs. Where necessary, USSOUTHAF augments host nation security 
forces.
    In addition, all U.S. personnel deploying to the U.S. Southern 
Command area of responsibility are required to receive pre-deployment 
anti-terrorism (AT) awareness training. FOL Detachment Commanders are 
also required to conduct security in-briefs for personnel arriving at 
FOLs.
    Security costs are negligible because of host nation support and 
existing security provisions at FOL facilities. Physical security 
requirements will be integrated into plans for U.S. FOL infrastructure 
improvements.
                                housing
    Question. I note that the $122 million military construction cost 
estimate includes funding for visiting enlisted and officers quarters 
at Manta. What, if any, type of housing is being provided for visiting 
military personnel at the sites in Aruba and Curacao? What is the cost 
estimate? What type of housing (on base, off base; leased; single or 
multi family etc.) will be provided for the permanent U.S. personnel 
stationed at these sites? What is the cost estimate?
    Answer. Visiting military and interagency personnel to Aruba and 
Curacao are billeted in U.S. Air Force contracted hotels, most of which 
are within 15 minutes of their assigned airfields. The fiscal year 2000 
budget for housing temporary duty personnel is $2,700,000. Furthermore, 
a small number of permanent personnel will be assigned housing within 
the local community. Their housing costs are projected to be within the 
current housing allowance.
                          regional assistance
    Question. General Wilhelm, you note in your prepared remarks that 
the nations of the Caribbean and Latin America recognize that fighting 
the illegal drug trade in the region is a shared responsibility. 
Certainly, Southern Command's counter narcotics operations benefit not 
only the United States but also our neighbors in the Caribbean. Other 
than allowing the U.S. military to use existing facilities on Aruba, 
Curacao, and Ecuador, what types of assistance are we receiving from 
these nations to fight illegal drugs?
    Answer. Together with the Latin American, Caribbean, and European 
nations, we are pursuing a regional approach to combat illicit drug 
production, transportation, and the associated problems inherent with 
the narcotics trade.
    In addition to the Forward Operating Location agreements, the 
Dutch, British, and French contribute surface and air assets to 
regional counterdrug operations in the Caribbean. This multinational 
support provides greater operational flexibility and complements U.S. 
and Participating Nation military and law enforcement assets on a 
continuing basis with maritime air detection and monitoring, at sea 
refueling, and maritime patrol aircraft.
    The nations of the Caribbean and Latin America support the regional 
counterdrug effort by conducting both military and law enforcement 
counterdrug operations within their borders. They own and operate 
numerous ground based radars to conduct detection and tracking and they 
provide the military and law enforcement personnel who are interdicting 
drugs, eradicating illicit crops, and arresting drug traffickers inside 
their respective countries. In 1998, nations of the source and transit 
zone were responsible for 85 percent of worldwide cocaine seizures and 
the destruction of 3.1 million marijuana plants and over 38,500 
hectares of coca. Additionally, 18 nations in the hemisphere have 
entered into bilateral maritime agreements with the U.S. to help each 
nation plan and conduct multinational air and maritime counterdrug 
operations regardless of territorial seas or airspace.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin
              colombian revolutionary armed forces (farc)
    Question. Are Colombian drug-related guerrillas of the Colombian 
revolutionary Armed Forces (FARC) still operating in the jungle 
province of Darien in Panama and are you concerned that this group may 
threaten the operation of the Panama Canal?
    Answer. The FARC is reported to frequently cross the Colombian-
Panamanian border into the Darien province. Although the Panamanian 
Public Forces (PPF) are neither manned, trained, nor equipped to combat 
them, I do not believe the FARC, or any other paramilitary group, 
presents a threat to the safe and efficient operation of the Canal at 
this time.
                       panama unexploded ordnance
    Question. Under Article IV of the Panama Canal Treaty the United 
States promised to clean up unexploded ordnance in former U.S. military 
installations. However, I have heard press reports that we are instead 
planning to close certain areas rather than clearing the ordnance. Why 
can't the ordnance be cleared?
    Answer. There are former range areas, characterized by steep cliffs 
and triple canopy jungles, which are virtually impassable. Ordnance 
detection and clearing in these areas is not possible without 
subjecting personnel to extreme risk or resulting in significant 
environmental damage.
    We used the same techniques and technology to clear our ranges in 
Panama that we used to clear transferring rangelands in the United 
States. More aggressive clearing methods such as clear cutting and 
excavation have been rejected for the devastating effect they would 
have on the forests and the plant and animal species harbored in these 
canal watershed areas. The areas that cannot be cleared represent two 
percent of the total acreage returned to the Government of Panama under 
the Panama Canal Treaty.
    The framers of the treaty realized the range areas could not be 
completely cleared of all unexploded ordnance, which is why all parties 
agreed to include the ``practicability'' clause in the document. We 
have complied with our treaty obligations consistent with terrain 
accessibility, technology limitations, and environmental concerns.
       dod forward operating locations for counterdrug operations
    Question. I understand that the United States funds the Regional 
Counterdrug Training Academy. I would like to know more about this 
academy. Where is it located/Does it do the same type of training as 
the Army School of the Americas, at Fort Benning, Georgia? Is it 
training military or law enforcement officials? Does the Academy 
include human rights training? Does the Academy provide Counter-
insurgency training? (Note: The remainder of this question will be 
addressed by SOUTHCOM) The Washington Post reported in May 1998 that 
U.S. special operations forces were training Colombian military units 
under the Joint Combined Exchange training program. It seems very 
difficult to conduct counter-insurgency operations when guerrillas and 
drug traffickers are located in and around civilian populations. Are 
the special forces providing counter-insurgency training? How is human 
rights training integrated? Does this training conform with the Leahy 
Amendment, which prohibits training to units that engage in human 
rights violations?
    Answer. The Regional Counterdrug Training Academy (RCTA) is located 
at Naval Air Station, Meridian, Mississippi. The RCTA was established 
in 1992 and its mission is to provide no cost, ``street level'' case-
making, counterdrug skills to domestic law enforcement officials. The 
RCTA is congressionally directed and is funded through the Department 
of Defense. The Mississippi National Guard is responsible for 
management of the academy and the courses are taught by guest subject 
matter experts, with a ``cops training cops'' environment. The RCTA 
does not do the same type of training as the Army School of the 
Americas, at Fort Benning, Georgia. The academy's mission is to train 
domestic local law enforcement officials in counterdrug operations, 
versus the School of the America's mission to train foreign military 
forces in military operations. The RCTA curriculum includes some of the 
following general areas: Undercover Investigations, K-9 Training, Drug 
Labs, Operational Skills and Raid Planning. The academy has more than 
35 courses, all oriented toward domestic local law enforcement 
counterdrug operations. The curriculum for the academy is oriented 
toward domestic law enforcement officials and specifically does not 
cover training in human rights or counter-insurgency operations.
    One last point, the academy's original charter was limited to law 
enforcement officials in the states of Alabama, Louisiana, and 
Mississippi, but in 1996 was modified to include Georgia. The RCTA is 
now authorized to train domestic law enforcement officials outside the 
four-state region, as well as National Guard personnel involved in 
counterdrug support operations.
    Question. Is a forward operating location agreement still a 
possibility in Panama? If not, what additional location is Central 
America is DOD seeking?
    Answer. At this time, there are no plans to re-engage the 
Government of Panama on the topic of U.S. military access. DOD will 
comply fully with the provisions of the 1977 Panama Canal Treaty and 
will withdraw all military forces and turnover facilities in Panama by 
December 31, 1999. DOD and the State Department are coordinating 
efforts to identify a location for a FOL in Central America however no 
site has yet to be identified.

                         conclusion of hearings

    Senator Stevens. If there is nothing further, this will 
conclude the hearings for both the Defense Subcommittee and the 
Military Construction Subcommittee.
    [Whereupon, at 11:25 a.m., Wednesday, July 14, the hearings 
were concluded, and the subcommittees were recessed, to 
reconvene subject to the call of the Chair.]


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Apgar, Mahlon, IV, Assistant Secretary of the Army (Installations 
  and Environment), Department of the Army, Department of Defense71, 74
    Prepared statement...........................................    77
    Questions submitted to.......................................   103

Baillie, Frederick N., Executive Director of Resources, Planning, 
  and Performance, Defense Logistics Support Command, Defense 
  Logistics Agency, Defense Agencies, Department of Defense......    39
    Prepared statement...........................................    52
    Questions submitted to.......................................    65
Burns, Hon. Conrad, U.S. Senator from Montana:
    Opening statement............................................     1
    Prepared statement...........................................    72
    Questions submitted by....................30, 65, 66, 103, 128, 164
    Statement of.................................................   137

Carrato, Rear Adm. Thomas F., PHS, Chief Operating Officer, 
  Tricare Management Activity, Defense Agencies, Department of 
  Defense........................................................    39
    Questions submitted to.......................................    64
Craig, Hon. Larry, U.S. Senator from Idaho:
    Prepared statement...........................................    95
    Statement of.................................................    95

Demesme, Ruby B., Assistant Secretary of the Air Force, Manpower, 
  Reserve Affairs, Installations and Environment, Department of 
  the Air Force..................................................   113
    Prepared statement...........................................   114
    Questions submitted to.......................................   128
Durbin, Hon. Richard J., U.S. Senator from Illinois, questions 
  submitted by...................................................   170

Helmly, Brigadier General James R., Deputy Chief, Army Reserve, 
  Office Chief, Army Reserve, Department of the Army, Department 
  of Defense.....................................................    71
Higginbotham, Maj. Gen. Geoffrey B., USMC, Deputy Chief of Staff 
  for Installations and Logistics, Headquarters Marine Corps, 
  Department of the Navy, Department of Defense..................     1
Hunter, Major General Milton, Director of Military Programs, U.S. 
  Army Corps of Engineers, Department of the Army, Department of 
  Defense........................................................    71
Hutchison, Hon. Kay Bailey, U.S. Senator from Texas, questions 
  submitted by...................................................    31

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, statement of...   134

Koepp, Col. Richard R., Director, Installations and Logistics, 
  Office of Air Force Reserve, Department of the Air Force, 
  Department of Defense..........................................   113

Lupia, Maj. Gen. Eugene A., Headquarters, USAF, the Civil 
  Engineer, Deputy Chief of Staff, Installations and Logistics, 
  Department of the Air Force, Department of Defense.............   113
    Questions submitted to.......................................   131

McCalls, Thomas W.L., Deputy Assistant Secretary (Environment 
  Safety and Occupational Health), Department of the Air Force, 
  Department of De-
  fense..........................................................   113
McGinn, Gail H., Acting Deputy Assistant Secretary of Defense, 
  Defense Logistics Agency, Defense Agencies, Department of 
  Defense........................................................39, 42
    Prepared statement...........................................    44
    Questions submitted to.......................................    66
McKinley, Brig. Gen. Craig R., Director, Air National Guard, 
  Department of the Air Force, Department of Defense.............   113
Murray, Hon. Patty, U.S. Senator from Washington:
    Prepared statements..........................................17, 73
    Questions submitted by...........34, 63, 66, 73, 111, 130, 131, 167

Pirie, Robert B. Jr., Assistant Secretary of the Navy 
  (Installations and Environment), Department of the Navy, 
  Department of Defense..........................................  1, 3
    Prepared statement...........................................     4

Roberts, Hon. Pat, U.S. Senator from Kansas, statement of........   135

Slocombe, Hon. Walter B., Under Secretary of Defense (Policy), 
  Department of Defense........................................133, 147
    Prepared statement...........................................   149
Smith, Rear Adm. Louis M., Commander, Naval Facilities 
  Engineering Command, Department of the Navy, Department of 
  Defense........................................................     1
Squier, Brigadier General Michael J., Deputy Director, Army 
  National Guard, Department of the Army, Department of Defense..    71
Stevens, Hon. Ted, U.S. Senator from Alaska:
    Opening statement............................................   133
    Questions submitted by.........................33, 64, 65, 111, 130
    Statement of.................................................    18
Suggs, Rear Adm. Ralph E., USN, Deputy Commander in Chief, U.S. 
  Special Operations Command, Defense Agencies, Department of 
  Defense........................................................    39
    Prepared statement...........................................    40
    Questions submitted to.......................................    63

Totushek, Rear Adm. John B., Chief of Naval Reserve, Department 
  of the Navy, Department of Defense.............................     1

Van Antwerp, Major General Robert L., Jr., Assistant Chief of 
  Staff for Installation Management, Department of the Army, 
  Department of De-
  fense..........................................................    71

Wilhelm, Gen. Charles E., Commander in Chief, U.S. Southern 
  Command, U.S. Marine Corps, Department of Defense..............   133
    Prepared statement...........................................   143
    Statement of.................................................   139


                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF DEFENSE

                            Defense Agencies

                    u.s. special operations command

                      tricare management activity

                        defense logistics agency

               personnel support, families and education

                                                                   Page
Additional committee questions...................................    63
Bangor Elementary School.........................................    57
Department of Defense education activity (DoDEA) facility 
  requirement....................................................    43
Distribution space...............................................    62
DLA:
    Fiscal year 2000 Milcon program..............................    52
    Privatization................................................    62
DOD:
    Child care requirements......................................    58
    Fuel system replacement......................................    61
    School eligibility...........................................    61
Fiscal year 2000:
    Advanced appropriation.......................................    56
    Medical Milcon program.......................................    48
Incremental funding..............................................    55
Medical facility in South Korea..................................    59
Personnel support, families and education........................    39
Special Operations Command (SOCOM)...............................    40
Tricare response time............................................    60

                      Department of the Air Force

Additional committee questions...................................   128
Environmental cleanup............................................   122
Overseas military construction...................................   123
Military housing.................................................   125
One-plus-one.....................................................   125
Malmstrom Air Force Base.........................................   127

                         Department of the Army

Additional committee questions...................................   103
Family housing privatization.....................................97, 99
Pilot programs...................................................    97
Incremental funding..............................................    99
Barracks modernization...........................................   100
Milcon funding--chemical demilitarization........................   101
Competitive sourcing.............................................   102

                         Department of the Navy

Additional committee questions...................................    30
Barracks.........................................................    20
    Funding......................................................    22
Base realignment and closure [BRAC]..............................12, 26
Demolition program...............................................    27
Incremental funding..............................................19, 23
Infrastructure:
    Budget in Perspective, the...................................     5
    Efficiency Efforts...........................................    15
Marine Corps demolition program..................................    29
Milcon funding levels............................................    25
Navy budget overview.............................................     3
Puget sound projects.............................................    25
Quality of life..................................................    29
Retention and recruiting.........................................    22

                         Department of Defense
      Forward Operating Locations (FOL) for Counterdrug Operations

Additional committee questions...................................   164
Aruba and Curacao operations.....................................   156
AWACS............................................................   141
    Retractable over the horizon radar...........................   159
Deployments......................................................   152
    Reduction in.................................................   148
Emerging threats.................................................   135
Five-year projection.............................................   161
Food safety......................................................   136
Force protection.................................................   158
Forward operating locations (FOLs)..............136, 140, 147, 153, 157
    Concept......................................................   154
    Cost.........................................................   151
    Deployments, reduction in....................................   148
    Funding concerns.............................................   162
Infrastructure costs.............................................   134
Locations, consideration of alternate............................   156
Military construction funding....................................   133
Military facilities, new.........................................   133
North American Free Trade Agreement..............................   137
Post Panama theater architecture.................................   139
Reprogramming....................................................   138
Retention........................................................   155

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