[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
                  MILITARY CONSTRUCTION APPROPRIATIONS

                                FOR 2003

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS
                             SECOND SESSION
                                ________
           SUBCOMMITTEE ON MILITARY CONSTRUCTION APPROPRIATIONS

                     DAVID L. HOBSON, Ohio, Chairman

 JAMES T. WALSH, New York           JOHN W. OLVER, Massachusetts
 DAN MILLER, Florida                CHET EDWARDS, Texas
 ROBERT B. ADERHOLT, Alabama        SAM FARR, California
 KAY GRANGER, Texas                 ALLEN BOYD, Florida
 VIRGIL H. GOODE, Jr., Virginia     NORMAN D. DICKS, Washington
 JOE SKEEN, New Mexico
 DAVID VITTER, Louisiana            

NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full Committee, 
and Mr. Obey, as Ranking Minority Member of the Full Committee, are 
authorized to sit as Members of all Subcommittees. Valerie L. Baldwin, 
Brian L. Potts, and Mary C. Arnold, Subcommittee Staff
                                ________

                                 PART 5
                                                                   Page
 Overview.........................................................    1
 Army.............................................................   81
 Navy.............................................................  143
 Air Force........................................................    7
 Quality of Life in the Military--Spouses.........................  237
 Quality of Life in the Military--Senior Enlisted.................  283
 U.S. Pacific Command.............................................  363
 U.S. European Command............................................  435
 Housing Privatization............................................  487
 Unexploded Ordnance..............................................  597
 Testimony for the Record.........................................  715
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 79-779                     WASHINGTON : 2002


                       COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

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

                 James W. Dyer, Clerk and Staff Director



             MILITARY CONSTRUCTION APPROPRIATIONS FOR 2003

                              ----------                              

                                         Wednesday, April 17, 2002.

                         DEPARTMENT OF DEFENSE

                               WITNESSES

DOV ZAKHEIM, UNDER SECRETARY OF DEFENSE (COMPTROLLER)
RAYMOND DUBOIS, DEPUTY UNDER SECRETARY OF DEFENSE (INSTALLATIONS AND 
    ENVIRONMENT)

                       Statement of the Chairman

    Mr. Hobson [presiding]. Committee will come to order.
    The subcommittee meets this morning to complete its review 
of the President's budget request. I want to welcome our panel, 
the Under Secretary of Defense, Dr. Dov Zakheim, and the Deputy 
Under Secretary of Defense for Installations and Environment, 
Mr. Ray DuBois.
    We look forward to hearing from you. Without objection, 
both of your prepared statements will be entered into the 
record. And I, too, have some words that I would like to give 
for the record. And I hope all those little people writing 
notes in the back take this down.
    By now everyone knows that I was gravely disappointed by 
the 15 percent cut the military construction account suffered. 
This disappointment was even more of a blow given that the last 
year's statement by the administration that the fiscal year 
2002 budget was the initiation of an aggressive program to 
renew facilities and to break ``the current cycle of pay me now 
or pay me later much more.'' This budget request, however, 
contradicts that assertion and confirms that we are back to 
``business as usual.''
    Consider the impact of the reduction. Operational and 
training facilities are reduced $580 million, or 37 percent. 
Maintenance and production facilities are cut $635 million, or 
59 percent. Community facilities are reduced by $196 million, 
or 51 percent. R&D facilities are reduced by $151 million, or 
82 percent. And funding for troop housing, medical, utility, 
administration and supply facilities are reduced as well.
    Now consider the following information about the condition 
of DOD's inventory: The recapitalization rate goes from 83 
years to 150 years.
    I do not think we will all be around then, Doctor.
    The most recent installation rating report shows that 68 
percent of the Department's facilities are rated C-3, which 
means they have serious deficiencies, or C-4, which means the 
facilities cannot support mission requirements, and the average 
age of the facilities is 41 years.
    Now, John and I might think 41 years is not that old, but 
in the facilities world that is a little old.
    Frankly, these facts to me are nothing less than 
embarrassing. Even worse, in my opinion, they do a disservice 
to our troops.
    Despite these facts, Congress is told that Secretary 
Rumsfeld is committed to putting adequate resources into the 
military construction account to permit facilities to be 
brought up to standard. Of course, this commitment is not until 
around 2006 or 2007.
    Frankly, gentlemen, I, for one, am very skeptical.
    To justify the cuts, the administration puts the onus on 
the Congress for not authorizing the BRAC legislation until 
2005. To say the least, I find this argument less than 
compelling. What makes this year any different than last year? 
There was not any BRAC authority last year, yet there was a 
$1.0 billion increase in the military construction account. How 
is it that it is not prudent to level funds for military 
construction because there is not a BRAC authority until 2005?
    During your testimony, I hope you address this 
inconsistency.
    I have also heard that the administration ``passed the 
buck,'' in effect blaming the Service Components for presenting 
them with less than an adequate budget. Though I realize the 
Services contribute to the process, I am equally aware that the 
Service Secretaries answer to the Secretary of Defense. And I 
have a lot of respect for the secretary and his force of 
personality. If the Secretary wanted to maintain level funding, 
he could have issued a program budget decision, PBD, that 
ordered it done.
    The argument is further diluted given the fact that the 
Army presented $90 million of projects that were executable and 
important in carrying out their missions, and yet those same 
projects were deferred for no apparent reasons.
    These projects were appealed to the highest levels, yet the 
appeal fell on deaf ears. Maybe we have to get some hearing 
aids, I am not sure.
    Listening to these stories, frankly, is extremely 
frustrating to this chairman.
    It is only fair to mention the bright spots in the budget. 
Dormitories are being constructed at a rapid pace. Overseas 
construction funding is up, and I am glad to see that. I am 
especially pleased with the level of host nation funding 
committed by the Republic of Korea and want to commend the 
administration on successfully negotiating a 50 percent ROK 
contribution.
    I might say, I think a former appropriator staffer had a 
lot to do with that.
    Finally, housing privatization is moving forward 
aggressively. If all goes well, financial transactions will be 
in place by 2007 that will eventually result in eliminating 
inadequate housing. This is a goal of which we can all be 
proud.
    I am also pleased to note the sustainment, restoration and 
maintenance account increased by $500 million, but I note that 
while the amount is appropriate, I am frustrated that the 
majority of these funds will be spent in sustaining decrepit 
buildings. As I mentioned earlier in the statement, one could 
question whether sustaining 69 percent of the DOD's inventory 
at the C-3 or C-4 level is really a good investment for 
taxpayers.
    Mr. Comptroller, Mr. Secretary, you are in the middle of 
putting together the 2004 budget. It is my hope that you will 
reconsider the approach you took this year. Our troops and 
their families deserve the best, especially now that they are 
putting their lives on the line every day.
    I will now yield, after those words, to Mr. Olver for any 
opening statement he may have.
    Mr. Olver. Well, thank you, Mr. Chairman. After that 
statement, there is not an enormous amount to be said perhaps. 
Maybe it is all been said, but not everybody has said it.
    Thank you.
    Mr. Hobson. I think with the Defense Department, John, it 
is not inappropriate to just keep saying it over and over 
again. You just hope that someday it, kind of, pervades through 
there.
    Mr. Olver. I would not hold my breath, Mr. Chairman. 
[Laughter.]
    Anyway, Mr. DuBois and Dr. Zakheim, thank you very much for 
being here.
    You know, I thought last year's budget procedures were 
little unusual, but I have a feeling that the last thing I 
really understand was the 2002 regular budget that passed 
somewhere around the middle of October or thereabouts. From 
that point, it becomes very much more complex.
    We have had the regular MILCON requests transmitted by the 
President for this year. And like the chairman and me, he has 
given a very good description of what one gleans from that. I 
was not happy with the level of the requests in that instance, 
because it does not anywhere come close to meeting the level of 
needs or an evolution of the implementation of correcting those 
needs that the chairman and I have seen as we have traveled 
around. The needs out there are clearly much greater.
    We are still trying to get a handle on the comings and 
goings of the MILCON projects what were funded or that the 
Congress, at least, expected to be fully funded in the 2002 
DERF, the Defense Emergency Response Fund, which was the big 
bill that passed, of course, a few days after 9/11. Then, last 
year, of course, was an unusual year; there is no question. But 
the expenditures of those 2002 DERF funds is ongoing.
    Then we have a 2002 supplemental, which is currently before 
the committee, but it, to at least myself and I think the 
chairman incredibly, has no military construction projects 
within it at all.
    And then there is the President's amended budget request 
which came in a month or so ago for an additional $10 billion, 
which is not even technically before this subcommittee, but 
does include some $565 million of military construction, and I 
think that might be called the 2003 DERF, Defense Emergency 
Response Fund, for this year.
    Now, I think those who have been witnesses here before, 
sort of, know my predilection to ask for data in a spreadsheet 
format. I do have the feeling that in our role, which is both 
an appropriations role and an oversight role, that we need to 
understand the big picture, which can--I see the big picture by 
seeing all the details in a pattern and being able to see the 
pattern of that picture.
    And I must say, once we get past the 2002 regular budget, 
which passed, as I say, around the middle of October of last 
year, I see nothing that gives me a big picture of this. I do 
not know. I do not see this pattern, and it is a very different 
pattern, each one of these bills.
    It seems to me that you, I suspect, will tell us that less 
is more. I do not believe that is the case. We are spending an 
enormous amount of money, and the pricing of it or the 
following of it is not at all easy to do. Maybe it is difficult 
for you as well.
    Anyway, I will have questions how the construction needs 
have developed, how they have changed, how the adjustments have 
been made in response to the changing pattern. I think the 
committee needs to know how you chose to do some MILCON and in 
one or another of the vehicles or which you chose to do none 
in, others why you included clearly defined MILCON projects in 
submissions intended for other subcommittees. With the funds 
and the requests coming in at an unusual rate in various 
legislative vehicles, I may have to ask for another 
spreadsheet.
    Anyway, thank you Mr. Chairman.
    Mr. Hobson. Gentlemen.

                    Statement of Dr. Dov S. Zakheim

    Mr. Zakheim. Thanks very much, Mr. Chairman, Mr. Olver, 
members of the committee. I have a written statement. I also 
have a written oral statement. I will do my staff the favor by 
giving you most of the written oral statement. But I am going 
to every once in a while interrupt myself and try to address at 
least some of your concerns up front, because the basic premise 
that I am operating from is two-fold. First of all, we are not 
out to tell you that less is more. Less is not more, number 
one. Number two is I think we all share the same concern, it is 
a question of how you get from here to there.
    So, bearing that in mind, I am going to go through some of 
these points. But we start off in the same place and I think my 
colleague, Deputy Under Secretary Ray DuBois, shares this view 
with me.
    Again, thank you so much for giving me the opportunity to 
discuss the military construction component of President Bush's 
fiscal year 2003 DOD budget request. And, I will do my best--I 
am already interrupting myself, as you can see--to address some 
of your concerns about the 2002 supplemental as well.
    Going back to the basic request, we believe it supports the 
President's commitment to revitalize and transform our defense 
posture at large, forces, capabilities and infrastructure so 
that we can indeed counter the 21st-century threats decisively.
    And that is the longer-term aim. When we talk about the 
21st century, and we are talking in the year 2002, you are 
obviously talking longer term. We have to balance that longer-
term aim with immediate requirements, especially the war on 
terrorism, and the need to improve the quality of life for our 
military people and their families right now.
    As with all the appropriations accounts in the fiscal year 
2003 budget, in our military construction request we had to 
make hard choices because of other pressing requirements. We 
were not spared these hard choices just because our 
Department's budget topline increased substantially.
    Let me just walk you through again, although some of you 
have heard this before, what the $48 billion increase really 
came out to be.
    Mr. Hobson. Can we have abstracts?
    Mr. Zakheim. I will be happy to give it to you. I think you 
may have it, but we will get you copies of it.
    Mr. Hobson. We will enter that for the record.
    Mr. Zakheim. By all means.
    The enacted budget in fiscal year 2002 was $331.2 billion. 
If you add inflation to that, that is another $6.7 billion. 
Then there were must-pay bills: $14.1 billion worth of must-
pays which included the over-65 health care accrual, that was 
about $8.1 billion, the civilian retirement and health care 
accruals, another $3.3 billion, and the pay raises, $2.7 
billion.
    Then we have a category we call realistic costing: $7.4 
billion for realistic weapons costing. We have had a chronic 
habit of underpricing and basically low-balling programs up 
front, and then having to come back to the Congress and say, 
``Could you help us out?'' And it totally distorts the way we 
program our acquisitions.
    We put in more money for readiness. We put in more money 
for depot maintenance; that came to $7.4 billion.
    You then add to that the cost of the war. As you know, 
there are two parts to that. There is $9.4 billion that is 
programmatic--and I know you have some questions about the 
accounts, and I will do my best to answer those, Mr. Olver. 
Another $10 billion is essentially a conservative estimate of 
what maintaining the current level of effort in Afghanistan 
would involve. As Secretary Rumsfeld has said, that would not 
carry us through all of next year.
    If you add all those up, you actually have more than used 
up the $48 billion. The only way we were able to do more with 
that, to get about $10 billion for requirements, was by making 
program adjustments of $9.3 billion. When you make those 
adjustments, which we did, you netted out at $9.8 billion for 
new money for new requirements. So I think it is very important 
to understand that if you are not talking about $48 billion, 
but you are talking about just under $10 billion, then you are 
making choices in a very constrained environment.
    These changes did allow us to increase the 2003 military 
construction funding above our previously planned level--what 
we had previously planned, and I underline that. We believe 
that the budget does support the facilities and the quality-of-
life requirement for our armed forces.
    I will walk you very quickly through an overview, with 
which I know already just from your remarks you are quite 
familiar, but let me walk you through it anyway, with your 
indulgence.
    The request for military construction and family housing 
totals $9 billion, funds over 300 construction projects at more 
than 185 locations. It will enhance our sustainment and 
modernization of existing facilities. It will enable us to 
replace facilities that are no longer economical to repair. It 
will address environmental compliance requirements and will 
continue caretaker efforts at closed bases. It will fund new 
construction that we addressed as critical, most notably to 
support new weapons systems coming into the inventory.
    I have to emphasize that the $9 billion total is the second 
largest requirement in the past six years. It was exceeded only 
by last year's unusually high level; 2002 was the exception 
over the past six years. Although our request is $1 billion 
lower than last year's 2002 request, it really does not in any 
way imply or mean to imply an easing of our commitment to 
revitalizing our infrastructure. We added $1.6 billion to the 
2003 funding that had been anticipated in the budget request 
for 2002 originally. The budget clearly supports our critical 
requirements and missions.
    The Secretary of Defense's strong commitment to facilities 
revitalization is demonstrated not only in our carefully 
crafted military construction and family housing program, but 
is also reflected in our funding for sustainment. That funding 
has increased, as you mentioned Mr. Olver, by not a small 
amount. So too has funding for modernization--the sustainment 
restoration modernization, with the abbreviation SRM, which 
appears in the operations and maintenance title and not in 
military construction title. Funding for that category totaled 
$6.2 billion. As you said, it is a half a billion dollar 
increase over last year's request. It includes $5.6 billion for 
sustainment alone to keep our facilities in good shape.
    We had to make difficult choices, because of the demands 
for the war on terrorism, especially within the operations and 
maintenance accounts, which in many ways bear the brunt of that 
war on terrorism. Nevertheless, we were able to fund 93 percent 
of the Services' facilities maintenance requirements. That 
represents an increase over the 89 percent provided in last 
year's budget. It is also significantly higher than what was 
budgeted in the previous few years, such as fiscal year 2000, 
when we met only 78 percent of our facilities maintenance 
requirements.
    We have $225 million in this budget over and above last 
year's budget for military family housing construction 
privatization. We are on track to meet the Secretary of 
Defense's goal of ensuring adequate housing for all our 
military personnel and their families by 2007, which, as you 
noted, Mr. Chairman, is three years earlier than was originally 
planned.
    We are also achieving greater benefit from our housing 
funds, because by joining forces with the private sector--and 
again, I know this is a major concern to the subcommittee--we 
will be leveraging our investments to provide quality housing.
    In fiscal year 2003 we are planning to obtain about 35,000 
privatized housing units, which is nearly twice the number of 
privatized units obtained to date. Based on the privatization 
projects that have been awarded so far, we estimate the DOD 
investment was leveraged at about eight to one, which is pretty 
good.
    Our 2003 funding request for privatization projects is $195 
million to provide about 24,000 housing units. If you apply 
that eight-to-one ratio or leverage rate with our $195 million 
investment, we should be able to obtain $1.5 billion worth of 
quality privatized housing. In other words, we are stretching 
our money as far as we can. This leveraged return must be 
factored into the overall value of our military construction 
budget.
    It is also important to note that the $9 billion proposal 
for military construction and family housing does not include 
$565 million for military construction requirements as part of 
the president's 2003 request in the Defense Emergency Response 
Fund.
    Mr. Olver, I will, if you like, go into more detail about 
why, it appears there and not in the basic budget.
    This added funding would enhance DOD efforts to protect 
against terrorism attacks on DOD installations around the 
world.
    Finally, a critical component of our plan is the 
congressionally approved 2005 base realignment and closure 
round, the BRAC round. We hope this round will achieve the 
needed 20 to 25 percent reduction in DOD infrastructure. With a 
successful BRAC round, our planned funding through fiscal year 
2007 will be sufficient to achieve by that date Secretary 
Rumsfeld's strong goals for facilities recapitalization.
    My notes do not tell me to tell you that there are any 
delays due to BRAC.
    So in conclusion, Mr. Chairman, I want to thank you and Mr. 
Olver and the members of the subcommittee again for the 
opportunity to be back here to describe our plans to sustain 
and revitalize DOD facilities.
    As I noted at the outset of my remarks, this budget will 
enhance the quality of life of the service members and their 
families. It will strongly support current requirements and 
missions and will enable the needed long-term streamlining and 
recapitalization of DOD facilities.
    I urge your approval of our request. The Department and I 
are ready to provide you whatever details you may need to make 
these important decisions.
    Again, Mr. Chairman, Mr. Olver, members of the 
subcommittee, I really do recognize your concerns. I do not 
assert, and would not assert, that less is more. We are serious 
in trying to meet these concerns because we do not question 
their validity. The issue for us, as it always is, is getting 
from here to there, and we are doing the best we can. Thank 
you.
    [The prepared statement of Dr. Dov S. Zakheim follows:]


    
    Mr. Hobson. Thank you, Doctor.
    Ray?

                Statement of Mr. Raymond F. DuBois, Jr.

    Mr. DuBois. Chairman, Mr. Olver, distinguished members of 
the subcommittee, as many of you know, I visited some 52 
installations since I have taken this job, 18 of which had been 
with you, Mr. Chairman and Mr. Olver, and some of the members 
here. Of course, Fort Hood in Texas and Tyndall Air Force Base 
in Florida.
    Mr. Hobson. Oh, you might remark that the Tyndall people 
just arrived in the room. They are all here. They showed up. 
[Laughter.]
    Mr. DuBois. I was down there with the President some months 
ago. Mr. Farr, I am going to visit Fort Worth at the end of 
May. That is how my schedule looks.
    Mr. Olver. What language are you learning?
    Mr. DuBois. The language?
    Mr. Olver. For the DLI visit.
    Mr. DuBois. Oh, I see.
    Mr. Hobson. You could visit Wright-Patterson, too.
    Mr. DuBois. We will figure it in.
    But I think it is important to recognize that, as Secretary 
Zakheim has indicated, that no matter what year we are talking 
about, no matter what kind of delta year over year, whether it 
is in MILCON or any one of the five major accounts, competing 
priorities did result--different competing priorities did 
result from September 11.
    But it is true, as Dr. Zakheim has said, that quality of 
life remains a very high priority for the Secretary of Defense, 
as well as the President, especially in terms of housing and in 
terms of basic allowance for housing and the compensation 
factor, as well as, of course, our reliance upon the private 
sector with respect to housing privatization and utility 
privatization.
    As Dr. Zakheim said, we have increased the MILCON funding 
for housing in fiscal year 2003 by over $222 million, but it is 
not just for housing for our families; it is housing for our 
unaccompanied or single troops. And in fiscal year 2002 we 
constructed and revitalized about 16,000 barrack spaces, and 
this year, in 2003, we plan to construct and revitalize almost 
14,000 spaces.
    Now, I am not as facile with numbers as the Defense 
Comptroller to my left, however, I think it is important to 
recognize that with respect to sustainment, restoration and 
modernization, when one considers the ingredients to--resources 
invested in our infrastructure, that is to say, new footprint 
construction, which is MILCON, restoration and modernization, 
which is MILCON, but there is also O&M funding for restoration 
and modernization, O&M-like funding for sustainment, and there 
is family housing construction improvement and then there is 
family housing maintenance.
    Those are the six basic ingredients that focus on 
infrastructure and quality of life. I did not talk about BAH, 
did not talk about the improvement in targeted salary 
increases. I am talking about addressing just issues pertaining 
to infrastructure. Year over year, if you include the Defense 
Agencies, you really only have a reduction of some 3 percent if 
you calculate it in that basket of ingredients, if you will.
    Now, it is true that the recap rate--that is to say, the 
metric that we use at the DOD level--does go up year over year. 
The current rate--fiscal year 2002 rate--we achieve 
approximately 101-year recap rate. The current rates, given the 
fiscal year 2003 budget, does go up to 150, but, as Dr. Zakheim 
said, the FYDP does require that it reduces to 67 by 2007.
    I also want to point out, because there has been some 
question as to the calculation or the division between 
restoration and modernization and sustainment, the majority of 
MILCON projects--in fact, over 60 percent--are for restoration 
and modernization of mission-critical requirements, not for 
sustainment, although the sustainment funding rises and has 
risen and continues to rise this year and in future years.
    I think it is important to note in my opening remarks 
here--make a reference to BRAC. The Secretary, in working with 
you all in Congress, is appreciative of the fact that we do 
have a BRAC in 2005. It is arguably the most important 
transformational initiative in terms of infrastructure that the 
Secretary will manage here over the next several years.
    In that regard, and I think it is important to reiterate 
what Dr. Zakheim said, that we have not deferred any MILCON or 
other O&M installations and environment-type projects in 
anticipation of BRAC. The fiscal year 2003 budget request 
reflects the priorities identified by the Service Secretaries 
and the Service Chiefs to support their critical missions, as 
they are currently configured.
    Now, it is true that the Secretary will kick off the so-
called BRAC process--the BRAC analytical process here in the 
next couple of weeks, and I look forward to briefing you all in 
private or in open hearing about how that BRAC process will be 
kicked off.
    Mr. Hobson. Boy, I do not look forward to that.
    Mr. DuBois. You do not want to go over that?
    Mr. Hobson. No, I said I do not look forward to it. We are 
going to have to do it, but I----
    Mr. DuBois. Painful, though it is, it is a necessary fact 
of life.
    Mr. Hobson. Like a policy; that is the part I do not like.
    Mr. DuBois. The last point, and it has been purported in 
the press over the last couple of weeks, that the Secretary is 
considering some proposals with respect to encroachment which 
is, as you know, an issue that is increasingly important to the 
Department, especially in terms of our test and training 
ranges. We anticipate submitting to the Congress, with our 
fiscal year 2003 defense authorization language, some requests 
pertaining to clarifications of current statutes. And when that 
is transmitted to Congress--I believe it will be done either by 
the end of this week, early next week--I look forward to 
discussing the details with you and your staff.
    So, again, in closing, I appreciate this opportunity. I 
know it is a hearing that we should have had perhaps four or 
five weeks ago----
    Mr. Hobson. Was not our fault.
    Mr. DuBois [continuing]. But it is an important hearing, 
nonetheless. And Dr. Zakheim and I look forward to your 
questions. Thank you.
    [The prepared statement of Raymond F. DuBois, Jr. follows:]


    
    Mr. Hobson. You heard what I said? It was not our fault.
    Mr. DuBois. I heard what you said.
    Mr. Hobson. Okay.
    Mr. DuBois. Was not my fault either.
    Mr. Hobson. No, I know. Notice Dov is not saying anything. 
[Laughter.]
    Mr. Zakheim. Give me a break, Mr. Chairman.
    Mr. Hobson. No, I am not giving you a break. I have got you 
where I want you for a moment.
    Mr. Zakheim. You can even kick me under the table.
    Mr. Hobson. Let me mention a couple of things and then we 
will get to the questions.
    First of all, none of you mentioned the fact that the 
footprint in Europe and the footprint in Korea is coming down 
and it is going to contribute to the savings in here. We all 
talk about the BRAC here, but what is happening in Europe--and 
you do not have to respond to that, but I think we all agree 
that that is something that ought to be put in here.
    A couple of quick things. On page three of your written 
testimony there are a couple of things that--under the medical 
projects, and I think one of the places you all need to work at 
is the funding on medical and how we arrive at this stuff. 
Because, first of all, it really ticks me off that we are 
paying a $10 million claim at Elmendorf, not--it did not happen 
on your watch, but, you know, those people are still there who 
made these mistakes. I do not know that we have ever gotten 
after this architect on this deal and we are paying $10 
million.
    Secondly, you guys talk--tell me how many beds are in the--
maybe you do not know this; I do--how many beds are in the 
hospital at Wainwright and how much money you are spending on a 
facility that some people felt could have been done a better 
way.
    But I understand, you know, there is some politics in this, 
but frankly, if it is a 30- or 40-bed hospital, and it is going 
to be $215 million, that to me is a lot of money, especially 
when you are doing one in Spangdahlem for $40 million, which is 
a whole hospital, and this one is $215 million. I do not know 
whether it is an apples-to-apples or not. But this whole 
hospital thing, the more I look at it, frightens me the way we 
go about it. And I hope you all are looking at that.
    Mr. Zakheim. Let me start, and Ray will correct me; how is 
that?
    You know, Mr. Chairman, this is not the first time you have 
raised this with me and we have discussed it. On these two 
projects and, in fact, on one or two others that we have 
discussed, I told you I would look into them. I did. Obviously 
these are projects that I inherited, as you acknowledge, and so 
then the question becomes what do we do at this stage.
    I have felt, and this was after some consultation with you 
and getting your advice, that it was terribly important to send 
the signal to people that we would not interrupt projects in 
the middle, which would create a total waste of money, but that 
we would scrutinize what was done very, very carefully.
    I have made it very clear to the people in question that 
are on top of these projects that you are deeply concerned 
about, that you and I have discussed, and that my people in the 
Comptroller's office are watching them carefully, and that it 
is not going to be a free ride.
    But to interrupt things in the middle I do not think does 
the taxpayer any good either.
    Mr. Hobson. But it comes back that we have got truck 
contracts where we are paying, because the contracts are not 
drawn correctly, we have got--and this is not in this 
committee--and we have got these kinds of contracts where we 
did not protect ourselves very well. And I am worried about how 
we do these contracts and why we spend so much money on these 
kinds of facilities.
    But, you know, we are just sending messages here that this 
kind of stuff has got to stop. This is just--I mean, when we 
talk about we do not have money to fund this or we do not have 
money to fund that, then I see $10 million going here at 
Elmendorf, that $10 million could have gone for a quality-of-
life child care center someplace or another hospital someplace 
that we did not have to do.
    So that is my point there. And I do not want to beat this 
to them. But I am worried about two other things that I want to 
mention to you.
    One, I am very concerned--and you do not have to answer 
this right now--this privatization of utilities is a very 
ambitious program, which is probably not going to be 
executable. But I am worried that because it is not going to be 
executable in the way everybody thought they were in the 
beginning that we are going to make some dumb deals. And I am 
going to have some people looking at every contract we have 
made on utilities and every proposed one, because I do not want 
to make any dumb deals.
    Thirdly, in Korea we have come a long way since we have 
been there. The speaker has been there and agrees with much of 
the stuff that we have talked about. The e-mail thing is not 
resolved yet, and if there is any problem I want to get that 
done under Schwartz's watch, and we do not have much time on 
that. General Schwartz has been a great guy there, done a great 
job.
    But the separate rations thing, I know everybody wants to 
avoid that, but if you want to avoid that then figure out a way 
that young people do not lose and that you do not have to 
interview five people to get one when they go on a PCS change 
to Korea for a year and they go to Kosovo and Bosnia on a--what 
is it?--six months, and it is not a PCS change, and their 
families do not lose. It is not fair to send a young person to 
Korea and they lose. It is just not right.
    And we need to figure out how to do that. With all the 
money we spend, to make 37,000 people in Korea second-class 
citizens is not right. And I am going to harp about it in this 
committee, I am going to harp about it--I am going to continue 
to harp about it in the big committee until we get this done.
    But I would like as much of this stuff--we are going to 
have a great general take over General Schwartz's place, I have 
met him, Ray has met him--but General Schwartz has been really 
up tempo on all this stuff and I want to make sure we get as 
much of it done while he is there.
    You do not have to respond to any of that right now if you 
do not want to, but I want to get it in the record.
    Mr. DuBois. I can just quickly, on the overseas basing 
issue, you are quite right, the Land Partnership Plan in Korea 
reduces, if we are successful, if the Koreans meet their 
obligations.
    Mr. Hobson. Well, the Koreans were sitting here and I told 
them I do not want anymore--they are not here now, but they 
were sitting right over here, and I said, ``You know, we are 
not doing our part this time until you do your stuff.''
    Mr. DuBois. There is definitely built into the contract--
small ``c''--obligations and commitments which, when not met, 
slow the process down. They have an incentive. We will reduce. 
We will close 16 bases; we will reduce three of the bases to 
one, to I think an end state of some 21 or 22 installations in 
the Korean Peninsula.
    With respect to Europe, as you know, we are reducing 13 
bases in the Hanau area to one. But the more important thing 
is, the Secretary of Defense himself, and the Deputy following 
up on the Secretary's initiative, is reviewing the integration 
and rationalization of all overseas basing strategies. Each of 
the CINCs have now submitted interim reports. I am about to 
sign out to the Congress an interim report in this regard 
pursuant to your request that we get something to you in April.
    On the hospital construction issue, an issue that you 
raised with me early in my career in this job, it turned out 
that there was a disconnect between the Office of the Assistant 
Secretary of Defense for Health Affairs, the Office of the 
Deputy Under Secretary for Installations and Environment and 
the Comptroller. We put together a management team--a cross-
service and interdisciplinary management team to address this 
issue. So Dov and I and Bill Winkenwerder all have this under 
focus.
    Utility privatization: You are absolutely right, the 
original plan, as promoted and promulgated by John Hamre when 
he was Deputy Secretary, is unexecutable. We have reviewed it. 
I have hired an individual SES to specifically manage the 
utility privatization initiative.
    Mr. Hobson. Not a former Enron guy.
    Mr. DuBois. No, sir. Actually the former chief of engineers 
for the Naval Facilities Engineering Command. But he has--and 
I, and the Installation Policy Board, as well as the Assistant 
Service Secretaries for I&E, have come to the conclusion that 
it was unexecutable, and that while we had some 798 RFPs on the 
street, we should not force them into a box that said 
``complete by date certain,'' which was last year.
    The important thing to recognize is that we have to put out 
a realistic date to complete at least a goal, and it is now 
looking like--and this is an informal comment, insofar as that 
I have not gone to Pete Aldridge to get formal approval of 
this, but it looks like the end of 2004 may be a realistic 
target to complete, or at least to award contracts. As we both 
know, awarding contracts, whether it is housing privatization 
or utilities privatization, does not indicate completion dates.
    The fourth area that you have raised, Korea, when you and I 
were both out there, clearly the separate rations issue--and as 
a former Army enlisted man, I can tell I am very sympathetic to 
this issue, although it is not in my portfolio. But the issue 
of Internet access for the troops is something they do have 
influence, involvement over. I talked to Tom Schwartz about it. 
It is still high on the list to be accomplished.
    Mr. Zakheim. I would like to just add a couple of things, 
Mr. Chairman. First, you mentioned in passing that we had 
achieved a new host nation support arrangement with Korea, and 
you said it was a former member of your staff, but I will name 
her, my deputy, Tina Jonas, who did a first-rate job in working 
for me to make this happen. I had told her, ``You get me a deal 
where it is 50/50,'' which is the best deal for an American 
taxpayer, and she delivered that. I think that this signals a 
degree of commitment on the part of the Republic of Korea that 
will also translate into what Ray was talking about, and your 
concerns about implementing the plan.
    One other point, and I think it is very important to 
emphasize this, Ray mentioned that our staffs are talking to 
one another. I do not know how the previous holders of both our 
respective offices worked on these matters, but as I think you 
know, Ray and I worked very, very closely on these issues.
    Mr. Hobson. I know.
    Mr. Zakheim. We are in constant--literally daily 
consultation. We are not going to let things fall through the 
cracks this time.
    Mr. DuBois. I moved my office from one side of the building 
to the other to be closer to him.
    Mr. Zakheim. Yes, so he could ask me for more money.
    Mr. Hobson. Let me mention one other thing, and then I am 
going to stop. At the Military Installation and Facilities 
Subcommittee hearing regarding the defense Authorization Act, 
you stated that the Secretary was committed to adequately 
funding the military construction budget, though this 
commitment will not kick in until the fiscal year 2006 or 2007. 
Of course, as I mentioned in my statement, we have heard this 
before, and I want to get this on the record.
    What makes this promise different from the others we have 
heard in the past? What are the out-year projects for the total 
MILCON budget? And frankly, are you guys committed to pressing 
the Service Components to maintain this level of funding? And 
what are you going to do if they do not present adequate 
budgets to OSD for consideration?
    Our problem is we keep getting these commitments year after 
year. We have been here--you know, you have been here before, 
we have been here before, we are here long. We--everybody 
always wants to press things in the out-years, and the out-year 
becomes the real year, and it is--well, we have got to continue 
it out again, and we never get the out-year.
    Mr. Zakheim. There is a difference. And the difference is 
that when Mr. Rumsfeld came in, he said facilities 
recapitalization was a priority and we bumped it up in the 
budget amendment significantly. In fact, a number of your 
concerns reflect the fact that we are down from the 2002 level, 
and you mean the amended budget level, and then what you all 
did with that.
    So you have a record of someone coming in and immediately 
putting money in. Had it not been for 9/11, I would venture 
that the way that the services looked at priorities would have 
been somewhat different. I mean, we clearly have a different 
set of circumstances.
    The fact is that the Secretary up front has said, ``I am 
committed to recapitalization, to put money in to bring the 
recap rate down.'' We know it is gone up again.
    Mr. Hobson. But what are you going to do if they do not 
present adequate budgets to you guys for consideration?
    Mr. Zakheim. We will review those carefully.
    I am constrained from discussing the actual give and take 
of budget negotiations, as you well know. But I think I can say 
generically, and Ray DuBois will confirm this, that there were 
cases even this year--even in this year where we did not come 
in as high as perhaps we would have liked, and certainly as you 
would have liked, that we put money back in that we felt was 
appropriate for several projects.
    Mr. Hobson. Are you stating you are going to hopefully have 
to do that again if they do not approve right?
    Mr. Zakheim. Well, I hope I do not have to. And I hope that 
they will do more. All I am saying is, we are committed to 
carrying out the Secretary's promise. He made a promise. He 
keeps them.
    Ray, do you want to add to that?
    Mr. DuBois. I can only say that, as the Deputy Under 
Secretary for Installations and Environment, and not the Deputy 
Under Secretary for tanks, ships and airplanes, this is the 
preeminent responsibility and obligation that I have, that 
along with Maury McCurren and Nelson Gibbs and A.T. Johnson and 
the three Services.
    The Congress by itself can help me a great deal----
    Mr. Hobson. We are trying.
    Mr. DuBois [continuing]. By making these points as you do 
in these hearings and in your private conversations with the 
Service Secretaries and the Service Chiefs.
    Mr. Hobson. Well, I am going to move on to John. But, John, 
before we came down here I pressed these people pretty hard on 
chem demil too. And we are not done with that yet, but we are 
going to have some meetings about that.
    And I am going to have John sit in with me on some of that 
too.
    John.

                    Defense Emergency Response Fund

    Mr. Olver. Well, thank you. Thanks again, Mr. Chairman.
    It is hard to know whether one should be talking about the 
big picture or try to get hold of a few details. And I prefer 
to try to see the whole.
    As I mentioned in my opening remarks, I am really worried 
and a good deal skeptical about how all of the various requests 
come together in a coordinated program, because we have--there 
are three that are before us now: We have the regular request--
the 2003 regular request that has been submitted; we have new 
supplemental for 2002 which is before us--before the Congress; 
we also have a submitted DERF for 2003. Those come on top of 
the 2002 DERF which was passed, but is in implementation.
    I hear from staff that OMB really had no idea what was in 
the DERF 2002 funds, how those were being spent. Although, I do 
not know that anybody there would admit that.
    I have also heard that the actual spending for this account 
is still changing the appropriation from back right around 
seven months ago, right after 9/11, the first one that made it 
through.
    I even heard that what the Services were starting out on 
one course and instances got virtually to the point of 
obligation of funds, which takes a certain amount of time and a 
certain thinking process and prioritization process, when it 
was pulled back and the money was stopped and used for other 
things.
    Can you tell me anything about the process that has been 
going on with that DERF 2002 fund? I mean, basically, Dr. 
Zakheim, you are the one that we have to--you are the one guy 
that we need to be able to count on to have a big picture of 
how these things are drawn up and how they fit together.
    Mr. Zakheim. Absolutely. First, in terms of OMB oversight, 
apart from the fact that right now we are having regular 
meetings with the senior OMB personnel to watch exactly this 
issue, we provide a monthly report to OMB that indicates what 
has been expended up to that point. And I would note that we 
are actually, relative to, I believe, every other government 
agency that receives money in the supplemental, we are 
expending at a higher rate, and closest to the predicted rate 
that we had laid out.
    So they do have oversight. They--any changes such as the 
ones you noted, and some of them are quite well known, for 
instance, in the case of Pakistan, we gave back $188 million to 
OMB which transferred it to State, so that they could transfer 
money to the government of Pakistan. Obviously, I just told 
you, we transferred it back to OMB. Those kinds of changes are 
not made by some kind of sleight of hand. That is number one.
    Number two, in terms of the relationship between the 2003 
DERF, the response fund, where there is $565, roughly, million 
worth of military construction, and obvious question, well, why 
isn't it in the military construction account?
    The reason is the same reason that procurement is not in 
the procurement account, and R&D is not in the R&D accounts, 
and that is we put this request together at the very end of the 
budget process. It was--there was literally no time to peel 
away each programmatic onion and place it in the right 
appropriations account category. And therefore, it all showed 
up in the operations and maintenance category. It does not have 
to be there, but that was the best we could do in the time 
available. And so that is why that is there, in fact.
    The only part of the request of the 2003 DERF that indeed 
belongs in O&M is the part of the $10 billion for the 
Afghanistan contingency. The rest of it is programmatic.
    Mr. Hobson. What about the $100 million? I mean, that is 
what he has--the Army was hit especially hard by the recall of 
funds, because they had $100 million in AT/FP projects in the 
DERF ready to execute. They did not get the $100 million, as I 
understand it.
    Mr. Olver. This was ready to be obligated, I assume, and 
that was pulled back at that time.
    Mr. Zakheim. I will get you an answer for the record on 
that. My understanding is that any monies that were made 
available--at least this is how it was represented to me--when 
we made any changes at all, were monies that had not yet and 
were not imminent immediately executable and, therefore, were 
available to be moved around.
    We are not taking--to my knowledge, and I will check it for 
the record, we have not pulled money back from projects to be 
executed.
    [The information follows:]

    A total of $113.5 million of Defense Emergency Response 
Fund (DERF) was withdrawn from the Army's force protection 
program to finance higher priority shortfalls in the military 
personnel accounts. The Army has taken steps to work around the 
deferment of some of their lower priority force protection 
efforts, which will be financed at a later date from funds 
requested in the FY2003 President's budget.

            Sustainment, Restoration and Modernization (SRM)

    Mr. Olver. I am sort of trying to interconnect what you are 
saying what we are talking about here with what Mr. DuBois was 
saying about SRM. I guess I do understand that SRM, 
sustainment, restoration and modernization, can be found in 
either of the two budgets, either in O&M or in MILCON. I guess 
when it gets to the point when restoration is no longer 
possible, then it becomes a replacement and that at least is 
findable where we are.
    I do not know what status those things are in, but it leads 
me to ask a slightly different question, which is the Army. The 
Army has instituted a regional approach to the management of 
maintenance funds, because there has been a feeling, I think, 
that installations maintenance has always taken a back seat 
when base commanders controlled it directly.
    And it seems to me that that process--is that part of what 
is going on here? Although normally you would expect that 
process to be pulling things away for what is an immediate 
priority, not the sort of thing that they would be moving on a 
set of immediate priorities as in the pullback that has 
occurred there. It sounds almost as if these are contradictory 
approaches.
    And I guess I am curious whether you think that there is a 
lesson. Is this being used as a test to see whether this works, 
and how is it going to be followed and then moved to other of 
the Services?
    Mr. DuBois. The Secretary of the Army's decision to create 
a centralized installation management system, wherein an 
installation commander goes to a regional commander, goes to 
the Assistant Secretary of the Army for Installations and 
Environment and the Assistant Chief of Staff for Installation 
Management, is, in my estimation, a good move.
    Now, that is not going to be implemented until the 1st of 
October; i.e., the first day of the next fiscal year. Like 
anything in a large organization, there is a certain 
bureaucratic inertia and a certain amount of end-game play.
    Mr. Olver. It is not implemented, so there is no connection 
to this. In fact, I would have seen an almost opposite----
    Mr. DuBois. Yes, sir.
    Mr. Olver [continuing]. Relationship.
    Mr. DuBois. But I will say this, the other two military 
departments are watching it carefully. The Navy is, sort of, in 
a halfway position. They have regional installation managers, 
but then the responsibility goes to major commanders. The Air 
Force is strictly a major command-oriented installation 
management construct. The Army has moved, in my view, in the 
right direction.
    How will it end up operating? In the final analysis, the 
true requisite is going to be, will the SR&M dollars, 
especially those that are in the O&M accounts, be more properly 
managed--or to put it in a blunt, pejorative way--not be stolen 
from? That will be the true metric in the next fiscal year. And 
trust me, I will watch it very carefully.
    Mr. Hobson. So are we.
    Mr. Olver. Okay, I will pass on and come back later.
    Mr. Hobson. Okay. Chet Edwards?
    Mr. Edwards. If we were debating on getting pensions, I 
would not have any points or questions today, but I did not 
hesitate to criticize the previous administration on that 
subject and good intentions for quality-of-life issues were far 
higher than their actual dollars committed, and I do not want 
to hesitate from raising those criticisms with this or any 
other administration as well.
    I would like to make four points and then a couple of 
questions.
    Point number one is, you both have a very difficult job of 
trying to make a $1.5 billion cut not look like a cut. You both 
do it extremely well; as well as could be done. [Laughter.]
    I also know you are both personally committed to trying to 
help improve the quality of life, but I would like to make the 
not-so-profound comment that a cut is a cut is a cut.
    Mr. Hobson. If it quacks, it is a duck, right?
    Mr. Edwards. If it still quacks, it is still a duck.
    Point number two: Secretary DuBois, I appreciate personally 
your credible commitment to going out and visiting 
installations, looking for creative ideas for quality-of-life 
improvements and our military will benefit from that purposeful 
commitment. And I mean that deeply.
    I also appreciate your honest comment that we are looking 
at a situation of competing priorities here. We all understand 
and respect the situation dealing with 9/11 and the war against 
terrorism. No one would question that priority. I will very 
briefly say, I find it stunning, while we are talking today 
about 60 percent of military families living in housing that is 
so inadequate it does not even meet basic, low DOD standards, 
that tomorrow on the floor of this House we will be debating 
the extension of a permanent tax bill that in the second 10 
years would take--if you count interest on the debt--$7 
trillion out of the federal revenues. I will leave the debate 
on that issue to tomorrow on the floor.
    But when we talk about competing interest, I think, in 
honesty, that is one of those competing interests, not just the 
war on terrorism, which costs much less than that.
    The third point: Secretary Zakheim, you say in your 
testimony that this is the second largest budget in six years. 
Let's also be correct in adding to that statement that if you 
account for inflation, this is the lowest MILCON budget in 10 
years; in fact, 50 percent below the Reagan years, 15 to 20 
percent below the previous administration's spending levels, 
and 10 to 15 percent below the last couple of years, if you 
account for inflation.
    And based on your previous testimony, $48 billion really is 
not all that much of an increase for defense if you consider 
inflation, we cannot ignore that same point once we start 
debating the impact of budget. So we all know the numbers, and 
inflation is a real factor, a real cost. And so, what we are 
really talking about here is a 20 percent-plus cut in MILCON 
funding.

                         HOUSING PRIVATIZATION

    My next point: Privatization, which I have supported 
strongly for five or six years now, even against some in both 
parties not the present members here, but previous members of 
this committee opposed it, and I believe in it. But I want to 
make it clear that at least for one person, I do not think 
privatization was ever intended to be a rationale for cutting 
$1.5 billion from the military construction budget. Rather, it 
was intended to recognize the fact that we have 60 percent of 
our military families living in substandard housing, and we 
ought to significantly improve that. And I am disappointed that 
privatization is now being used as rationale to cut funding 
rather than do what we all intended on this committee, which 
was to increase dramatically our commitment to quality-of-life 
improvements for our military personnel.
    The question that I would like to ask you, Secretary 
Zakheim, is when you say, and I quote, this budget clearly 
supports our critical requirements and missions, considering 
the fact that 60 percent of our DOD families live in 
substandard government housing, doesn't that undermine that 
statement?
    Mr. Zakheim. It goes to all three of your points, and I 
would like to address those. First, as I said, I do not make 
any claims that less is more or less is even the same.
    Mr. Edwards. I understand.
    Mr. Zakheim. That is number one.
    Number two is, I did not say in my testimony nor would I 
say that privatization is some kind of excuse or cover for not 
funding MILCON. What I said was something quite different, 
which was that there is a tremendous degree of leverage there, 
which is a mitigating factor in a situation that obviously we 
would have hoped would have been different.
    The fact that we made choices in that there were priorities 
we felt that were more urgent in no way implies or is meant to 
imply that these other concerns, military construction, 
adequate family housing, adequate facilities, are in any way 
unimportant, or that we do not--that we are not concerned by 
the fact that we could not come up with more. I do not want 
those two confused.
    We are committed to privatization, we think it is 
important, we think it does mitigate the impact of a reduction 
that clearly took place. You are absolutely right. Inflation is 
inflation is inflation. I am not going to try to fudge those 
numbers.
    We are committed to the troops. We are committed to their 
living in decent facilities. After all is said and done, I 
admit, given the size of the defense budget, $9 billion is not 
huge, but given the GDPs of most of the world, it is not 
trivial either. We are putting money in to the most urgent 
requirements; that is addition to the operations and 
maintenance funds that we have talked about. And again, we are 
committed, because were we not so committed, then the budget 
amendment in 2002 prior to 9/11 would simply not have had the 
kind of increase that we had.
    There is a commitment here and there is a concern, and the 
concern is sharpened by the very points you have made.
    Ray, you want to add to that?
    Mr. DuBois. I do not think there is another group of 
members of Congress than this subcommittee that has been more 
positive and supportive when it comes to military housing 
privatization. But that, as you point out, is only one tool.
    I just returned from Italy, visited the new Aversa-Naples 
facility.
    Mr. Hobson. I got an e-mail on your visit.
    Mr. DuBois. It is extraordinarily impressive. And I recall 
the one metric that Admiral Holmes, the senior naval officer 
there, gave me as an indication of why it is so important to 
make proper investments in military housing: The detailers in 
the Pentagon in the Navy are now assigning themselves to 
Naples, which 10 years ago never would have happened. People 
were trying to stay away from Naples. There are many tools that 
we have in our management basket.
    Mr. Hobson. Just like they are in Korea, right?
    Mr. DuBois. Exactly. There were, and I think it is 
important to note this, as I said in my testimony, that the 
cumulative program total end of fiscal year 2003, in terms of 
privatized units, is projected to be nearly 65,000 units. That 
is an amazing achievement in a rather short time.
    But that is not the only thing that we have to be aware of. 
We have to be aware of how many MILCON dollars are we going to 
ask for and appropriately invest in this regard. The President 
and Secretary Rumsfeld are committed to that. You all, however, 
your chairman at least, did caution me, one of my first days 
after I was appointed to this position, that moving too 
quickly, negotiating contracts that do not sustain and maintain 
appropriate levels of housing, is not the right approach 
either.
    I think this is prudent. We have increased at Kirk. We went 
down to Fort Hood and saw, arguably, some of the worst housing 
in the Army. And that 5,000-plus-unit privatization project, 
which, as you know, is under way, is going to be, I hope, a 
great example of what we are trying to do, trying to 
accomplish.
    Mr. Edwards. I will just conclude and save my other 
questions for the next round. But I was just saying that I know 
where you are coming from. I know your commitment. And I accept 
that we ought to be sure we have prudent contracts. But I would 
say that any suggestion that trying to improve the quality of 
military housing too quickly would be a serious problem is akin 
to the debate last year about were we reducing the national 
debt too quickly over the next several years.
    I do not worry about that concern too much, in terms of--if 
we had another $1.5 billion or $2 billion, I think we all know 
we could--any of you who visited Korea, anybody who visited any 
military installation anywhere knows that we could spend that 
money efficiently, effectively, to improve the quality of life.
    Thank you, Mr. Chairman.
    Mr. Hobson. Well, you are making another point too, which I 
made earlier--made before. Privatization is only one tool. 
There are places where the numbers do not work and we have to 
use MILCON dollars for those.
    Mr. DuBois. Well, and we have to re-scope projects and 
combine projects so that the economy to do it----
    Mr. Hobson. But not everywhere.
    Mr. DuBois. That will not work anymore.
    Mr. Hobson. Now, I do not want to build the old, 
traditional MILCON housing. I want to build to community 
standards.
    And I think, Ray, you should get credit too. Frankly, had 
it not been for you, I am not sure Fort Hood would be under 
construction today. So I do not want to be negative about 
everything. But I think you personally kicked the heck out of 
that tire, until it got rolling. And had you not been there--
and that is why it is important that we all go around and look 
at this stuff--had you not seen it, and we were all sitting 
here in Washington, it might not have happened. If the speaker 
had--if I had not gone to Korea, if the speaker had not gone to 
Korea, and Tom Schwartz had not been in Korea, I am not sure 
that would have changed.
    But it is changing. And it has changed dramatically. There 
has been more MILCON put into Korea in the last three years 
than in the last 15 total. And that is really outrageous, that 
that is happened. But it is not all your fault. I understand 
the other problems in that.
    But, you know, Chet is right. And I have fought this 
before. We are going to continue to fight it. And I think this 
game that goes on, that we will then put in all this additional 
money and take it from someplace else, is really not fair. But 
that is what happens.
    I have told before--the two projects in the President's 
bill from my district are absolutely--if those are the two 
greatest priorities of all the issues, of all the situations 
that my district, the people that submitted those should not be 
promoted. Because I can tell you, I can go and find--and I am a 
novice, compared to what they are supposed to be--I can find 
better programs to put in the President's budget. And this idea 
in the media, that somehow down there, what comes up here is 
correct always, I think is--there are three branches of 
government. OMB is not the only branch of government existing. 
[Laughter.]
    And I will put my number of times on bases, and my living 
on a base for a short period of time, against some of the 
people at OMB who have never been in the Service and who make 
these silly decisions, in my opinion, on some of the stuff that 
we do and do not do.
    You do not have to respond to that, because I do not want 
you guys to get fired. [Laughter.]
    They cannot fire me. Only the people of the 7th 
Congressional District can fire me.
    But I am going to continue, and so is this committee--all 
of us here are committed to improving the quality of life of 
the young people in the Service. And when I see $10 million or 
$40 million in a big bill going to pay claims with contractors, 
I get really frosted.
    Sam.
    Mr. Farr. Thank you, Mr. Chairman. I echo the concerns of 
the others that have spoken before me. And I would like to just 
mention to Dr. Zakheim, because I know Mr. DuBois has at least 
traveled with this committee. That I do not think there is a 
committee in Congress that hung together better, in a 
bipartisan fashion, than the four of us Democrats who did not 
miss one single meeting. We have been to every one of them. We 
travel with the chairman.
    And what we learn--I mean, what it is really all about, is 
the military we look at it from the bottom up. Because we live, 
and talk to soldiers and the men and women in uniform, and 
people on bases. And when you think about their military 
mission, it really is about their military life, and it is 
about quality-of-life issues.
    And so I think what shocks this subcommittee so much is 
where the President puts in a $48 billion increase in defense, 
and then cuts the quality of life by $1.6 billion. You wonder 
what the priorities in defense are all about.
    I think Mr. Edwards pointed out that you point out in your 
statement that you made $9.3 billion in savings to allocate 
toward our highest priorities. The highest priority of the 
President is a tax cut.
    Mr. Zakheim. Well----
    Mr. Farr. And I just think that there is a need to realize 
that the morale of the soldiers is really about quality-of-life 
issues. It is about housing. People will talk more about 
housing than anything else. They will talk about health care 
and delivery. Right now, we have a shortage of doctors 
participating in TRICARE Prime. They are not going to provide 
service to any of the soldiers in uniform, because the 
reimbursement rate is so low in our area, which is lower than 
San Francisco Bay Area and yet the cost of living is higher.
    There are consumer issues. And you talk about energy, and 
the best way I think to address the energy issue is what you 
did in California: You started metering all military houses, so 
that the soldiers on-base have to deal with the same consumer 
issues that the soldiers off-base have to do.
    So I think that the priorities seem to be mostly, new 
weapons systems coming into the inventory. This subcommittee 
does not attract lobbyists for weapons systems; they are not 
sitting in this room. But if you do not provide for quality of 
life, you are not going to be able to recruit the people who 
are going to operate those weapons systems.
    This is the message. It is not the new weapon they are 
going to be able to use in the military. That is not what you 
are showing on television. It is essentially, you know, how 
families can be raised on a military base. And I think that my 
concerns about your statement, particularly, in 
recapitalization of costs from base closure, I can tell you 
from base closure, you are not going to recap anything.
    We end up giving away this property, rightfully so, or we 
end up spending an incredible amount on cleanup. Your request 
for BRAC cleanup to this subcommittee, just a few weeks ago, 
was underfunded cleanup costs at Fort Ord already over $300 
million. The budget for this year for the entire nation is $545 
million. I do not know how you are going to reach the cleanup 
schedule for this year with such limited amount of commitment 
to clean up.
    So, I think what you are hearing from this subcommittee is 
that we are a little chagrined that we can see a defense 
buildup at $48 billion and yet a cut of $1.6 billion in this 
subcommittee's responsibility.
    Mr. Zakheim. Congressman, a couple of points. My written 
statement, my oral statement, addressed military construction 
family housing. It did not address quality of life as a whole. 
Quality of life begins with the pay increase. Quality of life 
includes reducing the basic allowance for housing, which is 
going to be eliminated by fiscal year 2005. We are on track for 
that.
    Mr. Edwards. The out-of-pocket?
    Mr. Zakheim. The out of pocket. Quality of life includes 
the $22 billion we are putting into health care, of which $8.1 
billion is for retirees over 65 who will have access to 
TRICARE.
    So, if you actually aggregate the total quality of life--I 
mean when someone comes into the military like to anywhere 
else, they are looking at the package. The package exceeds $100 
billion. We have the best paid, best cared for military in the 
world. That is why it is the best military in the world. That 
is why recruiting and retention is looking good right now.
    Now does that mean that we have done enough? No. Neither 
Ray nor I are making that argument at all.
    But I think, if we are talking about quality of life in 
aggregate, there is no doubt that quality of life means 
training, because people want to do meaningful things and train 
properly for it. It means pay. It means all kinds of benefits. 
It means retirement benefit. And it means the world's most 
expensive health care benefit.
    Frankly, I would commend this subcommittee for being 
bipartisan, because we in the Department do not look at defense 
as a partisan issue anyway. So we look at it the way you look 
at it.
    But when you ask around, you know very well morale is very 
high right now. And morale is high for several reasons. People 
know what they are doing. People like what they are doing, and 
people feel that the government cares about them.
    Mr. Hobson. I am going to get to that before we are over, 
because it is not in some places.
    Mr. Zakheim. It is not in some places. There are pockets, 
and there are pockets of problems.
    Mr. Hobson. And there are reasons for that that you guys 
could handle. Not you, but the Army could handle. And they are 
not.
    Mr. Zakheim. I am simply saying in aggregate, does that 
mean there are no pockets?
    Mr. Hobson. That is probably true.
    Mr. Zakheim. Of course, there are pockets. No doubt about 
it. I do not disagree at all. We are trying to fix those. We 
are trying to plug holes as quickly and as best we can.
    But when we say other priorities, number one priority was 
pay for people, without doubt. A major priority was health 
care. It is an entitlement for the over-65. It is a huge cost. 
But it means something to somebody, no question about it. So 
there is that element.
    Meters, by the way--all the privatized units have meters 
now. So we are moving in that direction.
    Again, you raise points that are fundamentally valid, but I 
think one has to place them in a larger context. And when you 
do place them in a larger context, you see that we are, indeed, 
doing our best to be responsive. That in no way allows us or 
should allow us or do we intend for it to allow us to cover up 
on those areas that need fixing. What needs to be fixed we have 
to fix and we will fix. We are trying to do a lot of things at 
all the same time.
    Even in terms of the weapon systems, and you quite rightly 
say, this subcommittee does not deal with the weapon systems, 
but you ask that 19-year-old out there whether they want a 
newer weapon system or an older one, whether they want one that 
will work or might that might get them killed, and the answer 
will be uniform on that one.
    Mr. Farr. My wife wants a new car.
    Mr. Hobson. She got it. [Laughter.]
    Tyndall Air Force Base? I mean, Representative Boyd?
    Mr. Boyd. Thank you, Mr. Chairman.
    I want to shift gears, Mr. Chairman, slightly. I noted Mr. 
Olver's comments when he started asking his questions about, 
and I want to quote; big picture versus getting a hold of a few 
details now. Mr. Chairman, you and Mr. Olver do a great job in 
a visionary way of talking about the big picture, and we 
appreciate your leadership. What I want to do is try to get a 
hold of a couple of details.
    And I want to start by asking Mr. DuBois a question. And I 
want to tell you that, I have a problem and I think that you 
can help me solve the problem here today. And I would like to 
solicit your help on solving that problem.
    There is a piece of property that is owned by the Air Force 
in Lynn Haven, Florida, that was a fuel depot--World War II 
fuel depot, and it has not been used by the Air Force since the 
1980s. And we have been working with the Department of the Air 
Force in getting it cleaned up and that process has been moving 
quite well.
    Last year the Bay Defense Alliance held a series of 
meetings with the commander of Tyndall Air Force Base, 
Secretary Dishner and the Air Force Real Estate Office, 
regarding the transfer of that Lynn Haven property to Florida 
State University. Prior to the House passing the 2002 defense 
authorization bill, the Air Force was provided a copy of the 
proposed language and the real estate office signed off on the 
proposal, as did the base commander. So you can imagine my 
surprise during the conference when the Air Force came forward 
and opposed the transfer.
    According to the letter that was provided to the Armed 
Services Committee, the base commander was the reason the Air 
Force objected, because he believes that the property could be 
sold and developed as residential property. I personally talked 
to the base commander, and that is absolutely not the case. I 
mean, it is not the case that he opposed the transfer of the 
property.
    What I would like for you to help me do is find out exactly 
who within the Air Force or what organization within the Air 
Force is opposed to that transfer. And the reason I bring this 
up today, Mr. Chairman, is because a month or so ago I asked 
this question when the Air Force people were here to try to get 
an answer, and we have yet to receive a response from the Air 
Force on this issue.
    So, Secretary DuBois, I would greatly appreciate it if you 
could help me solve this problem, while getting me some 
answers. I would like to get to the bottom of this, quickly, 
because as the 2003 authorization bill moves, we would like to 
act within that bill.
    Mr. DuBois. Mr. Boyd, I will report back to you. I was 
unaware of that particular situation. But certainly, if the 
facts are as you state, it is troubling at worst, and even more 
so.
    Mr. Boyd. I would greatly appreciate that. And again, I 
consider this to be a problem that has been going on now since 
December. We actually first called--my office called the Air 
Force last December about this issue and tried to find out who 
was opposed to it, and we had been unable to get an answer up 
to this point in time.
    Mr. DuBois. Did you pose the question to Mr. Gibbs, the 
assistant secretary for the Air Force for I&E? Do not worry, I 
will.
    Mr. Boyd. But we, in writing and at this hearing, posed the 
question.
    Mr. DuBois. If you sent a letter, I am going to ask that 
your staff fax me a copy or give me a copy today.
    Mr. Boyd. Great. Thank you.
    Mr. Chairman, do I have additional time?
    Mr. Hobson. Sure.

                              TYNDALL AFB

    Mr. Boyd. I think the other question probably, Dr. Zakheim, 
would go to you. Again, this in the form of getting a hold of a 
few of the details. And I apologize to the chairman and the 
committee for being somewhat parochial here, but maybe that is 
our job; if we do not, nobody else will.
    In the 2001 budget, this subcommittee provided $10.8 
million to resurface the runway at Tyndall Air Force Base. You 
shake your head like you know about this issue. And the reason 
we did that and have tried to provide other facility upgrades 
at Tyndall is because about a year from now we expect to bed 
down the first F-22s at Tyndall Air Force Base.
    Obviously, bringing the F-22 in there requires, as you can 
imagine, some extensive facilities work related to maintenance, 
storage, runways, fueling, all these kinds of things that may 
require different kinds of facilities than we have there now.
    We found out last fall--and we actually found out when we 
were informed by a pilot at Tyndall Air Force Base--that the 
project was started, and they ran out of money before 
completion, about halfway through. I do not know whether some 
of the money went someplace else, or what not. And we 
understand how these things happen.
    I think the troubling thing, the thing I would like for you 
to comment on is, in the FYDP, what we have done is we have put 
the completion of that runway into 2006 year. Now, I do not 
really understand that. I mean, the F-22 is bedding down in a 
year from now, in 2003. Talk to me a little bit about 
priorities and how we can move that out to 2006 when obviously 
it is a project we have already started, should have been 
completed, and it is not. That is my question.
    Mr. Zakheim. I will have to look into it and get you an 
answer for the record, unless Ray has some better insights. 
Generally speaking, when it comes to runway and similar 
footprints, I know the Air Force tends to be pretty urgent 
about that. There was the case a few months ago that I worked 
out with the chairman precisely on that kind of issue. So I do 
not want to----
    Mr. Hobson. Not in my district. Overseas.
    Mr. Zakheim. Not in your district either, for that matter. 
That is right, Mr. Chairman.
    So I will certainly look in and get an answer for you.
    [The information follows:]

                              Tyndall AFB

    This project is not required for F-22 beddown at Tyndall 
Air Force Base. The project in question, to upgrade portions of 
the runway and aircraft taxiways at Tyndall Air Force Base, was 
funded in fiscal year 2000 using military construction (MILCON) 
money added to the President's Budget Request by Congress. That 
project, while important, was not a high enough priority for 
the Air Force to include it in the fiscal year 2000 budget 
request. So, we were pleased that the Congress was able to add 
it to the budget, during its authorization and appropriation 
process.
    Also in fiscal year 2000, the Congress rescinded $56.2 
million from the MILCON program, with direction that we should 
not cancel any projects in order to manage the rescission. Air 
Force construction bids for the Tyndall airfield project came 
in approximately $2.0 million under the program estimate (the 
amount appropriated by Congress), so we used that bid savings 
to help offset the budget rescission and award other fiscal 
year 2000 projects.
    As this project progressed to construction, the Air Force 
discovered a discrepancy in the design documents. Specifically, 
the existing asphalt overlay on the runway proved to be thinner 
than identified during the design. This discovery drove an 
increase to the contractor (and subsequently the total project) 
cost to complete. Unfortunately, since the bid savings were 
used to award other fiscal year 2000 projects, the Air Force 
decreased the scope of the Tyndall project in order to complete 
the (most critical) runway repair portion. In adjusting the 
project scope, the Air Force deleted less urgent taxiway and 
taxiway shoulder upgrade work and included that work in a new 
project requirement, currently programmed for in the fiscal 
years 2003-2007 future years defense program for fiscal year 
2006 ($2.2 million).

    But my instincts tell me that the Air Force, on something 
like that, is not just doing something off the wall. But let me 
get you a right answer on----
    Mr. Hobson. The problem is that it costs more when we do 
it--when we finish it up than it would have cost to do it the 
first time.
    Mr. Boyd. We talked a little bit about this in the previous 
hearing, about the communications and the fact that our office 
had to find out actually from one of the pilots and not from 
the Air Force. I am not going to harp on that today. We have 
talked--the chairman was very blunt in his remarks to the Air 
Force folks about that. We would like to have better 
communications.
    Mr. Zakheim. I will get you--I will certainly get you an 
answer for the record. And if it is not satisfactory, do not 
hesitate to pick up the phone and tell me, ``You have not 
answered my question.''
    Mr. Boyd. Thank you very much, Mr. Chairman. And I 
apologize for trying to get a hold of a few of the details.

                                  BRAC

    Mr. Zakheim. Mr. Chairman, with your indulgence, I do not 
want Congressman Farr to think I did not answer one of his 
questions, but you mentioned BRAC today, and I feel that I owe 
you an answer.
    GAO, as you know, is not part of the Department of Defense, 
to put it mildly. GAO has just issued another report on BRAC, 
and it said that the savings up to now, the net--net of costs, 
like environmental cost, are $16 billion, and the steady-state 
annual costs on the basis of the first four rounds are 
predicted to be--and actually, I think they say ``are''--$6 
billion a year.
    The BRAC 2005 round is projected to be roughly as large as 
the first four. And if that indeed turns out to be the case, 
then you are going to be seeing roughly double the savings. 
Now, those are estimates, but the $16 billion is the number 
that GAO came out with. I have heard over the years people say, 
``Well, you know, no one has ever given a BRAC figure.'' GAO 
has just given one. And that is net of environmental costs.
    Mr. Farr. I think there are savings. Obviously, when you 
close something, you do not have the salaries, you do not have 
the operations. But the idea that you are going to gain savings 
from selling the land or you are going to gain savings--what 
you end up doing is having the incredible costs in cleaning up 
land because you have, you know, been negligent. And those 
costs are far greater than anyone expected.
    And I think the bureaucracy is what we have seen with a lot 
of base closures. If there is a model, it is what we saw down 
at San Antonio at Brooks Air Force Base. They went around BRAC, 
and they looked at base operations and the use of the land and 
made a deal. And I think, frankly, if we engaged in that type 
of involvement between local communities and military bases, we 
could come up with a re-use plan much smarter than this.
    Mr. Hobson. Well, you should remember, that deal did not 
come from any of the services. That deal came out of this 
committee. And it would not have happened if I did not sit on 
both committees. We would have still been squabbling over that.
    Mr. Farr. But that was a smart way to do it.
    Mr. Zakheim. I agree. We do not preclude those kinds of 
things. I am actually going further. In a way, you are 
reinforcing my point. Because the net savings presuppose the 
best estimates we have now--and GAO has its own estimates--GAO 
does not come to us, necessarily, to buy our estimates--on what 
the environmental cleanup should cost.
    So that, to the extent you pull off another Brooks, you are 
actually lowering the costs and increasing the savings.
    Mr. Hobson. But I do not want to pull it off. You are the 
folks who do it.
    Mr. Zakheim. I did not mean you. I meant, ``to the extent 
one.''
    Mr. Hobson. We should not have to. That should not be me 
having to intercede in every one of your horrible fights.
    Mr. Zakheim. I am only giving you credit, Mr. Chairman.
    Mr. Hobson. I know. Well, you guys did use it as--in some 
submission, you did use it as one you want to do.
    Mr. Zakheim. Yes.
    Ray, do you want to add to that?
    Mr. DuBois. I just wanted to say I met yesterday with Dick 
Wright from the Fort Ord SMART team, pursuant to your urging. 
And I was very impressed with what has taken place in the 
community with respect to Fort Ord. And I said, how can we 
replicate this kind of an approach?
    Mr. Farr. Send Dick Wright everywhere.
    Mr. DuBois. Sir?
    Mr. Farr. Just send Dick Wright everywhere. He is a great 
ambassador.
    Mr. DuBois. Clone Dick Wright. [Laughter.]
    But, as you know, the so-called cost to complete, with 
respect to environmental remediation of all prior BRAC 
properties, is estimated to be $4.2 billion. That is not an 
insignificant number.
    But when you also look at the steady-state savings, as 
certified, at least agreed upon, in the aggregate by GAO's most 
recent report, over $6 billion a year, even the cost to 
complete is subsumed within one year of aggregate savings.
    Now, we did increase the BRAC environmental remediation 
request year over year by $30 million, to $520 million. That is 
true, that last year Congress did plus-up that account by $100 
million; not an insignificant plus-up, I might add.
    Mr. Hobson. Probably got fanged by OMB and the pork barrel 
people for doing that. Sorry.
    Mr. DuBois. Do not want to comment on that. But it is a 
significant issue and one that, you know, how long will it take 
us to complete, given a $4.2 billion bill at $500 million to 
$600 million a year, well, the mathematics say that you will be 
through it in the next five or six years.
    But it is BRAC 2005 that I am concerned about, and lessons 
learned that Dick Wright mentioned to me yesterday about what 
happened at Ford Ord, and how can we put into place disposal 
methodologies that will reduce the time from closure to 
disposal or conveyance.
    Mr. Hobson. Okay. I want to say something I probably should 
not say, but I am going to say it anyway. They put out a pig 
book. And I think some of the stuff in there does deserve to be 
in there. But I am just furious that a shoothouse in Okinawa--
two shoothouses to train our young people so they can save 
their lives when they have to go into urban warfare combat, and 
housing for Korea are considered in the pig book. I mean, any 
credibility that pig book had with me goes dramatically down.
    Besides that, they did not put my name next to them. People 
in the Congress put those in because we were trying to help our 
young people defend themselves and their quality of life, and 
to put those in there just totally outrages me.

                       CHEMICAL DEMILITARIZATION

    Now, I got a question for you. Language included in the 
President's budget submission withholds $84 million from the 
Army for the chemical demilitarization program unless it meets 
certain ``milestones.'' The Army was unaware of this language 
and could not tell us what it meant. Because it came from OMB, 
we are turning to OSD--I love all these--to explain it to us. 
What are these milestones? Why are they included in this year 
and not in previous years? What is the practical effect of 
these milestones? And, frankly, could these milestones slow 
down or impede U.S. compliance with the chemical weapons 
treaty?
    Mr. Zakheim. Mr. Chairman, I know this is a major concern 
of yours, and we have discussed this on a number of occasions. 
I am, frankly, not as mystified by the language as others may 
be. It does read like English, quite frankly, and it simply 
says that the Army has to notify the Senate and the House 
committees, the Appropriations Committees, that it can meet the 
milestones. That means that it basically has a plan that it 
believes it can execute. Quite frankly, and particularly 
knowing your concern about executing things and having plans 
and having them done right, I think it is in the interest of 
all that they have that.
    And once that plan has been put together----
    Mr. Hobson. But the milestones are not spelled out.
    Mr. Zakheim. But the Army can spell out milestones. This 
does not say----
    Mr. Hobson. It says OSD and OMB do the milestones.
    Mr. Zakheim. But the Army will, obviously, propose them, 
and then we would work with OMB to simply say, ``These will 
work.''
    Now, you know, we do work with OMB. If we did not work with 
OMB we could not put out a budget. I have been on this job for 
10 months, and I have helped put out two full budgets and one 
supplemental, a budget amendment and three emergency 
supplementals, and obviously I was not able to do that by 
myself; we had to do that with OMB. So I think we do work with 
OMB. We do not share the same letters, we do not share the same 
personnel and we do not sit on the same side of the river, but 
somehow we do manage to put these things out.
    In fairness to those people, we will work with them. And 
Ray DuBois will have a major involvement in this, as will Mr. 
Aldridge, that we will get milestones out there that are agreed 
on and that would justify the $84 million. It is doable.
    Mr. DuBois. I think, Mr. Chairman, the real issue here is 
that last bullet: What is the practical effect; could these 
milestones slow down or impede? As you know, the entire 
chemical demil program has been problematic for a long time, 
and that is why the Congress asked Pete Aldridge, the Under 
Secretary of Defense for Acquisition and Technology, to, quite 
frankly, take it over, take it back from the armories.
    Now, the Army still has major equities here. The two 
particular issues, or places, Aberdeen, I believe, and Newport, 
Indiana--Aberdeen Proving Ground in Maryland, and Newport, 
Indiana, that are the focus of the so-called reduction in 
spending, my conversations with Dr. Fiori indicate that the 
Army recognizes the situation and is going to search for 
reprogramming dollars to handle it.
    It is not an answer to your particular question. As Dr. 
Zakheim indicated, the milestones may be reviewable, if you 
will, by the OSD, but they are milestones that Dr. Fiori--he is 
going to put on the table.
    Mr. Hobson. I want it moving. We have got some real 
problems with this, and rather new simpler solutions than 
spending all the money they were going to spend, if they are 
correct in what they want to do, and they got stopped.
    Mr. Zakheim. We recognize and share the concern. And we are 
not----
    Mr. Hobson. Congress has a lot of concern about the chem 
demil stuff and the way we found it. And we need to--there is 
something sitting out there festering, but we need to move.
    Let me switch to another subject. You know, we are talking 
about this infrastructure and stuff, but it seems that the 
Service Components always find a way to pay for new mission 
requirements, while their crumbling infrastructure continues to 
fall apart.
    For example, this year, the Air Force spent almost $290 
million on bed-down of new weapons platforms to the detriment 
of their existing infrastructure that received only 47 percent 
of the available funds. Next year, however, the Air Force plans 
to require that the cost of bedding down new weapons systems be 
included in the total cost of new system platforms.
    This package will, in effect, augment military construction 
funds that can be directed to improving the existing 
infrastructure. What is your opinion of this initiative? Should 
it be applied to any other Service Components? If the Services 
adopted this approach, could their military construction 
budgets be decreased accordingly, and what would OSD suggest to 
protect MILCON funds from being redirected?
    Mr. Zakheim. I will simply say that this is ultimately 
something that Pete Aldridge, as our acquisition executive, 
really has cognizance over. Ray DuBois works with Mr. Aldridge. 
Ray, I do not know--it is not really your area either, but you 
might have----
    Mr. DuBois. Well, I think it is important to recognize that 
the Services have been directed, but when you put together a 
long-term life cycle budget for a weapons system, you have got 
to take into consideration what MILCON impact is going to have: 
whether the airplane is not going to fit the current hangars. 
Do we have to build new? Do we have to redesign the doors? That 
is--however my understanding those are still MILCON dollars.
    What the program manager--let's take the Joint Strike 
Fighter, for instance--has to lay out for the senior 
acquisition executive in the United States Department of 
Defense, Mr. Aldridge, what MILCON impacts are inherent in the 
life cycle of that weapons system.
    It is still MILCON. It is still jurisdiction of this 
subcommittee. And if designated as such, the program manager, 
or in this case the Secretary of the Air Force, cannot take 
from MILCON and put it into buying another airplane in the 
abstract.
    Mr. Hobson. In the abstract, yes.
    Mr. DuBois. MILCON dollars, you know that it is fenced.
    Mr. Hobson. Let me switch to another subject. Last year, 
the Armed Services Committee authorized additional rounds of 
BRAC. From an appropriations point of view, we expect 
significant increase costs of what will be BRAC obligations.
    What do the out-year budgets reflect as far as increases in 
the BRAC account? Are these increases on top of increases to 
regular military construction accounts? Do you expect more 
joint bases as a result of consolidating functions, rather than 
eliminating real estate? And how do you discipline the Services 
to be a little more purple, if purple is the right color?
    Mr. DuBois. As I indicated in my opening remarks, the 
Secretary of Defense--I drafted in the so-called kick-off memo 
to the Secretary of Defense--and Mr. Chairman, in the opening 
remarks of that kick-off memo, it talks about the necessity to 
do a comprehensive cross-Service analysis.
    We--25 years ago, when Secretary Rumsfeld and I were in the 
Pentagon, most installations, if not all, were single service, 
single mission. Today, we have multiple service, multiple 
mission installations. One that you and I visited, I believe--I 
am trying to think--perhaps it was with Congressman Weldon--it 
was his Corpus Christi Naval Air Station.
    Mr. Hobson. Yes, we were there.
    Mr. DuBois. I guess we did go there together. And on which, 
of course, is the Corpus Christi Army Depot.
    There is no question in my mind that in order to accomplish 
a 20 to 25 percent reduction in excess capacity in terms of our 
total DOD realistic footprint, you are going to have to look at 
multi-service, multi-mission installations. I do not know any 
other way around it.
    And that is why the Secretary is also--as opposed to the 
four prior rounds of BRAC, the Secretary intends to personally 
lead this exercise, number one.
    Number two, he is not going to depend on--if it is the 
right word--each individual Service to do their own individual 
BRACs and then present them independently of each other to the 
Secretary for ratification.
    Mr. Zakheim. I would just add this is clearly ``green 
eyeshade'', but it is important to you, Mr. Chairman, and to 
the subcommittee. You had asked in the report language for a 
new program element for joint use projects. And we have got 
that now.
    Mr. Hobson. Good.
    Mr. Zakheim. So that is there. I will just review the five 
new ones in the 2003 request for those who may not remember or 
have seen those. There is one naval air station in Atlanta, 
which is Air Force, Army--this is the BEQ Air Force, Army, Air, 
National Guard, Army Reserve. That is $6.7 million.
    The joint reserve base--naval air station, joint reserve 
base and hazmat storage facility, Army National Guard, Air 
National Guard, Army Reserve $2.7 million.
    In New Orleans, runway taxiway extension, $14.6 million, 
Army National Guard, Air National Guard, Army Reserve.
    In Norfolk, Navy Marine Corps Reserve center, $4.8 million, 
Naval Reserve, Marine Corps Reserve.
    In Forbes Field, Topeka, Kansas, the Army Reserve--armed 
forces reserve center, $14.6 million. That is the Army, 
National Guard and Marine Corps Reserve. So this is clearly 
something that is building up momentum.
    Mr. Hobson. And I just want not a joint building but some 
other things you can do at Rickenbacker, which is not currently 
in my district, but is going to be in my new district. I moved 
a Navy--built a new Navy facility--moved a Navy facility in 
line with the Air Force, Air National Guard facility, so that 
they now use the same chow hall, they now all use the same 
medical facility, and so you do not have this, you know, one 
sitting way off here and a whole infrastructure around it.
    You can have one base infrastructure and everybody can work 
together. They wear different uniforms. You have different 
missions, but you do not duplicate a lot of the services.
    We are also trying to do this in a lot of armies that we 
are doing around the country today. One of the things we need 
to look at is, you know, Reserve and Guard could probably use 
some of the same facilities in the same buildings in a more 
community-related facilities that we are doing. The Marine 
Corps can be--where we got Marine Corps Reserve facilities, 
they could be integrated, so that they can use different times, 
different facilities, because they do not use them. Some parts 
use them every day, parts of it, but they do not have to be off 
in separate facilities where you have got two light bills and 
all this kind of stuff. And we need to look at this, because 
these dollars are very precious to go around.
    John.
    Mr. Olver. Thank you. Thank you very much.
    Let me just follow that question on BRAC one step further. 
You are beginning to prepare, if you have any time--just trying 
to understand the spread sheets on the things that are already 
before us--a 2004 budget. The BRAC process is one where you 
have to spend money to make money, to earn money, to save money 
somewhere along the way. When does that really begin to reflect 
and when we will begin to see money in your budget submissions 
in anticipation of the BRAC process?
    Mr. Zakheim. We wait a little bit on that one. The reason 
is, that you cannot have the commission prior to calendar year 
2005, you cannot really start the closure process until 2006.
    Mr. Olver. Until 2006. So we will not see any money in the 
budgets until fiscal 2006?
    Mr. Zakheim. Well, you cannot do anything that----
    Mr. Olver. Planning for that?
    Mr. Zakheim. You cannot do anything that anticipates 
closures of things. You do not know what is going to close. The 
rules are very, very clear on that one. We cannot anticipate 
anything, quite frankly. And so, there is nothing we can ask 
for, at least to my knowledge.
    Isn't that correct? Is there anything we can ask for? I do 
not think so.
    Mr. Olver. Should the FYDPs reflect in any way what the--
the FYDPs, of course, go on for some years.
    Mr. Zakheim. Well, beginning in 2006 there will be a 
reflection----
    Mr. Olver. There should be in the FYDP for 2006 some 
reflection.
    Mr. Zakheim. But even that, let me tell you exactly what we 
have in here. It is about $3.2 billion, which is what we 
estimate will be a generic cost associated with BRAC in 2006.
    Mr. Olver. So you are already planning.
    Mr. Zakheim. Exactly.
    Mr. Olver. Your $3.2 billion in 2006?
    Mr. Zakheim. And $5.6 billion and change in 2007. But you 
do not know it is there. These are totally parametic, generic 
estimates.

                           CHILD CARE CENTERS

    Mr. Olver. Okay. Let me got back to slightly higher level 
of specificity, more specific than I have been earlier. In the 
budget submission for this year, if I remember correctly, there 
are only two child development centers.
    Mr. Zakheim. Right.
    Mr. Olver. With the high rate of deployments, it seems to 
me there is a higher pressure upon the spouses that are left at 
home with the children involved here. And I am surprised that 
we would be having fewer rather than more child development 
centers. Would you care to comment on that?
    Mr. Zakheim. Yes, sure. Basically, what you have--and I 
actually have a chart that, if you like I could get to you--the 
child development center levels have, fluctuated, as have a lot 
of other related quality-of-life facilities development. For 
example, we have two in 2003. We requested four in 2002, and 
you added four to that. In 2001 we requested four, but in 2000 
we requested two. So they fluctuated over the years.
    Mr. Olver. I suspect they have been a typical add for us.
    Mr. Zakheim. No, no. This is what I am saying we requested, 
as opposed to what you added, okay?
    Mr. Olver. So you do not think this is an unusual number, 
essentially?
    Mr. Zakheim. That is right. It is within the bounds.
    Mr. Olver. Are these rated? Are these rated on the C-1, C-
2, C-3, C-4 characterization?
    Mr. Zakheim. I believe they are. But let me just add one 
other thing, because, it is not just a matter of child 
development centers.
    The need for child development centers, for example, 
depends, on where people are located. The urgency, for 
instance, of having child development centers in major 
metropolitan areas, where there are a lot of them available, is 
clearly quite different from, that for, a facility where there 
is nothing really around. So one has to bear that in mind.
    And, of course, we are talking about children, we look at 
schools. Now, in 2003 we are requesting funding for 13 schools. 
In 2000 we requested funding for six schools. In 2001 for nine 
schools. Last year for 13. So again, we are somewhat higher on 
schools. We are somewhat low on child development centers. 
Schools, again, are a function of the district or a function of 
what is available outside the base and so on.
    So when you take it into that larger context, the request, 
which may not be ideal from your perspective, nevertheless 
falls within the bounds of what we have done in the recent 
past.
    Mr. Hobson. Did you ever think about how much money you 
could save if you did not have DOD schools inside the 
continental United States?
    Mr. Zakheim. We have heard that argument made to us in the 
past. And quite frankly, it very much depends on what is 
available as an alternative. The military families very often 
appreciate the fact that they have those schools. It is a 
contextual issue, as you know, Mr. Chairman.
    Mr. Olver. Do you know if these two sites of the 
development centers are C-4s or C-3s that are being replaced? 
Or are these where there were not development centers there in 
the first place?
    Mr. Zakheim. The latter. These are new development centers. 
Remember, child development centers in general are a relatively 
new phenomenon. We were not building those 30 or 40 years ago.
    Mr. Olver. But we do have an ever larger number of married-
with-families personnel and personnel who are being deployed, 
more and more instances and more complicated.
    Mr. Zakheim. That is right, and so, again, one looks at----
    Mr. Olver. I am still not certain that that represents an 
adequate number.
    Mr. Zakheim. All I am saying is that there is a context, 
and many of our bases are near major metropolitan areas where 
child development centers are otherwise available, and there 
are those that are not. That is why you get this fluctuation. 
But again, two is within the bounds of what we have done in the 
recent past.

                                  NATO

    Mr. Olver. Let me ask a couple questions in relation to 
NATO. In the president's request, there are a couple of 
projects for NATO regional headquarters, one of them in Spain, 
one of them in Greece. Now, I do not know that our security 
investment program covers all our costs in NATO countries, and 
I am surprised and not particularly happy to see that--the 
decision to establish regional headquarters, at this particular 
time. We are going to have to pay for these through the 
investment program, I assume.
    I do not know, if this one of those things that your part 
of the decision is to have them do this? Or do you just get the 
bill to pay?
    Mr. Zakheim. Well, I get every bill to pay, as you know. 
[Laughter.]
    Mr. Olver. Are you part of the policy decision here?
    Mr. Zakheim. The Policy Office makes the decision, and it 
is done, obviously, in consultation with the NATO people. As 
you know, there are efforts to refocus NATO and make it more 
efficient, more relevant to the post-Cold War world. I will get 
you an answer for the record that I hope will be more detailed.
    Mr. Olver. Well, this one that I just asked has to do with 
the present budget. But coming down the road, we are hearing 
that we are likely to have quite a large expansion of NATO, as 
many as a half-dozen additional countries, and comparatively, 
these countries that are being talked about are poor as church 
mice compared with--I was going to use a different 
characterization, but that one will do--compared with most of 
the Western countries and certainly with us.
    What kind of implications are there for that? What kind of 
costs is that going to lead us to in the near future? I guess 
they are not yet appearing, but they must begin to appear as 
you think about the next budget that you are----
    Mr. Zakheim. There have been some analyses done.
    Mr. Olver. How much of this cost do we have to pick up?
    Mr. Zakheim. That is not clear yet, because in general it 
really does become a function of which countries you are 
talking about and where they are located. The candidate 
countries are spread all over the map in Eastern Europe.
    Mr. Olver. But the one thing they are poor as church mice 
essentially.
    Mr. Zakheim. They are not exactly as well off as Western 
Europe. I think that is accurate. But I would not hazard any 
estimate that presupposed the particular set of countries 
coming in as a high-risk estimate. What I will do for the 
record is go back to my Policy colleagues, talk to them, and 
see if I can give you a better feel for this.
    But I would say, as one who used to make these kinds of 
projections in the past, that it really is totally a function 
of what countries you are talking about.
    Mr. Olver. I am very curious what this group, additions, 
adds to the effectiveness of NATO, if any. And really, sort of, 
a comparison of what the investment program--the costs to the 
U.S. of the investment program had been in the previous 
expansions of NATO, which we apparently, sort of, skimmed the 
cream in the first round, and those economies are considerably 
better than the ones that are still under consideration when 
you get farther eastward.
    Mr. Zakheim. First of all, I suspect that the candidate 
members would not like to be described as something less than 
the cream.
    I will get you, for the record, those numbers that I can, 
in terms of what the cost was.
    [The information follows:]


    
    In terms of what the benefits are, obviously the benefits 
are not dollar benefits. They are benefits in terms of 
stability. They are benefits in terms of integrating countries 
that had basically been on the wrong side of the Iron Curtain 
for a half-century.
    Mr. Olver. You know, we are already hearing that there is a 
great deal of concern about the enormous gap between the well-
off countries in NATO and the American military situation. It 
is hard to see once that gap--the gap between those who have 
been the established, older members and these newer members, 
particularly ones who have been talked about as you have got 
coming in--is at least as great, probably far greater, than the 
gap that has now grown between us and those. It is difficult to 
see the policy rationale here and what it is in effectiveness 
of NATO that comes from this process.
    Mr. Zakheim. A couple of things. First, I would say this. 
If you actually look at the disparity of wealth, or size, or of 
military contribution to NATO, you can go back to say the 15, 
or the 16, when Spain came in, and you will see a gap between 
Portugal on the one hand and the United States on the other. 
And Iceland does not even have a military, and they are part of 
NATO.
    So, clearly, NATO is there for a lot of reasons, and 
different countries contribute in different ways. Some have 
contributed over the years--Iceland is a good example. During 
the Cold War, Iceland was a major facility for us. It was, you 
know, the famous GIUK gap. Greenland-Iceland-UK gap. Iceland 
was terribly important, and it drove the Soviets nuts, because 
it was there. Was a barrier to their submarines and their naval 
forces.
    So different countries bring different things to the table. 
That is point one.
    Point two is, not all of the candidate countries are at the 
same place economically. Some of the Baltic states are actually 
doing pretty well. Quite well. Other states are not. It is a 
mixed bag, it is a mixed bag from north to south, it is a mixed 
bag within the north, within the south, it becomes a function 
of a lot of different areas and concerns.
    There have to be NATO standards for people to get in. There 
are net standards that are being set, and if the standards are 
not met, the candidates do not come in. That is one of the 
reasons why I cannot predict which countries are coming in, 
because there are a slew of standards, and countries are going 
to be evaluated on the basis of those by the current NATO 
members.
    And finally, the percentage of cost sharing is going to go 
down, since by definition there will be more countries 
contributing. I will get you an expanded answer for the record, 
sir, on what it has cost us so far, but I think the consensus 
within NATO is that bringing in the first three countries was a 
good deal.
    Mr. DuBois. I think it is also important to recognize that 
no matter what new countries are invited in and how NATO 
expands, there is no direct correlation between that and what 
MILCON dollars are spent in those new countries. In fact, to my 
knowledge, we have not built ``new NATO bases'' in countries 
that have----
    Mr. Olver. Well, maybe my whole question is a bit beyond 
the jurisdiction of this subcommittee from that----
    Mr. DuBois. But I think that your MILCON will play----
    Mr. Olver. Is there a plug similar to the plug that you 
mentioned in 2006 in regards to BRAC?
    Mr. DuBois. That were specifically driven by the expansion 
of NATO? No.
    Mr. Zakheim. No, there is not. And again, one could see 
where our percentage contribution could actually go down. So it 
very much is a function of what countries are coming in, what 
expenditures are being made.
    Look, if we are not building facilities in these countries, 
and they are contributing something, then one could make the 
case. All I am saying is, there is no way to predict right now. 
There is not the plug to my knowledge.
    Mr. Olver. Okay, I withdraw it.
    Mr. DuBois. But two points I think need to be made. On the 
INSIP account, anything that I have learned on my trip to 
Europe, is that we benefit more on the basis of the INSIP total 
investments for our purposes than we actually contribute to it, 
number one.
    Number two, with respect to MILCON projects at headquarters 
NATO sites, the Navy--there are a total of eight projects in 
this budget request, totalling $55.62 million. Now, they are at 
NATO headquarters sites. For example, you mentioned the ones in 
Greece. But the Navy has its own BEQ for our naval personnel, 
and a support facility for our naval personnel, a dependent 
school for our personnel, and a medical and dental clinic--
these are all in Greece, at the NATO headquarters, for our 
personnel. So we have--in your jurisdiction, in this 
subcommittee, there are specific MILCON dollars, yes, that will 
be spent at NATO headquarters sites, but for our folks.
    And the one in Turkey is a dorm, mission support facility 
that the Air Force has requested for $4 million at the NATO 
combined air ops center at--I cannot pronounce it--Eskisehir.
    But the joint subregional headquarters in Madrid, again, it 
is a BEQ--excuse me, it is a Navy exchange, a morale, welfare 
and recreation site for $2.73 million. Again, it is for our 
folks.
    Mr. Hobson. Chet?

                                SCHOOLS

    Mr. Edwards. Two questions, Secretary Zakheim. In your 
testimony on page 3, you talk about the 13 schools for 
dependents. In that budget, or anywhere else in the defense 
budget, do we take into consideration that one direct impact of 
our privatization policy is to bring an enormous increase in 
the number of students onto our installations. For example, at 
Fort Hood, which, again, I enthusiastically support--their 
estimates are that they will have to build three new schools.
    Is it the administration's intention that the local school 
districts ought to have to pay for the total cost of building 
those new schools, or have either of you, perhaps, looked at 
that real problem--again, a direct result of a change in 
policy, which we supported? I hope we can find some way to 
address that.
    Mr. Zakheim. I think you know, the Army offered land for 
building the new schools. But the school construction is not 
supposed to be funded with privatization funds. Since the 
housing projects are phased over time, you are not going to 
need those schools immediately.
    We do support the construction of new schools at Fort Hood, 
we are going to provide the land, we do not have adequate 
funding right now to build a school. But we are working with 
the local school districts, and will work with them, to 
identify a solution.
    There is a need; we recognize that, and we have to figure 
out a way to meet the need.
    Mr. Edwards. Because when you say that schools are not 
going to have to be built immediately, I am not sure that is so 
correct in the Fort Hood case. And my concern is that the whole 
goal of this, yours and ours together, is to improve morale for 
our Service men and women and their families. We improve their 
housing, which I think will make a difference.
    We undermine that morale increase if they have to have 
their kids bused off-post, halfway across town. With the new 
security requirements on our installations, it is much harder 
to get on-post and off-post. So we are going to create some----
    Mr. Hobson. The school district can build a mock house.
    Mr. Edwards. The school district can, but I guess the issue 
in most of these cases, again taking Fort Hood as an example 
since that is the largest case of RCI, is that they are a 
property-poor school district; one of the poorest in the state 
of Texas on a property tax basis. So Impact Aid has been a key 
part of their funding, but all of a sudden they are estimating 
having to build three new schools.
    They just passed a $100 million bond package, which is 
incredible, the largest they have ever passed. Pretty amazing 
that they did it. It is a fairly low-income, middle-class 
community, but I do not think they had enough money in there 
for all three schools on the post.
    And it just seems like we should not put our heads in the 
sand and say, ``This is not a problem,'' or, ``We do not have 
any responsibility for it.'' Because it is a direct result of 
RCI.
    Now eventually, to be honest and fair, eventually they will 
benefit because these Part B students, some of them will become 
Part A. So ultimately, the operational funding increase will 
help the schools. Perhaps there is even a creative way to 
project some of those increases and help them now with 
construction costs, and take that out of their Part A funding 
later.
    I do not know what the answer is but it is a real problem. 
It is going to affect seriously the morale of the parents if 
their kids are either in huge classrooms, 40, 50 kids per 
teacher, or they have to be bused halfway across town.
    Mr. Zakheim. No, I think everyone agrees that we have got 
to find some kind of solution. You are right, the county has a 
problem. Obviously, you cannot tax homes on government 
properties, so it does not have that kind of tax base for that. 
We do not want to take the money out of the project funds and 
put it into schools: That is just robbing Peter to pay Paul; it 
does not do any good.
    We are offering up the land, and my understanding is that 
the Army is going to be working with the local district to see 
how it can fix it.
    Mr. Edwards. Everybody is saying we are going to try to see 
how we can fix it, but I am waiting for specific solutions.
    Mr. Zakheim. We will go back to them and see what they are 
doing, and whether we can be of any help.
    Mr. Edwards. I was hoping maybe the BAH increase above 
expectations might have opened up some money that you could at 
least consider, if you get to choose--I do not want to put it 
houses versus schools, but if it is going to fix up this extra 
park or build a school so kids do not have to get shipped 20 
miles across town, we might look at the possibilities. I know 
we are not going to solve that problem today.
    I just ask your help so these children will not have to get 
bused halfway across the community. I would welcome any 
creative ideas, and I would like to work with you. I know there 
is not a simple solution. But I do not think saying that local 
folks are trying to work on it is a solution, because they may 
not have been given any options that provide us a solution.
    Second, and I ask this quickly, is I would like this just 
to be in writing, but Secretary Zakheim you talked about we are 
on a seven-year track to, reach Secretary Rumsfeld's goal of 
seeing all military personnel and their families living in 
adequate housing. That assumes there is a track, and it assumes 
we are on that track.
    Could you send to this committee what the track is?
    [The information follows:]

                            Military Housing

    The Department is working toward our goal of eliminating 
inadequate family housing units in 2007. All the Military 
Services, except the Air Force, have funding plans to meet or 
exceed this goal. The latest Air Force Family Housing Master 
Plan provided to Congress on August 31, 2001, reflect 
achievement of this goal in 2010, which is a two-year 
improvement over its previous plan. That plan indicates that 
approximately 15,000 inadequate housing units remain after FY 
2007. The Air Force continues to analyze the feasibility of 
moving achievement forward to 2007.
    The following table reflects the FY2002-FY2007 DoD-wide 
Milcon funding currently programmed to eliminate inadequate 
family housing units through renovation, replacement or 
privatization. Also displayed are the estimated inventory of 
inadequate housing units and the estimated drawdown of those 
units, per fiscal year.

----------------------------------------------------------------------------------------------------------------
                                                                             Fiscal year--
                                                     -----------------------------------------------------------
                                                        2002      2003      2004      2005      2006      2007
----------------------------------------------------------------------------------------------------------------
MilCon Funding ($M).................................    $1,177    $1,341    $1,453    $2,265    $2,046    $1,895
                                                     ===========================================================
Inadequate Housing Units (Beginning Year)...........   167,766   142,704   101,695    85,248    59,610    36,450
Inadequate Housing Drawdown.........................    25,062    41,009    16,447    25,638    23,159    21,450
----------------------------------------------------------------------------------------------------------------

    No similar goal to eliminate inadequate barracks has been 
established. However, the Department has been working to 
replace or renovate its permanent party gang latrine barracks 
by 2008 to advance quality of life for the unaccompanied 
enlisted personnel. These gang latrine barracks are revitalized 
to the Department's 1+1 construction standard. This 
configuration provides a module consisting of two bedroom 
spaces, sharing a bathroom and service area. The Services have 
already met or are on track to complete this revitalization 
effort by 2008. The FY 2003 budget request includes $1.2 
billion to replace/revitalize gang latrine barracks and high 
priority basic training, transient, and deficit barracks 
requirements. The Department is considering whether to 
establish a revitalization goal for barracks similar to that 
established for family housing. Additionally, the Navy and Army 
are examining options for using the Military Housing 
Privatization Initiative authorities to improve DoD's 
unaccompanied housing inventory.

    Mr. Zakheim. Absolutely.
    Mr. Edwards. How many substandard housing barracks? I think 
the chairman referred to this, but very specifically, how many 
of those are barracks? How many are housing? Is it a straight 
track, or is it one of these tracks that goes like this, and 
year six and seven drops off like----
    Mr. Zakheim. We will get it to you. It is not a quick 
dropoff.
    Mr. Edwards. Because then we have something by which to 
measure next year, the next year and the next year.
    Mr. Hobson. And we would like the privatization of barracks 
too.
    Mr. Zakheim. We will get that to you, sir.
    Mr. Edwards. Great. Thank you both. Thank you both for what 
you are doing.
    Mr. Farr. Thank you, Mr. Chairman. I would like to follow 
up on this discussion that is not only BRAC but a follow-up on 
Mr. Edwards' comments about housing. What I see happening in 
the West--my experience obviously is in California--that real 
estate is becoming so expensive in California that we are not 
going to be able to afford to have soldiers live off the local 
economy. We are going to really need to do what I think we 
originally did, which was house them on bases.
    And I think that the RCI is a good way to build attractive 
housing and a smart way to do things. Because I think 
government is the best tenant you can have.
    But what I am concerned about is that we are not really 
committed to thinking about the dynamics of encroachment, the 
dynamics that you mention in your comments, the dynamics of 
having to move people to utilize our government-owned land more 
effectively.

             LOSS OF AGRICULTURAL LAND DUE TO ENCROACHMENT

    And two things come to mind. Allen and I both sit on the 
Agriculture Appropriations subcommittee. What we are very 
concerned about is the loss of productive agricultural land due 
to encroachment. It seems to me that there is a two-fer here 
and I saw it at Lemoore Air Force Base out in the San Joaquin 
Valley, north--near Merced, where the city of Lemoore is 
growing toward the naval base.
    What the Navy did was work with the local land trust, ag 
land trust, and buy up all that land and put it in permanent 
agriculture. So that the city, essentially, is stopped from 
getting closer. It is a great buffer zone. It is a win-win, 
because the farmers keep their land in agriculture.
    And it seems to me that you ought to really engage with 
agricultural land trusts on these buffer issues around the 
United States, that there is great opportunity. I am sure it is 
not just with the ag land, it is probably with a lot of other 
sensitive land that could be put into permanent easements.
    Mr. Boyd. Would the gentleman yield?
    Mr. Farr. Yes.
    Mr. Boyd. Some of the states have really done some 
innovative work in terms of conservation easements, development 
rights. They are really going over very well and they are 
popular with the ag community in areas. I believe the federal 
government even has a program. But I would just inject that it 
is something that--it is win-win situation.
    Mr. DuBois. There are several different specific examples 
over the last couple of years wherein the Army, in particular--
and I am reminded of the situation in Fort Bragg in North 
Carolina and the situation at Fort Huachuca in Arizona--where, 
working with local farmers and ranchers, land-owners, 
conservation easements have been bought. The Fort Huachuca 
situation is the San Pedro River water recharge issue.
    We have proposed, in our MILCON 2003 authorization 
language, two specific provisions that would streamline the 
ability of the military departments to work with both local 
land trusts, local governments, local land-owners and NGOs, 
like the Nature Conservancy, to not only invest and buy 
conservation easements, or actually accept land for these 
purposes. It is another land-use control mechanism.
    Mr. Farr. Could you get us some information on that?
    Mr. DuBois. Yes, sir.
    Mr. Farr. We are very excited about that.
    Mr. DuBois. We will do that.
    Mr. Farr. I applaud that. The other issue is a question to 
you, Ray, about the base ops contracts. You know, we have 
proven in Monterey that the Defense Language Institute--and I 
hope the Naval Postgraduate School will soon be on board--to 
contract out for limited services to the local public agencies.
    Principal Deputy Assistant Army Secretary Prosch wrote me 
on December 12 last year, expressing his support of this 
demonstration, because he recognizes it takes advantage of 
local community excess capacity to provide municipal services 
to the Army installation.
    I am not sure, did you propose permanent extension of that 
authority in your fiscal year 2003 budget? If so, why not? And 
can we get that permanent extension? We have got to get it into 
the authorizing mark.
    Mr. DuBois. As you know, last year we----
    Mr. Farr. You did a broad brush, and I think that was--I 
mean, it was every base, I think, it was too broad and OMB 
rejected it.
    Mr. DuBois. Right. I will answer your question for the 
record. I continue to try to convince OMB that this is a very 
valid and very valuable approach to reducing base operating 
services costs and to engage the local community in that 
regard.
    I will answer your question for the record.
    Mr. Farr. Okay. Well, I need--we need some discussion with 
Chairman Saxton----
    Mr. DuBois. Saxton, yes.
    Mr. Farr [continuing]. To get that authorized.
    The last part of that question is--and I would really 
encourage--and I think you are on it--is this whole concept of 
how you can integrate the community out there to be a better 
partner. I think it is part of this consolidation of bringing 
the Services together. What you have found is that there is too 
much duplication, and that is why we have base closure and 
realignment.
    But I also think that there is a second concern, that there 
is an awful lot of unnecessary need to protect that base as 
being totally federal from everything that happens. And so you 
do not take advantage of the community resources that are 
around the base to do base operations. Or, in areas you have 
done an incredible job of maintaining your bases, both, where 
you have cultural assets and you have environmental assets. I 
mean, the U.S. Park Service has been very complimentary of the 
way the Army has maintained their bases in that sense. And I 
think that we need to engage wherever possible if we are going 
to have the civilian community appreciative of our military 
services and our military bases.
    And I think, unfortunately, we are moving in just the 
opposite direction with this threat security, where we are 
essentially now building bigger fences and having more 
fortification. I think you are going to end up defeating what 
we are trying to do, which is to have sort of a town/gown 
relationship, to having more isolation. ``Well, that is, we do 
not know what goes on there, it is all a mystery.''
    I have lived in a community with three or four military 
bases around me and never knew what was on them because I could 
not get on them. It was not that it was impossible, just that 
it was always fenced off and you had to go through guards. And 
I think last year the Naval Postgraduate School hosted the Bach 
Festival because the building they traditionally use is being 
renovated. The Navy had a great win-win. And now they cannot do 
it because of the security issue.
    Mr. Zakheim. If I could, I was actually at the Naval 
Postgraduate School not long ago, and I had lunch with the 
mayor of Monterey and a whole group of local officials and 
local newspaper people. So please allow me a couple of 
observations.
    The first is that, you are right, that, especially in the 
last few years, there has been a tremendous degree of community 
outreach that was not here maybe 20 or 30 years ago. It was not 
even there when I was last at the Pentagon 15 years ago.
    I think, just from the people that I spoke with, there is 
an understanding that we have got to get our security act 
together, because that is in everybody's interest. I also 
recently spoke to 50 mayors and city council chairmen, mostly 
small-town mayors, from around the country, and they all feel, 
as you well know, that they are part of this war on terror, 
they are vulnerable to it, and that we need to work together to 
make sure that our populations are protected. Ordinary people 
also understand that we have got to secure the military 
facilities.
    On the other hand, there is an understanding on the part of 
the Department that we do not want to close out the populations 
around the bases because otherwise, again, the terrorists have 
won, they have changed our way of life, and we do not want that 
to happen.
    Mr. Farr. We certainly do not want a one-size-fits-all, and 
that is one of the difficulties I think you are having in 
trying to administer security where, in different communities, 
the risks are different.
    Mr. Zakheim. I do not disagree at all. We are working our 
way through something that nobody anticipated on September 10, 
and it is going to take a while. You know, we have not fought 
on our own territory in a very long time. No one has any 
memory--living memory of it. So what is really needed is good 
will and understanding.
    I think we have the understanding of the folks in the 
communities around the bases. By and large people in base 
communities, as we all know, are very supportive.
    Mr. Farr. I met with a lot of local leaders at a Homeland 
Security forum at the Naval Postgraduate School two weeks ago. 
One of the things that I think you are beginning to hear is 
that there is now, sort of, a pulling back. You know, it is 
almost they think there is too much security, because not much 
has changed.
    And the same thing is happening in airports. Passengers are 
up, but now they are starting to complain that maybe there is 
too much security.
    I think that we have to make that transition and there has 
been no sign of it. We do not have any sign of it here in the 
capital much less at home. Without necessarily fortifying 
everything, we have to get back to, sort of, a reasonableness.
    Members of Congress were talking the other day. I mean, 
what we have seen in the Middle East, particularly what we have 
seen in Israel. We think we can assume some more risk. We 
cannot stop everything. Certainly cannot stop a terrorist 
bomber. But we--you ought to be more cost-effective with our 
risk analysis, and doing something that allows people to feel 
secure but not intimidated.
    Mr. Zakheim. It is a delicate balance. You are right that 
there is a situational context. The problem, as you well know, 
is that, God forbid if there is another incident, everybody is 
going to say, ``Why wasn't there more security?'' We do not 
want to create a situation where we invite an incident.
    So it is a balance here. We want to make sure that the 
terrorists understand that there is no profit in trying to do 
something in the United States. We want to make sure that our 
citizens feel protected, that our military is protected and at 
the same time that we retain the kind of society we were on 
September 10.
    It will take time--it is a shakedown cruise. It is going to 
take some time until we get it right. But from everyone I speak 
to that is involved, the intent is to provide the security 
without disrupting the way of life. Part of that way of life 
has been that over the last 15 or 20 years, there has been a 
really ramp up in the interaction between local communities and 
the bases that are within them. And we want to preserve that as 
best we can.
    Mr. Farr. Well, I understand all that. But I will tell you 
as a politician who has to deal with a lot of other issues, 
civilian issues, the communities are starting to complain. We 
have got all these drive-by shootings. Where is the emphasis on 
that? And for people who live in those neighborhoods that is a 
much greater threat to them coming out of their houses than any 
terrorist activity.
    They see our government responding to terrorist activity, 
but they do not see our government responding to youth 
violence. And so there is a proportionality here that we have 
to bring back into the entire country, not just to military 
bases.
    Mr. Hobson. Did you paint that runway while I was aground?
    Mr. Boyd. No, sir, but we found out how much it will cost, 
I think.
    Mr. DuBois. It is a usable runway.
    Mr. Boyd. Thank you, Mr. Chairman.
    One of the things that I have learned since being on this 
subcommittee is that when I get done with this career that I am 
in now, I figured out what I do not want to do. I do not want 
to go into the Pentagon and be one of those people that has to 
appear before Appropriations Committees defending the budget.
    So I say that to compliment you guys. You have a very tough 
job. And have to understand a lot of issues.
    I want to bring up a new issue that will not be in the form 
of a question. You can comment on it if you like. It is one 
that I am going to talk to some people about, including the 
chairman, in the coming months.

                              TYNDALL AFB

    The 1st Air Force is located at Tyndall Air Force Base. As 
you know, the 1st Air Force oversees air defense forces in the 
continental U.S. and is a component of the North American Air 
Defense Command. Following September 11, the 1st Air Force 
Operation Center has been pushed to the limits because of age 
and size of that current building. Prior to September 11, there 
were 50 people permanently housed in the 1st Air Force Ops 
Center. That number went to over 300, maybe 350, during the 
months that followed. And we think it all settles out and the 
OPTEMPO is finally established, we are looking at 150 permanent 
personnel there.
    We have got a serious infrastructure issue there, you know, 
housing those people in a place where they can do their work. 
The current building is simply inadequate and needs to be 
replaced as soon as possible.
    You also may know, that the commander of the 1st Air Force 
currently is Major General Larry Arnold who is one of the three 
individuals in the United States with the authority to 
authorize a shoot-down of a commercial, civilian aircraft by a 
military aircraft. That is, I think, pursuant to September 11.
    I am going to make it one of my priorities to try to see 
that we get the proper facility down there. I wanted you to 
know--it is a new issue; I am not complaining or anything. I 
just want you to know that this is something that we need to 
deal with. And you can comment on it if you like. If not, we 
will move to the next issue.
    Mr. DuBois. I do not have anything particular on that.
    Mr. Zakheim. While I am here, I can say that. You know we 
have a supplemental that we sent up for fiscal 2002. There were 
a couple of criteria that had to be met before anything could 
be included in that supplemental.
    One was that we could only ask for things that were related 
directly to the war in Afghanistan and Noble Eagle at home. The 
second was that whatever we were asking for had to be 
executable in fiscal year 2002. That really goes to a larger 
question, which is yours, sir, namely, what about MILCON in 
this sup?
    The answer is that because as the design requirement, it 
would not be executable in fiscal year 2002. Therefore, you are 
not seeing anything in the supplemental along the lines of what 
you might be describing, or other similar projects, because 
this is really for urgent operations and programs that will be 
needed, spent on, and executed by September 30, 2002.
    Mr. Boyd. Okay, I guess that is a warning.
    Mr. Zakheim. It is not a warning. It is just a fact, an 
explanation.
    Mr. Boyd. Now, when you start talking about supplemental I 
thought maybe you were going to suggest that we ought to head 
in that direction. But I think you suggested just the opposite 
if I understood you right.
    Mr. Zakheim. I am not telling you where to head, sir. That 
is for you to decide. I am just telling you how it was put 
together.
    Mr. Boyd. I guess my other question----
    Mr. Hobson. Can I add something to that, before you go on 
to something else?
    Mr. Boyd. Yes, sir.
    Mr. Hobson. We have checked on that. It is in the FYDP, but 
we are asking to see if they cannot move it up. We have already 
asked that, on your behalf.
    Mr. Boyd. Have I asked it? No.
    Mr. Hobson. We have asked for you.
    Mr. Boyd. Good. Thank you, sir.
    Mr. Hobson. And it is being looked at.
    Mr. Boyd. I raised it just to make sure that everybody 
knows it is an issue.
    The other thing falls in the category of big-picture stuff, 
and I wanted to direct this to Secretary DuBois. It comes in 
the area of environmental clean-up. I know that, particularly 
for some of the Services, that there has been a de-emphasis of 
recent on R&D on the environmental side. Can you tell us, are 
you satisfied with the progress we are making on the 
environmental clean-up side, across the Services? Do we have 
adequate technology, or if we do not, are we doing what we need 
to do to develop the technology, or is that technology coming 
from the private sector? This is a general big-picture 
question.
    Mr. DuBois. I think we did touch upon this in the UXO 
hearing that you all had a month or so ago. We--the Department 
of Defense invests some $100 million in environmental 
technology of one kind or another. A rather significant amount 
is being focussed, because of my concerns with UXO, on 
detection and removal of unexploded ordnance and unexploded 
bombs, some of which are buried in some of these places, as we 
are finding out, much to our horror.
    Is that enough money? It is our considered judgment that it 
is the right amount of money. I will say this, that each 
service, at least the Army and Navy, also made technological 
R&D investments in this area. The Air Force had zeroed it out a 
couple of years ago, and now----
    Mr. Hobson. I am keenly aware of that.
    Mr. DuBois. I have had discussions with the new 
undersecretary of the Air Force, Pete Teets, and with the new 
Deputy Assistant Secretary of the Air Force for Environment, 
Maureen Coats. And we, as well as Nelson Gibbs, her boss--we 
are--how shall I say?--I am strongly urging the Air Force to 
reconsider this issue. To be a partner with the other two 
military departments and OSD in this regard, I believe that, 
coming from 25 years in the private sector, and watching 
carefully R&D dollars in the information technology arena, that 
they are, by and large, well spent. For every effectively spent 
dollar in R&D, we probably avoid spending seven or eight down 
the road.
    Mr. Boyd. Thank you very much for your answer.
    Mr. Hobson. You better look in the big bill, too, because 
in the big bill they are killing R&D. In my opinion.
    Mr. Zakheim. You think we are killing R&D? I am not sure 
about that at all.
    Mr. Hobson. In certain places.
    Mr. Zakheim. Maybe even selected items, because the R&D 
numbers have gone up, including the science and technology 
account.
    Mr. Hobson. Depends how you look at it.

                       DEFENSE LANGUAGE INSTITUTE

    Mr. Farr. I have one question, Dr. Zakheim. I represent the 
Defense Language Institute. The colonel out there told me that 
the demands on Persian-Farsi have increased. DLI responds to 
the Services' request. They are short about $2 million just in 
that program, that happened in the last several months. Would 
you look into that for us, to see if there are adequate funds 
there?
    Mr. Zakheim. Sure.
    Mr. Farr. What happened is that this request came along 
late--it ought to be in the supplemental. We have half a dozen 
new languages that are being taught at DLI in the last few 
months. And to recruit those professors, a lot of the exotic 
languages, to recruit them, to put together a curriculum, to 
put the whole thing together in a relatively short number of 
weeks has really been a remarkable feat.
    Mr. Hobson. And there are people in the military that can 
speak those languages, but they are not always in the right 
places. Now there was a young troop in--down at Guantanamo, who 
was assigned to Guantanamo, and he is not a member of the--from 
the school Sam and I visit, who had had antiquated facilities. 
He is not from there, but he is in the Service, and they 
pressed him into being an interpreter, but he went with being 
in the hospital. He was doing great stuff.
    Mr. Zakheim. I will look into it for you. I can say this, 
that at the highest levels there is tremendous support for what 
is being done. As you know, because DLI is in your district, 
there has been a traditional emphasis on Romance languages, and 
to some extent on German, and some on Chinese. But when you are 
talking about either the Central Asian languages, or even 
Arabic, there just has not been enough of that. And yes, there 
is a big push in that direction. I will certainly look into it 
for you.
    Mr. Farr. Thank you very much.
    Mr. Hobson. We heard a lot of people in Bosnia and Kosovo 
who were not graduates from there, and I--we should have had 
more graduates but they did not have them. They were contract.
    Let me go into something I am really upset about. 
[Laughter.]
    And I talked to you about this earlier. I mean, this budget 
got put together--one part of the Service that traditionally is 
one of the most unfunded parts of the Service got whacked 
again. And it just drives me nuts, for a couple of reasons. 
Once--I do not know whether you guys were aware of this when 
this was done--but the budget, when it was racked and 
restacked, or whatever you call it, Army Guard and Reserve got 
cut by 75 percent. The question here is, is this an 
administration policy? I do not think so.
    But of all the Services that really suffer, first of all, 
it is the Army. Second of all, the Army Reserve and Guard 
always are behind everybody else and they have the worst 
equipment, and I think your personnel policy is really 
shortsighted, and your call-up. This is not necessarily a 
problem of this committee, but it does affect MILCON in the 
future, and how we spend funds.
    And I hate to keep saying this, because the Army people get 
upset with me when I do this--when I use this comparison. The 
Air Force has figured out how to handle people in a call-up; 
they do not call them up for long periods of time. We are going 
to have a huge problem when these people come home of staying 
in the Guard. People are already losing their jobs in the 
Reserve. They are losing their jobs because of the manner in 
which you called them up. I am not picking on you personally. 
But the manner in which this has been done and the manner in 
which this is being implemented is going to cost us a fortune 
in retraining when we start all over again.
    And you already cannot operate the Army without the Reserve 
and the Guard. You do not have enough military police. You do 
not have enough people--and some people will tell you that we 
have taken it down too far to continue all the stuff we are 
doing. But to treat the Army Guard and the Reserve by a 75 
percent cut, when they already--you go out and look at their 
trucks, you go out and look at their equipment--the worst 
equipment is there.
    And that is not true in the Air Force. The Air Force has 
integrated itself. And they do not call their people up. And I 
have tried--the TAGS across the country have tried to talk to 
the Army about this, and it is like talking to that wall. They 
do not want to listen, they do not care. It is going to cost us 
a fortune.
    And I tell you, it is like everything else we lose. This 
came out of people's pockets, this money, people would start 
looking at it smarter. Because you are going to have a huge 
retraining. You have got a huge--just a huge problem.
    And I will give you an example. One of the things I am 
still concerned about, Doctor, is that a lot of these 
projects--this $100 million that I talked about earlier, a lot 
of those were executable in 2002. They were fences and other 
types of things like that that could have been done. I was in 
the Air Guard, but I feel for the Army Guard and the Army 
Reserve. We have done a disservice to these wonderful people.
    I have been called up. I know what it is to be called up 
and sent away for a year. But when you are sent away for a year 
to guard a facility in Newport, Indiana, and there are no 
facilities for you to live in, no quality of life, nothing, and 
you see no future, and then you hear that you might be called 
for another year, if you think people are going to sign up and 
people are going to stay, somebody is lost in the building, and 
is just walking around in circles.
    Because it is just not fair, and it is not right, and it is 
not cost-effective. And it is going to cost you all in lots of 
things down the road.
    I am going to keep preaching this in every forum I can get 
to, till we get somebody to listen, and not only listen, but 
act. I can tell you, TAGS all over the country have talked 
about this. It is a very high priority with them. But nobody is 
listening and acting.
    And some of this $100 million can be in there too--that 
would send a good message, but the policy needs to be changed.
    And I am so frustrated by it because we talked about this 
when it started, I have talked about, I keep talking, I keep 
chirping about it. And I do not like to get mad about it, but I 
do not know any other way to do it.
    You know, some people tell me, when we got into the problem 
on Guantanamo, somebody said, ``Gee, why does he have to carry 
a hammer?'' Well, let me tell you something: If you do not have 
a hammer, nobody listens, until you bang somebody in the head 
someplace and threaten certain things.
    And, frankly, I guess some of the stuff that we asked to be 
changed down at Guantanamo is being changed. We should not have 
had--my point is, we should not have had to ask for that to be 
done, that should have been within the department. But it is 
getting done.
    I do not know how much of this you can change in this $100 
million here, when you look back at what is in it, but somebody 
needs to go back and look at this 75 percent cut, because it is 
just not the right thing.
    Mr. Zakheim. A couple things. First, as you said, we do try 
to be responsive. This year we went to the Services and 
basically allowed them to make their priority choices.
    It may not be satisfactory to you, but nevertheless the 
2003 request, when compared to the pre-amendment request for 
2002, is actually higher, significantly higher, and higher even 
after inflation. In 2002 the plan originally was to ask for 
about $224 million. You then amended it up to well over $600 
million. This year's request is just short of $300 million. 
Maybe it does not satisfy you, but it reflects a trend in the 
right direction.
    This does talk to Service priorities. I hear what you say. 
We are going to look into it. We will be happy to look----
    Mr. Hobson. But the Army was cut by--the Guard and Reserve 
were cut by 75 percent.
    Mr. Zakheim. I am not arguing with the number.
    Mr. Hobson. Well, I just want you to state that you are not 
arguing the number. It is. It is a real number.
    Mr. DuBois. It is a fact.
    Mr. Zakheim. It is a fact.
    Mr. DuBois. Fiscal year 2002 as appropriated.
    Mr. Zakheim. As appropriated. I am talking request.
    Mr. Hobson. Gentlemen, gentlemen, we are talking about the 
government of the United States. I do not care whether it is 
appropriated or not appropriated, it was a fact that the money 
was there, and it is the government's money, whether you guys 
put it in or we put it in, and it is cut 75 percent. Now, are 
you telling me we have got to go back in and raise it back up?
    Mr. Zakheim. No. What I am saying no, on the contrary.
    Mr. Hobson. It does not show much of a--let me put it this 
way. Whether it is 75 percent or 50 percent, we can play with 
the numbers. The worst facilities, the worst equipment, the 
worst operations is the way the Army treats the Guard and 
Reserve, of the reserve components, and to do this and then 
call them up does not send the right messages. And then to call 
them up in the manner in which they called them up and the way 
they are treating them after they are called up is not the 
right way to maintain it.
    My problem is, it is penny wise and pound foolish, because 
the next couple years you are all going to come back and say, 
``Whoa, have we got a problem in the Army Reserve. We have got 
to go through this recruiting program. We have got to have this 
big thing because we have lost all these people.''
    Proper personnel management and proper equipment management 
would mediate a lot of the problem you are going to have. And I 
do not know if they tell you this stuff, but if you get below 
the officer corps, and there are a lot of officers that like to 
be called up because they get points for retirement and they 
make money, many times more than they make in their private 
job; not true of the younger troops and the people we need. And 
if we have to go out and retrain all these people again and go 
out and encourage enlistments and do all this other kind of 
stuff, it is going to cost us a lot of money.
    I am trying to avoid all that money, and this kind of thing 
just exacerbates the problem.
    And I do not expect you to have to--you do not have to 
defend it. The numbers are there. The facts are there. If you 
can get people to go out and talk to these people they will 
tell you. I have been there. They will talk to me because I was 
a guardsman. If I can get rid of all the generals that are 
around with me, they will talk to me, and they will tell me, 
and they will call me afterwards, and they will do that to 
other members when they go to these places. They will tell us. 
And we get letters, we get phone calls, I get e-mails--well, 
not from Korea, because I cannot get an e-mail from Korea. 
[Laughter.]
    But I get e-mails from other places.
    Mr. Zakheim. I hear you, Mr. Chairman, and I will talk to 
some of my colleagues. Look, we share the concern. We do not 
want people in the Guard and Reserves to be unhappy because we 
need them.
    Mr. Hobson. And they are doing great work.
    Mr. Zakheim. I will talk to my colleagues about that. We 
will be back to you. We do try to be responsive.
    Mr. Hobson. And, you know, this is our--first of all, I 
have great respect for both of you. I mean, it does not appear 
like it sometimes when we are doing this. But you have tough 
jobs, you were very kind to come up and listen to us and react 
with us, and we have shared some things, and we do, I think 
more than it may appear in here, we do all work together, the 
committee works together, to try to get this stuff done. But if 
we do not air it out here then it just stays inside certain 
scopes, and people need to know that we are working. You are 
working, we are working. Sometimes we have a difference of 
opinion how to get there, but our goals are the same, all of 
us.
    Mr. Zakheim. We agree.
    Mr. Hobson. Anything you want to say, or you just want to 
get out of here?
    Mr. Zakheim. I will say thank you, Mr. Chairman. And I 
would like to thank the members. And I do want to reiterate 
what you just said: Our goals are the same. It is a very 
bipartisan subcommittee. We are all trying to do the same 
thing, we are all trying our best, and we appreciate the 
concerns and the strength of feeling that we hear.
    Mr. Hobson. Thank you very much.
    The hearing is adjourned.
                                      Wednesday, February 27, 2002.

                               U.S. ARMY

                               WITNESSES

HON. MARIO P. FIORI, ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND 
    ENVIRONMENT)
MAJ. GEN. ROBERT L. VAN ANTWERP, JR., ASSISTANT CHIEF OF STAFF FOR 
    INSTALLATION MANAGEMENT, DEPARTMENT OF THE ARMY
MAJ. GEN. JAMES R. HELMLY, COMMANDER (TPU), 78TH DIVISION (TRAINING 
    SUPPORT), U.S. ARMY RESERVES
BRIG. GEN. MICHAEL J. SQUIER, DEPUTY DIRECTOR, ARMY NATIONAL GUARD, 
    DEPARTMENT OF THE ARMY

                       Statement of the Chairman

    Mr. Hobson [presiding]. The committee will come to order.
    Our hearing this afternoon focuses on the Army military 
construction program, including family housing, base 
realignment and closure, and the Guard and Reserve, which seem 
to be left out of the Army's budget.
    Our witnesses this afternoon are Dr. Mario Fiori, Assistant 
Secretary of the Army for Installations and Environment; Major 
General Robert Van Antwerp representing the Army; Major General 
James Helmly representing the Army Reserve; and Brigadier 
General Michael Squier representing the Army National Guard.
    I guess this is your last hearing, sir. You do not have to 
go through this again. Your life is going to get back to 
normal.
    It is a pleasure to have everyone appear before the 
subcommittee this year. We look forward to your testimony in 
our third hearing on the construction program for the Army, 
Army National Guard and Army Reserve.
    It is known by many that I am not happy with the 
department's fiscal year 2003 budget request for military 
construction and family housing. The request is $1.5 billion 
below last year's level. The funding level, along with the 
sustainment, restoration and modernization funding level result 
in the department's overall facilities recapitalization rate 
increasing from 83 years to 121 years.
    I find this lack of investment in infrastructure 
unacceptable when there is a proposed increase of $48 billion 
in overall defense spending.
    We hoped to get an explanation on the formation of this 
budget at our overview hearing this morning, which had to be 
canceled due to a rescheduling conflict of Dov Zakheim. 
Consequently, those questions will have to wait until another 
hearing date can be rescheduled.
    My main concern at this afternoon's hearing is, again, 
overall funding levels. The Army's construction request is $286 
million, or 16 percent below last year's level. The Army 
National Guard account decreases by $304 million, or 75 
percent. And the Army Reserve account decreases by $108 
million, or 65 percent.
    Although these funding levels are a disappointment, there 
is some positive aspects of this request. I had to find some. 
The request for barracks construction is $185 million above the 
amount provided last year. $138 million is requested for 
construction of facilities in Korea. This amount is 
approximately $16 million more than last year's level. And 
frankly, I am glad to see it there because Korea is an 
abomination. The request for the family housing accounts remain 
at last year's level at $1.4 billion.
    We look forward to hearing your testimony on this budget 
request and what you might have to tell us about how we can 
work together to improve the facilities where our soldiers 
work, train and live.
    I want to say another thing. There is a lot of stuff--I 
read a lot of articles--and I am going to write an article back 
to some guy--about the military and pork. Well, let me tell 
you, I looked through the Army's budget and I do not see one 
project in the Army for the state of Ohio for the National 
Guard or the Reserves. Not one. Now, you tell me that there 
isn't one and then I put it in and it is called pork.
    There are other times when the services will come to me and 
say, ``We can't get this in down there, but can you help us 
out?'' And then I hear grousing from the Defense Department 
about it being pork.
    Most of the stuff we have done has always been in the FYDP. 
We always get a 1391 before we do them. So I am a little tired 
of hearing some grousing and some stuff being fed to guys 
writing articles about pork in the defense bill.
    And I will tell you, I go on more bases than some of the 
officers and some of the people who put these things together. 
And if we want to go to pork, I will go to one of my favorite 
places to show pork that the Army is doing, which I think is 
absolutely outrageous. But I am not going to get into that 
today. And there are a couple other places where I can show 
great pork by the Army. Now, they do not call it pork because 
they hide it. Or the Air Force or the Navy or the Marine Corp; 
I am not pulling punches on that.
    But I just think it is silly for us to get into this name 
game. You know, I am willing to go to Arizona and look around 
some things in Arizona and some other places that are designed 
as pork. But when I save AFIT, at the Air Force Institute of 
Technology, and it is considered pork, when a four-star tells 
me that he wanted it saved, I get a little upset. So, if I am 
upset about it and people are listening, fine. Because I am.
    And I am tired of programs. There are certain programs that 
we lose $30 million or $40 million--this is not in your 
bailiwick--but we lose $30 million or $40 million because 
contracts are not drawn right or something happens beyond that. 
Those are the kinds of things I think are outrageous.
    And there are some pork barrel projects; don't get me 
wrong. I have had some fights over those and fighting some of 
those.
    So, I just wanted to tell you that before we got started 
today just to set the tone a little bit here. And now I will 
let John say anything that John wants.
    John.

                     Opening Statement of Mr. Olver

    Mr. Olver. Well, I am feeling crotchety, too today. 
[Laughter.]
    Glad to see you all again. I think we have had all of you 
except Dr. Fiori. And so I am going to be very interested in 
the testimony that he adds to this process. Maybe he will 
resolve all our problems here, including the chairman's 
problems.
    I feel as deeply as the chairman does, but, you know, I do 
recognize that the Army is facing some serious challenges. You 
are prosecuting a war against terrorism. You are trying to 
provide adequate force protection for troops and their families 
in some difficult places. You are dealing with and trying to 
correct what I continually find is a significant backlog of 
facilities that are below standards. You are implementing, or 
trying to, again, major transformations that are immediate and 
long term.
    So, these have some pretty heavy implications for the 
military construction bill we have before us this year. And I 
must say I am not buying the smoke screen that the reason why 
we have been cut rather substantially on the military 
construction--because I do not see any diminution at all of the 
needs--that that is being done because we are waiting for the 
next round of BRAC. I do not think that that is probably the 
reason at all. Among these challenges, the Pentagon has other 
priorities beyond the jurisdiction of the subcommittee at this 
time.
    So, I am deeply concerned about this budget because I think 
that some of our major needs are not adequately addressed. But 
I am looking forward to hearing what you may be able to tell us 
about how we can help you address the military construction 
problems that the Army has.
    Thank you, Mr. Chairman.
    Mr. Hobson. Let's see, I guess, Dr. Fiori, your written 
statement has been entered in the record, but I would like you 
to please summarize your testimony for us.

 Statement of Dr. Mario P. Fiori, Assistant Secretary of the Army (I&E)

    Dr. Fiori. Thank you, Mr. Chairman, members of the 
committee. We are all here very pleased to tell you about the 
budget and comment briefly and highlight some of the programs 
of the budget.
    We have many challenges in front of us. Our goal is to 
ensure that all garrisons, throughout the world, have an equal 
and outstanding level of service for our soldiers and their 
families. As I have visited selected Army installations, I have 
observed the progress that has already been made. I attribute 
much of this success directly to the longstanding support of 
this committee and your staff.
    The Army's overall budget request for fiscal year 2003 
supports The Army vision--People, Readiness and Transformation, 
and the strategic guidance to transform to full-spectrum force 
while ensuring warfighting readiness. It reflects a balanced 
base program that will allow The Army to remain trained and 
ready throughout Fiscal Year 2003, while ensuring we fulfill 
our critical role in the global war on terrorism.
    Our military construction budget request is $3.2 billion 
and will fund our highest priority facilities and family 
housing requirements. In fiscal year 2002, we presented a 
budget that was a down payment on our goal to better support 
our infrastructure. When we developed this year's budget, in 
light of the events that took place last year, we had some very 
difficult decisions to make. The need to fund our military pay 
raises, Army transformation, OPTEMPO, the war on terrorism, 
increases in health care, and other key programs were all 
included in the decision leading to our request. Thus, the Army 
budget provides the best balance between all of our programs 
including military construction.
    A few critical areas in our military construction request 
include The Army transformation at Fort Lewis, Fort Wainwright 
and Fort Polk. We have eight projects for $195 million included 
in the program to ensure transformation continues to progress 
as envisioned by our leadership. We are continuing to validate 
our construction requirements and schedule in projects so they 
best match our deployment schedules.
    The transformation includes not only projects for the 
Active Army, but also to support the activation of the Army 
National Guard units that are scheduled to convert to an 
interim brigade combat team.
    Army family housing is a success story this year. We are 
now on target to eliminate inadequate family housing through 
construction or privatization by 2007. Our budget includes $180 
million for Residential Communities Initiative, to continue 
acquisition and transition of the 11 installations currently 
underway, and seven new installations for a total of 50,000 
housing units.
    RCI is a great success story. I visited Fort Carson on 
Monday, and I am delighted to report that the program is three 
months ahead of schedule and now has 338 new units occupied and 
500 units renovated. The Army certainly appreciates your strong 
support in making RCI a reality. I am pleased to advise you we 
are also joining forces with the Navy at Monterey, and the 
Coast Guard has asked us to assist them in New York City. The 
combination of privatization and construction will meet our 
goal of fixing family housing three years earlier than we 
reported last year.
    A portion of our Military Construction, Army, and our 
family housing construction program this year is dedicated to 
overseas construction. Seventy-five percent of the overseas 
military construction request will be used to provide better 
barracks for almost 3,000 soldiers mainly in Europe and Korea.
    We are also constructing new facilities to support the 
Efficient Basing, East initiative in Germany, which will 
consolidate 13 small installations into a single installation 
at Grafenwoehr. Two projects in our request will finalize The 
Army's construction requirements for the Efficient Basing, 
South initiative in Italy, which will station a second airborne 
infantry battalion at Vicenza.
    Mr. Hobson. I was just there at Vicenza for the reflagging 
of that unit. It is very impressive. General Wagner does a 
great job.
    Dr. Fiori. Each project is vital to maintain a suitable 
working and living environment for our soldiers and families 
overseas. At the end of Fiscal Year 2003, we will have 106,000 
of our permanent party single soldiers, which is 77 percent of 
our goal for barracks modernization funded. Our strategic 
mobility program, at the end of this fiscal year, will be 100 
percent funded.
    We will have completed all base closures and realignments, 
and in the next two years will concentrate very seriously on 
the final phases of disposal of these properties.
    And the Army National Guard anticipates that 30 of the 32 
weapons of mass destruction civil support team facilities will 
be initiated.
    As stewards of Army installations, we oversee other 
programs, including our operation and maintenance funding for 
sustainment, restoration and modernization. This year, we have 
requested almost $2.4 billion to fund maintenance and repair, 
which is 92 percent of our requirements.
    In 1998, the Secretary of Defense set a goal to privatize, 
whenever economical, all utility systems on military 
installations by September 30, 2003. We are fully committed to 
utilities privatization and, to date, the Army has privatized a 
total of 25 systems. For Fiscal Year 2002, we have proposals 
for 109 systems under procurement, and we expect to complete 
privatization for at least 35 in this fiscal year.
    Our enhanced use leases, real property exchanges and energy 
saving performance contracts all contribute to taking care of 
our installations. This year, we initiated a pilot program, 
which Congress approved, to contract our first five years of 
maintenance within the contract for three of our military 
construction projects. This will ensure adequate maintenance 
for the first five years and set a precedent for future 
construction projects.
    I want to conclude by telling you about one of the most 
important initiatives in the facilities area: the way in which 
the Army manages installations. Last year, the Secretary of the 
Army approved the concept of centralized installation 
management through a regional alignment.
    We will implement this new management structure on 1 
October of this year. A top-down, regional alignment creates a 
corporate structure, with the sole focus on efficient and 
effective management of all our installations. It frees up our 
mission commanders to concentrate on readiness.
    They will still have an influence on the important 
installation decisions, but not the day-to-day headaches. We 
believe centralized management will also enhance our ability to 
integrate active and reserve components and to develop multi-
functional installations to support the evolving transformation 
force structure.
    In closing, Mr. Chairman, I look forward to continuing our 
work and will always remember: ``Quality of life--first.'' 
Thank you.
    [The prepared statement of Dr. Mario P. Fiori follows:]



    
    Mr. Hobson. Thank you. We are going to put that up on a 
wall one of these days when Barry gets around to us down here. 
[Laughter.]
    You want to have----
    Major General Van Antwerp. Yes, sir.
    Mr. Hobson [continuing]. A statement by General Van. Do you 
have something you want to say?

         Statement of Major General Robert L. Van Antwerp, Jr.

    Major General Van Antwerp. Sir, I would just like to maybe 
comment on a few issues, Mr. Chairman and members of the 
subcommittee.
    First of all to tell you today on average we have about 
124,000 soldiers deployed overseas. We have an additional force 
supporting the war on terrorism of about 14,000 deployed around 
the world. And then we have 10,000 National Guard that are 
supporting the states; an additional 26,000 Guard and Reserve 
that are called on to support the war on terrorism. A lot of 
them you see when you come into the Pentagon and see the guards 
there. All doing an incredible job.
    So one of our challenges today is to provide for the well-
being of those soldiers that are away from home station, take 
care of their families where they are.
    There is no question that the Army today feels that our 
installations are readiness platforms, and they are very 
important to the readiness of the Army. And there is an 
initiative by the Chief of Staff to put together a strategic 
readiness system that incorporates installations. Up to this 
point we have had what we call the Installation Status Report, 
and it was really done separately from the Unit Status Report. 
The chief is blending those two so that installations are 
figured into the readiness of the Army. So that is a real plus 
in the area that we deal in.
    I want to just give you a sense of our future facility 
strategy and what the guidelines we're being given by DOD. One 
is to improve the quality of all our facilities to C2 by 2010. 
Another part of it is to get on a 67-year recapitalization 
ramp, Mr. Chairman. You said this year it is at 121 in the 2003 
budget. We need to get on that ramp for 67 years by 2010, and 
we are targeting that as we work our POM. We are also supposed 
to reduce the deficit to C2 in the next 20 years.
    And then, finally, is to fund our new mission requirements. 
As you know, the Army is transforming, and there will be 
considerable mission requirements there.
    Just one word on anti-terrorism force protection. In this 
year's budget we have $350 million, that is the 2003 budget, in 
O&M dollars. Those are basically to work the access control, to 
work cargo inspection, in-transit security and generally the 
security on the installations. We are also working to come up 
with the other requirements it will take for the long term.
    And, finally, I just want to say one thing about the land 
partnership plan that is ongoing in Korea. As you know, without 
BRAC authority they are doing something that is similar to what 
BRAC did; they are closing a number of small installations, 
allowing those installations to go back to the Koreans in 
exchange for greater land masses around the installations that 
we want to keep that are enduring.
    Mr. Hobson. I just want to be sure that we do not give back 
and then the other part never----
    Major General Van Antwerp. Anything we need.
    Mr. Hobson. Well, we do not give back and the other part 
does not happen. In the past, one of the problems we have had 
is that we do our part and then it takes years and years and 
years and the other part just never, kind of, quite happens.
    I also would like to see us do a program, which I suggested 
to General Schwartz, like the Navy did in Naples, Italy, where 
they got the host country private sector to build a facility 
there, which was total housing, which we will not probably do 
there. But they built a facility, we leased it from them, and I 
think we have an option to buy at some point, but we leased it 
to them and they built it, they used their money, and we leased 
it, similar to what we do here in our privatization stuff. And 
the Navy has already got a model, and I think General Schwartz 
has sent his people over to look at it.
    Major General Van Antwerp. Yes, we have talked about that.
    Mr. Hobson. Well, I am just concerned that we have a 
tendency to negotiate and we do not do a very good job of 
negotiating, and we wind on the short end of those deals.
    Major General Van Antwerp. Good caution, sir. And as we 
look at the exchange, I mean, we need the new location to move 
our soldiers to. So we are going to have to have those locked 
in first, before we turn anything----
    Mr. Hobson. Well, that has not always----
    Major General Van Antwerp. It has not always happened. I am 
working on that.
    Basically, in 2003 we have six projects for $138 million as 
part of this land partnership program. And, sir, that is all I 
wanted to amplify on Dr. Fiori's statement.
    I look forward to your questions.
    Mr. Hobson. Well, you should amplify there are 37,000 
people, I believe approximately, in Korea, which we do not take 
very good care of. And I do not think it should be this 
committee that should be the one carrying the torch on that, 
although we have been. It should be the Army carrying the torch 
on that. And it has not been in the past as strongly as, I 
think General Schwartz has done a good job on that point.
    If anybody has not seen his tape, they ought to see his 
tape. He has got tape.
    General Squier.
    Brigadier General Squier. Mr. Chairman, distinguished 
members of the subcommittee, as you indicated earlier, this is 
my----
    Mr. Hobson. I guess I should have gone with the two-star 
first. But you are sitting in between there. Sorry, go ahead.

                Statement of Brigadier Michael J. Squier

    Brigadier General Squier. As you implied, this is my final 
time in this current capacity to appear before this committee, 
and I really appreciate the opportunity. This is actually my 
fifth time.
    We are a pretty busy Army National Guard, as General Van 
Antwerp has implied. We have forces deployed in Afghanistan, 
Bosnia, Kosovo, Kuwait, as well as doing force protection in 
Europe, and force protection here in the country. And, of 
course, you are aware of our activities in the airports; and 
our participation in the border mission is still being debated 
right now.
    On behalf of all of the men and women of the Army National 
Guard, I appreciate the opportunity to present our budget for 
2003. The budget request is an endeavor to provide quality 
installations and continue to integrate the initiatives such as 
the Army division redesign, which is part of transformation for 
the Army, transformation itself, to include setting up an IBCT 
in Pennsylvania, the Army National Guard facility strategy as 
part of the Army's facility strategy; continuation of our 
weapons of mass destruction, and, of course, the numerous force 
protection initiatives that are important to us all since the 
endeavors of September 11.
    We are working diligently to determine the security of our 
unique communities, over 3,000 armories and numerous other 
facilities in more than 2,700 communities in all of our 54 
states, territories, District of Columbia.
    Your support of the Army National Guard Weapons of Mass 
Destruction/Civil Support Teams in Fiscal Year 2001 and 2002 
has enhanced homeland security and will go far to benefit the 
31 states in our missions to support our citizens at home.
    We are currently validating the force protection 
requirements that I alluded to earlier with the Army to 
determine the best protection for our facilities for the 
future.
    Our fiscal year 2003 military construction request of 
$101.6 million will support programs that I just outlined in 
both the transformation and in facilities strategy.
    The focus on Army division redesign setting has been 
ongoing now since 1996. The program converts up to 12 brigades 
at a cost of, for this request, $26.8 million to transform one 
facility in Alabama and North Carolina and two projects each in 
California, Texas and Nebraska.
    The rest of our major military construction budget request 
is $55.2 million for five mission projects as part of the 
facilities strategy. Included are two projects in Wisconsin, 
which will replace part of an existing United States property 
and fiscal office complex. This particular complex is made up 
of 23 buildings ranging in year of construction from 1895 to 
1980. The new facilities will permit our personnel to perform 
the necessary mission tasks, as well as providing fiscal and 
logistical support for the entire Wisconsin Army National 
Guard.
    Also included in the request is the first phase of 
construction for administration buildings at Barber's Point 
Hawaii. These units are currently housed in the pre-World War 
II facilities and located in the Diamond Head State Monument 
Area. Renovation at this building at Barber's Point will 
benefit both the soldiers and the State of Hawaii. Upon 
completion of the project, buildings within the Diamond Head 
Monument Area will be vacated allowing the area to revert back 
to a semi-wilderness condition.
    Finally, as part of the Army's facility strategy, we are 
requesting a readiness center at Summersville, West Virginia, 
and phase one of an armed forces reserve center in Kansas. This 
facility will be shared with the Marine Corps Reserve and the 
counter-drug office for the State of Kansas.
    General Van Antwerp has mentioned the centralized 
installation management process. We in the National Guard, 
because of the nature of what we are, will not be playing in 
that initially. But we will be evaluating it as we go through 
that with the Army to see the values and applications for the 
future.
    The Army National Guard is a viable and ready part of the 
Army and seeks to remain so with modern facilities and higher 
quality of life that are a foundation of readiness for our 
future.
    I thank you for this opportunity. I will be followed by 
General Helmly and look forward to your questions.
    Mr. Hobson. General.

               Statement of Major General James R. Helmly

    Major General Helmly. Good afternoon, Mr. Chairman and 
distinguished members of the committee. At the risk of waxing 
into informality, may I just note that I was in General 
Squier's shoes several years ago and believed incorrectly that 
I was escaping. So Mike could come back----
    [Laughter.]
    Major General Helmly [continuing]. As a late-round recall. 
[Laughter.]
    Of course, I am pleased, Mr. Chairman, members of the 
committee, to represent the Army Reserve here today.
    The demographic realities of the Army Reserve dictate the 
need for a widely dispersed inventory of facilities. This is so 
because, similar to the Army National Guard, but unlike the 
active component of the Army, we are required to take the 
facility to the soldier, rather than the reverse where we move 
the soldier to facilities for training and housing.
    As such, we are situated in more than 1,150 locations 
around our nation and overseas with more than 7,600 structures 
having an average age of over 40 years. The six Army Reserve-
operated installations add another 2,600 structures to that 
inventory and on those installations, the average age is 
approximately 47 years.
    In general terms, as was noted by the members of the 
committee, these facilities, similar to the Army Guard and the 
active component, are now, ``showing their age.''
    As it relates to facilities, the Army Reserve has adopted 
clear priorities and an innovative strategy. Our priorities are 
to focus on providing essential facilities to improve readiness 
and soldier well-being, to preserve and enhance the Army's 
image across America on Main Street USA, and conserve and 
protect our facilities, particularly important subsequent to 
the 11th of September.
    Inherent in all of these efforts is an unwavering desire to 
promote and maintain in the Army Reserve employees, family 
members and soldiers' pride in themselves, what they do and 
what they mean to our nation.
    Our facilities strategy includes three basic and principle 
thrusts: military construction, full facilities revitalization 
and real property exchanges. All three work in tandem to drive 
us toward the Army goal by significantly impacting 
approximately 18 to 25 locations per year for new constructions 
or major renovations.
    Our MILCON budget request for fiscal year 2003 considers 
the highest priority Army Reserve requirements. The request 
seeks almost $49 million in Military Construction, Army 
Reserve, and would permit construction of four new Army Reserve 
centers in the states of Nebraska, New York, Texas and Virginia 
to replace essential but outdated and inadequate facilities.
    It would also permit a new addition to a North Carolina 
reserve center, a new Marine maintenance facility for 
watercraft in California and a battalion dining facility at 
Fort McCoy in Wisconsin.
    We also request $2.8 million for unspecified minor 
construction to satisfy critical emergent requirements, and 
approximately $7 million for planning and design funds to 
ensure continuously viable military construction programs 
through the FYDP period.
    The second major thrust of our strategy is to use 
sustainment, restoration and modernization, or SRM, funding in 
a focused and directed way to accomplish full facility 
revitalization, which is a holistic renovation of an existing 
facility similar to the barracks upgrade programs within the 
active component of the Army.
    Full facility revitalization buys us approximately 25 
additional years on facilities that would not otherwise be 
addressed with military construction funds in the foreseeable 
future. We are currently able to accomplish three to five of 
these full facility revitalization projects per annum.
    The final major thrust of our strategy is to maximize the 
number of real property exchanges, or RPXs, which is a rapidly 
growing means to gain new facilities. Real property exchanges 
are cases wherein we realize new facilities as a result of 
exchanges of existing property with other public or private 
concerns on quid pro quo basis and at no cost to the American 
taxpayer.
    Long-term resource constraints in both military 
construction and SRM have combined to accelerate deterioration 
of our valuable facilities and infrastructure.
    Our fiscal year 2003 budget requests also include 
approximately $173 million for SRM, which equates to 91 percent 
of our Army Reserve annual SRM requirement.
    We also respectfully solicit your support for SRM as an 
essential adjunct and enabler to our construction program.
    As it relates to the Army's move to centralize installation 
management, the Army Reserve is integrating its management 
capability fully in the form of an Army Reserve support 
directorate in General Van Antwerp's Office of the Assistance 
Chief of Staff for Installation Management.
    The directorate will function in a fashion similar to that 
of the Army's new regional directorate that will focus on all 
Army Reserve interests worldwide. The Army Reserves 
appropriations will remain intact and under the purview of the 
Chief Army Reserve as required by law, as the appropriations 
director. We fully support the secretary of the Army's intent 
in the centralized installation management matter.
    Mr. Chairman, the fiscal year 2003 budget request of $59 
million for Military Construction, Army Reserve, and $173 
million for SRM are critical for supporting the continued 
readiness of the Army Reserve. We continue to remain grateful 
to you, your committee, the full Congress and the nation for 
the support that you have given and continue to provide to our 
Army Reserve soldiers, our most valuable resource, the sons and 
daughters of America. Thank you very much.
    Mr. Hobson. Thank you. And now we will turn to questions 
from members.
    Mr. Olver.
    Mr. Olver. Thank you, Mr. Chairman.

                         EFFICIENT BASING, EAST

    Let me ask you first a simple one to get a sense here. I am 
certainly, in general, of support of what you call efficient 
basing initiatives and changing the footprint, as several of 
you have talked about that both in Korea and in Europe. The 
initiative in Germany, where 13 installations--or units of 13 
installations are being consolidated in a single location in 
Grafenwoehr in Germany, are all the MILCON needs for that 
consolidation included in this 2003 budget?
    Major General Van Antwerp. Yes. This year we have $70 
million in the 2003 budget. There is an additional $492 of 
MILCON to complete that.
    Mr. Olver. $492 million?
    Major General Van Antwerp. Yes, sir, that would be 
programmed in the out-years. And another $99 million that is 
for DOD schools, for commissaries, PXs.
    Mr. Olver. So, you are not talking just about the 
Grafenwoehr?
    Major General Van Antwerp. No, I am talking about the 
entire consolidation.
    Mr. Olver. So you have $70 million in; will that complete 
the Grafenwoehr?
    Major General Van Antwerp. No, sir.
    Mr. Olver. You will possibly need $492 million to do that 
consolidation?
    Major General Van Antwerp. That is the estimate right now: 
$492 million of MILCON over the FYDP period.
    Mr. Hobson. We do not get any money from the----
    Major General Van Antwerp. We are working host nation where 
possible. Most of the status of forces agreements you basically 
turn the facilities back. It is really going to help on the 
maintenance. We are maintaining 13 installations, the overhead 
required for that, and a lot those facilities we need to either 
upgrade them or move out.
    Mr. Olver. How many total personnel will be at Grafenwoehr 
when this is done?
    Major General Van Antwerp. It is essentially a heavy combat 
brigade. So, it will be in the neighborhood of probably around 
4,000 total.
    Mr. Olver. And you are saying it is going to take almost 
$500 million to bring those 4,000 people from where they are 
spread around in several different places?
    Major General Van Antwerp. Some of it is training 
facilities also.
    Mr. Olver. Then let me ask another question. What you are 
doing for this year, the $70 million that is in this year, is 
this all training facilities, the combat readiness kinds of 
things? What is left over for phasing?
    Major General Van Antwerp. Basically, there are pieces. 
There is a barracks for $13 million in this year's $70 million, 
utilities infrastructure is $47 million to set everything in 
place for the follow-on construction, and then site prep of 
about $10 million. What we needed this year to be in phase was 
$130 million, but because of budget constraints we are down to 
$70 million for this year.
    Mr. Olver. So, there is very little of the consolidation 
can occur as a result of this. This is what you are intending 
to do over a series of years for that one combat brigade. Oh, 
my goodness. That has blown my mind about the amount that is 
entirely necessary and how extensive this one particular 
initiative is.
    Let me go on to something----
    Mr. Hobson. John, one thing you might do is do a cost 
analysis that would help in this. If you are spending, say, 
$500 million, what you are going to save from other things, X 
amount of dollars, and then people will be a little more 
comfortable with where you are. I think that would help a 
little bit, John, I hope.
    Mr. Olver. I am sure it would. Something might help.
    Dr. Fiori. We are getting an independent check and it will 
be ready sometime, hopefully, in March. We do exactly that. We 
have done that already, but we are getting it independently 
validated.
    Major General Van Antwerp. It basically eliminates about 
5.7 million square feet of facilities, and so most of those 
facilities need to be replaced at the new location. But a lot 
of those facilities are in C4 condition; what you would say not 
mission capable. So that is, kind of, a magnitude of it.
    Mr. Olver. Okay.
    Let me call one other line here. September 11 has caused a 
great deal of rethink at the Pentagon and here on the Hill, 
obviously. I am just curious whether the military construction 
budget, since that happened then, your budget was in process 
upward. How much reprioritization went on in the development of 
this 2003 budget that we now are seeing? Can you give a sense 
of what that might be, somebody?
    Major General Van Antwerp. Actually, before 9/11, the Army 
had already started to look at our force protection and our 
terrorism needs. There was enough indication. So we convened 
some teams that put together the requirements in more detail.
    Basically, our strategy was, even without 9/11, to have the 
ability to restrict access on our installations, protect key 
facilities, to look at those places like chemical 
demilitarization sites where we have storage of chemical 
facilities that needed protection.
    We did adjust some. We are still working the requirements. 
But basically what you saw in 2002, the use of the DERF funds, 
the MCA projects in that, and the $350 million that is in the 
2003 budget are projects that have come out of that analysis. I 
do not know if that gets to----
    Mr. Olver. Well, I was not particularly aware. It certainly 
was not a major thrust, as far as I could tell, the business of 
force protection and access and things of that sort prior to 9/
11. But you are saying that was already in process in some kind 
of a way.
    Major General Van Antwerp. Much of it already was.
    Mr. Olver. So it is a little difficult, then, for us to 
assess. I was trying to get a sense of how much 9/11 changed 
the way the budget is, the budget that is coming to us this 
year from what you were planning to give us prior to that.
    Major General Van Antwerp. I would say it has changed, 
there is no question, it has increased it and it has increased 
the tempo by which it was going to be done. We were going to 
phase it over a number of years to be able to restrict access, 
for instance, and now we have brought that in, very close in. 
So it definitely increased the 2003 requirement.

                          SUPPLEMENTAL FUNDING

    Mr. Olver. How much money out of the $40 billion of 
supplemental funding that was provided last fall, basically 
October, has been given to you to do what would be military 
construction things?
    Major General Van Antwerp. Military construction, we had 
about $56 million military construction, but altogether for 
anti-terrorism, force protection, it has been about $900 
million.
    Mr. Olver. And that has already been allocated?
    Major General Van Antwerp. It has been allocated out to our 
installations.
    Mr. Olver. Is that all Army? $900 million, is that to Army?
    Major General Van Antwerp. I meant $900 million.
    Mr. Olver. Out of the $40 billion, that has already been 
allocated to the Army. How long will it take to actually do 
those items? This is going to be expendable. It has not been 
expended yet clearly.
    Major General Van Antwerp. A lot of it has been expended on 
installations, the protective barriers, the guard houses. Quite 
a bit. And also some of it has been used for contract guards 
overseas, because we are allowed to do that.
    Mr. Olver. Okay.
    Thanks, Mr. Chairman.
    Mr. Hobson. Mr. Edwards.
    Mr. Edwards. Thank you, Mr. Chairman.
    Secretary Fiori and Generals, thank you for your testimony 
and your service to our country and to our Army.
    I respect the testimony given today. You know, it 
reinstills what I always felt about the Army. Whatever you are 
given, whatever dollars, whatever resources, you are going to 
stretch them as best as any human can and tell the best story 
about the resources you have.

                   MILCON BUDGET--FY 03 VERSUS FY 02

    You know, Dr. Fiori, your statement I think is excellent, 
but it is what is not in the statement that I guess concerns 
me. If I could turn to page 13, if you could look at that, I 
would like to ask how these numbers compare to fiscal year 2002 
by each category.
    If I just listened to the testimony today and I did not 
have some semblance what the Army budget was, frankly, I would 
come away from this testimony thinking that the Army just got 
the best deal it has ever gotten in the history of the United 
States. You got the best military construction budget and 
everything is great. We are going to meet all of our standards 
by 2007 for housing. We are going to do all this and that. And 
we are doing a lot of good things. But I am afraid this may 
tell some of the good news, but does not tell the whole story.
    So could I ask you, Secretary Fiori, and perhaps, if 
necessary, the budget people, can you just quickly tell me, 
next to the column ``new construction $27.9 million for 2003,'' 
what was that number for 2002, and just run down that list, and 
then tell me what the percentage change that is Army family 
housing.
    How about just giving me the bottom-line numbers? I would 
like to look at the bigger picture, the bottom-line numbers for 
Army MCA compared to last year; is it an increase or a decrease 
from the fiscal year 2002 appropriation?
    Dr. Fiori. Oh, it is a decrease from the appropriation, 
sir.
    Mr. Edwards. Okay. Now could I find that in your report 
anywhere?
    Dr. Fiori. I did not compare it with last year.
    Mr. Edwards. How much of a decrease is it percentage wise?
    Dr. Fiori. Sixteen percent.
    Mr. Edwards. Sixteen percent?
    Dr. Fiori. From the appropriation, yes.
    Mr. Edwards. And if you add, say 3 percent inflation or so 
on top of that, it is approaching a 20 percent cut despite all 
the good news in here.
    I am telling you, and this is not lodged at any of you 
individually because I am absolutely certain none of you would 
tell me that this was the request that you sent over to OMB. 
But, I am reminded of a former governor of Texas who once told 
me--and this was not the President but a previous governor--he 
said this guy came into his office and said, ``You know, 
Governor, I just want you to drown your opponent in this re-
election,'' and went on and on about how he wanted him to drown 
his opponent. And finally gave the governor a check and the 
governor looked at it, gave the check back to him and said, 
``John, with this, I can't even get his toes wet.''
    I feel like we have got these great narrative goals and 
things we are going to accomplish. But bottom line is it takes 
money to improve barracks, it takes money to deal with the 
terrible infrastructure needs that are out there. And we are 
talking about in effect, a 20 percent cut in your overall 
budget. It was interesting, you know, I could not find that 
anywhere in the statement.
    Again, I am not blaming you. You are putting the best 
possible spin on what is a difficult situation. I hope we can 
end up helping with it. But I agree with the chairman, I hope 
we do not end up getting attacked by the Department of Defense 
for trying to get you back up to budget level that I am sure 
you initially tried to ask OMB for.

                           LOW MILCON BUDGET

    May I ask, is it safe to say that this was not the budget 
that you presented to the OMB as representing the true needs of 
the Army for fiscal year 2003?
    Dr. Fiori. We negotiated the budget in-house where we did 
all the trade-offs. And even our President's budget that we 
submitted, it was higher than this year by $300 million.
    So even that, you know, we were debating. And as I 
mentioned in my oral statement earlier, there were lots of 
trade-offs made. And my problem, being a beginner in this whole 
process, or watching how it was done, it was really done in an 
open forum with the Chief and the Secretary participating. And 
the budget we came in with, I do not think has been modified by 
OMB.
    Mr. Edwards. So I have to go back to Army soldiers across 
the world and if they show me the barracks they are living in I 
can say that, you know, ``Your leadership of the Army said you 
didn't need----
    Dr. Fiori. I did not say that, sir. But in our barracks 
program and in our housing program, we are pretty much on 
schedule. I was pretty pleased by that.
    Mr. Edwards. I am thrilled by----
    Dr. Fiori. But there are some things that obviously need to 
be done. There are a lot of places where our people work that 
need to be improved. There are always needs. But the need has 
to be balanced with other needs that the service has.
    Mr. Edwards. I understand. You are doing as you did in your 
testimony. You are presenting an honest, positive spin on what 
I think is a very, very--I do not know of any other federal 
agency that had come before a Appropriation Committee or 
subcommittee and say ``We are thrilled, we only got cut by 20 
percent.'' And I respect you for that. But it may be this 
subcommittee's effort to try to improve it.
    Let me just ask one last question because I think my time 
is up for this round. You mentioned that 77 percent of the 
soldiers live in barracks that meet Army standards. That means 
23 percent live in barracks that do not meet modern standards. 
What number would that be? How many soldiers would that be 
Army-wide that are living in inadequate, outdated, below 
standard barracks.

                                BARRACKS

    Dr. Fiori. These are permanent party barracks that we are 
talking about; soldiers are stationed there and live there on 
the base. This does not include the student barracks and 
others.
    Major General Van Antwerp. All together, 100 percent is 
161,000 barracks spaces. So it is essentially 23 percent of 
that.
    Mr. Edwards. Twenty-three percent of 161,000----
    Major General Van Antwerp [continuing]. Are inadequate.
    [The information follows:]

    Higher ranking soldiers are allotted two ``spaces'' so the 
161,000 barracks spaces translates to approximately 138,000 
soldiers that require housing. With the funding requested in 
the fiscal year 2003 budget, there will be approximately 32,000 
soldiers still in inadequate housing.

    Mr. Edwards. So about 35,000 or so are living in 
inadequate, substandard barracks.
    Thank you, Mr. Chairman.
    Mr. Hobson. I am going to do an add-on to you that I do not 
want to wait for it, because it goes with this thing. Let me do 
this now. What amount did the Department of the Army send in to 
the comptroller? What amount did the comptroller send to OMB? 
Where there any PBDs that decreased the Department of the 
Army's request to OSC or OMB? Can anybody answer that?
    Major General Van Antwerp. To my knowledge, and not to 
speak for Mr. Zakheim, but I do not think that OMB reduced the 
amount that was sent over.
    Mr. Hobson. Well, you have got the question. If I can get 
answers to those.
    Mr. Farr.
    Mr. Farr. Thank you very much, Mr. Chairman.

                  CENTRALIZED INSTALLATION MANAGEMENT

    Mr. Farr. I have five questions and I will just take them 
as time allows. The first question goes to your proposal in 
your testimony about centralizing the installation management. 
This seems like a very practical thing to do. I represent the 
Defense Language Institute in Monterey. The Defense Language 
Institute never seems to get any projects on FYDP list. I think 
they get buried by TRADOC. And I want to know whether----
    Mr. Hobson. And you and I do----
    Mr. Farr. That is right. If it was not for the chairman and 
ranking member, there would be no millioin projects at DLI. And 
I think since 9/11 we have now discovered DLI is a very 
valuable asset to the Army, as well as to the entire country.
    The question goes to how this centralized installation 
management allow us to get projects on the FYDP? Is it going to 
speed it up? Is it going to be less bureaucratic?
    Dr. Fiori. Well, we are going to try to, for one thing, 
audit the DLI. We are looking at bringing our RCI program for 
housing out there.
    Mr. Farr. No, I mean, will centralization allow for a one-
stop that is going to be faster and more expeditious?
    Dr. Fiori. We are going to look at the flow of the 
programmatics, but ultimately we are going to end up again in 
General Van Antwerp's office as far as the military 
construction requirements go. The way they are going to be 
developed is each of our regional directors will assimilate all 
his regional garrisons and work on prioritization there. And 
then he will recommend it to us. It is very similar to what we 
are doing today with our military construction.
    In that particular garrison, that is exactly what would 
happen. DLI would go to our regional director, and then it 
would come up to us.

            DEFENSE LANGUAGE INSTITUTE MILITARY CONSTRUCTION

    Mr. Farr. Okay. I am advised that no military construction 
projects for DLI have been approved in the FYDP for almost a 
decade. We need new classrooms, we have needed new barracks, 
now we are going to do the RCI projects. You know, since 9/11 I 
understand that there are now 18 new languages that the Army is 
going to be training in. Until I saw this request, I did not 
know even half these languages were even spoken. But, where is 
the backup to housing and to provide classrooms for these 18 
new languages?
    Dr. Fiori. Sir, I do not have an answer. I will try to find 
out for you.
    Van, do you have anything?
    Major General Van Antwerp. I know that there is an 
evaluation being done at the facilities, and we are going to 
take that on in the 2004 to 2009 POM, and we will have a 
facilities reporter there in the next several months. The IG is 
responsible for the language training of the Army, and they are 
the ones that say, ``We need these 18 languages.''
    Mr. Farr. Well, we have the capacity, you own the land. 
When you closed Fort Ord, you saved a lot of it. You could go 
over there and build. There just has not been a willingness to 
do that.
    Major General Van Antwerp. They are assessing the existing 
classroom space to see and if there is additional space----
    Mr. Farr. You are going to need it. In other words, it is 
not rocket science.
    That is why I am wondering whether this is a new process of 
making the decision? You now have a big mission for this great 
school. DLI has testified before committees here that the 
capacity is there, even for the intelligence issues that have 
been raised on languages. Sort of a school within a school.
    But it is never been a capacity issue. I think sometimes 
the Pentagon thinks it is because of the expensive real estate 
out there, but they forget that there is still a lot of 
military property available.
    But the difficulty has been and what this committee has 
experienced is the process--from knowing there is a problem to 
addressing the problem--something gets lost. And if it was not 
for this subcommittee going out and visiting the school and 
particularly the chairman taking a personal interest in it. You 
know, force readiness is going to depend on communication 
skills and understanding of languages.

                       DISPOSAL OF ARMY PROPERTY

    My other question is, the testimony on page four, Mr. 
Secretary, refers to the 200 million square feet of surplus 
Army property being disposed in 2003. I do not know how you are 
work in 200 million square feet. How many acres are you getting 
rid of? Do you know what that translates into acres?
    Dr. Fiori. Well, obviously we are talking about office 
space rather than acreage in this particular thing.
    Major General Van Antwerp. This is the facilities 
description?
    Dr. Fiori. This is the facility side itself that we are 
talking about, we are locating that many square feet.
    Mr. Farr. Does that include the BRAC actions of 1991, 1993 
and other years?
    Major General Van Antwerp. No, it does not include BRAC 
acreage.
    Mr. Farr. Does not. This is outside of BRAC?
    Major General Van Antwerp. Right, right. In BRAC, we have 
not disposed of a lot of acreage. We disposed of about 115,000 
acres, which is about 46 percent of the total required for 
disposal under BRAC. So we have another 133,800 acres to 
dispose of yet.
    Mr. Farr. Okay.
    Major General Van Antwerp. And the primary reason for those 
is environmental considerations.
    Mr. Farr. Could you break those figures down between what 
is BRACed and what is not BRACed, and what----
    Mr. Fiori. What we just gave you, sir, is all BRAC. The 
numbers that the general just gave you are BRAC numbers. In our 
BRAC program we expect that we have to get rid of 250,000 
acres.
    Mr. Farr. But the 200 million square feet is just----
    Mr. Fiori. That is office space.
    Mr. Farr. Yes. That is not BRAC?
    Major General Van Antwerp. No, it is not BRAC acreage. It 
is facilities based on installations that we are not closing 
under BRAC, and that are excess facilities.
    Mr. Farr. And they are not being passed on to anybody. 
Nobody is going to receive that. They are not excess property 
in the sense that they go through a disposal process.
    Major General Van Antwerp. Excess facilities do not go 
through a disposal process, but we look at clearly where we 
might have needs for those facilities. Like right now, we are 
finding, when we mobilize Guard and Reserve forces, we need 
spaces on the installation for those. So we relook that, what 
is excess all of the time, to see that we do not tear things 
down that we are going to need to turn over and use in the near 
future.
    Most of that is in the World War II wood category and 
really needs to be torn down. In some cases, to make room for a 
new barracks project----
    Mr. Farr. Yes.
    Major General Van Antwerp [continuing]. And other 
facilities.

          DISPOSAL OF BASE REALIGNMENT AND CLOSURE PROPERTIES

    Mr. Farr. Now what I do understand clearly from your 
testimony is that your planning to have all of the BRAC 
property cleared before the next BRAC round? All disposed of?
    Dr. Fiori. We are going to work hard at getting a lot of 
that additional 153 percent that we have, we are going to try 
and get rid of a lot of facilities.
    Major General Van Antwerp. This next----
    Dr. Fiori. We are going to expedite our environmental 
cleanup. We are going to look at the whole holistic picture and 
see what each of our facilities are that we have to get rid of.
    It is something we need to do. It cannot be accelerated. I 
have actually hired someone that is going to be concentrating, 
a very senior guy, just to pay attention to that so we can 
dispose of the entire property.
    Mr. Farr. Well, see, what I think is so encumbent upon the 
Army to do this expeditiously----
    Dr. Fiori. Yes, sir.
    Mr. Farr [continuing]. Because our colleagues, and more 
importantly the communities they represent, who are 
interrelated through the National League of Cities and county 
supervisors association--the local electeds--are going to ask 
the ones who have experienced the BRAC, ``How's it going?''
    And I think you are going to get a very negative report 
card because it has taken so long. It is not because the end 
result is not a good one. It is just that the process is so 
long, so cumbersome. Not all your fault; there are a lot of 
environmental issues there.
    But we can make BRAC--because I think we know we have to do 
it--we can make BRAC less painful and less difficult, 
politically and cost wise, if we can engage the communities in 
allowing them to know what is going on at these bases. I have 
urged our governor in California to do an assessment of every 
military installation in California.
    The states ought to know what there is there. And not only 
what the real estate is, but what the fixed assets are, because 
often you do not take those with you. And you will end up with 
communities like we saw in San Antonio with Brooks Air Force 
Base, where the community came in and said, ``We would like a 
partnership with the Air Force.'' So essentially, it did not 
make it BRAC-proof, but it certainly did everything up to that, 
I think.
    That was a smart partnership. And if we could encourage 
communities to partnership with bases, you would not have them 
screaming about, ``Do not close it under any circumstances and 
not in my backyard.'' And you might end up finding ways to get 
revenue for the Army that you have not ever thought of before.
    I think we have a total lack of involvement in the local 
political process with the military. You know, the ounce of 
prevention is worth a pound of cure. Because if you announced 
the closure, instead of everybody saying, ``Well, we are going 
to do everything politically possible to stop it,'' which is 
what happens here, to saying, ``Well, we do not like it, but we 
see all kinds of opportunity for us to engage in this closed 
base. And maybe, as you did at Fort Ord where you downsized it 
and now there is a need for additional housing, it is going to 
work out fairly well.'' But you know, that was 10 years ago.

                 BASE REALIGNMENT AND CLOSURE--FORT ORD

    So the opinion on Fort Ord if you ask local electeds, is 
they are going around saying to other people, ``How's your base 
going?'' and they say they heard about Fort Ord, I think the 
local opinion would be, Do not ever go through it. It is a 
mess.
    So whatever you can do to expedite and to engage those 
bases that have not been closed yet in getting a more town-gown 
relationship, I think is absolutely in the best interest of the 
Army and the interest in your long-term mission.
    Dr. Fiori. It is certainly a lesson learned. And the 
secretary and I certainly discussed how to include this faster. 
And in our planning for future BRACs, we are certainly going to 
include that very specific issue in detail.
    One of my goals in trying to get rid of this stuff now is 
so we do not have and have shown what we can do in an efficient 
manner with what we still have left to give to the communities. 
So, I agree with that.
    Mr. Farr. Thank you.
    Mr. Hobson. We are going to try to get another round if we 
can here.
    Virgil.
    Mr. Goode. Thank you, Mr. Chairman.

                    NON-CITIZEN MEMBERS OF U.S. ARMY

    Mr. Secretary, this is a question relating directly to your 
testimony. How many non-citizens are members of the United 
States Army?
    Dr. Fiori. Sir, I will have to find out. I do not know. I 
will report back to you.
    [The information follows:]

                  Non-Citizen Members of the U.S. Army

    There are 85 officers and 9 warrant officers (94 total) who 
are non-citizens in the United States Army. There are 5,454 
enlisted that are not U.S. citizens. A total of 5,548 personnel 
that are non-citizens in the United States Army.

    Mr. Goode. That is my one question.
    Mr. Hobson. Kay.

                         INTERNET USE IN KOREA

    Ms. Granger. Yes, I had the opportunity to finally get to 
Korea and see some of what we had heard about insofar as the 
housing and whatever. And although we have had hearings and 
seen pictures, it was much worse even than I had expected. And 
I think we have been making some inroads from this committee in 
improving things there.
    But one of the things that General Schwartz talked about 
was Internet connectivity and hardware, because there are so 
few that can bring their families over, or I would think even 
want to bring their families to those facilities. But to have 
daily e-mail contact with their families. Where are we with 
that process? You know, I was impressed with South Korea and 
what they have done with Internet. So it did not seem like it 
should be that difficult. Where are we on that process, sir?
    Dr. Fiori. Well, one thing I do know is that our chairman, 
Mr. Hobson, certainly helped us a lot with the status of it. We 
have been working very closely with our country people. But the 
details, I really have lost track of. We are going to have to 
give you a delayed answer.
    Mr. Hobson. I will do it.
    Dr. Fiori. Thank you, sir.
    Mr. Hobson. I think that as we speak, Microsoft and the 
Army are together. Microsoft has offered, I think gratis, their 
services to the Army to rectify this problem. That looks to me 
like they will be done--and it shows you how smart some of 
these people are. You know, we were going to go through this 
big, expensive hardware deal. And they came in and sat down and 
in about 20 minutes the guy says, ``No,'' he says, ``I think we 
can tap into''--of course, this is non-secure stuff--``we can 
tap into South Korea and put lines all over South Korea.'' We 
can tap into those lines. We can put up these mobile or non-
fixed asset up on places around, and people can get their 
Internet service that way off the South Korean lines that are 
there.
    I think it is working pretty well now. We had a little 
glitch, but I think it is back on track.
    And I think you are right, I think that is a very strong 
quality-of-life problem in Korea. The thing I just do not 
understand, and this is what I do not understand, is why this 
comes out of this committee to fix that and why it took the 
services so long to do it.
    And then when they came with a program it was going to be 
very expensive. And the program we are going to do, I think, is 
going to be far less expensive. And that should have come out 
of the Army doing itself and assessing what the quality-of-life 
problems are.
    But that came out as the result of a trip, because when I 
went there, I said to some of the Army people, ``What about the 
Internet?'' And they said, ``Duh.'' But if you talk to the 
young people there it is just like the movies. Nobody talked 
about the movies. We charged young people, we keep them on base 
in Okinawa and keep them on base in Korea, and we charge them 
for movies because the movie industry gets a great rate draw 
from our services that I think is outrageous. And I hope 
somebody listens to that, but nobody has so far.
    And so who winds up paying for the movies? The kids we want 
to keep on base, the kids we have got single overseas that we 
do not let them take their families. And then we wonder why 
some kids get in trouble or why people have trouble with 
divorces and they cannot communicate.
    I know, Brigadier General-Select Sinclair is working very 
hard on that with General Schwartz as we speak. And as late as 
two days ago, we were poking at this thing to try to get it 
done. And I think the Army has gotten the message. I will be 
very frank with you, I think the speaker's trip to Korea was 
very helpful that you were on in bringing some of these issues 
out.
    Major General Van Antwerp. As soon as they get the wireless 
network like the Blackberries that people have today, they will 
go in and they go into the fixed lines. But it eliminates the 
need to have any hard wire in one of our buildings, which is 
great.
    Mr. Hobson. That was the original proposal, right? I do not 
know much about that stuff, but the Microsoft guys did.
    Ms. Granger. Very good. Thank you, Mr. Chairman.
    Mr. Hobson. I am going to ask three real quick questions. 
And I would like to come back if you guys want to come back. 
But we have got a few minutes here.

            ARVIN PHYSICAL DEVELOPMENT CENTER REPROGRAMMING

    Mr. Hobson. Last year, the committee amended authorization 
language for the West Point gym. The new authority provides a 
total of $102 million for the project. Will the $102 million be 
sufficient for completion of the project?
    Dr. Fiori. Yes, sir, it will.
    Mr. Hobson. General Van?
    Major General Van Antwerp. Well, you never know when you 
get into construction. You know that. [Laughter.]
    Mr. Hobson. Hey, I am telling you--hey, guys, guys, this 
thing started out, you know, we changed the language for what 
you guys said it would be and what the bid said it would be. 
And there is a reprogramming coming over I said I would sign.
    Major General Van Antwerp. It is more than sufficient.
    Mr. Hobson. I am just, you know----
    Dr. Fiori. I have been really anxious in trying to get that 
document over to you. As a matter of fact, it has been sitting 
up and languishing in the OSD house. I hope it does get here as 
quickly as possible.
    Mr. Hobson. I do not know about John, but I told them I 
will sign it when it comes over. But that better be the last 
one and you better hope I am not here if it changes.

                             COMMISSIONING

    On the commissioning program, you have talked about and I 
think I would just like to reinforce it, do you think there are 
strong benefits to using that program, the commissioning 
demonstration program that you are doing? You talked about that 
a little bit, one of you did.
    Dr. Fiori. Well, I did. I brought it up. It has a lot of 
potential. I would like to see how it is going to work. We are 
doing three more this year. And I really did not ask for any 
additional ones beyond just the three.
    Mr. Hobson. Are you going to ask for additional authority 
on that? Do you need----
    Dr. Fiori. We would like to do a whole bunch more because 
obviously it works. I do not have to worry about them. I could 
use the internal funds for other things. And having to use 
contractor do it and be responsible for the five years of 
maintenance. I would not want him to take advantage of that by 
building a bad facility and then fixing it with the funds.

                   GUARD FACILITIES--NEWPORT, INDIANA

    Mr. Hobson. One thing I am concerned about while I have got 
you here and everybody here, you know, I do not know what we 
are going to do long term in a place like Newport, Indiana.
    Dr. Fiori. Yes, sir.
    Mr. Hobson. You have got National Guard there, and I am 
sure you have got Reserve in places like that elsewhere. That 
is an isolated place with no amenities, and you have got people 
called up out of their jobs. They are motivated, but their 
living conditions are not very good, to say the least. Have you 
seen where their beds are and where they have to go to the 
bathroom, take a shower down the street in a trailer? Where 
they eat is not bad, but it is not the most pleasant place.
    You can do that for a few months. And you are going to have 
to rotate people. But if you continue that as a long-term 
mission, and I mean three or four years until you can get that 
place where you do that system on that stuff that is in there, 
that is too long, in my opinion, to keep those people and to 
keep that unit on an OPTEMPO like that.
    Same way with the people you are using--and you are housing 
them. That is why I bring it up here; I am going to bring it up 
in the big committee, too.

                       NATIONAL GUARD--FORT KNOX

    But the same way at Fort Knox, which I went to Fort Knox. 
You are using people who have high-skilled jobs, you take them 
down there and you take their weapons away from them--you know, 
you let everybody else have their weapons, but not the National 
Guard, which is a problem. And you have them checking cars. 
This is not their basic skill level. Their skill levels are 
much higher than this.
    Housing is a problem. Housing, of course, is a Fort Knox 
problem. And I have only been to those two, and it has got to 
be a marriage. In the same way now most of the people in the 
Air Force you put in motels and stuff, but that is going to 
come down, too. Those are problems.

                            PUEBLO--HOUSING

    Dr. Fiori. Definitely are, sir. You know, I saw the housing 
yesterday at Pueblo, which has another Army National Guard unit 
from California and Texas in there. They are having these men 
living in cubicles of six per. That is the best we have. We are 
looking at other ways to expand. Of course, I cannot shut that 
place down for at least two years.
    Our goal, of course, is to at least come to 
demilitarization facilities or get them shut down as soon as 
possible. We will be putting a program together to accelerate 
it. That still does not answer the question on a place like 
Indiana, where the resources are limited. And, you know, after 
you visit it and I visit it, we may make some headway, but I 
cannot give you a report right now though. I will give you a 
report on the Indiana one.
    Mr. Hobson. My problem is just not those. My problem is 
that you are going to have a morale problem over a period of 
time, and you are going to have these families that are not 
expecting these long terms. And as long as you can fill them 
with volunteers, too, that is another--this idea of calling 
people up, a whole unit up for a year; if you can fill it with 
volunteers so that they go in and to the mission and then come 
back out, it is a lot easier than calling up somebody and 
having half of them sitting around doing nothing some place.
    Major General Helmly. If I may, the Army is surveying those 
sites. Initially, we are designating some sites as austere 
sites where we will leave those soldiers on six-month rotation 
as opposed to the soldiers being there for an entire year. And 
that is to recognize the specific issue that you just referred 
to.
    Dr. Fiori. The other thing that would really help us, of 
course, particularly when you mentioned the Guard force, or 
sentry forces and such, I know we put in last year and probably 
we are going to do it again, legislation to help us in that 
area to allow us to hire professional people and professional 
contractors to take care of our Guard force, which we are 
somehow forbidden from doing right now.
    Mr. Hobson. One of the things that would help, too, is some 
help.
    We have got five minutes or seven minutes to go vote. We 
will go vote and come back because some people have more 
questions. We will try to get this done as soon as possible. We 
will stand in recess for about 15 minutes.
    [Recess.]
    Mr. Hobson. Why don't we start back up even though my 
ranking member is not here? I do have one member of the other 
party here, and he has some questions he would like to ask.
    So, Sam, you are up.
    Mr. Farr. Thank you, Mr. Chairman.
    Mr. Hobson. If Chet comes in, he has got some questions he 
would like to ask.

                            UXO--SMART TEAMS

    Mr. Farr. I just want to, for the record compliment the 
department and the secretary on creating the SMART team. The 
SMART team is headed by the work of a retired military officer 
named Dick Wright. And I think Dick is a great--I have never 
watched anybody in front of a group of people handle tough 
questions about UXO cleanup and to be able to facilitate the 
angry concerns of a community versus the need to do the right 
thing and bring all the environmentals together.
    So I am here to praise the work of his leadership of that 
SMART team, and I hope you will use him. I know Congressman 
Manzullo told me it was the best thing that ever happened to 
his district was bringing that team in.

                 ENVIRONMENTAL RESTORATION AT FORT ORD

    You are working at Fort Ord on UXO and environmental 
restoration activities at BRAC installations. And in that you 
give a figure of $149 million as being budgeted for this 
activity this year. I think our subcommittee is going to have a 
separate hearing on UXOs, but $149 million is just not going to 
reach the bases that you are trying to clean up.
    We are spending about $22 million per year for UXO cleanup 
at Fort Ord. Ray Fatz testified at our congressional panel in 
Monterey in August that the estimated cleanup for Fort Ord was 
about $327 million.
    In light of that, how can $149 million reach the number of 
bases that you need to clean up this year? And I am wondering 
if you could just work with those numbers to show me where you 
came up with that figure, and how much of that is going to be 
allocated to the activities at Fort Ord?
    I do not know exactly how many bases you are dealing with, 
but again, it goes to the earlier point that if these bases are 
not cleaned up prior to the next BRAC go-round, that will be 
the headline of all the newspapers, is that they have not even 
been able to complete what they----
    Mr. Fiori. Yes, sir.
    Mr. Farr [continuing]. Put up in the past before they even 
started a new round.
    Mr. Fiori. The UXO certainly is an issue. I talked to Ray 
today and it is not a pretty picture no matter how you cut it. 
On this sort of funding level, we are going to have a good 80 
years before we get one of these places cleaned up.
    Right now the money we are using predominantly is to find 
out the extent of the problem in most cases, and find some 
technologies on how to alleviate the problems. And then we do 
have to practice those, as I mentioned to you and I am really 
pushing to concentrate on. So we are trying to focus on a 
cleanup, a physical cleanup in those areas.
    It is a tough issue. And there is no easy solution, except 
we are trying to organize ourselves in a manner to become more 
efficient and have a central control. Installation management 
will help us also at Monterey.
    I have gone to enough places where I have asked the 
question, ``So you are going to be finished with chem demil. 
What else do I have to dig out?'' And, you know, it is like the 
deer in the headlights. ``We haven't done it yet.'' It has been 
the lack of funding in a lot of the areas to find out the 
extent of the UXO problem.
    Van, do you have anything else on it?
    Major General Van Antwerp. We will get you the figures, 
sir, on what is being spent at Fort Ord, in particular. But my 
focus of the task paper here is that we spent a total of $318 
million since 1992 already.
    Mr. Farr. At Fort Ord or totally nationwide?
    Major General Van Antwerp. At Fort Ord.

                  ENVIRONMENTAL RESTORATION NATIONWIDE

    Mr. Farr. Well, then that goes to the question of this 
budget year, how are you going to do that with $149 million 
nationwide this year?
    Major General Van Antwerp. Well, we have about 26 
installations. We have closed 112 and realigned 27. And of 
those 112 we closed, there are about 26 installations that have 
the brunt of the environmental cleanup remaining. They have 
been closed so they are in a mothball status, but not disposed.
    So we are looking at several things. We are looking at a 
fixed-price remediation contracts where we get a developer in. 
We are looking at several alternatives some of which Dick 
Wright is really making a contribution there.
    But we have phased this. Frankly, as we look out into the 
program, we have got about $236 million that is going to be 
programmed beyond the 2008 period. So some of these sites are 
going to be pump and treat for 30 years.
    Mr. Farr. I understand that. And once you have decided that 
you have those types, the EPA requires that you have to have a 
proven technology in place, then you can transfer the property. 
As long as the surface is clean and the technology you are 
using underground for remediation of contaminated aquifers and 
everything is proven technology--and you have done that. I 
agree with that. But that is just an O&M cost after that.
    The thing I am getting to is you have got two proposals 
here. One is that we are going to do a buy-out. And I like that 
idea. You did that at the Presidio in San Francisco. And it was 
an expensive buy-out. It is going to be expensive. There is no 
way in the world that $149 million can even be--you cannot have 
a dime in that figure because that is a----
    Major General Van Antwerp. I think it is $100 million at 
Presidio, for instance, for the buy-out.
    Mr. Farr. Yes. The chairman is going to schedule a hearing 
on UXOs. I think this is an account that nobody has really got 
any understanding of how you are going to get there from here. 
Your money is too little. The problem is too big.
    And the difficulty is you cannot just fence these things 
and walk away from them, because you have got the huge 
liability issue and you are always going to have that. But you 
have then got the public relations thing and, ``What the hell 
is this all about? This base closure isn't base closure. There 
is no use of the property. We cannot get access to it. The Army 
just says they are going to clean it up and they don't because 
they cannot afford it. They just put a fence around it and walk 
away.''
    And it is an Army responsibility because no other service 
has the skills to do the UXO. I mean, this is your bailiwick.
    So perhaps not at this hearing, but at the next one that 
the chairman has, we can get into this account and really 
figure out how you are going to budget for UXO in the out 
years.
    Major General Van Antwerp. We have looked at all those 
properties, done the characterization. We are refining those in 
some cases. So we have a fairly good sense of what it would 
cost to do the cleanup. But as you say----
    Mr. Farr. But it is not reflected in that figure.
    Major General Van Antwerp. Well, this is what the budget 
would allow, frankly. As we put the budget together--because it 
would take a much larger portion if we are going to take care 
of that in say, a four-year horizon or it, sort of, depends on 
what your horizon for clean up is and what we can afford. It is 
an affordability thing. The requirement is bigger than $140 
million, no question.

                              UXO CLEANUP

    Mr. Farr. But it is an affordability issue that goes to 
almost everything else. How are you going to come to Congress--
and we have already acted on your request--not your's but the 
President's request for another BRAC round in 2005. The big 
issue is still going to be out there from today to 2005. Well, 
what about UXO cleanup and is the Army committed to it?
    So you can say we could not afford it in year 2002. In 2003 
when we are doing this budget, we just could not fit it in. 
What kind of statement is that to every base out there and 
every community, including Washington, D.C., that has some of 
this UXO problem, that we are really dealing with it?
    Major General Van Antwerp. Well, I think, right now our 
target on the wall is not to have all of these cleaned up from 
UXO by the time the new BRAC rounds. Every BRAC round we got, 
we did not have the former sites in the earlier BRAC rounds 
cleaned before the next round. We are still doing some out of 
the 1991 round.
    I understand. I mean, I understand what you are saying.
    Mr. Farr. It is not rocket science. What needs to be done 
at least is a schedule saying, ``We are going to clean up so 
many acres, so many properties per year that will be released 
for reuse purposes. And on that schedule you can see that there 
is a light at the end of the tunnel.''
    But I am not sure that that schedule even fits in with $149 
million if you are going to do in any reasonable way. We would 
like you to clean up on an acre-by-acre, not square-foot, 
basis.
    Major General Van Antwerp. With this $149 million we are at 
about 46 percent of the acreage that we are going to get 
another almost 20 percent out of this $149 million, because we 
have done a lot of work on those. It is not that we are 
starting cold on those now. But to get to the 100 percent, as 
you say, it is a long process.
    But we can lay that out for you, what we expect to get with 
this $149 million or what we expect to get every year.
    Mr. Farr. Appreciate that, because these questions are 
going to come up at a later hearing, and it is good preparation 
for that.
    And the last, if I may, Mr. Chairman? Thank you.
    I would really like to see, Mr. Secretary, about how to 
optimize the public relations of base closure and base reuse 
and base cleanup; it all fits together.

                         HOUSING AFFORDABILITY

    The one issue you are going to find, particularly in the 
West, and I think it is going to hit the East Coast. You know, 
we have bases where people are. And the places, the towns and 
communities where people are, are now becoming the most 
expensive communities in America, particularly in California.
    Why that is an issue to the Army, affordability in a 
community, is because no matter where you are training people, 
you are hiring a professional civilian community to work with 
it. Particularly in our area, it is languages. Or in the Navy, 
it is the post-graduate school, it is university professors.
    The civilian community needs housing to live in. And we 
have never had enough housing on all of our bases to house all 
of the military personnel or even the civilian community that 
work for the military personnel, on military bases. So we are 
going to have to rely on private sector housing. Housing is 
selling in California at $300,000, $400,000, $500,000 for a 
home--you know, the home you grew up in. And on the salaries 
that we are earning, even members of Congress cannot qualify 
for loans on those houses.
    So land is going to be the most valuable asset we have. And 
I think there needs to be some long-range planning on how are 
we going to house the people that the military needs to house 
for its mission, not just men and women in uniform but for the 
civilian professional community and for the workforce. We are 
going to have to use military land to do that.
    And as we face another BRAC round, perhaps some of that 
land ought to be set aside for housing. Maybe it is not needed 
for the mission any more, but it is going to be needed for 
military housing. And you are going to have to clean it up and 
do all of those other things because that housing is now going 
to have to meet local and state codes and environmental 
standards. And so it has got to be a higher standard than 
historically the military has had to live up to.

                BASE REALIGNMENT AND CLOSURE PROPERTIES

    So there is going to be some cost in it. And my whole point 
is that this cleanup, this BRACing, this housing, all of these 
demands out there are all interrelated. And there are some 
attitudes in Washington, ``Well, when we have a military asset, 
we have land, we ought to sell it for the highest and best 
use.''
    The minute you sell that land you are not going to put 
affordable housing on it. Whereas, as you give it away or as 
you reuse it or put it in some kind of housing trust, it is 
used for a public purpose, and that purpose, I think in most 
cases, is what I am suggesting--to help the overall military 
mission.
    But the right hand and left hand have got to start 
discussing it. And as a new BRAC round comes around, I think 
you ought to look at the assets and say, ``Well, this asset may 
not be appropriate for the military mission; we may need to 
consolidate or move or close. But we certainly may have another 
use for this property that is in--that is particularly for 
housing.''
    Dr. Fiori. One of our mainstays in turning over all of the 
property is working with the local reuse authorities.
    Mr. Hobson. But he has got people who we are giving it to 
and then they turn around and sell it for a half million 
dollars an acre. And that is part of the big----
    Mr. Farr. Exactly. The reason they are selling is because 
they need income--the above-ground contamination and the fact 
that everything on the base does not meet code, that the 
infrastructure has totally got to be rebuilt. There is no tax 
base on the base. The teardown of the buildings, which are lead 
and asbestos, are on the local dime. And essentially they have 
no pot of money that they can access to do all of the 
responsibilities they have. So the only solution is to sell the 
property that they have been given free. And they are allowed 
to do that.
    I am fighting them and saying, ``Wait a minute, don't sell 
this property because we need to build all the housing I just 
talked about.'' And I am having people in the military tell me, 
``We need now this housing.''
    When the base was closed, the Defense Language Institute 
was not at full capacity. It had 2,000 students; it is now 
4,000 students. The Naval Postgraduate School, which has a 
capacity of about 2,000 students was at about 1,200 students. 
It is now at 2,000 students, many of whom are foreign officers.
    So the demand for the missions of those two schools that 
have not been closed, and hopefully never will be, is housing 
that we should never have downsized.
    So somebody in the Pentagon was not thinking about the 
future of these missions and other services and this housing 
need. And frankly, we were not thinking about it in 1992. But 
in the year 2002, it is the number one issue for everybody in 
California. I do not care if you are a doctor who wants to go 
out there and start a practice--you cannot hire people. We 
cannot hire anybody because there is no affordable housing.
    Our communities are going to fall apart. And if the 
underlying community falls apart, the mission of the military 
there is going to certainly fall apart.
    So I am pleading with you--and I know our subcommittee has 
been on top of it and this chairman has been so excellent in 
this, because he understands this better than anybody else in 
Congress. We have the ability, and you have it because you 
control the dirt, to do things that are necessary in modern 
times that have historically never been necessary in base 
closure and management of land and contracting out for base 
operations and doing the RCI and inviting the private sector in 
and challenging them.
    I mean, there is nobody making any more land. I do not 
think we ought to ever sell the land. I think we ought to go 
out and just lease it all. And you know, you and I have talked 
about that. I do not even think we need to put up money for 
this stuff, except out in a remote area where no private sector 
will go.
    But I think the Army has been afraid to engage the private 
sector in solving some of your problems. And we have got all 
the assets. All the marbles are on our side.
    I talk to contractors. I said, ``When you build an 
apartment house, do you know you are going to get 100 percent 
occupancy the first day?'' They say, ``Oh, absolutely no. We 
have to pay a lot of marketing fees and we have got to go out 
and attract people. We have to make sure that we can hold this 
property for a year without rentals because we don't know when 
anybody is going to move in. We don't know if anybody is going 
to buy the houses we are going to sell. We speculate on it. We 
think we have got a pretty good idea.''
    But in the military, you have got 100 percent occupancy the 
minute your project is completed. Where is the risk?
    Dr. Fiori. Well, I certainly agree there. That is a pretty 
good deal.
    Mr. Hobson. And they are getting better in the financial 
packages they are putting together, I think, today that what 
you were doing when I got here a couple of years ago.

         BASE REALIGNMENT AND CLOSURE--LOCAL REUSE AUTHORITIES

    Dr. Fiori. We are. But the fact is, we are still working in 
each of the base closures with a local reuse authority. And we 
have to honor lots of the wishes there. And we are finding 
ourselves in other places, not Fort Ord, where, one of the 
communities is suing us because the other community wants to do 
it. We are being broken between the communities as we try to 
cooperate with them.
    So we do not have total control over how these places are 
going to be used because of that, because we have been given 
this guidance that we have to work with these communities. It 
is a tough issue.
    Mr. Farr. Well, there are two sides to base closure. There 
is the Washington side of what is going to close, and then 
there is the disposal side.
    Dr. Fiori. That is right.
    Mr. Farr. We ought to revise the disposal side because we 
now know a lot of good and bad practices. We could revise it 
and write a much better bill. I tried to do that. It is 
complicated. But if we can engage people in your shops to be 
interested in this, we ought to look at the pitfalls of 
existing law that prohibit us from doing best management 
practices.
    Mr. Hobson. Mr. Vitter?
    Mr. Vitter. Thank you, Mr. Chairman.

                U.S. ARMY SOUTH HEADQUARTERS RELOCATION

    And thank you, Mr. Secretary and generals for being here.
    I have a few focused questions. The first couple are about 
the possible relocation of U.S. Army South Headquarters 
currently in Puerto Rico. The Louisiana delegation has written 
Secretary White about this asking for information and updates 
because we would like to compete basically to meet that need if 
it moves. I know there is other interest, particularly from my 
Texas colleagues.
    Mr. Hobson. Florida, Georgia, Mississippi----
    [Laughter.]
    Mr. Vitter. I was not claiming to give you the whole list.
    Mr. Hobson. There is a whole list.
    Mr. Vitter. And so you have a lot of letters of inquiry, 
including from Louisiana.
    Last year in the Senate appropriations bill it actually 
contained report language on the issue directing the Army to 
provide the House and Senate Appropriation Committees the 
results of the study on the issue and any further updates.
    So, where are we on that?
    Major General Van Antwerp. First of all, right now we are 
studying what the mission needs of SOUTHCOM, that is the Army 
component USARSO, the support staff. NRG3 is taking that on.
    In addition, DOD is looking at what we call the Unified 
Command Plan to see are all the existing CINCdoms, including 
SOUTHCOM, going to be the CINCdoms that we need for the future. 
So we have got a couple of big issues that have to be solved 
first.
    If it is decided that SOUTHCOM remains, then USARSO is the 
component that will support that. The feeling right now from 
the commander there is that they ought to come out of Puerto 
Rico. There are perhaps other places where you can support the 
down-range part, and that is really what they have, the Central 
and South America effort, just as well as they could from 
Puerto Rico that would be easier to get workers.
    And part of the problem there is we have had a moratorium 
on military construction, for one thing. We have a $25 million 
housing project we have been unable to build down there. So, 
provide the quality of life.
    Mr. Hobson. Why?
    Major General Van Antwerp. Because of Vieques. It is a 
Senate hold on that construction. So, we have been on a freeze 
essentially.
    So, if we are not able to provide for the well-being, that 
is one of the reasons we have looked to relocate. But there has 
been no decision. The secretary has not said, ``Okay, relocate 
them.'' He has asked us to put together some criteria by which 
we can evaluate relocation sites, anywhere from their ability 
to do the mission, the building to deploy that force from a 
power projection standpoint; are they near a major airport?
    Mr. Vitter. What is the time line for the threshold issue, 
deciding the big issues, which in turn decide whether or not to 
relocate?
    Major General Van Antwerp. This I do not have officially, 
but I think most of those big decisions will probably be done 
by summer or fall of this year.
    Mr. Vitter. And then if those decisions point to 
relocation, when will the specific criteria for looking at 
areas around south or wherever appropriate be decided and 
available?
    Major General Van Antwerp. I think we are working that 
criteria right now. I think the next steps would be that if it 
is decided they would move, the secretary would make an 
announcement on the movement, and then we would put the 
criteria out and ask folks that meet that criteria to respond. 
So, we would envision a number of states responding.
    Mr. Hobson. The first question to answer is, will you still 
have a CINC for the south? That is the very first question. 
That is under serious review.
    Dr. Fiori. That is why it is going to take until summer.
    Major General Van Antwerp. And that really is beyond Army. 
That is a DOD decision on that.
    Mr. Vitter. Well, I just want to remind you all of our 
specific letter to keep us in the loop. And all we are 
requesting, our course, is an open process and thorough and 
complete knowledge of the public criteria, and an opportunity 
to respond to those criteria.
    Major General Van Antwerp. Our secretary says that it will 
be full and open and that we will publish that criteria. And 
there will be a period of time to respond and then we will cut 
it off and make decisions.
    Mr. Vitter. A follow-up question you touched on. I am not 
sure I completely understand it. Since fiscal year 1999 there 
have been MILCON appropriations to the Puerto Rico site that 
total about $26 million, and you mentioned a hold on some of 
that. And there are a bunch of different categories of these 
appropriations: child development center, housing, part of it 
you mentioned Army Reserve center, an elementary school, et 
cetera and I can give you what I think is a summary of all 
that.

                        STATUS OF MILCON ON HOLD

    What is the status of all of that and how will a decision, 
say, within six months, that the site is moving, if that 
happens, impact those appropriations and those projects?
    Major General Van Antwerp. Most of the things you listed 
are on hold, but the biggest project is the housing, I think, 
of all of those. I would presume if we decide to relocate 
USARSO to another location that we would not press forward with 
any of that construction; that we would relocate to another 
site.
    Mr. Vitter. And would it be the general Army plan or the 
presumption that those resources would move with the unit, with 
the headquarters?
    Major General Van Antwerp. That would be our hope. Of 
course, those which are particularly authorized and 
appropriated projects, we would have to come back, much like we 
have done with Efficient Basing, East.
    Mr. Vitter. What is not on hold? Let me ask the question: 
What is moving forward?
    Major General Van Antwerp. I have to take that for the 
record and get back with you on the specific things which are 
not on hold.

                          JOINT USE FACILITIES

    Mr. Vitter. My final area, which is a completely different 
topic, joint-use facilities. As you know, a lot of the 
congressional leadership this side and the Senate side, have 
been pushing to reform the budgeting process to better account 
for and plan for joint-use facilities. And there are some 
specific Senate subcommittee direction that I am sure you are 
aware of.
    What is the status on that? When are we going to get to a 
point that we can actually have a separate budget category for 
these joint-use facilities so that we can plan for them and 
encourage them better?
    Dr. Fiori. Congressman, I will let each of the components 
address it, because we have different activities.
    Major General Van Antwerp. They are joint looked at in a 
couple of ways. One is inter-service joint. Another is joint 
with our own components. And a lot of our facilities are ready 
and we will let Mike talk about the Guard and Reserve. But a 
lot of our facilities we are building right now we are looking 
at deployment facilities. We are looking at those facilities 
that would be joint use between our components.
    Mr. Vitter. Right. I was talking about inter-service.
    I didn't even realize that, you know, different parts of 
the Army----
    [Laughter.]
    Major General Van Antwerp. Now OSD, we have a process team 
that is working this. And we have been told to come up and look 
at possible pilots for joint use, inter-service. And so we are 
doing that right now.
    We have some places where it might make sense in the short 
term, like if you go to Fort Bragg, you have Pope Air Force 
Base contiguous to it with has just a fence line the middle. 
But there might be good joint-use projects there.
    So we are first looking at those that are really almost co-
located. And then we are looking at larger opportunities. But 
the services owe DOD some pilot sites where we can do this. We 
are still waiting on their guidance. And they have not put a 
budget category. They are saying eventually they will put a 
budget category to incentivize this. We do not have that yet.
    Dr. Fiori. It is in 2003. We do not have anything in MILCON 
for joint service.
    Mr. Vitter. Is it an active project to create that type of 
separate budget category?
    Dr. Fiori. DuBois who is my OSD counterpart, we have 
discussed it a lot. But it is at the discussion level.
    Mr. Vitter. Okay.
    Dr. Fiori. And we are trying to look more at the facilities 
that are co-located and how we could get those two people 
working together. I mean it is tough enough to have cultural 
problems internal to the house. To force that boundary seems to 
be pretty difficult for some folks.
    Mr. Vitter. Well, that is true. On the other hand, you can 
take the opposite view. You start changing the way we budget 
and the culture might rush to change in response to that. And 
that may be the quickest way to encourage the culture to 
change. And so I just, as one member, like to encourage 
innovative thinking about that type of budgeting because it is 
clearly something we need to do to make the most of our 
resources.
    Dr. Fiori. I do know that Mr. DuBois is working on the 
guidance and trying to get this going. And he has given us a 
few votes over the last couple of months. We have been in the 
debate process, frankly, just to give us a little guidance on 
how to go about doing it.
    Mr. Vitter. And again, final thought, if you wait for the 
culture to change, change the structure, it will never happen.
    If you change the structure, particularly the budget 
structure, you are going to create a bidding center for the 
culture to change. Or you could if it is done right.
    Thank you, Mr. Chairman.
    Mr. Hobson. Do you want to take over the hearing for a 
couple of minutes? I need to step outside.
    Mr. Vitter. Okay.
    Mr. Hobson. And I will be right back.
    Mr. Vitter [presiding]. Okay, Mr. Olver, I believe you have 
some additional questions.
    Mr. Olver. Yes, thank you very much.

                         CENTRALIZED MANAGEMENT

    I will try two different lines here just a little bit. The 
secretary has announced the plans to realign the headquarters 
and centralize the installation management.
    Now can you tell me, is that reflected in this 2003 budget 
proposal or is that just the moves farther down the road?
    Dr. Fiori. It is not clearly reflected in this year's 
budget. What we are doing this year is to prepare. The budget 
we submitted will be the budget we are going to live with, but 
what we are going to do is shift the coding of the budget; if 
you want to change the culture you have got to change who gets 
the money.
    We are in much discussion. General Van Antwerp could give 
you a long brief on the progress that we have been making 
working with the major commanders to divide the 
responsibilities and with the responsibilities the funding that 
we have allotted to those responsibilities.
    So it will not affect the 2003 budget in that matter at 
all. But the planning process and how much is going to be under 
our new organizational control is something that is being dealt 
with right now. That is a very difficult organizational thing 
they are tackling.
    Major General Van Antwerp. We are funding base ops and 
RPM--SRM at 90 and 92 percent of the DOD budget. What the 
central installation management will do--right now we have 21 
MACOMs and 14 land-holding MACOMs that all have withholds on 
that money. When that money is sent down to the field, those 
MACOMs withhold dollars to use for contingencies, to use for 
mission-related activities if they have to. And then they 
sometime during the year will probably replenish it back to the 
base ops and SRM.
    But what you get when you do that is you get a pool of 
dollars that goes like that. And a lot of them do not get back 
to the installation garrisons until August, September. So they 
have not had the use of those maintenance funds in a steady 
flow.
    So one thing that the centralized management will do, there 
will be a withholded DA that will be a fraction of what it is 
on aggregate of all those MACOMs that withhold today.
    Mr. Olver. We have had the impression that a lot of money 
ends up going not to where it was intended to go from time to 
time.
    Major General Van Antwerp. This will fence those dollars 
that are appropriated in base ops and SRM will definitely go to 
those functions. They will not go across----
    Mr. Olver. And that management tool you expect to be in 
place----
    Major General Van Antwerp. In place 1 October.
    Mr. Olver. 1 October.
    Major General Van Antwerp. When this budget hits, that will 
be in place that those base ops and SRM funds will be fenced. 
They will not be able to be used for mission functions. They 
will be used in the base ops and the maintenance and repair. So 
more of those dollars are going to go for what they were 
intended.

          CENTRALIZED MANAGEMENT--EFFECT ON GUARD AND RESERVE

    Mr. Olver. So is it expected that Guard and Reserve 
programs will be included in this management reorg and 
consolidation?
    Major General Van Antwerp. Essentially the same philosophy 
that those dollars will be fenced--I let my two companions here 
talk about it. But the answer is, as far as the dollars that 
were intended for base ops and SRM, they will be treated the 
same way in all of the services. The organizational structure 
for the Guard--because of the way the Guard, frankly, has their 
states and all the different facilities on those states, they 
are not wrapped up. But they will use their base ops and SRM 
dollars for base ops and SRM functions.
    Mr. Olver. Well, maybe I am the only one that would sense 
that this was related, but we have gone through and established 
that the budget for the Army is down, as far as MILCON is 
concerned, by 16 percent. But the budget for the Army Guard is 
down by 75 percent and for the Reserve is down by about two-
thirds.
    Now, if that is what is in that budget as to where money is 
expended, that is a rather major shift of what last year's 
budget was away from Reserve and Guard kinds of things. And you 
cannot chip those back: This budget is as indicated. Your 
management tool is not going to--that is hardly even-handed, 
although you may say that--that would imply, I suppose that the 
department feels that the Reserve and the Guard, you know, 
remain hugely over-funded.
    Mr. Hobson [presiding]. Or not needed.
    Mr. Olver. Or not needed or something. What does it imply?
    Major General Van Antwerp. I guess I would have to separate 
MILCON from the base ops and SRM dollars as far as talking 
about centralized installation management. The MILCON will 
take--you know, it will be--those lists will be produced as 
they have been in the past that an installation would forward 
that MILCON request.
    Today what happens, the Guard and Reserve and the active 
all compete, if you will. We have project review boards at 
which those projects are competed based on Army requirements. 
And as you know, we have been going after the permanent party 
soldier barracks and strategic mobility. That has been about 70 
percent or more of our program in recent years.
    Mr. Olver. Well, but does that then imply that you believe 
that the management tool here of consolidation and centralized 
installation management, essentially the whole pattern, that 
that does not have so much to do with MILCON's budget but 
rather with the pulling in budget on the other side; that is 
where the controls come, that is where the savings are or the 
efficiencies or what that you expect to get?
    Because once we have indicated where these monies are going 
to go project wise, you can't then change it to other places 
anyway.
    Major General Van Antwerp. MILCON it is fixed, you cannot 
adjust where it goes. But in the SRM dollars, the base ops 
dollars and the maintenance dollars, if you will, there is 
flexibility in that.
    I will tell you that all three components are funded to the 
same level for base ops and SRM that--now the MILCON, 
obviously, is not funded at the same percentage level. But the 
base ops, the part that provides services, pays salaries and 
the part that does maintenance of facilities is funded at the 
same percentage of requirements.

                           LOW MILCON BUDGET

    Mr. Olver. Okay, well then that probably puts additional 
focus on what I gave as the numbers of 16 percent down for the 
whole budget, but 75 percent down for Guard and two-thirds down 
for Reserve. It seems to me that that is a pretty imbalanced 
budget. And there must be some set of reasons for that 
imbalance.
    Major General Van Antwerp. Part of it is last year, if you 
looked at a glidepath starting the last three or four years up 
through 2001 and skipped 2002 and went to 2003, you would find 
there that the 2003 budget, if you take 2002 out, is the 
highest budget we have had in MILCON in recent years.
    So in one sense, there is a glidepath coming up. The 
difference is we were plussed up $700 million in the 2002 
budget. And frankly----
    Mr. Hobson. By this committee.
    Major General Van Antwerp. By this committee and we are 
grateful for that. But we did not start----
    Mr. Olver. And you expect us to do it again somehow?
    Major General Van Antwerp. Well, we did not have room in 
the Army budget to start with the budget we got in 2002 with 
your addition as a floor, frankly. We kept the same glidepath 
we had had as if we would not have gotten that plus-up. But it 
is an increase over 2001. So it is on a glidepath up. But we 
did not take the 2002 budget as a floor as we built this 
budget. There was not room in the Army budget.
    We had health programs. We had the pay raise. We had 
OPTEMPO increases. We had transformation. And I mean, that is 
our internal budgeting, but there were a lot of markers for 
those dollars.

                         EFFICIENT BASING, EAST

    Mr. Olver. All right. Can you tell me what you expect to be 
the savings per year for the consolidation in the East Command 
in Germany?
    Major General Van Antwerp. Yes, sir, I think we do have 
that.
    Mr. Olver. I think maybe the chairman had asked, but I was 
only half paying attention, for a cost-benefit analysis.
    Dr. Fiori. Well, he wants a more detailed analysis than we 
are prepared to give right now, which we are going to give you. 
Our budget----
    Mr. Olver. Do you have a sense of what you think the 
savings are going to be per year?
    Dr. Fiori. But they are not the whole big picture that the 
chairman asked for, and we are going to give him that. But just 
as an example, we are going to close 12 installations and the 
thirteenth is going to be partially closed. So we are going to 
eliminate a major amount of our office and building footprint. 
240 to 270 positions are going to be eliminated, somewhere 
between $9 million and $12 million. Our annually recurring base 
ops we are expecting to eliminate $23 million.
    Mr. Olver. Annually recurring base ops?
    Mr. Fiori. Yes, for those 13 places.
    Mr. Olver. And the savings there is then $35 million per 
year?
    Dr. Fiori. $23 million for the annual recurring, or 
eliminating positions by about $9 million to $12 million. Of 
course, we are going to put the positions elsewhere. We are not 
really saving, we are just moving them someplace else.
    Major General Van Antwerp. Because we have 13 garrisons we 
are taking down into a single garrison. So most of this is in 
the running the installations.
    Mr. Olver. That is why I wanted a study.
    Mr. Hobson. Give me a better idea.
    Major General Van Antwerp. It is about a $30 million 
savings if you add it up.
    Mr. Olver. I was wondering how many years we would have to 
stay there and whether we were really planning on being there 
that many more years.
    Dr. Fiori. Yes, sir.
    Major General Van Antwerp. We are doing a check on our 
analyses that we have. And we are getting that independent 
analysis, as I mentioned earlier to the chairman, we will have 
it by mid-March.
    Mr. Olver. Okay. Thank you all.

                       CHEMICAL DEMILITARIZATION

    Mr. Hobson. I have got two things I want to do. You do not 
have to answer this right now, but if you can that is all 
right. The budget submission would withhold $84 million from 
the Army's budget for chem demil unless it meets certain 
milestones. Can you explain this position and what it does and 
does not do and why it is in there?
    Dr. Fiori. Well, it is hard to explain what the motivations 
are of the people that put it in there. OMB did that, of 
course. It certainly was not my submission.
    It will really tie me down tremendously. As you know, I am 
working hard on accelerating the program, where I need 
additional funding besides the 2003 funding. I am coming in 
with additional money for 2002 to accelerate the budget.
    We are still evaluating the words and seeing how it is 
going to affect us. I think it is a little bit over micro-
management in the system.
    Mr. Hobson. Well, we need to talk about that and see how it 
can work, because I think this chem demil is a disaster waiting 
to happen out there if we do not get into it. We need to look 
at technologies. We do not want to do things if technology is 
not there, but we have to do some things any way----
    Dr. Fiori. Sure. Absolutely.
    Mr. Hobson [continuing]. To make sure that we--when I went 
over, I had never seen anything like I saw. But I went over to 
Newport, Indiana, and looked at the Butler building with this 
stuff sitting in there.
    Dr. Fiori. Sure.
    Mr. Hobson. We are so lucky. We are so fortunate in this 
country that some guy wasn't out there hunting one day and 
thought, ``I think I will test my rifle out here and just take 
a shot at that unoccupied building over there.'' Because we 
would have had a major, major disaster even though it is out in 
the middle of nowhere. And that kind of thing sitting around 
frightens me.

                        UTILITIES PRIVATIZATION

    So I just want to say to you we want to work with you on 
this. Our committee put extra money in as you know, in the 
supplemental, to try to help you. And we do that.
    And the last thing I want to mention to you, I want you to 
know that we are going to ask for some help at looking at your 
contracts on these--I am not against it. I wrote the Forrestal 
bill that you guys all killed me on some years ago, to try to 
deregulate the--in the previous administration they went after 
me. They came out of the administration then they changed their 
mind. I do not know what happened. But anyway, everybody went 
nuts when I tried to privatize the utilities some years ago.
    But I want you to know we are going to look very hard at 
those contracts in all of the services. I want to make sure 
that--I have had trouble with contracts. And I want to make 
sure that these contracts are appropriate and have not gotten 
us into trouble in long term, if it does not work we cannot get 
out or things of this sort.
    And so I am going to have somebody look at those. I am just 
warning you ahead of time so that you know to get your t's 
crossed and your i's dotted, that we are going to be looking at 
those contracts.
    I do not want to sneak up on you and have you say I did not 
tell you about it.
    Dr. Fiori. One thing we have done in that regard, we 
basically only use two people to write our contracts. One is 
the Corps of Engineers, the other is the DESC, which is the DOD 
energy folks. And we have really standardized those and taken a 
lot of your RCI comments and----
    Mr. Hobson. Well, what worries me about it is we have some 
private sector guys out there that are a little sharper 
sometimes than we are in drawing those contracts, and with the 
recent problems with certain energy companies, I want to be 
sure that we are, you know, really cleaning those things. Not 
about any personality things, but just that, you know, that 
contracts stand up under scrutiny now rather than somebody 
looking into them.
    So I hope you guys are back looking at them. You know we 
had to go back and fix, you know, And some other things we have 
to fix. we have had problems with truck contracts.
    I keep talking about this because we put all of this money 
in there. I do not want to lose the money or have claims and 
things of this sort or wind out that we made dumb deals.
    Dr. Fiori. Well, we----
    Mr. Hobson. You do not either. I know you, you are----
    Dr. Fiori. We certainly agree on that, sir. Certainly the 
Enron failure--and we only had one contract with Enron. And 
they are protecting us quite well, actually. We have everything 
done except for the sewers completed. And that is about 80 
percent completed. And the bond company is finding a new 
contractor to finish it for us. So it will work out okay.
    Mr. Hobson. As long as the contractor is not broke, you are 
fine.
    Dr. Fiori. Yes, sir.
    Mr. Hobson. And the problem today is reinsurance not just 
in this situation. But the reinsurance companies that are out 
there that were handling all of these bonds and things that--
    Dr. Fiori. As you also know, we have hired another man that 
is a senior executive service person to take over our 
privatization. And he has a background that is really quite 
well-founded in that. And he just started on Monday of this 
week, working in my organization.
    Mr. Hobson. Good. John, do you have any more comments? And 
was Sam finished?
    Okay.
    Well, we thank you very much. If you have any other 
comments you would like to make----
    Dr. Fiori. I would like to make two comments if I may, sir.
    Mr. Hobson. Sure.
    Dr. Fiori. We appreciate the help you can give us----
    Mr. Hobson. We have five minutes on the vote, so you have 
got to go fast.
    Mr. Fiori. Well, thank you very much. I would appreciate 
and I will accept the help in the chem demil area, because we 
are working hard to accelerate it and to solve the other one, 
that you alluded to, that exists in our National Guard 
facilities. And you know that was a stop-gap measure. And we do 
need help in the future. And if the General has any other 
comments, we would appreciate it.
    Mr. Hobson. He has been there. He knows.
    All right. Well, thank you all very much.
    The hearing is adjourned. Thanks you for your time. I did 
not think it would go this long, but that is all right.
                                        Wednesday, March 6, 2002.  

            U.S. NAVY, U.S. MARINE CORPS, U.S. NAVAL RESERVE

                               WITNESSES

H.T JOHNSON, ASSISTANT SECRETARY OF THE NAVY FOR INSTALLATIONS AND 
    ENVIRONMENT
REAR ADMIRAL MICHAEL JOHNSON REPRESENTING THE U.S. NAVY
BRIGADIER GENERAL (SELECT) RONALD COLEMAN REPRESENTING THE U.S. MARINE 
    CORPS
REAR ADMIRAL NOEL PRESTON REPRESENTING THE U.S. NAVAL RESERVE

                       Statement of the Chairman

    Mr. Hobson [presiding]. John and myself are still 
recovering from our brief trip, which at times did not seem 
very brief, and when we get back here it is hard to get 
orientated again.
    Our hearing this morning focuses on the Navy military 
construction program, including family housing, base 
realignment and closure, and the Reserves.
    Our witnesses this morning are H.T. Johnson, assistant 
secretary of the Navy for installations and environment; Rear 
Admiral Michael Johnson, representing the Navy; Brigadier 
General (Select) Ron Coleman, representing the Marine Corps; 
and Rear Admiral Noel Preston, representing the Naval Reserve.
    It is a pleasure to have everyone appear before the 
subcommittee this year. Secretary Johnson and Brigadier General 
(Select) Coleman, we welcome you in your first appearances 
before this committee.
    As I have stated at every one of our hearings this year, 
and will continue to state, I am very disappointed in the 
department's fiscal year 2003 budget request for military 
construction and family housing. The overall request is $1.5 
billion, or 15 percent below last year's enacted level.
    Today we have the opportunity to discuss the Department of 
the Navy military construction request, which is down $231 
million, or 21 percent from last year's level. We look forward 
to hearing how the Navy plans to restore and modernize its 
shore infrastructure at this funding level.
    I am pleased to see that the funding request for the Naval 
Reserve construction account and the Department of the Navy's 
family housing is at last year's enacted level.
    I was also pleased to learn that the Department of the Navy 
fully funded its base realignment and closure requirements for 
the fiscal year 2003, which was a change from last year, I 
might add.
    I believe our hearing this morning will be a very 
productive and good hearing. There are many quality-of-life 
programs and topics that I look forward to learning more about 
today.
    Among them are the Department of the Navy's plan to expand 
their privatization efforts to unaccompanied housing. This is a 
big deal. We need to talk about that.
    The home port ashore program, that will provide housing 
ashore for sailors who are currently required to live aboard 
ship, even while in home port, which, again, I think is a 
really new concept.
    And the Department of the Navy's plan to reduce long-term 
facility maintenance costs through expansion of the Navy's 
commissioning demonstration program.
    Once again, we welcome you, and we can look forward to what 
you have to tell us about how we can work together to maintain 
and improve the facilities where our sailors work, train and 
live.
    At this time, I will yield to John Olver for any opening 
statement he might have.
    We are having a little trouble orientating our sleep 
schedules. We are waking up at odd hours. But I think we will 
get over that. Even at John's and my age, we will handle that.
    John.

                         Statement of Mr. Olver

    Mr. Olver. Well, thank you, Mr. Chairman. Normally I would 
feel able to make less structured remarks, but this morning I 
really am not able, so I will simply read these.
    I also want to welcome you, Secretary Johnson, in this, 
your first appearance before the subcommittee, and I am looking 
forward to your testimony.
    Like the chairman, right now my mind--and I am afraid most 
of my body--is still on our visit to Afghanistan, which 
coincided with Operation Anaconda. And our losses there are 
tragic, and my deepest sympathy goes out to all their families.
    Still I am confident we will prevail in this action and 
that our losses will not be in vain.
    In the upcoming fiscal year, the Navy is facing many 
challenges, including continuing its important role in the war 
on terrorism, working to provide adequate force protection for 
our sailors and their families here and abroad, both on land 
and on the sea, and dealing with a significant backlog of 
facilities that are below standards.
    Obviously, these all have tremendous implications for the 
military construction bill, and we are looking at a Navy 
Department MILCON request that is $238 million below the fiscal 
2002 level. That is something like a 20 percent cut.
    I am very concerned that this request is inadequate to 
properly support our sailors and their families, and I am very 
concerned about this budget and look forward to hearing how we 
can help you address your military construction problems.
    So thank you for being here, Secretary Johnson.
    Mr. Hobson. Before we start, let me say one thing 
editorially. And I wish you were with us, Sam, because we 
needed your valuable picture-taking abilities.
    We just got back from Afghanistan, and I want to talk a 
little bit about that. The military thing is going to take care 
of itself, we will do fine there. But the humanitarian part and 
the government infrastructure in that country is the worst I 
have ever seen anyplace in the world. Sam and I went to 
Honduras some years ago, after the hurricane hit there, but 
this was worse than anything I have ever seen.
    And we went to an orphanage that has in the total facility 
about 1,000 young kids. We went to a hospital for children that 
is in just deplorable condition. It breaks your heart to go 
through it. The whole town of Kabul is in ruins. It is a true 
war zone. It is like pictures you have seen of Berlin after 
World War II. It is just totally bombed out.
    This was not done by us, most of it. Most of it was down in 
the civil war, and then by the Taliban.
    And we were in-country longer, I think, than any other 
CODEL has been, and we drove from the base at Bagram into 
Kabul. And I did not see one animal other than a couple of guys 
on donkeys along the road. And there really was not anything 
growing. They were getting ready to try to grow some stuff, but 
it is almost an arid land.
    And we are going to be probably working there a lot longer, 
I think, than most people believe at this point, because if we 
leave there too soon--and I am editorializing for not this 
committee hearing right now, but for people who are listening 
out there--we are not going to be able to leave there, I think, 
as fast as everybody thinks we are, in various roles, because 
that country does not really have any structure that I can see. 
And if we pull out, I think the structure's support is probably 
gone. And it will go back to what it was just a few months ago 
if we walk away too fast again, because it is deplorable.
    So with that lovely note, Secretary Johnson, your written 
statement has been entered in the record, but why don't you 
please summarize, Secretary, your testimony for us?

                       Statement of H.T. Johnson

    Mr. H.T. Johnson. First of all, I would like to welcome you 
back. We appreciate your going out and seeing why it is we do 
all the things that we do to prepare for Afghanistan, as well 
as homeland and other defense.
    Mr. Hobson. This is turning into the Johnson and Johnson 
program.
    Mr. H.T. Johnson. Yes, sir.
    Mr. Hobson. You guys going to form a company or something 
here? [Laughter.]
    Mr. H.T. Johnson. Also recognize your comments about 
humanitarian.
    Mr. Chairman, distinguished members, I would like to 
introduce my partners here. Rear Admiral Mike Johnson is the 
commander, Naval Facilities Engineering Command. He is 
representing the Navy today. He has a role with the Marines and 
the Navy service. He has 32 years service. He has been leading 
NAVFAC since October of 2000. He has a wealth of hands-on 
experience in the Seabee business. You have heard of Adak, 
Alaska----
    Mr. Hobson. Yes, awfully well.
    Mr. H.T. Johnson [continuing]. Desert Storm, the Panama 
Canal and the Balkans. So he brings a great wealth of 
background to us.
    Admiral Noel Preston is the deputy director, Naval 
Reserves. He has 30 years service in the Navy. He has been in 
this position just a short time: June 2001. Naval aviator. 
Anti-submarine commands. He was deputy commander of the Joint 
Task Force Southern Watch, southern Iraq, for a while.
    On my left is Brigadier General Ron Coleman. He is wearing 
colonel bars to confuse you, but he is a brigadier general. He 
has 31 years service in the Marine Corps. He had prior enlisted 
time in Republic of Vietnam. He is a logistician. He has six 
daughters.
    Mr. Hobson. He has also been a school teacher. He has a 
great career. He and I talked about this some time ago. I mean, 
first of all, it is very difficult to become a general officer, 
but to have a break in service and come back and be an enlisted 
person, and with all the problems you have with whatever they 
call this thing of where you are too long--heavy in age and 
rank and all this kind of stuff----
    [Laughter.]
    Mr. Hobson [continuing]. To move up like he has done is 
really a great credit not only to him, but the Marine Corps, 
because there are only--what?--80 general officers. See, you do 
not think I know all this stuff, but I have been checking up. 
There are only 80 general officers in the entire Marine Corps, 
and for him to be one speaks well for him and also the Marine 
Corps.
    Mr. H.T. Johnson. He served in Shining Hope. That was in 
the Balkans. So he has been in logistician positions at a 
front. And he is leading Facilities for the commandant. The 
commandant has told me personally that General Coleman is to go 
to every base and get the feel.
    Before I begin, I would like to say how much we appreciate 
the support of this committee, certainly in the Department of 
Navy. I would like to highlight a few parts from my prepared 
remarks, but I must say, Mr. Chairman, you have already done 
some of those, so I will skip through these.
    We are pleased with our overall budget for installations. 
We have $9.3 billion, which is higher than the last year; we 
had $8.9 billion in 2000. So from an installation standpoint, 
we have an increase.
    We have tilted our installations spending toward the top 
priority in the Navy, and that is our sailors, Marines and 
their families. There are a total of $375 million for family 
housing construction, which is up 15 percent. We will build 
1,100 new homes and renovate another 3,100 existing homes.
    As the chairman mentioned, we are also placing a great deal 
of emphasis on bachelor quarters. We will build 4,452 spaces 
for bachelors.
    As the chairman mentioned, we have 31,000 sailors who do 
not have a room ashore. We call it home port ashore. And we are 
committed to bringing them ashore by 2008. We have been able, 
because of some availability of quarters, to do it in Guam and 
also in Pearl Harbor, and the results have just been 
phenomenal, as you can imagine.
    Mr. Hobson. I am interrupting you, but do you need any 
statutory authority to continue that program or expand it?
    Mr. H.T. Johnson. Yes, sir, we do on the PPV, and we will 
talk about that later.
    The lowest quality of life is our sailors who live on the 
ships, even in home port, and we want to improve that.
    We also have added $269 million to better sustain our 
existing facilities. It is one thing to build new ones, but we 
have to sustain them once we build them. This is a new metric 
and we think it is a good metric. We always argue about 
metrics, but we believe this one is pretty straightforward.
    The part that you mentioned earlier on our military 
construction, it is $948 million, and 21 percent below last 
year. Last year was $1.1 billion, but last year was an anomaly. 
This year is higher than any in the past six, except last year. 
So we have had a steady increase. We are very pleased to have 
had the peak last year.
    We also have, as you mentioned, Mr. Chairman, $261 million 
in the BRAC cleanup. We have not just focused on BRAC, we have 
had a good cleanup on our active bases too. That is important, 
to continue the cleanups, whether you are going to excess a 
base or not, and we have done that.
    We have moved forward on the BRAC, getting back to that, 
and making great progress. As we have discussed in the past, we 
are trying to transfer property as quickly, and properly 
cleaned, of course.
    Several years ago, the secretary of defense established a 
goal to eliminate inadequate housing by 2010. This year, he 
accelerated that to 2007. The Navy service will meet 2007 for 
adequate family housing. The Marines will do it two years 
earlier, in 2005. And the Marines have really leaned forward, 
and when they meet it, 95 percent of the housing will be in 
public-private partnerships. So they have really embraced that, 
and the Navy is embracing it also.
    Mr. Hobson. The Marine Corps does not do 1 plus 1, the Navy 
does the 1 plus 1.
    Mr. H.T. Johnson. That is in barracks, sir.
    Mr. Hobson. Yes. But I just want to----
    Mr. H.T. Johnson. Yes, sir.
    Mr. Hobson. But you do not?
    Brigadier General Coleman. That is correct, sir.
    Mr. Hobson. Where does that come in your figures?
    Mr. H.T. Johnson. The next one here. Well, I have already 
talked about it on barracks, but as we go forward with PPV, 
jumping ahead, we have to look at their standards and the 
Navy's standards, and as we have discussed before, if we do 
public-private ventures we will probably use a percent of the 
basic allowance for housing, and it will be different for the 
Marines and the Navy because of different living arrangements.
    General Coleman will talk to it, but the Marines very 
properly want to built teamwork and camaraderie, so they want 
two people to a room and a bath, whereas the DOD standard is--
--
    Mr. Hobson. Are you telling me the 1 plus 1 does not do 
that?
    Mr. H.T. Johnson. The 1 plus 1, you have two rooms, 
singles, and a shared kitchen, shared bath.
    Mr. Hobson. Do you get less camaraderie that way----
    Mr. H.T. Johnson. In our plan, we will have----
    Mr. Hobson [continuing]. And less--what was it, what do you 
build?
    Mr. H.T. Johnson. Camaraderie and a spirit of teamwork.
    Mr. Hobson. Camaraderie and esprit de corps; you do less of 
that when you have 1 plus 1?
    Mr. H.T. Johnson. Yes, sir, and the PPV will have four in 
there, two rooms, two to a room, two baths.
    Mr. Hobson. I am just chiding you, because I think this 1 
plus 1 is overdone, but that is all right.
    Mr. H.T. Johnson. Yes, sir.
    On the public-private ventures----
    Mr. Hobson. I know what gang latrines are. We just saw gang 
latrines in Afghanistan.
    Mr. H.T. Johnson. I am surprised they had them at all.
    Mr. Hobson. Well, they have them. But do not get me into 
that, because the Air Force was using the Army's stuff, and I 
think the Army should be using their stuff. And the Air Force 
went out and got a bunch of the Army--these boxes of latrines 
and showers, and the Army got them after the Air Force got 
them, and they are actually Army stuff. But anyway, that is 
another story.
    Mr. H.T. Johnson. On public-private ventures, we have 
privatized at six locations for 6,600 homes. We have a 
solicitation for another 1,800 homes at two locations and plans 
for 12,000 at seven others.
    As the chairman has mentioned, we are working hard to find 
better ways to provide better quarters for bachelor members. 
And this is moving along well, and we hope to talk to you as we 
go forward on waivers we will need to move forward on the 
public-private ventures for barracks.
    In closing, I would like to mention one other thing, and 
that is so that you know that we: number one, want to have good 
facilities; number two, want to sustain them; and number three, 
we certainly want them to be safe. But also we work the energy 
end. This year the president passed out four awards for energy 
across all departments. The Navy got two of them, the only two 
in the Department of Defense. We are very proud of that and 
look forward to continuing it.
    With your permission, Mr. Chairman, I would like to have 
Admiral Johnson make some brief comments.
    [The prepared statement of H.T. Johnson follows:]



    
    Rear Admiral Michael Johnson. Good morning, Mr. Chairman, 
distinguished members of the committee. It is a pleasure to be 
back before you again to discuss the Navy's 2003 MILCON budget 
request.
    As mentioned, I am Rear Admiral Mike Johnson, the commander 
of the Naval Facilities Engineering Command, representing the 
Navy side. I would like to make just a few additional comments, 
amplify a couple of areas mentioned by Secretary Johnson in his 
opening statement.
    As you know, coupled with mission accomplishment, our 
people are truly our most important priority, and truly mission 
accomplishment and people are inextricably linked, and one 
outcome determines the other.
    As the secretary mentioned, we are 31,000 sailors living 
aboard ship, about 25,000 of those home ported in the U.S. and 
Italy, another 6,000 in Japan. And these sailors, like all 
sailors in the Navy, endure that austere lifestyle aboard ship 
while it is underway on the deployments.
    While the ships are in home port, we truly do need to offer 
them a better place to call home, similar to their married 
shipmates and all of their shipmates ashore. It is truly a 
major quality-of-service issue for each of us, and we are 
programming and executing projects that will resolve that 
challenge.
    We also need to come up with some innovative ways to 
expedite that, and the secretary has alluded to that, and we 
will perhaps talk a little more about that today.
    This year's budget does include 760 rooms for shipboard 
junior sailors who would otherwise be living aboard ship while 
it is in home port. Our goal is to get them all off, to get 
them off by 2008, and to have everyone, not only afloat, but 
ashore, in the 1 plus 1 by 2013. And that would help lessen a 
little bit that divide between our single sailors and our 
married.
    Protection of people while at work and at home has taken a 
little different twist since September 11, obviously, and I 
want to assure you that our facility projects are designed to 
meet the latest anti-terrorism force protection engineering 
standards, including shatter-resistance glass, building 
hardening, perimeter protection and structural reinforcing--
that progressive collapse aspect of it. We employ the standards 
under local conditions based on the threat analysis.
    An example of what that does is that wedge in the Pentagon 
that had those upgrades, and it obviously protected life and 
limb.
    Integral component of readiness are our facilities and 
infrastructure. It really is the launch platform for our 
sailors and Marines to deploy them to carry out that mission 
accomplishment. And there are places where they leave their 
families, and it is where our sailors, Marines and their 
families do live, work, train and relax, and we are committed 
to vesting the resources into that ashore readiness.
    There are no quick fixes to correct the infrastructure 
deficiencies we have lived with. It has grown over the years. 
We absolutely must stay the course and continue to balance the 
available funding against not only our facility lives, but 
across the rest of the department with the competing 
priorities.
    We need to sustain the facilities in the proper state of 
readiness, we need to fix the deficiencies, and we need to 
achieve that recapitalization goal of 67 years.
    Continued support by Congress, the administration, this 
committee is obviously vital in improving the condition and 
supporting fleet readiness now and truly into the future. We 
sincerely thank you for the continued support both you and your 
staff have given the Navy and Marine Corps team.
    I am not much for slogans, but one that has, kind of, 
caught my attention, ``mission first, people always,'' and that 
is what we have been talking about this morning and that is 
what we need to continue to talk about.
    Thank you, Mr. Chairman.
    Mr. Hobson. The motto of this committee is, ``quality of 
life first.''
    General.
    Brigadier General Coleman. Thank you, sir.
    Mr. Chairman, members of the committee, as stated, I am 
Colonel Ron Coleman, assistant deputy commandant for 
installation and logistics at Headquarters Marine Corps. It is 
a pleasure to appear before you today.
    First I would like to thank you, sir, for the kind words, 
and the honor truly is in serving, sir. I would also like to 
thank you and the committee for your ongoing support for Marine 
Corps military construction.
    Facilities are a critical component of our readiness to 
fight and win the nation's battles. Top-line constraints over 
most of the last decade forced us to defer investment in areas 
that did not have an immediate impact on near-term readiness. 
We sustained our combat readiness at the expense of 
construction because we had no other option. These were painful 
decisions because ultimately combat readiness is more than just 
a well-trained and equipped Marine.
    As stated, I visited all Marine Corps bases and spoke with 
Marines and their families. I am pleased to report that Marines 
and their families are more optimistic at this time than any 
time in the past.
    Family housing, bachelor housing and operational facilities 
construction supported by this committee has begun to become 
visible to our Marine Corps installations. However, there is 
still work to do.
    Our fiscal year 2003 military construction, family housing 
and Reserve budget provides over $500 million. Our proposal 
will support our most urgent requirements for readiness and 
quality-of-life construction. Operational and training 
facilities will support aircraft maintenance, weapons 
maintenance, and add essential recruit training opportunities 
at Beaufort, Parris Island and Cherry Point.
    Camp Pendleton will be able to implement further 
improvements to its potable water system and Quantico will have 
new barracks and new weapons maintenance facilities.
    Overall, our program will continue to provide in excess of 
$50 million for new barracks construction. I am happy to report 
that the fiscal year 2003 administration supported the 
commandant's request to increase family housing construction by 
19 percent over fiscal year 2002.
    With fiscal year 2003, our budget, we will be able to state 
that at every Marine Corps installation there is either 
demolition, restoration or rebuilding of all inadequate 
housing. Every dollar you spend for our facilities is an 
investment that pays long-term dividends in the readiness, 
retention and mission accomplishment.
    The Marine Corps thanks you, and I thank you for your 
continued support.
    Mr. Hobson. That includes Quantico now, right?
    Brigadier General Coleman. Yes, sir, it does.
    Mr. Preston. Good morning, Mr. Chairman, distinguished 
members of the committee. Thank you very much for letting me 
come today to represent Admiral Totushek and our some 88,000 
Naval Reserve sailors.
    First of all, I would like to thank you for your support in 
fiscal year 2002. You provided your Naval and Marine Corps 
Reserve some $53 million in budget request and congressional 
adds, and it supported our sailors and Marines as they carried 
out our nation's missions. On behalf of our sailors and 
Marines, thank you--Reserves.
    Our budget request for fiscal 2003 totals approximately $52 
million, of which $36 million are Navy Reserve projects. We 
believe these projects are well aligned to CNO's top five 
priorities and Admiral Totushek's top five priorities for the 
Naval Reserve.
    Without going into detail on the projects, again thank you 
very much for giving me the opportunity to speak today, and 
thank you for the support you have provided our sailors and 
Marines in the past.
    Mr. Hobson. Thank you, sir.
    We are going to go to Sam Farr first.
    Mr. Farr. Mr. Chairman, thank you. And I thank the ranking 
member, Mr. Olver, for allowing me to go first. I have to chair 
a California meeting today at 10 o'clock, but I do have some 
questions.
    First of all, I want to say two things. I want to really 
thank you, as colleagues of yours, for two of you going and 
others, going to Afghanistan. I think it is very important for 
members of Congress to see what is going on there, and I cannot 
think of two people with a better background to go to really 
put it into perspective. And as one of your colleagues, I am 
proud of you and I appreciate it.
    And I will tell you, when I heard the news breaking over 
the weekend, I was really worried about you, and I am glad you 
are home safe. And thank you.
    And for the men in uniform, thank you for serving. At a 
time when the nation is looking at you for such leadership, it 
is really encouraging to see the talent and the commitment you 
have, not only to the mission, but to improving quality of 
life, which is what this committee is all about.

                       NAVAL POSTGRADUATE SCHOOL

    I just really have two questions, Mr. Secretary, and the 
first is to let me put it in shape. Last year the House Armed 
Services Committee expressed the concern of whether the 
Pentagon had sufficient numbers of officers with technical 
education in science and engineering and technology.
    The committee directed the Secretary of the Navy to review 
future officer education requirements and determine how the 
unique facility you have at the Naval Postgraduate School in 
Monterey could be more effectively used for those requirements.
    And I have just visited and had review of the new courses, 
the schools within schools, that are just phenomenal. I mean, 
NPS is doing things that no other university in the United 
States is doing in integrated engineering and command 
integration. It is phenomenal to see. And I think the students 
are really charged.
    The problem is that the classroom space, called Spanagel 
Hall, that the Navy put that on the list for the FYDP in 2006. 
I appreciate you doing that. But I have been advised by your 
staff that Spanagel Hall has outlived its service life as a 
classroom. I have been in the building; it is falling apart. 
The heating and ventilation does not work; it is broken down. 
The building leaks. Even though you have tried to patch it and 
all that kind of stuff, the ceiling tiles are--with asbestos 
mastic, continually dropping. And I could go on and on.
    But I think that point is noted in your testimony, that you 
mention classrooms as part of what is necessary to enhance 
quality of life for the nation's Sailors and Marines and 
civilian employees.
    So my question is to explain to this committee how the Navy 
determines its priorities. I am really concerned that with the 
status of this building that it is so far down the 2006 FYDP.
    Mr. H.T. Johnson. First of all, we recognize the importance 
of the Navy Postgraduate School, and we also recognize the 
historic setting and historic buildings and so forth. And we 
are working very, very hard to maintain the history but at the 
same time move forward. And we intend to do that with Spanagel 
Hall. Of course, that was an old building that has been 
deteriorating. We look very carefully at all of our priorities 
and we have placed that in the 2006. But we recognize the need, 
as you talk about.
    Perhaps Admiral Johnson can answer some of the technical 
questions.
    Mr. Farr. Well, the issue is that I am very interested in 
seeing if you might speed that up. There are a lot of new 
programs the Navy is engaged in at the Naval Postgraduate 
School. That is the space they are using. But they are just 
growing out of the space. It is not worth putting the 
technology infrastructure into that building that we need with 
these new programs.
    And so, what I think what is going to happen is your 
mission execution is in jeopardy because of inadequate 
facilities. And perhaps what we ought to do with Spanagel Hall 
is fund it at a level consistent with the mission requirements 
and bring that infrastructure up to what the academic mission 
requirements are.
    Mr. H.T. Johnson. As you noticed, this year we did increase 
the overall funding for Naval Postgraduate School.
    Do you want to add some comments about the Spanagel Hall?
    Mr. Hobson. Oh, I thought you were going to say if Sam 
wanted to add something, he could do that. [Laughter.]
    Rear Admiral Michael Johnson. I think we have--everyone 
admits that that facility, looking at a cost/benefit, 
renovation, trying to fix it is not in the best interest. The 
project you are referring to is, kind of, a two-year, two-phase 
project.
    Mr. Hobson. How much money----
    Rear Admiral Michael Johnson. Currently, it is about $50 
million, plus or minus.
    There are some good aspects to it. Besides having the 
platform to do a lot of this technical pieces, the teaching, it 
also takes 210,000 square feet and reduces it to 160,000 square 
feet; still training the same amount of people but making it 
much more efficient.
    When you work all projects up through--I think you are 
probably aware of some of the process, but it works out that it 
competes against the rest of the projects in the Navy. And with 
a limited pot of money, everything, kind of, fits into where we 
can best afford it with the competing priorities.
    Mr. Farr. Yes, I have watched how you have increased the 
mission requirements out there and got it high-tech. And you 
have had all the admirals out there doing interesting studies, 
and the Secretary and the CNO are really using your school.
    And so, on the one hand, the academic mission is really on 
a fast pace, and yet the facilities that house that mission 
seem a lot slower. And I just want to engage in this dialogue 
because I think perhaps we can find innovative ways to speed 
that up a little bit.
    And before I go--and, again, thank you, Mr. Chairman, for 
letting me go--I want to thank you, Mr. Secretary. You know, 
the thing that Congress members fear most is BRAC. You served 
on the commission. We lost some things in my district under 
that decision, but I think you have noted that there are 
savings, management savings, that we can achieve.
    And I appreciate, in your testimony, that you are asking 
for the demonstration authority that the Army already has, 
where they can contract out for base operations.
    And I just wondered whether you are familiar with a program 
in Monterey, where you have the Army with the Defense Language 
Institute and the Navy with Naval Postgraduate School all 
within the city limits. The Army has contracted with the city 
to provide base operations at a savings of $2 million 
annually--audited savings; this is not just projected, it is a 
fact.
    And since you are asking for that demonstration authority, 
would you do that with the Navy, as well, rather than--I think 
you wanted just the long-term facility maintenance where it is 
built and then maintain it kind of like a warranty on the 
building. But would you expand that to other base operations, 
as well?
    Mr. H.T. Johnson. Sir, if we had that authority, we would 
use it. Whether we would use it there or not depends upon the 
circumstances and how it works out.
    Mr. Farr. Well, are you going to be asking for that 
authority? That is the question.
    I was not sure in your testimony whether you were just 
asking authority for--it says here, ``to allow a single 
contractor to design, build, operate and maintain facilities 
funded with military construction funds; would allow an 
additional demonstration project to seek and reduce life-cycle 
costs within that one facility.''
    Would that--was your interest also extending that to other 
facilities where it was cost-effective for the Navy to do that?
    Mr. H.T. Johnson. We are looking overall at what we can do 
smartly. And what has been done at Monterey is certainly 
something--that is not what we are asking for here. And Michael 
will explain that in a minute.
    But that has to do with we and the Army go about it a 
little differently. They have the right to keep the contractor 
in a maintenance role, and that is what we are asking for 
there, which is not unlike what you are talking about.
    Mr. Farr. Okay.
    Mr. H.T. Johnson. I am very familiar with the language 
school. I was probably the person who saved it many years ago, 
and I understand the need for it, and it has been multiplied.
    I also understand the closeness of those two organizations 
and the need to get them closer.
    Mr. Farr. Thank you.
    Mr. H.T. Johnson. It takes time, unfortunately, though.
    Mr. Hobson. Has anybody looked at the Brooks Air Force Base 
model as a model for the Navy to look at?
    Rear Admiral Michael Johnson. There are really three quick 
pieces. The reference you are referring to there is the design-
build-operate-maintain piece, and that is looking at a military 
construction to do a facility, to do a building. And that 
contractor that designs and builds would be responsible, as 
well, for operating and maintaining it for the next five years 
all under that one appropriation.
    And to do a contract vehicle, that would incentivize them 
to reduce the total ownership costs by reducing the five years 
of operations and maintenance and try to incentivize what they 
design in the way of sustainable development and the quality of 
materials and the quality of workmanship they put in it, 
because they have to operate and maintain it for five years. 
Hopefully that would go on for us in the next 45. And that is 
for a facility.
    I think some of the things you are referring to are more 
into elements of the BRAC 2005, but it was the pieces of the 
Efficient Facilities Initiative that the administration was 
working with.
    Mr. H.T. Johnson. And that is a Brooks City Base.
    Rear Admiral Michael Johnson. And that is the Brooks-type 
examples. And one of the areas that I think we are going to 
take a hard look at is Monterey and what is up there and how it 
might work out.
    A third element of that--and I think we talked about it 
last year--was more innovative use of enhanced leasing and that 
relationship. And we have focused a lot on the bike paths and 
the lakes and the golf course and parking and some other 
things. September 11----
    Mr. Farr. Changed a lot of that.
    Rear Admiral Michael Johnson [continuing]. Stifled some of 
that for now. And I think that we are still--we have not given 
up on that, but I think we are looking at other ways to do it 
and still live within the anti-terrorism/force protection----
    Mr. Farr. Well, I appreciate very much--appreciate your 
commitment to it. So we will not get BRACed in 1995--I mean 
2005. [Laughter.]
    Mr. H.T. Johnson. Sir, we have not done anything with 
respect to 2005. [Laughter.]
    It certainly did not influence our MILCON in any way, from 
the Department of the Navy standpoint.
    Mr. Farr. Thank you, Mr. Chairman.
    Mr. Hobson. Thank you.
    Mr. Farr. And I will talk to you--I have a lot of 
questions--I would love to talk to you more about your trip, 
too, after this.
    Mr. Hobson. John, do you have any questions you would like 
to ask?

                            HOMEPORT ASHORE

    Mr. Olver. In the home port housing program, I think that 
you have indicated that 31,000 sailors are to be served by 
this. Is that all meant to be barracks, or is that a mixture of 
barracks and family housing?
    Mr. H.T. Johnson. Sir, the family members already have 
housing.
    Mr. Olver. So it is all barracks.
    Mr. H.T. Johnson. Yes, sir.
    Mr. Olver. It is all singles.
    Mr. H.T. Johnson. Yes, sir. And the 31,000, 6,000 of those 
are in Japan, and once we do it here, we think Japan will 
provide that 6,000. So we are talking 25,000.
    Mr. Olver. Okay. Now, what portion of the 31,000 is 
provided for in this budget request?
    Mr. H.T. Johnson. We probably could not answer that. In 
this particular request, there are 754 rooms--bunks, if you 
will. And that is the first installment. But we already have 
some at Pearl Harbor and also at Guam.
    Mr. Olver. That have already been done, the 31,000?
    Mr. H.T. Johnson. Yes, sir.
    Mr. Olver. Then if they have already been done, or they 
have been provided for but not yet built they are done?
    Mr. H.T. Johnson. They were done on a space-available 
standpoint. At Guam we had some excess housing.
    Mr. Olver. Excess----
    Mr. H.T. Johnson. Housing, family houses, that we could 
make available.
    In Pearl Harbor, we did a dormitory. And when we fill the 
dormitory, we use the priority of bringing the sailors ashore. 
So that is not the long-term solution. That was an interim one.
    And we wanted to do that for a couple of reasons. As you 
might imagine, the master chiefs were concerned they would lose 
control of the sailors if they let them go ashore. They found 
just the opposite. So it has proved itself.
    The number we can provide you for the record, if you would 
like, sir.
    Mr. Hobson. John, if I could interrupt, were you going to--
Guam is coming back up as a--they are bringing a bunch of 
submarines out there. This is classified, but I know they are 
going there. Is that going to help or inhibit your ability to 
keep this kind of housing here?
    Mr. H.T. Johnson. We eventually will have to build bachelor 
quarters for Guam also, sir.
    Mr. Hobson. Well, I think that is part of John's point 
here.
    Mr. H.T. Johnson. Yes, sir.
    Rear Admiral Michael Johnson. Each area has, sort of, a 
unique environment. You have to look at what is there, what was 
there before, what did we keep, what excess capacity we might 
still have that is in good shape. You might be able to 
accelerate some of those moves while you wait to build and do 
other things. Family housing can be permanently diverted to 
bachelor housing if you have no family housing need.
    Guam only had a tender, I believe, as the only ship out 
there, and now will have two to three submarines as well.
    Now, we have always provided for submarine crews when they 
are home, as well as squadrons and Seabee battalions and that 
sort of thing--mine warfare ships. But these are the larger 
ships that we had never provided before.
    Mr. H.T. Johnson. These 31,000 are the last, I call them 
disenfranchised, people in the armed forces that do not have a 
room ashore.
    Mr. Olver. Well, you have puzzled me. If we have made 
available spaces that are down at Guam and Hawaii, then those 
were done over and above the 31,000, or before the 31,000 
number is calculated. Aren't you talking about the 31,000 are 
the ones that are left to be done?
    Mr. H.T. Johnson. No, sir. 31,000 is the total. We have 
been able to do some at Guam and some in Pearl. And then there 
are 754 new rooms.
    Mr. Olver. Okay, so 31,000 does not represent a number 
which is the remaining needs, then.
    Mr. H.T. Johnson. No, sir.
    Mr. Olver. Okay, fine.
    I have a table here in your testimony, Mr. Secretary, on 
page eight in your testimony, which has the Department of Navy 
barracks construction request. It has Norfolk getting 500 units 
and Bremerton, Washington, 264, which was the closest thing I 
can come to something close to the 754--I think it is actually 
764 units between those two. It seems to be the--am I right 
that those two, Norfolk and Bremerton, are the places that the 
760 units----
    Mr. H.T. Johnson. I know Norfolk is, and I assume 
Bremerton--would provide that for the record. But these are the 
total barracks, which has 754 for bringing----
    Mr. Olver. Well, what is then--are the other spaces 
included there? Are those renovations of current space existing 
as opposed to home port space?
    Rear Admiral Michael Johnson. Let me try to take a shot at 
it.
    We have had an ongoing bachelor program for a number of 
years, both renovating those that are economically amenable to 
renovation and new construction, targeting now the 1 plus 1 
standard.
    In the last couple of years, everyone stepped to the plate, 
that those most disenfranchised are the ones still aboard ship. 
That is an additional requirement, and it was put at the top of 
the list because they are in the worst condition. And the 
31,000 is the overall requirement that we are now working 
against to try to reduce.
    And the plan is to try to get them ashore as quickly as we 
can, using some assignment policy differences, and continue to 
build, so that by 2013, 2014, we will have everyone at the 
standard, but to get them ashore by 2008 into some much better 
homes for them.
    And it is a mix of using the BAH authority that you gave us 
for E-4 and above, looking at private sector for those. But 
really looking at the E-1s to E-3s predominantly, the ones that 
are on their first enlistment, the ones we are still 
culturalizing to the military environment and that sort of 
thing. And we have a pretty steep hill between now and 2008 to 
do a lot of that. And the secretary had talked a lot about the 
PPV for bachelor quarters, and I think that will allow us to 
expedite that.
    And the two that are referred to here are Norfolk and 
Bremerton, the 764. Within the overall program there are also 
some Marine Corps numbers on that table. And the 764 will house 
about 1,500 folks, as we bring them ashore, of that number.
    I was in the Atlantic Fleet a couple of years ago as the 
N46 at Fleet, and we had a very aggressive program up and down 
the coast, doing all sailors ashore. When you go to the sailors 
moving ashore, you are looking at the fleet's concentration 
areas. You are looking at a Norfolk. You are looking at a 
Mayport area. You are looking at Ingleside for the large-deck 
ship. You are looking at San Diego. You are looking at Puget 
Sound. You are looking at Pearl. You are looking at Guam. And 
you are looking at Japan and Gaeta for the 6th Fleet flagships.
    Mr. Olver. Well, let me, as long as I am on it, I really 
would like to try to understand this table. The table on page 
eight is all of the requests for barracks housing that is 
funded in this budget, is that correct?
    Rear Admiral Michael Johnson. Navy and Marine Corps.
    Mr. Olver. Navy and Marine Corps. The 760 represents $72 
million of that. The rest of is apparently--let me see if I can 
formulate this in a way that is fairly simple to answer. Are 
the other items in there not items that go against the goal of 
getting home port building for 31,000 people?
    Rear Admiral Michael Johnson. That is correct.
    Mr. Olver. That is correct.
    Rear Admiral Michael Johnson. I believe so.
    Mr. Olver. So the others are housing which are 
replacements, which are not related to this home port approach?
    Rear Admiral Michael Johnson. They are related to housing 
the rest of the sailors ashore.
    Mr. Olver. Okay. All right.
    Rear Admiral Michael Johnson. It has been an ongoing 
program.
    Mr. H.T. Johnson. You are right, sir.
    Mr. Olver. All right. Then let me ask this. I think--it was 
my impression that the effort on the 31,000 was an effort--when 
did we start that?
    Rear Admiral Michael Johnson. We just began it maybe last 
year.
    Mr. H.T. Johnson. This is the first time we have any----
    Mr. Olver. Well, how many of the 31,000 have already been 
previously taken care of then?
    Mr. H.T. Johnson. Only the ones at Pearl Harbor and Guam. 
And we can give you that number; we do not have it here, sir.
    Mr. Olver. Okay. When is the date at which--what is the 
goal date for finishing that program?
    Mr. H.T. Johnson. 2008, sir.
    Mr. Olver. What, then, was the date that was mentioned a 
couple minutes ago, 2014?
    Rear Admiral Michael Johnson. That is that larger group 
that is represented here along with moving them off of ships. 
That is those people that are assigned to shore that we have 
always been working on. And we have added the moving them off 
of ships to shore at a higher priority right now, to try to 
make it happen very quickly. And we will continue over the next 
10, 11 years to build barracks to get everyone into the right 
standard. But to get them off of the ships quickly at a 
different assignment standard.
    Mr. Olver. Okay, well, let me just accept the 2008. That 
will make it simple.
    We are talking about the 2003 budget and providing for 760 
of 31,000. There is a small number, indeterminate at the 
moment, that have been taken care of, probably, in Guam and 
Hawaii. I do not know how many exactly, but it is clearly not 
more that a couple hundred probably. Whatever it is, it does 
not much matter, I do not think, to my point.
    This budget is providing for 760 out of 31,000, roughly, 
that are there. How are we going to get, by the year 2008, if 
there are only five budgets left--2004, 2005, 2006, 2007 and 
2008--to get to the numbers that are involved here, how are we 
going to do that with this kind of budget? This goes to the 
inadequacy of this budget for meeting the goals. We will be 
talking about this 20 years from now.
    Mr. H.T. Johnson. Yes, sir, but the funds are in the out-
years to do that.
    Mr. Olver. And we do not have other things that have to be 
done, continuing--are you expecting to ramp up these budgets?
    Mr. H.T. Johnson. Yes, sir. And we also expect to use the 
public-private partnership approach with these sailors, as well 
as the Marines.
    Mr. Olver. Has that been--is that being done? Has there 
ever been an effort to combine family housing with barracks 
housing on the privatization deals, or are these all still 
intended to be totally separate? Is there some reason why they 
must be separate?
    Mr. H.T. Johnson. We are presently staffing a proposal that 
would allow us to do public-private partnerships for barracks. 
It would be the first time we have done that. And we would like 
to bring those two together, the family housing and the 
barracks, in our services.
    Mr. Olver. Into a single combined deal? Is that what you 
are saying?
    Mr. H.T. Johnson. In some cases, sir. If we were doing a 
privatization at Miramar, we would do housing and bachelor 
quarters with the same approach, with the public-private 
partnership.
    Mr. Olver. And the home port, the only--I think the two 
places that you mentioned in the home port deal was to be--our 
approach was to be done offshore, the only two that I remember 
were Italy and Japan.
    Mr. H.T. Johnson. Yes, sir. We only have ships at home port 
at a few places around the world.
    Mr. Olver. Not Naples?
    Rear Admiral Michael Johnson. Gaeta is where the 6th Fleet 
flagship is. The rest of the ships are deployers that deploy 
and then come home. Japan, at Sasebo, Yokosuka are pretty much 
the two home ports over there. Guam. And there is also a 
flagship home ported in Bahrain.
    Mr. Hobson. Yes, I am afraid we are going to have to go to 
Bahrain. There is a lot of stuff in Bahrain. We are going to 
have to go. [Laughter.]
    Mr. H.T. Johnson. Yes, sir.
    Mr. Hobson. Unfortunately, that is a long way too.
    Mr. Olver. Staff points out that we are intending to do 
30,000 in five budgets of privatization of barracks, when we 
have no experience in the privatization of barracks.
    Rear Admiral Michael Johnson. Let me whittle it down a 
little bit: 31,000, you have to subtract the 6,000, gets you to 
25,000.
    Mr. Olver. Where does the 6,000 come from?
    Rear Admiral Michael Johnson. The 6,000 is predominantly in 
Japan with a little bit in Italy. So we are looking at, in the 
States--in Japan, you have the Japanese Facilities Improvement 
Program, where the Japanese government works with us to provide 
their money to build facilities in Japan. So we will work with 
them to do that piece.
    The 25,000, if you look at what we have done, which I think 
is a little higher than a couple hundred, but we will get that 
number for you--you look at the 1,500 that are in here and the 
764 rooms, there is a start there. We will blend military 
construction funds with public-private ventures, leveraging 
other money.
    And the piece of this is some of the legislative changes. 
Right now we are prohibited from combining them because of the 
way the bachelor and family housing improvement funds are 
established. As the secretary mentioned, we will be working on 
some legislative changes to try to deal with that in some areas 
where it makes sense. Not everything would necessarily be a 
blend of family and bachelor.
    Mr. Olver. Well, I think I am just not a very cooperative 
witness here today. [Laughter.]
    And so, I think maybe I will just stop there.
    Mr. Hobson. Well, we will come back. We can do another 
round.
    Mr. H.T. Johnson. To me, sir, your questions were right on, 
sir. And you picked out a couple things that were obvious that 
we had not even picked out. So we appreciate them.
    Mr. Hobson. Let me editorialize for a minute. I saw Admiral 
Blair's staff guy come in out there, Randy. But I wanted to say 
this, and I forgot to say this when the Army came, but there 
are two things happening that I do with a lot of sadness. There 
are two people, two CINCs that I think have given great service 
to this country. Admiral Blair is going to retire here shortly, 
and I think he has done a great job. And he is one of the most 
outstanding people I have ever met.
    And also another great person, outstanding general officer, 
General Schwartz is going to retire. And in that theater, we 
are going to lose a great wealth of knowledge in a very short 
period of time from two people who I think, in their own 
personalities, are different sort of people, but they have done 
a great job for the defense of this country in those areas and 
for the people who serve underneath them. They have both done a 
great job. And I am really sorry to see them retire.
    And frankly, this is one of the problems I have with the 
military. We retire these people in the prime of their life. 
You and I think they are very young guys. And all of a sudden 
they are gone, and we lose that knowledge in our services.
    So it just occurred to be as I saw Randy out there that I 
wanted to say something about that publicly here.

                         BARRACKS PRIVATIZATION

    General, I want you to talk a little bit about the Marine 
Corps and their attention to the barracks privatization at 
Quantico and things of that sort. Because I do not think there 
is hardly a building at Quantico that we should not do 
something to--and other places. So do you want to talk a little 
bit about that, sir?
    Brigadier General Coleman. Yes, sir. Sir, with what we have 
Quantico certainly is a good-news story. It has gotten a lot of 
attention, a lot of needed attention, and we really are going 
to fix Quantico.
    Mr. Hobson. Oh, I would say it is about time, sir.
    Brigadier General Coleman. Yes, sir. It really is, and 
there is certainly a lot to be done.
    But family housing-wise, with the increase in BAH, with the 
combining phase two of Pendleton and Quantico, we the Marine 
Corps, believe that we can fix Quantico with 2003 funds. We are 
presently working that. We have already had some conferences on 
it already.
    But we are extremely confident that, with 2003 funds, all 
family housing on Quantico will either be restored or new 
housing. All the old housing will go down to include the metal 
housing, sir. We have gotten approval to hold on to one metal 
house, and let the rest of them go.
    So Quantico is certainly a good-news story.
    Mr. Hobson. That is the old Lustron they used to call it.
    Brigadier General Coleman. Yes, sir. Yes, sir.
    There is still some need for work with the infrastructure, 
some of the old buildings. But for family housing, we will take 
care of family housing, and we also are going to do a pilot 
program too--the Marine Corps is going to do two--one at Camp 
Pendleton and one at Quantico, on privatization of the BEQs.
    Not really sure how that will work out, but the commandant 
has said he is willing to give it his best effort and give it a 
shot.
    Mr. Hobson. Well, we are going to be looking at those 
contracts, as you know, and working with you on it. And I might 
say there are at least two I can think of rather powerful 
members of Congress interested in that. I think Mr. Murtha is 
interested and also Mr. Young. So I would say it is not only 
this committee that is interested, there is another committee 
that is very interested in those programs. So somebody is going 
to be looking over your shoulder to make sure that those are 
done correctly for the people that you serve and you serve 
with.
    Brigadier General Coleman. We have made great strides, sir, 
and we appreciate, we really do, the attention we are getting. 
The Marine Corps, when you all came to visit, we only showed 
you what we thought were the nicer things.
    Mr. Hobson. Yes. We are changing that in all the services, 
we are changing that. We do not--and I have tried to tell 
people, ``When members of Congress come, do not show them the 
really good stuff, because then they come back and tell me, 
`Well, why are you doing this stuff? Everything is fine.' '' 
And I am saying, ``You did not see it all, and you only saw the 
good stuff.''
    So you need to see where you need help. But I think your 
natural pride is you want to show the good things, and that is 
good, but people need to understand that it is not all that way 
and that they get a distorted view. But there is a natural 
pride, and you do not want to hang out your dirty laundry, but 
you have to sometimes in order to make sure we can clean it up.
    Brigadier General Coleman. We appreciate that.
    Mr. Hobson. I have been very encouraged by getting on with 
this home port ashore program. I think that is going to help 
morale a lot with the troops. As they come off of these ships 
after being out there for a long time, to be able to come back 
to something that they feel is their own and they can operate 
out of us is, I think, a good morale.

                        PIER REPLACMENT PROGRAM

    One of the things that I think is a big-dollar ticket for 
you people in the Navy is the pier replacement program. And I 
do not mean peers leaving, as I talked about before. I am 
talking about piers that ships dock to.
    And you have a lot of problems every place I go. You have a 
problem in Hawaii. I do not know about Guam. Guam might be an 
example of something where we BRACed, sir, and now we are going 
to de-BRAC or whatever a lot of it, I would suspect. And maybe 
in the short run that was a good program.
    I do not know whether we have actually--it would be 
interesting for somebody--and I do not want to spend a lot of 
time on this, we have other things to do money-wise. But it 
would be interesting to do the cost/benefit analysis, somebody, 
as to whether that was an appropriate thing to do.
    But I guess nobody really knew. You guys are supposed to 
have these big thinkers out there that are supposed to figure 
out what is going to happen in the future. And here we de-
BRACed Guam, and we knew at the time we were going to have 
problems with Okinawa. And we knew about it, that we may have 
to restructure it, and we knew about the threats and we know 
long term where our problems are possibly going to be.
    So it is, kind of, interesting that we BRACed it and now we 
are probably going to have to use a bunch of it, not only in 
the Navy--I do not blame it on just the Navy, because it is 
going to carry with it, I think, the Air Force and some other 
people.
    But you want to talk a little bit about the pier 
replacement program? We have, apparently, a vote on it we are 
going to have to go to.
    Mr. H.T. Johnson. Sir, we have done some good work down at 
Norfolk, and it continues. I will let Admiral Johnson talk on 
that. But we recognize what you are saying, and we try to 
prioritize all of our infrastructure.
    Piers are something that, if you are going to have ships, 
you must have good piers. We found at Norfolk that, not only 
are the piers deteriorating, but the support structure that 
goes along with the piers: the power and so forth. As we 
rebuild the piers, we can make the support structure more 
efficient and also certainly work better.
    Mr. Hobson. We have a short period of time here. I am going 
to give you some questions for the record.
    Mr. H.T. Johnson. Yes, sir.
    Mr. Hobson. I am concerned about these NATO regional 
command headquarters and about how much they are spending and 
where they are going. I have some problems doing some stuff in 
a country that will not let us land in certain circumstances--
and I do not want to get into that--and certain people who have 
not been real cooperative on certain types of things. And we 
are going to spend a bunch of money on NATO headquarters? I 
want to know who is helping us with the money on that.
    Because I will be very frank with you. I am not really 
excited about--you are the executive agent, but somebody is 
going to have to come and convince me a lot more on some of 
this stuff before I am going to spend a bunch of money on it if 
I can do anything about it.
    Because when I see some of the stuff that is going in here 
and when I see a budget request, $1.2 million for two flag 
officers' quarters, I got a lot of problems. That is a lot of 
money. So somebody is going to have to convince me on this 
stuff, and you do not have to do it today, but--that is enough 
on that.
    We only have about nine minutes left.
    John, you can submit questions for the record, and I do not 
think we have to come back unless you want to come back after 
this vote.
    Mr. Olver. If I may, Mr. Chairman, I would like to 
reinforce your comments. That was another reason I got bogged 
down on something else I was having difficulty and still am a 
bit befuddled by.
    But on the NATO headquarters, I am truly puzzled why we 
would be putting new NATO naval headquarters in Larissa and 
Madrid. It does not seem to me, from my understanding, that 
either of those has been particularly cooperative places for 
our recent activities by NATO. And I was curious how much money 
was in this budget for those and how much each of them in its 
total was going to cost.
    So I certainly am wanting to reinforce what you had to say 
already on that point.
    Mr. Hobson. Okay, we only have five minutes.
    Mr. Olver. That will be enough for the time being.
    Mr. Hobson. And you can submit any questions for the record 
that you want, and so will other members who cannot get here 
this morning. There is a lot going on.
    We thank you very much for coming over this morning.
    [Recess.]
    [Clerk's note.--Questions for the record submitted by 
Chairman Hobson.]
                        Homeport Ashore Program
    A major Department of the Navy quality of life initiative is the 
homeport ashore program. The goal of the program is to provide housing 
ashore for approximately 31,000 sailors who are required to live aboard 
ship even while in homeport.
    Question. How much of the fiscal year 2003 budget request targets 
this program?
    Answer. The fiscal year 2003 budget request includes two projects 
that will address homeport ashore: P-293 at Naval Station Norfolk for 
$37.31 million (Increment I) and P-301 at Naval Station Bremerton for 
$35.12 million. These two projects will provide a total of 764 1+1 
rooms. Based on the Navy's planned assignment policy for homeport 
ashore of 2 personnel per room, these two projects will provide space 
for approximately 1,500 shipboard sailors.
    Question 2a. Provide an estimate of the number of bed spaces to be 
provided with MILCON funding.
    Answer. In addition to spaces programmed through fiscal year 2003, 
the Navy intends to pursue traditional MILCON funding for 20,200 
shipboard Sailors. This equates to 10,100 1+1 rooms based on the 
planned assignment policy of 2 per room.
    Question 2b. Provide an estimate of the number of bed spaces to be 
provided with host nation funding.
    Answer. The Navy is pursuing funding via the Japanese Facilities 
Investment Program to provide funding and facilities for 5,700 
shipboard Sailors who are homeported in Japan.
    Question 2c. Provide an estimate of the number of bed spaces to be 
provided through the use of private financing authorities.
    Answer. Under the current program, all of the bed spaces will be 
provided through military construction. However, the Navy is currently 
developing a pilot project for Norfolk where there are 6,910 shipboard 
sailors.
    Question 2d. Provide an estimate of the number of bed spaces to be 
provided with existing capacity.
    Answer. 2,100 spaces have been provided to shipboard Sailors 
through existing inventory in Hawaii and Guam. Additionally, two fiscal 
year 2002 military construction projects have been funded to provide a 
total of 776 1+1 rooms. Based on the Navy's planned assignment policy 
for homeport ashore of 2 personnel per room, these two projects will 
provide space for approximately 1,600 shipboard Sailors.
    Question. What is the total cost estimate to complete this program?
    Answer. The current cost estimate to provide space for 20,200 
shipboard Sailors via traditional MILCON is approximately $950 million. 
Use of privatization efforts will reduce the MILCON cost. However, 
Basic Allowance for Housing (BAH) expenditures will increase. The 
additional BAH expenditures have not yet been calculated.
    Question. How much will the Department of the Navy rely on use of 
private financing authorities to meet the goal of this program?
    Answer. The Navy is developing a pilot approach for the use of 
private financing authorities to improve living conditions for single 
members. Based on the outcome of the pilot, the Navy intends to use 
private financing authorities wherever it is financially feasible to do 
so over the long-term.
                            Pier Replacement
    One of the significant challenges facing the Navy is the inadequacy 
of shore facilities, particularly piers and related infrastructure, to 
support the fleet. The Department's Installation Readiness Report notes 
significant and serious deficiencies in this area.
    Question. How does the fiscal year 2003 budget request address 
these deficiencies?
    Answer. The Navy's fiscal year 2003 MILCON budget request includes 
$91.43 million to address pier and wharf deficiencies. These projects 
include work to replace piers, upgrade pier utilities, and improve 
existing piers. Projects in the fiscal year 2003 budget request 
include:
           Replacement Pier @ Navy Auxiliary Landing Field San 
        Clemente Island;
           Pier 2 Electrical Upgrades @ Naval Station San 
        Diego;
           Recapitalize Bravo Docks @ Naval Station Pearl 
        Harbor;
           Ammunition Wharf Improvements @ Naval Magazine 
        Indian Island;
           Increment II of Pier Replacement @ Naval Station 
        Norfolk;
           Upgrade Electrical Distribution @ Naval Station 
        Norfolk;
           Waterfront Revitalization @ Naval Station Bremerton.
    Question. What is the Navy's goal for eliminating inadequate pier 
infrastructure?
    Answer. Each Fleet CINC has either developed or is in the process 
of developing Regional Shore Infrastructure Plans (RSIP) for waterfront 
facilities within their area of responsibility. Initial baseline RSIPs 
are anticipated for completion at all Navy waterfront facilities by 
August 2003. Upon completion of all RSIPs, Navy can then determine its 
Total Facilities Requirement (TFR) for all waterfront facilities, to 
include pier infrastructure. TFR can then be used to determine the 
investment necessary to revitalize inadequate pier infrastructure. Once 
the investment strategy has been determined, the actual time period 
required to revitalize all pier infrastructure will be dependent upon 
construction duration (typically 18-24 months), operational 
requirements which will be a constraint for scheduling, and 
availability of funding. At Fleet concentration areas such as Norfolk, 
the process of fully replacing or revitalizing waterfront 
infrastructure could take approximately 25 years.
    Question. What is the cost estimate to modernize the Navy's pier 
infrastructure?
    Answer. As the ``regional shore infrastructure plans'' are 
finalized in calendar year 2003, the Navy will have a detailed cost 
estimate to modernize the Navy's pier infrastructure.
                             Commissioning
    The Department of the Navy is seeking authority to expand the 
commissioning program developed by the Army. This program allows the 
first five years of maintenance funding for a newly constructed 
building to be included in the cost of construction.
    Question. What are the benefits of this funding approach?
    Answer. The Department supports extending the Army's pilot program, 
as it will allow the services to reduce life cycle costs for its 
facilities. Specifically, this program will:
           Reduce operational risk;
           Incorporate life cycle costing and commissioning 
        within facility acquisition;
           Facilitate overall project continuity in terms of 
        cost, scheduling, and quality;
           Improve constructability, maintainability, 
        operability;
           Improves warranty service;
           Provides an immediate trained work force;
           Provides for long-term cost stability and 
        predictability;
           Assures quality of mechanical and electrical 
        components;
           Creates incentive for builders to provide more 
        reliable and better quality products and services.
    Question. Would this funding method reduce long-term facility 
maintenance costs? If so, how?
    Answer. By funding the initial operation and maintenance needs with 
MILCON funding, the Department of the Navy can ensure that operation 
and maintenance needs are funded and develop a benchmark for how much 
it will cost to operate and maintain the facility after the initial 
MILCON-funded period expires. As the contractor would be responsible 
for the operation and maintenance, the contractor would build and 
install quality components to reduce life cycle costs.
    Question. Is this type of program used in private sector business?
    Answer. Yes.
    Question. How many projects would the Department of the Navy like 
to include in the program?
    Answer. The Department of the Navy would like to apply this 
principle to at least 3-5 projects per year.
                   NATO Regional Command Headquarters
    The Navy, as the Executive Agent, is responsible for providing the 
facilities necessary to support two new NATO Regional Command 
Headquarters in Europe--one in Larissa, Greece and the other in Madrid, 
Spain.
    Question. What type of facilities is the Navy responsible to 
provide at these sites?
    Answer. The Department of the Navy is responsible for providing 
support facilities at these locations such as housing and other 
community support facilities. Facilities that support direct 
operational requirements will be provided via NATO.
    Question. How many projects will the Navy have to provide at these 
locations and at what cost?
    Answer. At this time, the Navy does not have plans to provide any 
other facilities beyond those included in the fiscal year 2003 budget 
request.
    Question. Will the Navy have similar responsibilities at other 
locations in the future?
    Answer. If NATO stands up headquarters units at which U.S. 
personnel will be assigned, the Department of the Navy will be required 
to provide support facilities at those locations where it is the 
executive agent.
    Question. The budget request includes $1.2 million for two flag 
officer quarters in Larissa. What is the square footage of these units 
and do you believe the cost of these units is appropriate?
    Answer. The square footage of the two flag officer quarters in 
Larissa are 2,955 net square feet per unit. The cost of these units is 
consistent with OSD construction cost guidance. The project includes 
additional costs related to anti-terrorism and force protection 
construction standards due to the strategic location of the new NATO 
headquarters at Larissa.
                         Recapitalization Rate
    OSD's goal is to recapitalize the Department's infrastructure every 
67 years.
    Question. What is the current recapitalization rate for Department 
of the Navy facilities?
    Answer. The fiscal year 2003 recapitalization rate for Department 
of the Navy facilities is 122 years.
    Question. Does the fiscal year 2003 budget request for Department 
of the Navy infrastructure increase or decrease the recap rate and by 
how many years?
    Answer. The recapitalization rate for Department of the Navy 
infrastructures increases from fiscal year 2002 to fiscal year 2003 by 
16 years (fiscal year 2002 = 106 years; fiscal year 2003 = 122 years.
    Question. When does the Department of the Navy expect to reach a 
recapitalization rate of 67 years?
    Answer. Based upon the fiscal year 2003 President's Budget Future 
Years Defense Program, the Department of the Navy's recapitalization 
rate in fiscal year 2007 would be 69 years.
                              Housing Goal
    The Department accelerated its goal to eliminate inadequate housing 
by three years--to fiscal year 2007.
    Question. How will the Department of the Navy accelerate their plan 
to eliminate substandard housing by 2007?
    Answer. The Department of the Navy will accelerate the elimination 
of its inadequate housing through a combination of public private 
ventures and traditional family housing construction funding. Based 
upon the fiscal year 2003 President's Budget Future Years Defense 
Program and planned public private ventures, the Navy will meet the 
goal of eliminating its inadequate housing by fiscal year 2007. The 
Marine Corps will exceed the goal and eliminate its inadequate housing 
by fiscal year 2005.
    Question. How much will the Department of the Navy rely on housing 
privatization to meet the 2007 goal?
    Answer. The Department of the Navy will rely greatly on housing 
privatizations to meet the fiscal year 2007 goal. The Marine Corps 
plans to privatize 95% of its family housing inventory. The Navy plans 
to privatize 32% of its family housing inventory.
    Question. Is there an estimate of how much additional funding would 
be required over the next four fiscal years to meet the 2007 goal?
    Answer. The Navy and Marine Corps have sufficient funding in the 
fiscal year 2003 family housing budget request and Future Years Defense 
Program to meet the goal of eliminating all inadequate housing by 
fiscal year 2007 and fiscal year 2005, respectively.
    Question. How many family housing units are in the Department of 
the Navy's inventory? How many of these units are considered 
substandard?
    Answer. As of the beginning of fiscal year 2002, the Navy has an 
existing inventory of 59,485 owned homes; 22,169 of the owned homes are 
inadequate. The Marine Corps has an inventory of 23,252 owned homes; 
16,298 of the owned homes are inadequate.

    [Clerk's note.--End of questions for the record submitted 
by Chairman Hobson.]
    [Clerks note.--Questions for the record submitted by Mr. 
Farr.]
             Future Plans for the Naval Postgraduate School
    Question. With more students coming to NPS as directed by the House 
Armed Services Committee FY 02 committee report, and the growing 
international student enrollment, please tell the subcommittee what 
future modernization projects the Navy is considering for NPS?
    Answer. The fiscal year 2003 President's Future Years Defense 
Program includes the replacement of Spanagel Hall with new, up-to-date 
facilities. These new facilities would reduce annual operating costs, 
increase educational effectiveness, and provide a physical environment 
more appropriate to the level of the education expected at the Naval 
Postgraduate School. Increment I of the project will provide a 35,055 
square foot facility while increment II, will provide a 123,208 square 
foot facility. Specifically, this project will provide for flexible, 
high technology spaces for computer-intensive medium laboratory 
functions, classrooms and administrative offices to meet the combined 
requirements of four academic departments. Existing building 232 will 
be demolished upon completion of the new facility.
                         Demonstration Language
    I appreciated your acknowledgment of the success of the 
demonstration language under Section 2869 of the National Defense 
Authorization Act that has been used by the Department of the Army at 
the Defense Language Institute that has resulted in audited annual 
savings of more than $237 million.
    Question. Would you support the use of that demonstration authority 
at NPS and to the Navy in general?
    Answer. Yes, I support this demonstration authority. The NPS 
explored this concept with the City of Monterey, but the discussions 
did not, however, result in a specific project at that time. Some of 
the flexibility offered by this demonstration authority has already 
been provided throughout the Department. I anticipate a greater effort 
in outsourcing functions throughout the Department, in which local 
governmental entities shall play a significant role.

    [Clerk's note.--End of questions for the record submitted 
by Mr. Farr.]
                                          Wednesday, March 6, 2002.

   U.S AIR FORCE, U.S. AIR NATIONAL GUARD AND U.S. AIR FORCE RESERVE

                               WITNESSES

HON. NELSON GIBBS, ASSISTANT SECRETARY OF THE AIR FORCE FOR 
    INSTALLATIONS, ENVIRONMENT, AND LOGISTICS
MAJOR GENERAL EARNEST O. ROBBINS II, THE AIR FORCE CIVIL ENGINEER
BRIGADIER GENERAL DAVID A. BRUBAKER, DEPUTY DIRECTOR, AIR NATIONAL 
    GUARD
BRIGADIER GENERAL ROBERT DUIGNAN, DEPUTY CHIEF OF STAFF, AIR FORCE 
    RESERVE

                   Statement of Hon. Nelson F. Gibbs

    Mr. Gibbs. Thank you, Mr. Chairman.
    Mr. Chairman, members of the Committee, good afternoon. I 
appreciate the opportunity to appear before you today to 
discuss the Department of the Air Force fiscal year 2003 budget 
request for military construction, military family housing and 
dormitories.

                       Statement of the Chairman

    Mr. Hobson. The Committee will come to order.
    Our hearing this afternoon focuses on the Air Force 
military construction program, including family housing, base 
realignment and closure, and the Guard and Reserve.
    Our witnesses this afternoon are Mr. Nelson Gibbs, 
assistant secretary of the Air Force for installations and 
environment and logistics; Major General Ernie Robbins, the Air 
Force civil engineer; Brigadier General David Brubaker, deputy 
director of the Air National Guard; and Brigadier General 
Robert Duignan, formerly at Wright-Patterson Air Force Base, 
deputy chief of staff of the Air Force Reserve.
    Secretary Gibbs and General Brubaker, we welcome you to 
your first appearance before the subcommittee. These other guys 
have probably briefed you on what this is like.
    I have a couple of things that they want me to say here, 
and then I had a couple things I really want to say.
    I want to thank the members for being here.
    As I have stated many times, the department's fiscal year 
2003 budget request for military construction is a great 
disappointment to all of us on this committee and of the 
Congress.
    Of all the reductions proposed in the request, the deepest 
cuts come in Department of the Air Force accounts. The total 
Air Force military construction program is down $837 million, 
or 53 percent, from last year's level. This funding level 
renews a trend by the Air Force of under-investing in military 
construction because of higher priorities in the modernization 
and readiness accounts.
    An additional concern is that about half of this reduced 
funding request will be allocated to new mission projects. 
These projects are important and must be funded to support our 
next generation of weapon systems, such as the F-22 and the C-
17.
    And I might say that we saw some evidence of the good work 
the C-17 does in our recent trip when we looked at those bases 
and saw in, I think it was probably K-2, that everything they 
had in there we brought in, everything we have in Kyrgyzstan, 
you know, we brought in in aircraft. And actually we flew on C-
130s, but we saw C-17s.
    But my concern is that fewer dollars are being allocated 
for current mission projects, these types of projects that help 
revitalize our existing infrastructure by replacing or 
upgrading facilities and alleviating long-standing 
deficiencies.
    I am looking forward to hearing more today on how this lack 
of investment in current infrastructure impacts the Air Force's 
recapitalization rate. The department's goal is to recapitalize 
its facilities every 67 years. We are getting pretty close to 
that number.
    And I am looking forward to hearing more about the choices 
that were made by the Air Force in formulating this request, 
and when will we see a reversal in the Air Force's philosophy 
of using the construction accounts as a billpayer.
    On a positive note--I just had a discussion with somebody 
at the Defense Department saying I never say anything nice. But 
I do not think my job is to say all the nice things; my job is 
to point out where I think there are problems.
    But I want to say, the budget request for the Air Force 
family housing is $125 million above last year's enacted level. 
And I want to commend you for this proposed increase and 
congratulate you for staying the course of ensuring our 
military personnel and their families are provided the quality 
of housing they deserve.
    I want to say one other thing. John and I, we viewed a new 
base that the Air Force has built in Kyrgyzstan. And the 
general there, the one-star there--I forget what his name is, 
but the one-star was very proud of his base. He took us all 
around his base, and he has done a good job of setting it up.
    And his motto, which I thought was very interesting and a 
very good thing--he is very interested in quality of life. And 
he said, ``Our motto is, number one, wash your hands,'' and 
then he paused and says, ``with soap.'' And that is the motto 
all around the base, to be clean, neat and orderly. And this 
base is that.
    And it is a real credit to the Air Force, what they have 
done there. They even had Speed Queen best quality washers and 
dryers set up already. The thing that really got me, though, is 
they are using some Army equipment that I wish the Army would 
use. You guys stole--got it somehow, and the Army did not get 
it, for the sanitized showers and the sanitized toilets at the 
restrooms that they have, which really make a big difference in 
the ability of people to maintain their health.
    And also, they set up a great chow hall there. It was on 
concrete they put down in just a few days, and it was, I 
thought, as nice a facility as you would see on any base here, 
they had set up there. And they have done this in about 30 
days, 30 days, which was a great facility and I am sure it is a 
big morale booster to the troops that are there.
    And they are also making a lot of local purchases, which is 
very important to that economy over there. We have done about 
$8 million in Kyrgyzstan, which has been more open to what we 
have done, allowed more types of missions to be flown out of 
there, than we have in Uzbekistan. But the local purchases and 
letting our military people get into the town and spend some 
money is very important to that economy there.
    And all our young men and women in all the services are 
doing a great job. I want to once again say--I said this in the 
big hearing this morning. There are 80-some Marines guarding 
that embassy in Kabul that are doing a great job, and if you 
look at the picture in the New York Times, there are two of 
them standing behind us when we were there.
    But that is not the most secure building in the town, the 
only one I saw painted, belongs to a certain agency and it was 
in better shape than the embassy. But they have been there, I 
think, longer than the embassy has been back.
    At this time, I will yield to Mr. Olver for any opening 
statement he might have.
    John.
    Mr. Olver. Thank you, Mr. Chairman.
    And I want to welcome you, Mr. Secretary, to this, which I 
believe is your first appearance before this subcommittee. I am 
looking forward to your testimony also.
    I was also on this trip, which the chairman has described, 
to Afghanistan, along with seven other members of the Congress, 
split almost evenly between the two parties. And the images 
that we carry away from that are extremely vivid, both in the 
destruction to the country, and also in the morale and the very 
strong belief on the part of the people that we met at the 
various bases of all of the different services in the job that 
they are doing and the importance of it. So that was a very 
strong image.
    We also happened to be at the air base of Bagram in the 
middle of Operation Anaconda, and I just want to say that the 
loss of Sergeant Chapman and Airman Cunningham, as well as the 
losses that have been suffered by the Navy and the Army, are 
tragic, and I think I can speak for everybody here in all of 
our deepest sympathies going out to the families of those who 
have given their lives.
    The Air Force is facing many challenges, it seems to me, 
right now: a very active role in the war on terrorism, 
obviously, adequate force protection and for your personnel and 
their families, a significant backlog of below-standard 
facilities among others. These all have tremendous implications 
for the MILCON bill this year, and yet we are looking at a 
construction program that is down $837 million: 53 percent from 
last year's enacted levels, as the chairman already said.
    So, I am deeply concerned about this budget, and I am 
waiting to hear how you plan to meet those challenges that I 
cited and the others which are also significant. I did not try 
to cite all the possible challenges, obviously, but there are 
very significant ones. And I am curious how you can plan to 
meet those challenges.
    Thank you, Mr. Chairman.
    Mr. Hobson. Thank you, John.
    Secretary Gibbs, your written statement has been entered in 
the record, but we would like you to summarize your testimony 
for us, and then after that we will do some questioning based 
upon the way members came in the room. So, carry on, sir.

                             FAMILY HOUSING

    The Air Force's total military construction and family 
housing programs play a vital role supporting Air Forces 
operational needs, workplace productivity and quality of life. 
This committee's support for these programs has remained 
steadfast over the years. Last year, the Secretary of Defense 
made a commitment to transform the Department of Defense 
installations and facilities into those required for a 21st-
century military. Given the ever-present competing priorities, 
the Air Force has developed an executable and fiscally 
responsible plan for getting its facilities on a path to 
recovery.
    The Air Force's top priorities within this year's 
president's budget are to sustain the facilities that already 
exist, enhance the quality of life by improving housing for 
both single and married members, complying with existing 
environmental statutes, and supporting new missions and weapons 
systems.
    For fiscal year 2003, the Air Force is requesting over $4.2 
billion to invest in Air Force facilities and infrastructure, 
the same level as submitted in fiscal year 2002 budget request. 
This includes nearly $2 billion for sustainment, restoration 
and modernization to maintain our existing infrastructure and 
facilities; an increase of over $360 million from fiscal year 
2002.
    The budget request also reflects the Air Force's continued 
commitment to taking care of its people and their families. 
Their welfare is a critical factor to overall Air Force combat 
readiness and the family housing program, dormitory program and 
other quality-of-life initiatives reflect the commitment by the 
Air Force to provide its people the facilities that they 
deserve.
    The Air Force is requesting $1.5 billion for family 
military housing, of which $677 million is to replace more than 
2,100 worn-out units at 23 bases and improve more than 1,700 
units at 11 bases. This request also supports privatization of 
more than 4,500 units at five bases.
    To improve the quality of life for the Air Force's 
unmarried junior enlisted members, the Air Force is requesting 
$135 million for its fiscal year 2003 dormitory program, which 
consists of 11 enlisted dormitory projects at nine State-side 
bases and one overseas base.
    The fiscal year 2003 request also includes $644 million for 
active force military construction, $53 million for the Air 
National Guard and $32 million for the Air Force Reserves. 
Included are 25 new mission projects totalling over $287,284 
million. This includes investments to base the F-22 Raptor at 
Nellis Air Force Base for operational test and evaluation and 
at Langley Air Force Base, the home of the first operational F-
22 wing.
    Finally, this year's request includes new mission projects 
to support B-2 forward operations in the United Kingdom and at 
Diego Garcia, basing of the Global Hawk unmanned vehicle at 
Beale Air Force Base and expanded aircraft parking at Naval 
Station Rota in Spain and at Ramstein Air Base in Germany.
    In conclusion, I want to thank the committee for its 
continuing strong support of Air Force military construction, 
family military housing and dormitory programs. With the 
Committee's assistance and support, the Air Force will meet the 
most urgent needs of its commanders in the field, while 
providing quality facilities for the men and women who serve in 
and are the backbone of the most respected air and space force 
in the world.
    Thank you very much, Mr. Chairman.
    [The prepared statement of the Honorable Nelson F. Gibbs 
follows:]



    Mr. Hobson. Thank you.

                                  C-17

    Are you guys going to talk or you going to let him do it? 
You are not going to introduce your wife? I will if you will 
not.
    Ernie brought his biggest supporter here today if he would 
ever get her a fireplace. But other than that, Donna is here 
with him today and we thank you for coming and your support of 
the Air Force.
    So I am going to go to questions. I understand there are 
two studies on C-17s and where they are going in the Reserves. 
The Air Force is doing one and then we have ordered one. What 
is the deal on that?
    Brigadier General Duignan. The site surveys that were done; 
are you referring to those?
    Mr. Hobson. Yes.
    Brigadier General Duignan. Those have been completed both 
at March and Wright-Pat, the ones that were directed by the 
legislation.
    Mr. Hobson. But is there another one going on someplace 
else?
    Mr. Gibbs. The C-17 basing strategy is working its way 
through the structure of the Air Force. Air Mobility Command 
(AMC) owes the last recommendation into the Secretary, and we 
expect that the announcement of where additional basing will 
occur on the C-17 sometime in the near future.
    Mr. Dicks. In what year?
    Mr. Hobson. He did not say.
    Mr. Gibbs. Oh, I would believe it is this year, sir.
    Mr. Dicks. Will the chairman yield?
    Mr. Hobson. Sure.
    Mr. Dicks. You have C-17s at McChord on the West Coast and 
in South Carolina. And then there is going to be another base, 
is that the----
    Mr. Hobson. Well, there was a direction in the big bill and 
this bill that they look at a base in Ohio and a base in 
California. Is that correct?
    Mr. Gibbs. There was legislation to that effect, yes, sir.
    Mr. Hobson. Yes. That does not mean the Air Force follows 
legislation. They just, kind of, go off and do--and the Defense 
Department, kind of, goes of and does what they want beyond 
that.
    These are Reserve bases.
    Mr. Dicks. Okay. I got you.
    Will there be other active duty bases?
    Mr. Hobson. That is up to them.
    Mr. Gibbs. I expect so, sir. There is current authorization 
for up to 180 aircraft. Eighty-two have been received. One 
hundred and twenty are under contract. There are appropriations 
for the next 60. And by the time that comes, I am sure that the 
announcement will have been made as to where those additional 
aircraft will be based.
    Mr. Dicks. Okay. Thank you, Mr. Chairman.

                             FAMILY HOUSING

    Mr. Hobson. John, we will go to you for questions.
    Mr. Olver. Thank you, Mr. Chairman.
    I noticed that you have not specifically said this in the 
testimony today, Mr. Secretary, but in the Air Force budget 
briefer which we all get, I guess, somewhere along the way, 
there is a change in the time line for meeting the Office of 
the Secretary of Defense guidance on elimination of substandard 
family housing units--changing the time line there. It has been 
revised to 2007 to 2010.
    Can you give me some idea of what the reason for this delay 
is? I am not aware that that is a delay that is being carried 
across the other services. It may be, but I picked it up here.
    Major General Robbins. Yes, sir. When we looked at trying 
to execute the entire program to upgrade about 46,000 houses 
between now and fiscal year 2007, we could not get there, 
largely because we would have to displace so many families that 
there is not enough spillover housing, if you will, available 
to relocate families into while we are taking housing out of 
the inventory and doing the renovation on them. We calculated 
somewhere between 9,000 to 9,500 additional families that we 
would have to displace if we were to move that time line 
forward to 2007.
    So it was not so much a matter of funding, although that 
obviously an issue. It would take another almost half a billion 
dollars to move everything forward. It was really a matter of 
being able to do that without totally disrupting the lives of 
another 9,000 families.
    Mr. Olver. Do you propose that it be done by privatization?
    Major General Robbins. Part of it will be done.
    Mr. Olver. Part of it would be but not all.
    Major General Robbins. Yes, sir, that is correct.
    We now, counting what we have in the budget before you, we 
will privatize about 27,000 units across the Air Force.
    Mr. Olver. Counting what is in this budget anticipating 
that this is funded----
    Major General Robbins. That is correct.
    Mr. Olver [continuing]. You will have done 27,000.
    Major General Robbins. Correct, out of an inventory of 
103,000.
    Mr. Olver. Okay, 27,000 would be ended, there would be 
still 45,000 substandard?
    Major General Robbins. That includes some of what is going 
to be privatized. Some of that substandard will be renovated or 
replaced through privatization. And some of it will be 
renovated or replaced through military----
    Mr. Olver. You have to be clear with me; I am a little 
foggy here having just been around the world twice, it seems, 
and dragged through knotholes along the way.
    But the 45,000 that you mention is over and above. Those 
are the substandard----
    Major General Robbins. Within the 103,000 there are----
    Mr. Olver [continuing]. That do not include what is in this 
budget.
    Major General Robbins. They do include what is in this 
budget. We have approximately 103,000 in the inventory. Of 
those, 45,000 to 46,000 are considered inadequate.
    Mr. Olver. Okay.
    Major General Robbins. And between now and the year 2010 we 
will bring all of those inadequate units up to standard.
    Mr. Olver. How many substandard units are we going to deal 
with in this budget?
    Mr. Gibbs. Something approximately 8,300. In total, in this 
budget, we are talking about replacing 2,100 units, doing major 
renovation on 1,700 and privatizing 4,500. Not all of those 
4,500 are substandard. I do not have the detail----
    Mr. Olver. So you do not know offhand----
    Mr. Gibbs. No, but when we privatize----
    Mr. Olver. What I am trying to find out here was whether we 
are counting the ones that are included in this budget in the--
--
    Mr. Gibbs. In the 46,000, yes, sir.

                             PRIVATIZATION

    Mr. Olver. Okay. How many then had we previously funded for 
privatization over the last several years, roughly? Maybe this 
is too intricate. I need to get a sense of how this pattern 
fits together when you are really planning it, you are planning 
for several years in the future.
    Major General Robbins. I have the numbers here.
    Mr. Olver. Okay.
    Major General Robbins. From fiscal year 1998 through 2000, 
we had 6,300 units that we were going to privatize. And then in 
2001, another 5,672 units to be privatized.
    Mr. Hobson. How many of those did you do?
    Major General Robbins. So far, none of the fiscal year 2001 
projects have been awarded.
    Back to the 2000, four of those projects have been awarded, 
four more are under solicitation right now, and one is in Ready 
for Procurement (RFP) development.
    Of the four fiscal year 2001 projects, 5,672 units, all of 
them have solicitation under development right now.
    And in last year's program, fiscal year 2002, we had 12 
projects, a total of 10,500 units are involved in those 12, and 
they also are under development.
    Mr. Olver. Those are under development, but none of those 
are in construction.
    Major General Robbins. That is correct. Only four are 
actually under construction right now.
    Mr. Olver. I guess the real question there would probably 
be, is it possible, given the history of how long it takes to 
get these done----
    Major General Robbins. Right.

             FAMILY HOUSING CONVENTIONAL AND PRIVATIZATION

    Mr. Olver [continuing]. Whether one can even do it by 2010, 
rather than worrying about whether one can do it by 2007 and 
why we have been pushing that off.
    I wonder if it is possible, there must be some sheet of 
paper somewhere, almost--what do you call those? A flow chart 
or something----
    Major General Robbins. Spreadsheet.
    Mr. Olver. Spreadsheet.
    Major General Robbins. Yes, sir.
    Mr. Olver. Spreadsheet that shows how many you think should 
go by conventional and how many by privatization over the years 
to get to your goal at the end of 2010. Is that somewhere----
    Major General Robbins. We have it.
    Mr. Olver [continuing]. On some spreadsheet that you give 
for the whole process?
    Major General Robbins. In fact, it is probably in the row 
behind me.
    Mr. Olver. He will get you that.
    Major General Robbins. Yes, sir.
    [The information follows:]
             Family Housing Conventional and Privatization
    At the beginning of fiscal year 2003 the Air Force will have 23,000 
privatized units, 33,000 adequate units, and 46,000 inadequate units. 
Of those inadequate units, host nation funds will revitalize 3,400. The 
following table identifies the use of MILCON and privatization to bring 
the remaining 42,600 units up to an adequate standard. It should be 
noted that the share of units to be revitalized using MILCON versus 
privatization is a fairly dynamic number at this point in time. As we 
experience more success with privatization and as economic/security 
issues are resolved, we expect more privatization candidates to 
surface.

----------------------------------------------------------------------------------------------------------------
                                            FY03     FY04     FY05     FY06     FY07     FY08     FY09     FY10
----------------------------------------------------------------------------------------------------------------
Number of units revitalized through         2,100    4,700    4,500    4,300    4,700    7,000    6,300    4,500
 MILCON.................................
Number of units revitalized through         4,500        0        0        0        0        0        0        0
 Privatization..........................
Number of inadequate units remaining....   36,000   31,300   26,800   22,500   17,800   10,800    4,500        0
----------------------------------------------------------------------------------------------------------------

    Mr. Olver. Let me ask that for the future and I will pass 
on to others until another round perhaps.
    Mr. Hobson. Mr. Skeen, do you have any questions you would 
like to ask?

                        HOLLOMAN AIR FORCE BASE

    Mr. Skeen. Yes, I do, Mr. Secretary, and as you know, 
Holloman Air Force is located in my district. The survival 
equipment shop--was condemned a year ago, but it does not 
appear in the budget. Can you give me a status of correcting 
this?
    Major General Robbins. Yes, sir. That project at Holloman 
is in the Air Force future years program. I believe it is in 
the fiscal year 2006 program today.
    Mr. Hobson. How much is it?
    Mr. Skeen. What, for the cost?
    Mr. Hobson. Yes.
    Mr. Skeen. $4.6 million.
    Mr. Hobson. That might make it.
    Mr. Skeen. It is just easy, it is critical, you know.
    Mr. Hobson. Yes. Well, it would be easier if they put it 
in. I understand. But that might be one that could be added at 
some point, although I know that the administration does not 
want any adds to anything, and I assume you guys do not want 
any congressional adds to anything done. If I understand the 
administration's position, is that whatever we add is bad, 
whatever you guys do is okay, but I do not think that is going 
to happen.
    But I just take the moment to discuss that a little bit 
here at the hearing, because there is another agency around 
here that tries to say everything we do is bad and everything 
other people do is good, and I just want to send a message that 
I think we have some understanding of what goes on some of our 
places.
    And, frankly, certain things would be gone in the Air Force 
today if we would have listened to, you know--let me just say 
this. People come and go in administration, people come and go 
in the Air Force, and there are different people there around 
and have different priorities.
    There was one secretary of the Air Force that if that 
person would have had their way, the Air Force Institute of 
Technology would be gone today, even though the four-star at 
the time did not want it gone, and everybody who wore a blue 
suit did not want it gone.
    So, I take umbrage at this attitude that--I think there is 
some congressional wisdom that lasts longer than people that 
are in these jobs for short periods of time. I think Joe would 
probably agree with that and most of the members of this 
committee would agree with that. And we have to live with this 
stuff after everybody has gone. After Ernie retires, and Donna 
gets her fireplace someplace, I still have to live with all the 
things we have worked on here or not worked on.
    And there was a time when the Air Force did not want to do 
any privatization in housing because the guy who was leading 
the Air Force did not want to do it. Now the Air Force has 
gotten into it, and all the other services. It was not you. I 
am not blaming you. That guy is gone. He is off and making big 
bucks. And we are all set here, still having to deal with the 
problem.
    So, this is not just an Air Force problem. This is a 
problem of wherever we are.
    Go ahead. You got another question, Joe?
    Mr. Skeen. Yes, I do. The approach lights at Cannon Air 
Force Base have needed replacement for years. Yet they are not 
scheduled for replacement until 2007. And since this is a 
safety of flight issue, can you provide me with any status?
    Major General Robbins. Yes, sir. The Cannon approach light 
project is in the Air Force future year defense program in 
fiscal year 2007.
    Mr. Skeen. $1.0 million?
    Major General Robbins. Yes, sir.
    Mr. Hobson. Okay. Any other questions, Joe?
    Mr. Skeen. No. I came here to gripe a little, and you let 
me gripe.
    Mr. Hobson. I griped a little bit, too.
    Mr. Skeen. No, thank you for the recognition and the 
interest.
    Mr. Hobson. Thank you, Joe.
    Mr. Edwards.
    Mr. Edwards. Mr. Chairman, thank you. I would be glad to 
yield my time to the Chairman to continue his discussion of our 
constitutional prerogatives. [Laughter.]
    I wholeheartedly agree with what you said. I also hope that 
the Pentagon does not play the game of saying, ``Well, those 
guys on Capitol Hill are going to take care of MILCON, so we 
can underfund that.'' Some year the worst could happen: You 
might actually get what you asked for.
    I do want to thank all of you for your service to our 
country.
    And specifically, I would like to ask the question 
regarding the amount of resources in your military construction 
budget necessitated by September 11 and additional force 
protection expenditures. It seems to me that the Air Force has 
taken a double hit. First, your military construction budget 
request is down dramatically. And then secondly, even if it had 
been leveled amount of funding, you are losing money because 
you having to put some extra money in the force protection.

                            FORCE PROTECTION

    Can you tell me how much, specifically, is necessitated in 
spending out of your MILCON budget for force protection?
    Major General Robbins. Yes, sir. And, in fact, as you know, 
we started including the Anti-Terrorism/Force Protection (ATFP) 
design features, if you will, into our Military Construction 
(MILCON) with this budget. And so, fortunately we had already 
incorporated roughly 1 to 3 percent of each project's programed 
amount for splinter protection, structural reinforcement and 
that sort of thing. So, we were a little ahead of the game.
    Subsequent to 9/11, there were a couple of projects that we 
asked for through the Defense Emergency Relief Fund (DERF) and 
got funded. One, thank you very much, sir, the Dover mortuary, 
was not an ATFP issue, but it was a cost of war, certainly, 
which was funded. And then some projects in Southwest Asia, 
which were again funded as part of the 2002 supplemental.
    In 2003 there is another DERF request being formulated 
through the OSD folks and we have about $200 million in MILCON 
for ATFP types of projects in that Air Force request that has 
gone down at the Office of the Secretary of Defense (OSD).
    I think the point to make here is that our MILCON 
submittal, our 2003 budget that is before you, was not 
decrimented in order to accommodate that. This would be added 
to----
    Mr. Edwards. Assuming you are going to get that in a 
supplemental?
    Major General Robbins. Yes, sir. We are hoping it is.
    Mr. Edwards. Okay.
    Mr. Hobson. Is that true of the Guard and Reserve also? Do 
you cover all of it?
    Major General Robbins. Sir, that is the total force. Yes, 
sir.
    Mr. Hobson. Includes the total force. Okay.

                             PRIVATIZATION

    Mr. Edwards. One last quick question then. In terms of RCI, 
maybe it is not a quick question to answer----
    Mr. Hobson. They do not call it RCI.
    Mr. Edwards. In terms of--what is it called in the Air 
Force?
    Mr. Gibbs. Privatization.
    Mr. Edwards. Privatization, whatever you want to call it, 
how is that going? What is going well? What are the problems or 
questions that are still out there unanswered?
    Mr. Gibbs. It is taking too long. There are too many layers 
of review that the projects have to go through, and we are 
working on attempting to streamline that process. We are about 
six months behind where we thought we would be or should have 
been at this point in time, and basically it is our internal 
problem, and we are working on that.
    In terms of the privatization overall, General Robbins 
commented about the 26,000 units that are in there. The chief, 
shortly after he came in, asked for the base coms and link 
commanders to go back and review all of their bases a second 
time, regarding privatization, the possibility of including 
more in that.
    There are a number of those working through that process, 
that we are working on now. So we would expect that when we 
come back in 2004 that we will have identified additional bases 
that we can do privatization of the family housing also.
    Mr. Edwards. As the Army has in some cases, are you using 
request for qualifications and then picking the contractor, or 
do you design the project and then put it out for the lowest 
bidder?
    Mr. Gibbs. We use some of both.
    Mr. Edwards. Okay.
    Thank you, Mr. Chairman.
    Mr. Hobson. All right.
    Ms. Granger.
    Ms. Granger. Just one question. Can you tell me where you 
are on the process of determining where the Joint Strike 
Fighter training squadron will be based and what are going to 
be the MILCON requirements?
    Mr. Gibbs. The latter part, the MILCON requirements, no, we 
have nothing on that indication now.
    And in the Joint Strike Fighter, for permanent basing, to 
my knowledge, that study has not been started. There currently 
is a study that got under way quite recently under the auspices 
of the joint services to look for training bases. We are 
probably about 12 months away from having completed that.
    But I do know that they are in the process to go out to 
begin the surveys of the individual bases.
    But that part, the basing for training, has started 
recently.
    Mr. Hobson. I think Norm left.
    Sam.
    Mr. Farr. I am going to pass and let Allen----
    Mr. Hobson. I think Mr. Walsh is next.
    Mr. Walsh. Thank you, Mr. Chairman.
    Thank you all for your service.

                GUARD AND RESERVE MILITARY CONSTRUCTION

    I have a question, Mr. Gibbs. I noted born in Rochester, 
New York; it is right down the road. Clarkson University.
    Mr. Gibbs. Up the road.
    Mr. Walsh. My question, sir, is--and you may have covered 
this earlier, and I missed your opening statement--the budget 
for MILCON for Air Force is $4.2 billion for facilities and 
infrastructure. And yet for Air National Guard and Air Force 
Reserve, it is $85 million. Those two components have more than 
50 percent of the Air Force's war-fighting capability and 
comprise about 25 percent of the work force.
    Could you explain your rationale for that seeming 
disparity?
    Mr. Gibbs. I will give, sort of, an overview and then let 
General Robbins talk about it more specifically.
    Mr. Hobson. Oh, you are going to give him the tough job?
    Mr. Gibbs. Yes.
    Mr. Hobson. Okay. Ernie always winds up with the tough job 
here. [Laughter.]
    Mr. Gibbs. Yes. He has more experience.
    In putting together the philosophy, the structure behind 
what we are going to do, a determination was made that what we 
have to do is we have to fix what we have first, we have to 
stop any hemorrhaging. And therefore this basic decision was to 
fund the sustainment piece at 100 percent. And also overarching 
that was we were not going to cut back on what we were doing. 
We wanted to maintain it at a specific level, and we also have 
the requirement for the new missions that came up.
    So when you get to the specific MILCON budget, when you get 
those pieces, what happens next is the Air Force has a very 
extensive prioritization for MILCON projects for existing 
activities and existing bases. And I have reviewed that and 
looked at it, and it is a total force structure.
    The Reserve and the Guard flow into that process, just as 
do active bases, and how they then fall out of the process then 
becomes much more mechanical.
    Ernie, did I leave something out?
    Major General Robbins. Well, just everything you said was 
correct, and that there really is no attempt in terms of 
equitable distribution across major commands, of which the 
Guard and Reserve are major commands, for all practical 
purposes. Having said that, when you look at what the physical 
plant is in the Guard, Reserve and active side, the MILCON 
distribution ends up to be almost exactly on par with the 
relative percentage of physical plants.
    For example, the Guard this year in our budget has got 
$53.5 million in MILCON, which represents 8.0 percent of the 
total Air Force MILCON request. And they happen to have 7.9 
percent of the physical plant and the Air Force, so they are in 
proportion.
    Mr. Hobson. Are they more efficient?
    Major General Robbins. Sir? No. Well, if so then let's talk 
about the Reserves. They have about $32 million in our budget, 
which is 4.9 percent, but yet their physical plant is only 
about 3.8 percent. So, again, we are talking decimal places.
    And so proportionate to the size of their facility plant, 
which is what we are worried about here. And that by the way is 
exactly the 20-year average before adds.
    Mr. Hobson. Yes, you added that part, right?
    Major General Robbins. Yes, I did.
    Mr. Hobson. We are going to recess for a few minutes so we 
can go vote. Members have some other questions.
    [Recess.]
    Mr. Hobson. I think Mr. Boyd is next.
    Go ahead.
    Mr. Boyd. Thank you, Mr. Chairman.
    And Secretary Gibbs and gentlemen, thank you for your 
service to the country. As a former lieutenant, I am always 
honored to be sitting at the same table with general officers 
and I mean that very sincerely. I respect what you do greatly, 
and what you have done with your own personal careers.

                TYNDALL AIR FORCE BASE SURPLUS PROPERTY

    I want to ask, Mr. Secretary, a couple of questions that 
relate to specific items in the Bay County-Tyndall Air Force 
Base area. The first one has to do with a fuel depot which is 
awarded to surplus property in Bay County. Over the last couple 
of years, I, along with community leaders, specifically the Bay 
Defense Alliance, held a series of meetings with the commander 
of Tyndall, Secretary Dishner and the Air Force Real Estate 
Office regarding the transfer of this Lynn Haven Fuel Depot to 
Florida State University.
    The Air Force has been working for years to get this 
cleaned up. We are about there now. We are about ready to be 
able to dispose of it. We had been specifically working with 
the Real Estate Office regarding this transfer, and prior to 
the House passing the defense authorization bill, we provided a 
copy of the language that we wanted in the bill to the Air 
Force.
    The Real Estate Office had signed off on that proposal and 
the language that we proposed was put in there. Much to my 
surprise, when we went to conference, we found that the Air 
Force opposed this transfer. When I attempted to find out why 
they opposed it, we found a letter that was provided to the 
Armed Services Committee that said the base commander objected 
because he believed the property could be sold and developed as 
residential property.
    I personally spoke to the base commander and he let me know 
that was not the case. I think we have a situation down there 
unfolding that could be, sort of, a black eye for us if we do 
not resolve it. I hope everybody will lay their cards on the 
table and see where we can go from here.
    I know you were not there at the time. But I would like to 
make you aware of this situation and see if you can get some 
answers to this committee about why the transfer was opposed 
and then see where we can go from here. Because it is my belief 
that if there is any attempt by the Air Force to develop it for 
residential property, that will be strenuously objected to by 
the community, and we will have a problem.
    Mr. Gibbs. Sir, I appreciate you bringing it to my 
attention. I was not familiar with it. I will be shortly, and I 
will report back to the committee. I may not be able to answer 
your question directly about exactly what happened, but I can 
talk to you about what is going to happen.
    Mr. Boyd. All right, and I think that is the most important 
part.
    [The information follows:]
                Tyndall Air Force Base Surplus Property
    Lynn Haven is an Air Force property that was permitted to the 
Defense Logistics Agency (DLA) initially under an Army administered 
permit (No. DACA01-4-75-128) in July 1974, and currently under an Air 
Force permit (USAF/AETC-TYN-4-97-003) that expires 30 June 2004.
    U.S. Environmental Protection Agency placed Tyndall AFB on the 
National Priority List on 26 April 1997. This listing included Lynn 
Haven. DLA expects to complete its remediation of petroleum 
contamination in December 2003. The Air Force will complete the 
remediation of any remaining non-petroleum contamination no later than 
2012, and any remaining long-term monitoring activities by 2017.
    The Air Force and Department of Defense have not determined the 
property to be excess, nor am I aware of any plan to consider such a 
determination in the foreseeable future.

    Mr. Chairman, if I have more time----
    Mr. Hobson. Sure.

                     TYNDALL AIR FORCE BASE RUNWAY

    Mr. Boyd [continuing]. The other issue is two years ago, in 
fiscal year 2001, this committee provided $10.8 million to 
resurface the runway at Tyndall Air Force Base. It came to my 
attention just in the last couple of months--and I received 
this information from one of the pilots at Tyndall--that the 
job was half completed and they ran out of money.
    What I would like to do is get an update on that. And also 
say that that is probably a bad way for us to find out, from 
the pilots. If you have problems like that, you probably need 
to work with this subcommittee a little bit better.
    Major General Robbins. Yes, sir. We awarded the project 
exactly as appropriated. And, in fact, there was a low bid. A 
local contractor won the project. When they began to remill the 
surface of the runway, they found that the asphalt that was 
there was not uniform. You know, long story short, there was a 
lot more work required than was specified in the contract.
    Unfortunately, once we had awarded the project, we took the 
remaining dollars, which was about $2.2 million, I think, that 
is $2 million plus, and applied it, like we always do against 
other requirements in the Air Force. So by the time these 
design problems came to light, and construction problems came 
to light, and there was no money left to expand the scope of 
work. Air Education and Training Command (AETC) has put that 
$2.2 million project back into the Future Years Defense Plan 
(FYDP) to complete the work on the Tyndall airfield.
    So it was an unfortunate circumstance, a bad design, 
frankly. But we were at the point of no return in terms of 
those dollars.
    Mr. Hobson. But doesn't anybody go out and test the asphalt 
before they do it?
    Major General Robbins. Well, yes, sir.
    Mr. Hobson. If you are going to do a concrete project, or 
something in concrete does somebody do a core drill.
    Major General Robbins. Yes, sir. I said this was not a 
pretty story.
    Mr. Hobson. Did they promote the guy? That is usually what 
happens.
    Mr. Boyd. I guess, Mr. Chairman, the question is what do we 
need to do from here to----
    Major General Robbins. Well, like I said, the completion of 
the work that is required is in the 2006 FYDP, the AETC budget.
    Mr. Hobson. That means you probably have to do one of the 
things that nobody here in the Administration at OMB likes us 
to do. And you will probably get criticized by somebody in the 
other body for doing an add and a pork barrel project.
    Now, there is a question of whether the airfield is 
adequate or not. But it will be designed as a pork barrel 
project someplace. And you will probably be criticized by OMB 
for our doing it, but it will probably be done.
    Mr. Olver. Mr. Chairman, may I interject here?
    I am puzzled. You have done part of the work. That 
resurfacing or reconstruction of the runway is partially done? 
Or is the runway still usable?
    Major General Robbins. The runway is usable. We just did 
not complete the upgrade portion of the taxi way and some of 
the edges of the pavements, shoulders.
    Mr. Olver. Why is it put back in the 2006 FYDP for the 
completion of a project which is clearly something that you 
really would not like to sit out there like it is sore thumb on 
a doctor for the next four years would you? I would have 
thought that the Air Force would want to get this one done so 
that it is not sitting there to bring it back up in people's 
minds again and again.
    Major General Robbins. As noted in Mr. Gibbs' opening 
statement, we have a lot of requirements that we cannot reach. 
And this falls into the category of current mission so many 
requirements, so little money.
    Mr. Hobson. Yes. But let me say this again. And I am going 
to say this to Mr. Gibbs, you need to take this back to your 
bosses down here. If this happens to get in the bill, I do not 
want to hear anybody down there say it or anybody in the other 
body coming in and saying, ``Gee, you guys moved something up 
in the 2006 budget, that is a pork barrel project for 
Tyndall.''
    First of all, if they would have done it right in the 
beginning it would not be there. And then the powers that be 
down there do not put it in the bill. And then we take flak for 
putting it in.
    So a strong, clear message to the big guys, stop messing 
around with us on stuff like this. This is a game that is going 
on both places and it ought to stop. And we ought to stop this 
bickering back and forth.
    A guy left today because he spoke the truth and he was 
fired, and I do not like it. And I am telling you, I do not 
like it, not to you, but I am telling to the guys down there, 
and I have already told them, I do not like it. Because he 
spoke the truth about this stuff and stood up, he is gone.
    The next time I get a hold of the other guy in the other 
department, I want him to explain to me about this particular 
process right here. I will ask him specifically on this one. 
And I will ask him on a couple others. If he is doing his job, 
then why isn't he taking care of this stuff? And I am tired of 
it. I will tell you, I have just about had it.
    And let me be frank with you, I think the Democrats have 
been pretty good at not saying the stuff I have been saying, 
because I would have been saying a lot more if I were in their 
shoes, and it is not right.
    Norm.
    Mr. Dicks. Thank you, Mr. Chairman.

                              B-2 BEDDOWN

    I noted in the budget that the Air Force's Global Strike 
task force, you are going to be building B-2 aircraft hangars 
at Royal Air Force Base, Fairford, United Kingdom, and B-2 
aircraft parking pads at Diego Garcia. This has been something 
that we have been working on in the Defense Subcommittee, and 
this will give us the ability to take the B-2s from Whiteman 
and go to either Diego Garcia, Fairford, England, or to Guam. 
And, you know, it just cuts down these tremendous sorties that 
you have to fly from Whiteman, and so we will be able to 
forward-deploy the B-2 in the future, but we have to support 
these military construction projects.
    Mr. Hobson. But it also means, if I can interject, that you 
can use the plane more efficiently because you----
    Mr. Dicks. Right, cut down the sorties.
    Mr. Hobson. Well, yes, and you can do the things you have 
to do to the aircraft to get it back up in the air better and 
faster there.
    Mr. Dicks. Exactly.
    Tell us a little bit about this project, if you could.
    Mr. Gibbs. Well, it is specifically for what you described 
that, to reduce the amount of flight time that is now needed 
for the B-2 to operate from principally its sole source at 
Whiteman in Missouri. It will allow us to have greater over-
area coverage wherever we may need it.
    In Diego Garcia, basically, it is to construct an apron 
upon which to put a temporary shelter, which will be there a 
long time, a long, very long time. And in England it is to get 
it closer to theaters of operation there to cut down on the 
turnaround time.
    Mr. Dicks. The money will be provided in 2003, how long 
will it take to finish them?
    Major General Robbins. Sir, I have to get for the record. I 
do not know what the construction period is on this, I really 
do not.
    Mr. Dicks. Would it be very long or----
    Major General Robbins. Well, I do not--particularly the 
ones at Diego should not, since it is purely horizontal work, 
it is a matter of pouring concrete. But, as you know, it is a 
long pipeline to get materials out to that island.
    Mr. Dicks. Right.
    Major General Robbins. But I would think less than a year 
to construct those for sure. And then the Fairford one I am not 
sure. We will have to get it for the record.
    [The information follows:]

    The B-2 Aircraft Parking Apron Phase 1 project at Diego Garcia will 
require 15 months to construct. The B-2 Maintenance Hangar/Apron 
project at Royal Air Force (RAF) Fairford will require 19 months to 
construct.

    Mr. Dicks. I mean, if I could just get a piece of paper 
from somebody just to explain this to me, I would appreciate 
it, because this is something I have taken an interest in and 
worked with Darlene Druyan on, and try to move this thing 
forward.
    The other thing I thought was a pretty good piece of news 
in here was your, I think rather aggressive, approach on 
privatization of family housing. Now, the chairman has done a 
great job of reviewing these projects for the Congress, and 
maybe he has already said something about this, but it says 
here that in addition the Air Force is on track to award eight 
projects in the next 12 months that will result in an 
additional 9,000 privatized units across the Air Force.
    Can you tell me a little bit about this, and how many you 
are going to be able to do over the next five years? Because 
with MILCON down, this is the only way we are going to get the 
housing that we need. And I think this is a pretty good way to 
go.
    Mr. Gibbs. Sir, we currently have plans to move forward on 
approximately 26,000 units for privatization. I did comment a 
little bit earlier that Chief Jumper last fall asked the major 
commands (MAJCOMs) and base commanders to take a second look at 
the suitability for locations for additional opportunities of 
privatization.
    Those reports have come back in. There are additional bases 
now that we are currently in the process of reviewing and we 
expect to, by next year, be able to add on top of the 26,000 
that are currently in the plans.
    Mr. Hobson. If I could interject, this is a change in the 
Air Force. The Air Force had been somewhat resistant to 
privatization, had done a few to, kind of, pacify us. But I 
think there has been a change in the Air Force. This is not 
directed at anybody here, because it was not you guys. I know 
where it was. And they have now, I think, are getting more 
aggressive in this, realizing that this is the only game that 
is really going to get us anywhere in the long term.
    So, they become a player for both the Army and the Navy, 
and the Marine Corps. Even the Marine Corps has become a better 
player.

                         HOUSING PRIVATIZATION

    Mr. Dicks. You say here five-to-one leverage on the 
military construction investment from housing privatization. 
How does that work? Would you explain that?
    Mr. Gibbs. What that is referring to in there is the cost 
to get the privatization. It is not the ultimate cost. We are 
not accommodating for that.
    But before we can even get an upgraded house out of the 
privatized process for effectively an up-front cost of $1 
compared to an up-front cost of $5 in order to have the housing 
done through military construction. Because under the military 
construction, we have the cost of the construction.
    Mr. Hobson. But you know, there ought to be some places 
where there are no costs.
    Mr. Gibbs. Well, there are.
    Mr. Hobson. I mean, Norm, when they say five-to-one, what 
you are doing is buying the deal down to make the numbers work. 
With the new Basic Allowance for Housing (BAH) and at certain 
locations, it is going to be no cost at all, because where else 
in the world do you get the ground? I mean you are an 
accountant, you know this stuff better than anybody. Where else 
in the world do you get a deal where somebody gives you the 
ground, and then on the other hand, gives you a permanent 
paycheck to get the money so you do not have to put in the 
vacancy factors that you do in any other deal?
    So there ought to be a lot of, I call them deals; my staff 
does not like me to use the word ``deal,'' but in the real 
world we call them deals. Lots of people call them 
transactions. But in the real world, sir, there ought to be 
places where--there are some places where it will not work. I 
understand that. But in most cases--in a lot of cases, we 
should not have to put any money in.
    For example, the Army's doing that at, I think, Fort Meade. 
It is such a great piece of real estate in such a great 
location that we are not going to have to put any money in 
there. We are about five years later than I would like to be on 
the project, but there have to be places like that in the Air 
Force.
    Mr. Gibbs. Well, there are. Those numbers are the historic 
ones. And the Air Force has gotten smarter as they have done 
more good deals.
    When I talk to accountants I call them transactions. But 
when I talk to you here, they are deals.
    And over time that is improving. The later ones we do, we 
are much better negotiators, and we do get some that are 
effectively at zero cost to the developer to take it over. 
There are still some internal costs, and we have some design. 
And as the construction goes on, we still have responsibilities 
for inspection, maintenance and managing. So, there is a cost 
to go forward; they are not totally free. But, you are correct, 
it is a nominal cost and it is not per se a cost of putting the 
houses into the ground.
    Each one gets better than the last.
    Mr. Hobson. Are McChord or Fairchild on these lists at any 
point yet?
    Major General Robbins. Not up to this point, sir. I do not 
know they are in the out-year or not. Well, I think I have a 
list here that shows total out-year programs. I am going to 
have to get it for the record. I do not have it.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Goode?

                           MILITARY PERSONNEL

    Mr. Goode. Thank you, Mr. Chairman.
    I have just got one question. It comes from a citizen in my 
district.
    He heard the debate on campaign finance reform and one of 
the arguments against prohibiting non-citizens from 
contributing to federal election campaign was the fact that 
branches of the military had non-citizens as members. So, I 
would like to ask the assistant secretary, how many non-
citizens do you have serving in the United States Air Force?
    Mr. Gibbs. Sir, I do not know. I will get that number for 
you.
    Mr. Goode. Okay. We will not have to send you a letter. You 
will send it to us.
    Mr. Gibbs. No. We have heard it.
    Mr. Goode. All right.
    [The information follows:]

    There is one officer and 2,901 enlisted members on active duty who 
are ``Registered Immigrant Aliens.''
    The governing Air Force instructions on this matter are:
    (1) For enlisted personnel: Air Force Instruction 36-2002 (Regular 
Air Force and Special Category Accessions) and states minimum 
eligibility standards:
    1.4 Enlisted Program Requirements. Applicants must meet specific 
enlistment program requirements announced by Headquarters Air Force 
Recruiting Service (HQ AFRS), and be a:
    1.4.1 United States citizen, or
    1.4.2 United States national born in American Samoa or Swains 
Island, or
    1.4.3 Lawfully admitted resident alien who possesses an alien 
registration form (I-551) issued for a period of 10 years, or
    1.4.4 Foreign national citizen of the Federated States of 
Micronesia or the Republic of the Marshall Islands; and
    (2) For officers: Air Force Instruction 36-2005: ``Officers must be 
a U.S. citizen.'' All regular officers must be U.S. citizens according 
to law (Title 10) and according to Air Force policy. Reserve officers 
must be U.S. citizens according to policy only (waiverable in extremely 
rare circumstances); not according to law. The one officer in the Air 
Force who is not a citizen is a medical officer (non-line/reserve 
officer) who has been in since 1 January 1990. He applied for 
citizenship two years ago and is waiting for the Immigration and 
Naturalization Service (INS) to finish processing his application.

    Mr. Hobson. Mr. Vitter?
    Mr. Vitter. Nothing right now, Mr. Chairman. Thank you.
    Mr. Hobson. John?

                              B-2 BEDDOWN

    Mr. Olver. Well, I want to go back to the Diego Garcia bit 
for a couple of minutes. Sorry that Mr. Dicks is not here now.
    But the $17.1 million, is that the only item in the budget 
for Diego Garcia? And that is for the aprons and hangars. How 
large is the hangar? Is that for one or two, or three or four 
or whatever B-2s?
    Major General Robbins. The Air Force project is for two. It 
is a hanger.
    Mr. Olver. That is in Britain.
    Major General Robbins. Yes, sir.
    Mr. Olver. And on Diego Garcia?
    Major General Robbins. And on Diego, it is a slab, a 
concrete slab, capable of housing the temporary shelters. So, 
there will be no permanent----
    Mr. Olver. I see, there is no intent to be permanent there.
    Okay, now what has the role? Is there any permanent, then, 
change in the role of Diego Garcia since 9/11? You are talking 
about a temporary. Is that the only temporary thing planned, or 
do you have other things coming along?
    Major General Robbins. We have nothing that I know of in 
the Air Force budget for Diego Garcia other than this project. 
I do not know what the Navy may----
    Mr. Olver. So its relationship has not been changed 
fundamentally? But just put that in in order to be able to have 
a platform from which to operate B-2s for what we see in the 
near future.
    Major General Robbins. We have temporarily deployed B-52s 
and B-1s out of there during this operation, but no B-2s 
because of the lack of any facilities big enough to hangar 
them.
    Mr. Olver. This is one of those places that I have not yet 
had a chance to visit, and I may never have a chance to visit. 
In fact, I might never even until such a time as the Chairman 
has run out of places to go. [Laughter.]
    Mr. Hobson. Where is that?
    Mr. Olver. Diego Garcia?
    Mr. Hobson. Oh, trying to get there.
    Mr. Olver. He is right. It is way off in the middle of the 
Indian Ocean, somewhere.
    How many people do we have in Diego Garcia?
    Major General Robbins. Sir, I do not know. It is a Navy 
installation.
    Mr. Olver. Oh, it is a Navy installation?
    Major General Robbins. Yes, sir.
    Mr. Olver. I should have asked them earlier in the day, 
then.
    Major General Robbins. We deploy people through there to 
conduct operations, and then when the operations end we pull 
them back. There is a small Air Force contingent there for 
aerial support.
    Mr. Olver. Okay. Well, I can find out how many we have in 
the way of deployed people there running that installation for 
the Navy.
    Mr. Hobson. There are some other countries there, too.
    Major General Robbins. It is owned by Great Britain. And so 
there is a United Kingdom (U.K.) contingent there.
    Mr. Olver. Well, the rest of my question was going to be 
what, sort of, readiness rating does this installation there 
have; whatever installation you, the Air Force, run there?
    You don't have anybody there?
    Major General Robbins. We do not own any real estate there. 
The Navy owns the real estate that is on the island.
    Mr. Olver. Okay. So all that----
    Mr. Gibbs. I am not even sure the Navy owns it. The United 
Kingdom owns----

                             GUARD PROJECTS

    Mr. Olver. All right, I will save those questions for the 
Navy.
    Let me just ask you one other thing. There was a press 
report just the end of January, I guess it was. And what it 
said was that the top National Guard officer in West Virginia 
had spoken to the press indicating that there were $900 million 
in federal construction projects at two Guard facilities in 
West Virginia. One of them was identified. He identified it as 
Martinsburg Air Base close to finalizing a $400 million 
project. And the rest of the comment was that there was another 
$500 million federal project is ``this close'' to being 
finalized.
    Is anything you can say about these Guard projects 
supposedly or that you would wish to say anything about them?
    Mr. Hobson. He may not be able to say all he wants, but----
    [Laughter.]
    Brigadier General Brubaker. I know that they are 
anticipating some changes in force structure perhaps. I know 
that also these are not all Air related. Some of them are Army 
related, I believe.
    Mr. Olver. Some are Army related?
    Mr. Hobson. Were they in the previous bill?
    Brigadier General Brubaker. No, I do not think they were in 
any bill.
    Mr. Olver. They are not in any bill yet?
    Brigadier General Brubaker. No, they are not in any bill 
yet.
    Mr. Olver. That would be a pretty major thing of a Guard 
facility, $400 million for Guard places.
    Mr. Hobson. West Virginia. [Laughter.]
    Brigadier General Brubaker. I think some it is speculation 
on the part of the state.
    Mr. Hobson. Is the answer, General, for West Virginia Air 
or Army?
    Brigadier General Brubaker. It is Army.
    Mr. Olver. Okay.
    The one, as I mentioned, is specified as Martinsburg Air 
Base.
    Mr. Hobson. What is there now?
    Brigadier General Brubaker. They have C-130s and that 
mission could change.
    Mr. Hobson. C-17s?
    Brigadier General Brubaker. Did I say that? [Laughter.]
    Mr. Hobson. It is obviously a base that is probably not 
going to be in the Base Realignment and Closure (BRAC)? Is that 
what you are telling me?
    Mr. Olver. It might be cheaper to do it that way. When it 
is larger aircraft, it takes up a lot of space and there would 
not be room to put other things.
    Is it typical to have two bases--I guess I do not want to 
go there. [Laughter.]
    Mr. Hobson. That depends on where it is and what day it is 
and the historic--I mean, some of this stuff goes way back. 
Some of the bases have changed from active duty to Reserve or 
active duty to Guard. For example, Wright-Patterson today is a 
Reserve unit. Rickenbacker is a Guard unit. They were both on 
the same base at one time. And Wright-Patterson, for example, 
which is a very large base, has no active duty flying unit 
today. One of the oldest bases in the country in the Air Force 
has no active duty. The last active duty got sent because 
somebody had to give up something. It had nothing to do with 
mission or cost-effectiveness.
    And this is another thing that really bugs me, while you 
are on this, John. We move things sometimes just to move them. 
It took me eight years to figure out why the 4950th ever moved 
from Wright-Patterson to Edwards. I thought that it was some 
big secret deal that was going to, you know, save Edwards and 
do all this kind of stuff. And finally, a three-star retired 
who had been at Edwards and there and everywhere else and he 
finally said to me, ``Look, it was a very simple decision. 
General Yates had to give up something.'' And so we spent 
millions of dollars at a time when everybody was griping about 
how much money we did not have, to move something to another 
base because he could not give up Eglin and he could not give 
up Edwards, so he gave up Wright-Patterson.
    But it had nothing to do with cost-effectiveness of what we 
were doing. It was so somebody could say that they had given up 
something too like everybody else had given up something. Which 
I think is, kind of, like scoring in the things you do to bring 
it back to the real world here now. We do stupid things because 
of this--it was supposed to be a good idea. But sometimes 
business versus--I mean, we do dumb deals sometimes because we 
are worried about what the scoring effect is going to have from 
OMB.
    And we ought to get OMB into the real world on a number of 
things. And one ought to be scoring. And it is not their fault; 
they inherited this thing. And you know, we ought to understand 
that we should not do a dumb--and I do not--you know, you are 
an accountant. We should not do a dumb real estate transaction 
simply because of scoring.
    And I have had this fight with other services. I have not 
particularly had this fight with the Air Force. But of where we 
fight over scoring that makes us put a whole bunch of money 
into something because of scoring or we do not do the deal 
right.

                             AIRCRAFT LEASE

    For example, I do not think--this is not you guys in this 
committee, but I do not think the deal we are doing on the 
airplanes--on leasing the airplanes is right. We ought to draw 
that in a way that is cost-effective. And if we have to have a 
repurchase agreement in it, put it in, because that is what we 
do in the real world.
    But we do not do it maybe because it is scoring. That is 
baloney.
    I am sorry, John. I am on your time. Go ahead.
    Mr. Olver. Well, you have done very well with my time. 
[Laughter.]

                          DOVER AIR FORCE BASE

    Mr. Hobson. Well, can I say something nice because 
sometimes Marybeth beats me up because I do not say anything 
nice about you guys. But I do want to say--and Ernie, I beat 
him up every once and a while.
    But anything I have done was not directed at him, because 
he is a great fellow and the Air Force has done a good job on 
things. And one he did do a great job on and I want to talk 
about is the Dover mortuary, because that is a difficult 
subject for people to deal with.
    There were some people who did not even want us to go up 
and visit the place. Mr. Murtha said, ``You are going to go 
visit it?'' And I told him if he thought--if you think my wrath 
is bad, you know what, Mr. Murtha will be worse.
    We went up and looked at it. And unfortunately, that is a 
place we have to have. And it should be in a quality that is 
respectful of the people that we bring back to there as well as 
the people who work there.
    And frankly, it was not respectful of either. Although the 
people who are working there are lovely people and doing a 
great job, they were asked to work under circumstances that 
were unhealthy to them and not respectful, in my opinion, of 
the families of the loved ones who had been killed.
    And as a result of some good work, and I want to thank 
General Robbins for this, we are going to take care of that 
facility. And it is going to be done in such a way that is 
respectful so that we do not have television cameras intruding 
upon the way we take those remains into the facility and that 
they get the dignity that they are entitled to.
    And General Robbins worked this very hard, and I want to 
thank him for getting this done; and, frankly, for getting it 
done in which looks like going to be a very timely fashion. 
This is not going to take forever. Construction is going to be 
complete by the early spring of 2003, which I think is going to 
send some good signals on construction in the Air Force and 
other services to be able to get this done. And we are going to 
use--I think I suggested the tilt-up thing when I was there. We 
are going to use some type of construction things that we do in 
the private sector.
    And I want to thank you personally, General Robbins, for--
this was before your time, Mr. Gibbs, but I want to thank him 
personally for moving this forward in such an expeditious and 
quality fashion.
    Major General Robbins. Great teamwork.
    Mr. Hobson. And I do not know if this will be your last 
time here or not, maybe you do not want to face it again, but 
if it is, I thank you for all you have done; and if it is not, 
I will look forward to seeing you back here.
    I want to ask a question about something I think is very 
exciting that you are doing, because, as people will know, I 
have had some difficulties with this area and even changed the 
law to do this; and this is the general officers quarters.

                       GENERAL OFFICERS QUARTERS

    The Air Force budget request proposes constructing the 
first general officers quarters (GOQs) using the new size 
standards for housing. I could never understand why nobody ever 
asked for new housing for general officers. We just wanted to 
waste a whole bunch of money in old stuff. And I could not 
figure out why that was. And finally somebody said to me, 
``Well, it is because you can only have a new house at 2,150 
feet.'' And I said, ``I got it, we are going to get that fixed. 
And then we ought to start doing some of this.''
    And I am glad to see that you are getting into this. Maybe 
you can answer a couple questions. How many does the Air Force 
propose constructing? What do you think the square footage of 
these are going to be? And each one does not have to be a 
cookie cutter. What are the benefits of constructing general 
officers quarters to the new size standards versus renovating 
existing units? And do you have an estimate on the long-term 
savings associated with these projects?
    Major General Robbins. Okay. I can answer all but the last 
question, because I really do not know the long-term O&M 
savings. As you say, we put good money after bad in many cases, 
and I do not know how much that might have been.
    Mr. Hobson. It is a lot.
    Major General Robbins. It could be.
    In the budget before you there are projects which include 
eight GOQs scattered around the Air Force. One of our favorites 
is the one at Osan, which is----
    Mr. Hobson. Oh, yes.
    Major General Robbins. Yes, sir. That is in this budget 
request.
    Mr. Hobson. General----
    Major General Robbins. Heflebower.
    Mr. Hobson [continuing]. Heflebower will not be there.
    Major General Robbins. Is gone. That is correct. He will 
not enjoy that. But future commanders of 7th Air Force will.
    All eight of them are programmed at the 3,300 square feet, 
net square feet, that was our range----
    Mr. Hobson. Do you think that is appropriate?
    Major General Robbins. Yes, sir, it is the midpoint of the 
range. We went out to the National Association of Home Builders 
and asked them what an executive with this type of income, this 
type of responsibility would typically have in the private 
sector, and that is how we, kind of, developed the midpoint.
    But one of the things that I think general officers do more 
of than even corporate executives sometimes, and that is you 
have a certain amount of local community functions that you 
have to do that a lot of people in the business world do not do 
to the extent that you have to do with the local community and 
things of that sort.
    Major General Robbins. We included that in this 3,300-
square-foot programming target, and we added 10 percent to that 
for four-star quarters. So, for example, you will see two four-
star quarters at Peterson included in the budget, and they will 
be allowed to program 10 percent above that for those two 
quarters, just for the very purpose you mentioned, a special 
command position four-star in official entertainment.
    Mr. Hobson. He does not need 16,000 feet----
    Major General Robbins. No, sir.
    Mr. Hobson [continuing]. Like we got one----
    Major General Robbins. Yes, sir.
    Mr. Hobson. We know where that is.
    Major General Robbins. Yes, we do.
    Mr. Hobson. Been there, haven't we.
    Major General Robbins. Yes, we have.
    Mr. Hobson. Cost you a vacation that Donna--to Hawaii 
because he had to go with me, and I did not want him to go, but 
the chief wanted him to go because they were worried about what 
I was going to do. But I did not do anything bad.
    Major General Robbins. And she, kind of, liked Hawaii 
without me. [Laughter.]
    Mr. Hobson. You got there late, I think.
    So are you going to design these so that they reflect, for 
example, if you are in the Southwest----
    Major General Robbins. Yes, sir.
    Mr. Hobson [continuing]. It is going to look like 
Southwest?
    Major General Robbins. They will be compatible with the 
architectural standards at the bases where they are going to be 
built. So they are not cookie cutters, it is just that we are 
telling them to program at 3,300 square feet, plus or minus 10 
percent.
    Mr. Hobson. Do you have any idea of approximately how much 
per square foot you are going to----
    Major General Robbins. Yes, sir. I do have that somewhere 
here.
    Mr. Hobson. You knew I was going to ask that.
    Major General Robbins. Well, I had the cost per the unit. 
So they are averaging about $250,000 per unit, so do the math.
    So, that comes out to what? About $80 some.
    Mr. Hobson. That is right, because you do not have the land 
in there.
    Major General Robbins. That is right. Now that does not 
include the cost of the utilities up to them or if they have to 
fix the street. It is the cost of the housing unit itself. Is 
that right? About $85 a square foot. Yes, sir.
    Mr. Hobson. And they are going to be first class? I mean, 
these are going to be test models, so we do not want to build a 
bunch of junk.
    Major General Robbins. Yes, sir.
    Mr. Hobson. And we want to build stuff that we are going to 
be proud of for these officers to live in because we are going 
to get a kick back--I mean they are going to kick us back, I do 
not mean money. But I mean they are going to get upset if we do 
not build these right. And it is going to hurt the program in 
all the services if we do not do this.
    But, I think while we are doing the housing for other 
people, we need to do this. And it is better than wasting all 
that money on just dumping it into these old houses, and still 
having old houses when we get done.
    So, I am pleased to see you all getting on with that. 
Wherever we can we ought to do that.
    There was one other thing else I was going to ask you. 
Well, I still want to try to privatize the dormitories. And I 
am upset about the dormitory down at Lackland that I saw. It 
has a big cost overrun in it. I do not think the construction 
is what it should be. You know the one we looked at, the one 
near where my barracks used be. My barracks is where the Burger 
King is today. We didn't even know what Burger King was when I 
was on active duty, but that is long ago.
    But, has anybody looked at that facility since then?
    Major General Robbins. Yes, sir.
    Mr. Hobson. The reason I say that is you have another one 
in the budget. And if we are going to mess that one up as big 
as this one got messed up, I am not sure I want to do it. And I 
do not say you messed up, you have a contractor problem, I 
think.
    Major General Robbins. Actually, I think it was a 
combination of design and construction. And you are right; we 
actually have two other projects to go in there that we are 
going to combine into one. We are going to go with a larger 
contractor. Quite frankly, that was one of the problems. We 
believe that the contractor who did the first one, was perhaps 
over his head.
    Mr. Hobson. Okay.
    Major General Robbins. So, I have talked to AETC as 
recently as today on this very topic. And we will never paint a 
galvanized rail again. [Laughter.]
    Mr. Hobson. Okay. Well, you know, these are just things, 
when I go through these things I just have enough knowledge to 
be dangerous. But we had a big overrun on that one.
    Mr. Boyd.
    Mr. Boyd. Thank you, Mr. Chairman.
    Mr. Secretary, Mr. Chairman, I want to make sure that you 
both understand on the Tyndall runway issue that we have 
received a briefing from the Air Force folks pursuant to our 
call to them to talk about that. And during that briefing we 
were told that actually it was 2005 in the five-year plan, but 
that seems to have changed now. But, maybe we can fix that some 
way or another.
    Mr. Hobson. Oh, it is going to get fixed. It is a problem.

                          COMMERCIAL AIRLINES

    Mr. Boyd. Mr. Secretary, there was an interesting 
discussion about Diego Garcia and now Lebanon. There is a 
command and a facility whose role has changed significantly 
since 9/11 and that is the 1st Air Force, which is housed at 
Tyndall Air Force Base. And I assume the committee understands 
that the President has made the 1st Air Force commander--and 
you understand this better than I do, he is one of 3 people 
that now has responsibility to make decisions whether to shoot-
down a commercial airliner.
    But as a result of those additional responsibilities, we 
now have 440 people at the 1st Air Force Operations Center. 
Prior to 9/11 that number was 168. I understand that the final 
personnel force is scheduled to be in the neighborhood of 350 
people. We have many of our folks there working off of card 
tables with their laptops. This is truly an issue that we have 
to figure out how to resolve in terms of our facility and space 
limitations.
    I am going to make an attempt to try to get that facility 
built as quickly as we can. Would you care to talk about how we 
might work on that together and get that done as quickly as 
possible?
    Mr. Gibbs. I will make a brief comment and then General 
Robbins may want to add to it. In the process as I learned this 
fall and winter going through it, in terms of the 
prioritization going into the model, the individual wing 
commanders and Air Force commanders basically do the 
prioritization.
    And then as it flows up through the model and I do not know 
particularly where this one currently would reside. But 
generally, that is the practice that we are attempting to 
follow; to have the people in the field who are using have a 
very, very strong amount of input as to how projects get 
prioritized and how General Robbins, when he refers to it is in 
for 2005, it is in for 2007, that is really the process that 
does that.
    We are--certainly from the secretariat are not inclined to 
interfere with that.
    Major General Robbins. That is correct. And there is 
starting to be an echo effect here, but that project also is in 
the FYDP. And it is out in the 2006, 2007 years. There was some 
discussion between the Guard and Air Combat Command as to which 
command might program that.
    Mr. Boyd. What does that mean now?
    Major General Robbins. Well, as Mr. Gibbs said, the Guard 
prioritizes its MILCON requirements and Air Combat Command 
prioritizes its projects. And so there was some discussion as 
to which of those two bodies ought to address that in their 
priority list.
    We, kind of, reached an impasse and said, ``At this point, 
we will just stick it into the Air Force budget and later worry 
about whose FYDP and prioritization line it goes in.'' Because 
quite frankly, when you are out in the 2006, 2007 time frame as 
you are building your out-year program--if you look at the Air 
Force FYDP, there is a lot of MILCON headroom in there. And so 
really as to whether it is in the Guard or active line right 
now is not particularly important.
    But they are aware of the requirement. And again, it falls 
into the category of current mission. And as you have heard 
several times during this hearing, there is not a lot of 
current mission MILCON other than quality of life, dormitories 
and family housing that got funded because the new mission 
requirements pretty well consumed MILCON.
    Mr. Olver. May I interrupt? Why would you call that current 
mission? It sounds to me as if it is a new mission that has 
been added to the responsibilities of that base.
    Major General Robbins. No, sir, 1st Air Force has been 
there for, I do not know, six, seven years, sir.
    Mr. Olver. But I mean----
    Mr. Hobson. It was just expanded.
    Major General Robbins. They have had the mission. It is a 
matter of how many people they have brought in to conduct that 
mission because of the new----
    Mr. Olver. Did it have responsibilities for escorting 
civilian airliners and deciding which one might be shot down?
    Major General Robbins. No, sir. When I speak of 
responsibility, I am talking about defense of North America. 
And that has been a mission that the active force pretty much 
transferred to the Guard, not in total. Maybe you could help me 
here. But pretty much it is a Guard mission and has been for 
many years.
    Mr. Olver. I guess I am surprised by this conversation that 
the President, the Vice President, the Secretary of Defense, 
whatever the combination is have reached some decision as to 
where that responsibility should be. I should think they would 
be rather annoyed to know that that is not properly funded.
    Mr. Gibbs. The Air Force is teaching me some terminology as 
I go through here also. And I think the way I would 
characterize it back there, it is not a new mission. It is what 
they would refer to as increased Operation Tempo (OPSTEMPO). 
And what they are doing is doing more of what they did. And I 
am assuming in your particular case, that is why there are more 
people in there than any one particular time.
    Brigadier General Brubaker. That is correct. It is an old 
mission with much increased demands, much increased.
    Mr. Olver. Okay. Well, we do things with semantics.
    Mr. Hobson. And I want to ask three things. Some of that 
relates to that.
    Are you finished, Al?
    Mr. Boyd. Yes, sir. Thank you, Mr. Chairman.
    Mr. Hobson. We will come back if you want.
    First of all, you have a very ambitious utilities 
prioritization plan. It says the goal is to award all contracts 
by September 30, 2003, which I do not think is possible.
    Second of all, I wrote a bill called the Forrestal bill 
that was roundly criticized by a lot of people about five years 
ago. And everybody went and stumped on me and said, ``This is 
not the way to go,'' and killed the bill. OMB actually killed 
the bill at the time.
    And now we are all rushing out to do some things that I am 
concerned that we do not get into contracts that we later 
regret, and that we do not draw the contracts in the right way 
that if we have to get out of this and revert back to something 
else. And plus, what are we getting for these? Are we getting 
new infrastructure? Are we just giving away what we got and 
they do not fix up the old?
    As part of the original deal that I worked on was we were 
going to get new infrastructure if we privatized these things. 
I am sending messages not only to you, but to the other 
services here, because they all write this stuff down and share 
it back someplace in I don't where, but we are going to look at 
every contract to make sure that we do not have contracts that 
if we terminate it will cost us more than what we were doing in 
the beginning, and that we have ways out of these deals and 
ways into these deals and what do we get for them.
    And I do not think, if this is the right date that you are 
shooting at here. With all the other stuff you have going on, I 
am not sure that this is a realistic date.
    And are we doing this same thing like with--oh, I don't 
know, you do not have the utilities. Guard and Reserve 
generally do not have utilities; they are probably more on 
municipal airports and stuff. You might have some isolated 
stuff.
    You do not have to answer this now, except that I have a 
long question here on privatization, and I just want to put 
everybody on notice, I am looking at this. And I am not against 
it, but I do not want to get into some dumb deals again that we 
cannot handle in the future.
    I am also concerned about this word ``mission sensitive,'' 
and I am trying to figure out how I find out those things that 
are mission sensitive that we are postponing, not just in the 
Air Force, but in all the services. And you all have different 
terminologies and different ways of saying these things, but 
there are other things that are mission sensitive that are put 
out to 2006, 2007, they get on a FYDP, and the hope is, I 
guess, that we come along at some point and pick them up.
    But I am trying to figure out what are those mission-
sensitive things, because if we are going to do projects for 
members and things of this sort, or if we are going to be 
forced to pick up things that you guys cannot do and I got to 
find a way to find the money, I need to know what are the most 
important ones, and I need to figure out what has been pushed 
out by your inability to convince, wherever it is. I do not 
know how this all stuff is done, but it is almost like to me it 
is done in, you know, some, I do not know where, but a star 
chamber somewhere.
    But I am concerned that we fund the right things. If some 
of these things are mission sensitive and you cannot find the 
money to do them and we have to do our duty as a Congress here 
to make sure that this is right, that we do the right things 
and not do some of the things that some people want to 
criticize us for simply because it is in a member's district or 
some of this sort.
    And I am willing to do that, but we have to know as a 
committee where those are and how we can be the most helpful to 
you. I am willing to take the wrath of the newspapers, and I am 
willing to take the wrath of certain agencies of this 
government and certain members of the other body to do the 
right thing, but I got to know what they are. Or we will do 
some things that maybe are not--I mean, not knowingly, but we 
might not do some of the things we should be doing to help you, 
Mr. Gibbs, and these gentlemen and the other services do their 
job. So I want you to know we need to look at that.

                        FISCAL YEAR 2003 BUDGET

    Then, the other thing, the last question I am going to ask 
you is the one I started off with, and I do not think you guys 
have answered it yet. Why is your budget so low? I am not going 
to let you get out of here without taking a shot at that. And I 
think you ought to do that, Mr. Gibbs, since you are the guy 
who talks to the star chamber.
    Mr. Gibbs. Yes. I get beamed up occasionally to do that.
    Mr. Hobson. You and Mr. Traficant. [Laughter.]
    Mr. Gibbs. Basically, the Air Force took the approach that 
it was going to request for 2003 what it requested for 2002. 
And within that set of priority there was a shifting of 
priorities with that. It was a very overt decision to say, ``We 
need to fix what we currently have, we have to put more money 
into the sustainment piece.'' And when we are at the basis of 
saying keeping it level--that is what the overall 
prioritization would say within the Air Force--it came at the 
expense of creating new footprint for existing missions.
    And the additional monies went into the sustainment, went 
into the quality-of-life projects. We continued on what is a 
very sound program for dormitories to complete their 
rejuvenation, replacement, whatever you want to call it, over 
the planning period. And that was the overall decision of the 
Air Force and its philosophy of going forward.
    And the fallout of that, the changing of priorities, and 
the manner in which we approach the same problem, the fallout 
of that is that specific new military construction program did 
not get the funding that it had gotten in previous years.
    Mr. Hobson. What does this do to your recapitalization 
rate?
    Mr. Gibbs. Well, I personally have a problem with that as 
metric.
    Mr. Hobson. I agree.
    Mr. Gibbs. No, I understand. And I have talked to some of 
the people that have. And to specifically answer your question, 
it makes it higher.
    Mr. Hobson. But it is an arbitrary number. It is just like 
a lot of other things that we do, like this scoring thing is an 
arbitrary thing that somebody figured out. At some time it had 
a good purpose. I think this probably served a good purpose.
    But, you know, you are going to get stuck, getting whacked 
because your numbers have gone way up. And then the next group 
of guys are going to come and say to you, ``Mr. Gibbs, you 
know, you did not do a very good job on your recap rate.'' And 
you are just going to go, ``Oh, my God, here we go again.''
    And you know that is no fun.
    Mr. Gibbs. No, it is not fun. I have to talk to it from the 
perspective of we did a very specific assessment of what needed 
to be done. And our conclusion was that sustainment was more 
important than replacement in terms of new footprint.
    And I cannot really give you a better answer than that. It 
was done on a specific basis. The recap rate computation is 
directional. At best it is going to move substantively up and 
down each year as we can move forward in the recapitalization.
    Mr. Hobson. Let me mention something to you along that 
line. There is a building in Offutt that was supposed to be 
done. And you have not been around long enough to know this 
yet. I do not know what year it is in, and whether some of 
these things if they are in a year then we do these other 
things so they get pushed out another year, you know, things 
bump out down the road.
    And also are the contracts or the stuff that was done last 
year, for example, is that proceeding?
    Let me give you an example in the Guard. Not to be 
parochial, but this is an example, I want to make sure these 
are: There is a pad to be built at this Springfield 
International Guard base. Is that proceeding to contract? Is it 
going to get done? Or do you guys decide to flip that to 
another year?
    And they almost completed the one at Wright-Patterson for 
the C-17s in the future, C-5s or whatever.
    John.
    Well, I should say this. A little bit of my emotion today 
results not at you folks. You have done a good job running the 
service as it is. If something happened today in the 
administration that I am not real happy with and has nothing to 
do with you guys. But it does have something to do with the 
process and the ability of people to speak their minds.
    And it does come back to this idea of none of us are always 
right. The administration is not always right; the departments 
are not always right; and we are not always right. And we have 
our constitutional duties. But we have to learn to work with 
each other a little better. And I want to do that, and I want 
to do that with you, sir. You have all got a good background in 
this stuff. But we need that. We need to work on these things 
together. There is mission-sensitive stuff we need to know.
    We need to take a shot at maybe trying to privatize some 
barracks some places and that presents a certain amount of 
problems, I understand. I still like the thing that the Air 
Force has done with where it generally locates its 
privatization.
    I think the one thing I agreed with General Ryan on is he 
tried to place most of his privatization stuff close to the 
gates. So that if we had to fence those off in the future or it 
did not work that, you know, we would have less problem. I 
think that helps in bidding the projects.
    Also I think that the Brooks experiment, I hope, is going 
to prove useful to other services. We have talked to other 
services about using that model which the Air Force did.
    And I am hoping that model works. Because if Sam Farr were 
here he would tell you that that is a way to work with 
communities that is a lot faster than other types of programs 
we have on the books. So that one needs to be monitored and 
make sure that it is correct, because it is a massive project 
that transfers much of that property back to the community and 
creates other types of jobs that we are losing in the services 
back to there.
    Last thing, this does not necessarily have to do with you 
guys. But I had somebody call me yesterday about the work force 
shaping that is going on. And there is apparently at Wright-
Patterson and there is some--this is not under you. I am not 
sure. I do not think this is under personnel, but there are 
some problems with the work force shaping that is coming out. 
And there are specific dates and somebody is looking at about a 
week of one and they can take advantage or not take advantage 
of the--this is a program to get some older workers out so we 
can bring some younger people in. And there has been some 
resistance within the military of doing this.
    And I am trying to do it as a test program to--private 
industry would do this in a moment. The government has a lot 
more problem with getting into this. But I think, hopefully, it 
will work out to be a good--and again, scoring has some 
problems with this. But I am hoping that it works out better 
for the services and you get a more robust, newer--and you do 
not wind up with all people my age or younger, slightly 
younger, drawing checks.
    Mr. Gibbs. I do not have problems with people your age.
    Mr. Hobson. Yes, I know you do not. I looked at where you 
graduated and so did I. But, and so did John.
    But I am just sending you that message. I had some phone 
calls on that yesterday. And this is not really your bailiwick, 
but it affects your facility somewhat.
    So John, do you have anything else you would like to ask?
    Mr. Olver. No.
    Mr. Hobson. If not, we thank you very much for coming. 
Hopefully, this will get easier.
                                       Wednesday, February 6, 2002.

                QUALITY OF LIFE IN THE MILITARY--SPOUSES

                               WITNESSES

BOBBIE BECKMAN, SPOUSE OF CSM WALTER K. BECKMAN, USA
MARIE-CHRISTINE KEMP, SPOUSE OF LCDR DAVID S. KEMP, USN
PHYLLIS McLEAN, SPOUSE OF MAJOR DANIEL J. MCLEAN, USMC
DEBORAH DOUGLAS, SPOUSE OF MSGT BRIAN DOUGLAS, USAF

                       Statement of the Chairman

    Mr. Hobson [presiding]. The Committee will come to order.
    Welcome to this first hearing of the year. I am pleased to 
see all of you here.
    And Mrs. Robbins, there are no fireplaces given out here 
today. That is an inside joke that you all have to ask her 
about.
    Tell Ernie he arrived too late. I missed him in Dallas the 
other day. He was on a program after me, but I had to leave.
    Before I introduce the witnesses, I would like to mention a 
few housekeeping matters. First, the hearing schedule we have 
developed for the year is demanding, but the pace enables the 
subcommittee to mark up a bill in May and be on the floor in 
June, and potentially finish in time to send the president a 
final package before the August recess. Initially, the 
administration will probably ask Congress to consider a 
supplemental spending package sometime in March, which will add 
to our work schedule, and I am hoping add some money to our 
bill.
    Finally, as part of the subcommittee's oversight 
responsibility, I intend to inquire about the process DOD is 
using to determine which projects are funded with the $40 
billion supplemental appropriations enacted in December. At the 
moment it appears that there is no process for making these 
funding decisions, and I worry that bases are spending scarce 
resources with the false hope of being reimbursed through the 
Defense Emergency Recovery Fund (DERF) account.
    The last item I need to address is the budget request which 
Congress received Monday morning. In short, the request is a 
great disappointment to me, because the military construction 
budget is reduced by $1.5 billion. DOD's defense is that 
additional funds should not be invested in installations that 
might close in the base realignment and closure process 
scheduled to take place in 2005. Likewise, the administration 
argues that the sustainment account is increased by $466 
million, reducing the need to recapitalize existing facilities.
    I take exception to these arguments, and let me speak a 
little candidly about that. There are many enduring 
installations that will not be closed in a BRAC because of 
their strategic importance to our national defense. 
Furthermore, the service components did not consider BRAC 
informally in their budget requests. Thus using BRAC to defend 
the request is a red herring.
    Simply providing additional funds to sustain decrepit and 
outdated buildings and facilities, though necessary, is 
shortsighted strategy at best and a waste of taxpayers' dollars 
at worse.
    The administration wants to transform the Department of 
Defense. It is my opinion that successful transformation of DOD 
is hinging on having an infrastructure capable of supporting 
the new missions created by the transformation. There is little 
in this budget that supports a move in that direction.
    The bright spot in the budget is the military housing 
account. It is increased $225 million. Likewise, the BRAC 
account is fully funded, and that is a change. Obviously, the 
subcommittee will be focusing on these issues when the 
comptroller and the deputy undersecretary of installations come 
to testify later this month, which brings me to this hearing.
    This morning we will hear from the spouses and this 
afternoon from the senior enlisted service members. They will 
testify on the same subject: quality of life for the military. 
We will focus on two primary areas: work environment and home 
environment. We are going to ask all the witnesses questions 
about their individual experiences and the collective 
experience of their friends and colleagues.
    Also, like the member in uniform, military families serve 
their country just as devotedly, loyally and unselfishly, and I 
think even sometimes more unselfishly. This is the second year 
we have asked spouses to testify about their experiences, and 
for one reason: When John and I visit installations it is very 
often the case that wives will give us the unvarnished truth 
about the conditions of their families.
    I currently have an intern in my office that I met her mom 
and her sister in the commissary in Korea. I got everybody else 
away and we talked about some things. And then, later on I ran 
into her dad, and he said, ``My daughter needs to be an intern 
some place,'' so. But we learn a lot of things by just talking 
to the spouses.
    This morning's hearing gives Congress a way to learn more 
about how we can improve their experiences and it also gives us 
time to say thank you for the service to our country.
    I want to introduce our witnesses, and if they want to 
introduce their family members they can do so, and they can 
take whatever time they want to take. Bobbie Sue Beckman will 
represent the Army. Sue is currently serving as the president 
for the Fort Hood area Enlisted Spouses Club, and is vice 
president of the Fort Hood Band of Angels. And I think Chet 
probably knows who she is.
     I can tell you that the housing seminar that I just 
attended in Dallas, they gave me a big coin--it is about as big 
as the one I got in my office--from the Fort Hood people. Some 
of us have been to Fort Hood and we are very excited about that 
project.
    Marie-Christine Kemp will represent the Navy. Marie-
Christine and her family live in Chesapeake, Virginia, where 
her husband is the officer in charge of naval support activity 
in Norfolk. She is active in many spouse groups, including the 
USS Reed Wives Club.
    The Marine Corps witness is Phyllis B. McLean from 
Woodbridge, Virginia. Phyllis is an RN; one of my favorite 
professions. I wrote the nurse practice act in Ohio when I was 
in the legislature. Her professional positions have ranged from 
staff nurse to director of nursing. And anybody who has ever 
been in the hospital knows that the most important person 
there, sometimes is not the doctor, most times it is the nurse 
who comes in and really helps you.
    Deborah Douglas representing the Air Force, and her family 
have been stationed at Pope Air Force Base for eight years, 
have four children, including twin girls, which is quite a 
chore, but fun.
    I will now turn to my ranking member, John Olver, for any 
statement or comments he wishes to make.
    And let me say this, John has been a wonderful ranking 
member of this committee. We work together. We have been all 
over together looking at various bases around the world and in 
the United States. And I very much appreciate the relationship 
John and I have and the whole committee, but also the staff 
relationships that we have here. We try to run this committee 
without any distinction as to party and I do not think we have 
ever had an argument over that.
    Our main goal here, and John will tell you this too, is to 
improve the quality of life for people in the military that 
they can have the same things, the same quality that they would 
have if they are on the outside. We do not want to treat you as 
second-class citizens. And John and I are here to make sure 
that we improve the position that you all find yourselves in.
    With that, John?

    Mr. Olver. Thank you very much, Chairman Hobson. Correction 
to what you just said. Turns out that we happen to be about the 
same age, although clearly we do not look the same age, the 
chairman and I. But I just cannot keep up with him on these 
trips, so I do not go on quite as many as he goes on. He 
manages to visit a few more than I am able to do.
    But I am, sort of, surprised, Mr. Chairman, that you have 
not struck a coin for this occasion for the people who are 
testifying today.
    Mr. Hobson. They got one yesterday.
    Mr. Olver. Oh, they got one yesterday. [Laughter.]
    All right. I am already behind. Always behind.
    Well, again, thank you, Mr. Chairman.
    First of all, I want to also welcome the witnesses. We all 
depend upon the testimony and your experiences as spouses and 
the experiences that you, as the ones who keep the family 
together, I think, in very large measure, find as members of 
military families. We depend upon that testimony in order to be 
able to improve conditions for everybody. So it is a very 
important day. It is one of the most interesting hearings that 
we usually have.
    We all understand that it is not just the service members 
that make the commitment to serve the country, but the entire 
families along with the person who is actually in the service.
    I also need to take this opportunity, as the Chairman has 
also done, to comment on the President's Budget request. While 
the family housing accounts are given a small increase, as the 
chairman has already pointed out, the facilities that we need 
to respond to the current and future threats under our military 
construction budget are cut by $1.7 billion. Each of the 
services takes significant cuts.
    While last year we found billions of dollars in unmet force 
protection requirements as we traveled around and got 
indications, after 9/11 in particular, of the kinds of needs, 
the proposal for force protection here in the president's 
budget as submitted includes only about $100 million that you 
can attribute to those force protection kinds of purposes.
    I think that the argument given in the budget submission 
that we have to hold back on military construction until we see 
the result of the next round of BRAC in 2005 at the earliest is 
really, sort of, ridiculous.
    The proposal, by the way, also affects military families in 
a number of ways, even more direct, immediate way. There are 
going to be fewer teachers that are helping children to learn 
to read and fewer kids that are able to enroll in the programs 
for Head Start at our bases. There will be fewer police on the 
streets off base, where more than half of our military families 
live. Just as a couple of examples.
    Noticeably missing from this submission is any information 
or indication about the case for supplementary spending for 
fiscal 2002. The Pentagon and the State Department have already 
completed their analysis of those needs and they have stressed 
to the White House the need to move quickly. I can only assume 
that the Office of Management and Budget is withholding the 
supplemental requests in order to avoid making large additional 
requests for foreign assistance and the Defense Department at 
this particular time, while the main budget request has 
substantial reductions and, in a good many cases, eliminations 
in hundreds of domestic programs. But that is all part of the 
$1.7 billion in the reduction in force protection and in 
projects in military construction remains there as a glaring 
point.
    Now, I want to thank the Chairman for bringing this group 
of witnesses together. When we have traveled, as he said, we 
have gotten often the most interesting and most useful 
testimony out of the spouses at some of our locations. And I 
expect that you will give us the unvarnished truth, as well. 
That perspective is very important. So I hope that you will 
feel free to just tell it like it is. And that you will not 
even necessarily stay on what are strictly military 
construction issues, because we really cannot expect that 
families will know the arcane rules of subcommittee 
jurisdiction here on the Hill.
    So please we do have communications. And, in fact, of 
course, the Chairman I do not think said that, but he is on the 
big Defense Committee and where there is Subcommittee 
jurisdiction problems, he takes what he hears here and what is 
necessary to take to the other committee, he takes to the other 
committee and works on it there, as well. So please give us 
what you can.
    I am certain that you have the same concerns as other 
Americans: decent housing, decent working conditions, good 
health care, educational opportunities for your kids and 
economic security. So I am looking forward to hearing what you 
have to say. Thank you for being here.
    Mr. Hobson. Thank you, John.
    The Republicans are all off at a mandatory conference, 
which I did not go to. But since they are not here, I am going 
to give the other members--I do not want to prolong getting to 
you, but if there is anything anybody feels they want to say, 
they can.
    Norm is also on the big committee with me, so we go in and 
kick them around pretty good.
    So if there is anybody who wants to say anything right now, 
you can keep it short so we can hear their testimony. Or do you 
want to wait?
    Sam.
    Mr. Farr. As I was reading the statement of Mrs. Beckman--
and we were able to visit Fort Hood last year--I would be very 
interested in your comments on the RCI effort.
    Perhaps all of you could comment on this. I notice that you 
pointed out that you had to pay for paperwork to have cleaning 
done in your homes; that in Hawaii it was obvious that you 
would not pass quarters clearance unless you hired a cleaning 
team. And cleaning teams charge $15 to $20 simply to fill out 
the paperwork.
    Is that true on other bases? I mean, I am not sure we are 
very familiar with what are the requirements for expenditure to 
do clean-up and maintenance, and why the costs are so high. 
Because one of the things we have been looking at in committee 
is how to contract with local communities to essentially do the 
cleaning that local communities do anyway. Any perspective on 
that I would appreciate.
    Thank you, Mr. Chairman.
    Mr. Hobson. Anybody else?
    Mrs. Beckman, I think you are going to be first, so you 
want to introduce your family that is here. You need to put the 
microphone up to your mouth, because they will yell at you like 
they do me when I do not turn mine on.
    Mrs. Beckman. I have my husband here. He is the 4th Brigade 
sergeant major at Fort Hood, Texas.
    Mr. Hobson. Okay. Go ahead.
    Mrs. Beckman. I would just like to thank you for giving me 
the opportunity to come here and put my views across on the 
quality-of-life issues for the spouses, especially on Fort 
Hood. Thank you.
    I have submitted my written testimony for the record.


    
    Mr. Hobson. And we will accept that, but do you want expand 
upon that? Go ahead.
    Mrs. Beckman. Well, I was just going to say thank you for 
this opportunity. The reason I have submitted mine is I believe 
we all do not have our testimonies with us today so this way it 
could be put in.

                             CLEANING FEES

    Mr. Hobson. You want to respond to Sam's question?
    Mrs. Beckman. It was not in Hawaii, that the charges were 
for the clean teams. It was at Fort Bliss, Texas, and probably 
were going through the sergeant major's academy.
    Mr. Farr. Is that common that you have to----
    Mrs. Beckman. It was at the time, yes.
    Mr. Farr. I mean, on all bases?
    Mrs. Beckman. Now, I do not know.
    Mr. Farr. Do bases do inspection of your homes to see if 
they are clean?
    Mrs. Beckman. Yes, sir. They do.
    Mr. Farr. And the cleaning is either up to you to clean the 
house up, or to hire somebody to do it.
    Mrs. Beckman. Correct.
    Mr. Farr. And if you hire somebody to do it, does it have 
to come off an approved list of people who are----
    Mrs. Beckman. Yes.
    Mr. Farr. Is it a service provided at the base? You cannot 
go out and just hire somebody that you want to hire to clean 
your house.
    Mrs. Beckman. They have a list of cleaning teams, and you 
pick from that list. You can narrow it down by inviting a few 
people to come in and look at the quarters and see what they 
would charge you.
    Mr. Farr. What is the going rate usually?
    Mrs. Beckman. At Fort Hood last year, the going rate was 
$100 per bedroom.
    Mr. Farr. Per----
    Mrs. Beckman. Per bedroom.
    Mr. Farr. Per bedroom for what? Cleaning?
    Mrs. Beckman. For cleaning. And it just depend on who you 
chose. If they did the outside of your quarters, then they 
added more money to that. If they had to do extensive work, you 
know, like, heavy oven cleaning, for example, that would 
include extra charges as well.
    Mr. Farr. Minimum wage is about--what?--$6 an hour now. 
They paint the place?
    Mrs. Beckman. No, sir. They do not paint.
    But I have heard that at Fort Hood, we have the new RCI 
program starting, and that they are going to change that. And 
they will have someone that can come in and do the cleaning 
through their program, and that the charges will not be as high 
as if you were to go out and hire a cleaning team.
    Mr. Farr. Well, I am just shocked at that figure.
    Mrs. Beckman. It is pretty high.
    Mr. Farr. I do not think we pay that in a month to clean 
our house.
    Mrs. Beckman. Yes, sir. My neighbor, when she cleared out 
her quarters, cost her $350.
    Mr. Hobson. What rank were they?
    Mrs. Beckman. He was an E-7. She thought she was getting 
off good at $350, because she had been quoted at $100 per 
bedroom and she had a four-bedroom, and they were going to 
Germany, so their time restraint was restricted.
    And that goes for, like when we were at Fort Bliss, that is 
what the problem would come into. You had academy students 
going through the sergeant major's academy there. So they were 
there for six months. So to clear their quarters and be able to 
go to their--sometimes their first duty assignment as a 
sergeant major--ours was in Hawaii--that, you know, you had a 
certain amount of time to be able to get from point A to point 
B. And so you just paid the cleaning team to be able to clear 
and get out.
    Mr. Farr. Are the cleaning team federal civilian employees?
    Mrs. Beckman. I do not know that answer to be honest.
    Mrs. Douglas. I know for the Air Force it is contracted.
    Mr. Farr. Well, that is a contract we ought to look into, 
Mr. Chairman. [Laughter.]
    Mr. Hobson. Ms. Kemp, do you want to introduce yourself and 
any family members you have here today?
    Mrs. Kemp. Unfortunately, my husband was not able to 
accompany me, as he is at home with my three small children. I 
have a guest with me. This is a good friend of ours, Lieutenant 
Commander Don Schusler, here with me. So a little support.
    Mr. Hobson. I guess what all of you decided to do is submit 
your written testimony and go to questions; is that you want to 
do?
    Mrs. Kemp. Just a very brief introductory statement.
    Mr. Hobson. Okay. You have anything that you want to say?
    Mrs. Kemp. Just to give you a little bit more background, 
once again, my name is Marie-Christine Kemp, and I have been a 
Navy spouse for nine years. During that time, we have been 
stationed in Monterey twice. We have been once in San Diego and 
once overseas as part of an exchange program with a foreign 
navy where they do not offer services or housing to their 
members, so it is a very different experience.
    Mr. Hobson. Where were you?
    Mrs. Kemp. We were in Toulon, France. We served on a French 
destroyer.
    And currently we are in Chesapeake, Virginia, having also 
lived in Virginia Beach, Virginia, stationed at Naval Station 
Norfolk. I lived on-base and off-base, and I used all of the 
support services that the Navy provides, so I feel like a lot 
of experience across those areas. And I am honored and pleased 
to be here to answer all of your questions this morning.
    So thank you very much.
    Mr. Hobson. Mrs. McLean?
    Mrs. McLean. Good morning, Mr. Chairman.
    I have with me my husband, Dan McLean, and my son, David 
McLean. I would like to thank the members of the Military 
Construction Subcommittee.
    My name is Phyllis McLean, and I am married, obviously, to 
Major Dan McLean, United States Marine Corps. I have been a 
Marine Corps spouse for 23 years, seven years as an enlisted 
spouse, and 16 years and counting as an officer's spouse.
    I have lived with my husband at bases and duty stations 
across the United States and Okinawa, Japan. I would like to 
thank the subcommittee for holding this important hearing on 
quality-of-life issues and for giving me the opportunity and 
honor of testifying on the behalf of Marine Corps spouses 
around the globe.
    Although I can only speak for myself, I hope that my 
experiences as a Marine Corps spouse will enable the 
subcommittee to gain some insight into the lives of my fellow 
spouses.
    Once again, I thank you, Mr. Chairman, for allowing me to 
appear here today, and I welcome any and all of your questions.
    Mr. Hobson. You will be happy to know that since Valerie 
went to Quantico, I told Mr. Murtha, Quantico is going to get 
fixed. 8th and I is going to get fixed, and Pendleton, I think, 
is going to get fixed. Hopefully, right away, but I think 
everybody will be pleased with what we are going to do there.
    And that is one of the real benefits of going around and 
visiting these places. Valerie came back and kicked the can 
over, and then Mr. Murtha went down, and Mr. Young went down, 
and it is going to get fixed.
    Mrs. Kemp. Great.
    Mr. Hobson. Mrs. Douglas?
    Mrs. Douglas. Good morning. I am here with my husband, 
Brian Douglas.
    Mr. Hobson. Tell us what Brian does.
    Mrs. Douglas. Brian is a pararescueman in the Air Force. I 
do have some testimony here, if that is all right.
    Mr. Hobson. It is okay. Everybody can do what they want. It 
is fine. You have to do what you want to do; that is why we 
have you here.

                     STATEMENT OF MRS. DEBI DOUGLAS

    Mrs. Douglas. Okay. alright.
    Good morning, Mr. Chairman, and distinguished panel 
members. It is such an honor to have been asked to meet with 
you this morning. I hope I am able to convey some of our needs 
as far as the family members go.
    My name is Debi Douglas, and I am the wife of a 
pararescueman. My husband is stationed at the 24th Special 
Tactics Squadron at Pope Air Force Base, and we have been there 
for eight years.
    Brian has been in the Air Force for 22 years, and we have 
been married 21 years. We have four children. We have a 
daughter, Stephanie, who will be 20 soon, and she is a 
sophomore at University of North Carolina (UNC)-Chapel Hill. We 
have a son that is 17 years old who is a junior in high school, 
and then we have twin daughters that are 13-year-olds.
    My father was a Chief Petty Officer in the Navy for 27 
years, so I am a product of the military. Started out my father 
was stationed in Hawaii. That is where I was born. We traveled 
throughout my 19 years of living at home, until Naval Air 
Station (NAS) Jacksonville, where I married my husband.
    One of the main things that I wanted to talk with you about 
today was education. I am really concerned because of what my 
children have been put through as far as the moves that we have 
made. Whenever you move, you are not always able to have a say 
in what type of system that that particular state or county 
has, and so basically we are at the mercy of that particular 
county or state.
    One of the things that they have is called four-by-four 
block system. Have any of you heard of that before? It is where 
in one semester, the children--and this is for high schoolers--
they have four classes, and those classes are 90 minutes long. 
So usually there will be two core classes and two electives. 
Well, where this comes into play is if you happen to move 
before you graduate and you go to a school system that does not 
recognize this four-by-four, there have actually been instances 
where children cannot graduate on time because they do not 
recognize those credits.
    When I found that I was coming here, I passed the word 
along to a lot of friends that have since--we were stationed at 
Hurlburt Field with a lot of people have since moved around, 
and quite a few of them are at Moody Air Force Base now. And 
they have the same thing down there, not in the Department of 
Defense (DOD) schools, just the county schools have this four-
by-four. And I got an e-mail from someone that said that that 
is what was happening to them. Their son would not graduate 
when he was supposed to, because they would not recognize some 
of the credits.
    So that is one thing that I do not know if you can do 
anything about, but that is just something we have to deal with 
as parents, when we move our children around.
    Let's see, the other thing is my daughter, as I said, goes 
to college at UNC-Chapel Hill. Well, we have four children, so 
we do not pay for our daughter's education up front. She has a 
Stafford loan and Stephanie will be paying for her education 
when she graduates.
    Well, when we moved here, we have a home, so we are 
considered residents of North Carolina, and she gets in-state 
tuition. If Brian receives military orders, once we leave here 
he will have to pay out-of-state tuition, and that will go up 
about $12,000. I find that to be really unfair to Stephanie, 
because she is going to be the one paying for her education 
just because her father (permanent change of station) PCSs to 
another state.
    I am hoping that maybe some type of waiver can be 
instituted; something that can be done for these kids. Like I 
said, I do not think it is fair to Stephanie that she should 
have to pay that extra money.
    Mrs. Douglas. Well, if that is the case, I think maybe 
Allstate should look into that, because that is all it is doing 
is penalizing the kids for their father's, or sometimes 
mother's, job in the military.
    Another thing I would like to bring to your attention as 
far as education goes is, when my husband enlisted in the Air 
Force in 1980, there was a new program called VEAP, Veterans 
Education Assistance Program. And in this briefing my husband 
received, they did not express the necessity of putting money 
in the program, and did not explain that if they did not put 
money in the program, that was basically declining any 
educational benefit.
    Mr. Hobson. And he did not have any money when he 
enlisted----
    Mrs. Douglas. Exactly. It is not a very realistic program, 
because when we first got married, Brian's paycheck was not 
even $300 every two weeks, and our rent was close to $200 for 
the month.
    Mr. Hobson. Mine was $100 for a month as an airman. $108, 
was not it, Carolyn?
    Mr. Dicks. That was a long time ago. [Laughter.]
    Mr. Hobson. Yes, I know. We had muskets then.
    Mrs. Douglas. So, anyway, it was not realistic for airmen 
to be able to even put any money in that type of program.
    So, of course, they saw that was not a good thing, so they 
took it away. But now Brian cannot buy into the GI Bill, and 
Brian will not have any education benefits when he retires from 
the Air Force.
    Mr. Hobson. Although I showed him a way if he moved to Ohio 
we could pay for all their education.
    Mrs. Douglas. Housing is another concern. When we first got 
married, Laughlin Air Force Base was our first base. Brian had 
one stripe, and we were not allowed to live on-base because 
housing was so short. Basically, at that point, it was rank has 
its privileges.
    I just left home; my father was an E-9 living on-base. And 
even my parents could not understand how we could be forced to 
live on the economy when an E-9 could sufficiently take care of 
themselves on the economy.
    So, I do not know if that is changed or not, but I would 
hope that it should be the younger airmen and sailors that get 
the housing before the rank.
    We are very lucky at Pope Air Force Base, that it just 
built a lot of new housing; and I think they are continuing on 
with even more housing. The bad part is, it is still not 
enough. Because we are surrounded by Fort Bragg, which is one 
of the biggest Army Posts there is, they do not have enough 
housing. So that forces those people to look for housing and, 
Air Force members are looking for housing. And I believe that 
that overinflates the real estate within that area, because it 
is very expensive to live in the Fayetteville area.
    So I am hoping that those things can change for the Army 
and for the Air Force, so we do not have to go out and look for 
housing off-base.
    When we did get to Pope, they told us it would be a two-
year wait; and sure enough it was, because we built a house, we 
were in it for a while, and then they called and said, ``We 
have a house for you.''
    So right now the wait, they say, is anywhere from four 
weeks to 24 weeks, which is a whole lot better than it used to 
be.
    We have----
    Mr. Hobson. So did you sell your house, or move on-base?
    Mrs. Douglas. No, we decided to stay in it, just because we 
needed to build up some equity. And if we sold it, we probably 
would have lost money on it.
    Mr. Hobson. You are going to tell them about the commissary 
too, are you not? Because people listen. Even though it is not 
in our jurisdiction, tell them about the commissary situation 
at your base. They have got a new one, and----
    Mrs. Douglas. Oh, yes, okay the commissary. Fort Bragg has 
a large commissary because they have a large population. Pope 
Air Force Base is smaller, and we had a small commissary.
    Well, because Bragg is so big, they built them a second 
commissary. When they did that, they took away Pope's 
commissary. So we do not have a commissary on-base anymore, 
even though it was a small commissary.
    And General Casey was our base commander at the time, and I 
know he fought for it. And we even had petitions to try and get 
our commissary to stay open. But whoever these petitions were 
sent to, it did not work.
    But it is a big hardship on the families that do live on-
base, because there are airmen that live on base that do not 
have cars. And I do not know how these moms are toting, you 
know, their two and three children to get to Bragg, which is 
about five miles away.
    So I do not know, like I said, if you can do anything about 
that, but----
    Mr. Hobson. I was just talking--there are people listening; 
they write little things down, so.
    Mrs. Douglas. All right.
    Another place I would like to talk about on-base is our 
chapel. Our chapel is the fourth-most visited building on-base. 
Unfortunately, it does not receive the attention it deserves. 
There are water spots, wallpaper that is peeling, paint that is 
peeling. It is just not the kind of place that it should be. 
The grounds of the chapel are in need of professional 
landscaping and lawn care.
    I feel like the chapel is a place where families gather 
each week, and it should be suitable for all those that wish to 
assemble in the Lord's name. It is not. It really does need to 
be fixed up.
    Let's see: TRICARE and dental. The dental plan, we found--
okay.
    Our oldest daughter needed to have her wisdom teeth 
removed. So, being that we have the military insurance, they 
made us a little bill. Come to find out, they do not cover 
anesthesia. They expected my daughter to go and have her wisdom 
teeth pulled without anesthesia. So we paid the deductible, 
plus we paid for her anesthesia. So I question some of the 
plans that we have.
    My son is getting ready to have his wisdom teeth out. So I 
will be hoping that maybe that will change sometime soon. I do 
not know. But I thought that was pretty ridiculous.
    Mr. Hobson. I think it will.
    Mrs. Douglas. Let's see. I had written several other things 
down, but I think I will just wait and hear if you have any 
questions for me, and I would be happy to answer them.
    But the education thing was really something that I wanted 
to bring to your attention as far as what these children have 
to go through, you know, when they are uprooted every few 
years. Anything to make it easier on them.
    Mr. Hobson. Thank you very much.
    I will let people who were here first have any questions. 
Let's see, we will start with, John.
    John, do you have any questions you want to ask at this 
time?
    Mr. Olver. Thank you very much, again, Mr. Chairman. Thanks 
again for your comments up to this point.
    I am curious, Mrs. Douglas, in your biography by the way, I 
only have in front of me a written testimony from you, Mrs. 
Beckman. I do not know whether my pile is complete. I do not 
read very fast and I have not been able to read even that with 
care here, it arriving this morning.
    But, Mrs. Douglas, you, in your bio, it indicates that you 
were once stationed at Adak in Alaska. How old were you then?
    Mrs. Douglas. Let's say fifth grade through seventh grade.
    Mr. Olver. It is a little bit difficult to describe the 
difference, but Mrs. Beckman has indicated that there have been 
vast differences, vast improvements in the quality of life over 
a 27-year period at--I do not know that you have been at Fort 
Hood all those 27 years--have you?--but wherever. How many 
years have you been at Fort Hood?
    Mrs. Beckman. Three and a half years.
    Mr. Olver. Three and a half.
    I would be curious, what sort of difference you have seen, 
if you can remember? Perspective has changed, too, because now 
you are a mother with college-age kids. And from what you were 
when you were a 12-year-old or whatever it was at Adak. I would 
think that would be a rather primitive deployment.
    Mrs. Douglas. Well, at the time it was only Navy personnel 
on the base; since it has changed. But as a kid it was 
wonderful. They had the Quonset huts out in the tundra. For 
part of our, I guess, recess you would call it, our teacher 
used to take us on hikes up through the tundra and we would get 
to go through the Quonset huts and things. It was a lot of fun.
    They had something called the Adak National Forest, because 
it is a volcanic island, nothing grows. These trees were like 
five feet tall, and I believe they are still probably five feet 
tall. So, like, 12 trees was their forest.
    Mr. Olver. Well, it goes to show that it is all a matter of 
perspective, does not it? My goodness.
    Ms. Kemp, you have indicated that your husband had been 
part of an exchange program with the French navy.
    Mrs. Kemp. Yes, sir.
    Mr. Olver. How long was he involved in that?
    Mrs. Kemp. Two years, sir.
    Mr. Olver. Two years. Ah-ha. And you were there, you went 
with him?
    Mrs. Kemp. Yes, sir.
    Mr. Olver. Can you give us a sense of what the quality-of-
life programs available to the French navy were compared with 
your sense of what is available for American Navy personnel? I 
would be very curious about it.
    Mrs. Kemp. I would be pleased to share that with you.
    We had a wonderful experience on our tour in Toulon. Their 
attitude is that quality of life is very important, and they 
choose to address it from the tack of higher pay. They do not 
provide any services on base whatsoever for family members. 
When you go to a military base in France, what you find are the 
military structures, the piers, the ships and the buildings 
that support those, and that is it, okay?
    So when we lived in France we lived out on town. And there 
was no access to any kind of support at all through their 
military, in that perspective. However, their pay was at such a 
higher rate that it was affordable to live out in town and to 
have all the necessities that you needed for your family.
    Mr. Olver. And does that mean that during that exchange you 
were afforded pay----
    Mrs. Kemp. We were given a COLA.
    Mr. Olver. Which is similar to what they were getting, and 
then went ahead and did it off-base in whatever way you could.
    Mrs. Kemp. Exactly.
    Mr. Olver. I think that would be characteristic of a--I 
mean, France is a large country, European standards. But it 
does have off-shore dependencies and they must have some 
special provisions that you would see in various of their 
dependencies around the world; it would be different, maybe, 
from what happens there on the mainland. But, I guess, in the 
smaller countries that would work.
    Our people get deployed in various places all over and move 
from place to place. And we have gone much more about trying to 
provide for people in that way.
    It is a little bit difficult here. Mrs. Douglas, you 
focused rather extensively on education and several different 
items related to education. But, you know, we deal with housing 
and we deal with child care and fitness and recreation.
    Mrs. Beckman, you had commented about the problem of having 
not much--for teenagers--not much provision. We may provide 
child care at school, but not much in recreation or activities 
for teenagers. Centers for activities for teenagers are a 
problem all over. You used to have them busy from dawn till 
dusk on farms three generations ago, but we have not done 
nearly as well as probably we ought to.
    I would be curious, among the things, including health care 
and the long deployments and so on, if each of you might 
indicate what were the ones, particularly where we do not have 
written testimony--which are the issues that are most concerned 
to maybe Mrs. Kemp and Mrs. McLean, in particular.
    And if you, Mrs. Beckman, want to focus, because I know you 
have covered a lot of ground in a sequential, kind of, a way, I 
could take the sequence as your order of priority. But I would 
like to see where could we make the greatest--I guess the thing 
I would like to answer is, where can we make the greatest 
marginal gain in quality of life for military families by what 
we do here? Because there is not enough money to bring 
everything quickly up to any one particular standard.
    Mrs. Beckman. Well, for Fort Hood, for the spouses that I 
have talked to, the biggest impact that they have said they 
want changed is for their pre-teens and the teenage kids. It 
keeps them off the streets. It can build them to want to be 
soldiers themselves. It can help their quality of life as 
adults.
    We at Fort Hood have a program that we are starting, a 
pilot program actually, it is called BOAT: Better Opportunity 
for Army Teens. And that they would like to, kind of, base on 
the BOSS program, which is Better Opportunity for Single 
Soldiers. That is an avenue for our teens to actually teach 
themselves to be better adults. They have influence by adults, 
but the teens are actually going to run this program, and they 
are going to come up with their own bylaws and constitutions 
for that program.
    So that is a quality-of-life issue for myself, because I 
remember when our kids were teenagers, that that was pretty 
hard. When they were youths, you know, the schools had 
activities for the kids. But we rarely had anything for our 
older children.
    Not all high schoolers are athletes; you know, into the 
sports arena. There are some students that just want to be kids 
that do not get involved in some things. And maybe if they had 
a place that they could get involved in, it would be more 
focused toward community service more than sports service.
    But at Fort Hood, we have some very awesome teens, and they 
are very excited about this opportunity for them to be able to 
have something that is theirs.
    Mr. Olver. Thank you. I think teens really can be awesome.
    Can you describe something that you think would make the 
most marginal difference for you?
    Mrs. Kemp. Yes, sir. Coming from the mid-Atlantic region, 
which is the largest Navy military concentration across the 
board, we have a lot of issues with the quality of our 
facilities, because we just keep growing, as far as the 
military in this area.
    And one of the biggest issues we have is the quality of our 
child developmental centers. There has been no money for 
maintenance since the early 1980s.
    And there is one in particular that I can speak to, Oceana 
Naval Air Station. It is sad; I do not know how else to 
describe it to you. There is a 300-child waiting list for this 
particular CDC, and that is pretty typical across the board in 
our area.
    Oceana Naval Air Station is in Virginia Beach, and this 
particular CDC, it is in a cinderblock building, and it is very 
similar to the chapel that Mrs. Douglas described, but perhaps 
even worse. The walls are falling down, the ceiling tiles are 
falling down on the children, and the tiles are separating on 
the floors. There ares not even wash facilities in all the 
rooms for sanitation, as far as diaper changes and potty 
training and things of that nature. There are not toilets that 
are appropriate for the children in all the rooms. There are 
open areas of the pipes and the electrical systems that are not 
behind walls or coverings. The area when you walk in has no 
awnings.
    The whole parking lot, which is very small, is in a flood-
prone area, so it is often flooded, just from the rains. There 
is a modular building that they were given a few years back to 
help with their size. And it is an old building, an old 
modular, that also has a lot of water damage and rusting areas. 
And these are right in the classrooms where our children are.
    And the greatest need in these areas is for the infants. 
There is just not the accessibility to civilian child care for 
the 0- to 2-year-old age range. They are just not out there. So 
when we are required to go out on town, besides the fact that 
we are paying more money, there is nobody who is offering care. 
There is just not enough places for our very small children, 
and particularly the infants and the toddlers. I mean, there is 
a huge, huge, huge need, sir.
    Mr. Hobson. Do you know whether that is--excuse me for 
getting into this----
    Mr. Olver. By all means.
    Mr. Hobson [continuing]. But I wrote the day care law in 
Ohio, so I just know enough to be dangerous about it. And my 
sister owns seven day care schools, and she did not like the 
law I wrote, but she is doing fine.
    Do you know whether the base commander has asked, or where 
this is on his priority? Or the previous base commander? 
Because, frankly, if that were in the private sector, it would 
be shut down.
    Mrs. Kemp. Yes, sir.
    Mr. Hobson. And most of the new day care--I have not seen 
the Navy that much, but in the other services I looked at, the 
day care we are building is better than it is on the outside, 
the facilities and the operations. But we must have instances 
where it is not. And that is what we need to know, and we need 
to know, because I looked through the list for Virginia. And if 
you look through the list for Virginia that the administration 
signed off on, it is huge----
    Mrs. Kemp. Yes, sir.
    Mr. Hobson. Makes me a little upset. But I did not see that 
day care facility on there at all, so we are going to look at 
that. And that is why it is important for you to tell us these 
kinds of things, because we cannot see it all.
    Mrs. Kemp. I understand.
    I cannot, obviously, speak to the commander's priorities, 
but I can tell you that they have requested MILCONs in the 
past, and they have not received them----
    Mr. Hobson. For that?
    Mrs. Kemp. For that, yes, sir. Yes, sir.
    Mr. Olver. Well, could I have a look at that----
    Mrs. Kemp. It has not come because--go ahead.
    Mr. Olver. Could I, just for completion, get Mrs. McLean to 
give the thing that you think might provide the best marginal 
gain?
    Mrs. McLean. I think looking back, as an enlisted wife and 
now as an officer's wife, one of the issues that constantly 
comes up is housing. My family has, the majority of the time, 
lived out in the community, out in town. And the reason for 
that is because, once we get to a new duty station, the housing 
usually is not available. The wait is not a short one.
    An example would be Camp Lejeune, North Carolina. We have 
been stationed there twice; each for three years. And the wait 
for housing was 18 months to two years. When you are there for 
three years, by the end of two years, you are settled out in 
town. And the idea of picking up and moving for a year and then 
having to pick up and move again in another year is quite a 
disruption.
    So even when we moved here, the thought of housing almost 
really did not cross my mind, because we know it is not 
available in a timely manner.
    Housing that we had lived in, in the past, which has been 
infrequently, has been appropriate. Our housing overseas was 
quite appropriate but, again, the wait, at least for us, was 
six months, which means that we stayed in a one-room hostess 
house for 30 days. I found that a little bit difficult. My 
husband went off to work with the only vehicle we had. My son 
went off to school and I stayed in a one-room accommodation, 
not knowing anybody, not knowing where to go. It was difficult, 
obviously, to communicate with anybody.
    Mr. Hobson. Was that at Kadena?
    Mrs. McLean. That was at Camp Foster.
    Mr. Hobson. Okay.
    Mrs. McLean. Within 30 days, we had found a place out in 
town. And one of the first questions they ask is your rank, 
because then they can adjust the rent that they are going to 
charge you, accordingly.
    So we lived out in town for six months in a small 
apartment, by American standards. By Japanese standards, it was 
quite large. And the military provided furniture for us, until 
we received our large shipment, once we got on to base.
    Living out in town initially was not very comfortable, just 
because you did not know anybody, you did not know where to go. 
You did not know how to speak the language. And even moving 
about was difficult because, once you obtained a vehicle, a 
second vehicle, you were on the other side of the road on the 
other side of the car. It was a big culture shock. Once you got 
over that and settled in, it was okay.
    We got into base housing within six months and that was 
just at tremendous difference. The camaraderie, making friends, 
and everybody is in the same position. Everybody, kind of, 
looks out for one another. So once you get on base, it is 
absolutely great. And my memories of Okinawa are actually more 
positive than negative. But initially, that initial six months, 
was pretty tough.
    The DOD schools overseas versus within the United States 
were absolutely wonderful. The technology that they had within 
the classroom was exceptional; nothing that we have seen here 
in the United States in the community schools. The activities 
they had for the children, the field trips, the cultural 
experiences were just phenomenal and I cannot say enough about 
the DOD schools that my son attended while we were in Okinawa.
    So by far, I think that the main thing on my list would be, 
especially for the lower ranks, and what I remember what we 
went through as enlisted, would be to make housing available as 
quickly as possible for members of the service.
    Thank you.
    Mr. Hobson. We are going to go by how people have showed 
up.
    Chet.
    Mr. Edwards. Thank you, Mr. Chairman.
    Thank you all for coming. And the single most important 
thing I want to say is what everyone else on this committee 
would want to say--just thank you for your service to our 
country. Whether you have worn our military uniform or not, you 
are every much as part of our national defense effort as those 
spouses who have worn the uniform.
    As someone who does have the privilege representing Fort 
Hood, I see on a regular basis the sacrifices we ask our 
spouses to make and military children to make. And our country 
cannot thank you enough for that.
    I hope that this committee will continue its leadership 
efforts, under the great leadership we have, Mr. Hobson and Mr. 
Olver, to fight hard for quality-of-life issues. It is going to 
be a tough struggle this year. As you know, the budget that 
came out yesterday recommends $1.5 billion cut in military 
construction programs and I hope we will turn that around.
    I would like to ask a couple of questions on this round 
anyway. My first one to Mrs. Beckman, since you are a 
constituent of mine, you are the president of the Fort Hood 
Area Enlisted Spouses Club and you gave me an idea just 
speaking a minute ago, that I never thought of before. I have 
met with our uniform leadership. I try to meet with enlisted 
soldiers and try to meet with spouses. I have never had a 
meeting specifically with the children of military families.
    Can you, through your spouses' club, put together a 
meeting, if I could come down to Fort Hood, where I could have 
a room with, say, the teenagers only? You pointed that out as 
one of the real challenges. Something where I could meet with 
them, where they would not feel intimidated by leadership in 
the Army or even, perhaps, where they could just speak openly; 
do you think something like that would be possible?
    Mrs. Beckman. Yes, sir. That could be arranged.
    Mr. Edwards. I think that would be very, very helpful and I 
will follow up with that.
    Secondly, to Mrs. Kemp and you, Mrs. Beckman on child care, 
I have got a 6-year-old and a 4-year-old, so I have gone 
through some of the challenges, not to the extent that you have 
and others of you have.
    Mrs. Douglas, I know you have a compelling story, having 
four children and two children with medical problems, your 
husband is away in Korea for a year and then deployed 280 days 
the next year.
    What do families do--enlisted personnel especially--if 
their children cannot get in the child care and they do not 
have a grandparent in the neighborhood or the community? What 
do they do? How do they cope?
    Mrs. Beckman. What I have found is that they have been 
going out and looking for a provider off post because at Fort 
Hood, we do have a list of providers off post that are 
certified child care providers; so they go to that list. And 
sometimes if you work on post and you got to off post for child 
care, you are just leaving your off post, where you are close 
to work, and going off post to drop your child off and then 
coming back on post. And right now, with our security, it is 
hard to get back on post because you are waiting in line now to 
get on post.
    Mr. Edwards. Right.
    Mrs. Beckman. So that is the areas that we have found.
    Mr. Edwards. Good point. And if you cannot afford to have 
two cars--Mrs. Kemp?
    Mrs. Kemp. I would say that we have some of the similar 
opportunities. There are home child care providers. There is a 
program that is done by the government for that. However, 
again, being in an area of the high concentration of military, 
there is just not enough of them. And it is, again, much more 
challenging for the very smallest children.
    I have a 7, 4, and a 3-month old. And I know that those 
enlisted folks try the CDC first. And then if they are forced 
to either go to a home care provider, either on-base or off-
base or to one of the civilian day cares; those will be the 
next thing. But again, costs will increase, every time you go 
off-base, so that is a big issue for them, and then drive 
distances. And then I know that if they cannot find anybody, 
then you have to say home, and you know how important those 
second incomes can often be.
    Mr. Edwards. Absolutely. Final question. We have about one 
minute, in respect to the time, for other members, Mrs. 
Beckman, you mentioned in your testimony a program to train 
spouses to be certified child care providers. Is that going on 
at installations all over the country. And if so, there is a 
problem when you move from state to state? Do you have to be 
re-certified in a new state?
    Mrs. Beckman. My children are grown and out on their own. 
From what I have been told on Fort Hood is that there is, like, 
a small class that they do go to, even though they have been a 
provider in another state. It is just, kind of, like what the 
new regulations or updates for that state would be.
    Mr. Edwards. Okay. Very good.
    Thank you all. Thank you for what you are doing for our 
country and for being here today.
    Thank you, Mr. Chairman.
    Mr. Hobson. Sam?
    Mr. Farr. First of all, Mr. Chairman, I would like to thank 
you for having your wife here today. I am looking at the----
    Mr. Hobson. That is going to cost me big money, because----
    [Laughter.]
    Mr. Farr. I am looking at the resumes of these women and I 
am thinking there is a lot of similarity between them and our 
wives and our lifestyle. And maybe someday we ought to have a 
hearing for the wives of politicians about quality-of-life 
issues.
    Mr. Hobson. I am in big trouble now, Sam. [Laughter.]
    Mr. Farr. I admit it. We all may be in trouble, but it may 
be something we really need to do. I mean----
    Mr. Hobson. We would probably have to have a closed-door 
hearing for that.
    Mr. Farr. I have a question. I notice that two of you are 
licensed. Mrs. Kemp is an occupational therapist and Mrs. 
McLean is a RN. In your opinion, what are the percentage of 
spouses working in the civilian community or on-base if there 
are jobs?
    We always hear about the number of families in the military 
now, the increase. I think Mrs. Beckman pointed out that in the 
old days, the Army said, ``If we wanted you to have a family, 
we would have issued you one.'' And we do not think about this, 
what you do in the workforce, because you are always being 
transferred. So is there a high percentage of spouses that are 
working at the same time?
    Mrs. McLean. I think as the years have gone by, I have 
noticed that more women are working. I think if financially 
they can stay home for a year with children, they choose to do 
so; if financially they cannot, they use child care services, 
if they can afford to do so, to go back to work.
    I have always worked. I enjoy my job. I just do not think I 
would never not work. It is just a part of me. Even when I was 
in Okinawa, although I did not work full time, I chose to work 
on a substitute basis as a nurse and as a school teacher.
    I just think if women can stay at home and be financially 
secure within the family unit, they do so. But if not, I think 
more women are going out to work today.
    Mr. Farr. I have a follow-up question, Mr. Chairman.
    Mrs. Kemp. And I think it fluctuates greatly. I think it 
fluctuates across the ranks and I think that it fluctuates by 
location, as well.
    I, on the other hand, have chosen, as much as possible to 
not work, so that I could be home with my kids when it was 
available to us. The burden of child care often outweighs a 
part-time job, and I was not willing to work full time with 
small children. That was a choice I made in my family.
    We know lots of people whose spouses need to work, or who 
choose to because, like Mrs. McLean, it is a part of who they 
are. And they should be able to do that if they need to.
    So I would say at least 50 percent, just to throw out a 
number.
    Mr. Farr. My follow-up question is that, Mrs. Kemp, you had 
an opportunity to live in the housing in my district. I drive 
by it all the time. You lived in Monterey after the military 
closed the base, in the leftover housing that the military 
kept. As I recall, that is pretty old housing. And weigh your 
experiences so that--I guess we want to hear more on the 
negative of that kind of housing, and compared to other housing 
you have lived in; do we need to upgrade that?
    And, lastly, I guess what I would always be interested in 
from any of you is the decision politicians have to make--to 
narrow all your issues down to a couple of priorities. And I 
would ask the generic question, and you do not have to respond 
now, but in your other responses, what is the most important 
thing that we need to do in quality of life? Is it housing? Is 
it child care? Is it teen centers? Is it health care? In your 
experience across the board, was there one issue more glaring 
than any other?
    Mrs. Kemp. Okay. I can speak directly to Monterey. I would 
say, yes, that Monterey has some of the older housing that I 
have seen across the United States. Typically--and I am sure 
that the other wives can say the same thing--they are too 
small, they are falling down, they are crowded, they are on top 
of each other. Many are not handicapped accessible in any 
shape, way or form, for any kind of an exceptional family 
member. So those are big issues.
    As far as what is the most important thing, I think it is 
hard to answer, because we need to have all of these pieces. I 
know that there is not money for all of them right now, so 
perhaps it is easier to look at it on a regional basis. In each 
region, in each installation, what is their greatest need, 
right now, at this time?
    Right now, we have some wonderful family housing in the 
mid-Atlantic region. You guys have provided us with a lot of 
money in the recent years and the housing where I am is 
wonderful. There is not enough of it, but it is certainly a 
vast improvement over what we had. And Monterey does not even 
come close to the things that I am lucky to have now, where I 
am.
    But where we are, like I said, the CDCs are at the bottom. 
So that is how I feel I can answer that question best.
    Mr. Hobson. Any other comment?
    If not, Mr. Boyd.
    Mr. Boyd. Thank you, Mr. Chairman, and thank you for 
holding this hearing and, ladies, for coming and testifying.
    Like Mr. Olver, Mr. Chairman, I only had Mrs. Beckman's 
written testimony. We did have the bios on the others, but I 
assume that we will have copies of the written.
    Okay. Mr. Olver and I were in the driver's seat here by 
ourselves.
    Listening to your testimony made me somewhat reflective, in 
some sort of a sentimental way, about my own experience. My 
wife and I got married about the same time I went on active 
duty in the Army in 1969, and I was just curious about, Ms. 
McLean, your comments concerning housing. I remember the no 
credit cards, the one car, the really ratty housing that we had 
to find out in the community, because there was not housing 
available on the post. But I do not think it was quite as bad, 
because I remember I had only an eight-month stay at Fort 
Leonard Wood. You ever been there?
    You are lucky. [Laughter.]
    And then they got housing. So I know that the situation has 
deteriorated since 1969 and the Vietnam War. Thanks to the 
efforts of the chairman and ranking member and others, maybe we 
are reversing that trend.
    I have two questions. Mrs. Douglas, you brought these 
issues to the table in your comments, but you said that there 
was an issue of college in-state tuition fees. You owned a home 
in North Carolina, but you understand when your husband gets 
assigned to some other assignment that your daughter will lose 
that in-state status even though you own the home and your 
established residency is there. Walk through that if you could 
please.
    Mrs. Douglas. But when we PCS, when we leave the state, we 
will no longer own that home, so we will no longer be in-state 
residents. So because Stephanie is a dependent of ours, she 
will also fall under, you know, whatever state we will be in, 
you know, when we move. So, that is what they have told us.
    Mr. Boyd. Well, you have a permanent residency in another 
place?
    Mrs. Douglas. Florida is our permanent residence.
    Mr. Boyd. Well, that is good since it is Florida. 
[Laughter.]
    I hope it is in North Florida.
    This, obviously, is an issue that, Mr. Chairman, I do not 
know if we can deal with. Maybe we can; maybe we cannot. It is 
something we ought to consider. I know those requirements are 
established by the state, and in many cases, they are probably 
established by the individual institutions, universities, in 
some states. But it is something that we certainly ought to 
look at.
    The other question I have is one that you raised of the 
four-by-four classes. And I would like to hear others, too, if 
you have any comments on this. The reason I want to hear more 
about it is it just came to my attention recently that Bay 
County, Florida, which is the home of Tyndall Air Force Base, 
is considering going to the four-by-four system. And we 
normally try to keep our noses out of the local school board's 
business, but maybe it would be a good time for us to enter 
this fray.
    Talk me through a little bit more about that. I have not 
heard a great deal about it being controversial.
    Mrs. Douglas. I had not heard about it before, either.
    The school system we were in just had the regular courses, 
you know, seven classes per day. They just started this two 
years ago. And it is not a bad thing for the county, because 
the children that live in that county, you know, have the 
luxury of staying in that county for all four years. But being 
military, of course, you do not always have that same luxury.
    What happens is, the credits are based differently, 
because, just say, you only complete one semester, and then you 
PCS to another state that does not have this--or even another 
country, because it is not always statewide.
    What happens is, let's say my son had taken English and 
algebra the first semester; he has completed those things. 
Well, he did not get to take history and chemistry. So when he 
gets there, he is half a year behind, because he should have 
already been taking chemistry and history.
    So that would make it where he possibly could not graduate 
if he was in his senior year, which is something we are looking 
at. We may be PCSing, and he may have to start at another 
school his senior year.
    Mr. Boyd. Let me follow up. Do you see the problem more as 
the four-by-four class, or the rules of the receiving school 
district?
    Mrs. Douglas. Well, if they will not be flexible, then it 
would probably be on the receiving end, that part of it.
    I have not had to experience this yet, but just as I said, 
I have the military wives that I am friends with at Moody Air 
Force Base, and that county has the four-by-four. And when they 
moved from Hurlburt Field and they moved up there, that is when 
they found out that their son would not graduate, because they 
were--vice-versa, when they moved there, that he would not 
graduate because he did not have--and that is what it was, his 
chemistry. He did not have enough credits.
    Mr. Boyd. Do any of you other ladies have comments or 
experiences with this?
    Okay. Thank you very much, Mr. Chairman.
    Mr. Hobson. Norm?
    Mr. Dicks. Well, thank you, Mr. Chairman. I want to 
associate myself with all the comments that have been made here 
today about our appreciation for all of you, and what you do 
for our country.
    I have the honor of representing the Sixth District in the 
state of Washington, where we have Fort Lewis, McChord Air 
Force Base and the Puget Sound Naval Shipyard, Trident 
submarine base Bangor and Keyport.
    And that is why I always fight to get this last seat on 
this Committee.
    Mr. Hobson. And the B-2.
    Mr. Dicks. Tell me again; we were talking about the day 
care centers, and you were saying there was a list of 300 
people waiting to get day care. Is that what you find across 
the board: everywhere there is a backlog?
    Is there any base you have ever been to where they had an 
adequate day care?
    Mrs. Kemp. The base that I am currently living on has 
adequate day care.
    Mr. Dicks. So you can take care of all the kids?
    Mrs. Kemp. It is a small base. It is very far out, with a 
limited number of military personnel. And so, therefore, they 
are able to provide enough spaces.
    But it is so far out, that even if we had spaces in a few 
of the classrooms, it would be an hour drive for, perhaps, a 
service member who was up at the naval station to drive down, 
drop their child off and drive back to work, drive down after 
work, pick them up and take them home.
    Mr. Dicks. You talked about off-base housing. Is it 
adequate? I mean, can you get good off-base housing, or do 
people take advantage of the situation and just, kind of--and I 
have had this problem in Bremerton, my hometown; I complained 
bitterly to the local people there that we need to upgrade the 
housing, you know, that is being rented to the military.
    And tell us your experiences on your off-base housing.
    Mrs. Kemp. My experiences in the Virginia Beach/Norfolk 
area are that there is not enough off-base housing, civilian 
homes available in the ranges that your folks need them.
    There is lots of real high-end, large homes that are 
available, but not apartments and smaller single-family homes 
that fall either within our BAH, which is our housing 
allowance, or they are even available if we are willing and 
able to put in some of our own money. They are just not out 
there.
    When we moved to Virginia Beach, we had three days to find 
a place to live. The housing list was two and a half years for 
a junior officer, and so that was not an option. We went out 
into town; there were exactly four houses that fell within a 
price range that I could afford, and the rentals were above 
anything that we could afford, even adding in money of our own.
    So we did have to buy a home, even though that may not have 
been our first choice. And it was very limited. And we ended up 
buying a home that had a very poor school district. And I then 
had to put my son into private school. And that is a very 
typical, kind of, experience.
    Mr. Dicks. You know, each of the bases is supposed to go 
out and inspect the housing in the community, to make sure they 
are up to standards. Has that been done on the bases where you 
have been?
    Mrs. Kemp. I am not familiar with anything like that.
    Mr. Dicks. See, that is one thing that some people do not 
understand. The bases are supposed to go out in the community 
and look at the housing and make sure that it is up to 
standards. And sometimes that does not happen. And maybe that 
is something our committee should take a look at too, Mr. 
Chairman.
    I agree with you on this; I think this is a major issue.
    What about Boys' and Girls' Clubs? Are there any Boys' and 
Girls' Clubs on defense bases? A YMCA? I mean, anybody else--I 
mean, whoever wants to comment can--no Boys' and Girls' Clubs?
    Mrs. Kemp. Yes, we do have some in the mid-Atlantic region.
    Mr. Dicks. That are on the bases for the kids?
    Mrs. Kemp. Yes, sir. They are on the bases. They are run in 
the youth centers. They are very respected.
    Mr. Dicks. I would think we might want to look at that, too 
because, you know, the government does put some money into the 
Boys' and Girls' Club, which I think is well worthwhile for 
after-school things.
    I mean, certainly I think the bases would be a fantastic 
place to have those kind of facilities. Maybe we ought to----
    Mrs. Kemp. They are very popular where we are.
    Mr. Dicks. Yes.
    Thank you, Mr. Chairman.
    Thank you very much for coming here today. We appreciate 
it.
    Mr. Hobson. Mr. Skeen?
    Mr. Skeen. Mr. Chairman, thank you.
    Mr. Hobson. Do you have any questions you would like to 
ask, or any comment that you would like to make?
    Mr. Skeen. Yes, I have a comment.
    Mr. Hobson. Carry on.
    Mr. Skeen. I want you to know that this is a hallowed 
situation with this committee. This is the Agricluture 
Committee's Hearing Room--where I first became Chairman. I just 
want you to know that this beautiful building--this room is 
well decorated, because I had the Agriculture Appropriation's 
ladies decorate it.
    Mr. Hobson. Yes, sir.
    Mr. Skeen. So, thank you for letting me sit in. Ladies, you 
are doing a good job. It is a good thing and you get things 
done right. That is what my wife tells me all the time. 
[Laughter.]
    But I just wanted you to know this is a hallowed hall; that 
the military is very important to us, too, in New Mexico.
    So thank you, Mr. Chairman. Good piece of work.
    And with that, I am going to get out of here and go let 
some other group of folks come up here to talk. You have 
certainly done a good job of telling us what the situation is. 
And the women really run the Army.
    Have a good day. My time is up. And I want to get the heck 
out of here before I get into more trouble.
    Mr. Hobson. Okay, thank you, Joe. [Laughter.]
    Mr. Skeen. Thank you all very much.
    Mr. Hobson. And we thank you for your service over the 
years, too.
    Mr. Skeen. Ladies, thank you. Have a good day.
    Mr. Hobson. Thank you, Joe.
    Mr. Miller.
    Mr. Miller. Thank you, Mr. Chairman. And thank you for 
having this hearing. I think it is real important that we hear 
on these quality-of-life issues. And you all are the ones who 
keep the military running, and we appreciate what you are 
doing; but we appreciate your input.
    And I appreciate what our Chairman and Ranking Member have 
been fighting for. They really have been fighting to improve 
quality of life; and we have been seeing some, hopefully, 
improvement as the money is increased. Hopefully we can do 
better this year; we have some concerns.
    Let me ask a couple questions to clarify some things, and 
go back to the day care issue. I have a granddaughter back at 
home, and one of the sources of day care sometimes is--I am not 
sure this is the right word--black market. A woman who has 
children will take care of other children in their home.
    Is that common on military bases? Is that even legal, to 
get paid to take care of an extra couple of kids? Or is there a 
black market--and ``black market'' may not be the right word to 
use, but----
    Mrs. Kemp. I can answer to that.
    It is very common to have home care providers, is the term 
that we use.
    Mr. Miller. Right.
    Mrs. Kemp. There is a system in place that is--I am not 
sure if it is a DOD or a government, but it is definitely a 
program where women can be certified to have children in their 
home. And it is also possible off-base, out in the civilian 
community.
    But yes, I can tell you that there are plenty of women out 
there that are doing it who have never been certified. And if 
you are spouse who needs to work, you will find whatever place 
you can to put your child, and it happens all the time.
    Mr. Miller. But if you are certified you can do it in your 
base housing. I mean it is limited how many you can handle, of 
course----
    Mrs. Kemp. You can do it in base housing. You have a 
structure. It is very strict; it is a wonderful program. They 
are inspected regularly. They have to provide certain types of 
foods and cleanliness, and they have a limited number of 
children they can take by age. It is a wonderful program.
    Mr. Miller. For paying for that, the base day care 
program--there is a fee for it, but I assume it is very heavily 
subsidized.
    Mrs. Kemp. The CDC is on a sliding scale based on your 
rate, yes.
    Mr. Miller. Okay. But if you go to a private home, you are 
paying what--you know, they feel--Mrs. Douglas, a question you 
mentioned, and clarify with me, where do you claim resident? 
And you mentioned Florida is where is you are a resident, just 
because you are based there now. But I guess you are in North 
Carolina now, is that right? But you still kept your Florida 
residence?
    Mrs. Douglas. Yes.
    Mr. Miller. Is that common that you frequently will keep a 
residence in one state as you move around, and you, kind of----
    [Laughter.]
    Mrs. Douglas. It is for tax purposes.
    Mr. Miller. Is that----
    Mrs. Douglas. Well, we were stationed in Florida for 10 
years. We were at Eglin Air Force Base and we were at Hurlburt 
Field. So we were there.
    Mr. Miller. What address do you use in Florida? Or do you 
have an address?
    Mrs. Douglas. No. We do not have an----
    Mr. Miller. Just do it for your taxes.
    It is just not the military that claim Florida. We 
appreciate it because it, you know, you have no inheritance tax 
or state income tax.
    Mrs. Douglas. Well, we want to go back to Hurlburt Field 
after we finish here, so.
    Mr. Miller. Is that true with lots of families, they just 
keep--is Florida a popular one because the tax issue, is that 
it? Or do you claim your parents?
    Mr. Hobson. Chet, you better jump in: Texas is too. 
[Laughter.]
    Mr. Edwards. No income tax.
    Mr. Hobson. You will find the states that do not tax the 
military, but the rest of it is there naturally. You will also 
find people retiring near major facilities that have hospitals 
and commissaries and BXs and that do not tax; am I right?
    Mr. Miller. Let me ask one. All the years that each of you 
have been with the military, have you seen in recent year a, 
you know, improvement in its quality-of-life issues. I mean, we 
have seen an increase in the total dollars flowing out of this 
committee, but are you actually seeing it happen not only at 
your bases, but at the other bases? And what are you seeing 
that you think--have you seen a turnaround in the past decade 
or so?
    Mrs. Beckman. I believe that we have. We have been in the 
military 27 years with my husband, and then I was a military 
brat, as well. I believe housing has improved upon what it used 
to be. There is still a long way to go, but there still is a 
lot of improvement.
    At Fort Hood alone, some of the quarters that we have there 
for our family members were built in 1947. The quarters that I 
live in now were built in the 1970s. But they are improving 
them.
    So, yes, they are coming up in housing areas, as well as 
the child care, because it used to not be that we had those 
kinds of things. And youth services, we did not have those 
years ago. Programs out there just for the spouses alone were 
not available. So we are moving up. It is just that we need to 
expand upon what we are moving up.
    The Army is getting larger. The family members now that are 
coming in are no longer just single soldiers. These soldiers 
coming in have got families of their own; some of them two to 
five kids. And that is very hard for a family on a private's 
pay when you have two to five kids.
    And I think one of the reasons that they do come in is 
because we are improving. It is just not real, real fast, but 
we are improving. And it is a good quality of life for them. 
They know that they got a pay check and they know that 
eventually they will get their housing. And they are going to 
be taken care of; their families are going to be taken care of. 
So, yes, our quality of life is improving.
    Mr. Miller. Thank you.
    Anybody else wish to add?
    Mrs. McLean. I think I have to concur with Mrs. Beckman. 
Over the years I have see improvement in quality of life in 
base housing. We did use child care for a while, and during 
that time it was excellent. We have also seen an improvement in 
health care, and I think I closely scrutinize that; as a nurse, 
my expectations may be a little bit higher. Even in recent 
years I have seen that improve.
    The one thing that I have to say or make a comment on is, 
within the hospitals. Recently I was a patient at DeWitt 
Hospital, and the care I received there was excellent. The care 
that I received as an outpatient at Walter Reed was excellent. 
And some of the clinics that we go to for acute care, the 
military personnel that I have seen there, treatment has always 
been appropriate.
    The downfall that I see at some of the clinics are some of 
the contracted physicians that are brought in. It almost seems 
at times difficult to hold their attention as to what your 
needs might be.
    So I cannot really say enough about the military people 
that I have received health care from. The only negative thing 
I have to comment on is, some of the contract physicians that 
are brought in: Some of them leave a lot to be desired.
    But definitely there has been an improvement in quality of 
life within the military.
    Thank you.
    Mr. Miller. Thank you, Mr. Chairman.
    Mr. Hobson. You should read a report that we have had--I 
will send you each a copy--concerning the licensing of 
physicians and contract physicians and that relating to the 
military. I hope that these recommendations are followed, and 
some of that should improve.
    Also the commander of that facility, wherever it is, is 
directly responsible for those contract people. And if they are 
not executing their duty then, you know, that is where we come 
in.
    But that we have looked at the licensing of physicians, the 
licensing of other professionals. And the fact that many of 
them were not required to maintain their continuing medical 
educations and their continuing licensing procedures. And that 
is now changed. And everybody should be up to snuff in their 
specialities that are on a base.
    Now, that does not always mean they are going to do it 
right, but it is a step forward than where we were.
    And everyone will be duly licensed. There are no more 
licenses that are suspect anymore in the military or in the VA 
or in the Indian Health Service. That should have changed, and 
changes within the last year.
    So if you do not see it, you need to come back and tell me, 
because we try to fix these things, but if we do not hear back, 
we do not know.
    Some guys actually want to pull a surprise on writing about 
this, and to the military's credit, instead of running and 
hiding or defending, they said, ``We do have a problem and we 
are going to fix it.'' And we have been watching to make sure 
it is fixed. So if it does not get fixed, this committee needs 
to know about it and the authorizing committee needs to know 
about it. We only whack them on their money, but we have some 
other persuasions that we use and we try to make sure that the 
authorizing committee knows what we are doing, and the big 
committee that I am on.
    Robert.
    Mr. Aderholt. Thank you, Mr. Chairman.
    Thank you for being here today.
    I came in a little bit later to the hearing, so some of 
this you may have already addressed in some way. But for those 
of you who do live on-base, I would just like some of your 
thoughts on the current physical conditions of your house and 
what are your thoughts, inputs how you would rate it, and just 
a little brief overview of what you would like for us to know.
    Mrs. Beckman. I live in a nice community. Like I said, the 
housing where we are at, it was built in the 1970s.
    Overall, they are nice, it is just that now they are 
starting to shift. So now that they are shifting, pipes are 
getting little holes in them. Last week, actually, we had pipes 
leaking between the walls, so you had water coming--I could not 
find it. It was on the floor, but it was not coming from the 
ceiling. And I never thought that it was coming from inside of 
a wall. And they said that, kind of, helps with the fact that 
the pipes are old and that the house is starting to shift now. 
Because the floors are starting to have a slope, which makes 
your tiles start to crack.
    But they have been very well about coming out and doing 
their piecework of putting this piece back together and that 
piece back together. So I think with the new RCI program that 
we have at Fort Hood that probably as that program kicks off a 
little more, it will get a little better. But I have had no 
problems when I have to get maintenance done. They are there to 
do it.
    It is just that they have said that it is money on just 
them not being able totally take something out and replace it 
and putting something new in there that they have to just keep 
fixing that old thing or keep just doing the patchwork on it. 
But overall, they are just old, and once they start doing the 
new face-lifting and things like that, it will probably get a 
little better.
    Mr. Hobson. Okay. We might say that the RCI project is one 
the Army is doing--some members may not know because they have 
not been there on this--I do not know if you went with it or 
not to Fort Hood, but Fort Hood is going to get about 5,500 
renovated and new facilities; almost the total base is going to 
be privatized in housing.
    So it is going to be the Army's first--well, they did Fort 
Carson but it is not as big--but Fort Hood is the biggest one 
so far that the Army, that we put forth.
    There is one in Norm's district in Washington that the Army 
has. It is about 4,000 houses, and Fort Meade is about 3,500. 
And that will be almost all new. We are trying to get more new 
wherever we can rather than just renovating, although Fort Hood 
is a little different in that respect.
    So there are some big changes. The Air Force is doing some. 
Navy is doing some. They are generally a little smaller, 
although the Navy is doing 3,300 houses as we speak at San 
Diego. And I feel like I live in Monterey, because Sam is 
always on me about Monterey. We have been fighting that for a 
long time. It costs me too much whenever I go back there in the 
bill.
    But those are some changes that you are going to begin to 
feel as we move further into this program. But go ahead and 
tell him----
    Mr. Aderholt. Anybody else have any insights they would 
like to share?
    Let me just ask, Mrs. Beckman, you had mentioned that when 
you called, they would have to fix the pipes; are those usually 
responded to in a reasonable time?
    Mrs. Beckman. Yes, sir. They usually will respond between 
48 and 72 hours. Depends on what the urgency is. In the 
quarters that I have, if I had, like, you know, a faucet in the 
bathroom was leaking, if I can turn the water off, I do not 
find that an emergency because I have a backup rest area. But 
for some quarters, they do not have that, so it would be an 
emergency. But they are very well keeping their word and coming 
in between 48 and 72 hours. Unless it is really, really 
extensive.
    With my quarters when I had the leak, they could come in 
one day and they bust the walls out--we had three to five holes 
where they finally started cutting the walls, looking for this 
leak at. Then they came in and they patched it, and now we are 
waiting for them to come back and do the painting over that.
    Mr. Hobson. You also have to remember she is the sergeant 
major's wife too. [Laughter.]
    Mr. Aderholt. What about the rest of you in terms of the 
time between the call and actual someone coming up and----
    Mrs. McLean. My most recent experience with quarters was 
between 1995 and 1998 when we were stationed in Okinawa, and I 
have to concur with Mrs. Beckman. The few problems that we did 
have, the response from maintenance was in a timely manner. And 
we also had an opportunity to use a maintenance closet for 
small needs. If we needed new light bulbs, or whatever you did 
not have but needed, the military would provide for you to go 
down and check those things out at no cost and repair it; it 
was yourself with something you could do yourself.
    But normally, I think we had one issue that was an urgent 
matter. There was some wiring or an outlet that we were 
concerned about, and they were out in a timely manner. So, no 
problem there.
    Mrs. Kemp. I can also concur with that. Currently in the 
base that we live on right now, they come usually within 24 to 
48 hours, and again, depending on how quickly the emergency 
level of the situation.
    I also found in Monterey where the houses were much older 
that it was, kind of, the same thing. They were fixing the 
older structures just to maintain them, but again, they always 
came out in a timely manner. We always felt confident that if 
we had a problem in our homes, that they would be fixed, and 
that is a really positive thing.
    Mr. Aderholt. Mrs. Douglas, do you have anything?
    Mrs. Douglas. It has been a while since we lived in base 
housing.
    Mr. Aderholt. When you were there----
    Mrs. Douglas. When I was there, things were fine. The only 
complaint I had was when we moved from Kirtland Air Force Base, 
I was several months pregnant, and our daughter was 2\1/2\. 
When we got to Eglin, they would not let us have a three-
bedroom home, because they did not count my unborn child as a 
person. So we had to move in a two-bedroom house, and then when 
the baby was born, then we got to move again, so we can be in a 
three-bedroom house. So, some of the rules are very strange.
    Mr. Aderholt. That is something we probably should look 
into. That is a good point.
    That is all I have, thanks.
    Mr. Hobson. One common denominator might be that the MILCON 
housing at your ranks are generally smaller than the community 
housing across the board, and we are trying to change that. 
Because what we build today, even in the rehab stuff, there 
will be the community standard and not to the smaller MILCON 
standard, which I think is going to benefit the families if we 
get it on-line.
    Virgil.
    Mr. Goode. Thank you, Mr. Chairman. And I want to say 
thanks to you and express commendation to you. As Mr. Skeen 
indicated, you are focusing on the spouses. You did last year 
and this year, and I think that is a great help to how this 
committee needs to go. And I want to thank you for doing that.
    I also want to thank the spouses that are here today for 
being with us.
    I would like to ask Ms. Beckman, just on your experience, 
what percentage of Army spouses and their families cannot get 
base housing when they would want it? Just where you have been?
    Mrs. Beckman. How many cannot?
    Mr. Goode. Yes, just a percentage, 5 percent, 10 percent.
    Mrs. Beckman. I did write a figure down. On most, it is 
usually from the ranks E-1 through E-6. At Fort Hood, because 
we are so large, we carry about 4,000 people on a waiting list 
for quarters. I mean, on quarters.
    Mr. Goode. And they are all below E-6?
    Mrs. Beckman. Yes, that is what I was told. That they are. 
We actually have----
    Mr. Goode. Now what is the difference----
    Mrs. Beckman. I could not put a percentage on there, but I 
know that the most sought-after housing bedroom size would be 
two bedrooms, and that is a 10-month waiting list for a two-
bedroom. So if you are E-1 through E-6, as maybe 10 percent----
    Mr. Goode. Say the cost to a PFC or an E-3 and their 
family, by not getting base housing, how much extra would you 
say that costs them a month, ballpark?
    Mrs. Beckman. How much it costs them to live off post?
    Mr. Goode. Yes, out of pocket.
    Mrs. Beckman. Out of pocket?
    Mr. Goode. Right.
    Mrs. Beckman. I would say probably 30 percent out of their 
pocket to live off post.
    Mr. Goode. Thirty percent more than it would if they were 
on----
    Mrs. Beckman. Correct.
    Mr. Goode. And that counts, as the chairman said, VA aid.
    Mrs. Beckman. Because they are taking into the effect that 
they are going to be paying electricity, water, their garbage 
pickup, those kinds of things. And probably, it depends on how 
far they went out, on how much they were putting into gas to 
get onto post, so you could factor that kind of things into 
them as well.
    Mr. Goode. At Fort Hood, how far do most of them live that 
are off the post?
    Mrs. Beckman. Usually they are not that far out. Maybe 20 
minutes, 25 minutes out.
    With our new RCI program, the whole goal I am assuming is 
that there will be no out of pockets expense for soldiers and 
their families. At the most, I think at the present time, in 
some of the areas outside of Fort Hood, they might be putting 
out just a little more than 15 percent. It just depends on 
which area they went to. There are some areas like there 
further out, like in Harker Heights, would be a little more, 
because the housing there is a little more.
    So I would venture to say safely for the most probably 15 
percent. If they lived within Killeen Copperas Cove, where the 
housing is cheaper. But it depends on what size they got. And 
it is like we were talking about earlier with the realtors when 
you go out and--I believe one spouse said about her quarters. 
You know, they find out what the rank structure is.
    You have to remember that with military, military personnel 
are the ones that walk around with their rank, years and 
paycheck on their shoulders. Real estate agencies, everybody 
knows what they make. So there is no avoiding some of that for 
housing. You know, when you want to go out and get a house, 
they know what you make.
    Mr. Goode. Why do not you call them up on the telephone and 
just ask them that? Do not even say you are with the military.
    Mrs. Beckman. Probably would work.
    Mr. Goode. All right.
    Mrs. Kemp, what would you say? With regard to your 
experiences in the Navy, how many, percentage wise, cannot get 
military housing that would want it?
    Mrs. Kemp. I can tell you that in the mid-Atlantic region 
we have over 35,000 families that would like to have a house, 
and we actually have units for less than 4,000 of them.
    Mr. Goode. That is 30,000.
    Mrs. Kemp. Ten percent. And they vary. And like I said, I 
did say earlier----
    Mr. Goode. And Ms. Beckman said the waiting list was about 
10 months for an E-3. Give me comparable----
    Mrs. Kemp. For waiting list? Enlisted housing waiting list 
is one to two years, and junior officer housing is two to three 
years.
    Mr. Goode. Mrs. McLean, what do you say?
    Mrs. McLean. I have to be honest to say that recently my 
experience with on-base housing is very limited. My family and 
I have lived out in the community the majority of the time my 
husband has been in service. And my most recent experience was 
over in Okinawa, and that for us was a six-month wait.
    Mr. Goode. What was the off-base housing like at Okinawa?
    Mrs. McLean. It was comfortable. It was small according to 
American standards.
    Mr. Goode. All right.
    Mrs. Douglas, I know you said you have not experienced 
military housing much lately.
    Mrs. Douglas. No. But I did write down what our Basic 
Allowance for Housing (BAH) is. My husband is an E-7, and our 
BAH is $724 a month. Our mortgage payment is $930, plus 
utilities. So we figure that we spend over $400 a month out of 
pocket just for our house, you know, to live.
    I am sorry?
    Mr. Farr. You are buying it?
    Mrs. Douglas. Yes, we are buying it.
    The rent when we looked in that area for something 
comparable, that was the cheapest way for us to get a home, was 
to buy it, because with having four children--even the square 
footage, what we have right now, this is the biggest home we 
have ever lived in. It is right at 2,000 square feet.
    Mr. Goode. What is your length of the mortgage?
    Mrs. Douglas. Thirty years Veterans Administration. That is 
the cheaper way to go since we know we are not going to be in 
that house forever.
    Mr. Hobson. Are you personally liable on that mortgage or 
can you walk away from it?
    Mrs. Douglas. Well, if we walk away it will foreclose. That 
is not very good, is it?
    Mr. Goode. Well, I have got a problem at Pinesville, where 
that actually happened on the VA loans. That is a lot. And I am 
trying to fix that.
    Mrs. Douglas. The woman across the street from us was a 
single mother in the Army, and she did walk away from that 
house across the street.
    Mr. Goode. It does not help your credit.
    Mrs. Douglas. No. I would not suggest it. No.
    But I was just going to say that it is quite expensive if 
you cannot get base housing--how much more. And my husband, 
doing the job that he does, gets different hazard duty pays, so 
I cannot imagine what it would be like for another E-7 to have 
to--they would not be able to afford where we live, because 
they do not get those extra pays.
    Mr. Hobson. Let me give you a real tragedy in that, Virgil. 
If you do a PCS move to Korea, which is unaccompanied, your 
family is left here and you do not get the same kinds of 
benefits that you have been getting. But you are still here and 
he is over there. So you get a lot less money and no tax breaks 
or anything.
    Now, if you go on a TDY to Kosovo or Bosnia, it is a lot 
better deal. You get all kinds of tax breaks. You get all kinds 
of pay. And you do not lose; because it is not a PCS change, 
you do not lose.
    Now, I think that is a terrible inequity that we do to 
families today, and I think that ought to be changed. And I am 
trying to work very hard to change that, because if you look at 
where people do not go--the number of people they have to ask 
to go to Korea, to get people to go and then we treat them like 
that, it just drives me nuts. And we are trying to work on 
that. But that happens.
    I am sure there are other PCS changes like that, too. The 
Navy has some of that same problem when people are out on 
ships, and we are trying to work on that, too. Plus when the 
people are on ships the single people do not have any place 
when they come back off duty.
    So these are quality of life. I want you to know that we 
are trying to work on those things and this committee is 
becoming more knowledgeable about those things.
    My active duty experience was when I was a senior in law 
school, my wife was teaching school and putting me through, I 
got activated and I went to France, but I did not go as nice a 
place as you did. I went to Etian, which is still out in the 
middle of nowhere. I have been back there a couple of times and 
looked at my barracks.
    But when anybody is deployed, whether it is a PCS change or 
TDY change or whether it is accompanied or unaccompanied, it is 
difficult and it is a strain on families. And we are having 
this right now in the call-ups that is happening with the Guard 
and Reserve right now, we are having a lot of trouble with 
that. So it is a problem. And the committee is trying to work 
on that.
    Anybody else have any other comments? We are running a 
little long, but that is okay. This is important. And we use 
these as learning experiences for all of us, because, you know, 
we try to go out a lot and look at things, but, you know, many 
of the people have not been in the service or on active duty.
    I think Virgil is a reservist and I think Mr. Boyd was on 
active duty, but other than that, in the Congress, generally, 
it is a big difference today. And I was not on that long. As 
John says, I have got more mileage out of being on active duty 
for the short period of time I was as an enlisted person, but I 
was not real happy about doing it when I did it. But I am glad 
I did now, because I think I understand a little better what 
people go through.
    When you land in a different country and you do not speak 
the language--I never did with family, but I am sure it is got 
to be--it can turn out to be a wonderful experience. But I am 
sure, as you said, Ms. McLean, the first few months are very 
difficult, and especially when you have to wait so long to get 
on-base. I cannot figure out why they cannot coordinate that 
better. And if you had to wait at your rank, I wonder what even 
the lower ranks wait over there. You know, you were probably a 
little older and little more mature than some of these young 
families, and that is not good for retention when we treat the 
young families the way we do. And we need to talk with the 
military better about how we handle these things.
    The lower ranks being with family as much as they are 
today, it is different than when you came in the service today. 
That is a phenomena that we have to work with.
    When we go on these bases--I was just in Aviano, and there 
are a lot of young children there with the families. And, you 
know, there are some on-base, some off-base, and how they all 
meld together. Now, they do have the DoD schools overseas, that 
we only have a few in this country. We are not going to create 
a DoD school system in this country. The DoD schools we have 
now were built for a very sad reason, which is probably, 
hopefully, gone now. We only have six or seven left, I think, 
on the continent, most of them in the South; one is not. And I 
question why it is not.
    Mrs. Douglas. Fort Bragg has some.
    Mr. Hobson. Yes, and those were built for a reason, which 
hopefully has passed. But there is one in the North that still 
exists, which I do not understand why, but it does. It has very 
powerful backers.
    But in any event, Chet, Sam?
    Mr. Edwards. Mr. Chairman, I know we are tight on time, but 
if I could follow up, because this is a great opportunity for 
our committee.
    It is one that, over the years, we generally have not had 
military spouses testify until Chairman Hobson thought of this, 
and pushed it over the last several years.
    Just very quickly, a couple comments and question. Mrs. 
Douglas, there is a Military Family Coalition; former General 
Pete Taylor, former III Corps commander at Fort Hood, has been 
involved in this. He set up an organization of schools and 
military families all over the country to try to address both 
the high school problems you have dealt with and the 
consistency. Also he met with me recently and mentioned the 
problem of tuition for colleges for our military children.
    He pointed out something that I did not know. Several years 
ago, Congress passed legislation for children graduating from 
high school in the District of Columbia. They get in-state 
tuition in any state of the country, and the Congress pays for 
the difference to the university between the out of state and 
in-state tuition.
    The question to me was--which was a good one and I am 
looking into it--``If Congress can do this for children who 
just happen to live in the District of Columbia, why shouldn't 
we try to do that for military families and their sons and 
daughters?''
    My staff is looking into that. I want to find out what the 
cost would be. We are under tremendous budget constraints. But 
I think you have raised two very good questions, and if you 
have not plugged into this Family Coalition you might want to 
pursue that. I think you are really going to do good work. I 
know Pete Taylor; he is a modern-day version of General Patton 
and he will work to get things done.
    Mrs. Douglas. Thank you.
    Mr. Edwards. Mrs. Beckman, you mentioned RCI in your 
written testimony and, as you know, I care about it deeply. I 
worked on it for five years. This committee worked on it; it 
would not be a reality at Fort Hood today if it were not for 
Chairman Hobson and his special leadership in this committee--
Mr. Olver, and all the members of this committee. We have a lot 
at stake and invested in this at Fort Hood. When we did the 
groundbreaking, the Army leadership said it is the largest 
military housing improvement program in the history of the 
military.
    The future of RCI could well depend on how well it goes at 
Fort Hood. I would just plead with you to give me feedback on 
what is going well with it, what is going badly, or what 
problems are. I am especially interested in knowing the impact 
on morale of service men and women. I hope that, as Mr. Hobson 
said, as this program begins to develop at Fort Hood, more and 
more soldiers and families at Fort Hood will realize this is 
going to make significant, positive difference in their quality 
of life. But if at some point it is not helping morale, I would 
like to know about it.
    Maybe I will just finish with this. I would like to ask you 
what your general perception is, in terms of speaking for other 
service families at Fort Hood. What is their general perception 
of RCI? Is it something they really do not know much about yet, 
or is something they are excited about, or something about 
which they are not quite sure what to think? What are the 
perceptions as of today?
    Mrs. Beckman. I had some spouses come out and talk to me 
about the new RCI program and along with their area of quarters 
that are not affected yet. The overall is they are very excited 
about it because they have been able to see some progress in 
McNair Village, which is our oldest village, which was built in 
1947.
    They have done a facelift on that by going out and changing 
the old ugly-looking brown yucky color that was outside and put 
some nice siding up. They have covered the garbage cans sitting 
out in the front; they have made a little barrier there so that 
is not visible. It is very eye-pleasing right now.
    On the inside I got to see an old set of the McNair Village 
and the new ones that they have just redone, and they are just 
wonderful. They have carpeting in some. The houses are newly 
painted. They got nice appliances in them.
    The overall right now is that they are very excited about 
that, and they are looking forward to the advancement of this 
RCI program. There still are questions being raised, because 
they are not sure yet about what the outcomes are going to be, 
but they are very excited about the new housing.
    Mr. Hobson. A $5 million project; it had better work. 
[Laughter.]
    Mrs. Beckman. And they are counting on you to make sure it 
does.
    Mr. Hobson. Please work with it.
    Mr. Farr. Mr. Chairman, are you finished?
    Mr. Hobson. Sam?
    Mr. Farr. I know we have to go vote, but I want to say a 
couple of things.
    First of all, I hope you understand that this committee is 
your consumer committee. And thanks to Mr. Hobson's chair, he 
is really taken on these issues about quality of life in the 
military. Not just spending money for construction; it is what 
the money buys. And so I hope you feel and will tell others to 
use this committee to voice your concerns. If there is anybody 
that can bust the bureaucracy, we think we can.
    A couple of things that I would like to suggest, Mr. 
Chairman, and it is out of the same hearing you had last year. 
We have done a lot to push the military to do off-the-shelf 
buying of equipment and computers and other things. We have not 
pushed them much to do off-the-shelf inventory of personnel and 
where they are moving to. And it seems to me that a lot of 
these questions are about an assignment to move, but on the 
receiving end, nobody really knows you are coming, or is 
prepared for you. Even in the questions that the staff 
prepared, which were excellent, we did not get to half of the 
questions.
    But the whole idea of spouses looking for employment, 
networks and databases and employment advocacy councils, does 
the service provide you to use Continental United States 
(CONUS) military air flights to look for a job in the new area? 
Are military spouses eligible to receive unemployment 
compensation?
    A lot of these things it seems to me in the private sector 
we do. When there is a defense contract letdown--I know in 
California we know the company, Lockheed, is not getting a 
renewal of a contract whereas Boeing or somebody else may. And 
instead of having this massive layoff of aerospace workers who 
have been working for one company, the California Department of 
Employment, working with the Department of Defense, is able to 
transfer all of these employees from one company to another, 
because the new company is looking at a big hiring policy for 
their new contract.
    It seems to me that what we have done in the civilian 
sector, particularly on military defense contracts, we have not 
done for military personnel in the real estate market. And the 
real estate market is all online now; you do not even have to 
go to a place to find houses. You know in my area, for every 
house that is up for sale, there are videotapes that you can 
just call it up and walk through it on the Internet----
    Mr. Hobson. Sam, we are doing that in San Diego, I think.
    Mr. Farr. We need to do more of that. The military has to 
link up with the private sector on military personnel moves. I 
think it could make the transition a lot easier.
    And as far as you paying a mortgage of $900 a month, if you 
were buying the homes that Mrs. Kemp knew in Monterey, your 
mortgage would be a minimum of $4,000 a month, after you put 
down $100,000 on your house.
    Mrs. Douglas. Well, then we would have to live in a box on 
my husband's pay.
    Mr. Farr. Well, what is going to happen is pretty soon the 
military housing, no matter what condition, it is going to be 
the most popular housing to try to get, because there is 
nothing going be available in the private sector.
    So, thank you, Mr. Chairman, for this hearing, and I hope 
we will continue to bust the bureaucracy.
    Mr. Hobson. Thank you. Let me say this. Sam and I are 
working to try to find some affordable housing in that Monterey 
market to keep it going on some of the land that we have been 
giving away, that they have been marking up and selling off.
    Let me thank all of you for coming today. We are going to 
have a luncheon with all of you. We may be a little late 
because we have some votes to do.
    But let me end with this. I think there has been a change 
in the command structure concerning quality of life. We had, 
last year, for the first time in the history of this committee, 
General Ralston came in, Admiral Blair came in, General 
Schwartz came in, and they all testified that their number one 
issue when they talk to the Secretary of Defense was the 
quality of life for the people that they lead, and who serve 
with them. And that is a change.
    Now I do not like the way the number came out this year, 
and we are going to work to make that number better, but I 
think it is a sea change, when you see the CINCs coming in and 
testifying for the first time before this committee, that that 
is their number one issue. And I want to thank them and I want 
to thank you for what you do in helping us to make sure that 
that is on everybody's mind. And you are very important not 
only to your husbands, but you are very important to the 
changes in the quality of life by what you did here today, and 
we all thank you very much for coming forth and taking your 
time to come in and talk with us today.
    So with that we are going to end this hearing and you are 
all going to go to lunch, we are going to vote, and then we are 
coming to lunch with you. Thank you very much.
    [Recess.]
                                     Wednesday, February 6, 2002.  

            QUALITY OF LIFE IN THE MILITARY--SENIOR ENLISTED

                               WITNESSES

SMA JACK L. TILLEY, USA
JAMES L. HERDT, USN
SGT MAJ MARINE CORPS ALFORD L. McMICHAEL, USMC
CMSAF FREDERICK J. FINCH, USAF

                       Statement of the Chairman

    Mr. Hobson. The Subcommittee will come to order.
    Sorry I am late. I have been over delivering some messages, 
John, in the big committee. There is a closed meeting going on 
over there. Going to affect some quality of life in a certain 
part of the world that we are all talking about in the paper. 
So I thought I would deliver those. I am a little late getting 
back, but Jerry was very accommodating to let me talk on that 
while we were there.
    Let me say welcome to our witnesses today, who are the 
senior enlisted advisors in our military.
    This morning, we heard from the military spouses. Our 
witnesses this afternoon are the senior enlisted, as I 
mentioned before. These hearings are continued in the tradition 
of the subcommittee's focus on quality of life for our troops, 
which is, I think, our number one issue. As I said twice this 
morning, the CINCs testified for the first time in this 
committee that this was their number one issue, so I think that 
changes the order from things that we have had before.
    I want to say a couple things that I said this morning, but 
I will say them a little differently. I need to address the 
budget requests, which Congress received Monday morning. In 
short, the request, frankly, is, I will say it again, it is a 
disappointment to me, because the military construction budget 
is reduced by a billion and a half.
    DoD's defense is that additional funds should not be 
invested in installations that might close in the base 
realignment and closure process scheduled to take place in 
2005. I think that is a pretty hollow argument. Likewise, the 
administration argues that the sustainment account is increased 
by $466 million, reducing the need to recapitalize existing 
facilities, and frankly I have a lot of problems with that, 
too.
    So let's speak very candidly. There are many enduring 
installations that will not be closed in the so-called BRAC 
process, which I think is a faulty process, having been through 
it a couple times before. But those will not be closed because 
they have strategic importance to our national defense.
    Furthermore, the service components did not consider BRAC 
in formulating their budget requests, so its using BRAC to 
defend the requests I think is hollow or a red herring.
    Similarly, in providing additional funds to sustain the 
decrepit and outdated buildings and facilities, while 
necessary, is a shortsighted strategy, at best, and a waste of 
the taxpayers' money, at worst, in my opinion.
    You know, there is a bright spot in the military housing 
account; it has increased $225 million. Likewise, the BRAC 
account is fully funded. That may be a first; I am not sure. 
Obviously, the Subcommittee is going to be focusing on these 
issues when the Comptroller and the Deputy Under Secretary of 
Installations come to testify later this month. So we are just 
sending a few messages so they can hear it a couple times and 
maybe they will get it. Or maybe they will not.
    But which brings me to where we are today. So we are going 
to talk to all of you about some of those things, and I am 
going to ask John if he has any comments. He may have stronger 
words than me, I do not know, but we will see where we go. And 
then we will let you guys tell us what you want to tell us. 
And, you know, we have all traveled together before. You do a 
great job.
    And, with that, I am going to turn it over to my ranking 
member, John Olver. We have gone a lot of places together and 
done a lot of things to learn more about quality of life. And I 
appreciate all of John's support.
    John.

                         Statement of Mr. Olver

    Mr. Olver. Thank you, Mr. Chairman.
    Again this year, I want to welcome the senior enlisted men 
representing each of our Services. You are all the same people 
who we saw last year, so we have gotten to know you a bit and 
maybe you can tell us how we are doing in the intervening 
period and in particular where we really need to put our effort 
for the future.
    This is always an interesting hearing, because we get a 
different and valuable perspective on the impact this committee 
has on the quality of life for the military.
    Now, I am sure that your troops have many of the same 
concerns as other Americans: decent housing and working 
conditions and good health care and educational opportunities 
and economic security. Things are a little bit different than 
they were last year.
    First and foremost on our minds, we are in a war on 
terrorism and each of you have lost service personnel to this 
effort.
    Second, the President has proposed significant cuts in 
spending for military construction, not for housing, but for 
the facilities where your troops work and train and for the 
hardened facilities, gates and inspection stations we need to 
keep those facilities and our service men and women secure in 
this new environment.
    And each of the Services has taken significant cuts. While 
last year we found billions of dollars in unmet force 
protection requirements, the new budget proposal for force 
protection does not even approach the $100 million mark. So we 
are very far from dealing with the true need out there.
    While family housing barely holds its own, the other 
military construction accounts, which include those facilities 
that we need to respond to the current and future threats, they 
are cut by $1.7 billion at this point.
    And I am afraid of the effects the President's proposal 
will have on military families in other ways. For example, the 
President's education budget proposes to cut $1.7 billion from 
56 programs and freeze funding for 71 education programs, 
including teacher quality state grants, which is the main 
federal program aimed at raising teacher quality.
    In this morning's hearing the spouses indicated that 
programs for children are a top concern. With most military 
families dependent on public schools, this budget will have an 
impact on your children, where they go to school.
    Despite the need for greater security since the events of 
September 11, the President's budget proposes to cut over $500 
million from essential local law enforcement and community 
policing programs. For you, with nearly three-quarters of 
military families living off-base due to huge waiting lists to 
get on-base housing, the last thing we need are fewer police 
providing security in their neighborhoods where they are living 
while they are serving the nation.
    In this hearing today we need your thoughts on a number of 
important issues. We want to address the needs of your 
families. We want to make certain that the troops have the 
right facilities to do their jobs. We want to do everything we 
can to increase readiness, and at the same time to increase 
security.
    So I am looking forward to this hearing and hope to learn 
more about how we can help the enlisted men and women serving 
our country.
    Thank you, Mr. Chairman.
    Mr. Hobson. Chet, is there anything you would like to say 
before we get started?

                     MILITARY CONSTRUCTION FUNDING

    Mr. Edwards. Mr. Chairman, to be honest, I have not quite 
put into words what I want to say about the proposal to cut 
$1.7 billion out of military construction this year. In the 
days ahead, I think I will be able to pull together my 
thoughts, because I feel so strongly about it I would just make 
a few comments today.
    In my opinion, there can simply be no rational 
justification for a $1.7 billion cut in military construction. 
It does not pass the smell test. It does not pass the common 
sense test. It certainly will not pass the most important test, 
which is the morale test of our service men and women.
    What kind of message does it send to our servicemen and 
women when just a few months ago this Congress could vote to 
give a $1.5 billion tax rebate to IBM that they did not have to 
do a single thing to earn, and in order to pay for that, we are 
going to have to cut military construction by $1.7 billion?
    Let me say up front that President Bush is not only my 
President, our President, he is also my constituent. I have 
great respect and admiration for him. And I think he has the 
interest of our service men and women genuinely in his heart.
    I think the President has been ill-served by some budget 
crunchers somewhere, perhaps in the bowels of OMB, who have 
come up with this; the very people who have not heard the 
testimony we have heard year after year about the sacrifices 
our servicemen and women make, the kind of deplorable housing 
we too often ask them to live in. I am confident with the 
bipartisan cooperation of Congress we will help turn around 
this terribly ill-advised effort.
    Should anyone in the Administration listen to our 
testimony, I would remind them of an experience I had just a 
couple of years ago in the previous Administration, where we 
had just passed a significant pay raise and other benefit 
improvements, quality-of-life improvements.
    I went home in December and was asked by a Fort Hood 
soldier at a Rotary Club speech, ``Sir, why did you all take 
out of one pocket what you put in the other?''
    And I said, ``What you talking about? We just gave you all 
these benefit increases.'' And I thought, you know, this would 
be a plus and improve morale.
    He said, ``Sir, we just found out that the basic allowance 
for housing was going to be cut.'' And it totally undermined 
all the goodwill created by the salary increase.
    And my fear is that, you know, with the most significant 
pay raise in 20 years, we quickly undermine that if word gets 
out we can afford to vote for a $1.5 billion tax rebate for 
IBM, $250 million, by the way, tax rebate for Enron as part of 
the stimulus package we voted on a few months ago, but we 
cannot afford to provide more day care for privates who are 
trying to serve their country, or for the mother who is having 
to take care of the children because her husband is thousands 
of miles away fighting the war against terrorism.
    I just cannot believe in my heart that this was President 
Bush putting this proposal together. I hope we can find out who 
the people were responsible. I would love, Mr. Chairman, to get 
that person, or that bean counter before this subcommittee at 
some point and let them even begin to try to explain the 
rationale for this.
    But with the kind of leadership you have shown, Mr. 
Chairman, Mr. Olver, I am confident we will turn this around 
and not do serious damage to the morale of our service men and 
women.
    Mr. Hobson. I hope you will show up to the hearing on 
February 27; it might be interesting.
    Let me say this: We did fix that BAH problem. It did not--
--
    Mr. Edwards. I remember, you and I worked on that.
    Mr. Hobson. It did get fixed. As well as others did.
    If there are no other comments, I want to introduce the 
four people here today and make a couple comments.
    From the Army we have Jack Tilley, Sergeant Major of the 
Army. From the Navy we have James Herdt, Master Chief Petty 
Officer of the Navy. And I guess this is his fourth and final 
appearance. As we were talking at lunch, he is a real short-
timer.
    Maybe they will extend you; I do not know. They did some 
other people on the way here.
    And from the Marines we have Alford J. McMichael, Sergeant 
Major of the Marine Corps. We have Chief Master Sergeant of the 
Air Force Frederick J. Finch. And it is his third and final 
appearance before the committee.
    I want to thank you gentlemen personally for the service 
you have done. It has been a pleasure to get to know you, not 
just here, but in other things that we have done as we have 
traveled around the world and see the respect that the people 
in the military have for what you do for them, because you are 
their eyes and ears in telling other people about--not only the 
command people, but other people about what the problems are 
out there.
    So without further ado, you have testimony I think you have 
all submitted for the record. I will ask you to make any 
comments that you would like.
    And we will start off, I guess, with the Army, Sergeant 
Major Tilley.

               Statement of Sergeant Major Jack L. Tilley

    SMA Tilley. Good afternoon, Mr. Chairman, and distinguished 
subcommittee members. I am honored and privileged to be here to 
represent soldiers of the United States Army.
    And what I would like to do first is introduce Command 
Sergeant Major Lackey, who is the senior non-commissioned 
officer of the United States Army Reserve, and Command Sergeant 
Major Lever, the senior noncommissioned officer of the National 
Guard.
    We work very closely as a team, and so we are all here 
together as a team.
    A year ago, I told you our nation had the best Army in the 
world. And in my opinion, that was validated by the tragic 
events on September 11th. The Army and all branches have proven 
themselves fit, motivated, and trained and ready to defend our 
country.
    You know, the war on terror really began just a couple 
miles from where we sit right now. And I tell you, I am proud 
of what I saw that day, and I am proud of the soldiers I saw 
who put themselves, certainly, in harm's way.
    I doubt I have to say that much about the Army and what we 
are doing right now. We are stretched as thin as we have ever 
been.
    To start, routinely the Army has about 124,000 troops 
stationed overseas in places like Germany and Korea and Japan 
and Italy. That includes another 9,000 Army reservists.
    A year ago I told you the Army had about 30,000 troops 
deployed away from their homes and families. Today that number 
is nearly 50,000 soldiers, to include about 11,000 National 
Guard, and some 10,000 reservists.
    Beyond the Balkans, Sinai, Kuwait, Philippines, there are 
troops in more than 60 locations, such as Central and Southwest 
Asia, Turkey, Tunisia, East Timor, Cambodia, Vietnam, Colombia 
and other places.
    But closer to home, the Army to date has more than 15,000 
Army reservists and National Guard engaged in homeland defense, 
and another 2,000 soldiers that have been mobilized for force 
protection in Europe.
    The key number not reflected here is how many active duty 
troops are needed to secure their own posts and facilities and 
are not available on a daily basis for just normal duty within 
their command.
    As an example of that, in January, our Forces Command was 
using about 4,000 soldiers a day to secure about 11 major 
installations. That number, of course, fluctuates, based on the 
threat, and it does not include our law enforcement personnel 
helping with force protection. Again, that number can jump as 
much as 11,000 or 15,000 on any given day, again, based on the 
threat.
    But today I mostly want to come here and thank you on 
behalf of the soldiers and families. And we talked about the 
$1.7 billion for housing, and I was just made aware of that 
this morning. But I really wanted to come here and thank you 
for all the things I see going on in the Army right now. A year 
ago, we really laid out a number of concerns in a number of 
areas. Today, the news is good in each one of those areas.
    The first one is pay. It is the best pay raise that we have 
ever received in the last 20 years. The latest raise certainly 
sends a strong signal, and I really wish that you could be with 
me when I travel to different installations and they talk about 
how much that pay raise means to them. Soldiers are happy, and 
they are talking about it.
    There is still a ways to go, but I feel free we are going 
in the right direction. It is a great boost, and everybody 
certainly enjoyed that targeted pay raise.
    The word is getting out about housing too. Army-wide, 
families sense that commitment. And we are moving in the right 
direction. I just hope that we certainly do not slow down.
    RCI is also tracking very well at Forts Meade, Lewis, Hood 
and Carson. We are on the right track with RCI and we need to 
continue.
    There is no question about that, but the clear signal about 
that, and I need to point out to you, the last set of quarters 
that I lived in as a sergeant major with 29 years in the Army, 
was 950 square feet. And now just think about that after 30 
years of service to your country: big deal. But we are doing a 
lot of things at Fort Carson, and we are starting to make a 
difference, and we need to continue to focus on those things.
    We talked just a few minutes ago about BAH. I am getting a 
lot of positive feedback on BAH, and soldiers appreciate what 
you are doing to assist them. About half of our families live 
off of military installations. I guess if I had one concern 
about BAH, sometimes when we get a raise on BAH, the landlord 
raises the rent for soldiers, and that is a concern.
    Also, I have visited new barracks and construction and 
renovation sites of last year. It is still either feast or 
famine. Either it is a newly renovated facility, or it is a 
poorly maintained building, 30-plus years old.
    The 2009 goal to fix our barracks minus Korea is 
attainable. That commitment is visible and certainly 
appreciated by all soldiers within the United States Army. But 
I still have some concerns.

                        SOLDIER HOUSING IN KOREA

    Mr. Hobson. Why minus Korea? Everybody always says, ``minus 
Korea,'' and it really ticks me off.
    SMA Tilley. Well, first of all I do not think it is funded 
correctly right now in Korea, but about getting it completely 
renovated as far as the funding for the billeting in Korea.
    Mr. Hobson. That is what I need to know.
    [The information follows:]
    SMA Tilley. Yes, sir.
    And I need to tell you, I was in Korea in 1987. They have 
made a lot of improvements in Korea since that time, but they 
are still not where they need to be. When you talk about 
soldiers living in Quonset huts and jammed in with about 25 or 
28 people, that is a little tough.
    Mr. Hobson. We are going to have to ask you to hold for 
just a minute, we have got eight minutes left and we will go 
vote and then we will come back.
    Let me say one thing before we go. I bet you have never 
been to Newport, Indiana, it is really out in the middle of 
nowhere. The closest Wal-Mart is in Clinton, which is about 10, 
15 miles down the road.
    You have got National Guard troops over there, because I 
have been there. And they are really sparse, out in the middle 
of nowhere, and, you know, so there is duty, unusual duty going 
on all over by everybody right now. It is really a different 
situation than I have ever seen before.
    I mean, we are guarding a building that stood there for 40 
years, out in the middle of nowhere. And if anybody had a 30.06 
rifle it had gone right through and put all this stuff out 
there and suddenly we are guarding it after 40 years. So it is 
a different world right now.
    But I want to just ask you to hold for a second, so we can 
go vote and we will come right back.
    Mr. Olver. Before we do that, because we do have a couple 
of minutes, I just want to say--``minus Korea,'' because I had 
just jotted down ``minus Korea,'' when you broke in, Mr. 
Chairman. But in Korea, the President's proposal on the housing 
side, seems to put in a lot of money. There is a total of $190 
million in the President's submission for Korea, improvements 
in housing and a couple of DoD schools and dormitories and 
things like that.
    I am more concerned in Korea, at the moment, about some of 
the other force protection issues in the bases and the base 
facilities themselves, other than the housing. That seems to 
make a substantial step in Korea, at the moment. I am far more 
concerned, actually, about the fact that there is nothing 
proposed in that budget in Japan for either housing or those 
facilities.
    Mr. Hobson. No e-mail fix yet either.
    SMA Tilley. Yes, sir. I have got that covered right here in 
a second. [Laughter.]
    [Recess.]
    Mr. Hobson. Why don't you go ahead, and we will go ahead, 
because I do not want to hold you guys.
    SMA Tilley. Mr. Chairman, I wanted to point out, Sergeant 
Major Lever came up to me while you were gone, and said, ``Hey, 
look, I do not know if you know it or not: I am going to be up 
in Newport this weekend on Saturday.''
    Mr. Hobson. Tonight?
    SMA Tilley. And visit.
    Mr. Hobson. Tell him I said hello. I was there. I gave them 
donuts from Young's Dairy Farm. [Laughter.]

                     RESERVE COMPONENT UTILIZATION

    SMA Tilley. But, you know, we are very concerned about the 
National Guard and Reserves, and we are really focusing on the 
force protection, and the fact that some of their quarters are 
not good enough. And so we are looking to make sure we improve 
them as much as we can.
    Mr. Hobson. Well, while you bring that up, let me just 
shoot one other thing in it. This is just for general 
consumption; does not relate to you guys.
    But one of the things we need to look at, I do not think we 
need to have all these people up for a year. If they can do 
this stuff on a volunteer basis and fill these missions, you do 
not need to have a whole bunch of people sitting around back at 
posts some place doing nothing. If you--and this is true of the 
Guard and Reserve across the board, if they can fill these 
positions and do these missions with volunteers, then I do not 
see the reason for holding these people for a full year sitting 
back at a post at home.
    Let them go to work, and if you need them, then you rotate 
them through. But it seems to me that it is not cost-effective 
to keep these people out there, because you are going to find 
that it is a morale problem when you talk to some of these 
people.
    And I have been to a number of activated Guard positions, 
Reserve positions since this has all happened. And having been 
one, I can tell you when you are activated, if you are going to 
be activated, it is a lot better to go overseas where you feel 
you are doing something, than if you are just sitting around in 
your home town while everybody else is going to work, and you 
are sitting out there going to the base. So I think that is 
something.
    A lot of these people who do these activations are never 
activated. They do not really know what that is like. I can 
tell you what it is like. Even though it was a long time ago, 
it is still the same trauma on the family, and it is still the 
same trauma on the person that it was then. And there are ways 
to do that work; that will keep that morale up. Those kids up 
there I think have pretty good morale. The kids at Fort Knox 
are a little different, and that is another problem.
    And most people need to be treated--if they are reservists 
or Guard, and this is pretty good especially in the Air Force--
it needs to be seamless when they go on. And for the most part 
it is. A couple places it has not been: Fort Knox is one you 
need to look at.
    But anyway, I am sorry. Go ahead, Sergeant Major.

                      QUALITY OF LIFE IMPROVEMENTS

    SMA Tilley. Sir, I just wanted to start off by saying I 
still have concerns about overseas locations, Germany, Hawaii--
especially Korea. You know they have made great progress in 
Korea since I was there as a first sergeant, but that was in 
1987. You do see construction, but it is isolated construction. 
We need to continue to focus, again, not just in Korea, in all 
of our installations: on barracks, gyms, dining facilities, and 
we talked about that before, Internet services. That is 
important for soldiers.
    Also, the sustainment restoration and modernization funding 
this year was funded at 91 percent. The last couple of years, 
we were funded at 68 percent. Now I think I commented last 
year, at the current funding it would take us 157 years to 
maintain our installations. But right now we have about an $18 
billion backlog on our military institutions.
    And also the medical facilities--I mean TRICARE. It is 
important to families--and noting that there is more 
satisfaction across the Army; I hear less and less questions 
and concerns about TRICARE. Better quality, reduced out-of-
pocket expense.
    But I have to be honest with you, and we know that 
improvements are attributed mostly to funding. It just needs to 
continue to watch on funding for TRICARE and I want to thank 
you for that.
    A year ago I said we could not get the job done without the 
Guard and the Reserve. And that is so much true today. There is 
no question about that. I would ask you and your colleagues to 
remember our Reserve Component soldiers and their families, and 
the sacrifice and the dedication that they have.
    Also we cannot overlook the importance of their civilian 
employers while they are away from their jobs. We need their 
support for our troops, where they are deployed for either that 
year, or whatever the length of time is.
    I would ask you for support in adjustment to the 
entitlements and benefits given to the Reserve Component 
soldiers. I think that we ought to always take a look at that 
and see what we can do to make it better for those soldiers.
    Another group of people that we cannot forget is our 
nation's veterans and retirees. Each time I get around them, I 
thank them for what they do. And I would ask you to thank them 
every chance you get, and consider the issues and requests that 
they put before committees like yourself. They built the Army 
that is serving us so well and have sacrificed so much for our 
country.
    Overall, we are doing well. We are making our recruiting, 
and re-enlistment goals. Really, today, there are a lot of 
issues that are going to come out. I just want to come here and 
thank you.
    But I would also like to say, we are not yet perfect in any 
of these areas. I think we need to continue to stay focused on 
that--especially on MILCON. There is still a long way to go, 
but there have been a lot of visible improvements that I see as 
I travel around the Army, and it certainly makes me proud to 
see soldiers with the new billets or family housing.
    We are focused on the war at hand, and we are ready to do 
any missions given us. You know, I am proud of this country. I 
am certainly proud to be in the Army and to be a soldier. And 
we know who we are fighting against and we know who we are 
fighting for.
    I thank you, and I really look forward to answering your 
questions today.
    The prepared statement of Sergeant Major Jack L. Tilley 
follows:



    Mr. Hobson. Thank you.

         Statement of Master Chief Petty Officer James L. Herdt

    MCPON Herdt. Good afternoon, Mr. Chairman, and 
distinguished members of the Committee. Once again, thank you 
for the opportunity to speak on behalf of sailors and families 
of our great Navy. This is, as you mentioned, my fourth and 
final opportunity to testify before the committee before I 
retire from active duty in April. It is my distinct pleasure to 
thank you on behalf of America's Navy families serving around 
the world for taking the time to listen and respond to their 
concerns, as you have.
    I especially want to thank you for your unfailing support 
of our service. In the nearly four years that I have been 
serving as the Master Chief Petty Officer of the Navy, I have 
noticed measurable improvements in the quality of life and 
quality of our Navy. In that short time, the overall quality of 
service of our enlisted sailors has been greatly enhanced by 
those improvements. With your help and the help of the entire 
Congress, and especially this committee, as I said, we have 
come a long way in the past few years. The retirement plan has 
been vastly improved by allowing service members the option to 
choose. Pay table reform builds incentives for highly talented 
young sailors to consider making the military a career.
    While there may not have been enough money in the budget to 
pay every junior enlisted enough to live a comfortable 
lifestyle, it is important to show them that a life of service 
does not continue without adequate compensation for our career 
sailors.
    Your help in the area of sea pay reform, allowing all 
sailors to receive sea pay from the moment they begin their sea 
duty and the authority to begin moving our junior single 
sailors ashore, has made a significant impact on the quality of 
life of all enlisted sailors.
    Your enhancements to the Montgomery GI bill and 
implementation of TRICARE for Life are significant quality-of-
life factors for those who choose a life of military service.
    I want you to know that your investments are paying 
dividends. Thanks to your support in these and many other 
areas, our Navy has met recruiting goals for three consecutive 
years. Additionally, our first-term sailors are re-enlisting at 
a rate that can only be defined as the best ever. The momentum 
is definitely moving in the right direction, and I am sure your 
continued support will keep us on the course for success.
    As in previous years on the job, I have traveled 
extensively to visit sailors and hear their concerns. Just two 
weeks ago, I visited sailors aboard the ships in the northern 
Arabian Sea, doing their part in Operation Enduring Freedom, 
and they are performing admirably. You could not ask for a 
finer or more proud group of young Americans to be defending us 
today in our war against terrorism. I shudder to think what 
might have happened, had we not taken the steps to treat our 
volunteer forces as the true professionals they are.
    The Navy, along with all of American society, continues to 
grow more technologically advanced. Sailors today have the same 
skills, the same education, real experience and discipline that 
would be an asset in any civilian business. Sailors today 
rightfully expect at least the same level of respect and job 
satisfaction as their peers who choose to work in the private 
sector. They also expect comparable opportunities for success 
and growth as their civilian counterparts. The patriotic young 
Americans serving today do so by choice, and like all armed 
services, the Navy is a career, not an alternative.
    Any corporation understands that to retain the finest 
employees, they must provide competitive wages, room for 
growth, and a high degree of job satisfaction. As an all-
volunteer force, the Navy is no exception. Our sailors expect 
and deserve to be treated as valued professionals, and we must 
do our very best to fulfill our commitment to provide 
competitive compensation and the best living and working 
conditions we can for our service members.
    When President Bush signed the 2002 defense authorization 
bill, he said, ``We can never pay our men and women in uniform 
on a scale that matches the magnitude of their sacrifice. But 
the bill that he signed reflects our respect for your selfless 
service.''
    In saying that, the President summed up how many of us feel 
about our service. It is that level of respect that we in 
uniform really appreciate. I encourage you to continue 
investing in our enlisted people with the same level of 
commitment that you have demonstrated in the recent years.
    Sailors enthusiastically send their thanks for your 
continued congressional support for full funding of housing 
allowances, reforming sea pay, and continuing to close the pay 
gap between military and their civilian counterparts, just to 
name a few.
    While sailors and their families appreciate the recent 
improvements in monetary compensation, they must continue to 
maximize every opportunity to improve all aspects of military 
service, ranging from improving housing quality to ensuring 
first-rate working conditions and reducing maintenance 
backlogs.
    A continued support for fully funding BAH to 100 percent 
for military families was a great step toward enhancing our 
service members' quality of life. This year, we were able to 
reduce the out-of-pocket requirement for housing for service 
members who reside in civilian housing from 15 percent to 
nearly 11 percent. Our goal is to have the out-of-pocket 
expense reduced to zero by 2005.
    Ongoing public-private venture initiatives and other 
military construction projects are bringing us closer to 
housing our country's defense in a more deserving manner.
    As my time is limited here, I will submit a detailed 
written testimony, and have.
    Mr. Chairman, this completes my statement, and I am pleased 
to answer any questions you may have.
    The prepared statement of Master Chief Petty Officer James 
L. Herdt follows:



    Mr. Hobson. Fine. I think we will get to those at the end, 
but we want to thank you for your service, sir----
    MCPON Herdt. Thank you, sir.
    Mr. Hobson [continuing]. For many years.
    Sergeant Major, you are up.

            Statement of Sergeant Major Alford L. McMichael

    Sgt Maj McMichael. Thank you, Mr. Chairman.
    And to the members of the committee, once again it is an 
honor to appear before you and have the opportunity to speak to 
you about the conditions of the facilities and how these 
facilities impact the Marines and the families of our Marines 
throughout the Corps around the world.
    As I come today, I tell you that we still have 172,600 
Marines in our active duty forces, but we also have 107,000 of 
them that are in our operational command, with 37,000 Marines 
today forward-based, forward-deployed or forward-stationed 
doing our nation's business. We say that because it is very 
important that I tell you that the quality of life of these 
individuals have a great impact on their families. With 161,900 
family members, we have 68,800 spouses, with 92,800 children 
that goes with these service men and women that serve our great 
nation.
    It is important that we concentrate on the quality of life. 
And, as you know, the quality of life for our Marines and 
Marine families is still a priority for the Marine Corps, 
because we constantly believe in taking care of our families as 
we do those that wear the uniform.
    During our quality-of-life surveys that started in 1993, we 
found out some things that were much needed to improve the 
quality of life for our service members in uniform. And then in 
1998, we still found that we were not doing as much as we 
needed to do, because there were still comments about privacy 
and room and things like barracks space and things of that 
nature.
    But I am very excited about the 2002 quality-of-life 
survey, that we will use this year, that should kick off within 
a month in the United States Marine Corps. I am excited about 
it because this survey has been structured so that it will ask 
the right questions so we will know the right matters to try 
and find the right answers to do the right thing for our men 
and women and their families as they serve this great nation.
    With that said, I would like to talk about, first, the 
quality of life for our housing. In the Marine Corps, we look 
at housing in two parts: family housing and single bachelor 
quarters.
    When we looked at our family housing, with about 25,000 
units that we take care of around the world, during our first 
survey we found that there was about 18,000 of those quarters 
that were considered inadequate. And then by 2001, in 
September, we found that we were able to say that we were down 
to about 16,298 of those quarters that were still inadequate.
    With your support, and with our commitment to these houses, 
we know that we will be able to eliminate about 1,600 more 
during 2002, and another 1,000 by 2003.
    This means that we are really focused in listening to what 
our Marines and our Marine families are telling us about the 
inadequacy of where they live, and where their families have to 
be housed.
    It is important that you understand that 64 percent of our 
Marine family live off the installations, with 36 percent of 
those that live in Marine quarters or other service quarters. 
And 26 percent of those live in Marine-owned, or Marine-leased, 
or PPVs, which is public-private venture for our Corps.
    When I talk about public-private venture, it is important 
that I tell you that it is a program that is being utilized in 
the Marine Corps in the right places and giving us great 
results.
    One of our public-private venture programs that is now 
being managed today with our partnership is in Camp Pendleton, 
California. And I am tremendously proud of what we are doing 
with that program. With about 712 units being affected by our 
public-private venture, 200 of them are within renovations, and 
another 312 are replacement houses, with 200 more being new 
buildings for our public-private venture. This is a great 
success.
    What it tells our family members and our men and women in 
uniform is that they no longer have to hear it or see it in 
writing, they have a vigil that they go in and off the bases 
and stations to see this construction going up. And as they 
started to move in of October of 2001, it was a great success 
for us.
    As we look at our family housing, it is very, very 
important that I say to you that the money that has been 
allotted for it--about $89 million throughout each year--91 
percent of those funds have been allocated or used for enlisted 
family housing. And I am very proud of that, because it was 
definitely needed.
    When we talk about our single bachelor houses, those are 
the ones that we manage about 93,000 of them around the world. 
And when we looked at those, we found that we had about 16,000 
of those that were considered inadequate.
    Today, with your help and your support, and the leadership 
of our Corps, we are about 3,700 of those inadequate houses 
still in our inventory between Hawaii and the CONUS.
    But I feel that what is important, even though we committed 
ourself to $50 million a year, $64.3 million has actually been 
used each year to get rid of the inadequate housing.
    One way we have been able to do that and reach that is 
because we worked so hard to get the waiver of a two-by-zero 
configuration. And when we say two-by-zero, we really mean that 
we are talking about our junior enlisted Marines, those that 
are in the pay grade of E-3 and below, that would live in a 
room together to build camaraderie and cohesion to continue 
with the culture of our United States Marine Corps.
    And we have found that it is working quite well for us. And 
we ask for your continued support, to let that waiver be so 
that we can continue to reach the process of getting rid of 
inadequate quarters by the time frame that we would like to see 
it by 2008; and the time frame for our family housing by 2005.
    We also have facilities that we are working on. But before 
I move to the facilities, let me say this to you: that the 
funding that went to our single bachelor quarters, 100 percent 
of that funding has been utilized in enlisted bachelor 
quarters. That is a major improvement for taking care of our 
own.
    As we say in the Marine Corps, ``officers eat last.'' And 
when we take care of them in that fashion, they get to see the 
importance of what the leadership care about the great men and 
women that they are serving their leadership.
    When we look at our facilities, as I said to you before, 
last year in March, we have facilities that are still cold in 
the winter, and it is hot in the summer, and still wet and 
damp.
    But I can also tell you, with your help and your support, 
and the commitment of our leadership, we have been able to move 
forward with some great facility projects. Maintenance 
facilities are going up. Training facilities are going up. 
Weather facilities are going up. Barracks are going up. Child 
development centers are going up around our bases and station. 
As well as business centers from Camp Lejeune, Cherry Point, 
Miramar, Camp Pendleton: all across the United States Marine 
Corps. And we are very proud of what we see.
    Even the Marines know that when they go to work, they have 
quality facilities to work in. But when we do those, we cannot 
forget our reserve component as well.
    With the 185 Reserve centers that stretch across 47 states 
within our Marine Corps, we still have 75 percent of those 
Reserve centers that are 30 years old; and 35 percent of those 
are 50 years old.
    That legacy, that life is wearing thin. What it is saying 
is that we have modern equipment, modern technology, that is 
being taken care of and worked on in facilities that are not 
capable of taking care of the electrical needs or the computer 
needs, or trying to fit modern tanks and trucks and other 
equipment in here to work on.
    So we ask for your continued support, as we move forward to 
upgrade the infrastructure, upgrade our facilities where our 
men and women have to work each and every day.
    These things are very important, but we still have high 
priorities for quality of life. We have a quality of life that 
will still rank up there with pay, compensation, housing, 
health care, infrastructure and community relations. These 
things are still priorities for our Marines and their families.
    I know we are short on time and I have submitted a written 
statement for the members of the committee. But I would like to 
say thank you for what you are doing and I ask for your 
continued support, so we can get to where we need to be, so 
that we can no longer talk about the need, but we can talk 
about the things that they have that they had needed.
    And to the chairman, I would like to say thank you very 
much, sir, for what you are doing for the men and women in 
uniform. You have been more than just a sunrise, you have been 
a sunshine for the men and women that wear this uniform.
    Thank you very much.
    [The prepared statement of Sergeant Major Alford L. 
McMichael follows:



    Mr. Hobson. Thank you, Sergeant Major. I would like to tell 
you that because of the staff and a couple of visits by a 
couple of other congressmen, besides me, Quantico is going to 
get fixed and there is going to be more stuff and Pendleton, so 
you can feel pretty good about that. And 8th & I is getting 
done.
    But 8th & I is, I think, truly a treasure of this country. 
But more important to me is where you all live in Quantico and 
Pendleton, because that is your life blood out there.
    And we are going to fix that, are not we, Valerie? Yes.
    So I think that is gotten done. I told Mr. Murtha and Mr. 
Young we are both very instrumental in that. I would like to 
take credit for that. I only send them there. [Laughter.]
    You know, I think it is important that we take care of 
everybody's housing, but those were some things that were on 
our agenda and I think they are going to get done for you, sir.
    Chief Master Sergeant, this is your last time, too, so we 
thank you for your service. And what do you want to tell us 
about the Air Force?

         Statement of Chief Master Sergeant Frederick J. Finch

    CMSAF Finch. Thanks, Mr. Chairman. Good afternoon and good 
afternoon to the distinguished Members of the Committee. It is 
an honor for me to be back with you again today to discuss 
issues affecting the men and women of our United States Air 
Force and their families. And it is also a--before I get 
started too much--a special thanks to you for going around and 
visiting our airmen and their families around the world this 
past year. I have gotten reports that you have been out and 
about and, well, that is a nice thing.
    While, I have submitted a written witness statement for the 
record, I would like to touch on a couple of issues that are 
covered in that.
    As you know, many of our airmen are presently deployed to 
remote locations around the globe defending our nation's 
security interests. In fact, I visited members of our total 
force team, deployed to seven separate countries, so far, this 
calendar year, and I am here to report that they continue to 
work very hard in service to America. Therefore we believe 
those serving on active duty, members of Air Force Reserve 
Command and their Air National Guard Counterparts deserve a 
standard of living, at least equal to the Americans that they 
support and defend.

                              MILITARY PAY

    We make great strides toward improving the quality of life 
for our people and I truly appreciate the support of Congress 
and, in particular, the Members of this Committee. In Fiscal 
Year 2002 National Defense Authorization Act, as you know, and 
has been stated earlier, our airmen received the largest pay 
raise that we have had in two decades. And we have targeted 
additional dollars towards the mid-level and senior 
noncommissioned officers' which has also been a welcome change.
    While there is still more work needed on the enlisted pay 
table, I think we are moving in a good direction to better 
match compensation to the demands that we place on our 
experienced mid-level and senior noncommissioned officers.

                      BASIC ALLOWANCE FOR HOUSING

    Recent improvements in the basic allowance for housing, or 
the BAH, as you mentioned, have reduced out-of-pocket costs for 
maintaining an off-base residence to approximately 11 percent 
of the national median housing costs, as you understand.
    While, this is a vast improvement to the 15 to 19 percent 
that we had just a couple of years ago, we must continue to 
make incremental increases to BAH funding, until we can 
eliminate the average out-of-pocket expenses. As you know, we 
cannot feasibly expect to house all our military members and 
families on our bases, but we can establish comparable housing 
compensation for them to make up that difference.

                            RETENTION RATES

    This has been an outstanding year for the Air Force in 
recruiting. But unlike our sister services, retention has still 
been a problem for us. Prior to implementing stop loss, which 
you are familiar with, our first-term retention rates had 
stabilized, but we continue to fall short on our second-term 
and our career airman retention goals. These are the people 
that represent our experience base. For us, these are the 
skilled technicians, the trainers and the deployers who are 
vital to meeting mission requirements.
    While stop loss has temporarily helped us meet current 
requirements, retention is still a major concern, and 
unfortunately there is no single solution that will fix it.
    One issue that has come up during my travels and is 
discussed among the senior leadership in the Air Force is the 
current manning requirements for real-world operations. The 
demands to support both current contingencies and homeland 
defense have required us to take a hard look at the force 
structure that we have. Even with improved recruiting and 
retention, we expect to have a mismatch between the people and 
resources we have available when compared to the missions our 
Nation asks of us.

                           EDUCATION BENEFITS

    Another issue affecting retention is enhanced educational 
benefits. The education concern most often raised by 
noncommissioned officers relates to the 49,000 Air Force people 
currently without Montgomery GI Bill benefits. Many appreciate 
the recent legislation authorizing the transferability of 
benefits to a select few in critical skills. But I must add 
that those without Montgomery GI Bill access, and others, of 
course, tend to view this as a widening of the wedge between 
the haves and have nots on the Air Force team.
    The Air Force is very appreciative of this Subcommittee's 
efforts to improve the mission support facilities along with 
housing for our military members and their families. Thanks to 
your support, in fiscal year 2002 we saw improvement in our 
facility recapitalization rate. However we are still 
significantly beyond the Office of the Secretary of Defense's 
facility recapitalization goal of 67 year. I am told that 
currently at a rate of about 118 years in the recapitalization 
rate.

                             FAMILY HOUSING

    I also believe there is a direct correlation between safe, 
affordable housing and being able to recruit, motivate, and in 
our case retain top-quality professional force that we need in 
the Air Force. The Air Force owns or operates about 103,000 
homes and leases 7,100 additional units. We continue to strive 
to meet our current Air Force family housing master plan, and 
are on track to meet the 2010 revitalization goal. As you are 
aware, we are pursuing a balanced approach, using both 
traditional military construction and the privatization 
authorities that you have given us. Within the next 12 months, 
we anticipate awarding privatization projects at eight 
locations.
    During my travels, I've toured privatization projects at 
both Lackland and Robins, and the feedback I have received back 
from the airmen who have been there, has been pretty positive. 
The service members like the new kitchens, the modern style, 
the garages, the extra amenities in the housing area such as 
swimming pools, and community centers have been well received.

                         DORMITORY MASTER PLAN

    Our Air Force dormitory master plan outlines how we will 
meet the goal of providing single airmen, classes E-1 to E-4, a 
private room on base, and replace our worst dorms by the year 
2009. With the current level of funding, we are on target to 
meet this goal. For us, dormitories serve as more than just a 
place to house single airmen. They help us transition our 
youngest members into the operational Air Force.

                           FITNESS FACILITIES

    The importance of fitness is also tied to readiness, and it 
is vital we provide our people with functional facilities. We 
project by fiscal year 2005 that only 42 percent of the fitness 
facilities that we have will meet Air Force and DOD standards.

                               CHILD CARE

    Affordable child care is also a significant concern among 
many Air Force families. Currently, we meet less than 65 
percent of our child care needs, and this has placed a 
difficult strain on our single parent and our many dual-career 
families that we have on our Air Force team.
    Ultimately, the Air Force leadership strongly believes that 
quality of life directly impacts recruiting and retention. I 
thank you for your support in our efforts to provide a 
reasonable standard of living for our people.
    Before I conclude, let me add that this will probably be my 
last time, as you mentioned, and it has been an honor to 
address this Subcommittee and get a chance to work with you.
    One of the things I have learned, during tenure here as the 
Chief Master Sergeant of the Air Force, is that many of our 
troops in the field really see us as all as the ``they'' in 
Washington. So therefore when one group or someone improves 
life for the troops, we all move up a notch in their eyes, and 
I appreciate that, as it is very helpful for us.
    Of course, it is a double-edged sword too, and we also have 
to explain the decisions of folks here sitting at this table, 
to those who do not care for these decisions or those who 
believe they have been left out of something. Ultimately, I 
consider myself blessed to have served as Chief Master Sergeant 
of the Air Force during a time when the members of this 
Committee, and others in our national leadership team, 
sincerely wanted to improve the quality of life for our 
military members. So I thank you for that.
    Of course, they do deserve our attention and our support. 
We ask them to serve long hours in places that are often 
unsafe, far from home. We ask them to commit their heart and 
soul to the service and their country. And unfortunately some 
of our members pay the ultimate sacrifice.
    But on behalf of the men and women who serve in America's 
Air Force, thank you for your leadership, and for allowing us 
the opportunity to discuss issues and concerns in this open 
forum.
    I look forward to your questions.
    Mr. Chairman, thank you.
    [The prepared statement of Chief Master Sergeant Frederick 
J. Finch follows:]



    Mr. Hobson. I will go down the line of members. John, do 
you have any questions you would like to ask?
    Mr. Olver. I am trying to organize.
    Mr. Hobson. Let me go to Chet.
    Mr. Edwards. No, no.
    Mr. Hobson. Oh, okay. [Laughter.]

                        TROOP DEPLOYMENT FIGURES

    Mr. Olver. I want to just clarify a couple of things. To 
Sergeant Major McMichael, you said there were 37,000 forward-
deployed Marines. And Sergeant Major Tilley, you said that 
there are 124,000--I think that would be roughly overseas, or 
something--that must be roughly the same definition--forward-
deployed.
    SMA Tilley. Yes, sir.
    Mr. Olver. Either of the other two, Finch, Herdt, do you 
have an idea of what one would give us a comparable number in 
each of your places? Basically, I am trying to get at what the 
percentage is in each of these.
    MCPON Herdt. Yes, sir, I will take that question for the 
record, to provide you with an accurate count on our number 
that are forward-based. And that is how we term it: ``forward-
based.''
    But I can tell you that, on any given day, we have upwards 
of 40,000 to 45,000 that are actually deployed away from their 
home port.
    Mr. Olver. Forty-five thousand, roughly?
    MCPON Herdt. Yes, sir.
    Mr. Olver. So it is going to be something--getting the 
definition exactly correct is probably not critical. But if I 
have got them in the right ballpark of what the total--may be 
each of you might give us----
    MCPON Herdt. I think this is critical, if I could----
    Mr. Olver [continuing]. Using Reserves and Guard where we 
have Guard and so on in those numbers.
    MCPON Herdt. It is critical, I think, as you point out, 
that the definition be somewhat accurate. When I say 
``deployed,'' I mean out on, you know, exercises or actually 
out on six-month deployments.
    If I add in the number of people that we have stationed in 
places like Japan, Korea, Italy, Bahrain and so forth, people 
that are permanently stationed there on PCS orders, the number 
will be, I think, somewhat short of the Army, and probably 
higher than the Marine Corps.
    CMSAF Finch. Comparable, probably, to the Air Force.
    I do not have the exact number here. And I will be happy to 
take that for the record, and we will get that back to you.
    [The information follows:]

                      Air Force Military Personnel

    During fiscal year 2002, the Air Force deployed an average of 
29,500 military personnel (23,700 active, 3,800 Air National Guard, and 
2,000 Air Force Reserve Members) around the world. In addition, over 
73,000 active duty airmen are currently forward-based on permanent 
Outside the Continental United States (OCONUS) assignments.

    CMSAF Finch. When we look at deployed, we talk about 
forward-deployed, we can also define those who are away from 
their families over in some bare base environment. Plus there 
are a number of people who are in Korea and serving remote as: 
overseas.
    Mr. Hobson. Let me clarify that for you, too.
    Some of this is not a full Permanent Change of Station 
(PCS) deployment. A lot of these are 90-, 120-day rotations in 
and out. And how you do this is a lot different, because PCS 
and Temporary Duty (TDY) and some of these other things are 
different in different Services. And so it is a little hard to 
get apples to apples.
    Mr. Olver. And it might be that one is looking for what is 
the average forward deployment, or whatever is the comparable 
definition of those.
    One of the reasons I asked it, was that I had somebody 
recently who was complaining about the amount of money that was 
being spent on the military. And they were very annoyed at the 
number of places that we are involved.
    And Sergeant Major Tilley, you were commenting about the 
number of places. And we all know that we are involved in a lot 
of places, and we are likely to continue to be involved in a 
lot of places.
    And I asked him, ``Well, how many do you think we are over 
there?''
    And he was saying, ``Well, we have got about a million 
people forward-deployed.''
    And I said, ``I do not think it is more than a couple of 
hundred thousand: maybe 250,000.'' I do not know exactly what 
it is going to come out, but I do not know that I need to know 
the exact number, but it was of some interest here, as this 
came up.

                            PAY AND BENEFITS

    You have given somewhat different testimony from the women 
that we had this morning--the spouses. In this case, we 
happened to have all women as spouses. I am looking forward to 
the day when we have a woman in this group and a man in the 
other crew of the spouses. And someday that will happen. It 
will take a while for those proportions to get around to that, 
I imagine.
    But it seems to me thinking about it, that there are two 
categories. There are categories of things you can do that 
affect everybody and instantly affect everybody, which are 
retirement benefits and maybe the educational benefits that you 
are talking about, Finch, are the educational benefits for the 
member, him or herself, I take it.
    CMSAF Finch. Yes.
    Mr. Olver. And interestingly that the women, the spouses, 
were talking about the educational benefits for their kids. And 
so the issue that, say, pay and retirement benefits and the 
basic allowance for housing, the BAH, are ones that we can make 
a change here and suddenly put the pay up 15 percent for 
everybody, or 3 percent or whatever it happens to be. And that 
gets distributed immediately.
    Much of what we were getting for them was from differences 
of issues which are located and about to be fixed on a point-
source basis, in essence. The day care centers, the child 
development center, where that is the schools. The teen 
activity center, big bases where there are lots and lots of 
teens, what do they do? We have done something for the younger 
kids through day care and so on, but we have not really perhaps 
done very much at the top end of the scale, and fitness is a 
very locus-oriented thing.
    Among those things, it seems to me that if we wanted to 
judge ourselves by what impact we have had as a Committee or 
the Congress as a whole over a period of time, the report card 
is a report card that looks at how did we do on recruitment 
goals and how did we do on retention goals. Over the long haul, 
how we are able to do on recruitment goals and how we are able 
to do on retention goals.
    Now, you spoke something about both of those, I think, but 
mainly about the retention goals.
    The rest of you did not speak about that, and I would like 
you to think about it, and I will ask you to respond, now that 
I have laid it out, when I get my next round, having now taken 
a certain amount of time to lay out the question, because then 
I am going to come back and ask what are the things that we 
could do at least on those if you could add to it, where could 
we make the most impact in what we do. We do not have to talk 
money. There are so many choices. On improving those 
recruitment goals and those retention goals. But I need to know 
how we have been doing on that first. So much for that.
    Mr. Hobson. Chet?

                         FACILITIES MAINTENANCE

    Mr. Edwards. Thank you, Mr. Chairman.
    I have three questions. Sergeant Major McMichael, did I 
understand you correctly to say that we still have facilities 
that are cold in the wintertime, and if so does that refer to 
housing facilities that we cannot keep comfortably warm in the 
wintertime?
    SGT MAJ McMichael. The facility that I speak of is the 
facility that our Marines work in daily, that they do repair, 
and they do maintenance, and the billions of dollars and 
millions of dollars that they are supplying.
    And I say that because it is important. We can spend 
billions of dollars on equipment, regardless of what we buy, 
and it will have very little value if we do not have great 
people behind them. And if we put those great people in 
facilities that will be conducive to their morale and their 
need to work effectively, then that billion dollar equipment 
then becomes effective for defending this great nation.
    We still have housing, as I said, both single barrack 
bachelor quarters and family housing. As I said, we had 18,000 
at one point, but that went down and we had 16,000 single 
bachelor quarters that were inadequate.
    Mr. Edwards. Right.
    SGT MAJ McMichael. But with your support from this 
committee and the leadership of making commitments to that, we 
are drawing it down. But, yes, we still have those facilities.
    Mr. Edwards. Still have great needs out there. So those who 
would argue for a $1.7 billion cut in military construction, 
they could not be arguing from the basis that we have already 
taken care of all the needs of our military servicemen and 
women and their families.
    Sergeant Major Tilley, let me ask you. You said there is an 
$18 billion backlog in MILCON. Is that, if you add up the 
backlog in all services?
    SMA Tilley. No, I am just talking about the Army.
    Mr. Edwards. Just the Army.
    SMA Tilley. Just the Army, sir. I am really talking about 
infrastructure. When you visit a military installation, you do 
not maintain the dining facilities, the gymnasiums, the motor 
pools, and that infrastructure where we have not funded it 
correctly for a long time, that is where our problem exists. 
And so we need to make sure that we try to clean up that 
backlog as much as we can.

                            OPERATIONS TEMPO

    Mr. Edwards. Let me ask you something that ties pretty 
directly into what this committee does, what its 
responsibilities are in regard to housing and quality of life. 
Operations Tempo (OPTEMPO), you have all discussed that; we 
know that is a serious problem. There have been proposals 
within the Pentagon, floating around the last year, to suggest 
taking down the Army by two active duty divisions. There have 
also been some proposals saying we really ought to increase the 
total population of the Army and force structure.
    Can you just tell me, given the present OPTEMPO rates in 
the Army, if we were to--assume we took down two active 
divisions in the Army, what would that do to OPTEMPO and 
quality of life for military families, and on the other hand, 
what would happen if we were to increase the end strength?
    SMA Tilley. Well, the one thing--and that is really tough, 
because, you know, I cannot get in to what size the Army should 
be.
    Mr. Edwards. Sure.
    SMA Tilley. That is the responsibility of the Chief of 
Staff of the Army, the Secretary of the Army and the Secretary 
of Defense. But I would just simply tell you, since 1992, I 
have been more deployed now than I ever have for the first 20 
years I was in the Army. In fact, I think on two occasions I 
was gone at least a year each time.
    So what would it do? It would have an impact on retention 
in the military. I mean, it would cause a tremendous amount of 
problems. I mean, we deploy enough now. And I cannot think of 
a--I am going to give you an example. That is probably the best 
way to do it.
    As I was in Saudi Arabia about two years ago and I was 
walking around, I saw this soldier leaning up against a 
building. It was a sergeant first class, a senior 
noncommissioned officer. And I said, ``How are you doing?''
    And he said, ``Aw, not very good.''
    I said, ``Geez, can I help you with something?''
    And he said, ``Well, not really. You cannot.''
    I said, ``What do you mean?''
    He said, ``Well''--and this guy was clearly upset. He said, 
``I have been deployed eight times to Saudi Arabia since the 
war.''
    I said, ``Well, Jiminy Christmas, I cannot believe that.''
    And then he said something else that certainly bothered me. 
He said, ``And because of that, I just lost my family.''
    And that is the bottom line. And so the answer to your 
question, for me is pretty simple, and not just for the Army, 
it is for all Services. If, in fact, we continue to march as 
fast as we are, those kind of things are going to happen. And 
those may not be the things that we see.
    I mean, I deployed to Bosnia for a year. It is the same 
thing. You are gone from your family for such a period of time, 
it really does affect the military.
    Mr. Edwards. Thank you for your comments.
    Let me just conclude with a quick observation. I wish all 
of you could have been with me, Congressman Dicks, Mr. 
Bereuter, Senators McCain and Lieberman had a trip. We went to 
Munich for the 38th annual defense conference they have had 
there. And there were 35 to 40 defense ministers there from 
throughout Asia and Europe. Next to fighting the war on 
terrorism, the biggest concern was that the quality of the 
people and the technology in the U.S. military has gotten so 
good and so far advanced beyond our NATO allies that they had 
serious concerns about the ability to integrate U.S. forces 
with NATO forces.
    And I just mention that as a compliment to each one of you 
individually, to your families and to all the service men and 
women that you represent with your presence here today and your 
lifetime of service. Thank you for making us proud of the 
quality of our U.S. military. We are deeply grateful to you.
    Thank you, Mr. Chairman.
    Mr. Hobson. Before I go to Sam, let me make a comment. On 
this eight times to Saudi Arabia, that should not have 
happened, because there are rules on that. And we just--for 
example, we had something changed, I think, where if you went 
to Korea for a year, you could immediately be assigned to 
Bosnia or Kosovo. And I raised objection about that, because 
they ought to be able to at least stay some time in Continental 
United States (CONUS) before they have to do those. I mean, I 
think they changed that.
    But there are supposed to be rules about tracking your 
deployment and how often you can go and your ability--now, 
there is certain Military Occupation Specialities (MOSs) or Air 
Force Speciality Codes (AFSCs), that they will probably violate 
that or get a waiver on, but most of the time, there is 
supposed to be a certain amount of time that you spend before 
they can do that to you again. And that is something we need to 
watch.
    There are these anomalies, like I just found out about the 
Korean one, which just seems--you are PCSed to Korea and then 
they send you on TDY to Bosnia or Kosovo, it is not quite fair.
    Now, I do think at some point we ought to talk about the 
overall size--somebody ought to talk about it; I am not sure it 
is this Committee--that we can do it; we provide the funding. 
But somebody needs to look at the size of the force if these 
kinds of things are happening. The size of this force may have 
been brought down too low overall. And somebody needs to look 
at the configuration of what it is.
    And while I am sending messages, since there are lots of 
ears in the room, let me suggest that I still think we have 
37,000 people in Korea and we have abandoned them. And some 
people do not support, I do not believe, well enough those 
kids. They are our kids. And we strand them over there and make 
them second-class citizens. And it is not fair and it is not 
right. I do not care who knows that I think that, because there 
are a lot of other people who think that. And if I have my way, 
before I am gone from here, we are going to treat them fairly, 
and we are going to treat the kids in Europe fairly on their 
MILCON, and we do not, either place.
    Now the President sees--the Administration has, kind of, 
gotten the message, all of a sudden, because they have put in 
more, I think, this time than they ever had before. And now our 
job is going to be to try to hold it. So I am just sending some 
messages, because there are lot of ears in the room and it is 
easier that way than any other way.
    So with that, Sam, you have my tie on.
    Mr. Farr. Thank you, Mr. Chairman.
    Mr. Hobson. Nice tie.
    Mr. Farr. Thank you for your tie. But you were not born on 
the 4th of July. Thank you, Mr. Chairman.
    I really appreciate the testimony and your being here 
today. And Sergeant Major McMichael, I heard you give a tribute 
in the Rotunda to the Navajo codebreakers.
    SGT MAJ McMichael. Yes, sir.
    Mr. Farr. Well, I want to tell you, I have been in that 
rotunda and listened to Presidents and Vice Presidents, 
Speakers of the House, Senate leaders, religious leaders. I 
have never heard a better tribute given, ever, by anybody than 
you gave that day. I was so proud of our country and what you 
were doing in congratulating and honoring those people we have 
kept secret for so many years. I really appreciate. I was so 
proud of you that day.
    SGT MAJ McMichael. Thank you very much.
    Mr. Hobson. Sam, that is his wife sitting right behind him. 
I will bet she was proud, too.
    Mr. Farr. Well, I will tell you, do not ever get into an 
oratory debate with him. He speaks without a note and he can 
outwit you anyway. So maybe there is a career for him in 
politics after the military. [Laughter.]

                  QUALITY OF LIFE AND EQUIPMENT ISSUES

    I have a real tough question, but it is a question we are 
faced with. We have to solve every problem in the world, right? 
We fund the United States government. And it is always a 
question of tough choices. And particularly with a defense 
budget. It is, you know, big defense, and there are two sides 
of it. There is the side of labor force, which is the men and 
women in uniform, and there is the equipment side of the 
military hardware.
    What I have noticed here in Washington is that, when it 
comes to the quality of life and the issues relating to the 
labor force, to the men and women in uniform, nobody is allowed 
to lobby for them. For the retirees and veterans, there is a 
big lobby. But for what you talk about in this committee, there 
is no lobby out there. Yet, when it comes for what the military 
ought to buy, the Fortune 500 companies have the best paid 
lobbyists on K Street down here trying to sell us that stuff.
    So within the military budget, we have to make these 
choices of how much we are going to put into procurement and 
how much we are going to put into quality of life. I am really 
proud of you and the leadership we have within the chairman and 
the ranking members to bring up these issues. We will never 
have an equal playing field, but at least a forum where these 
issues can be discussed.
    The soldier you just talked about did not care what you 
equip him with; if he has got a broken heart and a defeated 
attitude, he is not going to be a very good soldier. So it 
seems to me that is what business has to worry about, too--it 
does not matter what your stock is selling at, if your 
employees are unhappy, you are not going to be in business very 
long.
    Can you give us some kind of a feeling about how much we 
have to commit to meeting these quality-of-life issues that are 
going to make you better soldiers, versus how much hardware we 
have to buy?
    SGT MAJ McMichael. Sir, over the last four years, I have 
watched this process and have learned a great deal. I am not a 
bean counter or a green-eyeshade guy, but I do sit in meetings 
where these things are discussed. And I think your observation 
is about right on target.
    Mr. Farr. I would make one minor modification to it. I see 
it as a three-part decision process. It is the people pot that 
you talked about. It is the current readiness pot, the services 
that the taxpayers have already bought and paid for. And then 
it is the future readiness piece.
    My view of it has always been that you can give a mediocre 
sailor the best equipment in the world to operate, and you end 
up with a mediocre weapons system.
    You can give a top-notch sailor a mediocre weapons system, 
and they will make it perform admirably.
    It seems to me that ever since the end of the Cold War, we 
have been on a diet of meeting a bogey, over the last decade or 
better. And we have put well-meaning people in positions of 
having to make these tough choices, and they put the pants on 
one leg at a time every day and go to work and hope to do the 
very best that they can. And they are faced with making these 
choices.
    I think over the last four years, we have made wonderful 
choices in the personnel arena. I think we have gotten it about 
right to be honest with you. I wish we could have had more, but 
I am not sure we could have had measurably more without 
affecting the other two so miserably that we would have a lot 
of well-paid people with nothing to operate, with not enough 
equipment to operate, or very old equipment to operate.
    So this is a continuous struggle that is not likely to 
change over the years of trying to get the right mix between 
people, taking care of what we already have and getting the 
right stuff for our future force. That is how I see it.
    CMSAF Finch. I would like to add just a comment or two to 
that. I agree we use different terms basically saying some of 
the same kinds of things. We are forced to choose between 
modernization, readiness and taking care of people, and 
sometimes maybe, in past years, we have lost sight of the 
people part of the weapons system, and if we do not fix this 
piece, we could have nice equipment but nobody there to do 
anything with it. So you have got to figure out how to make all 
that balance.
    We also have come to have an expectation--and certainly we 
want to continue to do this--that in any war we fight, we want 
to win 100 percent to nothing, and so that also means we have 
to increase the use of technology.
    And the leadership is trying to choose between all of 
those. I think retention boils down to three things really:
    One is people have to know they are doing important stuff, 
and if we do not give them the right equipment, they will not 
value the jobs that they are doing. They will not think that we 
take that seriously. People definitely want to be appreciated 
for the kinds of work that they are doing, and if we do not 
show them in some quality-of-life kinds of things, they will 
think that we are asking much more than we are willing to give 
to support them.
    And they need some reasonable expectation that their family 
is going to be taken care of. If we do all these kind of 
things, we will continue to find the right balance.
    For us in the Air Force, when it comes to balancing all 
these things, we have taken quality of life and looked at 
facilities, infrastructure and housing and we have developed a 
priority basis. This way you can talk to anybody in the 
leadership of the Air Force to receive what the housing and the 
dorm priorities should be, so that as we continue to fund 
initiatives, we will move in a good direction.
    And we cannot just focus on one at the expense of another. 
We have to take a balanced approach in continuing to move us 
forward.
    I am happy to say in the last few years we have been moving 
up and not moving down. And as Jim Herdt has said, I think 
there was a time that we were trying to defend everything, and 
we were trying to figure out how to hold onto things. And the 
troops tend to view this as moving in an upward direction.
    The question I ask them is, are we better today than we 
were a year ago? And the answer I have had in the last couple 
years is yes, we are trying to recover and that is a good 
thing.
    SMA Tilley. I would just like to add to what both of them 
said. First of all, I have been in the Army a long, long time. 
And I remember the first tank that I was on. It was an old 48. 
And I associate that because I was back in Vietnam in 1967. And 
I think about what we have to do as far as transforming our 
military. And he talked about people. If we do not transform 
our military, what we are going to do in the end is lose 
soldiers' lives.
    One of the things that I have to do is go to a hospital 
every time a soldier is hurt or killed or wounded and talk to 
their family members or the soldier in the hospital.
    And I was over there the other day and I talked to two 
soldiers. One lost his arm, one lost his leg. One was an 
Explosive Ordnance Disposed (EOD) accident and the other one 
was some kind of hostile fire where he had lost his arm and 
ripped his chest open.
    So I say that because if we are not allowed to transform 
the Army, to have the kind of equipment that we need, in the 
future, unfortunately, we will lose a lot more soldiers' lives. 
And that is why it is important for us to change.
    And when you talk about quality of life and the things that 
we need to do, we have about 48 things that we associate with 
quality of life. We are not just talking about equipment. We 
are talking about pay. We are talking about housing. We are 
talking about communities. We are talking about education. We 
are talking about development for all of our young adults that 
are in the military with their family members. And so it is 
just not one thing that you can put your hand on. It is 
everything that you need to continue to focus on to push 
forward.
    Mr. Farr. What is very interesting is we travel to these 
different military bases with this subcommittee. It has been my 
impression--and I live in California and represent a lot of the 
Silicon Valley area, in Monterey and Santa Cruz County. But the 
impression I got is that, frankly, young men and women in 
uniform in the military, and particularly those with families, 
are really living at a better quality of life than their 
counterparts in the civilian sector even though they are making 
a lot more money. With all that money in the private sector, 
they do not have the quality of health care. They do not have 
the quality of child care. They do not have the quality of 
physical fitness. They do not have access to commissaries. I 
mean, they got Costco, I guess; that is the civilian 
commissary.
    But it is very interesting. And I have used that when I go 
around to high schools to try and encourage students because 
there is not the pressure to join the military that there was 
when we had the draft when I was young. I think we ought to be 
doing a lot better job of recruiting by offering what that 
lifestyle is in comparison to what it is in the civilian 
sector.
    All these dot-com companies make you think you are going to 
be a jillionaire out there. You cannot afford a house. You 
cannot afford child care even though you are making a pretty 
good salary. So, I think we lack the ability of explaining 
exactly what improvements we are making to the military quality 
of life.
    But also with the economy now, we have got to vote on these 
things like Star Wars. I am always going back to the basics. I 
played football in high school. And I remember we never lost a 
football game, but we got cocky every time we won by a big 
score. And our coach would always go back every Monday and say, 
``Okay, now you are going to learn how to run, block and 
tackle. That is all this game is all about. No matter how good 
you get, you have got to go back and learn the basics.'' And I 
think that is what we forget that the military: men and women 
in uniform are about the basics of the military, which is 
investment in people and the morale of those people.
    Your observation about equipment, we have that same problem 
in public schools. It is often said that what is the value 
system of America if you send the kids down to a mall that is 
full of the latest technology and music and color and you walk 
into a public school and it is 1950s technology and a pretty 
sad place to be. Where is our value system? Is it all just 
about going out there and making money, or is it about getting 
an education.
    And I really appreciate your comments.
    SMA Tilley. Thank you, sir.
    Mr. Hobson. Sam, do you have anything else?
    Mr. Farr. No. I just want to follow Sergeant McMichael's 
future political career. [Laughter.]
    Mr. Olver. What district are you in?
    Mr. Hobson. I hope it is not mine.
    Mr. Olver. I know, Mr. Chairman, that you have things that 
you want to follow.
    Mr. Hobson. No, go ahead.

                  EFFECTS ON RECRUITING AND RETENTION

    Mr. Olver. As the others have spoken after I did, I was 
wondering if my whole analysis had been blown to pieces. I am 
not sure. I think maybe I could just expand. You know, I am 
trying to understand this. There is a lot of different stuff 
that comes together and I am trying to be able to think about 
it in a broader context.
    So the idea that really the--it is a retention issue, the 
retention and the recruitment. There is such a lot of word of 
mouth that goes out from all of our military personnel. So you 
are not going to get recruitment if the word of mouth is not 
good, it is bad.
    Now, it turns out that most of those big, broad things like 
pay and BAH and retirement benefits and even educational 
benefits for members comes out of what the big committee does, 
which the Chairman is also Senior Member there. And one of the 
members on my side of the aisle is the number two Democrat 
there: Norm Dicks. And so they are able to do something about 
that.
    But that has a big part, I think, hearing what Sergeant 
Major Tilley was saying here on--has a big part on those 
retention issues.
    But what we do in this Committee is mostly because it is 
the Military Construction Committee. It is mostly those point-
source sorts of things. So we have a, kind of, a peripheral 
affect on top of these big aspects. And I guess I would be 
curious if you have a sense, among those point-source issues, 
you try to do things in an even, kind of, way and things are 
fad.
    Well, for a period of time it might be fitness centers are 
the fad. And then another time it is child development centers. 
And there must be, in your view, since you have seen a lot of 
what is going on--two years, and Sergeant Major McMichael, you 
are three years, I guess and the other two are with us four 
years and your last year--over that period of time, are we 
bringing all of these up somewhat? Or are there some of those 
point-source kinds of issues that have been neglected in the 
process and we need to put some work on those in particular?

                     ``POINT SOURCE'' IMPROVEMENTS

    What would be the places that we could make the biggest 
marginal benefit in our recruitment, retention goals? And maybe 
you would like to speak to whether you have seen really 
benefits on the recruitment side and on the retention side in 
each of your services in the years that you have testified 
before this committee.
    SMA Tilley. The answer is on the recruitment, I told you 
before, we are doing very good on recruitment. We are 
recruiting the kind of soldiers that we want to come into the 
military. And we also set up a lot of things within the Army 
that are well being associated. Our well being focuses on pay, 
compensation, education, housing, continuous education for 
soldiers, fitness, workplace environment, that kind of stuff. 
So we have groups within the military that focus on the kind of 
things that you were just talking about.
    And so when new recruits come in, we are trying to educate 
them about the kind of things that we have in the United States 
Army to help them to be a better family. So I think we are 
focused on that.
    The one thing you did talk about was child development 
centers. Now, that is always a continuous problem. One is 
because of the amount of times that we are deployed, is it open 
long enough? Do we pay the people who work in the child 
development center enough money? Do we have enough of them? And 
usually, the answer to all those is no, because we are deployed 
a lot more.
    The other question that you talked about--initially when 
you asked your question about the Reserves and Guard, it is--
you know, they blend in real good. Again, they are deployed 
just as much as we are. You cannot tell if it is a Guard or 
Reserve or active duty soldier. We are all just blended in 
together doing what we have to get done.
    But the Army is focused on those things. But I guess your 
question is if there is one thing--there are so many things, it 
is hard to pick one. The one thing I do hear quite a bit is 
child development centers for family members.
    MCPON Herdt. Sir, to address your general question first, 
are we making a difference? Are we bringing everything up, sort 
of, equally? I would make a flat statement. In 35 years in the 
Navy, I think I have seen more improvement across the board in 
the personnel area of quality of life and quality of service 
over the past four years than I saw in the first 31 years.
    Now, that is a bold statement to make. But I have had a lot 
of reason to reflect here recently as I get close to 
retirement, and I believe things have changed dramatically from 
1998. And I do believe that over the years we have been able to 
bring things up in, sort of, an equal way.
    And yes, there is point sources out there. There may be a 
child development center in one place, a single sailor center 
in another that maybe we did not get the right percentage of 
resourcing into. But I think by and large we are doing 
wonderfully.
    I will tell you one of the things that I think made a big 
difference over the last four years, in the Navy in particular, 
and that was BRAC moves, where we relocated and we had money to 
go in and build from the ground up new facilities. Our Naval 
Aviation Technical Training Center down in Pensacola is a great 
example of that. The Nuclear Power Training Command in 
Charleston is another one where they are designed from the 
ground up and done--you know, we were not in the fix-up mode. 
We actually built a quality place.
    Now, the RPM issue has lagged behind. And if we are not 
careful, those places are going to look old pretty quick.
    Mr. Olver. RPM is maintenance?
    MCPON Herdt. Real property maintenance.
    The backlog that the sergeant major mentioned, we all have.
    Mr. Olver. After we build things, we never provide for its 
maintenance.
    Mr. Hobson. People steal that money. They steal that money 
and use it for other things. And we do not have any control 
over that. I am trying to get control over that so they do not 
steal it, so they use it. That is why we wind up with these 
places.
    Any property owner will tell you, if you do not maintain 
it, it is going to be junk. And everybody robs Peter to pay 
Paul on those places and then we wind up with junk.
    Excuse me, John. [Laughter.]
    MCPON Herdt. If there were one area in the Navy that I 
would tell you that if I had extra money that I would like to 
do faster is we have finally made the decision that we are 
going to move sailors off their ships in their home port. We 
have, as a routine matter, a situation where sailors live in 
living conditions that they brag about to everyone when they go 
to sea. And they expect to live as we do when we go to sea. We 
live very close together because space is a premium.
    But the idea that we are finally going to move those single 
sailors off of their ships, junior sailors, in their home 
ports. We have a plan to do that. We are short about 24,000 
beds to be able to do it. But we have a plan to build to that.
    And it is my great hope that, as we move over the next five 
years or so, that we make sure that we get the money to do it. 
And if we speed up anything, that is where I would speed it up.

                MILITARY CONSTRUCTION AND PRIVATIZATION

    Mr. Hobson. I think there is some privatization 
opportunities in that. But there has to be some understandings 
of the BAH and the BAH needs to be specially tailored for that 
particular situation. But we are moving in a direction on that. 
We are also going to move in a direction of privatization of 
barracks so we can get you better barracks.
    There is some culture problems within the various services 
about that and how we do that. This is not a question about 
jobs. There is some control factors existent within it, but I 
think we can work through that.
    But we are never going to get enough money, in my opinion, 
to get this stuff up to standard through the MILCON Committee 
alone. And we are getting smarter in the housing side of it, in 
the facility side, and not just in barracks, but in buildings 
that we operate out of to perform our missions. Some of those 
buildings can be privatized, and some of the old buildings can 
be used in a different manner. And we have to get the people in 
the building and the commanders all thinking outside the box of 
new ways to handle this problem. And we are getting there. It 
just, you know, takes a while.
    And the housing, I think, started, then the barracks are 
going to start, and then we have got to look at these other 
buildings down the road, and we just have to keep pushing 
people to think outside the box a little bit so that we get you 
to those buildings that are adequate and I showed pictures on 
the floor in Europe of where we are using World War One horse 
barns in the Army to fix automatic weapons, rocket launchers 
today, and the trucks do not fit in, and the motor pool 
situation if they were here would be condemned, and the EPA 
would be active. We are asking people to work in those 
conditions.
    Now we are going to have to figure out some of that is 
going to be MILCON. Some of it is going to have to be the 
private sector. And we have to figure out the mix, and the 
people that we all talk about who plan this out--the Congress 
will not be able to do this in itself. We are not set up to do 
it. We can help you implement it, but we have to have you all, 
your guys down there, people down there, figure out the process 
and how we move in it.
    Mr. Farr. Mr. Chairman?
    Mr. Hobson. I think that is where you are going.

                MAINTENANCE AND FACILITIES PRIVATIZATION

    Mr. Farr. On the privatization, I know we have really done 
a lot for construction and moving into new buildings. I think 
we ought to also challenge the military to think outside the 
box on maintenance.
    We have done something with the Defense Language Institute, 
which is TRADOC managed, where the entire base operations is 
run by the city of Monterey. They have saved the military about 
40 percent of the costs of when they had to do it themselves, 
and the quality of maintenance has gone way up.
    The director of our housing authority in Monterey County is 
a retired military housing person, and he tells me that with 
the staff he has from the housing authority that they can 
provide a much better level of service at a higher quality to 
the military, but nobody has ever come and asked them, to 
participate.
    I am not suggesting that we need to privatize the 
maintenance, but I do think we need to look at what other 
public maintenance activities are already going on in the 
region, and allow the other public entities to compete for 
price and quality work. And that would be a little thinking 
outside the box.
    Mr. Hobson. They are looking at some of those things. They 
are also looking at utilities very heavily, because their 
infrastructure is bad in utilities, and we do not have the 
money to fix them. We may have to privatize some of those, but 
we have got to make sure we get the contracts right. I keep 
reiterating we have to be smart in how we draw contracts. And I 
am going to go meet a guy here in a minute who wants to talk 
about that, because I have criticized some of the contracts in 
some of the places. And he is not too happy with me.
    And I just want this last thing on quality of life and 
everything. As we do these things, we need to make sure that 
what we do is correct, and the next generation looks back after 
all of us and does not say, ``Boy, you guys entered into some 
dumb deals. You just created another HUD problem over there, in 
whatever you did.'' And I do not want to do that. Nobody on 
this committee wants to do that.
    So we are urging people to think outside the box and move 
forward but make sure that--I call it underwrite--we underwrite 
the projects in a manner that 10 years from now, 15 years from 
now, or 50 years, when somebody looks back and says what we 
did, they said, ``Gee, those people thought it out and they did 
it right.''
    Times may change, but, for example, in the housing we are 
going to need in certain places in the future we need to have a 
way to get out of these transactions at the right time. Things 
may change on how soldiers and sailors and Marines and airmen 
live in the future. They may live more on the economy than they 
do now. Some services do not want that as much as other 
services want that. You know, it is just different cultures, 
and we have to deal with those.
    And those are all things that we do not have the 
legislative authority on that, but we can affect it by asking 
questions, and we can affect it by the funding that we do. And 
I hope all of you get out of this--and I do not know whether 
John has anything else or not--but my last comment is, I hope 
you realize that this committee is dedicated to trying to help 
all of you do your jobs. But we need your help by your 
assisting us, by sending us things, telling us things and being 
forthright about the problem. Because sometimes we will act out 
of ignorance, and then we will not do it in the right way. If 
we have the knowledge, we will try to do it in a way that makes 
a difference.
    And I think privatization is a good example. Everyone 
thought we were opposed to it when we started down the road. I 
was not opposed. I was just trying to learn about it. And as we 
learned about it, we figured out that there are different ways 
to do this. In each service, you have a little different spin 
on it. But in the end, our goals are all the same.
    And that is what we want. We really value the things that 
you tell us. We value the work that you do, and we want you to 
know that if you need us to go someplace or do something or 
look at something, members of this committee are willing to go 
and look and learn.
    And I thank you for your time today and your service over 
the years. To both of you who will not be back, and you guys 
will be back and we will get you again. Let us know not just 
now but as we go throughout the years, you have done as we run 
into each other, let us know what is working, what is not 
working, and what we need to try to fix.
    And with that, we thank you all for being here today.
    Meeting is adjourned.
                                           Thursday, March 7, 2002.

                          U.S. PACIFIC COMMAND

                               WITNESSES

ADMIRAL DENNIS BLAIR, COMMANDER IN CHIEF, PACIFIC COMMAND
GENERAL THOMAS SCHWARTZ, COMMANDER IN CHIEF, UNITED NATIONS COMMAND/
    COMBINED FORCES COMMAND; COMMANDER, UNITED STATES FORCES, KOREA

                       Statement of the Chairman

    Mr. Hobson [presiding]. The committee will come to order.
    Good morning, everyone.
    Today I am pleased to welcome Admiral Dennis Blair and 
General Thomas Schwartz to the hearing. Last June, John and I 
hosted, a CODEL that visited their areas of responsibility, and 
we had a wonderful experience. We learned a lot about the 
peculiarities of their particular commands. Only after 
traveling from the U.S. to Hawaii, Okinawa and Seoul did I 
fully appreciate the monumental size of the Pacific theater. 
Consider some of the countries in that region: Japan, China, 
Korea, Indonesia, Vietnam, Thailand and India. It is a region 
that is vastly important to the United States economically and 
militarily.
    I really want to thank both of you for hosting us on that 
trip and frankly I want to commend you both on the jobs that 
you have done for this country.
    Today is the last time we will hear from these two great 
officers in this forum. I would like to take a little time to 
introduce them. It is going to be a very difficult time when 
you lose two commanders of this stature in the region or at any 
time in this country, but especially two people who had a 
partnership for some time now.
    Admiral Blair has been a marvelous Commander in Chief and 
has been a force at the Pentagon pushing for more military 
construction funds, something I personally appreciate. Admiral 
Blair is the 19th officer to hold the position of Commander in 
Chief U.S. Pacific Command, the largest of the unified 
commands.
    In addition to his many accomplishments, he has been a 
recipient of several personal decorations including the Defense 
Distinguished Service Medal with two oak leaf clusters and 
Defense Superior Service Medal. His commands include the USS 
Cochran and the Kitty Hawk battle group.
    His forte is intelligence gathering. I guess that is 
because he is an intelligent guy. I do not know. Diane will 
know more about that. In fact, a recent article in the 
Washington Post stated that the president reached every support 
provided to him from Admiral Blair. In short, the admiral is a 
force, and a we appreciate his contributions to our national 
security. He was actually my choice for another job, but that 
did not happen. But, you know, as I told him, I am not going to 
be a United States Senator either, and I never thought I would 
be here, and he probably never thought he was going to be an 
admiral.
    You know, it is an interesting time and we really 
appreciate what you and Diane have done for this country. And, 
you know, time goes by awfully fast. I think probably when you 
were going through training you never expected these days would 
get there. And I can tell you, being at the age I am and being 
in Congress, you wonder, you know, when your time is. You guys 
get a date, we do not get a date; we just get people who go out 
there and whack us. [Laughter.]
    Admiral Blair. And we honor you for it, sir.
    Mr. Hobson. Like Admiral Blair, General Schwartz faces the 
challenge commanding the theater that must be ready to go and 
fight tonight. General Schwartz is a wonderful advocate for his 
soldiers. He is a war-fighter with an incredible career in the 
military.
    Let me describe a few of his personal decorations. General 
Schwartz has been awarded the Air Medal Distinguished Service 
Award. In addition to this award he received the Silver Star, 
Bronze Star and Purple Heart demonstrating his valor in service 
to the United States. The country is truly fortunate and 
blessed to have the dedication and commitment of General 
Schwartz.
    I have to tell you one story here. We were in Korea, and we 
were walking through a barracks, and there was this young troop 
who had just arrived. I mean, he was really fresh. And all 
these congresspeople were walking through the room, and I said, 
``Have you ever seen so many congressmen before?''
    And this kid said, ``No.''
    And I said, ``Have you ever met a four-star general.''
    He said, ``No, I have never seen a four-star general except 
in the movies.''
    I said, ``Well, here, meet one right here, General 
Schwartz.'' [Laughter.]
    And, of course, you know, Schwartz is such a big guy and 
his four stars are shining everywhere. We have some great 
pictures, John, as you know, of the North Korean guys looking 
in, and they were not looking at all the rest of us, they were 
looking at General Schwartz up there with all these stars on. 
And we were all getting a little nervous about what was going 
to happen when we were out there.
    But there was a great colonel up there. I do not happen to 
like 9 millimeter sidearms. This one special forces guy told me 
they just make people mad. [Laughter.]
    And this colonel and I got into an argument about he, kind 
of, liked his. But he knew more about it certainly than I did. 
He was a pretty good guy. And I think as long as he was there 
you were probably pretty safe, sir.
    You know, I think whatever would have happened, both of 
these people would have been successes in whatever they did in 
life. And I think they are really standouts today because they 
not only were there themselves, but they had two spouses that 
really supported them and will tell you that we do not get 
through this life very well. I know E.J. would be nothing 
without Susan. [Laughter.]
    And people say Carolyn is 70 percent of my vote.
    But I guess the thing that is troublesome to me, and I know 
that life goes on, but both of you have been such great 
advocates for the people that are in your command. And the 
people really respect you in the commands.
    And I think if you look at this part of the world, it is a 
better place today. And one of the reasons it is maybe not as 
volatile right now is because you two have had such a great 
partnership. And the people that work with you have had such a 
good morale that I think you can both say that the commands 
that you have had are better today because you people were 
there and did your jobs to such a high degree and fought for 
your people, fought for your commands and to get the right 
stuff.
    And not everybody can say that. But you were certainly two 
people at the right time, at the right place, together to get 
this done. And it is nice to see the Army and the Navy, kind 
of, getting along. And we had an Air Force guy there once in a 
while, too, behind you trying to work it.
    But I really want to tell you, you can sense that. We sense 
that. I think everybody who went to your region sensed that. 
And your military personnel, no matter what service they were 
in, both of you, they sensed that. And I think the allies in 
the area realized that they could not divide you two; that you 
had a unified command. Your different personalities, you 
approach your jobs differently. But you both are people who are 
result-oriented.
    And I just want you to know that I am sure all the members 
of this committee share this and I want you to know that I do. 
We thank you for your service. And we appreciate you coming 
this morning. We are going to miss you both. I hope you stay in 
touch. I know Schwartz is going to be bugging me for West 
Point. [Laughter.]
    But we really, really, truly thank you for your service to 
this country.
    And with that, I will turn it over to Mr. Olver.

                         Statement of Mr. Olver

    Mr. Olver. Well, thank you, Mr. Chairman.
    It is difficult, when the chairman has gone through such a 
fine series of sincere and gracious remarks, to figure out what 
there is left that I might say. But, we are politicians, so----
    [Laughter.]
    Mr. Olver [continuing]. I have to give it a try.
    I, too, want to thank you very much for the service that 
each of you has provided. I do understand, or sense, that this 
is probably the last time that either of you will testify 
before this subcommittee in the roles that you have filled so 
ably over the last several years.
    As the chairman said, we had an opportunity to visit with 
you about nine months ago and had a good chance to see the kind 
of challenges that you faced at that time. He has made fine 
comments about how wonderful you work together, what we have 
not seen is these places where I am sure there were some 
clashes. And you might want to elaborate on those somewhere 
along the way. But maybe not in this particular forum.
    Mr. Hobson. Certainly not on the record. [Laughter.]
    Mr. Olver. I have to say, General, that we just came back 
from another trip out to the central part of Asia, the other 
end of the silk route, more or less. And I am beginning to 
understand that each command seems to have its own kinds of 
mantras. The chairman has already mentioned that yours was, 
``Ready to fight tonight,'' and we heard that all over in our 
visit to Korea last year.
    In Central Asia this time the mantra that we heard was, 
``Wash your hands with soap.'' The commander there again and 
again was telling people, ``Wash your hands with soap.''
    Mr. Hobson. No, it is, ``Wash your hands. With soap.'' 
[Laughter.]
    Mr. Olver. Okay. You see.
    I hope this committee has helped you make the areas under 
your command better places for the people to operate, and I 
trust that that has been the case. I think you are, sort of, 
giving us exit interviews--in a sense. The one thing that is 
happened here is 9/11, and I would be extremely interested to 
know what the challenges are, what the changes are and how you 
have already prepared for that, and how we can help there as 
well.
    Thanks again for your great service to this country.
    Mr. Hobson. We have a little ceremony that we have to do 
here. Today is a special day, we understand, in the life of 
General Schwartz. And I have tasted these earlier today before 
you got here. [Laughter.]
    So for you we have a little birthday donut.
    [Applause.]
    I want you to know, I did not wait for you to get here 
before I ate my donut. But they are okay, I checked them out.
    General Schwartz. Okay, I will make my wish. Thank you.
    [Applause.]
    Mr. Hobson. Gentlemen, your written statements will be 
entered in the record, and we would like you to summarize your 
testimony before us, but before I do that, Ms. Granger has--no, 
go ahead. No, it is fine.
    Ms. Granger. I would just say the same thing, and I want to 
add, I did not get to make the trip with the chairman, and I, 
of course, made the trip later and saw very clearly what you 
all have done.
    And I want to say to you how much we appreciate your coming 
to us and saying, ``This is what we need.'' Oftentimes we do 
not hear that, and it is very frustrating to us to try to 
provide the needs when someone sitting in front and saying, 
``We do not need things.'' You did not, and you said, ``This is 
what we need,'' and we have tried to fulfill that.
    And so I want to tell you how much I personally appreciate 
that as a member of the committee. It has been very, very 
helpful to us. And I know we have not done everything that 
needs to be done, and so I hope as you leave here you will say, 
``And do not forget,'' and make sure we know what the next 
priorities are so we can fill them.
    Mr. Hobson. One other thing you might mention is what you 
said when you were in Turkey. What did you tell those guys in 
Turkey?
    Ms. Granger. I told them it was like living at the Hilton. 
[Laughter.]
    You know, as they were showing us the needs, I just said, 
``Let me tell you, I just returned from Korea, and it is like 
you live at the Hilton,'' that I saw some real needs there.
    Mr. Hobson. So I just wanted you to know, you picked up 
another advocate.
    Ms. Granger. Absolutely. [Laughter.]
    I just was not completely sympathetic.
    Mr. Hobson. So, with that, you gentlemen, Admiral, I guess 
you are up first.

                  Statement of Admiral Dennis C. Blair

    Admiral Blair. All right, sir, Mr. Chairman.
    Mr. Hobson. This is your last time.
    Admiral Blair. Last shot, yes, sir, with the committee. I 
would like to thank you for your kind words, but I would also 
like to say that we deal with numbers of members of Congress, 
and you all are the ``get out there, get your hands dirty'' 
type, which I think does the best for our country. And the trip 
that you just got back from Afghanistan, six hours ago, or 
seven hours ago, is an example of the dedication that you have, 
and all of our people notice it when you come out there.
    As you were there in Afghanistan, if you looked up in the 
sky, you saw aircraft flying from the U.S. Pacific Command on 
missions. There were airplanes that were home based in places 
like Japan, Okinawa, even Alaska.
    If you had been able to go down south, you would have seen 
ships who were launching those airplanes and carrying out other 
missions, and they were from places like San Diego, Pearl 
Harbor, and Guam.
    You may have met some Marines who had been in Camp Rhino. 
They were from Camp Pendleton. And, of course, all of their 
families are back there worrying about them and waiting for 
them to come home.
    Beyond supporting those operations in Afghanistan, we have 
our part of the global war on terrorism in the Pacific, and our 
mission is to eliminate Al Qaeda in the Asia-Pacific region and 
to make it a very unfriendly place for other terrorists to 
come. And we are fighting this war from many of those bases 
that you visited.
    And the key to success is a relentless pursuit of these 
terrorists and an unprecedented cooperation with our allies and 
treaty partners. That is the big difference between before 
September 11 and after September 11. Before September 11, we 
were building bigger fences, we were getting more standoff 
distances; after September 11, we are going after them and 
making them worry about their safety and their lives.
    We have had some initial successes in our part of the 
world. You may have read about recent arrests in Singapore, 
Malaysia and the Philippines, and these arrests eliminated 
parts of a network in Southeast Asia which was threatening our 
forces and our embassies and the host nations.
    We are providing advice, training and material assistance 
to the Philippine armed forces in their efforts to eliminate 
the Abu Sayyaf group. This is a group which has had links to Al 
Qaeda in the past. It holds two American missionaries hostage 
right now.
    Our joint task force, which is there advising them, is the 
largest military operation that we currently have ongoing in 
the war on terrorism in the Asia-Pacific region.
    Even assistance and support operations are dangerous. It 
was less than two weeks ago that we lost eight soldiers and two 
airmen when a helicopter went down on its way home from a 
mission.
    While some of our forces and I would say a relatively small 
part of our fighting forces and a lot of our intelligence 
effort and our headquarters effort is engaged against 
terrorism, we are continuing to keep the peace in other parts 
of the Asia-Pacific region.
    General Schwartz's troops that you are very familiar with 
are keeping the peace on the Korean Peninsula. Other parts of 
the Pacific Command are keeping an eye on the Taiwan Strait. 
They are exercising and operating with their allies and 
partners in other parts of the region in order to keep it a 
quiet place where peaceful development can occur and to 
continue their success stories of Asia which have taken place.
    I can tell you that overall in the Pacific Command 
readiness is high, morale is high. But at the pace of 
operations that we are now experiencing, it will not be long 
before we begin to show some wear. The wear will be on our 
people their families and on the bases from which we deploy.
    We have to be ever-vigilant to make sure that those people 
that we are so proud of live in housing and operate from 
facilities that we can also be proud of. Your committee has 
been in the forefront of making that slogan a reality.
    This war on terrorism is going to be sustained; our 
president has told us about it. Everything I know about these 
terrorists makes me believe that we are going to be after them 
for a long time to come.
    And so, one of our priorities is increasing the security of 
our bases. Force protection has always been important, but it 
is even more important after September 11. Among our components 
in the Asia-Pacific region, including General Schwartz's 
forces, we have identified over a billion dollars worth of 
force protection projects necessary to bring the whole 
infrastructure up to standard.
    In this year's funding, we funded the highest-priority 
ones, the ones that we really need to take care of. But we need 
to, over time, sustain that funding so that eventually they are 
the sort of bases that we can feel good about the protection 
of. And these are things like roads that are in the wrong place 
or gates that need technology in order to inspect truck cargoes 
and just some of these long-term improvements.
    We are now taking care of these issues with people, 
primarily reserve component people, to our inconvenience and 
inefficiency in our activities. And over time, we have to 
reconfigure our bases, which were built in another era, for the 
safety required in this era.
    Our overall strategy--the war on terrorism, deterrence on 
the peninsula, all of the other things we do--rests on a basis 
of base-forward-deployed forces, a command and control 
structure on top of that that can move information around the 
theater quickly, and then a strategic mobility infrastructure 
so we can get the right forces on a rapid basis to the places 
that they are needed.
    So we need the modern war-fighting headquarters like the 
new one we have at U.S. CINCPAC, for which I am very grateful 
to this committee. It will be finished in December of 2003, and 
it will be able to command the forces as they should be 
commanded and controlled.
    But you also saw the other headquarters buildings at the 
Army Pacific, and Pacific Air Force. They have to be replaced 
and renovated, respectively. And our Marine and Special 
Operations headquarters also need new command centers, but we 
have not even put those in the program yet. These are not 
cheap. We put a lot of particular information technology in 
them, and we build the buildings around the----
    Mr. Hobson. Are these in the FYDP? They are not even in the 
FYDP?
    Admiral Blair. The Air Force and the Army are in the FYDP; 
the Marine Corps is not. The Marine Corps Pacific is not there 
yet, sir.
    And then, as you all know better than anybody else, it is 
not just building the new buildings, it is keeping up the ones 
we have. And the replacement backlog, we stopped the growth 
over the last couple of years due to, primarily, congressional 
adds, but it is going to go back up unless we keep working on 
the SR&M budget.
    The good news in the Pacific is that our allies pitch in 
here to help us support our forward-base forces. Japan and 
Korea together will spend $942 million this year to construct 
facilities for U.S. forces that are based in their countries. 
Japan, of course, is the largest single contributor of any 
ally. And, due to General Schwartz's efforts, there is good 
news in Korea about the increase in their contribution, and he 
will tell you about that.
    As you know, out of the budget, we have spent about $20 
million for the Army Corps of Engineers, and that was to 
leverage the money spent by Japan and Korea in order to design 
and make sure that those projects meet our specifications.
    So let me finish up by mentioning several projects which 
are on the books for the future, but which did not quite make 
it into the cut for this year's budget, because there are 
things that we have to sustain the momentum on. And although 
General Schwartz and I will not be here, our successors will 
need them.
    This war on terrorism has highlighted the crucial 
importance of intelligence. We have incredible people doing 
that job. They are doing it in inadequate and vulnerable 
intelligence centers, and we are missing opportunities to be 
able to do more.
    We have done the initial design work on our Pacific 
Security Analysis Complex, which will take two of our 
facilities--our Intelligence Center, Pacific, and our Regional 
Signals Operations Center--and put them into one state-of-the-
art building, in a very safe place. And that will keep us ahead 
of the threat for many years.
    This complex is an idea that will require cooperative 
funding among the Intelligence Committees, and this committee. 
We have had visits from the House Permanent Select Committee on 
Intelligence staff and, Speaker Hastert. I believe you were 
there, Congresswoman Granger, and saw one of the facilities. We 
have good, I think, understanding of what we need. But it is 
going to take some creative work in order to determine which 
money comes from which pot in order to fund this. But it is the 
right thing for the Pacific, and we need to start in fiscal 
year 2004, when our designs are at a better stage.
    Then, finally, the schools for our kids overseas. The 
Department of Defense Education Agency received a report card 
last year, and it fared very well. It does a better job than 
most school systems in the United States. It was particularly 
strong in minority student achievement in the schools. In fact, 
it was the best of any school system in the country. And that 
coincides with the feedback that we received from our parents, 
servicemen, and from our commanders.
    But in the near term there are three schools that were not 
able to make the cut for this year and they need funding. Our 
first priority is an elementary school at Camp Humphreys, for 
our kids who are there in Korea. And then, in fiscal year 2004, 
we need two schools in Guam. We need a high school for all of 
the high school students in Guam; Navy and Air Force. And we 
need an elementary school in the southern part of the island 
for the Navy.
    Mr. Hobson. But now, Guam was a base that was BRACed, at 
one time, is that right?
    Admiral Blair. We BRACed part of that base, yes, sir. And 
where the elementary school in Guam is now located is in a BOQ 
building, which was right on the edge of part of that BRACed 
area in Agana. It appears, we went too deep in Guam with our 
closures. It is the last piece of land in the west that we own. 
It is United States owned. It is going to be a lily pad for 
moving out. And we need to work on it.
    Mr. Hobson. Have you said that to the powers that be that 
are down there now?
    Admiral Blair. Yes, sir.
    Mr. Hobson. Do they know this?
    Admiral Blair. And, in fact, if you read current defense 
plans, they direct us to conduct a study of basing another, 
either deployable or permanent, air wing overseas. And we are 
looking at Guam as the location for that. The Navy is moving 
three submarines to Guam. So the momentum is--I mean, Guam went 
down like this, and the momentum is definitely back in the 
right direction. So, I think we have support within our 
building, within the Pentagon for increasing Guam. We just have 
to get the right pieces in the right place.
    Mr. Hobson. But, apparently, they are not ready to fund it, 
is that right?
    Admiral Blair. The schools did not make the cut. And I wish 
they had. We fought hard, and they have just been postponed.
    Mr. Hobson. How much was that, total schools?
    Admiral Blair. For the school in Camp Humphreys, it is 
about $7 million. For the two in Guam, it is about $35 million, 
$40 million. So it is about $80 million for the two schools in 
Guam.
    Mr. Hobson. Well, for all the note takers in the room, I 
will make this statement at this time, which, if you were here 
yesterday, I made. What happens in this situation, is if we 
take care of that, we are going to be accused by OMB of being 
excessive spenders, and not playing on the team. And if they 
could, they would probably fire us. And then there will be 
some, in another body who will accuse us of doing pork barrel 
projects.
    And I would like to serve notice to all you people who go 
back and report to all the powers that be, down there, who 
right all these notes down, I hope you very carefully took down 
my statements. And I hope somebody from down there will come at 
some point and explain to me what is going on, because I do not 
know.
    And I said this yesterday on a runway at Tyndall that if 
the member takes care of that runway as it should be and as 
they hope it will be, then he will be accused of not--well, he 
is a Democrat so they--I do not know what they will do to him. 
But maybe they will show up in his district and try to take him 
out.
    But it just seems to me that there is something going here 
that is not appropriate to go on. And this ought to be in a 
much more refined dialogue than we are having to carry out this 
way.
    And so I wish someone would begin a dialogue with the right 
demeanor, instead of everybody taking shots at everybody like I 
am doing now, somebody would sit down in a rational fashion. 
Maybe it has to be in the leadership or somewhere.
    But this is not healthy for you all. You should be able to 
come here and tell us exactly what you did. And you are both 
short-termers, so it is okay. [Laughter.]
    But I know you guys, you would have done it anyway. But 
people should not fear in telling us what their problems are, 
because it is only in that way that we can help. And we have 
three branches here trying to work together to get this stuff 
done. And we should be working together rather than taking 
potshots at each other on this sort of thing.
    Because we all have, frankly, the same end goal. And that 
is to perform these missions to the best you can. And if we are 
not all on the same wavelength, then we are not getting that 
done. And I am hoping that somebody gets the message. Because 
if they do not get the message pretty soon, then we are going 
to have to go to the floor of the House and then the media. And 
all this, is just not healthy. But so far nobody has listened.
    Admiral Blair. Yes, sir, Mr. Chairman. I mean, this will be 
my last time before this committee. But I have been watching 
this business for a while and we have discussed it. Readiness 
funding gets high attention. Of course, building new ships and 
planes gets high attention. Pay gets high attention. But we 
just have not developed a hook for the bases, piers, posts and 
stations. They are always something that, sort of, if you have 
money left over, you spend it on that.
    And you are right. The time has come, we cannot sustain 
this forever. We cannot patch the roof, we have to replace it. 
We have to pay attention. I will tell you, only subcommittees 
that have names like MILCON on them spend their concentrated 
time on it. So I am going to be moving on and cheering from the 
sidelines.
    But I would like to say to all members of this committee 
that you all are our champions for this. You are the ones who 
do it. We can talk and we get in various forms of trouble with 
our bosses and that is okay. But you all are the ones who make 
it happen.
    And I just would encourage you to continue what you have 
done for our men and women and their families. It is very 
important. It is noticed and it is the right thing to do.
    [The prepared statement of Admiral Dennis C. Blair 
follows:]



    Mr. Hobson. Fortunately, my bosses so far every year have 
been willing to step up to the plate and make substantial 
changes in a positive fashion. But I do not know how long that 
is going to continue if this constant sniping goes on. And I do 
not mean you when I do that.
    So with all that, General Schwartz, I hope you are going to 
tell us about some of the quality-of-life things such as the 
movies and the e-mail.
    But actually, before you start, they were pretty good to 
Korea, the administration. Just so I say something good because 
I get in trouble if I do not say something good, too.
    But they did do a better job than I have seen in the past 
in funding some things for Korea in the administration's 
budget. So we cannot be totally critical of what they have 
done. And there are barracks and things that the other body has 
said in the past that they would not mess with. So we have 
pretty much the whole--find the way of that language is to hold 
them to it. But go ahead.

                Statement of General Thomas A. Schwartz

    General Schwartz. Thank you very much, sir.
    Let me just start with this. I want to thank you, Chairman, 
committee members very much for everything that you have done. 
It has been monumental really, the best word I can use to 
describe what you have done to help Soldiers, Sailors, Airmen, 
and Marines where it really matters. And back to what Admiral 
Blair said, these things fall out in the priority sometimes. We 
just do not seem to get at them. And they need to be moved up.
    Under your chairmanship in this committee, they have been 
moved up. And it has been very significant and noted by our 
people.
    I guess the best thing I think of is results not reasons. 
We used to have that saying when I was coming up. I would see 
it on mottos with companies, battalions and everything, but it 
really reminded me of this committee because you make things 
happen.
    And the results are out there. It is on the record, and it 
is noted and appreciated by our people so thank you very much.
    You know, just to make a comment that you alluded to 
earlier about Admiral Blair and myself, you know I have been 
serving the country for 35 years, and I have been in a lot of 
teams and a lot of partnerships, but I can tell this committee 
that our personal relationship, professional relationship has 
been one that has been enriching, rewarding and actually 
believe it or not, Admiral Blair and I have not had any 
clashes.
    We have worked together. We have talked together, and we 
moved our commands together. And I am tremendously proud of 
that relationship, and I just wanted to comment on that.
    Congressman Hobson, I will cover a few things in a minute, 
but I would like to just go right to a couple of things you 
mention right there. You have been personally involved with 
some of these things. And let me just give you some quick 
feedback on it. As far as movies on the peninsula----
    [Laughter.]
    General Schwartz [continuing]. Every Soldier, Sailor, 
Airman or Marine are watching movies at no cost. We have almost 
tripled the attendance of movies on the peninsula with family 
and particularly the people going are families; kids whose 
parents you do not normally take, and now that it is free, they 
are going to the movies together. There is goodness in this, 
and it is significant. It may seem small. It is huge. Thank you 
very much.
    Free Internet. We were headed down a path. We are now 
engaged with different people to look at how we can do this 
cheaply, but in the next two years, we will have free Internet 
access for our people. We seeded the initial cost of it, and 
over the next few years, we will provide it for our people as a 
result of your initiative and a lot of hard work by a lot of 
great people.
    We have been talking about the pay raise and what 
difference it makes, and the hardship tours in Korea. It is 
talked about every day. They appreciate it deeply. It is making 
a difference in their lives, particularly those back home who 
are sacrificing and every dollar makes a difference. On housing 
I would just say this: Over the last three years, this 
committee, MILCON, Mr. Chairman, under your leadership, we have 
had more MILCON in three years than Korea has had in the last 
15 years. I think there is no other way to describe it other 
than that, so that is quite unbelievable.
    Twenty-seven months in Korea this tour, six years almost in 
Korea at 35. Loved every minute of it. I will tell you I am 
honored of those six years. They stand out as highlights of my 
service, and this is an incredible alliance.
    General Moon is back here, and I would like to acknowledge 
him and Colonel Park. They are here today, and we are glad to 
have you. Because we always do everything together. We say we 
go together. Thank you for being here today.
    We are ready to fight in the theater. You noted that when 
you came. It is a fight-tonight theater, and we are proud of 
it. And we work on it every day. Our Soldiers, Sailors, Airmen, 
and Marines are proud of themselves. Morale is high. A lot of 
the reason is due to your contributions and your efforts here.
    They sacrifice a lot. We have had over 100, and I have 175 
here, but it is over 100 Congressmen, and Senators from two and 
a half years visit the peninsula. We are proud of it. To tell 
our story, and to find out and understand and come to 
appreciate and help our people.
    North Korea, just to comment on them, because everybody 
asks me about where are we with them. Well, we are not much 
different in the sense that Kim Chong Il continues to build his 
military at the expense of his people. That is the bottom line. 
He grows stronger while his people suffer. And he is dangerous, 
he is adaptive and he is unpredictable. And all of that again 
is done at the expense of his people. That is the story and it 
surely was one that was repeated by our President when he 
visited.
    I might add that his visit was a turning point in a lot of 
ways for the Korean people. They were anxious, they were 
worried about war.
    Mr. Hobson. Did you get him and show him all the quality-
of-life needs that we have over there?
    General Schwartz. We did not get a chance to show him that 
because of his busy schedule, but I certainly talked to him 
about it.
    Mr. Hobson. Did you give him one of your tapes?
    General Schwartz. I should. I will follow up. [Laughter.]
    Mr. Hobson. You need to make sure the president gets that 
tape.
    General Schwartz. We need to forward that tape, because if 
we could get him to watch it would be great, and I will follow 
up on that.
    I am amazed at this alliance every day. Sometimes the 
things the Koreans do is not well understood back here, but I 
will just give you an example. In Enduring Freedom, when 9/11 
hit, the President of that country said, ``I will provide more 
support than we did for Desert Storm/Desert Shield.'' He said 
that will exceed $500 million. That was his commitment. He is 
on a glidepath to exceed a $500 million contribution.
    There are about 400 people involved right now in the effort 
with Enduring Freedom from Korea: a logistics ship, C-130 
aircraft and a medical unit. So we are proud of that.
    They are also helping us protect our bases. They have 
contributed over 10,000 people in the effort to protect our 
camps and stations. You know, we have 85, and so they are 
really on a glidepath to help us there.
    I would just like to say, last year we had a special 
measures agreement, and I think when I was before this 
committee we had not concluded it. But they were contributing 
$425 million a year, and this is direct dollars that we can use 
for construction and CINC priorities on the peninsula. This 
year they went to $490 million. The next two years, under an 
agreement we have with them to increase by 10 percent, it will 
go to $550 million, in the last year close to $600 million.
    The Koreans are stepping up to the plate, and we have to be 
proud.
    Mr. Hobson. You had a good ex-appropriator helping you out 
on that, and Tina Joyce, I think, was involved in that.
    General Schwartz. Exactly.
    Mr. Hobson. So I do not have to worry about that agreement, 
because I know Tina.
    General Schwartz. She was great, and everybody was great in 
this, sir, but most of all, the Koreans were great and they 
really stepped up to the plate.
    The Land Partnership Plan, if I can just make a comment 
about it, it is moving along; we will sign it in the next 
couple of weeks. The goal was 15 March; we will either hit it 
or be very close.
    This is a kind of a guess, and we have done some work on 
this, but right now our figures show, when LPP is completed we 
will save approximately $70 million to $100 million a year as a 
result of the efficiencies achieved under the Land Partnership 
Plan. That is significant. That is BRAC-Korea.
    I briefed the President of the United States on it. He 
recognized it, he was aware of it, he was very proud of our 
efforts there and excited about LPP.
    Mr. Hobson. My only concern is, and I want to say this with 
all due respect to the Koreans, we tend to give up our stuff 
and there is an awful long time to get the other stuff. So I do 
not want to give up stuff until we know where the other stuff 
is. Because we have a bad history of things not happening in 
the way we thought they were going to happen and in the fashion 
they were going to happen after we have given up land. And I am 
very concerned as to how this works so that it does not have 
the patterns of the past. Or at least what I perceive to be the 
past. And maybe I am wrong on that, but I do not think I am 
wrong.
    General Schwartz. You are not wrong. We have taken your 
advice and I have made sure that the wording of that agreement 
recognizes that fact and that it is not piecemeal; that, in 
fact, as it goes along if something happens and the reciprocal 
thing must happen. And so we think we have guarded against 
that. We feel good about it as a result.
    Mr. Hobson. And it is going to be on the record.
    General Schwartz. And it needs to be in the record.
    Mr. Hobson. I am going to be here longer than you guys.
    General Schwartz. Sir, the thing I would report to you 
about what is going on in Korea for MILCON is it is making a 
difference. You can see it when you fly over Korea. You can 
start to see the buildings coming up. If you look at the 
numbers that I gave you earlier about MILCON, a lot of that is 
yet to come, but every one of those dollars means new barracks. 
It means new dormitories. It means new UOQs and BOQs for the 
enlisted folks. It means dining facilities and housing for 
people. And it has helped our morale.
    And we are working hard with the OSD. I know you alluded to 
that earlier. And we are working with them. And they are 
working hard with us. Our services are working hard with us. We 
have a lot of support. It is just hard, some of this stuff. But 
I will reflect to you that they are doing a good job and they 
understand our needs and are working with us.
    I would just say a couple of our needs, when it comes to 
SRM, sustainment, renovation and modernization, costs, a lot of 
times referred to as backlog, by the old name. We still need 
help with that area. I mean we are getting the everyday things, 
but we are not getting at the backlog things, as Admiral Blair 
said. And we need that priority to be raised up so we can get 
at some of those shortfalls that are still significant.
    The renovation dollars that you have helped us with Hannam 
Village have made a huge difference. You saw the difference. 
With those millions that you provided, we are in phase three 
right now; it is a three-phase project. I will come back to you 
and articulate the need for phase three. We do not have those 
dollars yet. But we have a plan to integrate them into the POM, 
and it looks pretty good. We need your support with that as we 
continue to finish.
    Mr. Hobson. What about the proposal: using the Koreans like 
we use the Italians in Naples?
    General Schwartz. Yes, sir. And that is the build-to-lease, 
which I was just going to comment on. The progress is great. We 
took that model, we applied it to Korea. We put some seed money 
down to get all that going, the discussions going, some of the 
design going, some of the contract negotiations going.
    We do need some additional dollars. In fact, we need some 
seed money from you that we have inserted into the 2003 
request, and the 2004, 2005 POM to try to get about $12 million 
to finish that. It is like RCIC money that we had to do as we 
started that program in the Army. We need the seed money to get 
this all going. It is about $12 million, our request, sir, is 
for that.
    But I would report to you, Mr. Chairman, that this thing is 
coming right along. But that money we do need and it has been 
submitted.
    The MILCON dollars again, Chairman, are going just great. I 
have listed, of course, by your directive, some of the top 12 
priorities we have. I have those. I will submit those based on 
your direction to the committee.
    Congressman Olver, I think you will be glad to know that we 
have I think been very responsible in our environmental 
dollars. And I can testify as how we used them and some of our 
needs in the future. We do have needs for more money in the 
environmental picture. But those needs are submitted and we are 
working with the people to get that accomplished.
    Let me just say the alliance is strong, as I finish up 
here. I am proud of this relationship. I am proud of what your 
committee has done and, sir, plain and simple, you are making a 
difference. This committee is making a difference and we deeply 
appreciate it.
    [The prepared statement of General Thomas A. Schwartz 
follows:]



    Mr. Hobson. Thank you, gentlemen.
    We will open it now for questions.
    John, do you have questions?

                         LAND PARTNERSHIP PLAN

    Mr. Olver. Thank you, Mr. Chairman.
    Thank you both for the update and summary.
    General Schwartz, since your things are closest to the 
surface here, since we have spoken last, are all the items in 
the budget request consonant with the Land Partnership Plan, 
which is close to being signed?
    After all that was made up sometime before the land 
partnership agreement was completed, and it is not yet signed, 
I was just wondering if all those items down the list are 
within that time?
    General Schwartz. Let me put it this way, Congressman 
Olver, LPP is a very comprehensive plan. And it does include 
most of our needs over the next 10 years; not all of our needs 
but most of our needs. I think some of the environmental stuff 
is taken care of, for example, in LPP. But there are some 
requests outside of it.
    So I think the fair answer is most, but certainly not all 
of our MILCON and not all of our environmental, just to use 
those two as an example, are totally taken care of, but 80 
percent----
    Mr. Olver. I think you misunderstood what I was saying. 
There is a list here of MILCON items in Korea coming to about 
$180 million in the president's budget submission. I do not 
expect that we have done everything by any means. That is not 
what I am saying. What I am asking is whether each of the eight 
items that is here totalling $180 million--which budget request 
was in submission stage well before what you are now finishing, 
and soon to sign, the Land Partnership Plan. I want to ask 
whether every one of those eight are priority items within the 
land priority plan.
    General Schwartz. Sir, the answer to that is yes, they are.
    Mr. Olver. Okay.
    General Schwartz. And I might add this, all of those are 
going to enduring installations under LPP.
    Mr. Olver. Now there is one major piece of this whole 
puzzle that remains and that is what happens with Yongsan? 
Isn't it in the center of the city?
    General Schwartz. Yes.
    Mr. Olver. Does it make sense since that is still up in the 
air, that we continue doing things? I know we did some thing at 
Hannam Village, and the nature of Hannam Village relates to 
some degree on what the final disposition is of Yongsan.
    General Schwartz. Let me answer it this way, sir.
    Mr. Olver. Should we continue to do things at Yongsan in 
the meantime until that is decided?
    General Schwartz. A great question, sir. When we designed 
LPP we said, ``Should we include Yongsan or not?'' We decided 
to pull Yongsan out, because it was, we thought, a deal-
breaker. In 1993, we agreed to talk and have dialogue about 
Yongsan but it never took place. And the reason it did not take 
place is because it is about a $10 billion bill to totally move 
Yongsan. So we pulled it out.
    Yongsan is a special issue. We have agreed, the Minister of 
Defense and I, and we are studying it right now, the whole 
Yongsan relocation. We will have a review of the bidding and 
options that we can seriously consider by the 15th of June.
    But what we have done, Congressman Olver, is we have 
continued to move ahead with the near-term construction on 
Yongsan. Because what we have done in the past, and we have 
really been caught by this, is we always are going to either 
close next year, go home or there is some deal in the making so 
we will hold off. So we cannot continue to operate that way.
    So the near-term projects for Yongsan we did go ahead with. 
A couple of housing projects, for example, that are significant 
this year. But as soon as we have any kind of a deal that we 
think makes sense or we think it is at least feasible for the 
future, that we should review the bidding on some of the 
projects at Yongsan, then we are going to do so. We will hold 
up.
    Mr. Olver. So, in essence the answer is that the final 
disposition, whatever is going to happen there, will take five 
to 10 years to accomplish, or something like that, and you must 
do some things in the meantime.
    General Schwartz. I think that is a fair way to put it.
    If we do Yongsan right now, the initial look at it is a 10-
year project.

                                 JAPAN

    Mr. Olver. I see.
    Okay. Let me just ask Admiral Blair one thing in your 
field. I have read it in the newspapers, and we have gotten a 
couple of other indications that the Japanese government has 
approved the development of an airfield offshore in northern 
Okinawa. Is that true?
    Admiral Blair. Yes, sir. The joint committee that our 
representatives and Japanese government representatives 
comprised has agreed on a relocation of the Futenma airfield to 
Nago. And although we have not dotted the i's and crossed the 
t's, it looks as if an offshore fill runway will be the 
solution for that.
    Mr. Olver. When you spoke of the $940 million that Japan 
and Korea are putting in, I guess that is this year?
    Admiral Blair. That is this year.
    Mr. Olver. This year. Does that include any of the 
development of that Nago?
    Admiral Blair. No, sir. The $940 million I referred to are 
the ongoing contributions to infrastructure program. The Nago 
airfield Futenma replacement is part of the SACO agreement, the 
Special Action Committee for Okinawa. That is funded by the 
Japanese government separately on top of the ongoing facilities 
replacement program.
    Mr. Olver. But there is no construction yet. What is the 
level of opposition to this process within Okinawa? Is there 
still opposition or is that settled?
    Admiral Blair. There was an election within the last 
several months for the little town of Nago, which is where the 
new facility will be. The incumbent mayor, who is in favor of 
the relocation there, his opponent was opposed; the incumbent 
mayor was elected by a very high majority. So there were 
elements of a referendum. It was successful. We are moving 
forward.
    The only issues still there have to do with the business of 
whether this facility will be for 15 years or not. We are 
working that out with the governor of Okinawa, who wants a 15-
year limit on it, and the government of Japan say that that 
does not make any sense, and we are not ready to agree to that. 
So that is on the way to resolution.
    So the path is clear to the Japanese government paying for 
the relocation of our Marine Corps air station. Which I do not 
know if you all saw Futenma, but it is like if there were an 
airstrip in the mall and you fly over houses.
    Mr. Hobson. We saw that it is quite a difficult situation.
    Admiral Blair. Right. So that will be moved and Japan will 
pay for it.
    Mr. Olver. So locally, at Nago----
    Admiral Blair. In Nago.
    Mr. Olver [continuing]. They want it because it is tourism 
for them? Is there a potential block from other 
environmentalists in Naha, in the prefectural government in 
Okinawa?
    Admiral Blair. Very low probability.
    Mr. Olver. Very low probability.
    Admiral Blair. Very low probability, yes, sir.
    Mr. Olver. Okay.
    Admiral Blair. Never say never.
    Mr. Hobson. Well, I want to carry on with that a little 
bit, because Okinawa is a peculiar problem overall.
    What is going to happen? You are going to keep Kadena?
    Admiral Blair. We have to keep Kadena, yes, sir.
    Mr. Hobson. What about the rest of this stuff that is down 
there? Is that going to move north?
    Admiral Blair. Yes, sir.
    Mr. Hobson. All that will move north?
    Admiral Blair. All of it ought to move north. That hospital 
that you saw, which is due for replacement in the next several 
years, that ought to be relocated to the north, the housing.
    Mr. Hobson. Okay. I got a thought on hospitals, too, that 
we can build modular hospitals that are as good as the other 
ones. And the Koreans are putting up one in Kyrgyzstan, and 
somebody ought to look at that and see----
    Admiral Blair. Yes, sir.
    Mr. Hobson [continuing]. If that isn't something we could 
do. And the Dutch put up one in Kosovo, and I took a doctor 
from here, a naval doctor to it--you will like that, Admiral--
and he thought it was a fine facility. And instead of going in 
and building one of these things that cost us, you know, like 
up in Alaska, we ought to look at some of these things.
    And they are first-class buildings. These are not like the 
Air Force general's house at Osan; these are not prefab 
buildings like that.
    But as a matter of fact, you will be happy to know, this 
goes with you guys, they are going to be a general officers 
house at Osan, and it is going to be about between 3,000 and 
4,000 feet, and it is in the Air Force budget to do. Because I 
told them, you know, ``Just fix that.''
    By the way, you might want to know this, it cost $800 to 
fix that house, the roof in there.
    Admiral Blair. $800?
    Mr. Hobson. $800, sir, not what everybody was talking 
about. We got some guy over there knew what he was doing and he 
go up there and screwed that thing back together with some 
things that FEMA has developed, and that worked fine.
    Admiral Blair. That is why we love to have your visits, 
sir, and you know more about this than all the rest of us. 
[Laughter.]
    Mr. Hobson. No, I just know enough to be dangerous on that 
stuff.
    But anyway, if we are going to build hospitals, they want 
to go all out, and they are going to want to spend $200 million 
to build a 30-bed hospital or something. I think we need to 
look at some of these things, because there is pretty classy 
looking stuff. I guess we will have to look at that.
    Just so we have an understanding of the Okinawa situation, 
because that has been a long term thing, and it is coming to 
fruition. Kadena is going to stay there, and the Marines, and 
everything, are going to move north, now, and have this 
facility.
    And Kay has got a question, she wants to ask, too. And 
Robert is coming back. Go ahead.
    Admiral Blair. It is more complicated than that, as I am 
sure you know. There is the port there, at Naha, which is a big 
point of congestion. And there are some other facilities. But 
the overall idea, is to have Kadena be the most southernmost 
thing in Okinawa. Everything else, over time, as it needs to be 
replaced, moves north.
    Mr. Hobson. Before she leaves, Kay, let me say one thing. 
She was very helpful to all of you, not only in that speech, 
but in going with the speaker on this trip. I am glad we had a 
spy in there----
    [Laughter.]
    Mr. Hobson [continuing]. From our committee, who could 
articulate to the speaker's trip, and reinforce what was going 
on. So there has been a good response, as I understand it. You 
might want to talk about what the speaker talked about--if you 
have a minute--about the tax stuff, and things of that sort.
    Ms. Granger. You know, some people have a political problem 
with us making the trip. There is nothing like seeing it. You 
know, we have seen the video. I wish you could show the video 
to the first lady. I think that might make a little difference 
in housing. But it really does make a difference, and 
particularly with the speaker there. You know, there is such 
limited time, but he really saw, first hand.
    And then, because I had been on this committee, I could 
talk things about the tax implications, what we are really 
doing to people, beyond housing, and buildings, and Internet 
and things like that.
    So, I was very sincere when I said, we really appreciate 
having very specific information about how we can help. But it 
did make a huge impression on the speaker, and the speaker's 
staff. And that is often times as important, as we all know, up 
here, who really does the work are those staff members. So we 
really do appreciate it.
    Mr. Hobson. So, I think we might see some things happening 
on the tax.
    Ms. Granger. Yes, we talked about it and made lists. So, we 
do listen, and even though sometimes we are tired, and kind of, 
dragging through. [Laughter.]
    It does not look like it. We really did. All of us made 
lists, and said we would follow up on those.
    Mr. Hobson. Thank you, very much. Any questions you wanted 
to ask?
    Ms. Granger. I got it. Thanks. I have to go to another 
hearing.
    Mr. Hobson. Okay, Robert is coming back, at some point. He 
has got a question.
    Virgil, do you have anything?

                            SCHOOLS IN GUAM

    Mr. Goode. Going back to schools in Guam, I assume it is a 
high school and an elementary school. And, did I hear you 
right: $35 million and $40 million for each of them?
    Admiral Blair. Yes, sir. Those are the numbers.
    Mr. Goode. How many students would be at those schools?
    Admiral Blair. I do not have the numbers of students right 
here. But that is a school for both the Air Force high school 
students in the north, and the Navy high school students. And 
it is located, right now, in an old headquarters building. So 
they are there now. And this would be a new and proper building 
for them.
    The elementary school--and I will get the numbers of 
students for you, sir--is for the Navy elementary school 
students in the south. That is now in an old BOQ.
    Mr. Goode. How many Guam residents live on Guam?
    Admiral Blair. The total number on Guam?
    Mr. Goode. I do not mean military personnel. I mean non-
military personnel on Guam.
    Admiral Blair. I do not know that figure.
    Mr. Goode. Would they be attending those schools?
    Admiral Blair. They would not be. I do not know if you know 
the history, but our service people used to go to the Guam 
schools. And we worked hard for years to try to improve them, 
because, frankly, they just fell short of what they should be. 
And then, about four years ago, my predecessor, Admiral 
Prueher, with a lot of advice from the people who were 
stationed in Guam, decided to pull our kids out of the Guam 
schools, and ask the Department of Defense Education Agency to 
come in and build the schools.
    We put everybody, immediately, the next year, into 
temporary schools. And there are three schools on Guam: the 
elementary/intermediate north, the elementary/intermediate, for 
the Navy, south, and then a common high school. We have been 
able to replace the elementary/intermediate school to the 
north. It is a magnificent school. And it is the last two that 
we need to put into permanent structures.
    Mr. Goode. Ball park, on the number of persons attending 
the high----
    Admiral Blair. The number of students there? Do we have 
this?
    Mr. Goode. I mean, just a ball park.
    Admiral Blair. But let me also say that these facilities 
are going to be beefed up. We have done an about-face, relating 
to Guam.
    Mr. Hobson. They are moving three submarines to Guam that 
are not there now.
    Admiral Blair. Correct, sometime this summer.
    Mr. Hobson. And the Air Force is going to come back in and 
probably beef up its situation there. Am I correct in that?
    Admiral Blair. Yes, sir, certainly.
    Mr. Hobson. This has now become a re-energized area. Is 
that correct?
    Admiral Blair. Yes, sir. That is absolutely correct. Guam 
is becoming more important to us. And in the high school, it 
has 500 students there and in the elementary school it has 
1,100.
    I have been stationed in the Pacific many times, and Guam 
used to be the pits.
    Mr. Hobson. They are still out in the middle of nowhere 
when you try to get there.
    Admiral Blair. But it is a nice place in the middle of 
nowhere. Ten years ago it was not. Ten years ago if you got a 
set of orders to Guam you wondered what you had done to your 
commanding officer.
    Mr. Hobson. Sort of like going to Korea.
    Admiral Blair. But it is not that way now. The retention in 
Guam was better than it was. We are about to consider extending 
the tour length there, which will save us money because the 
families, especially young families, are doing fine.
    Mr. Hobson. So that is a PCS change accompanied?
    Admiral Blair. It is accompanied.
    Mr. Goode. What I am hearing you say is, no one at all 
would want to go there without their families. Well, I will not 
say no one at all, but for the service person with their 
families, they much prefer having those schools there for their 
children.
    Admiral Blair. Yes, sir. They would much rather have the 
children going to the proper schools instead of being jammed 
into old buildings where you open the door to the bathroom and 
you can see that from the hall.
    Mr. Hobson. Diane.
    Mrs. Diane Blair. On the hallways, you are running into 
things in the hallways and you are not a rambunctious third 
grader, but the hallways are not even wide enough for, you 
know, normal traffic, let alone school traffic. It is very 
close to the street. There is no playground area at all.
    They are very happy with the switch. Even in the old 
facility they are just glad that it is a DOD school now, and 
they are not on the Guam school system. But the contrast 
between the new building and these temporary arrangements they 
have now is truly startling. And I am sure it will make a big 
difference, especially with the young families, the 1,100 
elementary age kids, how they view their time there.

                         FUTURE NEEDS FOR GUAM

    Mr. Olver. Would you yield?
    The foreseeable plans, five years or whatever horizon I see 
for Guam, what do you expect would be the increase in the total 
U.S. force in there as these things evolve?
    Admiral Blair. The three submarines are for sure. We are 
looking at small numbers of additional surface combatants, 
particularly with theater ballistic missile systems. And we are 
looking at the ability, either temporarily or permanently, put 
an Air Force wing there.
    Mr. Olver. What is the total force of Air Force and Navy 
personnel on Guam?
    Admiral Blair. Let me get that number, sir. It is on the 
order of 3,000 to 4,000.
    Mr. Olver. What is the change with the additional 
submarines and the wing and so forth?
    Admiral Blair. Would add another thousand or so.
    Mr. Hobson. Anything else?
    Mr. Goode. That is it, Mr. Chairman.
    Mr. Hobson. Okay.
    Robert.

                 REUNIFICATION OF NORTH AND SOUTH KOREA

    Mr. Aderholt. First of all, let me say good morning. I love 
to be here. As one of the members of the committee who had 
opportunity to go to the Pacific Command back in May and June, 
I was certainly honored to be on that trip. The only thing 
about Admiral Blair was that we were cut short on our time with 
you one day on our trip to your area. And so certainly we 
regretted that. But certainly, we did enjoy our time there.
    Admiral Blair. Did you get up early and make some quick 
billets in the morning?
    Mr. Aderholt. We did. We had full schedules, so. And 
certainly, General Schwartz, we enjoyed being over in Korea 
with you as well. And enjoyed our time at the DMZ, as well as 
other parts of Korea.
    Still, I have my photograph that I was presented during 
that trip of the difference between North and South Korea in 
the lights, the lights that are on in South Korea as opposed to 
the darkness in North Korea. And it is certainly a reminder of 
the differences between the two nations and how we have 
developed over the past several years.
    Of course, we are hearing a lot about North Korea today and 
especially since the President's comments, but even before 
that. Of course, we know the concern of North Korea.
    One of the things that we talked about then, at the time of 
our visit, was reunification and South Korea's attitude toward 
that and how those developments might occur. Just briefly, 
could you mention some of your thoughts on that, especially in 
light of September 11 and how that may or may not have changed?
    General Schwartz. Let me maybe say it this way. Of course, 
you know the great hope for all Koreans is that reunification 
occurs. That is their dream, that is their hope. There are so 
many families that have been separated as a result of the war. 
Their deep-hearted yearning is that they come together, have 
the chance to see each other before they die. They are getting 
older in age, obviously, and so that is what they really want 
on the peninsula.
    You know, I think I could maybe answer the question best in 
light of the President's visit. There was a lot of anxiety 
prior to his visit about the possibility of war, and they were 
not certain where our President stood. He had an excellent 
visit. He was very clear about his convictions, was very clear 
about his hope for reunification, about his hope for future 
dialogue. And he said there are no preconditions. He laid it 
out.
    The ball is in the court of Kim Chong II in North Korea. 
They know it. I would have to tell you they have not responded. 
And we hope that they will, but there is no indication that 
they are going to right now.
    And so, the situation really has not changed much from when 
you left except I think the president renewed the hope for 
dialogue, and I think that is good.
    Mr. Hobson. Are there votes? Is there a whole bunch of 
votes?
    Staff. There is a 15-minute vote followed by a five-minute 
vote.
    Mr. Hobson. All right. Let me run through some questions 
here that I want to get on the record, and you guys can answer 
them for me if we have time before we go. But I want to get 
them in the record.

                              WAKE ISLAND

    Last year, we were able to include about $9 million of the 
$25 million budget request to begin improving the 
infrastructure at Wake Island. What is the strategic importance 
of Wake Island to the United States?
    In their budget justification, the Air Force states it 
would like to continue a dialogue on the cost-share 
requirements of this project. Admiral Blair, do you know the 
concerns the Air Force has referring to cost-share 
requirements? And you can think about that while I go to 
General Schwartz here. Also, if you would talk about the shoot 
houses that we did in Okinawa and where they stand, I would 
appreciate that.
    You mentioned, General Schwartz, the Korean master plan 
2010 and one of its components, the Land Partnership Program, 
which allow you to consolidate 85 scattered bases into 
centralized hubs. I do not know what the MILCON requirement of 
that is going to be and the level of funding of the host 
nation; I think you talked a little about that.
    But also, for the last two years, you have advocated a 
leased housing initiative at Camp Humphreys, which I am 
interested in also. But I am really concerned about where OSD 
is on this concept and whether they have signed off, and after 
you are gone and they think I am not a problem, what is going 
to happen to it.
    The other things is, have there been further discussions 
with the Office of Secretary of Defense to increase the number 
of accompanied personnel slots in Korea? Who makes this 
decision? Is there a time frame during which the decision will 
be determined?
    And I have some others we will submit for the record, but I 
would like you to answer those if you can.
    Admiral Blair. Yes, sir. Let me just go quickly on Wake 
Island.
    What we need Wake Island for is an absolutely minimum, 
bare-bones base which is used in case of in-flight emergencies 
and in case of loading at other bases. In September, when we 
began to flow forces across the Pacific to Afghanistan, we had 
about 30 divert landings to Wake Island.
    And we do not need it as a fancy full-up base. We just need 
it as a strip strategically located for airplanes to go when 
they do not have other alternatives.
    The $9 million that you added for us was very welcome. The 
total bill is $106 million. There is a program that does that 
over about four or five years.
    Mr. Hobson. But you know there are people that question the 
use of that facility.
    Admiral Blair. Yes, sir, but the pilots who landed on it in 
September did not question it. They needed it.
    And the Air Force they are doing it for some of their own 
planes, but also for a lot of other planes. And they are 
looking for ways to get other people to help them pay the bill. 
I mean, it is no secret that we made a decision in the 
department that this is an Air Force executive base in 
responsibility and I think they ought to just do it.
    And also I am fully convinced that if the Air Force has the 
responsibility, they will spend not a penny more than they need 
to. Because they feel that they need the money for other 
things.
    So we just have to do it for the overall good of the 
strategic deployment of the command and the Air Force is the 
one who is stuck holding the rows. And they just have to grasp 
it and move it.
    Mr. Hobson. It is important for you to articulate that, 
sir. Because there are lots of ears around for people to hear.
    Admiral Blair. Yes sir.
    Mr. Hobson. And if you do not get the story out, then 
nobody knows what is going on. So I appreciate it.
    Admiral Blair. Yes, sir. My Air Force colleagues are tired 
of me beating on them and I am tired of them not funding it. 
[Laughter.]
    Mr. Hobson. There are some in Congress that also have----
    Admiral Blair. Oh, yes, sir.
    Mr. Hobson. And it is important for them just to be in the 
record, for people to hear that. They are not particular to 
this committee, but elsewhere.
    Admiral Blair. On the shoot house, the forces we now have 
in the Philippines, the ones you are reading about those are 
from the first of the first who were trained in the old shoot 
house that you saw when you were out there. It is okay. We do 
not send them in unless they are well enough trained. But we 
have cleared the ground, we have almost completed the designs 
and we are going to be breaking ground.
    Mr. Hobson. So there are two outgoing. And there is one for 
Marines and one for the special forces.
    Admiral Blair. Yes, sir, and there is the one for the 
special forces.
    Mr. Hobson. Well, I do not understand why there is the 
dividing line between the two. I mean, those Marine guys did 
not feel like they could walk over to the Army one, which was, 
kind of, stupid to me, and I had to make them come over because 
they had stopped at a line drawn in the sand, which I never 
understood. But you know, I invited them over. In other words, 
they would not have come over, because I do not think they are 
allowed over there, unless they sneak over and look at it. 
Which is, kind of, a stupid thing to be frank with you----
    Admiral Blair. I agree. I agree.
    Mr. Hobson [continuing]. Between the two services. Since 
there is a Marine in the room and there is an Army guy in the 
room, I am going to say that. You want to do your stuff?
    General Schwartz. Sir, I can comment quickly on those three 
questions you had for me. The MILCON under LPP, as I discussed 
with Congressman Olver, is on track. The $180 million he 
referred to is part of the LPP. The main point here is if we 
can keep MILCON at about the rate it is now, $240 million per 
year over the next 10 years, LPP and housing will be on-track 
and accomplished.
    Mr. Hobson. I am not going to be here in 10 years.
    General Schwartz. But near term we are on track.
    The housing initiative at Camp Humphreys, you gave us $12.8 
million for the 54-plus sets of housing units initial first 
phase of Humphreys: on track. The next phase is part of the LPP 
and it will track and I am confident it will happen.
    As far as increasing the slot of those number of people----
    Mr. Hobson. Wait, is there support in OSD for Camp 
Humphreys?
    General Schwartz. For Camp Humphreys? For the money you 
gave us, done deal.
    For LPP increased housing, it really leads to your third 
question of do we have the support of DOD for increased housing 
on the peninsula? I am the one who makes the call in terms of 
the cap. Right now the cap exists at about 3,000. That is a 
CINC's call. And that is supported by DOD. If I want to 
increase that cap under LPP, I am asking for an increase to 
5,000.
    And if I want to do that, I am in negotiation with them. I 
do not have DOD approval, OSD approval on that, yet. I am 
working that under the LPP, but it is not a done deal yet.
    Mr. Hobson. Okay. And there are no increased slots?
    General Schwartz. Not yet.
    Mr. Hobson. Okay. Do you have anything you want to add? We 
have five minutes left.
    Mr. Olver. Maybe I can get this through.
    My impression, General Schwartz, is in your written 
testimony, you indicated that the you are trying to get the 
family housing percentage up from 10 to 25.
    General Schwartz. 25, yes, sir.
    Mr. Olver. Is the 25 percent something that has been agreed 
to? Is that DOD policy?
    General Schwartz. The DOD policy and approval for me, CINC, 
my call is 3,000. I am trying to get 25 percent. 5,000 is not 
done yet. I do not have that approval yet. It has to be 
approved by DOD. It is not there.
    Mr. Hobson. Gentlemen, thank you for your service to this 
country. And we hope to work with you while you are still 
there. We will see you again.
    General Schwartz. Thanks a lot, Mr. Chairman.
    [Clerk's note.--Questions for the record submitted by 
Congressman Farr.]

                            Personnel Issues

    Question. One-third of PACOM 300,000 servicemen and women are 
forward deployed. Has that number increased since 9-11?
    Answer. Yes, there has been a slight increase to the number of 
forward deployed service members since 9-11. Most notably we deployed 
850+ personnel to the Philippines in support of our overall GWOT and 
out focused initiative with JTF 510. Additionally, we have deployed 
over 600 to Diego Garcia as well as other small numbers throughout the 
Pacific Region in support of Enduring Freedom.
                         Pacific Command Budget
    Question. Admiral Blair, in your testimony, you state that the 
Dept. of Defense thinks the Asia-Pacific is the highest priority 
overseas region in the future. If that is the thinking of the 
department, please tell the subcommittee the total amount of funds you 
would estimate are necessary in Fiscal Year 03 to bring all your 
facilities up to date?
    Answer. Many facilities have suffered from years or even decades of 
restricted sustainment budgets, and even well-maintained facilities 
eventually need replacement. Advancing technology and mission 
imperatives, such as force protection, create additional demands. My 
MILCON program is designed to realistically balance these competing 
priorities with budget realities to implement a long-term strategy to 
eliminate facility deficiencies. The total fiscal year 2003 portion of 
my MILCON program is $1.75 billion. This total is made up of a base 
amount from previous funding guidance, and requested additions for 
emerging and urgent needs, as shown in the table below. The amount of 
the additions reflects the priority of the facility investments being 
made in the USPACOM region.

                        [In millions of dollars]

Fiscal year 2003 programs......................................... 1,190
Fiscal year 2003 additions........................................   561
                                                                  ______
      Total....................................................... 1,751

    Question. Last year, you told this subcommittee that you could not 
be able to replace or renovate inadequate housing until 2010. In your 
testimony this year, you advance that time line to 2007. Please tell us 
how you will reach you goal if your milcon budget continues to 
decrease?
    Answer. I advanced my timeline to eliminate inadequate family 
housing by 2007 to align with the goal of the Secretary of Defense. 
Even without the guidance, military family housing is at the top of my 
priorities for Quality of Life (QOL) to address as soon as possible. I 
recognize the 2007 goal will be a significant challenge and will 
require continued Congressional support of key projects. Decreasing 
MILCON budgets will make the accelerated goal that much harder. 
However, the focused effort by the Military Departments and use of 
innovative approaches to eliminate inadequate family housing offer a 
realistic possibility of achieving the 2007 goal.
    The first approach involves use of Host Nation Funded Construction 
to build family housing units. For example, the Special Action 
Committee on Okinawa (SACO) recommendations include a $1 billion 
portion specifically for new family housing. The topic of funding 
family housing using Japanese Facilities Improvement Program (JFIP) is 
discussed more completely in response to your question #6.
    The second approach uses private capital rather than MILCON funds 
to build family housing, then leases the constructed facilities. A 
current example of this technique is the Camp Humphreys leased housing 
initiative. The Army will follow the Naples Model using contractor 
funding to build an entire community with housing, school, clinic, 
gymnasium, exchange, commissary, and multi-use recreational areas for 
1500 families. The contractor then recovers the capital investment 
through lease to the military. The Navy has awarded a Public Private 
Venture (PPV) contract in San Diego, California for 2,660 families and 
Everett, Washington for 473 families. A PPV in Oahu, Hawaii is planned 
over three phases from fiscal year 2003 to 2005 and will provide for 
5,000 families. The Air Force is using the PPV approach at Elmendorf 
AFB in Alaska and at Hickam AFB in Hawaii to provide 2,808 family 
housing units. The Marine Corps is using a PPV at Camp Pendleton, 
California to reduce their deficit by 284 family housing units.

                          Host Nation Support

    Question. Admiral Blair, your testimony indicates that the 
Pacific Command ``counts'' on allies and partners for some 
basing support during crisis. What kind of basing support does 
the U.S. currently get from its allies in the War on Terrorism?
    Answer. The United States has enjoyed widespread 
operational access from friends and allies in the War on 
Terrorism. We have made extensive use of U.S. facilities in 
Diego Garcia, which are leased from the U.K., as the linchpin 
of our Pacific activity. The U.K. has also graciously supported 
Coalition partners from these facilities. Other nations, as 
required, have provided operational access for aircraft and 
ships (both U.S. and other Coalition forces) transiting to 
other destinations. India and the Philippines made generous and 
almost immediate offers for use of bases and facilities, 
although U.S. planning and activity at the time did not require 
those facilities. U.S. and Coalition ship port visits have been 
supported at numerous locations throughout the Asia-Pacific 
including Australia, India, the Philippines, and Singapore.
    Question. Japan supports a U.S. presence in the Asia-
Pacific region via the Japanese Facilities Improvement Program 
(JFIP). Please tell us what level of support Japan will provide 
in fiscal year 03?
    Answer. The Japan Facilities Improvement Program (JFIP) 
will provide approximately $750 million in construction support 
to U.S. Forces Japan in 2003, and annually through 2005. The 
exact amount will not be known until the Government of Japan 
provides the funding. There has been only minimal U.S. MILCON 
expenditures in Japan since 1989 due to the high level of JFIP 
support. JFIP has been the mainstay for new facilities in 
Japan. The program high for JFIP was $1.1 billion in fiscal 
year 1992.
    Question. With housing so expensive in Japan, not unlike 
California as you noted in your testimony, can JFIP funds be 
used for family housing?
    Answer. Our main source for family housing construction is 
the Japanese Facilities Improvement Program (JFIP). The JFIP 
funds primarily quality of life and housing projects, although 
recently the quality of life projects have fallen out of favor 
with the Government of Japan. In the 21 years since inception 
of JFIP, the program has supplied 10,729 family housing units 
and 21,825 unaccompanied officer/enlisted barracks rooms. Other 
major contributions include 123 Headquarters buildings, 34 
medical/dental clinics, 81 aircraft shelters/hangers, 140 
warehouses, 124 maintenance shops, 65 schools and childcare 
centers, and 170 million barrels of fuel storage. In addition 
to JFIP implementation, the Special Advisory Committee on 
Okinawa (SACO) recommendations include a $1 billion allocation 
funded by the Government of Japan specifically for housing.

                      Historic Preservation Issues

    Question. Much like your Pacific Command Headquarters, I 
also have an historic structure located in my ``Area of 
Responsibility'' called the Naval Postgraduate School. It was 
built in the late 1800's. My colleagues heard me list the many 
infrastructure problems the school is trying to cope with at 
the Navy hearing yesterday. Please tell the subcommittee what 
suggestions you have to address the costly modernization and 
maintenance needs of these historic buildings that must be 
preserved but must also function like an efficient and modern 
workplace facility?
    Answer. The hundreds of historic properties within the 
USPACOM region serve as living monuments to our military 
legacy, especially within the Pearl Harbor National Historic 
Landmark. Modernization of the Pacific Air Forces Headquarters 
at Hickam Air Force Base, a historic property due to its role 
in the events of December 7, 1941, demonstrates the fusion of 
past, present, and future in a single facility. However, 
operational use of historic properties is always a challenge 
for efficiency and cost control. Approval by the State 
Historical Preservation Officer (SHPO) is required for any work 
associated with historical facilities. In many cases costs are 
higher as a result of historic considerations. This is due to 
costs required to replace items and materials with that of the 
period, higher costs of artisan labor, or just that the 
restoration is more costly than replacement with newer 
materials. We have found that several actions can help mitigate 
the increased cost of managing historical properties. First, 
adequate funding for routine maintenance so that more costly 
renovations can be avoided. Second, detailed planning and 
design of required renovation projects to ensure best 
utilization of the facility within the constraints of the 
historical designation. Finally, active and open coordination 
with the SHPO to avoid confusion about project scope and 
purpose, and resulting delays in project approval and 
execution.

                                 Korea

    Question. The Land Partnership Plan will consolidate 85 
scattered bases into centralized hubs. Please give the 
subcommittee a status report on the progress of the LPP and the 
projected cost savings.
    Answer. The Land Partnership Plan is moving ahead. The 
Office of the Secretary of Defense and the Republic of Korea 
have approved the Land Partnership Plan. Our next step is to 
begin execution of the plan with land grants from the Republic 
of Korea to United States Forces Korea and land returns from 
United States Forces Korea to the Republic of Korea beginning 
as early as October 2002. We currently project savings of 
between $70 million to $120 million annually upon completion of 
the plan. Increased MILCON funding or pulling projects forward 
to accelerate the plan would allow the command to capitalize 
additional savings.
    Question. Last year this subcommittee paid special 
attention to the appalling living conditions of our military 
personnel in Korea that resulted in new housing and barracks. 
What impact will these new housing projects have on the quality 
of life for our military personnel serving in Korea?
    Answer. I want to thank Congress for its support over the 
last few years. Your efforts are starting to make a difference 
in Korea. Congressional visits, funding support and the 
recognition of our unique requirements are well known to our 
servicemen and women and are very much appreciated! As many of 
you have seen first hand; however, Korea is a ``unique'' 
theater with unique requirements. There are still many urgent 
needs that can be addressed with additional Military 
Construction support.
    In fiscal year 2002, we received $128.2 million for four 
Army barracks, 1,392 soldiers and two Air Force dormitories, 
271 airmen, which will greatly improve their living conditions 
and quality of life. We also received $12.8 million for 54 Army 
family housing units that will provide much need and greatly 
improved for our accompanied service members. USFK enjoyed an 
increase in Military Construction to support our service 
members, but the work has just begun. We continue to make 
progress in improving balanced readiness in my command, but 
will need your help to continue the good work.
    Question. How many more married members will be able to 
bring their families with them to Korea as a result of this new 
construction?
    Answer. As the CINC, I have the authority to establish 
command authorizations in Korea and I have currently 
established the ceiling at 3,000. The current acceptance rate 
for an accompanied assignment to Korea is 65 percent. My real 
limitation; however, is that I only house 2/3 of what I am 
authorized because I only have 1,979 units of government-owned 
and leased housing available. This equates to less than 10 
percent of the married accompanied personnel compared to more 
than 70 percent of married accompanied personnel who live in 
Europe and Japan.
    During the initial stages of our housing program, my goal 
is to concentrate on improving existing quarters and the 
quality of life of those already assigned, and bring more of 
the personnel already living off-post into on-post quarters. 
This will dramatically improve quality of life, and force 
protection. As we move beyond this initial phase of new housing 
and we build new housing, we will be able to allow more service 
members to bring their families to Korea and we anticipate that 
by 2006, we will have housing for the 3,000 authorizations 
already established.

    [Clerk's note.--End of questions for the record submitted 
by Congressman Farr.]
                                       Thursday, February 14, 2002.

                     UNITED STATES EUROPEAN COMMAND

                                WITNESS

GENERAL JOSEPH W. RALSTON

                       Statement of the Chairman

    Mr. Hobson [presiding]. Meeting will come to order.
    Want to welcome General Ralston today. I want to apologize 
to you for not having more members here today, but we were up 
until 3 o'clock in the morning.
    General Ralston. I understand.
    Mr. Hobson. Chairman Young wanted to be here. He may be 
arriving later depending on the weather. But he is going to 
make every effort to be here.
    Our hearing today focuses on the military construction and 
family housing programs in the European theater. We are very 
pleased to welcome back General Joseph Ralston, Commander in 
Chief of the United States European Command and Supreme Allied 
Commander in Europe, as our witness.
    General, as you know, overseas military construction and 
the importance of adequate facilities to our troops located so 
far from home is and it continues to be one of our top 
priorities and one of my top priorities as chairman of this 
committee. And I also know that my ranking member shares my 
concerns. Therefore, I am very pleased to see that you once 
again state in your prepared testimony that improving the 
infrastructure in the European theater is your top funding 
priority.
    I have visited many installations in Europe since becoming 
chairman of this subcommittee. Actually, my first trip was to 
Europe some years ago.
    During my travels, I have witnessed firsthand how the lack 
of facility investment during the drawdown of Europe in the 
1990s and the increased OPTEMPO over the same time period has 
inflicted an enormous strain on our infrastructure in the 
region, an infrastructure that is expected to support the 
mission and to provide excellent living and working conditions 
for service members and their families stations in-theater.
    You know, I went over with Whit Peters, because I had not 
seen it, the Mildenhall Tower, which I understand is hopefully 
under construction as we speak, the World War I horse stables 
that were being used to repair, I think, missile launchers for 
the Army in them, we are still using them. The Izmir School, 
which has a lot of force protection problems, it is right on 
the street. And there are a lot more things as you go around 
that are a real problem.
    I am pleased to see that we resolved the problem relating 
to the battalion in moving it south of the Alps. I was there 
for the flagging ceremony. It was very impressive. I think 
General Wagner is a great leader of troops down there, and I 
think they are doing a good job. The site is a little tight, 
but Camp Darby would have been an absolute disaster, in my 
opinion, as far as any mission in the future and our ability to 
build the infrastructure that was probably needed at Camp Darby 
was probably behind what we would be able to do, especially 
with our difficulties with certain people over overseas MILCON.
    So I think it is going to work out. And the people I met 
from the Italian government, the local government and the 
federal government there, seemed very pleased with the decision 
that you all made, and I want to thank you for getting that 
decision completed.
    The rationale for not investing in facilities during the 
drawdown of Europe in the 1990s was, I think, understandable. 
We simply did not know what our footprint was going to be. This 
debate continues today, despite a significant reduction in the 
number of European bases over the past decade. Tough questions 
about overseas force structure and the appropriate level of 
overseas construction funding require thoughtful and deliberate 
analysis, which hopefully will be included in the overseas 
basing master plan which will be submitted to Congress no later 
than April 1 of this year.
    While the debate will continue in the future, we must not 
let our service members and their families feel we have 
forgotten them. It is this subcommittee's obligation to improve 
their qualify of work, quality of life, and even when they are 
far away from a member's district, mere geographical location 
does not absolve us of our responsibility to these people.
    We look forward to your testimony, sir. I think you know 
the respect that all of us in this committee and this Congress 
have for you and the job that you have done in serving this 
country. I know that your tenure will be somewhat short, but 
you have done a lot of good things there and I think you will 
get some more done before you have been extended. And, frankly, 
if there is somebody that is extended, I am glad it is somebody 
like you, because you do good work, you will stand up for what 
you believe.
    And I think the idea that you are here before this 
committee again testifies to your desire to improve the quality 
of life for the people that are under your command.
    So I am going to yield to Mr. Olver for any opening 
statement he might have at this time.
    And so, John.

                     Opening Statement of Mr. Olver

    Mr. Olver. Well, thank you, Mr. Chairman. I am going to be 
very brief. I think better we should have the time to sleep 
here or do whatever we are going to do. We are in a bit of a 
shadowy fog of sleeplessness, as has already been alluded to, 
and I do not think I need to add to that.
    We are very happy to have you here. I recognize and join in 
the chairman's comments in a general way. I would say that if 
you look around at some of the things that he has mentioned and 
at some of the places that I have visited, like Izmir and 
places in Italy, Vicenza and Naples, and less so Brussels and 
Greece, if you look at those, we have done some things in the 
last several years, so it is perhaps sometimes useful to let us 
know exactly what is needed.
    And those places that we actually visit--and I have been 
very lucky to be able to visit a number of places with the 
chairman in the last two, three years--that we do actually try 
to do something about that, though the budget this year is not 
nearly as good as it was on earlier times. The rather severe 
cut in the military construction budget, as it has been laid 
out in the president's submission as a budget, will put 
substantial crimps in our capacity to do that.
    So I am interested in what your needs are and perspectives 
are. And I thank you very much for being here with us today.
    General Ralston. Thank you.
    Mr. Hobson. Your written statement, General, has been 
entered into the record, but I would like you to summarize your 
testimony for us, if you would, please.

             Opening Statement of General Joseph W. Ralston

    General Ralston. Thank you, Mr. Chairman, Mr. Olver, Mr. 
Edwards. It is certainly my privilege to appear before the 
committee today.
    Before I begin, I would like to tell you how very grateful 
the service men and women of the European Command are for the 
resources that you provided us last year, in fiscal year 2002. 
And it was due to your leadership that our theater received 
about $360 million in total funding for military construction 
for fiscal year 2002. And as you know, that was a significant 
increase over previous years.
    This funding was about $250 million for the nonhousing-
related MILCON, it was $15 million for service housing, and it 
was about $95 million for DOD agencies.
    Now, we are watching very closely on that money that you 
appropriated to make sure that it is obligated in a timely way 
and done effectively, and I have instituted staff procedures to 
make sure that they do not drag out. You have given us the 
money; we need to expeditiously get that on contract and make 
sure that it is spent properly.

                EUROPEAN COMMAND AREA OF RESPONSIBILITY

    As you know, European Command encompasses a vast geographic 
region. It is somewhat misnamed when we say European Command, 
because it includes Syria, Israel, Lebanon, and includes all of 
Africa that you see in the green there on that map. It is 91 
countries that we are involved in.
    [The information follows:]



    General. Ralston. We have about 118,000 service members. We 
have another 20,000 Department of Defense civilians. And we 
have over 138,000 family members that are in Europe. You add 
that all up and it is about 276,000 Americans that are there 
depending upon the support of this committee in terms of their 
quality of life.

                               OPERATIONS

    I might add that today we have five combat operations 
ongoing in the European theater. Our pilots are flying over 
northern Iraq as we speak. We have the troops on the ground in 
Bosnia. We have troops on the ground in Kosovo, troops on the 
ground in the Former Yugoslav Republic of Macedonia, and we 
have the global war on terrorism ongoing. I would be happy to 
talk about any of those operations later on if you would 
desire.

                             INFRASTRUCTURE

    When I arrived in this command, it did not take long to 
realize, as you have stated, that our facilities were in sad 
shape and we needed help. And that is why, for the last two 
years, I have made this my number one priority with the 
Department of Defense, that we need to fix the aging 
infrastructure that had been neglected for many years.
    I have some pictures I would like to show you, and I think 
they are in front of you there.
    [The information follows:]



    General Ralston. The picture in the upper left-hand corner 
shows the conditions in which our single service members 
currently live. This is a female shower on a berthing barge at 
San Stephano Island, and this is part the La Maddalena naval 
facility. We have 50 sailors on shore duty that reside there in 
lieu of a permanent barracks.
    We are working hard to address conditions like that, but as 
you can see, that is pretty sad. And right now it will be 2009 
before we get our barracks upgrade program in shape. And one of 
the issues that we have is some funding for our barracks 
upgrade program that you are aware of.
    The upper right-hand photo shows one of our family housing 
facilities, and this one is at St. Mawgan in Cornwall, England.
    By American standards, we do not believe that we have 
overstated our standards. We have said, if a family qualifies 
for a three-bedroom apartment, we think they ought to have two 
bathrooms. We think they ought to have a stove, a refrigerator, 
a washer and a dryer. I do not believe that these standards are 
gold plated in any way. But I must tell you that 73 percent of 
our Army families in Europe are living in facilities that do 
not meet those very basic standards.
    The bottom left photograph shows what some of the 
underground utility infrastructure looks like. This is at 
Ramstein Air Base. You can see the water that comes through the 
rusted pipes that are there. And this is one of those things 
where people each year have put it off. They can say, ``Well, 
we do not really need to fix the water pipes this year, we will 
get around to it next year.'' Well, next year comes and it is 
put off and it is put off and it is put off, and ultimately 
that is what results.
    Finally, the lower right-hand photo shows an Army 
administrative workspace that is in use at Manheim, Germany. 
This speaks to the conditions in many of our working 
environments.
    Thanks to your help, we have made great strides in our 
housing areas, but we have not been as successful in our 
working and support facilities. And I ask your continued help 
with that.
    I have addressed these deficiencies with the Defense 
Department, up to and including the Chairman of the Joint 
Chiefs of Staff and the Secretary of Defense, and I have made 
it clear that this was our number one investment priority for 
the European theater.
    And just like last year, I will continue to emphasize this 
point during my posture statements before the major defense 
committees of the Congress. Secretary Rumsfeld has been 
supportive of our efforts, and the 2003 budget is indicative of 
his and the President's support. This budget includes 
approximately $575 million for the total military construction 
in the European theater. That is a 60 percent increase over 
what was appropriated last year.
    So I ask for your favorable consideration of this increase 
so that we can continue to bring our housing and our work 
environments up to a standard more consistent with the quality 
of service provided by our young men and women and their 
families.
    And I might remind the committee that these are your 
constituents that are serving there in Europe.
    Mr. Chairman, that is all I have for opening comments. I 
would be pleased to address any of our ongoing operations in-
theater or field any questions that you may have.
    [The prepared statement of General Joseph W. Ralston 
follows:]



    Mr. Hobson. Thank you, General.
    John.
    Mr. Olver. You are going to give me first run here. Well, 
Mr. Chairman----
    Mr. Hobson. You are my partner.
    Mr. Olver [continuing]. You are in worse shape this morning 
than I thought you were, I guess. [Laughter.]

                        NEW NATO MEMBER NATIONS

    Okay. General, I would like to ask a couple of questions 
for my own information; maybe goes beyond what I have seen thus 
far in your testimony, about the relative status of our forces 
under NATO.
    Do we have a hard presence in the Czech Republic or Poland 
or Hungary? By hard presence, I mean, what I understand, what I 
am using, in my mind at least, is hard presence in Germany and 
Italy and Greece and Incirlik and something in Spain and 
obviously Britain and Belgium.
    But do we have a hard presence similar to those in any of 
the new three, anywhere in the new three?
    General Ralston. Yes, sir, we do, although we do not have 
in the Czech Republic and we do not have in Poland.
    Mr. Olver. We do have in Hungary.
    General Ralston. In Hungary we do have. And we set up the 
air base at Taszar in Hungary that was a major support activity 
for our operation in Bosnia. It is just across the border. But 
it is not a huge presence, huge installation, but we have 
probably something on the order of 100 troops that we have at 
Taszar in Hungary.
    Mr. Olver. In that process, have we yet actually built 
things that would come under the jurisdiction of this committee 
at that location in form of either family housing or barracks 
or supply centers or maintenance centers, you know, the kind of 
infrastructure that goes on in those hard locations that I have 
described?
    General Ralston. Mr. Olver, we do not have military family 
housing there, because we do not have families at Taszar. We do 
have barracks, we do have workspaces and warehouses.
    Let me get an answer for the committee so I am exactly 
correct. I do not know whether that was done with U.S. MILCON 
or whether it was done with NATO infrastructure or whether we 
used some existing facilities.
    [The information follows:]

    The newest North Atlantic Treaty Organization (NATO) 
countries are Hungary, Czeck Republic, and Poland--all of which 
joined NATO on 12 March 1999. To date, United States European 
Command (USEUCOM) has not built any permanent facilities with 
Military Construction (MILCOM) or other funds in any of these 
new countries. Additionally, no NATO Security Investment 
Program (NSIP) funds were used to build facilities for U.S. 
service members in any of these countries. USEUCOM forces 
currently deployed to Taszar, Hungary are using existing host 
national infastructure.

    Mr. Olver. Let me see if I can express this correctly 
today.
    In the 16 nations that were there before we added the 
three, I suspect that you could look at the populations and the 
sizes of the economies and calculate from that some relative 
factor that I would like to compare with the participation, the 
inputs of those 16 members of NATO prior to the addition of the 
three, to get a kind of an average input on the part of those 
nations.
    And then I would like to ask you the question: How would 
the inputs of Poland, the Czech Republic and Hungary compare 
with the average inputs of the older nations? Can you do that 
in a relative form for me?
    General Ralston. Yes, sir, I can do it in a couple of 
different ways. And this is always a dangerous exercise.
    But one of the measures of merit that is used is what 
percentage of your gross domestic product is spent for your 
defense. And we have that data. I can give you from one through 
19 who spends the most and who spends the least in terms of 
percentage of gross domestic product.
    I can do the same thing for you in terms of real dollars or 
dollar equivalents which one is the most.
    [The information follows:]


    
    Mr. Olver. That would be great. A chart of that would be 
wonderful.
    Does the fact that there is a presence in Hungary mean that 
Hungary has the highest number or the highest relative inputs 
to the operations of NATO of the new three?
    General Ralston. No, sir, it does not. The reason that we 
are in Hungary is for geography, because it was right next door 
to Bosnia, and that is what we needed at the time.
    Mr. Olver. So it is purely strategic and it does not relate 
to that nation's relative inputs to the operations of NATO, to 
the operations.
    General Ralston. Yes, sir, that is correct.

                             NATO ASPIRANTS

    Mr. Olver. What I am leading to is there is much talk 
around about who is going to be added to NATO this year, so on. 
What is the level of the capacities of the nations--and maybe 
you can do this also in your chart, a bunch of six or eight or 
10 who have been talked about as possible entrants--what is the 
capacity of those places, by the same terms you are using, if 
you like, budgetary terms, I suppose, or in terms of the size 
of the economy, what is the relative capacities of those 
nations?
    [The information follows:]


    
    Mr. Olver. And are any of them up to the level of Poland, 
the Czech Republic and Hungary, as you understand it?
    General Ralston. Yes, sir, let me give a little background 
on it, if I may.
    Mr. Olver. Sure.
    General Ralston. We have nine countries that have expressed 
an interest in joining NATO. They are called the aspirant 
countries or aspiring to NATO membership. Each of them has a 
membership action plan of all of the things, steps they need to 
take prior to NATO membership.
    Now, this fall, in November, will be a heads of state NATO 
summit in Prague. President Bush will attend there with all of 
his other 18 counterparts. And a decision will be made at that 
point as to which of these aspirants would be offered 
membership in NATO.
    Let me, if I may, further explain. As I tell each of these 
countries when I go visit them and I get the question, ``Is 
country X going to be offered membership?'' I state that when 
country X is offered membership is a political decision, not a 
military one, and as it should be.
    I try to keep us in uniform focused on the objective 
military criteria of each of these nations. What is the status 
of their reform of their military? Do they have civilian 
control of the military? What does their geography mean to the 
alliance?
    But I can build a case that country X may have maxed the 
course on every one of the objective military criteria and 
there may be a very good and valid political reason as to why 
you would not want them to be a member of the alliance.
    And conversely, I can build a case for you that country Y 
may not be exactly where we want them in terms of the reform of 
their military--by the way, we are not exactly where we want to 
be in terms of reform of our own military--and there may be an 
overriding political reason as to why you would want them as a 
member of the alliance.
    So I say that in a very positive sense, and not in a 
derogatory sense in any way, that it is a political decision. 
But EUCOM is heavily involved in providing objective military 
advice to our political authorities on each of those aspiring 
countries.
    I can tell you that in a general sense we have told those 
countries in their membership action plans that they need to 
spend approximately 2 percent of their gross domestic product 
on their defense, and the aspirants, by and large, are doing 
that. And I can give you a chart that will tell you where each 
of those aspirants are in terms of their spending.
    Mr. Hobson. Chet.
    Mr. Edwards. Thank you, Mr. Chairman.
    General Ralston, welcome.
    General Ralston. Thank you, sir.
    Mr. Edwards. I enjoyed seeing you in Munich at the Munich 
Conference.
    I might just make a comment, Mr. Chairman, this was the 
38th Munich Conference, now called the Conference on Security, 
and there were about 40 defense ministers there.
    Next to the war on terrorism, the next biggest topic of 
conversation was that the United States military force is so 
strong, so powerful, so advanced technologically and with the 
quality and training of its people that our NATO allies are 
worried about being able to integrate the other NATO allied 
forces with the U.S. forces.
    Mr. Hobson. They need to spend a little more money.
    Mr. Edwards. I guess that is correct. I guess it is a good 
challenge to have.
    But, General Ralston, that is a compliment to you and all 
the men and women in our services today, and I thank you for 
that.

                           PRIVATIZED HOUSING

    Let me ask you, the reason I was a few minutes late is I 
introduced the Army secretary, Secretary White, at a breakfast 
this morning, and he mentioned that under the Residential 
Community Initiative, which this committee has led the fight 
on, the Army will have about $700 million in private investment 
put into housing programs this year, to supplement the public 
budget.
    I assume that is a much more difficult model to try to use 
in Europe. Is there any variation of RCI that is being tried or 
is working? I know there have been a few efforts made, but 
anything to the magnitude of the kind of investment we are 
talking about in the Army this year through RCI?
    General Ralston. Mr. Edwards, as you mention, it is more 
difficult when you get into overseas areas to try to do that.
    Having said that, we have tried this, we have some efforts 
that are working. And it is country-specific, it is base-
specific. What are the investment opportunities on the part of 
the local community?
    I can get you a more concise answer on specifically where 
we are, but I know we have a privatized housing project in 
Italy, for example----
    Mr. Hobson. In Naples----
    General Ralston [continuing]. That the Navy has worked on, 
in Naples, that is an excellent project.
    Mr. Hobson. As a matter of fact, if I could interject, and 
General Schwartz has had people over there, we had some 
problems getting it done. But I think, having said that, it has 
turned out to be a good project. And it is an Italian-owned 
project that we lease back, and I think we have the right to 
buy it at some point.
    And I have been there, and it is well built and it has a 
school and all that stuff. And I have asked General Schwartz to 
have his people look at it, trying to get a Korean model for 
that, although it scares some people because that is 
accompanied housing there; the Korean model might not be 
accompanied housing.
    But we have done it, and we might be able to do it 
someplace else. I do not know where else they are looking to do 
it, but the guy was under house arrest for a while that was 
building it, and we had some problems over the land and how he 
got hold of the land. But it seems in the final analysis that 
at least the people who are there are happy with the results of 
the project.
    General Ralston. Mr. Chairman, if I could add to that, you 
are exactly right. It is a wonderful housing area. I have been 
there, I have talked to the residents. It is very good.
    And if I could add a personal experience to this, also 
overseas-related, although it was Alaska, when I was commander 
there we did an 801 housing project, private housing at Eielson 
Air Force Base, 366 units. It was the best housing that I have 
ever seen in the Department of Defense, in my 37 years. And the 
good news was, it did not take an investment on the part of the 
U.S. government to do it.
    Mr. Hobson. That was Alaska, wasn't it?
    General Ralston. That was Alaska, yes, sir. That is true. 
But it was part of the overseas OCONUS account that we have. 
But the service members got excellent housing, the community 
got the jobs, local builders built the house, and we turn our 
housing allowance over for a specified number of years to do 
that.
    So I think it is an excellent program, and I strongly 
support it.

                         EUCOM FORCE STRUCTURE

    Mr. Edwards. If I can follow up with one question that 
relates to this. You put in your written comments that one of 
the concerns in housing investment in the past has been where 
we were going to stabilize our forces, at what numbers and what 
areas throughout your command. And that was a good rationale 
for Congress not to invest more.
    And I am thrilled that the Chairman of this subcommittee 
has made an investment in saying that is not good enough; that 
we need to help our military families have better quality 
housing today, regardless of future decisions.
    I guess the opportunities for private-public ventures, as 
well as convincing Congress to spend more money on upgrading 
housing, depends on the perception of the stability of our 
force structure in Europe.
    Are we at a point where you confidently say that this level 
of force structure there now is where we should be and you 
think we will continue to be and therefore we could move ahead 
with some more investment?
    General Ralston. Mr. Edwards, let me put it this way. I 
will tell you what I have told the Secretary of Defense as 
recently as yesterday, when we discussed this issue.
    I said, today we have just a little over 100,000 troops 
forward based in Europe. And as I have stated, we have 91 
countries in the European Command Area of Responsibility (AOR). 
That is half the countries of the world there. And in my 
judgment, 100,000 troops forward-based is not excessive.
    By the way, that is 8 percent of the active-duty military 
strength in the United States military. I do not believe 8 
percent is too big of an investment for half the countries in 
the world.
    And we have tried to prioritize those installations. We 
have tried to prioritize those that are to major installations; 
and then those that I think are less enduring, we have come 
forward with a plan to close some of those.
    The Efficient Basing East in Germany that we worked with 
with the United States Army, where we closed down 13 little 
installations that we were never going to be able to make the 
investment in to give our people the right quality of life, and 
then consolidate them to Grafenwoehr Range, where they get 
better training. It will be an enduring facility, they will 
have hospitals, gymnasiums and housing and all the things that 
they need.
    So my advice to the Secretary of Defense is that the 
100,000 is about right. Oh, by the way, it is halfway to the 
Middle East if you need something there. They are one ocean 
closer. And so I think it makes sense strategically to have 
those forward-based forces.

                  RESERVE/NATIONAL GUARD CONTRIBUTIONS

    Mr. Edwards. Does that 100,000 include guardsmen and 
reservists, or would that be in addition to the 100,000?
    General Ralston. That would be in addition to. And as part 
of the 118,000 number that I use--and this fluctuates on a day-
to-day basis. If I have a carrier battle group that is coming 
through the Mediterranean, it goes up; if they go on to the 
Central Command, it goes down. So I will say approximately 
110,000, plus or minus.
    We do have guardsmen, as you know, today in Bosnia. We have 
the Virginia National Guard, the Maryland National Guard, many 
different National Guard units are there.
    Mr. Olver. Do not forget the Massachusetts----
    General Ralston. And the Massachusetts National Guard is 
doing----
    Mr. Hobson. The Ohio National Guard----
    Mr. Edwards. I am sure there are some Texans there 
somewhere.
    Mr. Hobson. You got the Ohio and the Mississippi Guard at 
Incirlik right now----
    General Ralston. Yes, sir.
    Mr. Hobson [continuing]. Because I was there.
    General Ralston. And without leaving anybody out----
    [Laughter.]
    General Ralston. I mean the Guard has done an absolutely 
superb job in all of these installations.
    The numbers are relatively small. In Bosnia today, I am 
going to give you a round estimate of about 1,500 Guard troops 
that are there.
    Mr. Hobson. What is the overall number of people in Bosnia?
    General Ralston. Thirty-one hundred. And if I could come 
back----
    Mr. Olver. About half of them are Guard.
    General Ralston. Yes, sir. And I think it is about 60 
percent, so it is a little over.
    Give me my thermometer chart.
    My point is that while the Guard is extraordinarily 
important to us to do this, it is a small percentage of the 
overall 100,000 that we are talking about.

                     BOSNIA U.S. FORCE CONTRIBUTION

    Since you did not exactly ask the question, but close 
enough, I would like to show you our troop levels in Bosnia 
here that we have been working very hard on. And this is U.S. 
troops.
    If I go back to January of last year, just before I 
testified before this committee, we had 4,400 Americans in 
Bosnia. By October, I had it down to 3,100. Here, in about six 
weeks, we will be at 2,500. And my projection for October of 
this year would be 1,800.
    So we are working very hard on this. We are working this 
with our NATO allies.
    And this, by the way, in my judgment, reflects more 
accurately the situation on the ground in Bosnia. Remember, it 
was six years ago when we went into Bosnia with 60,000 troops.
    [The information follows:]


    
    Mr. Hobson. For a year.
    General Ralston. I am sorry.
    Mr. Hobson. The original projection, we were going to go 
in----
    General Ralston. Oh.
    Mr. Hobson. I just want to bring that up.
    General Ralston. Yes, sir, I understand.
    The Americans were 20,000 troops of that. We were 33 
percent of the effort when we started that in December of 1995. 
But as the situation on the ground has improved, we have been 
able to revise our forces, bring our force levels down. And 
today, this morning, we have less than 18,000 total NATO 
troops. We have, as I say, 3,100 Americans. We are 18 percent 
of the effort. I expect we will be at 15 percent of the effort 
by this October.

                    PERSONS INDICTED FOR WAR CRIMES

    Mr. Olver. Maybe if we continue to reduce that number we 
will finally find Mladic and Karadzic.
    General Ralston. That is an important issue, and let me 
address that.
    Mladic, I believe everyone in this government and every 
other government around the world realizes that he lives in 
Belgrade in Serbia. That is not part of Bosnia, we are not 
allowed to go into Serbia. And this is something that the 
Serbian government has got to step up to and has got to turn 
him over to the ICTY.
    With regard to Mr. Karadzic, I do not believe that there is 
anyone that knows exactly where he is, although we are working 
it very hard, and I do believe that we are closing the noose on 
that. But he travels continuously throughout the Balkans, and 
we are working very hard on that aspect of it.

                          EFFICIENT BASE EAST

    Mr. Hobson. Let me ask a couple questions.
    This Efficient Basing East funding is somewhat troublesome 
to me.
    The budget request includes $69.8 million for three 
projects at Grafenwoehr, Germany, to implement Efficient Base 
East. Does this funding level allow you to implement the 
initiative in the desired time frame? If not, how far does the 
schedule slip, and what is the effect on the overall cost of 
not getting the amount of money that was originally thought to 
be? And did the U.S. Army Europe plan a more robust 
infrastructure request in 2003; and if so, why were there only 
three projects requested?
    General Ralston. Yes, sir.
    Let me state it this way. The United States Army Europe did 
go forward to the Department of the Army with a proposed 
funding plan for the Efficient Basing East. And like any plan 
that comes in, choices have to be made across the river in the 
Department of Defense.
    The United States Army Europe's request was not fully 
supported. Although it was supported, they did not get all of 
the money that they asked for in the request for 2003. As a 
consequence of that, it does, in fact, slow down the Efficient 
Basing East initiative.
    And one of the real benefits of Efficient Basing East was 
the fact that once we get it consolidated at Grafenwoehr, the 
Army estimates that they will save about $40 million a year in 
infrastructure costs once they consolidate. So if this slides 
out a year, then that means that that is one year later that 
you will realize the savings from the consolidation.
    But those are the types of judgments that had to be made at 
the Department of Defense as to exactly how much in 2003 could 
be allocated to Efficient Basing East.
    Mr. Hobson. But you could have spent more and gotten it 
done if they would have given you the money.
    General Ralston. Yes, sir, that is correct.
    Mr. Hobson. And it would have probably cost you less if 
they would have given you the money to do it right.
    General Ralston. If there were more funds available to do 
that, we could, in fact, complete the project sooner and we 
could, in fact, realize the savings sooner by having done it.

                        BARRACKS UPGRADE PROGRAM

    Mr. Hobson. I am going to ask one more question, you do not 
have to answer it, I just want to get it in here, but if you 
want to answer it, you can. And then I am going to let John ask 
you some questions, and then I think we have a vote, and then 
we are going to have to terminate.
    I am really concerned about this SRM deal that went on 
someplace that members were not really aware of, and I am more 
concerned about what happened to the money than I am about the 
event. I realize why the event happened, but I am really 
concerned. We fight so hard for dollars to be done in Europe, 
we got this problem with Efficient Basing East, we got all 
kinds of other things that we could do, and then I find out, 
kind of, not from you guys, but just in talking to some people, 
that mysteriously $100 million moved. And I think it wound up 
in CONUS someplace, although it is, kind of, off-shore.
    And I am concerned about this whole transaction. And if you 
do not want to get into it, that is fine, because I am going to 
get into it elsewhere, since I found out about it, but I want 
it known that I am not upset about the language in the bill; I 
am more upset about how the money got spread around.
    General Ralston. Mr. Chairman, this is what I would like to 
address. And again, I only found out about this shortly ago, 
when I was notified that the United States Army in Europe was 
going to lose approximately $100 million out of their barracks 
upgrade program in 2002.
    Now, it affects me very much because the barracks upgrade 
program is a very high priority for me, as we have talked about 
here. And so I do not know all of the procedures and how this 
happened, other than it was presented to us as a fait accompli 
that within the Department of the Army money was moved around 
and USAREUR was the net loser in the process.
    Mr. Hobson. Well, there are always people listening, 
writing little things down, but I am not going to let it drop 
there. I mean, I am going to let it drop with you, but I am 
concerned about it.
    John, do you have some questions you would like to ask?
    Mr. Olver. I would like to just follow that one up just 
very briefly and then make one other request.
    I would like very much to support the consolidations and 
the base efficiency initiatives that you are dealing with, 
because I suspect that spreading our footprint all over the 
place is not a very efficient way to function.
    And, clearly, it seems to me, as we expand NATO, if we are 
going to continue to expand it and add even only half of that 
nine, by some integer, close to half, that eventually one has 
to think where the center of your functions ought to be, and 
that goes to my question of do we have hard facilities, are we 
planning hard facilities or whatever in some of the new 
nations.
    In understanding the question that the chairman has asked, 
you have initiatives, the Rhein-Main, for additional facilities 
at Ramstein and Spangdahlem, and you have also some Navy things 
mentioned and so on.
    Is it only the Army's initiatives that are affected by this 
glitch in the budgeting, which I will just use the term 
``glitch'' for the moment?
    General Ralston. Yes, sir, that is my understanding, that 
this was a Department of the Army.
    Mr. Olver. And is it only Army in Germany or is it Army 
throughout Europe Command?
    General Ralston. My understanding is it is Army throughout 
the European Command.
    Mr. Olver. Throughout European Command.
    General Ralston. Yes, sir.
    Mr. Olver. So things that are Army in Italy may also be 
affected, or England or Germany.
    General Ralston. Yes, sir, that is correct. And as I 
understand the problem, as I say, United States Army Europe 
just became aware that they have less dollars than what they 
had anticipated for 2002, so they will have to prioritize with 
what they have remaining. And that is a decision I do not think 
has been made yet as to which barracks specifically would lose 
the funding.
    Mr. Olver. If we do not have that information already in 
staff, I would like to know what were the planned projects that 
that would have covered----
    [The information follows:]


    
    General Ralston. Yes, sir.
    Mr. Olver [continuing]. Location and dollars.
    And lastly, since you have shown that, I would like to see, 
and maybe you can make it available, where our forward-
deployed--which I think is the term you used, which I think 
means everybody in the European Command, since that is off-
shore----
    General Ralston. Forward based.
    Mr. Olver [continuing]. And would England and Germany and 
all the places over there, and Turkey and whatever--what we 
have in terms of Reserve and Guard together. Is it fair to lump 
them together?
    General Ralston. We can give it to you both ways.
    Mr. Olver. I guess I mostly care about what are our regular 
full-time forces versus our Reserve and Guard forces as a unit 
in those various places where they are forward-deployed, 
country by country.
    And if you have some other things that are happening on a 
time scale similar to what you have described for Bosnia, we 
may well be doing something like that in Kosovo, and there may 
be other bases where your initiatives of consolidation and so 
forth mean that there is some movements about, I would like to 
see that.

                          PERSONNEL LOCATIONS

    And it seems to me it is quite easily done, country on one 
side and time frame on the other side, with two spots in each 
country, one for the regular and one for the Reserve and Guard 
forces or some version of that.
    [The information follows:]


    
    General Ralston. Yes, sir. And we can provide that for you. 
Let me give you a general answer.
    With regard to Bosnia we talked about right now, because of 
the Guard units that we are talking about, we have about 60 
percent from the reserve component. But that is something that 
changes with each rotation. In April, these units will rotate 
back out of Bosnia and come back home, and they will be 
replaced by primarily active-duty units. And then that will go 
for a couple of cycles, and then the Guard will pick it up 
again.
    So it will vary from time to time, but I can certainly give 
you a snapshot right now.
    Mr. Olver. Well, you can see the window----
    General Ralston. Yes, sir.
    Mr. Olver [continuing]. At a particular time.
    General Ralston. Right.
    Mr. Hobson. A couple of things. I do think that it is 
important to note the Texas Guard, with a bigger group, was in 
there in Bosnia and worked that.

                     KOSOVO U.S. FORCE CONTRIBUTION

    I was at Bondsteel, and there is still quite a group of 
people at Bondsteel. How many people do we have in Kosovo, 
General? Do you have a----
    General Ralston. Yes, sir.
    Mr. Hobson. You do not have a thermometer.
    General Ralston. In Kosovo this morning we have 
approximately 5,300 Americans. That is down from the 7,000 that 
we started. That is out of a total of 39,000, overall. We have 
not exceeded 15 percent in Kosovo, and so the other nations are 
carrying 85 percent of the load there.
    Now, as we do this six-month review, I will go back to the 
North Atlantic Council and report to the foreign ministers and 
defense ministers in the May time period, it is my anticipation 
that we will bring the numbers in Kosovo down, just like we 
have been able to do in Bosnia.
    And do not hold me to this number, but I think by this fall 
I should have that number down to around 4,000 Americans, so it 
is a significant reduction, in excess of 20 percent, over the 
next few months.
    Mr. Hobson. I think General Huber is doing a good job 
there. He was a colonel when I first met him in SOUTHCOM, I 
think.
    General Ralston. He is an excellent commander, and I am 
very, very proud of him.
    Mr. Hobson. I am somewhat concerned about this footprint 
problem that we have in the area, because we should get this 
footprint implemented. We have been doing this for a long time, 
getting ready where we are going to put people over there. And 
the longer we do not get it done, the worse the number gets, 
the more morale problem you have.
    Right now I think your morale is probably pretty good in 
most places, especially in Kosovo and Bosnia: people feel they 
are doing something, they feel they are important. And we give 
them a lot better deal than we do in Korea or some other places 
as far as in and out and things of that sort.

                   INCIRLIK--OPERATION NOTHERN WATCH

    I think Incirlik is a modern miracle. To have the tempo 
that you have in Incirlik, which is 800 to 900 percent a year, 
people living in tents, going in and out, maintaining 
airplanes, flying airplanes, Guard units, Reserve units, 
active-duty units, all working there together, somebody ought 
to write a book about it. Because as far as I know, and I knock 
on wood when I say this, we have only lost one airplane in the 
whole time, that not to hostile fire. And to be able to do that 
with the changes that you have is just almost beyond what you 
would ever war plan anywhere, that kind of tempo, and to keep 
it up for the period of time that you have.
    I will be very frank with you: I am not sure how cost-
effective the mission of Northern Watch is, other than 
symbolic, because when you see the number of times we fly, when 
you see how much it costs when we fly, the risks that we take, 
I am not sure, other than political, whatever that is, that it 
is worth the money that we spend.
    I forget what the number is, but it is a huge number, 
because you have to put up a whole package on any day you can 
fly, and you only fly eight days a month, something like that. 
It is not as many as we all think it is and there is a lot of 
risk, when the Iranians come up and other people come up.
    I assume that that is being assessed at the highest levels 
of this country as to the cost-benefit analysis on that.
    General Ralston. Yes, Mr. Chairman. And it is a very 
important issue. Obviously, we have received the mission, and 
our people are doing a magnificent job in carrying out that 
mission.
    And as you know, they have been doing that now for 11 
years. It is an extraordinary effort, as you talked about. And 
practically every time that our people fly over northern Iraq, 
they are shot at.
    So it is something that I have addressed with the Pentagon. 
Only the Washington policymakers can decide if the benefits 
coming out of the mission offset the cost and the risk that we 
encounter.
    And so that is something that has been provided to the 
policy leaders in Washington and they will decide. In the 
meantime, we are carrying out the mission that we have been 
given.
    Mr. Hobson. Well, I want to thank you very much for coming 
and sharing these thoughts with us. And it is important that 
you come and do this. I know that all the troops out there that 
serve underneath you, in your command, this is very symbolic to 
them that you come here to this committee, and they take to 
heart what you are doing.
    I was going to stop there, but I see another member came. I 
do not know whether Sam has any questions or not.
    Do you have any questions you want to ask, Sam?
    I am surprised that Sam is even walking today, he has been 
so sick. But I appreciate your coming. We were just about to 
wrap up, but I do not want to wrap up if you have some pressing 
matter.
    Well, there is one other significant event that, sir, if I 
could impose upon your time for one more second. I would like 
to announce, because in this particular service promotions are 
very hard to come by. And when a major gets to lieutenant 
colonel, I think that is a significant event, especially in the 
Marine Corps.
    And Major Norm Cooling is going to become a lieutenant 
colonel, and I talked to him yesterday, but I just want to say 
in front of the committee, he has done valuable service and we 
appreciate working with him. And just hope he does not get the 
big head now that he is a lieutenant colonel, sir; I do not 
know. [Laughter.]
    He has done good work up to now.
    But congratulations to you. I cannot say lieutenant 
colonel. Major waiting. I wasn't in the Marine Corps. But 
anyway, I think it is a significant event.
    General Ralston. Mr. Chairman, I thank you very much for 
recognizing Major Cooling, because he is a superb officer, and 
I think he is doing great work for the men and women of EUCOM, 
working the congressional issues.
    And if I may, before we close, I would also like to 
recognize the great work that your staff has done in helping us 
put together this program and in working through it. And so it 
has been a very cooperative effort, and I very much appreciate 
it.
    Mr. Hobson. Well, thank you, sir.
    We could not get it done without staff, and it is a 
bipartisan staff. We try to work together on this and make the 
dollars that we get work for people.
    And it is frustrating sometimes when you find out about 
these other things and to see where we are going. But we are 
going to keep poking at it till we all get it right. I just 
wish you were going to be around longer, sir.
    But thank you very much for your service, too, because this 
is probably the last time that you will appear before this 
committee.
    General Ralston. I have quite a while to go, so I do not 
know. You might always have another hearing. [Laughter.]
    Mr. Hobson. We will call you back for something else. Yes, 
but they have extended you now. But, you know, for a guy from 
Norwood, Ohio, you have done all right, sir.
    General Ralston. Thank you, Mr. Chairman.
    Mr. Hobson. He wants the next hearing in one of the Greek 
isles, so maybe we will have that there.
    Thank you very much, General.
    General Ralston. Thank you.
    [Clerk's note.--Questions for the record submitted by 
Congressman Edwards.]
                       On Post Living Percentages
    Question. Throughout EUCOM, what percentage of service men and 
women are living on post. How does that compare to CONUS?
    Answer. The below table provides a comparison of our current 
percentages of the service members living on post, broken down by 
Service Component, compared with service members living on post in 
CONUS.

------------------------------------------------------------------------
                                                     EUCOM       CONUS
                     Service                       (percent)   (percent)
------------------------------------------------------------------------
Army............................................        65.1        33.5
Air Force.......................................        46.6        33.0
Navy............................................        49.7        28.0
------------------------------------------------------------------------

                             Housing Costs
    Question. For those living off post, what percentage of housing 
costs are covered by the Basic Allowance for Housing (BAH)?
    Answer. Unlike service members in Continental United States 
(CONUS), service members overseas do not receive the Basic Allowance 
for Housing. Instead they receive the Overseas Housing Allowance (OHA). 
OHA is comprised of three components: rental ceiling, utility/recurring 
maintenance allowance, and the move-in housing allowance (MIHA). Rental 
ceilings are computed using actual rents as reported through military 
finance centers. Rental ceilings are set such that 80 percent of 
members with dependents have rents fully reimbursed. Unaccompanied 
members or members without dependents receive 90 percent of the with-
dependent rate. Utility/recurring maintenance allowance is paid monthly 
to defray expenses paid to utility companies. Payments fully cover 
reported expenses for 80 percent of members. Finally, MIHA provides a 
fixed-rate lump-sum payment that reflects average expenditures to make 
overseas dwellings habitable (e.g. wardrobes, kitchen and lighting 
fixtures, supplemental heating equipment). MIHA also reimburses actual 
expenses for legally required rent-related expenses such as rental 
agency fees, taxes, etc. Finally MIHA fully covers expenses paid to 
enhance physical security of dwellings (where deemed necessary). All 
service members and Department of Defense (DoD) employees in the 
theater are required to consult with the regional housing office before 
entering a rental agreement on the local economy so the housing office 
may advise our personnel on allowable and reasonable costs incurred 
with the rental agreement they are considering.
                        Unaccompanied Personnel
    Question. What percentage of married service men and women are not 
allowed to bring their families to areas within European Command 
(EUCOM)?
    Answer. Only seven locations in the EUCOM AOR are classified as 
dependent-restricted sites. They are Eskisehir, Istanbul and Yumurtalik 
in Turkey; Souda Bay, Greece; and the Embassies in Lebanon, Albania and 
Bosnia. There are a total of 386 military members assigned to these 
eight locations, with the majority (352) being assigned to Souda Bay. 
This equates to approximately 0.375 percent of EUCOM's total service 
member population who are not permitted to bring their families to 
depend-restricted locations.
    United States Army Europe (USAREUR), as one Service Component, 
reports that there are no permanent Army billets in/under their control 
that are labeled as ``unaccompanied.'' However, for the past 18 months 
they have been tracking the number of soldiers denied travel with their 
families to USAREUR. Over the last 18 months, 544 soldiers, or .9 
percent of the Army population in EUCOM, were denied family travel 
because of command sponsorship/housing or exceptional family member 
reasons. Of those 544, 229 (.4 percent) opted to take a short tour 
option and leave their family in the States, while 315 (.5 percent) 
requested to be deleted from the assignment. The other Services do not 
track this type of data.

    [Clerk's note.--End of questions for the record submitted 
by Congressman Edwards.]
                                         Wednesday, March 13, 2002.

           DEFENSE DEPARTMENT (INSTALLATIONS AND ENVIRONMENT)

               U.S. ARMY (INSTALLATIONS AND ENVIRONMENT)

                     U.S. AIR FORCE (INSTALLATIONS)

               U.S. NAVY (INSTALLATIONS AND ENVIRONMENT)

                               WITNESSES

RAYMOND F. DuBOIS, DEPUTY UNDER SECRETARY OF DEFENSE (INSTALLATIONS AND 
    ENVIRONMENT)
GEOFFREY G. PROSCH, PRINCIPLE DEPUTY ASSISTANT SECRETARY OF THE ARMY 
    (INSTALLATIONS AND ENVIRONMENT)
JIMMY G. DISHNER, DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE 
    (INSTALLATIONS)
H.T. JOHNSON, ASSISTANT SECRETARY OF THE NAVY (INSTALLATIONS AND 
    ENVIRONMENT)

                       Statement of the Chairman

    Mr. Hobson [presiding]. Good morning; the Committee will 
come to order.
    The hearing today will focus on the privatization of family 
housing in the military.
    I am pleased to introduce our witnesses: Ray DuBois with 
the Office of Secretary of Defense; Geoff Prosch, Principal 
Deputy Assistant Secretary of the Army; Duncan Holaday, Deputy 
Assistant Secretary of the Navy; and Jimmy Dishner, Deputy 
Assistant Secretary of the Air Force.
    Is everybody here?
    Mr. Johnson. Yes, sir, except for a little change there for 
the Navy. H.T. Johnson.
    Mr. Hobson. Oh, yes, Mr. Johnson. I should have known that. 
You were just here.
    Before we move into the substance of the hearing, I want to 
announce that this is Jimmy's, I guess, last--swan song. And I 
want to thank him for really all the assistance you have done 
with us and working with us, and for 40 years of service to the 
United States. That is almost as long as I have been married to 
my wife.
    Jimmy has had, you know, quite a career. He is a graduate 
of the Citadel, and served on both Active and Reserve Air 
Force. In fact, he retired from the Air Force as a brigadier 
general.
    We will not hold that against you, as an enlisted guy in 
the Air Force.
    And he has served in his current position since 1995.
    And I think everybody on this Committee and everybody in 
this room wishes you well in your next endeavor, whatever that 
may be, because you are still a young guy by my standards.
    Over the last several years, this Committee has focused a 
great deal of energy on the privatization issue--that is, kind 
of, an understatement, I guess. [Laughter.]
    The budget request for fiscal 2003 represents a banner year 
for housing privatization because, combined with previously 
budgeted projects, the department expects to privatize a 
cumulative total of over 60,000 by the end of fiscal year 2003. 
The work we have to achieve is monumental, and I hope the goal 
can be met.
    The members of the Subcommittee have a good working 
relationship. Nowhere is our commitment to quality of life 
stronger than it relates to good housing. I look forward to 
being updated about where this initiative stands today.
    I want to thank each of you coming here today.
    Let me say one other thing. We have probably focused more 
on housing privatization than probably any other committee 
around, and probably more than everybody expected--right, Ted?
    But I hope that everybody--I think today when we look at 
where we are in this thing--when we started out, I think 
everybody thought I was out to kill housing privatization, and 
that was not true. What I have been concerned about is that we 
do this in a way that achieves the goals that everybody wants, 
and achieves them in a cost-effective manner, that people do 
not look back at what we have done in the future and say, you 
know, ``How did these people get to this? And, you know, why 
did they do these dumb deals?'' And I do not want to knowingly 
do dumb deals.
    I came in, kind of, after this got started. It was started 
in a different fashion than it is going today. But I think, 
still, while there are very ambitious plans out there today, we 
really have not completed a whole lot yet. We have got a lot 
going, but we have not completed some things to where we really 
know where we are on all these.
    Some of them we completed did not work right in the 
beginning; now they are beginning to work in the way they were 
intended. Some of them had to be fixed. But as we go along, we 
learn.
    Geoff, did you go to the same store almost that I did to 
get a tie today?
    Mr. Prosch. Bargain basement, sir.
    Mr. Hobson. Yes, boy that is--outlet. Brooks outlet. 
[Laughter.]
    Before I go on, let me recognize our distinguished ranking 
member, John, for any opening remarks he would like to make, 
and then we will go to statements that you can summarize, and 
the full text will be included in the record.
    I might say that John and myself just got back from 
Afghanistan, Uzbekistan and Kurdistan, and I do not see any 
privatization of housing over there that we would want to model 
for here.
    We could have used you, Sam, taking pictures.
    And John is going to have to leave for a transportation 
hearing.
    So, John, do you want to----
    Mr. Olver. Absolutely. Thank you, Mr. Chairman.
    Actually, we hardly saw any decent housing at all. As it 
turned out, there was virtually nothing that was not 
substantially destroyed in Afghanistan.
    Anyway, all the faces here have been before us before, 
except Mr. Prosch. And happy to have you here. I do not know 
how long your stint is going to be in this, and I do not know 
how long Mr. Johnson is going to come back to this committee if 
he gets treated as cavalierly as he has been treated once, at 
least, by me. [Laughter.]
    Anyway, I do also understand that Jimmy Dishner, this is 
your last--probably your last testimony before us. You can 
probably hardly wait. And happy to have you in Massachusetts in 
the future.
    As I have served on this subcommittee, a good deal of our 
focus has, indeed, as the chairman has said, been on housing 
privatization. The privatization has taken root and, I guess, 
has gotten to the point of blossoming. And I think it has to if 
we are to meet the goal--but I think a rather ambitious goal of 
addressing, as Mr. DuBois has stated in his written testimony, 
quote, most of our inadequate housing by fiscal year 2007; 
three years earlier than our initial goal of 2010. So I am 
interested in how we are going to do that and in what ``most'' 
means along with in that process what will be left out of the 
acceleration and why that is going to be left out.
    So thank you all for being here. And I am sorry I do have 
to leave in 15 minutes or so, but I imagine we will have a 
chance to hear what each of you has to say in the beginning.
    Mr. Hobson. Do you have any questions you want to ask them 
before I take their statements?
    Mr. Olver. I am going to leave those to my esteemed 
colleague, Chet Edwards.
    Mr. Hobson. Okay. All right. I was going to let you ask 
them ahead of time, but go ahead.
    Ray, are you going to be first?
    Mr. DuBois. Yes, sir.
    Mr. Hobson. Okay.

                  Statement of Raymond F. DuBois, Jr.

    Mr. DuBois. Mr. Chairman, thank you very much.
    Mr. Olver, Mr. Edwards, Mr. Farr, we have traveled together 
in the past. We have looked at housing at various 
installations. It remains a top priority of the Secretary of 
Defense to fix. As you point out, Mr. Olver, he has pulled the 
goal from 2010 to 2007, 2007. And I think that the witnesses 
today will inform you as to how the military departments will 
achieve that.
    I want to make a personal, if I might, comment. Mr. 
Dishner--Jimmy Dishner has served his department and the 
Department of Defense with distinction. I might add that his 
successor, Mr. Fred Kuhn, who is in the front row over here, is 
here today to get pointers from his predecessor.
    Mr. Dishner, however, is not leaving the service of his 
country. We have asked him to stay on for one year as a special 
assistant to help us--Mr. Olver, you may be interested in 
this--with issues pertaining to Massachusetts, in particular 
Massachusetts Military Reservation on the Upper Cape, and some 
of the issues that----
    Mr. Hobson. Is that because John Olver is such a problem, 
he needs a special assistant or----
    Mr. Olver. The Mass. Military Reservation has been such a 
problem over such a long time, there has been a bit of a 
breakthrough. So I can understand that you might want to have 
somebody take a real interest in that.
    Mr. DuBois. Yes, sir. And I have been up there personally, 
and we will continue to take that interest. And Jimmy will take 
that responsibility on over the next year.
    Mr. Chairman, you have noted that this committee--and I 
over the last 10 months in this job can heartily concur with 
you, that this committee is no question the leader with respect 
to the Congress on the issues of quality of life and housing 
for our military personnel.
    The Secretary wants to ask me to extend his appreciation to 
you and to all the members of the House of Representatives to 
extend our military housing privatization authority to 2012, 
although we do not believe that we will need it.
    The last few months, as we all know, has been anything but 
normal; 9/11 has changed our country forever. That does not 
diminish the fact that the Secretary of Defense is committed to 
all of our installations and our infrastructure, especially the 
housing for our personnel.
    Your busy schedules have allowed you to visit Fort Hood, 
Lackland, Naval Station Everett to review the progress of the 
department's privatization efforts and to visit with our 
service members living there. This action on your part speaks 
volumes.
    Mr. Edwards and I, before the hearing this morning, 
discussed the issue of what is going on in Fort Hood. Clearly, 
there is a renewed sense from the enlisted personnel and junior 
officers and their families that the Secretary of Defense and 
the Congress, working together, are paying intense attention to 
this issue.
    Mr. Hobson. Let me interrupt a minute, Ray.
    Mr. DuBois. Yes, sir.
    Mr. Hobson. I want to say this publicly. Without your 
intervention--personal intervention Fort Hood would have not 
gone forward, in my opinion. Had you not kicked at it like you 
did, when you did, I think we would still be messing around 
with it and I would still get being blamed for holding it up.
    And I was not. But I want to say publicly that you 
personally became involved in that, and I do not think we would 
have gotten it out of OMB without your personal intervention. 
So I just want to say that.
    Mr. DuBois. I appreciate that, Mr. Chairman.
    The President, of course, and the Secretary of Defense have 
stated publicly and on more than one occasion how important 
housing is, notwithstanding that Fort Hood is near the 
President's ranch. We will continue to focus on housing both 
domestically and overseas, and I think it is an important issue 
to remember.
    Our construction budget, our family housing construction 
budget of $1.3 billion, our request, is from $1.1 billion in 
terms of our request--our amended presidential request in 2002. 
It supports traditional approaches to military housing, as well 
as privatization to implement our plans to renovate, replace or 
privatize over 35,000 housing units in fiscal 2003 alone.
    I want to talk in a little more detail, as will my 
colleagues at the table, with respect to how we will achieve 
that this year, the units that we will contract for 
privatization.
    This is an enormous task and one that has shown over the 
past 10 months an increase--an exponential increase in units 
awarded. We have presented to you a quarterly status report--I 
signed it out on March 11; I think we will send it to you 
electronically--on that issue, and I have--we will hand out a 
one-page chart that will give you the 2003 rundown by service.
    As you know, the department, in its aggressive pursuit of 
this initiative to improve living conditions, we want to: one, 
increase housing allowance to eliminate out-of-pocket costs; 
two, we are going to increase our reliance on the private 
sector through the privatization issue; three, we are going to 
maintain the military construction funding, because not all 
situations can be addressed by privatization.
    I think it is important to recognize that our policy 
requires that privatization yield at least three times the 
amount of housing as traditional military construction for the 
same amount of appropriated dollars. As you know, we have to 
achieve at least a 3 to 1 leverage factor, but the projects 
awarded thus far reflect a leverage ratio of almost 8 to 1. I 
think that in and of itself is a dramatic statistic.
    The six privatization projects awarded over the last year 
have more than tripled the number of units already privatized. 
We have accelerated this program, because, yes, the dedication 
and the focus of the secretary and the President; but I want to 
call attention to the dedication and the focus of the new 
service secretaries in this regard. Also, of course, the 
congressional interests and the increased buy-in of 
installation, as we call them, stakeholders clearly supports 
the acceleration.
    You have raised in conversations with me the so-called 
post-award management question. Because decent, safe and 
affordable housing is such an important component to our 
service members' lives, we are taking steps to ensure that 
privatization projects which we have already awarded remain 
fiscally and physically in good shape for the long term.
    To that end, we oversee these projects through an internal 
oversight program and document called the evaluation plan or 
the program evaluation plan.
    The two data submissions we have analyzed thus far--and 
this is important--indicate that at this stage--although the 
sample is small, at this stage of the program there are no 
overall portfolio areas of concern.
    Financial data looks good as well. For example, our current 
debt coverage ratio--and I know that you have a certain 
background in housing and in development, Mr. Chairman, and I 
hope this comports with your understanding--our current debt 
coverage ratio for all applicable projects is 1.2 or greater.
    Now, also my office plans to hold a one-day session, 
probably in May, which we would hope that you and/or other 
members of the subcommittee, and certainly members of your 
staff, will attend.
    The service portfolio managers, which are at this table and 
sitting behind us, will review in great detail--in great and 
perhaps excruciating detail the kind of information we are 
gleaning from this evaluation program. Areas for improvement. 
Changes in future projects necessary.
    In particular we want to improve the deal structures to 
provide private sector incentives while maintaining sufficient 
government protections which you, Mr. Chairman, have addressed 
on several occasions.
    In closing, again, on behalf of the Secretary of Defense, 
on behalf of Secretary Rumsfeld, I would sincerely like to 
thank you and Mr. Olver and the other members of this 
subcommittee for your strong support of our military housing 
privatization program, both in the United States and abroad, 
and I look forward to working with you in the future.
    Thank you.
    [The prepared statement of Raymond F. DuBois, Jr. follows:]


    
    Mr. Hobson. Mr. Johnson, I think, is next.
    Let me put something out for all of you before you go on. I 
do not know where you fit in the privatization of utilities, 
but we are going to have to look at each of those contracts. I 
think I mentioned this yesterday, Geoff. And I also have not 
heard anything about SHPOs and any meeting of the minds or 
long-term understanding among the services and the department 
as to their dealings and responsibilities or penalties or 
whatever--non-penalties in dealing with the SHPOs, which is 
something that I raised some time ago.
    So, as you go, you do not necessarily have to answer those 
today, but----
    Mr. DuBois. Just quickly, utility privatization is within 
my portfolio. I have just brought on board Dr. Get Moy, former 
chief engineer of the Naval Facilities Engineering Command, to 
focus specifically on this program.
    This program, interestingly enough, is somewhat like the 
housing program was four years ago, in that, yes, we have got 
to overcome some internal bureaucratic inertia, yes, we have 
got to make some adjustments as we go down this path and 
learn--gain lessons learned. But we have today--even though we 
have only awarded 20, we have some 700 RFPs on the street for 
utility privatization.
    On these State Historic Program Offices, the so-called 
SHPOs, the Advisory Council on Historic Preservation--
presidential commission--has just, with the approval of the 
president--the president has just issued an executive order 
granting for the first time the Secretary of Defense a voting 
seat at the table. My Principal Deputy, Philip Grone, sits in 
that chair on behalf of me and the Secretary, and we are 
working to address some of the issues that you and I have 
talked about in the past of difficulties that some installation 
commanders face with respect to buildings 50 years or more--
years older or more.
    Mr. Hobson. And those coming on-line.
    How are you going to do this? Mr. Prosch first?
    Mr. DuBois. No, Mr. Johnson is senior.
    Mr. Hobson. He is senior? Okay; we do not want to get in 
the middle of that. [Laughter.]

                       Statement of H.T. Johnson

    Mr. Johnson. Senior in rank only, if I may speak, sir.
    Mr. Chairman, members of the committee, we are very proud 
of the leadership you have shown in privatization. Hopefully, 
you will see that we have followed your lead and done well.
    And in privatization of projects, we want them to meet 
several objectives: first to be self-sustaining with long-term 
recapitalizations without adding additional money. We would 
like there to be a self-sustaining entitlement and good home 
for all of our sailors and Marines.
    Secondly, we want it to be legally--we want to have a 
legally recognized voice in key decisions. We are a partner in 
the partnerships.
    Thirdly, we would like to have flexibility to accommodate 
unforeseen changes in the future.
    Fourthly, protection of government interest in case of 
default. As a partner, we would become a defaultee--we would 
get the default, so the government does not lose.
    And finally we want to be consistent with deal forms. I 
know, Mr. Chairman, you have listed your deal forms and we 
followed those very carefully.
    We used a two-step approach. First of all, we request 
qualifications.
    Mr. Hobson. Those are like Rumsfeld's rules, you know.
    Mr. Johnson. Not quite as many.
    Mr. Hobson. No.
    Mr. DuBois. But just as important.
    Mr. Johnson. We request qualifications and developers 
present their qualifications then we select highly qualified 
proposals--normally four to six. They provide more detail, 
technical and financial, and finally we select a developer for 
exclusive negotiations. We bought the vision of PPV, public-
private ventures, to fruition to provide higher quality homes 
for our sailors, Marines and their families.
    We have awarded eight projects for nearly 6,600 homes. We 
have leveraged $135 million of Department of Defense funds with 
$478 million; we have a leverage factor of 4.5 to 1. But, 
again, we are a partner--equity partner up to 50 percent. 
Normally deals work between 30 and 45 percent of our equity in 
the partnership.
    Going forward, we have exclusive negotiations ongoing for 
two Marine Corps projects. One is Beaufort Parris Island for 
1,600 homes, another is Stewart Army sub-post in New York for 
171 homes. We are pursuing another seven projects for 12,000 
homes.
    Mr. Hobson. One of them is at Quantico, is not it?
    Mr. Johnson. That is the next section. Yes, sir, year we 
are going to take care of Quantico.
    Mr. Hobson. If you do not, you are going to hear from Mr. 
Murtha and Mr. Young, I can tell you that.
    Mr. Johnson. Yes, sir. We have that under control, sir.
    A second part, and Mr. Olver and I had a discussion, and I 
did not explain myself very well. We have two challenges. One 
is bringing sailors ashore in home port. The other one is 
providing good homes for everyone.
    The sailors ashore there are 31,000 of them. About 6,000 
are in Japan, and they will take care of those, so we have 
25,000. When we first bring those ashore--and I gave your staff 
a breakdown of these--we will put two per room. The long-term 
is one per room, using the DOD standard of 1 plus 1. But we are 
committed to doing that.
    In addition we have some 42,000 Navy, 44,000 Marine Corps 
spaces that need to be brought up to the standards. So we are 
working on a much bigger problem, but home port ashore is part 
of it.
    We are developing three bachelor privatization pilots, and 
we want to work very closely with you and the Senate on these. 
One is in Hampton Roads, which will take care of some of our 
home port ashore. Another one is at Camp Pendleton, and it is a 
small of Camp Pendleton, DelMar, the very southern part next to 
the port. And Quantico will be the third pilot. We have some 
details to work out when we come into you and get permission to 
go forward on these privatizations.
    We want to work with the developers to provide good homes 
for everyone in our services.
    Mr. Chairman, we thank you and the committee for your 
experience, inspiration and encouragement.
    Thank you, sir.
    [The prepared statement of H.T. Johnson follows:]


    
    Mr. Hobson. Geoff.

                    Statement of Geoffrey G. Prosch

    Mr. Prosch. Sir, before I begin my formal remarks, I would 
just like to publicly say thanks to your leadership. Thanks for 
going to Afghanistan to check on the troops. And as I was 
looking at the TV this morning, I saw 101st Air Assault getting 
ready to fix bayonets, 10,000 feet, in the snow, fighting from 
rock to rock, cave to cave, to take out the last of the Al 
Qaeda zealots.
    And this program will allow us to reward housing 
privatization of Fort Campbell starting next year. What a 
wonderful program this is. As I begin my 36-year Army service, 
this is the most profound quality-of-life program I have ever 
seen.
    So thank you for your leadership. Thank you for the 
Committee.
    Mr. Hobson. Well, I think anybody who visits with these 
young people realize that they are the best of the best. And 
they are doing a great job, and this country owes them the 
quality of life that they deserve when they return home. And 
they need to know that their families are safe when they are 
gone, because if they are worried about their families' safety 
and the quality of life or not having the money to pay for this 
or that, then we are going to have, you know, we are going to 
have a problem with the people out there.
    But we do not have that today. All the people I met, and 
John met, when we were there, were very motivated and they knew 
their mission. They were trained for their mission and they are 
carrying it out.
    I am sorry I interrupted you.
    Mr. Prosch. Thank you, sir.
    Mr. Chairman, members of the subcommittee, I am pleased to 
appear before you to discuss the Army's residential communities 
initiative (RCI) of family housing privatization. I have 
provided a detailed written statement for the record, but I 
would like to speak briefly about several important aspects of 
our program.
    I would like to cover three topics: status of the program, 
summary of the budget and our key lessons learned.
    As you know, RCI projects are complex, multibillion dollar 
partnerships that will provide quality communities for our 
soldiers and their families. The RCI program is giving us the 
opportunity to provide modern homes to Army families much 
sooner than traditional military construction methods.
    Regarding the status of RCI, our national initial projects 
are showing very positive results. The RCI program will 
encompass privatization of over 60,000 family housing units in 
the United States through fiscal year 2004. Through the RCI 
process we attract world-class developers to partner with the 
Army, negotiate sound business agreements and increase the 
well-being of our soldiers and their families.
    I am delighted to report that our first project at Fort 
Carson, Colorado, is three months ahead of schedule. We have 
338 junior enlisted families in new homes and 500 more families 
in newly renovated homes. To date, the Fort Carson development 
partner has awarded $64 million in contracts to local 
businesses. And we have received very positive feedback in 
recent meetings with the Fort Carson families and the Colorado 
Springs Chamber of Commerce.
    In October of 2001, the Army awarded our RCI project to 
Fort Hood, Texas; the largest housing privatization project in 
the Department of Defense to date. This projects involves the 
renovation and construction of over 5,900 homes for Army 
families and provides $2 billion in development over the life 
of the project. Our Fort Hood private partner has already 
awarded over $9 million in total contracts, of which 82 percent 
went to local businesses. And they expect to award more than 
$100 million in local contracts over the next five years.
    Great progress has also been made with the projects at Fort 
Lewis, Washington, and Fort Meade, Maryland. Working closely 
with the Army----
    Mr. Hobson. You might say on Fort Meade, it is about time. 
[Laughter.]
    Mr. Prosch. Yes, sir. Yes, sir. Amen.
    Working closely with the Army, our development partners 
recently completed plans for construction, financing and 
operations to the life of the projects. The Army will transfer 
assets and operations to the development partners this spring 
at Fort Lewis and Fort Meade.
    And, Mr. Chairman, we would like to invite you to those 
groundbreaking ceremonies.
    Twenty additional projects will be initiated between fiscal 
year 2002 and fiscal year 2004. We have completed the first 
stage of the solicitation and have identified eight developers 
to bid on the next four projects at Forts Bragg, Campbell, 
Stewart and Pope. In addition, we have solicitations well under 
way for new projects in California, New York, New Jersey, 
Washington, D.C., Maryland and Virginia.
    My next topic is our budget. To maintain our momentum, we 
have requested $25.9 million for program operations in 2003. 
These funds are critical to enable us to manage and oversee the 
first four privatized projects, which support 15,700 families; 
continue development on the nine fiscal year 2002 projects, 
which are 20,300 families; start development at the five fiscal 
year 2003 projects, which is 17,400 families; and begin site 
studies for six fiscal year 2004 projects, which will touch 
10,800 families.
    With the above projects, we will initiate housing 
privatization to provide better quality homes for over 60,000 
Army families. This fiscal year 2003 budget request also 
includes $153.5 million for the Army's investment cost for five 
additional projects.
    I would like to conclude by highlighting some of our 
lessons learned. First, the RCI program enhances civil and 
military relations and is good for local businesses. Over 70 
percent of the developers' contracts are awarded to local and 
small businesses.
    Second, early and continuous coordination with Army 
families, local governments, schools and chambers of commerce 
is essential.
    Third, our private industry experts provide knowledge and 
experience not available in the Army. They add value to the 
projects and help us negotiate better deals.
    Next, our streamline procurement process encourages 
competition and saves money.
    Additionally, our projects employ a lockbox concept, which 
controls and prioritizes the use of project income to ensure 
that Army interests are provided for before the developer 
receives any profits.
    And finally, we will continue to monitor and apply lessons 
learned. We will host our fourth Army lessons learned 
conference in Atlanta in April. And in summary, the RCI process 
has improved and we are accelerating the program.
    In conclusion, Army family housing privatization is a 
success story. Your investment, sir, of $62 million for the 
first four Army privatization projects is generating over $1 
billion in private sector funding of family housing 
construction and renovation in the initial development phase 
alone.
    With the combination of housing allowance increases, 
additional military construction and privatization, we are on 
target to eliminate inadequate Army family housing by 2007; 
three years sooner than we reported last year. Your support of 
our fiscal year 2003 Army family housing budget request is 
absolutely critical to the continued success of this 
initiative.
    We are very grateful for your past support. And we look 
forward to working closely with you and your able staff to 
provide our soldiers and their families the quality residential 
communities they deserve.
    And, Mr. Hobson, I will always remember this motto: Quality 
of life first.
    This concludes my statement. Thank you.
    [The prepared statement of Geoffrey G. Prosch follows:]



    
    Mr. Edwards [presiding]. What I would like to do now is, by 
unanimous consent, agree to quadruple the budget for all 
privatization----
    [Laughter.]
    Mr. Edwards [continuing]. Do I hear any objections?
    Chairman Hobson had an important errand for a few minutes, 
and I thank you, sir, for your leadership and your testimony 
today.
    Mr. Dishner.

                     Statement of Jimmy G. Dishner

    Mr. Dishner. Mr. Chairman, Mr. Edwards and members of the 
committee, we appreciate the opportunity to find the time to 
discuss with you the Air Force's continuing efforts to seek 
private sector investment in our family housing modernization 
program.
    When we testified in 1996, we considered then and now 
family housing a retention and recruitment multiplier. Adequate 
housing is important to the morale and the whole way of life of 
our people and their families, especially in light of the 
frequent deployments in the current war on terrorism.
    The Air Force is very appreciative of this Committee's 
continued support of our uniformed members and their families 
by supporting our family housing program both through 
traditional Military Construction (MILCON) and through the 
privatization authority granted additionally, as you recall, in 
1996.
    While this program benefits all military members and their 
families, it is targeted mainly toward our enlisted members who 
occupy 83 percent of government-controlled housing.
    President Bush made it clear when he signed the Defense 
Appropriations bill in January of this year that he continues 
to support critical pay raises and quality-of-life programs for 
our military members and their family. Better housing is one of 
those quality-of-life programs.
    The Air Force is committed to maintaining a high level of 
readiness to respond to its many missions around the world that 
supports the United State national objectives. However, the 
constant high operational tempo and frequent deployments 
undermine our authority to recruit and retain high-quality 
people. This directly impacts readiness.
    I accompanied Congressman Weldon of Pennsylvania to many 
services' bases. It showed that housing remains a primary 
concern of all our military men and women. They want quality, 
affordable housing and a safe living environment for themselves 
and their families.
    This is particularly important when our operational tempo 
requires frequent and often extended family separations. For 
this reason, family housing privatization is an important tool 
the Air Force uses to directly and positively affect readiness.
    The extension of the housing privatization authority 
through 2012 gives us an excellent opportunity to fully realize 
the benefits from this approach to achieve adequate housing.
    The United States Air Force is the most technologically 
advanced and powerful aerospace force in the world today. To 
maintain this strategic advantage, we must take care of our 
people.
    To meet these daunting challenges and leverage our limited 
resources to meet people, readiness and modernization needs we 
constantly look for better business practices. Housing 
privatization prudently applied is one such tool in our 
toolbox. The challenge is still significant, as some 46,000 of 
the Air Force's 103,000 housing units remain inadequate.
    Mr. Chairman, the Air Force has published a family housing 
master plan to guide its housing investments. The plan is a 
corporate, requirements-based housing investment strategy that 
integrates and prioritizes traditional construction and 
operation maintenance funding with private sector financing 
with a single road map. Our latest plan will be published later 
this year to provide the road map for the future.
    Since the plan was first published in August 1999, the Air 
Force has proceeded on a path of a measured balance approach to 
housing privatization. I draw your attention that when 1996, 
when the law was first passed, this was referred to as a family 
housing privatization test. And we found--realized after the 
two years, and maximum of three years, that, in fact, the test 
was working and we ought to go that route; very significant.
    We started with a few select projects looking for successes 
and best practices before expanding our efforts. We continue to 
learn valuable lessons and are applying them to future 
privatization projects.
    Integral to this effort has been the establishment of our 
housing center of excellence at AFCEE, the Air Force Center for 
Environmental Excellence at Brooks Air Force Base, augmented by 
a staff of professional private support contractors. Our five 
PSCs, private support contractors, are fully engaged in 
developing the 2002 and 2003 projects and will certainly be 
critical in development of future privatization projects.
    Last year in my testimony on this subject I highlighted the 
success our first privatization project at Lackland. Mr. 
Chairman, I am happy to report to this committee that all 420 
units of the late Frank Tejeda Estates housing project are 
complete and occupied by Air Force families.
    In addition, three other pilot privatization projects at 
Robins, Georgia, Dyess, Texas, and Elmendorf, Alaska, are under 
construction, partially occupied and making excellent progress 
toward completion.
    The Robins project is scheduled to be completed in June of 
this year, three months ahead of schedule. Of the 670 units in 
the project, 300 are to be renovated and 370 new units to be 
constructed. To date, the contractor has completed 83 percent 
of the renovations and new construction and Air Force families 
now occupy these units.
    At Dyess, construction on 402 privatized units is 70 
percent complete. As of January of this year, 24 of the units 
have been occupied. We estimate the project will be completed 
in 2002.
    The Elmendorf project privatizes 828 of units in the first 
phase of the project. Of the 828 in phase one, 120 of the units 
are complete and occupied. Construction is progressing very 
well and the remainder of the new and renovated units will be 
ready in phases later this year. Notably, another project for 
an additional privatization of 625 units at Elmendorf is 
included in the fiscal year 2002 program.
    We were disappointed--I personally was disappointed, at 
Goodfellow Air Force Base when we received an unacceptable 
proposal from the city of San Angelo and the older developer of 
the 801 housing there to our request for a proposal for 
housing. If you will recall, Mr. Chairman, the 801 housing, 
which was excluded by the 1986 law, which says you cannot have 
leases over a period of time; it has to be scored in the year 
that you do that. Here was our first attempt to try to pull in 
one of those 801 housing and put it with the privatized of the 
housing and reconstruction of the base. It just did not work 
out. The numbers did not make sense.
    So we are looking for that first project well in advance of 
when these leases start coming up. They start coming up in 
2006, 2012, 2011. So that was going to be our test there. We 
are now looking for another one. We have 10 of those, by the 
way, that are on the books.
    All in all, when these projects are complete, the Air Force 
will have 6,000 privatized units that represent a great start 
as we continue to look for better ways to provide adequate 
housing for our people through privatization.
    For fiscal year 2003, we have five projects, which include 
4,400 housing units at Cannon, New Mexico, Hanscom, 
Massachusetts, Maxwell in Alabama, Shaw, South Carolina, and 
F.E. Warren in Wyoming. We remain committed to objectively 
identifying additional housing candidates.
    In addition, we are vigorously scrubbing requirements with 
our major commands and their installations to ensure we are 
capturing other potential economic privatization candidates.
    Let me make one final comment about our housing 
privatization program as it relates to the Office of the 
Secretary of Defense (OSD) initiative regarding basic allowance 
for housing, BAH. Congress has made positive steps toward 
providing the necessary funding to reduce the out-of-pocket 
expenses so that our service members can find adequate 
affordable housing in the local community. And as you know, by 
2005 we are working to reduce that to zero; no out-of-pocket 
expense.
    This and future increases in the housing allowance which 
will cause a reduction--will have a positive effect on future 
privatization efforts. As we accomplish updates to the family 
housing plans, we will account for any potential variations in 
housing requirements. And this includes the five housing 
projects at overseas bases where some of our worst housing 
exists.
    Last week, the Air Force hosted a lessons learned meeting 
with our five privatization support contractors; those five 
that we have hired in house to bring the projects to us. We 
hope to incorporate the lessons and make the programs stronger 
by cross-streaming ideas and initiatives between not only the 
support contractors but with the other services.
    And we also support Department of Defense-level lessons 
learned lessons to benchmark the privatization program and 
evaluate the effectiveness of the program.
    I might add Mr. DuBois has been very, very helpful in 
ensuring that all the services share work together, and that 
there are lessons learned in this. There is not one way to do 
this. There are many ways to do it, and we have three services 
doing the total of all those housing deals. Some are Request 
for Quote (RFQ). Some are Request for Proposal (RFP). It is a 
great way to do that. So we need to continue to share that.
    I would like to mention just one item on State Historic 
Preservation Offices (SHPOs). That has been a concern in the 
Air Force for many, many years. One of the first projects that 
we had in family housing, now privatization, which was in 1995, 
was SHPO in Louisiana had stated that we had to put the orange 
tile roofs on the housing because it was in a historic 
district.
    And when we read the law on the SHPOs and the designation 
of historical properties, it does not say that you must do 
that. It says you must consult with them. So we consulted with 
them, and we built the roofs with asphalt-impregnated orange-
colored tile; a saving by the way of over $100 a square. A 
square is 10 by 10 by 10.
    So that is--they are great people to work with and I think 
there is a lot more that we could do there.
    Again, Mr. Chairman, I appreciate the opportunity to share 
with you the Air Force privatization plans. As you noted, this 
is my last testimony before Congress, and in my 41 years of 
government service, this has been one of the most rewarding 
programs I have been involved in, because of the people not 
only beside me but in front of me and those that work in the 
building. That has been a great blessing to me.
    I thank each of them. You represent the final step, in my 
opinion, in stewardship of our services' resources, and we 
thank each of you for that.
    God bless each one of you.
    Thank you, sir.
    [The prepared statement of Jimmy G. Dishner follows:]


    
                            OVERSEAS HOUSING

    Mr. Hobson [presiding]. One thing you brought up that has 
not been mentioned, and I am going to Chet for questions--what 
you should think about is the overseas component of housing, 
the overseas component of privatization.
    I talked with the Army. I talked with General Schwartz the 
other day, and they are pursuing a similar program to a very 
successful Navy program in--it did not look like it was going 
to--some of the structure in the beginning did not look like it 
was going to be, but I think after the legalities of it were 
worked out, it probably is a good thing. And while it will not 
fit everywhere--for example, in Korea we do not have a lot of 
accompanied housing and that is basically accompanied housing--
it does provide a model, I think, for--and I think Schwartz's 
people went over to look at it. It is a thing that the Air 
Force could look at some places.
    One thing, staff reminded me at some point with the words 
Base Realignment and Closure (BRAC) out there, I just wonder--
some people are going to look and say, ``Gee, if they do a 
privatization at a facility, does that mean it is not going to 
be on the list?'' And I think we have to be a little careful 
about that, although most of them I looked at are probably 
bases that are going to be here anyway.
    But it is an interesting phenomena as we go through this 
how that plays out in some of these things. As he moves out of 
the sunset, I am going to give him the Appropriations Committee 
coin here.
    Mr. Dishner. I will trade you my tie----
    [Laughter.]
    Mr. Farr. They had a privatization unit on Fort Ord at Sun 
Bay Apartments. The developer bought that out, and actually it 
was a really good deal for them. So you can have a closure with 
a contract running, and the----
    Mr. Hobson. Well, if they are a good real estate deal----
    Mr. Farr. Yes.
    Mr. Hobson [continuing]. Somebody is going to buy them, I 
would think.
    Chet.
    Mr. Edwards. Thank you, Mr. Chairman.
    If I could ask, Sam, do you have a time constraint?
    Mr. Farr. No, I will wait.
    Mr. Edwards. You sure? Good.
    Let me begin by saying one of the reasons we can meet in 
this subcommittee in a small room is that there are not as many 
lobbyists interested in pushing for quality-of-life for 
military families as there are when you are dealing with $100 
billion procurement projects. That is why the chairman's other 
Subcommittee room is somewhat larger than this one. And that is 
why----
    Mr. Hobson. Well----
    Mr. Edwards. Understand.
    And that is why I especially appreciate the leadership of 
all of the witnesses today. Secretary Dishner, Secretary 
DuBois, Secretary Johnson, Secretary Prosch, thank you for your 
commitment to quality of life that we all know in this room is 
so important for our readiness and capability of our military.
    As I begin with thanks, as someone who has worked hard and 
cared deeply about this program for six years now--it seems 
like a lifetime--I do want to thank, on the record, the 
chairman for his leadership in this effort. At no point did I 
ever think he wanted to kill this program. At every point along 
the way, I felt he was committed to seeing if we were going to 
do it, we were going to do it right.
    And as someone who represents one of the large programs at 
Fort Hood, Mr. Chairman, I want to thank you for making it a 
better program through all of your questions and all of your 
focus. We all owe you a debt of gratitude for that.
    Secretary DuBois, I want to especially thank you for your 
involvement, as the Chairman said, in the Fort Hood project. I 
know it is in my district. Sounds parochial. But we do have 20 
percent of all the active duty Army divisions in the world so 
it is significant to the overall picture of the Army.

                           INADEQUATE HOUSING

    I agree with him that the project that might still be in 
the debate stage had you not gotten involved and you are a 
living example that you can have discussion and debate with OMB 
and live to see the----
    [Laughter.]
    Mr. Edwards [continuing]. And tell about it.
    I want to go back to your testimony, Secretary DuBois, 
about on page 3 and 4, you say there approximately 60 percent 
of DOD's housing worldwide that is considered inadequate. And I 
hope that is a fact that does not get lost out there. Over half 
of the servicemen and women in our U.S. military, putting their 
lives on the line when called upon to do so are living in 
inadequate housing. And I think that is 168,000 units, as you 
mentioned.
    You mentioned on the next page that by 2007--or rather 
2010, ``We are going to address most of the inadequate 
housing,'' and that is very positive news. I commend you for 
your leadership in that effort.
    Let me ask you what we mean by ``most.'' Does ``most'' mean 
51 percent of the 168,000 units what the present plans project 
as being improved, rebuilt by 2007? And do we have a budget 
projected? Could you project out what the budget will have to 
be for the next five years, counting 2003, in order to reach 
that goal?
    Mr. DuBois. Let me address the first question I believe 
that you are posing here, Mr. Edwards, and that is the ``most'' 
term.
    When this testimony was written, drafted if you will, a 
number of weeks ago in anticipation of this hearing, I was 
still in discussions with the Department of the Air Force on 
making--determining how they could reach the 2007 goal. The 
Army and the Navy Departments are reaching it. The Air Force is 
slightly beyond it.
    I am pleased to say, and I believe that it violates no 
confidences to say in open testimony, that the Air Force Chief 
of Staff, General Jumper, and the Air Force Secretary, Jim 
Roche, have responded positively to some of my comments and 
remarks with respect to their programs, and working with Jimmy 
Dishner and now with Fred Kuhn, as well as with Nelson Gibbs, 
the Assistant Secretary, we believe that the Air Force's 
program will be revised to achieve a 2007 goal.
    I will not know that for certain until we review, as you 
can imagine, each individual project to see to it. So the most 
is really almost an assured number, an assured statistic.
    Mr. Hobson. But the Air Force's number is not as high to 
fix as the Army or the Navy's number.
    Mr. DuBois. As well as the Air Force has the lowest goal in 
terms of overall privatization of their total units.
    Mr. Hobson. Well, they did not want to do any of it to 
begin with.
    Mr. DuBois. Right. But in this regard, the Air Force is 
going to increase its goal, because they see the advantages of 
privatization, in no small measure because of what has happened 
to date.
    And in that regard, as the answer to another part of your 
question, Mr. Edwards, this year, 2003, we have a projected 
total--and this is a conservative projection total--of contract 
awards for over 36,000 more units, which essentially doubles 
the program year to date up through 2002.
    I have a chart here. There is a minor typo in it that I 
will fix, and then I will provide you with the chart. But it 
has all the projects that are listed for award in 2003 through, 
as you can see here, May of 2003, because we know that there 
are always slippage in this program.
    The typo is the three California projects in the middle of 
the top half of the page, Fort Irwin, Moffett and Camp Parks, 
are all being grouped together as one award package, not Fort 
Belvoir. So it should have been Fort Irwin with a double 
asterisk.
    Now, the ones at the bottom of the page are still scheduled 
for award in fiscal 2003, but we wanted to be conservative and 
we wanted to look--as I indicated, there will always be 
slippage. So what I report to you perhaps in October, as I 
will, in my quarterly report, we might see some slippage from 
the top list to the bottom list and some issues in the bottom 
list having been achieved. So I am trying to balance it out.
    Mr. Edwards. If I use just simple mathematics, Mr. 
Secretary, and take 168,000 inadequate housing units and divide 
by 35,000 a year, that is about 4.8 years. That gets us out to 
about the time frame you are talking about.
    My question is, can we sustain? It has taken years and 
years to get us to where we are contracting 35,000 units 
approximately this year. Can we sustain that level or something 
close to that in the next four to five years?
    Mr. Hobson. We are going to find out. I think we will 
probably find that out after this year. We have not had that 
kind of thing before, and I think it is a question. It is a 
good question as to whether, you know, there are going to be 
some glitches here and there in them, some protests and some 
things of this sort that go through that may mess that up a 
little bit, but that means you got to do more the next year.
    Mr. DuBois. Right. And you know that in--I believe it was 
in 2002 the enacted appropriation--excuse me, 2001, was only 
$45.7 million. In 2002, admittedly, a dramatic increase to $322 
million enacted. Our 2003 presidential budget submission is a 
little less than $200 million, but the Secretary and each of my 
colleagues here can speak to their own military department, it 
is in the Future Years Defense Plan (FYDP) that they will 
achieve this by 2007 with the appropriate amount of investment. 
That is the plan.
    Mr. Edwards. And how do we--and we might have to follow up 
on this after the vote.
    How much time do we have?
    Mr. Hobson. Well, we are going to vote and then come back.
    Mr. Edwards. Okay.
    I will give you then maybe some time to think about this. 
If we are saying we are going to have all of this housing up to 
adequate standards, but we are also talking about a BRAC 
process to close down, I do not know, make whatever assumption 
you want to make, 10 to 20 percent of the installations around 
the country, then do we have 10 to 20 percent of adequate 
housing at installations that have been closed?
    And maybe we could discuss that either on my second round, 
Mr. Chairman, when we get back.
    Mr. Hobson. Okay, well, why not break now, and we will come 
back? Because we have all got some more questions that we need 
to ask.
    We will go vote and come back.
    [Recess.]
    Mr. Hobson. The room will come to order. Sorry, we had a 
vote. Jimmy is around the corner.
    Mr. Edwards. Well, I can continue on, Mr. Chairman, or Sam 
is back.
    Mr. Hobson. Sam and I came back. He disappeared. I do not 
know where he went.
    You go ahead until Sam gets back.
    Mr. Edwards. Secretary DuBois, if we could just go back to 
my point--and maybe the reason the term ``most'' is used is to 
leave room for housing that you might not update because of the 
possibility of a BRAC process. But I assume we do not have a 
specific plan to bring every house at every installation up to 
standards, knowing that we are going to have a BRAC round the 
next couple of years. How do we square all of that in the 
planning process?
    Mr. DuBois. In the general sense, let me be perfectly clear 
about this, there are no investments, MILCON or otherwise, in 
our infrastructure, to include housing, which has been driven 
by any considerations of BRAC. As a practical matter, we have 
not started the BRAC analysis yet.
    Now, I think it is important to recognize--and this is a 
special aspect, it seems to me, of housing privatization--
housing privatization should not be viewed as either BRAC-
proofing or BRAC-availing an installation. It stands on its own 
with respect to its financial construct.
    Installations--and perhaps my colleagues might want to talk 
about some specifics--installations that have had or are due to 
have a housing privatization project, it is there because--and 
it is in the contract--no matter what happens to that 
installation, the developer says, ``This is a good deal for the 
community, for the military first, and should that installation 
be realigned, it still stands on its own, it is still a good 
thing.''
    Mr. Hobson. That is why I do not like to give guarantees.
    Mr. DuBois. Right.
    Mr. Hobson. Because some of these deals they push for that 
guarantee. You have Carson. Carson has a $10 million guarantee. 
And I do not think we ought to do that.
    Mr. Edwards. Is that a buyout guarantee, Mr. Chairman?
    Mr. Hobson. No. It is a mortgage guarantee.
    Mr. Edwards. Some of these cases that we have 50-year 
contracts that are locked in, and if you did have a base shut--
there are some areas, for example, in Sam's district that if an 
installation shut down housing would be worth more than the 
military could ever pay for.
    Mr. Hobson. Well, all these have a deal written in them, if 
I understand it correctly, which I pushed for, is that there is 
a track out of these deals.
    Mr. DuBois. That is correct.
    Mr. Hobson. And that is why I do not like the guarantee, 
because the guarantee hurts that.
    Mr. DuBois. We object to guarantees per se.
    Mr. Johnson. We have none in the Navy.
    Mr. Hobson. Do you have any? You have one. We are very 
unlikely to have any more. [Laughter.]
    Mr. Edwards. I will pass, since Sam is here, and I will 
have a second round.
    But, Mr. Secretary, if I could just ask if maybe you could 
get your staff to look at that 168,000 unit number and project 
out through 2007 how much will have to be spent each year 
through 2007 in order to get how many of those 168,000 units up 
to standard. And I am not asking that the pencil be so sharp 
that it be down to the very unit, but just a broad picture, if 
I could, so I could better understand what the future holds.
    Mr. DuBois. Very well. I will certainly do that.
    Mr. Edwards. Thank you.

                       FAMILY HOUSING MASTER PLAN

    Mr. DuBois. And I think it is also important to recognize 
that in that world of, quote, inadequate units, some of them we 
have demolished, some are deficit unit, you know, we have a 
deficit in certain places, and some places we have more 
probably than we need, and this is an interesting case-by-case 
analysis that I work with the individual service on.
    Now, each service has a master plan, and that master plan 
is provided to Congress, and they are supposed--and it has to 
be adjusted year to year, slippage in some cases, but that 
master plan lays out how they are going to address, year by 
year, how many units, where, to achieve this goal. And as I 
indicated, the Army and Navy Departments' master plan call for 
2007; the Air Force, I have assurances, will make that in their 
next submission.
    Mr. Johnson. The Marines will finish in 2005. When they 
finish, they will have 95 percent plus of their houses 
privatized, which says that self-sustaining entitlement, self-
renewing and all that goes with it. So there should not be a 
problem going into the future.
    Mr. Hobson. That includes Quantico, right?
    Mr. Johnson. Yes, sir.
    Mr. Edwards. Thank you.
    Thank you, Mr. Chairman. I will hold off until the next 
round other questions.
    Mr. Hobson. Sam?
    Mr. Farr. Thank you, Mr. Chairman. I have two questions, 
both for Mr. DuBois and Mr. Prosch.
    First of all, I want to echo the chairman's and I think the 
committee's feeling, Ray, that, you know, one person does make 
a difference over in the department, and you have made a big 
difference in being able to break some rice bowls and push some 
envelopes.
    And I think those of us in Congress who are elected on two-
year cycles feel in some ways that we have to accomplish 
everything in two years. So we really appreciate your 
diligence. We appreciate the bureaucracy becoming more 
efficient. And I think it takes leaders to do that. And both of 
you, Mr. DuBois and Mr. Prosch, have been phenomenal in 
responding to our needs.
    But my question goes to the big issue of DOD. You know, we 
have another BRAC coming. We also have a need for military 
housing. And it seems to me that the right hand of the military 
does not look at the left hand of the military.
    In Monterey's situation, you have the Defense Language 
Institute there. You have the Naval Postgraduate School, the 
Fleet Numerical Weather Center. And what happened when Fort Ord 
closed--because of DLI--Army kept some of the base for military 
housing. That school was only at half full at the time, half 
capacity. So was the NPS under capacity.
    Both DLI and NPS are at maximum capacity now. The Army gave 
away more land than they needed at Fort Ord. And now the Army 
finds itself needing to build some more housing.
    In this, I really do believe that there needs to be some 
better gauge of total housing need for the military.
    Mr. DuBois. I could not agree with you more.

                      BASE CLOSURE AND REALIGNMENT

    Mr. Farr. And I am afraid as each military service decides 
what they ought to downsize, they do not think of what the 
impact is on the other neighboring military communities. And 
DOD, when they go into BRAC, ought to be looking at the entire 
housing needs for all military services in a given region, 
rather than just for the Army or for the Air Force or the Navy.
    Mr. Hobson. Did not they try to BRAC Defense Lanuage 
Institute? Was not it part of the BRAC?
    Mr. Farr. Yes. Yes, it was suggested. And then the BRAC 
commission found out that certain Senators wanted to move it to 
Fort Huachuca. But that location, one, does not have the 
infrastructure to receive it; and two, none of the faculty in 
Monterey would move there, and third----
    [Laughter.]
    Mr. Farr. And third, they were going to contract out for 
teaching. And the last time they did that was during the 
Vietnam War. They contracted with Berlitz and the regular 
instructors went on strike.
    So you know, there are good reasons DLI is in Monterey. 
Monterey is a great place to have it. And I think that the Army 
is now convinced that they are getting what they need out of 
Monterey, out of the DLI.
    But the issue of housing is still critical. I think we are 
in a new era of housing. With privatization, we ought to be 
building the most beautiful communities in the world because we 
own the land, we own the zoning, we own everything. I mean, 
there is no other area where you can go in and just build a 
housing package like you can on military land.
    Also, if that housing ever becomes available to the 
civilian community, it will be more valuable. And hey, whether 
you give it away or rent it out or lease it out, I think we 
ought to be very creative about doing that.
    So I think the question is, how do you gauge the need for 
housing in DOD? And how often is the BAH formula updated?
    I noticed that the BAH for Monterey, believe it or not, is 
now $1,100 per month for a two-bedroom apartment. But if you 
looked at the real estate ads in any of our local newspapers, 
you cannot find a two-bedroom apartment for that price. That is 
too cheap.
    So how often is the BAH updated? And what is the--how good 
is the comparables in determining that BAH?

                                  BAH

    Mr. DuBois. It should come as no surprise to you, Mr. Farr, 
that when you first educated me about the Monterey situation, 
in terms not what an apartment or a condo or a detached or 
semi-detached house rents for, but is it available out there? 
This made me begin to ask questions of my staff and of the four 
services. I used to refer to it as the Monterey situation. How 
many other places do we have this? How do we deal with this?
    I quickly found out that when I took this job nine, 10 
months ago, one of the biggest sore points between OSD and the 
three military departments was called housing requirements 
determination process. And I said, ``We have got to stop 
playing games here. And we have got to start determining on a 
more analytic, methodical way, what housing is needed, on-post, 
off-post; how do these moving parts all fit together?''
    Now, I have out for coordination today the housing 
determination requirements. Each of these three gentlemen are 
ready. We are negotiating some of the finer points. Now, it has 
taken me nine months to get there, but I think we are very 
close to establishing an across-the-board, standard way of 
addressing this issue.
    Now you can imagine, whether it is Monterey or whether it 
is Wright-Patterson or whether it is Fort Hood, there are some 
local, unique issues. Not the least of which is so-called 
commute time. A, B--how wide an area does one take your caliper 
and determine BAH? And is BAH the sole criteria? No, we have 
got to talk about availability too. We have got to talk about 
comparables. We have got to talk about all of these issues.
    Now, there is an inherent conflict in the bureaucracy 
called the Department of Defense. How much should the OSD, the 
Office of the Secretary of Defense, dictate to the services how 
much should we, on the other hand, allow the services to do 
independently of each other? That balance is always ongoing.
    But this is an excellent example. And in answer to your 
question----
    Mr. Farr. We asked for this. We wanted to be, everybody, 
consistent because we were having different things----
    Mr. DuBois. So the new team has concurred that there will 
be one approach, one set of disciplines, one software program 
that we--will address these issues.
    Mr. Farr. Do we need authorization to do that, or can we 
just do that----
    Mr. DuBois. No, sir.
    Mr. Farr. Thank you. How do you determine both housing 
needs and the buildup for the BAH?
    Mr. DuBois. The BAH is adjusted and analyzed once a year. 
But we are trying to tie these two things together.
    Here is another example of, kind of, our bureaucracy. 
Housing is in I&E. BAH is in personnel and readiness. Now, 
fortunately Dr. Chu, Under Secretary of Personnel and 
Readiness, his office and my office are practically back-to-
back. So from a physical standpoint, we also talk about some of 
the issues that we share. And this is one of them.
    So we are trying to tie it together.
    Mr. Farr. It will be interesting how you tie that together. 
I would be curious.
    Let me ask Mr. Prosch--first of all, thank you for all of 
your assistance to our community. You have been really a can-
do, positive voice my military community.
    From your testimony here, you, ``Utilizing lessons learned 
from all housing privatization projects, we will continue to 
shorten the amount of time required to complete a project and 
reduce the costs associated with each project.''
    Can you go over a little bit of the time line for the RCI 
for the military community?
    Mr. Chairman, you may remember from your visit to Fort Ord 
that the Army did not retain enough housing property. What they 
did retain is marginal. I would not want to live in any of that 
housing. I think they ought to just tear it down.
    So the military really does want to build some new housing 
both there and the Presidio in Monterey, the DLI, and they have 
gone to an RCI. But I understand it is going to be 18 months 
before the contract is signed, and even longer before the 
ground is broken. It seems to me that is a long process. And 
what does the Army intend to do in the meantime to house its 
personnel?
    I also understand you are going to do a land swap. You are 
interested in obtaining a parcel of land commonly know as the 
Stilwell Kidney. That has already been conveyed to the city of 
Seaside. And they agreed to swap for another adjacent owned 
Army land.
    But my understanding is that this land would come part of 
the Army's RCI program to create new housing for the expanded 
mission of DLI, but when does the Army intend to ask for 
legislative authority to swap that land--and do you need it? If 
not this year, how can a proper contract for RCI projects be 
let if it does not include the housing that we want to build on 
the Stilwell Kidney?
    So my questions are about the underlying land-swap deals 
and the need to go forward in a more expedited fashion to get 
the RCI contract let.
    Mr. Prosch. Sir, good questions. Before I answer it, let me 
just publicly thank you for your leadership. Obviously you have 
got your head in the game with those detailed questions.
    And we appreciate what you have done to support RCI. We 
appreciate what you have done with progressing the Fort Ord 
Reuse Authority to try to turn over the land there quicker. We 
appreciate the public-private partnership we have with the town 
of Monterey, which is a benchmark that the Army uses--we are 
trying to seed the rest of the Army with that type of 
cooperation.
    And we look forward to being with you Friday in Monterey, 
to help co-chair with you meetings with the Fort Ord Reuse 
Authority to address these type of answers.
    The first question concerning how do we speed it up, we 
think we can. First of all, as you know, the Ord military 
community is combined with the housing on the Presidio of 
Monterey and now the Naval Postgraduate School.
    Mr. Farr. Yes, let me really compliment you. This RCI 
combined two services' needs to provide housing for both. It is 
great.
    Mr. Hobson. Why are not you using all those houses that are 
standing there at Fort Ord? There must be--how many of them are 
there?
    Mr. Farr. Well, they got rid of them all. They do not own 
them. Nine hundred.
    Mr. Hobson. Where are they? They are just standing there.
    Mr. DuBois. Yes, sir. They are part of the Fort Ord Reuse 
Authority right now. And I will touch on that and that land 
swap you are talking about, because there are some houses 
there.
    Mr. Hobson. I mean, what a dumb deal that was. There must 
be--what?--half a billion dollars worth of houses or more 
standing there rotting, not being taken care of. We put some 
money in it to try to keep them up. Somebody took part of the 
and did something with them, some church group or something.
    Mr. Farr. Well, what we did is----
    Mr. Hobson. But it is outrageous that those things have 
been let go like that. I mean, it is just--somebody ought to go 
to jail for that kind of--if somebody did that somewhere else, 
somebody would go to jail for letting those things sit there 
like that and go down. Whoever made that--why did they make 
that deal? I mean, I do not know what is in that deal. I did 
not see that--I was not here when that deal was made.
    Mr. Farr. It was a BRAC decision of where the line ought to 
be drawn. But somebody gave the recommendation to draw that 
line and put, you know, put that----
    Mr. Hobson. I mean, those houses have stood there for how 
long?
    Mr. Farr. Ten years.
    Mr. Hobson. Ten years?
    Mr. Farr. Unoccupied.
    Mr. Hobson. Unoccupied. And there are housing needs all 
over California. I have been harping about that for--since I 
became chairman of this committee.
    Mr. Farr. Well, what we are now doing is----
    Mr. Hobson. Now we are going to spend more money.
    Mr. Farr. Well, even the housing that is there that we 
retained needs to be improved. And what is planned now is for a 
land swap to improve geographical management of the military 
compound. Remember, we sold the golf courses there and the land 
around the golf courses has value for development for the city. 
And for that, let me----
    Mr. Hobson. We did not sell it. We gave it.
    Mr. Farr. No, we sold it. As an enterprise within the MWR 
account, the golf courses had to be sold. You cannot give away 
enterprise facility. You can give away housing. You can give 
away the rest of the land. But if it is an enterprise for the 
military it must be sold.
    Mr. Hobson. They will make a fortune off that.
    Mr. Farr. Well, the point here is I think we are moving in 
the right direction. We are moving positively by looking at the 
entire military community locally and looking at their overall 
housing needs. And now we have the RCI to do that. But it could 
be caught up with this land swap and with just whatever 
bureaucracy is in the DOD that prevents getting things 
expedited.
    So you think it will take how long?
    Mr. Prosch. I think we can do it sooner than 18 months.
    Let me tell you our milestones. We plan to select a 
development partner in June. And that is when we sit down and 
do our community development management plan--which takes about 
six months--where we jointly, with the community, school 
boards, your office, the Chamber of Commerce, to come up with 
the best plan for that community. Because it is a 50-year-plan, 
we want to make sure it is solid.
    Upon completion, we will staff it through the Army, OSD and 
OMB. And we hope to get that over to your committee to validate 
in about 11 months, in February. So I think if we can sustain 
the great teamwork we have, I think we can get that moving 
quicker than 18 months.
    Mr. Farr. Including the land swap?
    Mr. Prosch. Well, concerning the land swap, that is 
something that the garrison commander has proposed. And we are 
looking into that. We are waiting for the Training and Doctrine 
Command to talk to us about that.
    I would recommend you and I get a briefing on that when we 
are in Monterey on Friday. Because we want to make sure we do 
the proper due diligence in the swaps in the best interest. But 
if it makes sense, I think we ought to do it. And I think 
together we ought to do it before the RCI developer jumps on 
board.
    Mr. Farr. Well, I think it has to be part of that project.
    Mr. Prosch. Right.
    Mr. Farr. Thank you.
    Mr. Prosch. Yes, sir.
    Mr. Hobson. One of the things that concerns me is giving 
communities--you know, taking land--Sam has talked about this 
before. We give--we have land and we give it to a community, 
then they turn around and sell it off and build stuff that 
normal people cannot live in. And suddenly, we have given them 
the ground and we give them everything else that goes with it.
    And I am concerned that when we do this all we do is build 
country clubs or shopping centers or whatever.
    Mr. Farr. If I can just add to that, I appreciate and I 
fully supported a public benefit conveyance and the economic 
development conveyance. I think those are best ways to 
stimulate the economy.
    The difficulty we have in those conveyance mechanisms are 
the related public policy issues. I have said many times in 
California, this is the largest land giveaway since the 
westward expansion in the 1880s, and there ought to be--where 
there is learned public policy about needs to really fit the 
social needs of a community, we ought not allow this 
privatization just to go to the highest and most expensive use, 
when indeed that does not solve the community's needs at all.
    We have used that land for military needs--military 
community needs, and that is proper. But when we transfer it to 
these local communities, we ought also to mandate that that 
land is to be used for community needs, not just for real 
estate development for making a hell of a lot of money.
    Mr. Hobson. Part of that may be that we need to talk to the 
authorizers about the law. I am not sure that the law they 
operated under before does that.
    Mr. Farr. We need to reform BRAC, not the process that 
leads up to what you are going to close or realign, but the 
other side of the formula wherein once you have made a decision 
to close a base, what you do with the land is more fully 
addressed in the law. That has to be revisited.
    Mr. Hobson. And that is part of my next question. Are you 
finished, Sam?
    Mr. Farr. Yes. Thank you, Mr. Chairman.
    Mr. Hobson. Is that we have had five years of experience 
under this deal that we are doing now, and do you all need to 
look back and say, ``Okay, what is wrong with this law, what is 
right about it, what do we need to fix?''
    For example, I will give you one that bothers me, is that 
at Fort Stewart I have been trying to fix a problem. Now, you 
are going to go in and do an RCI, but it is not going to fix 
the problem that is in the community down there. And yet I am 
told that, you know, there is something in the law that does 
not allow us to do what I think is good public policy for the 
community and the base.
    What has happened in the past is that people go out and get 
VA loans, soldiers do, and then--because they did not like the 
on-base housing or whatever--and then they leave town, and the 
house sits there and deteriorates after they leave. And they 
abandon the mortgage, because they are not liable on the 
mortgage, or if there is, there is no equity anyway. So that 
house is a blight in the neighborhood. And they have got a 
couple hundred of these.
    And what I wanted to do is form a housing--and the 
congressman from there and I suggested to the mayor they form a 
nonprofit and take over these houses, fix them up and lease 
them to soldiers over a period of time, which you guys all 
complain about that, that that affects your RCI, but you need 
to have some thought about the community that you are in and 
what you are doing to the community.
    And this community has got a real problem with this real 
estate within its community that could be taken over and fixed 
up, because I do not think Department of Housing and Urban 
Development (HUD) does a very good, or the VA does a very good 
job of, you know, handling these, because if they did, they 
would not be all sitting around like they are today and be a 
blight on the community.
    So this was a way I proposed to fix it up. Now you guys are 
going to go into an RCI, go in and put on all good base 
housing, and still the little down there, Hinesville or 
whatever it is, is not going to get fixed up. Oh, you are going 
to fix up the base and you will bring everybody back on base, a 
lot of people back on base, but you are still going to leave 
this problem out there in the community, which I tried to fix.
    So that is one area that I think somebody needs to look at. 
And I think you need to look at some alternatives in the 
housing mix to see what kind of deals work and what they do not 
work.
    And I do not know whether there is any new legislation 
needed or not, you do not have to tell me now, but you need to 
be thinking about it and you need to go talk to the guys that 
do the authorizing to get the kind of things that you need. And 
we will try to help and be supportive of that from what we have 
seen in the real world.
    I do not know that they go out and really look at these 
things the same way as we do, because we are into the practical 
side of it where, you know, we see the bricks and the mortar 
when we do it. But they should be brought up to date as to any 
legislative authority you need. I do not know what you need.
    If you need it, Ray, you guys need to tell us.
    Mr. Johnson. We need some for the bachelor housing, but the 
family housing----
    Mr. Hobson. You also need some salesmanship on the bachelor 
housing, not with me, but there are some other people within 
the services, there are some people within the other body, and 
maybe even this body, that have some questions for that, 
because it is a radical departure.
    From the Air Force's standpoint, they do not like to do 
anything that is not right on the fence, and most of these 
barracks are not on the fence.
    You could probably do yours in the Navy because you are 
going to build some of the stuff that you are going to do. But 
there are some inherent problems in that.
    But you need to do some salesmanship because I think there 
are tons of people who would really like to get into this and 
could build them better.
    For example, the Air Force has got a problem with one at 
Lackland, a dormitory that has got a big cost overrun on that 
we saw. And I do not know what has happened to that thing. And 
then they want to build another one. And I am saying, ``Gee, I 
do not know if I want to build another one if you cannot build 
that one right.''
    And I never did find my barracks. It is where the Burger 
King was. But--or is now. We did not have Burger King when I 
was going through basic.
    But those are the kinds of things that we need to look at.
    Ray.
    Mr. DuBois. I think that the history of privatized military 
family housing demonstrates clearly that when you try to 
harness the creativity of the private sector you get a better 
result, you save the taxpayer money.
    Now, you have raised an interesting option, if you will, 
link up. And this gets back perhaps to the housing requirements 
determination process. When you have housing in the community 
that is run down, but were it to be maintained appropriately 
and available to the military families in that area, in around 
Fort Stewart, Hunter Army Air Field, ought it not enter into 
the calculation.
    Now, does the private sector sit with the local 
jurisdiction, in this case Hinesville and say let's do a 
public-private deal here. And to what extent does the Army, in 
this case, get involved? I do not know. But you have raised an 
interesting idea that we ought to pursue.
    Mr. Hobson. Well, I have been pursing this for about, I do 
not know how many years now on behalf of that little town. And 
I keep bumping into little head rooms every time I--bumping my 
head every time I get into it. And last time we got whacked in 
the process right at the end and the member got upset that we 
were trying to help out his community. I do not even think he 
represents this community anymore.
    But since I got into it, I am not going to let it go. I 
still represent them even though I am in Ohio.
    Mr. DuBois. Who owns these houses? I have been trying to 
fix this----
    Mr. Hobson. The VA.
    Mr. DuBois. The VA, they reverted to the VA because of 
defaulted loans.
    Mr. Hobson. The VA got them all. And they are just sitting 
there. And maybe one or so be picked off along the way. But 
there is about--there were about 200 of them or something, I do 
not know, in this little town.
    And I think you need some--well, even if they get the 
additional legal authority, they have got to have the will to 
do it. And I am not sure that there has been the will on behalf 
of the commander down there and some other people to get 
involved in it. And I--we need to start working on it.
    The other thing at Fort Stewart, and all these places that 
you look at, we are talking about housing. But you have got 
another big problem, and that is the work force and where they 
work.
    I mean, you go to Fort Stewart and you got buildings down 
there that--and that is just one. I could show you a bunch of 
other ones. You all know where they are--where you have got 
World War II buildings that have--that they will not repaint 
because they have got asbestos in the paint--or lead in the 
paint, lead in the paint. And it is chipping off and it falls 
on the ground. And then it washes in the sewer or they walk it 
into the building or into their cars and they take it home. But 
they do not have the money, one to paint it even, because it is 
a big deal to do that under all the rules you got, that we 
probably put on you. And then to demolish it is a whole other 
thing. And then you have got to have another--you got to have 
the money to put those people in that you took out of these 
buildings.
    That is also a critical problem within the military, the 
old infrastructure. Not so much in the Air Force, but it is in 
the Army and the Navy that somebody has got to look at down the 
road not too far. Because once you start getting this housing 
on-line, everybody is going to be kicking you out about the 
work place.
    Allen, do you have any questions you would like to ask?
    Mr. Boyd. Thank you, Mr. Chairman.
    Mr. Hobson. See how fast you got on?
    Mr. Boyd. Pardon me?
    Mr. Hobson. See how fast you got on the agenda?
    Mr. Boyd. I apologize. I know all of us have the problem of 
hearings. Some, Mr. Chairman, have more hearings going on at 
once than others.
    Mr. Hobson. I have got to get over there.
    Mr. Boyd. I only have one.
    But I really only came down to thank these gentlemen for 
their service. Particularly to Jimmy Dishner, who I know is 
leaving to go on to other responsibilities. You have served the 
people of this whole nation well for many, many years. In 
particular to me, you have served the people of Tyndall Air 
Force Base very well. And I just wanted to come and say thank 
you for your service.
    Thank you, Mr. Chairman.

                              CONSULTANTS

    Mr. Hobson. I have got one question I want to get in here. 
And this is really a bother to me. Last year the Army requested 
$30 million to pay consultants for the RCI program. The Air 
Force requested $35 million. Both numbers which, I think, is 
outrageous, just so you know where I am going. [Laughter.]
    The conference cut these amounts by $5 million and $8.5 
million, respectively, because the costs were not justified 
when compared to the $3 million costs the Navy consultants 
said.
    So you get off pretty easy on this one.
    But my concern here is, who are your contractors? What 
services do consultants provide? What are the per-hour costs of 
the consultants for the various services? Why are the 
consultants managing the Army's housing portfolio rather than 
Army personnel? What are the performance measures the 
consultant must achieve for each service provided? And who in 
the hell is monitoring the consultants? What are the 
consequences to the consultant if the portfolio does not 
accurately monitor their services?
    And, I mean, I really think the numbers on these things are 
beyond what I ever anticipated. I think you need consultants, 
but I do not think the consultants should be in charge of the 
program. The consultants were to be the people that you use to 
make sure that you were putting the deals right so that the--
and to help you when you got with the negotiations with the 
developers that you were not getting taken.
    My personal opinion is the biggest takers in this thing are 
all the consulting fees that are in here. And then we do a 
reprogramming, which I did not like, for $8.5 million, which 
just means you took money out of something else that should 
have been done someplace, and we pay it to consultants.
    I have got a lot of problems with the consultants, with the 
competitiveness of how we are picking the consultants. I mean, 
do they just walk in and we say, ``Okay, you are the guys,'' 
and somebody worked here before, and whatever?
    I mean, that is a lot of money. You know, how many deals 
did we do in the Army?
    Mr. Prosch. We have six ongoing right now. And maybe just 
one.
    Mr. Hobson. We hear a lot of business and I think--why do 
not--if we are going to have all the consultants, get rid of 
all the Army people and all of the other people. And if we do 
not--if we are going to pay all these consultants--you know, do 
we need all of them?
    I mean, one or the other has got to be in there, but I 
cannot see paying $30 million to consult. I mean, it just runs 
the cost up on these things.
    And $35 million in the Air Force, for crying out loud. You 
do not have that many deals. And the Navy did it for $3 
million.
    How many deals you got going?
    Mr. Johnson. $3.5 million for the Navy.
    Mr. Hobson. All right, $3.5 million.
    Mr. Johnson. Sir, we have two ongoing, but we have done 
eight, and we have got some 16 more. So there are a lot 
ongoing. And we have our team here, as a matter of fact. Scott 
Forrest is sitting behind me. He is in the Navy side, and he 
has a staff of eight or nine or so. And behind him is Will 
Baumann, he is part of the team, Basile, Baumann & Prost.
    Mr. Hobson. Yes, he testified.
    Mr. Johnson. They do nothing except work for us and other 
government-type organizations. One partner works for the Air 
Force----
    Mr. Hobson. Well, you are making the other guys look bad.
    Mr. Johnson. Sir, we originally had an audit firm, and they 
had a different approach to life. We built this team, it is 
doing well, and I congratulate them on the good work they are 
doing. And we might need a little more money as we do more 
projects.
    Mr. Hobson. Don't you ask me for $30 million, you are not 
going to get it. [Laughter.]
    Because I just think somebody needs to look at this. You do 
not have to defend what you are doing now, because we have 
already done last year, but I am going to look--I am telling 
you, we are going to look hard at it, because I think it is 
outrageous that we are spending this kind of money on 
consultants. And maybe do it in other stuff. I know we pay a 
fortune to consultants, but, you know, all they are is ex-
military people that come back and figure out how to work the 
deal.
    Mr. DuBois. We are aware of the--as some have categorized 
it, the extreme concern; others might say the displeasure----
    Mr. Hobson. Well, it is not just me. You go talk to the 
Senate. They got the same problem.
    Mr. DuBois. Right. But I think two things need to be 
understood here. We are monitoring consultant costs. I will 
defer to my colleagues as how consultants are selected, but it 
is important to understand that there are differences in the 
way the services do business and there are differences in the 
way that they structure their deals, and there are differences 
in terms of how much in-house talent they use versus a 
consultant--utilize consultants.
    I also want to point out, Mr. Chairman, if I might--and I 
will take the Army as an example, because they are carrying a 
$24 million consulting unit, program to date cost, as I wrote 
in my quarterly report--the first four projects--Carson, Hood, 
Lewis and Meade--carry probably three, six, 10 of that $24 
million versus all the rest of the projects that are in my 
report.
    Mr. Hobson. They are in infancy. The rest of them are in an 
infancy stage. It does not take a whole lot to do them at this 
point.
    Mr. DuBois. Well----
    Mr. Hobson. Carson is not fair because Carson is not an RCI 
project, and you guys keep doing that, and I am tired of that. 
Because when it goes good you call it RCI; when it did not go 
good you call it--what is the name you had for it? What is it?
    Mr. DuBois. Capital Venture Initiative (CVI).
    Mr. Hobson. CVI. You know, when it was not going right it 
was CVI and it is not part of RCI. Then it got good, and then 
guys go and give speeches and say, ``Man, is RCI working. It is 
the most terrific thing since sliced bread.'' You know, come 
on, either call it one thing or another, you know.
    When it went back for reprogramming it was called--it was 
not called RCI. So, you know, let's call apples to apples here.
    Now, it is turning out to be an okay project, second time 
around, and if you want to call it RCI, fine, now, because it 
is going good, but that was not what it was--that was not the 
way it was originally done; you had a whole different concept, 
there were whole different people involved in it. You took them 
out, put them back in, the Corps was one in and one in, and now 
the Corps is in or out, I do not know where it is. That is 
another problem with me.
    You know, what is going to happen if the $8.5 million is 
not approved? Will you get new consultants or have you already 
paid them?
    Mr. Dishner. No, sir, we would reevaluate then. And we will 
not be defensive, because I do not think there is any reason 
for us to be defensive.
    But I think to go back to the bases, our premise in the Air 
Force has always been, Mr. Chairman, we do not want to develop 
that expertise in the government. This is a nongovernment 
expertise. So we want to bring in those consultants to do it, 
and when their job is done they go home. Otherwise, we are 
hiring government employees to be entrepreneurs, and we just 
felt that there is no need to do that.
    Now, if the numbers are too high, we look at it, we say if 
we go MILCON our consultant fees, Naval Facilities Engineering 
Command (NAVFAC) and the Corps of Engineers, there is no spear, 
no barb whatsoever----
    Mr. Hobson. You might as well throw a spear at them, 
because I am going to throw spears at them.
    Mr. Dishner [continuing]. Is 10 percent.
    Mr. Hobson. Yes. And that is wrong.
    Mr. Dishner. And if we give the housing to the private 
sector, we spent 3 percent, including consultants. I mean, it 
just does not make--so it does not make sense. I mean, if you 
wanted to use that just as your parameter for it. But again, 
nondefensive, it is just that why develop a corps of government 
employees to make deals?
    Mr. Hobson. I do not want to. But $35 million for where we 
are in the process is a lot of money for consultants. And I do 
not know how many deals you got going, but that is--
    Mr. Dishner. Well, we do--as compared to the Navy or the 
Army, we do ours--they do partnerships--the Navy does, at 
least, excuse me--we do deals up front. And so the bow wave of 
those costs are up, and then those peter out. They are not over 
$2 million to $5 million over the life of the project, because 
they are doing all these--we are talking about 2007, 2006 
projects with them and where they are going to be in the FYDP. 
So it is not just the ones for 2003 that that $35 million 
covers.
    Mr. Hobson. Well, I have not seen any lessening in federal 
employees as a result of hiring consultants, either in the Air 
Force or the Army or the Navy. Now, if somebody can come in and 
show me that, then I would be a little--but there is still an 
awful lot of folks, when you look at the staffing of these 
things, out there that are in the services, as well as the 
consultants. And it looks to me like the consultants have been 
laid on top of the other stuff, and it is a lot of money for 
consultants.
    And I--you know, I question, frankly--well, I would like to 
see consultants that have built something, have somebody in 
their team that has built something, instead of somebody who is 
just a bean counter. And that troubles me sometimes when I look 
at these consulting teams, they do not have anybody--and one 
general got mad at me one day when he came in because I kept 
questioning the two guys who were with him rather than him, and 
I know he would never build anything, and I wanted to know that 
they had leased something, they had built something, they had 
some experience other than just sitting in a room and reviewing 
a document.
    And that does not mean that that is going to be perfect, 
but the underwriting of these by these consultants I think is 
very important, but I did not want the consultants to become 
the major fund-raising organization for accountants.
    Mr. DuBois. I think one more clarification, at least in my 
own mind, the budget request for privatization support costs, 
you know, include other things than consultants, too. So the 
environmental compliance with National Environment Policy Act 
(NEPA) is an expense, not an insignificant expense. The 
appraisals when we go through these kinds of programs. Post-
award portfolio management. There are a number of other pieces 
to the budget request not just----
    Mr. Hobson. All I see is $35 million.
    Mr. DuBois. I know. And so we owe you a better breakdown of 
how those--you know, NEPA, which is a requirement, we cannot 
escape it, is not an insignificant cost when you go through 
these projects.
    Mr. Hobson. Well, I just want to make sure OSD is reviewing 
these and make sure that we are not, you know, overpaying 
consultants.
    And I understand--I do not want to build a big 
infrastructure inside the services either, but some of them 
already got it.
    Chet, you have a question?

                         HOUSING PRIVATIZATION

    Mr. Edwards. Mr. Chairman, any other questions except one I 
will submit in writing.
    But I am a long-time enthusiastic supporter of 
privatization. I think it is really going to make a difference 
in the quality of life in military families.
    I have seen one systemic problem that I appreciate 
Secretary DuBois, you are looking at such an approach, that I 
think could affect Fort Campbell, Fort Bragg, Fort Stewart at 
the least, and perhaps some of these others on the list on the 
line for privatization.
    And that is, because of the size--normally the size of the 
Fort Hood project, many of the homes, as you know, they were 
tearing down a wall and turning a two-bedroom home, with maybe 
no children or one child there to a three- or four-bedroom home 
where now there are three, four, who knows, five children.

                                SCHOOLS

    The local school district has done some very detailed 
demographic analysis to determine they are going to need three 
new public schools at Fort Hood very, very quickly. The 
community, which is low-income, below the average median income 
in Texas, just passed a $100 million school bond program. I 
think they included funds in that for, perhaps, building two or 
three schools, but they need help building the third school.
    To be fair, ultimately the school district will benefit 
moving part A to part B impact aid students. On-post will be 
part A. But there is no help under the present program for 
construction costs in the schools.
    The practical result would be this: While we are trying to 
improve morale--that is the goal of this whole program--you end 
up having to send first, second and third graders along with 
kindergarteners off-post to a school halfway across town with 
new security arrangements where it is harder to get on and off-
post. You could undermine the very morale of the service 
families that we are trying to help.
    And if there is any way the two of you could look at that 
and see if there is some approach to solving that problem, I 
would appreciate it.
    Again, it might help us plan ahead as we look at the other 
major projects like this. You know, one possibility--I talked 
to General Ellis about this one point--is maybe as BAH is 
increased--and I appreciate the administration's leadership on 
that--you know, that brings some extra revenues in to the deal 
where a school could be considered as a possible development 
with those funds.
    And if that is a possibility, do we need to change 
authorizing language in any way to allow that?
    If you can look to Fort Hood as an example of that problem, 
or if you have some thoughts already that flow from that today. 
If not, if you could look at it in the weeks ahead, I would 
appreciate it.
    Mr. Prosch. Sir, a good question.
    Before I answer, though, I would like to thank you publicly 
for your leadership as co-chair of the Army caucus for helping 
the Army at large and your great help at Fort Hood. We thank 
you for the groundbreaking ceremony on Veterans' Day.
    And your remarks of, ``It is simply a matter of respect,'' 
has kind of become the battle cry for the Army now, because it 
is simply a matter of respect; if we are going to be flying 
these soldiers overseas, we owe them adequate housing.
    Mr. Edwards. Thank you.
    Mr. Prosch. I think the schools are very important. One of 
the lessons learned that I emphasize is early coordination with 
all the stakeholders. A key stakeholder in the RCI process are 
the local school districts.
    And we will take this on. We understand that the local 
county is floating a bond to construct some new schools. We 
want to make sure that we do our part in that.
    In the past it is, kind of, been Army tradition not to 
participate in the construction costs. But we have increased 
the impact aid when the students move off-post. But we are 
going to have to look at that and see if maybe it needs to be 
changed because RCI is new.
    Mr. Hobson. I think some of them already--did you put a 
school in it? Somebody has got a school.
    Mr. Dishner. We have got a school which--it was not housing 
privatization, but the impact of having the school on the base 
or nearby and the impact fees which is what really--it has 
nothing to do, necessarily, with privatization, except----
    Mr. DuBois. We did it in New Orleans, where we provided the 
ground, the land.
    Mr. Johnson. And we, too, provided the land.
    Mr. DuBois. The authorization for housing privatization 
does not preclude including a school being constructed in the 
deal. The problem, obviously, becomes one of marginality and 
finance. How much is it if you are--if you run every project 
that is marginal--on the edge, if you will--but it makes sense, 
and you throw a school in there, then it does not--do your 
totals run on the other side of that line?
    But there is no question in the 31 major installations I 
have visited in the last nine and a half months, while housing 
is certainly important, as is pay and BAH, 95 percent of the 
time when you talk to enlisted wives, or you talk to the flag 
officer in charge: schools.
    Mr. Hobson. But we are not going to build DOD schools on 
every----
    Mr. DuBois. We are not going to build DOD schools.
    We are not in the business of schools, but we are in the 
business of being concerned about education of our military 
families' children, as any American family is concerned about.
    Mr. Hobson. But some of the best families in a school 
district are the military families. They take more interest in 
their children in school. I wish the other families took as 
much interest as the military people do. But to take them out 
of that school district also does a disservice to that school 
district because they are some of the best people and some of 
the best students in those districts.
    Since you raised this question, I am going to bring up 
another----
    Mr. DuBois. These would not be DOD schools that we would 
build were we to do so. It would be local schools.
    Mr. Hobson. Well, because that brings me to another subject 
that I am having looked at right now. There are--there is one 
DOD school north of the Mason-Dixon Line left. Somebody is 
looking at that right now. And there are a number of DOD 
schools left south of the Mason-Dixon Line. And they were built 
for a very good reason. This one, I am not sure why it was 
built. But the rest of them were built for a very good reason 
at the time. I do not know that that still exists. If the 
reason for that still exists in those communities, we need to 
take some other action.
    Mr. DuBois. There is a bigger problem.
    Mr. Hobson. But I want to know--I think we need to look at 
why we have DOD schools inside the continental United States 
today. I understand overseas, but I do not understand it inside 
here.
    For example, I have a school at Wright-Patterson that has--
it is--does not have any students from outside the military, 
but it is a public school within the district. And it is one of 
the better schools.
    Mr. DuBois. What part in Wright-Pat?
    Mr. Hobson. It is in the Riverside school district.
    Mr. DuBois. Right, but it is on-post.
    Mr. Hobson. Well, yes, it is right----
    Mr. DuBois. Right inside the fence.
    Mr. Hobson. It is inside the housing area. I do not--we do 
not have a--the housing area is not fenced off. I am not sure.
    But you know, I am not opposed to fixing some of these 
schools up and giving them to the local community after we fix 
them up. Because I think it would be important for the school 
district to just say, ``Well, here are these kids you got to 
take care of.'' And I think Chet is right about sending them 
clear across the community.
    But I mean, a school district that has got 5,000 families 
on it, like Fort Hood does, ought to have some school close to 
the base. And we do give different types of impact aid for 
people who live on-post versus off-post and things of that 
sort. And if that is not adequate, we need to look at those 
numbers. But we do not, that is not our Committee. But we need 
to influence the committees that do that, because I get 
complaints about impact aid every once and awhile throughout--
especially from the Wright-Patterson area.
    Mr. DuBois. Sure.
    Mr. Hobson. You got another question? I interrupted you.
    Mr. Edwards. No. I just appreciate the focus on this 
because what is happening is that it is the policy of the 
Department of Defense to have housing privatization. And it is 
the direct result of that policy, which we support, that is 
causing the local school district to have to make a massive 
investment in new construction. And while Impact Aid will help 
them with operation costs down the line, the construction costs 
are a real problem.
    Again, if you would look at that, then hopefully we can 
come up with a policy. They already have, Mr. Chairman, several 
schools of the Killeen Independent School District at Fort 
Hood. So they have that.
    The demographics astounded me. When all of a sudden you 
went from a one- or two-bedroom home to three-bedroom or four-
bedroom home, all of a sudden you get a massive influx of 
enlisted families with a lot of children. And it is just--it is 
not the kind of planning process a community can normally go 
through planning out 10 years in advance. This, kind of, 
happened within a year or two. And that is why I would be 
grateful of your consideration of how we can address that.
    Mr. DuBois. Yes, sir.
    Mr. Edwards. Thank you.

                         BARRACKS PRIVATIZATION

    Mr. Hobson. I want to ask the Navy a question.
    Does the administration support the process of privatized 
barracks? And the barracks privatization initiative depends on 
sailors receiving some amount of reduced housing allowance. You 
got to calculate what all is going to go on here on the pilot. 
And has the amount been requested in the O&M account for the 
defense bill? Does anybody know what the costs are? And if not, 
when are you going to make the request? And you know, how are 
you going to get the legislative authority to do this? When 
does your salesmanship start on this?
    Mr. Johnson. First of all, the Department of Defense 
supports it. But I would like to get Mr. DuBois to tell you 
that. The--we are coming forward with a proposal for a pilot. 
And when you look at total cost, it is less than the MILCON, so 
the money is there, but we have to put it in the right 
appropriations in order to complete the pilot plan. And it 
would be a partial payment.
    The reason for doing pilots is to determine exactly what 
levels those ought to be. We are going to try to determine a 
percent of BAH across the service, or a room arrangement, and 
have one as opposed to several.
    Mr. DuBois. We support the various options. And we have 
left it up to the military services to pursue in a creative 
fashion how they would address the enlisted and Bachelor 
Enlisted Quarters/Bachelor Officers' Quarters (BEQ/BOQ) 
barracks-type situations from the privatization standpoint.
    The Navy has some unique issues. Sailors coming off ship. 
When you and I were down at Kingsville, Ingleside, outside of 
Corpus.
    So we are working with the services to try to come up with 
projects that satisfy your criteria and ours and the financial 
offices.
    Mr. Hobson. Since I kicked the Air Force and the Navy 
around, I am going to kick the Navy around cross-wise.
    You have got Larissa, you have got a request in to build 
two flag officer headquarters. In that budget request, there is 
$1.2 million for two houses. I think that is pretty expensive 
even though--I do not know what size square footage those are 
going to be, but I think that is a lot of money to build two 
houses.
    Mr. Johnson. Yes, sir. As you know, we are supporting a 
NATO obligation here at Larissa, Greece. There are several 
problems. One, they have some seismic concerns, and with those 
NATO houses we have to build saferooms. I am sure you have seen 
those in Brussels and elsewhere. And the supporting items of 
$300,000, that includes utility maintenance and site 
improvements. The numbers build up fairly quickly. When they 
only have two houses, of course, the overhead, as you all know, 
is much higher.
    We understand your concerns. We share them. We are trying 
to support the NATO request.
    Mr. Hobson. That does not do it with me. I do not--you 
know, just because NATO asked for it--then tell them to pay for 
the damn thing. You know, I get tired of our taking the burden 
on this stuff. You know, we are supporting the NATO deal; fine. 
Why did not NATO support us a little bit in this deal and get 
some of our money back with their--because they do not give us 
money back on this type of stuff, I do not think. But they 
should.
    I mean, if we are supporting NATO--as a matter of fact, I 
would like a little support--better support from some of our 
NATO allies in some of the things. When I find out--sorry, you 
got me started on something now--when I find out we cannot land 
certain places with the people we are bringing out of 
Afghanistan as prisoners and it is a NATO ally, I get a little 
uptight about that.
    Then when certain people during--when we were in Kosovo and 
Bosnia--sending oil up the Danube that I wanted to bomb and we 
could not do it. And they are supposed to be our allies, and 
then we are going to spend $1.2 million in their--in certain 
countries, I have a hard time with taxpayers' dollars with that 
kind of stuff.
    So these people that write down little things around the 
room, so write that down, because I am not real happy with 
that. And it is not the same country on the landing; it is a 
different country on the landing.

                       GENERAL OFFICERS QUARTERS

    But, you know, fair is fair. And $1.2 million for two 
houses, you know, there are not a lot of houses in my district 
that go for $600,000--maybe in Sam's, but not in mine. I do not 
have Monterey. And when they look at two houses for $1.2 
million, that is why some of this stuff--that is why I want to 
build--somebody, I forget who, Jeff, is building some general 
officers'----
    Mr. Dishner. We are down at Patrick.
    Mr. Hobson. Patrick--two of them--I am glad to see that 
starting. Because I think there is a tendency to say, ``I do 
not want to build general officers' houses,'' and that is not 
necessarily true. I do not want to dump a bunch of money into a 
bunch of old crummy things. But to still wind up with old, 
crummy things after you put $300,000 or $400,000 into it, you 
might as well build a new one that is functional in today's 
world, rather than winding up with a 10,000-foot house that is 
not functional.
    I hope there is still one sitting down at TRADOC that is 
not done. But if you do it, I hope you do it with not the 
taxpayers' dollars. They are willing to put $1.2 million into a 
house. They have got $900,000 into one before I got ahold of 
them down there.
    But, you know, this is ridiculous. A general officer does 
not need to live in a $1.2 million house or a $600,000 house if 
we can build one cheaper--but nice. You know, they are going to 
build one at Osan. They are going to build Osan, after we fixed 
it for a lot less money than you guys wanted to fix it.
    Mr. DuBois. That was the Ohio construction guy going to the 
roof--
    Mr. Hobson. That is when I climbed in the roof. They are 
not used to that. But we fixed it for $800.
    But anyway, I have a lot of trouble supporting a NATO 
mission for $600,000 a house. And I think somebody ought to 
look at that and somebody ought to squawk to NATO and talk to--
is that General Ralston?
    Mr. DuBois. Yes, sir. It certainly is. But they are moving 
their headquarters around in general. But we will go back and 
look----
    Mr. Hobson. Well, they have got some other problems in some 
other houses over there too. The vice's, his house is----
    Mr. DuBois. We will look at that and bring the numbers back 
here. But we hope to be able to have the opportunity to address 
this committee from a total MILCON infrastructure standpoint on 
the budget----
    Mr. Hobson. You may not want to go there with me on the--
because I am not happy with the MILCON budget.
    Mr. DuBois. I know, but that is why we need to have the 
hearing.
    Mr. Hobson. Chet?
    Mr. Edwards. Mr. Chairman, I just wanted to comment.
    Secretary Prosch, you mentioned something a minute ago that 
I thought was very, very important, and I would just like to 
emphasize--politically for the future of this program in 
Congress. You talked about percentage of the contracts that 
have been going out to small or local businesses.
    One of the things that could do as much damage to this 
program as anything is if members of Congress think that, as 
companies come in and as general contractor, they do not give 
any support, any services, or any contracts to local 
businesses.
    You all know better than I do, there is a special bond 
between a local community and an installation. That is a two-
way street, and you need to keep those relationships. I think 
you have been emphasizing to the general contractors. But I 
just would want to encourage that message to be sent out fairly 
and repeatedly that, as they are looking, when they can find a 
deal that is as good as or almost as good as something they 
could buy in another part of the world, look at those local 
businesses for partnership. That will, in the long term, help 
quality of life for military families on bases.
    And thank you, Secretary Prosch, for having mentioned that 
earlier.
    Thank you, Mr. Chairman.
    Mr. Hobson. John.

                                 KOREA

    Mr. Olver. Thank you, Mr. Chairman.
    Just one thing that has occurred to me to ask, as long as 
we have you, Mr. DuBois here, in the privatization of family 
housing, we are moving toward having enough units and adequate 
units for all the families who are eligible for them in our 
system.
    We visited Korea last year, where there are a fair number 
of families who are there who are off the BAH and who are there 
by themselves, and there is no--there is a very small 
percentage of housing there for the number of families who 
would otherwise be eligible had they been stationed stateside. 
We have had them there for a very long period of time. And the 
actual percentage of housing that we have for people is 
probably less than 10 percent.
    Do you know if there is anything, can you give me some 
sense of whether there is policy developing, is there a 
percentage of our personnel in Korea that we are going to try 
to cover over the future which may not be the full 100 percent 
of those eligible as families? Can you give me some sense of 
what the policy may be developing in this area?
    Mr. DuBois. The CINC, General Schwartz, has put forth a 
proposal. Right now a company on command-sponsored tours is 
limited to 5 percent, as I understand. And there is a focus on 
taking care of that 5 percent who choose--you may be in a 
command-sponsored tour, but you might decide to leave your 
family back at Fort Hood, even though you are in a command-
sponsored slot.
    Now, General Schwartz, as we discussed, I think, last year, 
is concerned about retention and individual officers who are 
given command opportunities choosing not to come to Korea 
because of issues pertaining to adequate housing.
    The CINC, General Schwartz, would like over time to 
increase accompanied tours--although this is not policy yet, it 
is his proposal--up to 25 percent.
    As you also know, in Korea, the CINC, General Schwartz, has 
a Land Partnership Plan that is a proposal to reduce from 41 or 
42 installations that the United States military has to less 
than 25. In exchange, we would receive host country's 
construction for where we move those missions so that it will 
not be a MILCON or a taxpayer-supported construction issue. 
What we are asking for is certain acreage to those receiving 
installations in Korea to allow for housing and other 
construction.
    Mr. Hobson. They just signed an agreement on it, did not 
you?
    Mr. DuBois. The agreement, I think, we will do formally 
blessed and signed in another week or so in Seoul.
    Mr. Hobson. Well, the only thing I--John has raised a good 
question. The only thing I would suggest, and I said it when 
the Koreans were here and Schwartz was here the other day, I am 
not for giving anything back until we see some action on their 
part.
    In the past when these deals have been done, we do our part 
and then all of a sudden there are delays and this changes and 
that changes. And we do not wind up getting what we were 
supposed to get. And then we have to make another deal and the 
Army winds up with the short end of the deal again. And I do 
not want to see that happen.
    I put everybody on notice on that. And I know the person 
who negotiated on our side and Tina is wonderful. But I just 
hope that they have not--once again, I hope we do not wind up 
we got out-negotiated again and we end up, you know, that we 
have agreed to give up all this stuff first and then we are 
going to wait for the other stuff. Because that is just not--I 
do not know whether we have any oversight of that or not.
    Mr. DuBois. Based on your concerns, as expressed to General 
Schwartz when you were over there last year, he clearly took it 
to heart. Because when he briefed me the other day, there are 
triggers. If the Korean government does not do X, they do not 
get back Y. It is built into the program.
    Now, as I mentioned, in this program, it requires the 
Korean government to invest no less than 50 cents on every 
dollar--on every MILCON require dollar needed, they have to 
come up with that or else we do not do it.
    Mr. Hobson. It is a better deal than we had.
    Mr. DuBois. Yes, sir.
    Mr. Olver. May I just continue that? In your knowledge, is 
the number of families--persons who have families roughly the 
same percentage, roughly 50 percent or a little over 50 percent 
of our personnel in Korea as it is in our whole armed forces?
    Mr. DuBois. I am not sure I follow the question, sir.
    Mr. Olver. Well, in the armed forces as a whole, we have 
singles and we have families.
    Mr. DuBois. I see.
    Mr. Olver. And roughly the military personnel, 50 percent 
or a little bit over 50 percent--I mean, it is moving steadily 
upward a little bit, I think year by year, but roughly 50 
percent, say, of our whole force. Am I roughly right there?
    Mr. DuBois. The whole force is what, single?
    Mr. Hobson. Married.
    Mr. Olver. No, 50 percent of the whole force is singles and 
roughly 50 percent have families, are married or have families.
    Mr. DuBois. I think it is higher than that on the married 
percentage.
    Mr. Olver. Well, that is what I was saying that it is going 
upward a little bit and steadily moving upward.
    Mr. DuBois. Correct.
    Mr. Olver. We can agree on that roughly.
    Mr. DuBois. Because when I was in the Army many years ago, 
there were--in the young enlisteds, 95 percent of E-1s, E-2s 
and E-3s were single. Today that is not the case.
    Mr. Olver. Okay. In Korea, the policy is--I think the 
policy is that they may have up to 10 percent sponsored, but 
there is not adequate housing for 10 percent and that is where 
the 5 percent comes out. There is, in fact, only adequate 
housing for 5 percent sponsored. Do you know how many are not 
sponsored? How many people are taking their people--their 
families over in an unsponsored way and they are living on the 
community?
    Mr. DuBois. I do not----
    Mr. Hobson. Schwartz knows that. He has that number.
    Mr. DuBois. Geoff, do you have the number? Because mostly 
it is Army anyway.
    Mr. Prosch. I do not have all that.
    Mr. Olver. Well, it is some percentage. I do not know what 
it is. It would be good----
    Mr. DuBois. That bring their families over and they have to 
put them on the local economy.
    Mr. Olver. Right. They put them on the local economy.
    Now, if you are on stateside, of that, somewhere over 50 
percent of all of our personnel who have families, we undertake 
to provide housing for them at all stateside.
    Mr. DuBois. Yes, sir.
    Mr. Olver. And we have inadequate housing of the framework 
of 160,000 units yet that we are making major--taking a big 
bite out each year. And we will continue to take a bite of 
30,000 or so per year for the next several years.
    But if you compare that situation with Korea, whatever is 
the total number of families, only 5 percent of those are now 
able to be taken care of by adequate housing and our policy is 
10 percent. Schwartz would like to see it at 25 percent. Would 
you like to comment on the relative merit?
    I do not expect that in a forward base like Korea--except 
for the fact that we have been there and probably will be there 
for several more years. I do not expect that it necessarily 
would be the same policy that we would follow stateside that we 
undertake to provide 100 percent. But 10 percent is a pretty 
damn low number and 5 percent adequate is terrible.
    I am being given some initial numbers to try to assimilate 
here that we do not undertake to provided family housing for 
everybody. But if they did not have some opportunities out 
there on the economy with the BAH, then we probably would be 
trying to provide them. If we are in a place where there is no 
housing out there on the economy, we would be trying--it is our 
policy to provide 100 percent in such circumstances.
    Mr. DuBois. That is really in the United States. The 
number----
    Mr. Olver. In the United States. I am trying to get a 
balance here, get your sense of where our policy is headed. It 
seems to me that 5 or 10 percent in Korea is a very poor--is a 
very low aspiration.
    Mr. DuBois. Understandable that it is a low number. I think 
we also, as you pointed out, we have to recognize that 2002 is 
certainly different than 1962 or 1972. The situation has 
changed in Korea. We have an administration where the President 
of the United States is--and a Commander-in-Chief (CINC) and a 
Secretary of State who are committed to normalizing 
relationships on that peninsula.
    But no matter what happens on that peninsula, as you also 
pointed out, Mr. Olver, there will be a significant United 
States military presence there for as long as we can see.
    The question is--the question you are posing is as we take 
care of our military families in the United States, should we 
not, as we move this percentage up, from a policy standpoint in 
Korea, do the same thing? And the answer is, yes, we must do 
the same thing.
    But the policy of moving up accompanied or command-
sponsored tours is not set yet. What should it be? Five percent 
this year, 10 percent next year, moving to 25 percent by 2020? 
The Army is still trying to determine what makes most sense.
    Mr. Olver. I was hoping that I might get some sense of 
where the Army was headed, where you were headed with the 
policy on this process.
    Mr. Hobson. Well, they have got a problem. While I may 
agree and you may agree on this, there is not unanimity within 
the Congress in both bodies as to changing that position. And 
we have had some great difficulties in trying to change that 
number.
    So I would hope that the administration would look a bit. 
Because I think it really strains some families to--and we need 
to have some salesmanship with some people, and we all know who 
I am talking about, to try to understand that this does cause 
some real strain on, especially young families at very 
difficult times in their lives. Especially with not being able 
to get separate rations and a lot of other things and e-mail 
and things like that, which were taken care of.
    But this is--John has raised a very important point that I 
hope you all look at and we all try to sell together to the 
people who are naysayers on this.
    The last thing I really want to say to all of you, I really 
want to thank you for Korea for what you have done in the 
president's budget for the housing in Korea. It is far better 
than I have seen before. And it makes a giant step forward.
    Now our job, all of us together, is to collectively to hold 
that.
    Mr. Olver. It would be enormously greater--enormously a lot 
easier for us to hold or to achieve an improved policy in Korea 
if there was a policy set at the administrative level that was 
clear as a goal along those lines.
    And I was hoping I might get you to release something about 
what the thinking is of the Department of Defense on the 
proposal by the commander in Korea.
    Mr. DuBois. We all know where Tom Schwartz stands on this. 
He is a compelling salesman and has made a very good argument 
within the councils of the Army and the Pentagon. And I--
    Mr. Olver. Well, let me then, for what it is worth, put 
myself behind you in this request.
    Mr. DuBois. Yes, sir, very well.
    Mr. Olver. And I hope you get a CINC that is as good a 
salesman for the next CINC because we lose Schwartz in May. And 
Schwartz has been a wonderful advocate for the Army and for the 
troops in Korea who are the forgotten 37,000 people, including 
the Air Force people that are there in the world.
    And we do a great job of taking care of people in Europe. I 
mean, we could do more there too. But comparative-wise, Korea 
has been, kind of, the dog-eared place to go from--and it 
should not be. It is not that--it is a good place to serve. But 
it is not good when you are away from these young families.
    And that is, to me, a very difficult burden that somehow 
got placed on this place. And as long as I can remember, since 
the 1950s we have been in Korea. And I do not see us getting 
out of there any time soon. So we need to make some plans.
    And if we did some of this housing, John, in a 
privatization kind of way, we could then walk away from it in 
the future if we did move out and let it go back to the 
Koreans, who, if you look over there, they could use more--I 
mean, every time you look, there is another one of those white 
buildings going up.
    It would be a good thing for their country and ours, if we 
left there at some point or reduced our size. It would not be a 
burden. So I will just leave you with that one.
    I do think that the one thing we have all accomplished in 
the last three years is a better--we have got everybody's 
attention on Korea better than we have before. And that is a 
positive thing for all of us.
    So with that, we will adjourn the hearing. We thank you 
all. Thanks for coming.
    [Clerk's note.--Questions for the record submitted by 
Chairman Hobson.]
                  Housing Privatization Budget Request
    Question. The budget for family housing is $200 million higher than 
last year while the military construction account is down $1.7 billion. 
The Administration justifies the decrease in the Milcon account on 
BRAC. Doesn't this justification apply in the same way to family 
housing? Or should we assume that the bases with family housing 
projects are not going to close?
    Answer. First, I would like to make it clear that the reduction in 
the military construction President's Budget request is not based upon 
a future BRAC round. As I have testified, the reduction resulted from 
balancing priorities across the Department. This included many new 
requirements such as those resulting form Operation Enduring Freedom 
and enhancing security at military installations.
    One of the priorities the Secretary wanted funded is improving 
military family housing. There is no correlation between the family 
housing projects in the FY 2003 budget request and the military value 
of an installation. They are based on need, condition of the housing 
inventory, and whether our housing privatization authorities can be 
used in a cost efficient manner.
    In the House report last year, DOD was directed to work with OMB to 
compare the current scoring methodology with similar federal housing 
programs and to report the findings to the appropriation committee by 
March 15. This direction was included in order to foster consistent 
scoring principles.
    Question. What is the status of this report?
    Answer. My office has completed work on the report, coordinated it 
with the Office of Management and Budget, and it is currently under 
final review within DOD. I expect to send it to the Committee in early 
April 2002.
    Question. What are some of the findings of this report?
    Answer. The report compares the Military Housing Privatization 
Initiative (MHPI) with housing programs under the jurisdiction of the 
Department of Housing and Urban Development and the Department of 
Agriculture. It finds that the budget scoring methodologies and federal 
accounting procedures for MHPI are fully consistent with those applied 
to these other federal housing programs. It also finds that the scoring 
methodologies and accounting procedures comply fully with the Credit 
Reform Act, the Budget Enforcement Act, and all applicable provisions 
of OMB circulars.
    Question. What is the Administration doing to encourage the 
services to develop capacity and expertise in housing privatization?
    Answer. Through the experience of creating, awarding, and executing 
the first 16 Military Housing Privatization Initiative (MHPI) projects, 
the Services have developed internal expertise and capacity in 
disciplines important to housing privatization. Each Service now has 
experienced privatization teams in place with expertise in project 
management, acquisition, financial management, personnel, legal, and 
real estate/housing management. This expertise can be found at the 
installation, command, and headquarters levels of each Service.
    In order to maintain and broaden this expertise, the Services 
routinely hold ``Lessons Learned'' sessions for their installation 
teams, conduct ongoing educational sessions, and engage in post-award 
or portfolio management. In the spring of 2002, the Office of the 
Secretary of Defense will sponsor a third post-award conference to 
assess the efficiency of the Program Evaluation Plan and Service's 
steps to implement their own portfolio management efforts. The Services 
use in-house teams to conduct effective pre-award and post award 
management. When additional expertise is required they augment their 
teams with consultants, particularly to provide advice on deal 
structuring and financial analysis.
    Question. Does the Administration support the Navy request to 
privatize barracks? Why wasn't a request for the additional BAH made to 
the Defense subcommittee?
    Answer. The Department of Defense supports extending the benefits 
of privatization to barracks. We are reviewing the specifics of the 
Navy's proposal and working with them on issues such as paying housing 
allowances to shipboard sailors; paying less than the full basic 
allowance for housing to members living in privatized barracks; 
identifying the appropriate construction standards; and developing 
scoring guidelines.
    The Navy is developing a pilot proposal for barracks privatization 
that requires enabling legislation, which is currently under 
consideration within DoD. Accordingly, it is premature to include a 
request for additional Basic Allowance for Housing in the Fiscal Year 
2003 budget. Any necessary adjustments will be reflected in future 
budget requests.
    Question. What is OSD doing to speed up the privatization process 
so that projects are begun with more alacrity?
    Answer. My office, in coordination with my counterparts in the 
Services, continues to assess the Department's privatization program to 
determine ways in which we can accelerate and streamline the process. 
However, each installation is very specific and no one approach fits 
all Services. The DoD housing privatization program had awarded 10 
projects in 5 years (FY 1996-FY 2001), producing about 7,000 
privatization units. Only one year later, we have awarded a cumulative 
total of 16 projects producing about 25,000 privatized units. The six 
privatization projects awarded over the last year has more than tripled 
the number of units already privatized. We believe that we have been 
able to accelerate the program because of the dedicated efforts of the 
Military Departments, the Administration's support and funding, the 
increased buy-in of installation stakeholders, and Congressional 
interest and support.
    The Secretary of Defense has accelerated the Department's goal for 
eliminating inadequate housing from 2010 to 2007. Accordingly, we are 
also accelerating housing privatization, but working to implement this 
program in a manner that ensures high quality construction and 
renovation of military family housing in an efficient manner. Some of 
these efforts have included diligent scrutiny and selection of 
developers, sound legal documents, and strong oversight and monitoring 
procedures. We believe the program has momentum and Service project 
privatization plans are moving forward. We are gaining experience and 
moving out of the pilot stage into full implementation of this program.
    Question. What is OSD's role in reviewing consultant costs? 
Are you concerned with the costs of the Air Force and Army 
compared to the Navy? Why did OSD approve the Air Force 
reprogramming request of $8.2 million . . . funds that were 
rescinded last year by Congress?
    Answer. We are aware of the concern with the costs of 
consultants hired to assist Services with housing privatization 
projects and programs. Housing privatization allows a Service 
to leverage scarce MILCON appropriations to obtain more housing 
than it would under traditional MILCON construction. However, 
privatization projects are financially complex; the Services 
hire consultants to assist in deal structuring and financial 
analysis. The cost of consultants adds to the total project 
costs, but supports the Services' efforts to eliminate 
inadequate housing by 2007.
    House Report 105-647 to accompany the Military Construction 
Appropriations Act, 1999, requests the Department report 
quarterly on housing privatization projects' status. House 
Report 106-710 to accompany the Military Construction 
Appropriations Act, 2001, requests quarterly information on the 
amount of money spent by the Military Departments and the 
Office of the Secretary of Defense (OSD) on contractor support. 
The Department provides this information in a single quarterly 
report to Congress. Contractor support costs are listed by 
project.
    When examining consultant costs it is important to also 
understand the larger universe of privatization support costs, 
into which consultant costs fall. Privatization support costs 
are used to pay for items which support the privatization 
effort including studies, appraisals, post-award portfolio 
management and environmental assessments in addition to 
including the costs of the consultants who provide advice on 
deal structuring and financial analysis.
    With regard to differences among the Services, alternate 
approaches to doing business and structuring deals drive 
differences in the Services' privatization support costs, 
including consultant costs. Different deal's structures require 
different degrees of portfolio support.
    With regard to OSD's approval of the Air Forces' 
reprogramming request of $8.2 million (Congress rescinded $13.4 
million last year from the Air Force privatization function), 
we determined that the overall Air Force privatization plan to 
accelerate the revitalization of their housing by 2007 would be 
deterred by this cut. The Air Force provided documentation that 
six of their projects totaling 3,929 units (Cannon AFB, New 
Mexico; Altus AFB, Oklahoma; Hansom AFB, Massachusetts; Andrews 
AFB, Maryland; Hurlburt AFB, Florida; and Maxwell AFB, Alabama) 
projected for award in FY 2004-FY 2005 would need to be placed 
on permanent ``hold'' by this action to rescind. In addition, 
the Air Force provided information to OSD that showed the 
rescission actually cut more than funding for consultant costs; 
the cut affected these other areas; concept development, 
planning and oversight costs, and certain project management/
portfolio management; and installation project management.
    Question. After five years of experience, are the current 
legislative authorities adequate? For example, current law doesn't 
allow for the services to purchase existing housing units off a base. 
Therefore, at Fort Stewart, the Army wasn't able to acquire existing 
homes close to the installation that were in VA foreclosure even though 
the installation, the community, and the Congressperson were in favor 
of the transaction. Have you considered requesting additional authority 
for this type of housing ``deal?''
    Answer. We are very appreciative of Congressional action to extend 
our Military Housing Privatization Initiative authorities to 2012. The 
authorities have proven extraordinarily helpful in improving the 
quality of the housing we provide to our military members and their 
families. However, as we gain experience with these authorities, we 
have discovered areas that could use improvement. Therefore, as part of 
FY 2003 President Budget, the Department has submitted to Congress some 
proposed changes to the Military Housing Privatization Initiative 
authorities which we believe will make them even more effective, 
particularly in the area of unaccompanied housing.
    With respect to the Fort Stewart situation, we are working with the 
Army to understands all the details and report back to the Subcommittee 
with a workable solution.
    Question. In your opinion, what circumstances would prompt you to 
propose using traditional military construction hinds to construct new 
family housing versus the privatization initiative?
    Answer. We believe privatization of housing is feasible in most 
situations and encourage the Services to consider privatization at all 
locations. However, there will remain some locations, for any number of 
reasons, where military construction (MILCON) may be the preferred 
alternative. For example, if privatization yields less than a three to 
one leverage of appropriated dollars, or if the life cycle cost of 
privatization exceeds the life cycle cost of an identical MILCON 
project, MILCON would be the preferred method. Additionally, MILCON is 
the preferred alternative in a situation where military family housing 
is located on property that is not severable from an installation.
                           Fort Hood Housing
    Question. It took almost five months from contract award to close 
the Fort Hood housing initiative. What are some of the reasons for this 
delay? Did the developer request changes in the contract? Were there 
changes in the financial transaction? Can you suggest ways to 
streamline this process for future projects?
    Answer. The RCI Program allows for a 90-day transition period in 
the schedule. The 90-day transition period begins when Congress 
approves the project (and the Army subsequently issues the Notice to 
Transition) and ends when deal closing occurs (i.e., assets and 
operations are transferred). In regard to Fort Hood, the Army had some 
extenuating circumstances that extended this three-month period to five 
months. First, an environmental problem surfaced during the transition 
period. Excessive levels of Chlordane, an insecticide used to treat for 
termite, were found in the soil surrounding family housing. Testing and 
remediation plans were developed, and the Army and development partner 
agreed to transfer assets and operations October 1, 2001, thus delaying 
the closing 30 days. However, financial closing was delayed another 30 
days as a result of the September 11 events (our original bankers and 
insurers had offices in the World Trade Center). The financial and 
insurance markets were in turmoil due to the tragic events and issues 
were resolved within 30 days and financial closing occurred November 1, 
2001, five months after Congressional approval. In regard to developer 
(and Army) requested changes and changes in the financial transaction, 
there were no significant changes to the plan that was briefed to 
Congress. In regard to streamlining transition, we do not believe that 
the 90-day transition period needs streamlining. The development 
partner is not guaranteed any work until Congress reviews the project 
and a Notice of Transition is subsequently issued. Given the scope and 
magnitude of these projects, it is reasonable to expect that the 
partners will not want to start mobilization until they receive the 
Notice. Also, 90 days is the industry standard for mobilization for 
projects of similar scope.
                              RCI Program
    Your testimony states that the RCI program will include 690,000 
family housing units by 2004, which seems rather optimistic given the 
current speed of the privatization process.
    Question. Your testimony states that the RCI program will include 
over 60,000 family housing units by 2004, which seems rather optimistic 
given the current speed of the privatization process. What is the 
Army's oversight strategy?
    Answer. Yes, the Army's schedule is optimistic, but attainable. The 
first four sites resulted in privatization of over 15,000 units. The 
Army improved its acquisition process, and solicitations are currently 
underway for 12 additional sites (an additional 24,102 units). In 
addition, the Army has sites scheduled for solicitation in Fiscal Year 
2003 and 2004, adding 8,178 and 14,692 units, respectively. Although 
the Army has had some minor delays, this schedule is achievable, 
subject to the availability of funds in the Fiscal Year 2003 budget 
request for Army Family Housing.
    For the Army's oversight strategy in the RCI program, a 
partnership/limited liability company is formed at each installation in 
which the Army is a limited partner/member. Representatives of the Army 
and the development partner are members of a major decisions committee 
that oversees the project. As a result, the Army contributes to all 
major decisions in a project. In addition to the partnership and major 
decisions committee, there are several other oversight processes in RCI 
projects including the following:
     The Army retains ownership of the land, and the Army 
performs periodic reviews of lease provisions, including those portions 
of the project operating agreements that have been incorporated into 
the lease, to ensure compliance.
     Residual government staffs at RCI installations interface 
with the project staff and provide oversight of the project to ensure 
all agreements are met.
     Resident satisfaction surveys are performed by 
independent, third parties.
     RCI deal structures have the flexibility build into the 
arrangements to allow efficient adaption to changing conditions.
     Portfolio and asset management is conducted to monitor the 
progress of all RCI projects including execution, finances, and trend 
analyses.
     The Army requires independent financial oversight of how 
all funds are accounted and expended through periodic reviews of lock-
box accounts.
    Question. What mechanisms have you put into place to measure the 
results of the construction companies and the maintenance companies?
    Answer. As part of the evaluation during the solicitation process, 
bidders are asked to comprehensively discuss previous relevant 
construction projects. In addition, previous business clients/
associates are contacted to provide an assessment of the bidders' 
business practices. Subsequently, only those bidders deemed highly 
qualified are permitted into the project's competitive range.
    In addition to the detailed review during the solicitation process, 
fees and returns for development and construction are controlled by 
benchmarking them against current industry standards. Also, a portion 
of all fees is incentive based and the measurement criteria include on-
time and on-budget delivery, as well as quality components.
    Furthermore, all RCI sites have either government personnel or 
third-party architectural and engineering firms evaluate the quality of 
construction/renovations. Also, the Army's portfolio/asset management 
program reviews maintenance and capital expenditures of the project to 
ensure sustained, high quality.
    Question. What types of reviews are in place to ensure the 
financial transaction remains sound?
    Answer. The Army is continuously engaged in actively monitoring 
project financial stability.
     The Community Development and Management Plan and the 
final business agreements contain detailed procedures for the review 
and validation of plans, performance, and expenditures.
     The Army, as a partner in the privatization agreements, 
maintains a role in all major decisions.
     The business agreements between the Army and the 
development partner incorporate performance-based incentives.
     The project employs an independent firm to monitor quality 
control in construction and services, and independent financial 
oversight of how all funds are expended.
     The Army maintains a portfolio/asset management function 
to review project costs and quality to protect the Army's investments 
and interests.
    Last year, the Army requested $30 million to pay consultants for 
the RCI program and the Air Force requested $35 million for its 
privatization program. The Conference cut these amounts by $5 million 
and $8.5 million respectively because the costs weren't justified when 
compared to the $3 million cost of the Navy's consultants.
    Question. Who are your contractors?
    Answer. The Army RCI budget request last year for Fiscal Year 02 
was $27.9 million. Included in this requested amount was $15.7 million 
for consultant services (not $30 million). The actual amount allocated 
for the Fiscal Year 02 RCI program (following a Conference reduction of 
$7.9 million and an additional rescission of $.2 million) was $19.8 
million. The actual consultant funds in the Fiscal Year 02 RCI budget 
is $9.5 million. Jones Lang LaSalle, a global real estate management 
and investment firm, provides real estate advisory and assistance 
services to the Army privatization program. Jones Lang LaSalle was 
awarded the contract to provide professional services to the Army 
following a competitive solicitation through normal contacting 
processes.
    Question. What services do consultants provide?
    Answer. Consultants provide private sector real estate, financial, 
and property management expertise. Specifically, they provide advice 
and assistance to:
     Develop pro forma models and conduct analyses.
     Perform due diligence (i.e., work with government 
personnel at installation and headquarters to define the project scope 
from a financial standpoint and establish negotiation parameters).
     Evaluate development scenarios and financing options.
     Prepare installation transition and performance 
measurement plans.
     Train installation privatization staff for deal 
collaborations/negotiations.
     Provide the private sector real estate expertise to the 
government staff during the Community Development and Management Plan 
negotiations.
     Provide legal assistance for business agreements and 
closings in subject matter areas of the transaction where government 
attorneys lack sufficient expertise.
     Review and assist in negotiating final agreements.
    Question. What are the per hour costs of consultants for the 
various services?
    Answer. Rates are competitive with those of other firms providing 
comparable professional real estate advisory services to the 
government. The specific rates are business confidential and 
proprietary and, therefore, will be provided to the Subcommittee, 
Chairman Hobson, under separate cover.
    Question. Why are consultants managing the Army's housing portfolio 
rather than Army personnel?
    Answer. Consultants do not manage the Army's housing portfolio. 
Consultants provide the expert technical assistance to the Army's 
portfolio/asset managers to ensure compliance with deal points and 
agreements using systems, controls and metrics consistent with the best 
practices of managing large, private sector real estate portfolios.
    Question. What are the performance measures the consultants must 
achieve for each service provided?
    Answer. The government's Contracting Officer's Representative (COR) 
initiates task orders that describe the work to be performed by 
consultants, the period of performance, and costs. Subsequently, work 
and deliverables are evaluated by the COR with input from other 
government managers at the Army Headquarters and at installations based 
on:
           Technical knowledge and skills
           Initiative and innovation
           Quality of deliverables and other work products
           Timeliness of work
           Accomplishment of task order objectives
           Cooperation with government staff
           Communications with government personnel and other 
        stakeholders
           Business ethics on the job
    Question. Who is monitoring the consultants?
    Answer. The government's Contracting Officer's Representative (COR) 
is primarily responsible for providing oversight of consultant 
performance and costs, and reviews all deliverables and invoices. Other 
government personnel who receive consultant support also review 
deliverables and work performance, and provide comments/input to the 
COR. The Defense Contract Management Agency (Baltimore) also monitors 
consultant invoices.
    Question. What are the consequences to the consultant if the 
portfolio isn't adequately monitored or serviced?
    Answer. The consultants may not be paid for unacceptable services, 
e.g., failing to perform properly tasked work within expected standards 
and timelines, and may be terminated for cause if appropriate.
    Question. The testimony asserts that Army consultants have assisted 
with negotiating improved deals and putting more money into the 
projects for Army family housing improvements. Please explain what this 
means and give concrete examples of how specific projects have been 
improved by the actions of the consultants.
    Answer. Consultants have proven their value-added ability to help 
the Army craft final agreements that have terms and conditions more 
favorable to the Army and the project than initial, going-in 
negotiating positions. As a result, more funds have been made available 
to the projects for additional construction, improvements and 
amenities. Consultants introduced concepts, analyses and 
recommendations, and assisted in negotiations that saved millions of 
dollars in fees and returns, which resulted in increased value to the 
housing and community projects. Assistance with negotiations required 
extensive private sector business acumen, in depth knowledge of 
acceptable marketplace deal point parameters, and exceptional corporate 
research and analysis to support the Army's negotiating positions. 
Examples follow:
     At all three pilot sites, final agreements reduced fees 
and payments to the developer. At one of the three, the savings were 
calculated at $70 million.
     At all pilot sites, negotiations significantly lowered the 
level of and preference and timing of the return on equity the 
developer could expect. At one site, this return was decreased by one-
third.
     At all pilot sites, the developer's share of cash flow 
splits were significantly reduced. One example of the split to the 
development partner was that it was reduced by two-thirds, thus 
increasing funds for the project by millions of dollars.
     The consultants also introduced the notion of the partner 
debt being competitively bid, thus saving the projects additional funds 
(again, in the millions of dollars).
     Relative to other projects where private sector real 
estate experts were not utilized, the savings to the overall government 
contribution to the RCI pilot projects is at least $40 million.
    Question. Additionally, the testimony states that the cost of 
consultant per RCI installation is steadily dropping. What are the 
costs of consultant per RCI installation to date, and what are the 
costs of consultant per future RCI installation?
    Answer. Project savings and cost avoidance, and an expanded number 
of projects without a proportionate increase in program-wide support 
costs, have combined to reduce consultant costs from an average of over 
$4.5 million per project for the first 4 projects, to approximately 
$2.2 million for current and planned projects. It should be noted that 
consultant costs are a relatively minor expense when compared to the 
total scope of these large-scale, complex, billion-dollar real estate 
agreements. The Army team is negotiating with skilled private sector 
development professionals on 50-year agreements worth $4-6 billion in 
cash flow per installation.
    Consultants provide the Army with a comparable level of business 
knowledge and experience as that held by the private sector developers 
with whom the Army must negotiate. This expertise improves the Army's 
ability to negotiate with confidence and protect the Government's 
interests.
    Question. The Army is developing more in-house capability and the 
testimony provides some examples of workload transition from the 
consultants to the government workforce. What are the savings of moving 
these responsibilities to government employees?
    Answer. The Army is controlling consultant costs as the program 
expands, and where appropriate, reducing reliance on consultants. 
Examples of savings and cost avoidance include:
     Transferred acquisition in support activities to a 
government entity--savings of $130,000 per solicitation.
     Eliminated full-time support to installation-level project 
management--savings of $200,000 per project annually.
     Reduced requirements for policy development/program 
institutionalization as the program has matured--savings of $860,000 
annually program-wide.
     Converted industry forums to self-financing operations 
through registration fees to participants--savings of $25,000 per 
solicitation.
     Expanded the use of government real estate specialists in 
lieu of additional consultant support--savings of $150,000 annually 
program-wide.
     Reduced training provided by consultants--savings of 
$140,000 per solicitation.
     Applied lessons learned and standardized procedures to 
reduce due diligence costs--savings of $100,000 per site.
     Eliminated industry marketing efforts--savings of $315,000 
annually program-wide.
     Applied lessons learned and accelerated procurement to 
reduce program management support--savings of $2,000,000 annually 
program-wide.
                          Family Housing--Navy
    Question. The family housing operations account has gradually 
decreased for the last two years. Is the privatization initiative part 
of the reason for the decrease in operations and maintenance budget?
    Answer. Yes. The reduction in the number of Government-owned units, 
as a result of privatization, accounts for approximately two-thirds of 
the reductions made to operations and maintenance accounts in Fiscal 
Year 2003.
    Question. The Navy requested $3 million in FY 2002 for contract 
assistance with the privatization initiative. Will these costs increase 
during FY 2002?
    Answer. We anticipate that there will be an increase in the amount 
of privatization support required during Fiscal Year 2002.
    Question. What are the contract costs for FY 2003, and will they 
increase? Please explain the purposes for which these funds are spent.
    Answer. $7.1 million has been requested in Fiscal Year 2003 to 
support both contractual and in-house costs associated with the 
Department of the Navy's housing privatization program. $3.8 million of 
this request is for contractual support of the program. Contractual 
support is provided mainly through the use of consultants. As with 
Fiscal Year 2002 costs, there is a likelihood that our requirement will 
increase. Consultants support Government personnel in the development 
of project concepts, pro forma and lifecycle analyses, proposal 
evaluations, negotiations and preparation of business agreements, 
transition from Government to privatized operations, and development 
and implementation of long-term management practices and procedures.
    Question. What are the responsibilities of the Office of Special 
Ventures and Acquisitions? How many staff does the Office have?
    Answer. The Special Ventures Acquisition (SVA) office is 
responsible for the development, management, and execution of 
innovative acquisition ventures supporting all Department of the Navy 
shore activities. The SVA group supports the Headquarters Marine Corps, 
Chief of Naval Operations, and the Navy Secretariat. The SVA office 
also provides liaison to the Office of the Secretary of Defense, and 
the Congress. In addition, SVA works directly with senior executives of 
major real estate and financial firms and corporations in the private 
sector to incorporate the best industry business practices in 
developing programs and negotiating the specifics of individual project 
initiatives. The office has a staff of seven, plus an SES Director.
    Question. What are the similarities and differences of the services 
provided by this office and the services provided by contractors paid 
by Army and Air Force? Who are your contractors?
    Answer. The Special Ventures Acquisition (SVA) office is 
responsible for the development, management, and execution of 
innovative acquisition ventures supporting all Department of the Navy 
shore activities. The SVA group supports the Headquarters Marine Corps, 
Chief of Naval Operations, and the Navy Secretariat. The SVA office 
also provides liaison to the Office of the Secretary of Defense, and 
the Congress. In addition, SVA works directly with senior executives of 
major real estate and financial firms and corporations in the private 
sector to incorporate the best industry business practices in 
developing programs and negotiating the specifics of individual project 
initiatives. The office has a staff of seven, plus an SES Director.
    Question. What is the Navy's goal for eliminating inadequate 
housing? What is the Marine Corps goal?
    Answer. The Navy will eliminate its inadequate family housing by 
the end of Fiscal Year 2007. The Marine Corps will eliminate their 
inadequate family housing by the end of Fiscal Year 2005.
    Question. What is the cost of buying-out the inventory in military 
construction dollars and through privatization?
    Answer. The total cost of eliminating inadequate Navy and Marine 
Corps inadequate family housing, solely through military construction, 
is $5.2 billion. The cost of eliminating inadequate family housing, 
through a mixture of military construction and privatization, is $4.0 
billion.
    Question. In conjunction with constructing a NATO Regional Command 
in Larissa, the budget requests $1.2 million for two flag officer 
quarters. Why is the cost of these quarters so expensive? What size are 
the quarters? What are the construction costs per square feet?
    Answer. The cost of these units is consistent with OSD construction 
cost guidance. Factors influencing the costs are the size of the units, 
the local area construction cost factor (which is 12 percent higher 
than the overall Fiscal Year 2003 program weighted average), additional 
costs related to anti-terrorism and force protection construction 
standards, the requirement to use U.S. manufactured or factory-built 
housing, and the small size of the project (i.e., quantity of housing). 
The size of each unit is 3,664 gross square feet (GSF) (or 2,955 net 
square feet (NSF)). The total construction cost per square foot, 
including building and site costs, is $168/GSF (or $208/NSF).
    Question. Has the Navy been able to meet its timeline for closing 
privatization deals and awarding the contracts in family housing? 
Typically in these deals, are maintenance costs covered by the income 
stream?
    Answer. For various unanticipated reasons, the actual execution 
timeline exceeded the planned timeline. These, typically, were issues 
that were not known to the Government at the time of concept 
development and events, beyond the Government's control, that arose 
during exclusive negotiations. Such matters included changes in lender 
requirements, extended negotiations with local municipalities, 
adjustments to projects (e.g., replacement vice renovation, siting of 
new housing, etc.), and changes by the developer to the members of the 
development team, including the builder, equity partner and financing 
component.
    In Department of the Navy projects, maintenance costs are covered 
by the project's income stream. Operating expenses, which include 
maintenance services, are paid, first-out, from gross rental income. 
The income stream is sufficient to ensure that the housing is sustained 
over the life of the agreement.

                      Navy Barracks Privatization

    Question. Does the Administration support the request to 
privatize barracks?
    Answer. The Department of the Navy is drafting pilot 
legislation that would, in addition to using these authorities, 
include provisions related to the payment of Basic Allowance 
for Housing. We are currently coordinating this legislation 
with the Office of the Secretary of Defense.
    Question. The barracks privatization initiative depends on 
Sailors receiving some amount of reduced housing allowance. 
Have you calculated the amount of BAH required for the pilot, 
what is it, and has the amount been requested in the O&M 
account in the Defense bill? What are the projected costs 
should the initiative be institutionalized? If not, why not? 
When do you intend to make that request?
    Answer. We are presently calculating the amount of Basic 
Allowance for Housing required for the pilot projects. Because 
we do not anticipate the award of pilot project contracts prior 
to Fiscal Year 2004, the amount has not been requested in this 
year's budget. The total costs, should the initiative be 
institutionalized, will be dependent on the evaluation of the 
feasibility of privatization at Navy and Marine Corps 
installations. The Fiscal Year 2004 budget will reflect, as 
necessary, any costs associated with barracks privatization.
    Question. The barracks privatization initiate is dependent 
upon a change in legislative authority. Have your forwarded 
this request to the Armed Services committee? What is their 
response?
    Answer. The Department of the Navy is drafting pilot 
legislation that would, in addition to using these authorities, 
include provisions related to the payment of Basic Allowance 
for Housing. We are currently coordinating this legislation 
with the Office of the Secretary of Defense. The legislation 
has not yet been forwarded to the House and Senate Armed 
Services Committees.
    Question. In order for the barracks privatization initiative to be 
successful, additional BAH must be requested and appropriated and Title 
10 must be amended. What should this subcommittee do with the request 
you've made to us for credit subsidy in the event these prerequisites 
do not occur?
    Answer. Absent the legislative changes, the Department has not yet 
made a request for a credit subsidy.
    Question. Would you ever assign a family to a barracks and under 
what circumstances.
    Answer. It is possible that a family might be referred to 
privatized bachelor housing in the event that there are insufficient 
unaccompanied personnel to keep the housing filled. This would only be 
done if it was considered to be in the Government's best interests. In 
such a case, the housing would have to be adequate for the size of the 
family.
                               Consultant
    In the FY 2003 budget, the Air Force requested $20.5 million for 
consultants.
    Question. Who are your contractors?
    Answer.
    Privatization Support Contractors (PSC) who provide direct support 
to the major commands and bases in developing the privatization 
concepts and advertising the solicitations
          --Basile Baumann Prost & Associates, Annapolis, MD
          --Jones Lang LaSalle, Chicago, IL
          --Ernst & Young, Washington, DC
          --PSC Military Housing Company, Salt Lake City, UT
          --Kormendi Gardner Partners, Washington, DC
    Project management support contractors who provide direct support 
to the Air Center for Environmental Excellence (AFCEE) project managers
          --Booz Allen Hamilton, San Antonio, TX
    Site surveys, environmental baseline studies, etc., for base 
privatization projects
          --Atkins Benham, Oklahoma City, OK
    Proformas, surveys, studies for base privatization projects
          --Avila Government Services, Washington, DC
    Question. Is this cost for consultants reasonable based on the slow 
turn-around for these projects?
    Answer. Yes, the costs are reasonable and were determined in a 
solicitation for services using the Federal Acquisition Regulation. The 
costs for consultant services are not based on turnaround time, but 
rather are firm fixed fees for the defined scope of work to be 
performed. The primary drivers on cost are the types of skills the Air 
Force is seeking, i.e., private sector real estate and financial and 
business deal-making expertise. Also, these contracts are for multiple 
years, and do have annual price adjustments. Therefore, some 
inflationary adjustments are built into basic contract provisions. So, 
if a work segment is extended beyond the annual price adjustment date, 
a slight increase in fees may result.
    The primary cost drivers for delays are usually the need to update 
previous products and analyze for current conditions. The most common 
example of this type of updating is the economic analysis and proforma 
to reflect changes in market conditions and annual basic allowance for 
housing (BAH) changes. In addition, we also become more susceptible to 
new criteria, policies and changes in emphasis due to changing 
leadership.
    Question. What services do consultants provide?
    Answer. Our consultants provide a wide range of services from the 
initial concept development through execution phases of the project. 
Some of these services are:
    Preparing proformas and other economic analyses on the feasibility 
of projects.
    Assisting the Air Force in analyzing various alternatives available 
to maximize options to match project goals with market opportunities 
and provide best value for the Air Force.
    Assisting in workshops and meetings, providing expertise to 
government leadership and decision makers.
    Assisting in documenting decisions, preparing briefings, and other 
administrative tasks.
    Assisting the Air Force in the development of the solicitation.
    Developing the metes/bounds and topographic surveys, geotechnical 
reports, etc.
    Preparing the Environmental Baseline Survey and Environmental 
Analysis.
    Assisting the Air Force in the solicitation and proposal evaluation 
process.
    Assisting the Air Force in finalizing the legal, financial, and 
technical documents for transaction and loan closure.
    Performing construction inspection of the privatized housing.
    Administrative tasks ranging from arranging and facilitating Air 
Force wide training sessions, development of execution guides, process 
enhancements, website development, and updates, etc.
    Quality assurance support in compliance testing, accounting and 
financial reporting, document management of the executed privatized 
projects.
    Question. What are the per hour costs of consultants for the 
various services?
    Answer. Some of the more frequently used disciplines and hourly fee 
ranges are:
          Project Manager--$127-357 per hour
          Market Analysis--$45-201 per hour
          Financial Analysis--$103-201 per hour
          Legal Attorney--$150-400 per hour
          Real Estate Specialist--$40-275 per hour
          Engineer/Architect--$75-201 per hour
          Support Staff--$35-110 per hour
    The Air Force strives to limit the hours required and negotiates 
each task order with the consultant. Additionally, when the Air Force 
has the capability to perform the service such as legal services, then 
the work is performed with Air Force resources.
    Question. Why are consultants managing the housing portfolio rather 
than Air Force personnel? Who's monitoring the consultants?
    Answer. Consultants are not managing the housing portfolio 
function. The Air Force Center for Environmental Excellence (AFCEE) has 
been assigned the Air Force mission of Portfolio Manager. AFCEE has a 
limited in-house staff of civilian employees with expertise in 
financial, real estate, legal and engineering to execute the Air Force 
portfolio management function. Therefore, consultants have been 
retained to assist AFCEE. AFCEE functions as the agent for contracting 
and oversight of the portfolio management consultant contract.
    Question. What are the performance measures the consultants must 
achieve for each service provided?
    Answer. Air Force Center for Environmental Excellence (AFCEE) 
contracts are executed through a firm-fixed priced task order with a 
defined scope of work, definitive deliverables, and performance 
periods. Standards for quality and professional products are specified 
in the contract. The consultants are tasked to use industry standard 
methods and tools, such as computer software, to ensure uniformity in 
data presentation and ease of review, as well as Government tools such 
as proforma and economic analysis methodology. Standards are also 
established in use of generic legal, financial, and solicitation 
documents to ensure a consistently high quality of finished products.
    Question. What are the consequences to the consultant if the 
portfolio isn't adequately monitored or serviced?
    Answer. If a consultant fails to provide anything less than 
acceptable performance, they will not get repeat work and could be 
terminated from on-going task orders.
    All of the Air Force consultant's performance are reviewed and 
assessed periodically, depending upon the type of contract vehicle 
used. For the Portfolio Management consultant, quarterly assessment of 
the firm's technical performance, schedules, timeliness of reports, and 
management are made. These assessments are formally presented and 
reviewed with the consultant, to include problems encountered and other 
comments/issues, as appropriate. The decision to award follow-on task 
orders to a consultant is based upon several assessment factors. Among 
them are past performance and customer input.
    Oversight of the privatization portfolio is critical to assure the 
health and well being of the Air Force's investments. Failure to 
provide effective oversight of the construction and housing management 
activities or inadequate trends analysis could result in housing 
communities that do not meet current Air Force standards failing to 
attract and retain service tenants.
    Question. Of the $20.5 million request for consultants, $7.5 
million is for 32 individual contract employees located at each base, 
meaning each of these employees is being paid about $180,000/year. What 
are the duties of these project managers? How long are their contracts? 
Do you have performance indicators for the managers? What type of 
oversight do you employ over them?
    Answer. The main purpose of the personnel being hired at each base 
is to supplement the installation staff during the period from 
privatization concept development through construction completion and 
initial member referrals or lease initiations. Privatization 
initiatives are manpower intensive at the base level. Base-level 
organizations are neither normally manned nor have personnel with 
dedicated expertise to provide project information and continuity. The 
person may be contractor or a term overhire, whichever can be obtained, 
who has the required qualifications.
    The $180,000 listed typically includes more than just one person's 
salary. It also includes direct and general/administrative overhead if 
the person is a contractor. In addition, these contracts typically 
include costs for travel and associated per diem to support off-site 
conferences and meetings; producing and hosting conference events; 
developing briefings, reproducing graphics, hand-out materials, etc; 
and other specified studies that may be performed by other consultant 
personnel or sub-consultants. Further, the $180,000 amount is a budget 
estimate and could be less or more depending upon the actual services 
obtained.
    Typical duties of the contract support staff include providing a 
full range of project management services in support of the base's 
assigned programs; participate, host or accompany Government personnel 
at various formal/informal meetings, conferences, briefings; provide 
expert advice, assist and provide guidance to the Major Command 
(MAJCOM)/installation on the privatization program; review, evaluate 
and recommend actions on various privatization supporting documents, 
including environmental, engineering, and financial studies and 
reports; serve as the base point-of-contract for informal and general 
information/consultation by MAJCOM and base members; participate in 
conferences, workshops, forums and meetings in support of the program 
including providing briefings, reports, handout materials and minutes 
of the meetings, as necessary; monitor and report on project status; 
provide other support such as website development, newsletter, hosting 
meetings and general support.
    Contract durations are specified within the contract and 
typically do not exceed one year but can be extended.
    Performance standards are established for the work being 
conducted. However, the contract establishes initial standards 
in the qualification requirement for the contract manager, 
ensuring a minimum level of expertise and experience of the 
assigned personnel. Further, the contract requires the 
consultant to maintain five contract deliverables and reporting 
ledgers. These include monthly project status reports, 
performance and cost reporting, data repository file, 
Government oversight capability and conflict of interest 
provisions. The information in these deliverables is 
incorporated into quarterly and annual reports to the Office of 
the Secretary of Defense and Congress.
    A Contracting Officer's Representative is assigned to each 
task order to provide oversight and management of each task 
order. As indicated above, quarterly assessments of 
contractor's performance are made on the consultant's technical 
performance, schedules, timeliness of reports and management. 
In addition, where contract personnel are assigned to base 
locations, an on-site Government representative is assigned to 
provide the oversight function of the consultant's performance.
    Question. in addition to the $5.7 million for program 
managers, $1.7 million is for the development and solicitation 
of 10 projects. Explain the differences between what this 
amount is for and what the project management amount is for?
    Answer. The $5.7 million is for contracted support 
personnel at the major command, installation, or Air Force 
Center for Environmental Excellence (AFCEE), to perform in-
house program management and technical support functions where 
existing government in-house expertise is either not available 
or insufficient. The $1.7 million amount is for consultant 
support to assist in developing the technical, financial, and 
legal documents to support the project solicitation. It also 
provides the expertise in real estate, legal and financial/
business arrangements to assist the Government in evaluating 
developer's proposals, and assisting in negotiating and closing 
the transaction. While these services could be performed 
together, the program management is more general in nature, 
while the project development requires more specialized 
expertise, especially for limited duration tasks like proposal 
evaluation and transaction negotiation/closure.
    Question. Finally, of the $20.5 million request, $3.6 million is 
for project management by Air Force staff. Please explain the 
responsibilities of this group. Is there duplication between what the 
Air Force staff and the contractors are doing?
    Answer. The $3.6 million is for Air Force Center for Environmental 
Excellence (AFCEE) support functions. This includes in-house cost for 
civilian personnel, travel, training, equipment, and miscellaneous 
support items. It also includes some contracted management personnel to 
assist with non-inherently governmental work where the in-house 
Government expertise is insufficient. They have assisted in conducting 
Air Force wide training conferences, developed marketing tools to 
attract private sector developers, established generic documents, 
reports and studies to help streamline the privatization process. 
AFCEE's consultants also provide a manpower pool for the peaks in 
workload, where it would be impractical or impossible to acquire 
adequate experienced Government personnel, especially in view of 
current manpower ceiling restrictions.
    These contracted services do not duplicate the effort of the major 
command/base contracted program managers.
    Question. In the testimony, it is asserted that the privatization 
initiative has ensured returns averaging 5 to 1 for the taxpayer. 
Please explain the basis of this return.
    Answer. The five to one refers to what is called the leveraging 
effect of using private sector funds to leverage our limited 
appropriated funds. The leveraging of a project is determined by 
dividing the projected military construction development costs for a 
project by the Office of Management and Budget scored amount. So, for a 
project to have a five to one leveraging ratio would mean that for 
every dollar of taxpayers money spent on the project in scored cost, 
the Air Force will receive five dollars in private sector development 
cost. Overall, the Air Force expects the leverage ratio for some 
projects to be much higher and some projects to be slightly lower than 
the average.

    [Clerk's note.--End of questions for the record submitted 
by Chairman Hobson.]
                                         Wednesday, March 20, 2002.

                   TESTIMONY OF A MEMBER OF CONGRESS

                                WITNESS

HON. EARL BLUMENAUER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    OREGON

                       Statement of the Chairman

    Mr. Hobson [presiding]. Our hearing this morning focuses on 
unexploded ordnance (UXO). This is the Subcommittee's first 
hearing on unexploded ordnance, and we look forward to learning 
more about this important issue. Before we introduce our 
witnesses for today, I would like to thank Mr. Farr for raising 
the importance of this issue to the subcommittee.
    Today, we are going to hear from several witnesses. Our 
first witness will be the Honorable Earl Blumenauer from 
Oregon's 3rd District. Congressman Blumenauer, as many of you 
are aware, is a strong advocate for UXO cleanup and awareness 
in the Congress.
    The subcommittee thanks you, Congressman, for your 
leadership on this issue, and looks forward to your comments.
    A second witness today will be Mr. Michael Houlemard, 
executive officer of the Fort Ord Reuse Authority.
    Where is that? I have met you before. Thank you for 
appearing before the subcommittee to speak about specific UXO 
cleanup and challenge and the lessons learned at the former 
Fort Ord.
    Our final panel will include witnesses from the Defense 
Department who have oversight responsibility for UXO cleanup. 
The panel includes Mr. Ray DuBois, Deputy Undersecretary of 
Defense for Installations and Environment; Mr. Ray Fatz, Deputy 
Assistant Secretary of the Army for Environment Safety and 
Occupational Health; Mr. H.T. Johnson, Assistant Secretary of 
the Navy for Installations and Environment; and Ms. Maureen 
Koetz, Deputy Assistant Secretary of the Air Force for 
Environment Safety and Occupational Health.
    The subcommittee would like to welcome all of our witnesses 
here today and thank you for taking time out of your busy 
schedules to appear before the subcommittee.
    Unexploded ordnance is an environmental concern that until 
recently received very little recognition. With over 25 million 
acres of potentially contaminated land on former military 
sites, and a growing number of these properties transferring to 
private and commercial use, UXOs present a very real threat to 
the welfare of our citizens and communities. In fact, over the 
past several years, UXOs have caused an increasing number of 
injuries and fatalities to our military members and civilian 
population.
    Additionally, an increasing number of sites are being found 
where water supplies are contaminated with explosive wastes.
    We have an Ohioan here today, he used to be head of the 
Ohio Environmental Protection Agency, and he knows about water 
and contaminants from his previous job. I see him hiding in the 
second row back there.
    Since this is the subcommittee's first hearing on 
unexploded ordnance, we are looking to receive a broad overview 
of UXO terminology, definitions and issues. Specifically, we 
hope to gain a better understanding of UXO inventory issues, 
estimated cleanup costs, technology development and the plans 
to mitigate UXO problems in the future.
    With that said, I must state that over 85 percent of UXO 
funding provided in the Defense Subcommittee bill, a committee 
I also sit on, the final year 2003 request for UXO cleanup in 
this bill was only $32 million. While this subcommittee needs 
to understand overall issues, we must focus on the area for 
which we are directly responsible, the Base Realignment and 
Closure (BRAC) account. I am very interested to hear about UXO 
cost estimates, potential liabilities and any other issues that 
relate to BRAC. Also, I would like to hear any general lessons 
learned which any of you might have concerning future BRAC 
rounds.
    I understand that the Navy has some interesting ideas about 
transferring the cleanup responsibility and liability to the 
gaining entity. I am curious to know how this might apply to 
UXO cleanup efforts and how it is possible to transfer this 
immense liability.
    In summary, we look forward to hearing your testimony on 
UXO cleanup issues and your specific insights into UXOs as they 
relate to base closure sites.
    At this time, I yield to my ranking member, Mr. Olver, for 
any opening statements, and then to Mr. Farr, who may have an 
opening statement also.
    Mr. Olver.

                         Statement of Mr. Olver

    Mr. Olver. Thank you, Mr. Chairman. I want to thank you 
very much for holding this hearing. This is the first time that 
we have focused on the issue of unexploded ordnances. Although 
at several of the sites that we have visited on our various 
trips out of the country in particular, we have had anecdotal 
evidence of what are really quite startling volumes of 
unexploded ordnance in places that had not been dealt with.
    I think that it is entirely appropriate that we are having 
this hearing, in particular in relation to our BRAC closure 
responsibilities, though those are basically all State-side, 
rather than out of the country. Some of our very worst problems 
with unexploded ordnance are outside the confines of the 
nation.
    I am very interested in how people from the various 
services view this, and how we are going to go about it. I want 
to thank all of the witnesses here, particularly for the 
leadership of my colleague from California, Mr. Farr, in 
requesting us to deal with this problem, and for the leadership 
of my colleague from Oregon, Mr. Blumenauer. Thanks for being 
here.
    Mr. Hobson. Sam?
    Mr. Farr. Mr. Chairman, I really appreciate your having 
this hearing.
    Thank you, Mr. Olver, for your interest in having the 
hearing as well.
    I want to thank our witnesses. Earl Blumenauer has been the 
champion of livable communities and I think he will be very 
pleased to see what the RCI is doing for building really modern 
military bases. But you cannot build new ones on old land until 
you clean it up. So this hearing is really important.
    I especially want to thank probably someone who knows more 
about all of these issues than anybody in the United States, as 
the person on the ground at the largest base ever closed by the 
military, which was Fort Ord, which was a training base from 
about 1915 until 1991. Thirty-three thousand people got up and 
left. About 4,000 military remain in an enclave, but the 
property is experiencing problems with transfer issues, of 
which UXO is a big one.
    I think the purpose of the hearing is to explore whether 
the money we appropriated is being spent right and whether for 
size of the problem that we have we appropriate enough.
    I can tell you that I have some personal experience with 
this issue, some of which involves a beautiful family story for 
me. My father passed away a few years ago, but when he was a 
young lawyer in a small town, the first case he ever had of 
prominence involved two kids on Easter Sunday, back in 1949. 
These two children came from a family of 17 kids, five of which 
were older brothers in the military. One of the older brothers 
had brought home or built a lamp out of a bazooka shell.
    The younger kids, who were around 7 years old, ventured out 
with their dog on that Easter Sunday to pick some wildflowers 
for their mother. They saw just on the other side of a barbed-
wire fence, no signs or anything, a shell sticking out of the 
sand, picked it up, thought this would make another great lamp, 
and on the way home dropped it. It killed their dog instantly, 
blew off the legs of one child and blew off the hands and toes 
of the other.
    Their lawyer, my father, took the case. At that time, a 
historical note, the limit you could sue the federal government 
for was $10,000. So my father had to come back here, his first 
political move, and lobby to raise the tort liability limit for 
the federal government. The newspaper article that the Army has 
on this incident shows that he won that case, settling it for 
the largest award in the history of the United States at that 
time, for $158,000 for these two children.
    Well, I was 8 years old at the time, and I grew up with 
that story and these kids came to our house a lot. The family 
was poor and needed a lot of help and we helped them.
    But, you know, 60 years later, and 11 years after Fort Ord 
closed, we are still faced with this problem, we are still 
having kids climbing over fences and going in and picking up 
ordnances. And that is going to be the way kids are all over 
the world. You know the old story, we were all young, fences 
are to climb over. Now, fortunately, the Army has been able to 
find some fences that make it less attractive and very 
difficult to scale.
    But the fact of the matter is that this is an issue of 
quality of life. History shows on Fort Ord that most of the 
people who have been injured over all those years were 
dependents of military; they are closest to the UXO fields. 
This becomes a quality of life issue for active duty military. 
It is a public safety issue if it is not cleaned up. This also 
creates an incredible liability for the military.
    This is an incredible environmental issue because these 
items are old, they are rusted, they leach out metals in the 
ground, and can contaminate ground waters, and that can make 
reuse of an aquifer impossible.
    I think that you will find that there is an old story here: 
that we have been penny wise and pound foolish. If we are 
really going to get credibility for BRAC, the next BRAC round, 
the cities that are going to be affected are going to be 
immediately calling cities that have had been BRACed and ask 
them what their experience has been. I think that of closed 
bases that have had cleanup issues, they will tell the next 
BRAC wave that cleanup is going to be the major barrier. I 
think it can be done a lot better and a lot faster and a lot 
smarter, and I think the witnesses will show that.
    And I do think that the military has come around. It has, 
kind of, been learning as we go with the Fort Ord experience. 
Remember, what we do have in place now that we did not have in 
the past is that states have adopted a lot of environmental 
laws, and therefore you can go into state court and sue, as 
they have done at Fort Ord. They can go into federal court and 
sue under the laws that were developed for Superfund cleanup.
    We have two different cleanup procedures in play here. One 
is the federal procedure for Superfund--Fort Ord is a Superfund 
site--and the other is a separate procedure for UXO cleanup. 
The two get to the same bottom line of responsibility for 
cleanup, but the process of getting there is much more arduous 
under the Superfund rules. UXO cleanup ought to be able to move 
faster than Superfund cleanup.
    So I look forward to this hearing and I want to thank you 
all for attending.
    Mr. Hobson. I was just sitting here, thinking about this 
problem we have here in this country, and I was just thinking 
when we were in Afghanistan, what a problem the mines and all 
the unexploded ordnance are. There are more mines, apparently, 
than people and we do not even know where they all are. And it 
is scary, because people will get blown up for, I do not know, 
the next 50 years or more.
    Congressman, the floor is yours.

                   Statement of Hon. Earl Blumenauer

    Mr. Blumenauer. Thank you, Mr. Chairman and Ranking Member 
Olver and members of the committee. I deeply appreciate the 
work that this committee does. You have referenced my interest 
in livable communities. And what you have been doing is 
pioneering work to make sure that this subcommittee is 
providing livable communities for the professional men and 
women and their families who work in the armed services.
    And Mr. Chairman, you are right, the issue of unexploded 
ordnance has global implications. Every day, probably every 
hour, there are many people who are killed and injured around 
the world, from the Balkans, Middle East, Southeast Asia. 
Tragically, some of that occurs in our country. You have the 
opportunity, with this committee--and I appreciate that you are 
looking at only a small portion, but I am convinced that the 
leadership that you have demonstrated in the past can help 
break through some barriers, and I think can have dramatic 
effects in terms of our addressing this issue.
    I have referenced in my testimony--and I will not go over 
it, because you are well aware of these statistics, the facts, 
the examples and you will have more, in terms of what is 
happening in the hundreds of sites across the country dealing 
with BRAC. There are more in terms of formerly used defense 
facilities. I think at times we get numbed by just having the 
repetition, but I have yet to find any state where there is not 
a problem. In virtually every congressional district, this 
touches people around the country.
    Last spring, with Eleanor Holmes Norton, we went up to the 
campus of American University in Spring Valley, where we are 
still cleaning up. Eighty-four years after World War I, we are 
still cleaning up the residue of chemical weapons testing in 
the boundaries of the District of Columbia.
    And we need your help, not just dealing with the BRAC, but 
putting the attention that this deserves. We need to light a 
fire under people to give it the attention and the priority 
that it deserves and that is in the Department of Defense, but 
it is also Congress.
    I fear that, we in Congress, are the missing in action, in 
terms of the range that this problem faces. First and foremost, 
you can document that this issue is dramatically understated, 
just in terms of the costs that are involved. There is a GAO 
report that talks about the understated costs from April of 
last year, that indicated the Department of Defense reported 
its liability of cleanup of training ranges at $14 billion. The 
GAO report goes on to say that there are Department of Defense 
estimates that indicate that range cleanup could be over $100 
billion.
    I met with private contractors last week who have 
projections that go far beyond that, far beyond that----
    Mr. Hobson. I will bet they do.
    Mr. Blumenauer [continuing]. In terms of the magnitude of 
the problem.
    And I think Mr. Chairman, I appreciate there may be a 
modest amount of self-serving interest, but I do think that, as 
we look with people in the NGO community and other 
dispassionate observers, we are looking at potentially hundreds 
of billions of dollars. And it is a responsibility that is not 
going away. This attaches to the federal government.
    Delay costs us money. Even if we are going to have 
ineffective fencing and education, there is staff time that is 
involved in trying to segregate the problem. And you know from 
your own experience that there is a huge amount of shuffling of 
this problem, as we, sort of, move resources here and there, 
and we react when there is a tragic incident, where children in 
San Diego are killed as they were in a subdivision.
    I am told just a couple of weeks ago there was a new 
subdivision in Arlington, Texas, where someone is roto-tilling 
in the backyard and finds unexploded ordnance. We move here and 
we move there, and there is a lot of time and energy that is 
spent, kind of, moving around the deck chairs.
    There is an opportunity--you have mentioned this is a 
global problem--the extent to which we are able to focus our 
time and our attention in a more systematic fashion, there is 
an opportunity to reduce the costs of this. There is an 
opportunity to bring the unit costs down dramatically through 
technology, through competition and greater volume.
    It is no secret that if we had a steady predictable program 
that is going to be doing more, people could afford to invest 
more resources. It would attract more people to the business. 
It would drive the unit costs down. And I feel very strongly 
that we have not touched the tip of the iceberg in terms of the 
value of the property that could be returned to productive use.
    I do think it is important to focus not just on the 
Department of Defense but on the communities that we have from 
coast to coast that have to face these challenges.
    You referenced, Mr. Chairman, the notion of what would 
happen in terms of further BRAC closing. I am told that we have 
10, 20 percent or more inventory in terms of bases that we do 
not need. But if--and you are going to hear about the situation 
in Ford Ord, one of the celebrated cases--and there is nobody 
who has been a more tireless champion than Mr. Farr in that; 
the leadership that you and the committee have exhibited. But 
11 years later it is still not done. And it is not something 
that inspires a lot of confidence on the part of people around 
the country who are going to be facing this situation.
    We do not want to saddle communities with, sort of, 
sacrifice zones where we are just going to have buffers, we are 
going to try and ignore it with barbed wire or trying to just 
cut people slack.
    We have a situation here. We are attempting to have 
legislation to help categorize the situation. We are trying to 
seek additional money on the big picture. But we think you can 
help us focus on the policy questions in a unique fashion. Is 
the UXO cleanup factor delaying property transfer where 
transfers are pending? How prevalent are these delays? Coaxing 
out some statistics about the impact of UXO hazards that affect 
base closure decision-making process that we are going to be 
seeing in 2005.
    Are there concerns that UXO that will somehow avoid people 
moving forward with BRACing a facility because of their concern 
that they are going to be opening up a can of worms, and so 
they are going to keep an inefficient facility, because it is, 
in fact, too dangerous to close?
    I think these are appropriate questions for you to help us 
focus in on.
    I believe that we have some of the finest men and women in 
the world who are working for us in the Department of Defense. 
And if we give them an assignment like dealing with terrorists 
in Afghanistan, they train with time, energy and resources and 
they do the job. I think we need to give the same grant of 
authority and resources to the Department of Defense to get at 
this problem. And you can start with the problems, the slice 
that you have with BRAC. If, at a time when we are spending 
over a billion dollars a day for the Department of Defense, 
unparalleled costs that are being assigned to the military, if 
in this climate we cannot allocate enough money to clean up 
after ourselves, whenever will we do the job?
    You have the leadership and resources here to help us 
focus. I appreciate your willingness to have this hearing 
today. I look forward to maybe sitting in a corner and----
    [The prepared testimony of the Honorable Earl Blumenauer 
follows:]



    Mr. Hobson. Are you going to be able to stay?
    Mr. Blumenauer. Would you mind if I monitored?
    Mr. Hobson. No, I would like you to stay and we could 
probably interact when we hear the other panels.
    The one thing I would like to suggest for thought in this, 
as we go through this, I am wondering if somehow--and I just 
want everybody to think about this as we go through it--but 
when we have been able to get these facilities over into the 
private sector, we have been able to get--it takes so long--
what I hear from people, it takes so long to get stuff out into 
the real world. If one of the things we could not do better, 
rather than trying to make this a military campaign, which in 
some cases gets bogged down and cumbersome, if there is not 
some way we might figure out, if the money is provided, that we 
get it out of the military situation, which is not really their 
bailiwick; they seem to put the stuff down. I guess they should 
have the responsibility for getting it back. But if we would 
not be able to get it out faster and get the properties sooner 
into the public domain to create jobs in the future if we had a 
better plan that maybe the private sector working with the 
military could get it out of there.
    One of the things I look at is Brooks, as to how we were 
able to get Brooks out. Now, I do not know what the range--if 
they had ranges or stuff and they did not have this problem, or 
DESC in Dayton, I went in to DESC this week, and I have more 
private sector--now, it is not a huge facility, but it was very 
controversial when it was BRACed in Tony Hall's district. We 
have more private jobs in there today--what I call ``real 
jobs''--than we did government jobs. And so the whole society 
has changed on that. These jobs are not dependent now upon the 
federal government whims of programs in and out.
    But the mayor kept yelling at me to get him the property. 
Now, that was not even my district, but I helped him do it, 
because Tony and I worked together.
    And I think Brooks is going to be that way. The faster we 
can get it into the private sector hands. So we all might think 
about it as we go on to our people and as we talk about the 
experiences that they have had at Fort Ord or maybe lessons 
learned that we could do better.
    So you are welcome to stay around. I hope you do.
    And now, Mr. Houlemard, your written statement has been 
entered in the record, but please summarize your testimony for 
us.
    And you might remind me how long ago it was we were out 
there, Sam. Was that about four years?
    Mr. Farr. Three years ago.
    Mr. Hobson. Three years ago?

               Statement of Mr. Michael A. Houlemard, Jr.

    Mr. Houlemard. Two and a half years ago, you were there, 
sir, in the fall of 1999 or so, you were there.
    Yes, Mr. Chairman, members of the Committee, I, too, want 
to express my appreciation for your willingness to hold this 
hearing. And on behalf of the mayor of Seaside, Jerry Smith, 
the mayor of Marina, whom you also met, who is the chair of our 
board, Supervisor Edith Johnson and Mayor Jack Barlich of the 
city of Del Rey Oaks, I just would like to extend on their 
behalf their appreciation for the ability for us to comment on 
the very deep concerns we have about ordnance and explosives, 
called UXOs, sometimes called munitions removal, sometimes 
called remnant munitions. In this case, all of those are the 
terms that we concern ourselves with here.
    Our reservation, as Congressman Farr pointed out, was 
closed in 1991, and we still have a considerable amount of 
property to be able to transfer. It was a very large 
installation, it is 45 square miles.
    Mr. Hobson. You do not have a map of that, do you?
    It might be interesting, if somebody could see the map, 
because it is a big installation----
    Mr. Houlemard. You can always count on the Army, sir.
    Mr. Hobson. Well, that is true.
    Mr. Houlemard. As I mentioned, Fort Ord is 45 square miles. 
And when we talk about, you know, the United States Army has 
indicated that there are thousands of acres that still have 
ordnance and explosives, to fence an area like that is at a 
considerable cost. And what we have found is that fences do not 
work. And I will talk about that a little today.
    When our installation was closed, we found that we wound up 
with all kinds of small business closures, vacancies, an array 
of other problems that included unemployment and economic 
distress of varying types. We have designed a plan that is 
quite workable. It is visionary. It includes research and 
development facilities, commercial facilities and housing to 
support it. And those facilities can only be accomplished if 
they can be done in a safe way.
    We are finding that the proximity of ordnance and 
explosives--and Mr. Chairman, you are looking at a map behind 
you which shows in red stripes the major area where we find 
ordnance and explosives. All the area in red on that map are 
also areas designated for future development where ordnance and 
explosives are still present. In fact, the United States Army 
is doing considerable removal actions on surface ordnance and 
explosives in some areas immediately adjacent to the populated 
community.
    Mr. Hobson. Where is the place where all those houses are 
vacant and some people claim there is--although I do not think 
it is true--that there is ordnance underneath? Do you know 
where that is?
    Mr. Houlemard. There is some housing on the map, in the 
yellow, on the northern part of the map. It was where you, sir, 
and Congressman Farr toured the base. That is the Patton and 
Abrams Park housing of the former Fort Ord. There is some 
evidence that there were mortar ranges that were in that area, 
there were practice rounds used in that area. And the United 
States Army has found those and removed them. It looks like 
those areas will be able to be transferred free of problems.
    The principal problems, as I mentioned, are the areas that 
are either in striped red or red on that map above you.
    The civilian reuse of this base is completely and totally 
dependent on the United States Army's ability to remediate 
these ordnance and explosives areas. In our reuse, we have 
faced or overcome a number of major issues, which have included 
the heavy cost of converting these installations to civilian 
use. We have also had to deal with problems arising from legal 
challenges to the cleanup. But most importantly, it is the 
complex, multi-agency oversight that is involved with the 
ordnance and explosives cleanup that causes the greatest 
problem for us.
    As my colleagues in the Army put it, it is the long pole in 
the tent, of being able to do military base transfers on former 
ranges.
    However, our concern is not so much for reuse; it is for 
safety. As Congressman Farr has mentioned, just within a few 
yards of existing populated areas, we have in-land ranges, 
where young children wind up going into the ranges and find 
ordnance and explosives. In fact, as Congressman Farr--some of 
those incidents have resulted in serious injury in our area, 
and just recently some young children from Fitch School in the 
city of Seaside wandered into the in-land range and went under 
the fence. We talk about how high it wants to be, one of the 
Army folks told me that the best fences they have probably are 
only a 75-second deterrent because children have the ability to 
go under fences.
    As a consequence of their going into the range, they picked 
up a number of practice rounds of grenades that they picked up 
from the in-land range just not too far from their school, 
brought them back to the school, took the grenades--practice 
grenades threw them against the wall of the gymnasium because 
they were imitating soldiers. And these 11-year-olds could have 
just as easily picked up grenades lying right next to the 
practice grenades which were high-detonating explosive grenades 
which would have caused a serious event.
    When that happened, the United States Army recognized that 
it had even more of an exposure for liability than it had 
before, and did much more to try to improve fences. And we have 
an active education program to try to solve that.
    But I just want to reiterate the fact that you cannot just 
fence these installations and let them go. The fencing really 
does not work when you are proximate to existing populations.
    To address all of these concerns, Congressman Farr asked 
the United States Army to think about doing these kinds of 
activities of ordnance and explosives, the multi-agency 
sequential processing, to try to do it in a teamwork, kind of, 
fashion. And you will hear more detail about this later, I am 
sure, from the United States Army.
    But the Army put together the strategic management, 
analysis, requirements and technology team, sometimes called 
the SMART team, or smarter-than-the-other-folks team----
    [Laughter.]
    Mr. Hobson. Hopefully.
    Mr. Houlemard. Hopefully. And actually, I think the 
``hopefully'' should be affirmed. That SMART team has done 
extraordinary work with being able to get agencies to look 
together, rather than sequentially, rather than in disparate 
ways, at the same issue and try to find solutions. The problem 
has been the absence of adequate technology and adequate 
resources to address the solutions. That is our view.
    We have often heard the excuse that OE clean-up is subject 
to annual appropriations and competes with many other 
priorities. Three times we have visited upon some of you asking 
for restoration of locally initiated resource requests for 
ordnance and explosives at Fort Ord.
    We do recognize that there is a disconnect between the many 
bureaucracies that have to deal with this, and we have tried to 
work at the local level, and appreciate Congress' efforts to 
get early transfers and to think about how the military can 
work directly with local communities to solve the issues.
    At Fort Ord, the complicated mix of removal technology 
needs, the protection of habitat under the Endangered Species 
Act, and worker safety issues combine to have a very major 
potential cost implication to the process at Fort Ord. I am 
sure we are not distinct in that regard, but we have a unique 
combination of issues that are unlike others.
    We have even heard that what is happening at Fort Ord with 
respect to court challenges and others may have precedent 
impacts elsewhere that affects us.
    We also want to point out, it is not just enough to clean 
the areas that are going to be made available for use, we have, 
beyond that, explosive safety arc issues, where, in some cases, 
some of our explosives on in-land ranges may have an impact 
several hundred feet into adjacent property. So we have 
concerns about that.
    We have a capital, in terms of money, resource concern that 
has to do with the many requirements that are imposed on the 
cleanup process by other federal agencies, absent the resources 
necessary to implement those activities.
    As we understand it, the Army's appropriated resources are 
scarce and dollars spent to accommodate other agencies' 
requirements often do not directly contribute to the 
remediation at Fort Ord. The failure to provide those 
appropriations to other agencies is of great concern to us, and 
we are very concerned that that will be another problem if you 
intend to do closures in the future.
    Under all such circumstances, we believe there are only two 
results that are possible, where the agency that is responsible 
for providing for the soldiers, for munitions and for training 
is also responsible for providing a budget for ordnance and 
explosives. There are only two things that can happen: either 
the Army's scarce resources wind up being drained with 
significant overlap, or the community winds up unfairly 
burdened with extended, long-term cleanup processes. We are 
even hearing that our ordnance and explosives cleanup might 
take till 2012 or longer. That is scary to us, because we have 
kids that are not necessarily safety-minded these days.
    This inherent conflict unfairly pits the folks within the 
United States Army issue against issue. It does the same thing 
with Congress; it is issue against issue. And for us, it seems 
a concern, because if you were an attorney, you could not 
represent both sides of this issue, but yet you are asking the 
military to do exactly that.
    In effect, we are asking three things. One, we believe that 
it is important that Congress provide consistent, reliable and 
dependable appropriations for this kind of UXO remediation 
work.
    We also think there are legislative issues that need to be 
considered, that bring both balance and coordination to the 
disparate laws and processes that exist amongst the various 
agencies tasked with playing some role in a part of this 
process.
    We also believe that there needs to be an increase in 
appropriation levels to allow for the maximum use of the best 
and most current improved technologies with respect to 
detection of ordnance and explosives. In our case, we find at 
Fort Ord that much of the technology that is being used is aged 
and really has not been developed.
    When you are talking about, as Congressman Blumenauer and 
Congressman Farr have said, $100 billion potentially, or even 
$15 billion of potential exposure, it certainly makes sense 
that a portion of that be dedicated toward improving the 
technology of detection because certainly long term it is going 
to affect the liability of the federal government for future 
accidents and future problems.
    In conclusion, I want to note that our particular concern 
is for safety and for current and future users of Fort Ord, as 
well as for habitat and for the folks that are adjacent to Fort 
Ord. We are committed to ensuring that the decisions regarding 
the cleanup of UXO consider all of the issues related to 
compliance with federal and state laws, our community reuse 
plans, the technology strengths, cost and most importantly, as 
we all hear, the protection of human health and the 
environment.
    We think balancing these needs is very tough. When we speak 
of homeland security these days, we locally think that it must 
also be considered that our homeland security must consider 
what the parents in Seaside and Del Rey Oaks are thinking about 
when they think of the terror of having ordnance and explosives 
just a few hundred feet away from their homes.
    [The prepared statement of Michael A. Houlemard, Jr., 
follows:]



    Mr. Hobson. Thank you. We are going to recess now and go 
over and vote, and then we are going to come back. And we will 
have our next panel.
    I would like to say that since you were talking about the 
technology, before we go to vote I want to make this statement, 
when we were going into Bosnia I met with some young people in 
the Army, and I said, ``Why do you have that rope and that 
hook?''
    And he said, ``Well, the rope is a problem, they have 
lengthened the rope and I do not think I can throw it that 
far.''
    And I said, ``What do you do with that?''
    He said, ``Oh, that is how we find land mines, sir. I throw 
that rope out there, I fall on the ground after the hook hits, 
and then I wheel it back in.''
    They probably did that before World War I or back in World 
War I and they are still doing it in the Army. Now, there are 
some other technologies, but that is still a deployed system in 
the Army, if I am not mistaken. And if you have thrown one of 
those hooks, it is a lot of fun.
    We will be back.
    [Recess.]
    Mr. Hobson. The hearing will come to order.
    I think you are not Mr. DuBois but that is all right. We 
will give him a lot more trouble than you are probably going to 
get.
    Sam, do you have a couple of questions you want to ask?
    Mr. Farr. Thank you, Mr. Chairman.
    Mr. Houlemard mentioned that there were a lot of other 
federal agencies and state agencies that weigh in, and I 
thought that maybe he could give some examples.
    Also, it is not just an issue of cleaning up or raking up 
the land. It is also a big debate as to how deep do you have to 
clean? How clean is clean? It has incredible ramifications. I 
would ask him to point out two of those examples.
    Mr. Houlemard. I do not have all the numbers with me, 
Congressman, but the agencies I was talking about that we work 
with almost on a daily basis include U.S. EPA, California state 
EPA which includes the Department of Toxic Substances Control. 
We do work for the Agency for Toxic and Disease Registry as 
well. And the U.S. Fish and Wildlife Service.
    Mr. Hobson. They have to be very helpful.
    Mr. Houlemard. Yes. And the Bureau of Land Management as 
well.
    Many of those agencies, because they are either land 
recipients or they have authority, have asked the Army to 
increase the level of cleanup or increase the depth of cleanup. 
In fact, just last week, in one of our SMART--strategic 
management analysis requirements and technology: SMART--one of 
our SMART team meetings, or ``Sort of Smart Team'' meetings, we 
heard testimony from the Bureau of Land Management.
    They have great concern about taking property from even 
another federal agency without it being cleaned to a depth that 
they know can be used for passive recreational uses. And so 
that is something I think they are----
    Mr. Hobson. Did they give you any?
    Mr. Houlemard. I think that is between agency to agency.
    Mr. Hobson. That has to be----
    Mr. Houlemard. And that is one that we do not get into as 
much. We are concerned because it is property that is adjacent 
to our community, but that is just one example.
    A real cogent example, I think, of where we have costs at 
Fort Ord that are affected by agencies is, in California our 
EPA and the Department of Toxic Substances Control gets 
involved whenever we ask for an early transfer that you were 
talking about early to try to get property early. That requires 
the governor to sign, and it requires advice from our agencies.
    In our case, we have a burn requirement in order to clear 
party. You cannot get to the ordnance and explosives safely 
without burning the vegetation. If you use mechanical means, 
there is a potential for explosion. If you use robotic means, 
you can blow up the robot. And it is literally impossible for 
worker safety to get in to remove ordnance and explosives 
without burning this vegetation.
    That burning creates smoke which we all know is unhealthy, 
and some folks have concern that that smoke is unhealthy and 
there may be things in it. We have no evidence that that is the 
case, but because of those kinds of concerns, and the lawsuits 
that come from the burning process and the local community 
concerns, to remove vegetation at Ford Ord costs something like 
$4,000 an acre, where elsewhere in the state the California 
Department of Forestry can remove vegetation and burn for $12 
an acre.
    That is nearly $4,000 that could be used for ordnance and 
explosives removal that winds up going into this detailed burn 
program. And, Congressman, I know you have great concern about 
that.
    Mr. Hobson. He was a former legislator in California. He 
could probably handle some of that.
    Mr. Houlemard. I would also like to point out another 
example of where it might be best if we consider how not just 
the regulatory agencies affect cost, but how our partners in 
the private sector will also affect cost.
    And one of our projects in the city of Del Rey Oaks, where 
there is a commercial project that is proposed, the United 
States Army has gone in and cleaned the property. And after 
cleaning that property, they wound up going back in to clean it 
again, because they found several samples, discovered more 
ordnance and explosives than they anticipated in the future. 
And as yet the developer on the property and the financial 
entities that support that developer had not had a chance to 
review that process.
    And now that the financial community is involved, they are 
indicating great concern not just for the immediate property, 
but the explosive safety arc of what happens adjacent to that 
property. Which now means, before we can get property into 
effective reuse to create jobs, to build the recovery, to 
create new housing, we still have to go back and do more work. 
And so the cost to do this several times over multiplies 
geometrically rather than arithmetically.
    I think if we think about this on the base cleanup teams, 
thinking about having local reuse authorities, developers and 
financial community involved so that you do the cleanup one 
time, that efficiency will help us all. It means that you know 
you are cleaning it up for its intended use, you know that you 
have the liability issues addressed and that you have somebody 
on the other end that can use it.
    What we often do in the cleanup process now is we point to 
an area that we know is concerned. We burn it and we clean it 
to a depth of 12 inches, and we find out later that that does 
not work because all of the foundations are going to be three, 
four and five feet. And as a consequence, we go back and have 
to clean that property to depth. And so it is important that 
there be coordinated efforts between the private sector, the 
local reuse authority and the military branch that is involved 
in the cleanup process.
    Mr. Farr. Mr. Chairman?
    You are suggesting that for cleanup purposes, perhaps we 
should create at each base a team of end-users, of at least 
local folks who are going to be end-users. I mean, I had not 
thought about that, but that is a really interesting idea, and 
you are absolutely right; if you end up with lenders saying, 
``We cannot lend in this project because of liability.'' The 
Army has one standard, local building ordinances on how deep 
you have to clean is another standard, and earthquake safety in 
California is yet another standard. So I agree, there is a 
problem.
    Mr. Hobson. We probably ought to do this in the BRAC thing. 
But also I think what we ought to do is look at where we are 
doing ordnance now and instead of just continuing to fire, we 
ought to have plans as we are firing as to how we are going to 
clean that up when we clean it up, which we probably have not 
done, and I do not know whether we do that or not. I know the 
Air Force does when they bomb. I am not sure the Navy does when 
they bomb. But the same problems the Air Force had when they 
occurred could happen to the Navy, but I do not think they have 
taken note of that.
    But the same way on ranges, where we are doing outdoor 
ranges. We may want to think about in the future, do we do 
outdoor ranges? Now, some people are keeping them because they 
do not want to clean them up, but maybe we ought to start 
thinking about how we begin to clean ranges and how we go away 
from maybe outdoor ranges, which I am considering at a base I 
have. But there is a cost associated with that, but the overall 
cost--and this is where you get in trouble.
    I am looking at this right now in a situation where I have 
a range, it is an outdoor range, probably should not be there 
anymore, it has a lot of cleanup in it, versus an indoor range 
which costs a lot of money to build, but in the long run, if 
you do not have to do a lot of cleanup after it, it is probably 
cheaper. But we do not like to spend the dollars because the 
dollars up front are more precious right now and somebody else 
will follow about the problem down the road.
    And so it is something somebody ought to be looking at. I 
guess I am just sending messages.
    Mr. Houlemard. It is consistent with how the military is 
looking at the Residential Communities Initiative Program, in 
terms of trying to build housing that is to municipal 
standards, that is a community that looks like, acts like and 
feels like a municipal community. If all of the activities 
consider that in mind with what is going to happen later on or 
what happens with the adjacent community, we would not wind up 
spending $4.5 million for the Del Rey Oaks parcel and still not 
be sure that we have it available for its end use.
    Mr. Hobson. How big is that parcel?
    Mr. Houlemard. It is 360 acres.
    Mr. Hobson. Okay, are we all right?
    Thank you.
    We will go with our next panel.
    Okay. We are going to start with Mr. DuBois' statement. I 
guess everybody's statement is entered in the record, and if 
you will just, kind of, summarize.
                                         Wednesday, March 20, 2002.

                           DEFENSE DEPARTMENT

                               WITNESSES

RAYMOND DuBOIS, DEPUTY UNDER SECRETARY OF DEFENSE, INSTALLATIONS AND 
    ENVIRONMENT
RAYMOND FATZ, DEPUTY ASSISTANT SECRETARY OF THE ARMY FOR ENVIRONMENT, 
    SAFETY AND OCCUPATIONAL HEALTH
H.T. JOHNSON, ASSISTANT SECRETARY OF THE NAVY FOR INSTALLATIONS AND 
    ENVIRONMENT
MAUREEN KOETZ, DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE FOR 
    ENVIRONMENT, SAFETY AND OCCUPATIONAL HEALTH

                Statement of Mr. Raymond F. DuBois, Jr.

    Mr. DuBois. I will try to be brief.
    Mr. Chairman, Mr. Olver, Mr. Farr, thank you very much for 
asking us to testify on this very important issue. I have with 
me the Assistant Secretary of the Navy, H.T. Johnson; the 
Deputy Assistant Secretary of the Army, Ray Fatz; and Ms. 
Koetz, the Deputy Secretary of the Air Force for Environment, 
Safety, and Occupational Health. This is her first opportunity 
to testify with the team.
    Mr. Hobson. I bet she is excited about that.
    Mr. DuBois. She is excited. The Secretary of the Air Force 
was very excited that she accepted his offer of the position. 
[Laughter.]
    I also want to identify Mr. John Paul Woodley, who is the 
Assistant Deputy Under Secretary for Environment, former 
secretary of natural resources for the state of Virginia on 
Governor Gilmore's cabinet. We are very pleased that he has 
joined our staff at the Defense Department.
    Congressman Blumenauer, thank you for your remarks, 
bringing focus to this important issue.
    Mr. Houlemard identified some key aspects: competing 
priorities always a problem whether it is MILCON budgets and 
R&D budgets and procurement budgets or budgets pertaining to 
how environmental cleanup is executed.
    Fort Ord is a situation that might as well be a poster 
child for many similar situations across the country in terms 
of BRAC properties. It is a nexus of so many different, yes, 
competing issues, conflicting local economic issues, 
conflicting local environmental issues. It is not something 
that we would have wished upon ourselves, but it is something 
that we are trying to deal with in terms of our 
responsibilities in the local community.
    Mr. Hobson. Have you been out there?
    Mr. DuBois. To Ord? No, sir. Not yet.
    Mr. Hobson. Anybody here been to Ord?
    Mr. DuBois. Ray has, yes.
    I want to allow the military departments to have the most 
opportunity to explain their initiatives and from their 
perspective how they are responding to the UXO challenge. As I 
indicated, the hearing today is extremely timely. The suspected 
or known presence of UXO represents a significant challenge for 
successful redevelopment of BRAC properties. More importantly, 
UXO, or unexploded ordnance, can represent an immediate 
explosive hazard, as has been articulated on some tragic 
occasions, both to our military personnel and their families as 
well as to surrounding communities.
    Now we have learned much through our current UXO response 
actions and are using those experiences to help build a 
comprehensive military munitions response program. Now as this 
hearing is to focus specifically on UXO and BRAC, it is 
important to recognize that the BRAC program is in existence to 
transfer property from our custody to the local community to 
create economic growth.
    As you pointed out, Mr. Chairman, there might be, as we 
approach a BRAC 2005, around ways to dispose and convey 
property differently than what we are doing now and we are 
looking at that.
    As a practical matter, the 500,000-plus acres that have 
been BRACed or closed over the past four BRAC rounds, only half 
of those acres have actually been put into viable reuse. And in 
many cases, it is because of competing environmental issues, 
competing local economic issues. But we do have 28 
installations with areas that may contain unexploded ordnance 
munitions and munitions constituents, and therefore need to be 
addressed in this regard.
    Now, 96 percent of the total acres potentially with UXO are 
on only nine installations. And most of them are Army, and the 
Army will address them. But we need to focus, obviously, where 
our biggest problem is, and that is what we are going to do.
    Now in fiscal year 2003, the president has requested an 
investment in unexploded ordnance of approximately $252 
million. And of that $252 million, $32 million is specifically 
set aside for UXO issues pertaining to BRACed properties. Now 
this total amount is also an increase over last year. This 
represents the cost to remove actual unexploded ordnance and 
the disposal of scrap metal. It in some cases includes the 
cleanup of munitions constituents.
    The Department of Defense is committed to fund these 
response actions required to mitigate immediate threats to 
safety, human health and environment. However, because the UXO 
challenges are so great at our BRAC installations, that with 
current funding levels, longer-term actions may--in point of 
fact this has been referred to today by two of the witnesses--
they will probably extend until 2015 or beyond.
    Now one of our major objectives is to find a way to 
accelerate that schedule by addressing the safety issues, by 
addressing technological capabilities and technological 
advancement, as well as land-use objectives.
    Now, I know it is no surprise to any of you here and, to be 
sure, the people who are sitting behind me when I tell you that 
the unexploded ordnance challenge is perhaps one of the most 
difficult ones that I and my staff has to deal with.
    As you know, in my portfolio of BRAC, historic properties, 
A-76, environmental compliance and cleanup, someone said I have 
all the third rails of defense politics. [Laughter.]
    But I will tell you in no uncertain terms that UXO, for me 
at least, while it has connections and is tangential to many of 
these other difficult areas, is one that I have found to be 
perhaps the most complex. It is also time-consuming. And it 
will be in large measure solved, again, over time, by a 
combination of technology, reasonableness, persistence, 
patience and appropriate funding; never forgetting the last 
item.
    Now, the potential presence of UXO obviously increases our 
traditional environmental cleanup program, and it represents a 
significant challenge for the military departments, for the 
communities involved, for the regulators, and for the 
developers, who are ultimately asked to come up with a reuse 
plan and execute.
    Now, the GAO recommended last April that the Department of 
Defense establish leadership accountability in our program. 
Last fall, shortly after I took on these responsibilities, I 
acted on those recommendations and designated a focal point for 
all UXO issues. As I said, it is Mr. John Paul Woodley, who I 
have introduced. I also have a special assistant, Colonel John 
Selstrom, also behind me, of the Air Force, specifically 
focusing on UXO issues.
    Now, in addition, I enhanced our defense environmental 
restoration management guidance last fall to detail the 
requirements for UXO and munitions constituents response 
actions at locations such as the BRAC bases, locations other 
than our operational ranges.
    I have also directed the department, with the Environmental 
Council of the States, ECOS, the National Association of 
Attorneys General, the Environmental Protection Agency, to get 
together and establish a munitions response committee. We are 
also, in that regard, extending invitations to Native American 
and Alaskan native tribes and the federal land managers to join 
this committee.
    While it is true that all politics is local, all cleanup is 
probably driven locally. But there must be at the national 
level--as I think has been implied by some of your comments 
today, that the national organizations which have equities here 
have to also have communication and agreement. That committee's 
goal is going to be to develop that consensus approach that 
will coordinate and synchronize complementary efforts by the 
Defense Department and the military departments, EPA, the 
tribes, the states, the federal land managers.
    An issue that was addressed in the last exchange between 
Mr. Farr and, I think, Mr. Houlemard, is technology. Technology 
is both an existing constraint as well as a tremendous 
opportunity. It is the future potential that we have to 
accelerate cleanup.
    As an example--and I gave an address recently to a group of 
technologists and scientists asking them to begin to focus on--
and, yes, with investments from the Department of Defense--on 
needed hardware and software improvements that will save time 
and also increase reliability. We need airborne sensor 
platforms to improve efficiency and identification and 
detection of UXO. And we need further software development to 
detect and identify sub-surface UXO, which will also improve 
the effectiveness of our programs.
    I think, as I conclude, I want to review the requirements 
of the fiscal year 2002 Defense Authorization Act. As you know, 
that act required the Department of Defense to develop an 
inventory and report by May of 2003. And this year's Defense 
Environmental Restoration Program Report to Congress will 
identify and outline our initial steps in that regard.
    I think that it is now probably best to give the services 
an opportunity--I want to acknowledge their contributions in 
this regard. But also, I think that each of the military 
departments, and certainly the Department of Defense, fully 
acknowledges its obligation to protect our service members and 
all of our citizens from the potential hazards associated with 
unexploded ordnance.
    It is a challenge, especially in the cases of our BRAC 
properties. And with your support, Mr. Chairman, and the 
support of this committee and the House of Representatives, we 
will succeed, I believe, in managing our UXO challenges.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Raymond F. DuBois, Jr. 
follows:]



                    Statement of Mr. Raymond J. Fatz

    Mr. Hobson. As is the normal protocol, we will start with 
the Army first, since it is the oldest service, apparently, 
then the Navy and then the Air Force.
    Mr. Fatz. Quite an introduction.
    Mr. Chairman and members of the committee, I appreciate 
this opportunity to address the Army's perspective on the 
complex challenges we face in addressing unexploded ordnance, 
or UXO, and the comprehensive approach we are taking in concert 
with the Office of the Secretary of Defense and our sister 
services to meet these challenges.
    The primary mission of the Army is to fight and win our 
nation's wars. Tough, realistic, battle-focused training is 
essential to maintaining a trained and ready force. Training 
with live ammunition is critical to our principle of train as 
we fight and fight as we train. We must provide our soldiers 
with opportunities to practice their skills on the training 
ranges and not on the battlefield.
    Since the Revolutionary War, every soldier at some point in 
his or her career touches a bullet of some kind, whether in 
basic training, peacekeeping operations or combat. Since 
America's Army has been training and preparing our soldiers for 
over 226 years, one can only imagine the magnitude of the UXO 
challenge.
    Our munitions are designed and managed to be safe during 
storage and transport and to withstand a harsh environment 
before they function. However, for a variety of reasons, some 
munitions fail to function as intended. This has resulted in 
known or suspected presence of UXO on areas currently or 
formerly used for live fire training and testing.
    In addition to live fire training and testing activities, 
we have used land for disposing of unserviceable, excess or 
obsolete munitions. These and other munitions-related 
activities complicate our cleanup challenges.
    Mr. Chairman, to give you a feel for the magnitude of the 
UXO challenge we face today, the Army has 13 BRAC installations 
that have approximately 100,000 acres with suspected UXO. The 
current estimate for only four of these BRAC sites is 
approximately $400 million for munitions response actions.
    Also, for our formerly used defense sites, we have 763 
known sites, totalling more than 8 million acres that may 
require munitions response, at an estimated cost of over $13 
billion.
    We are in the process of compiling the inventory called for 
in the fiscal year 2002 Defense Authorization Act, which will 
also look at our 16 million acres of Army land to identify 
additional areas with UXO. Response action costs for all sites 
continue to increase.
    It is important to understand the complexity and magnitude 
of munitions response requirements and to be aware of the 
comprehensive approach we are taking to meet these challenges. 
We are working the issues every day with federal, state 
agencies, the tribes and the public.
    One of our greatest challenges with regard to the conduct 
of munitions response is our collective inability to quantify 
risk posed by munitions so as to answer the basic question: How 
clean is clean? This challenge is exacerbated by the lack of 
clarity.
    Mr. Hobson. You mean, what the word ``clean'' means.
    Mr. Fatz. What the word ``clean'' means.
    Mr. Hobson. You just got it.
    Mr. Fatz. The challenge is exacerbated by the lack of 
clarity and consistency of regulations, the site-specific 
nature of munitions responses, the need to overcome 
considerable technology voids, and the overall misunderstanding 
of UXO in general.
    To address the question of how clean is clean, we need a 
consistent national regulatory framework within which to answer 
this question. We need realistic land-use options to be 
considered up front and methods to integrate explosive safety 
and environmental protection into decision-making, 
acknowledging that explosive safety concerns affect every facet 
of a required munitions response action. And we need to ensure 
an appropriate role for all stakeholders in the decision-making 
process.
    To move forward in these areas, we must close the 
technology gaps relative to munitions and reuse. The Army's 
environmental quality technology program is focusing research, 
development, test and evaluation efforts on UXO, its 
constituents and on sustainable range design.
    Since fiscal year 2000, we have increased our technology 
investments by 70 percent, and of that amount, 83 percent was 
focused on UXO and its constituents.
    In our green ammunition program, we are continuing to 
develop environmentally benign munitions and replacements for 
chemical constituents used in their production.
    Also, while detection technologies have improved, they are 
still imperfect. We are working aggressively through our 
technology programs to address these limitations as well as 
approaches that support long-term sustainability of our ranges.
    Again, Mr. Chairman, we must provide our soldiers with 
tough, realistic battle-focused training as a key to their 
success in combat. You can assist us by developing, as you are 
today, a better understanding of the complexities and issues 
surrounding UXO. The Army appreciates your support in meeting 
the challenges associated with UXO.
    Thank you.
    [The prepared statement of Raymond J. Fatz follows:]


    
    Mr. Hobson. Mr. Johnson.

                       Statement of H.T. Johnson

    Mr. Johnson. Mr. Chairman, I would like to introduce Don 
Schregardus, who you know from your Ohio days. He is our 
environmental assistant in the Department of Navy.
    I am very pleased to talk today about munitions response, 
which includes removal of UXO. Munitions response is a larger 
context.
    The department has been very proactive and comprehensive in 
our munitions response programs. We have several goals. The 
first one is to ensure the safety of the munitions response 
personnel conducting the work. We cannot emphasize enough how 
dangerous this is. We have had 13 seriously injured people, two 
fatalities, working UXO on our ranges. All of these were 
involved in the actual removal of UXO with the exception of one 
person, as Congressman Farr mentioned, who walked in and that 
person was hurt with a dud, but we take it very, very 
seriously.
    The second goal is to complete the removal based upon the 
projected reuse. We have talked a lot about how clean is clean. 
We very much like to clean to the intended reuse.
    We follow the cleanup regulations and procedures. We also 
work very closely with the federal and state regulators and 
need the participation of the stake holders. Each state has 
regulations and regulators, and we have to meet their 
requirements of course.
    Mr. DuBois has already talked about national response 
programs and policies. I would like to talk about two success 
stories: Adak in the Aleutian Islands, 78,000 acres. In World 
War II there was a lot of bombing on both sides there, and 
there is a lot of UXO. It is a remote location. It is very 
harsh weather. We have worked very closely with the state of 
Alaska and the various environmental groups.
    Next month we will have cleaned up 57,000 acres of the 
78,000. We expect to finish the whole thing in 2004.
    Mr. Hobson. Where did you get the funding for that?
    Mr. Johnson. Department of the Navy, sir.
    Mr. Hobson. Was it an add or----
    Mr. Johnson. I am sure we were assisted, sir. [Laughter.]
    Mr. Farr. What is the end use?
    Mr. Johnson. The Aleuts are going to use a good portion of 
it. There is a very critical runway there. We thought the 
Aleuts were going to operate it. They do not want to. They are 
trying to get someone else to operate it. But it is used by the 
Air Force, the birth place of Shemya.
    Mr. Farr. Where the UXO is located are they going to have 
housing on it?
    Mr. Johnson. No, the Aleuts will operate some stations, and 
refurbish some stations. They have another one along the 
Aleutian chain, where they handle fishing vessels.
    Mr. Hobson. How much did that cost?
    Mr. Johnson. I do not have the number, sir. I will provide 
it for the record.
    [The information follows:]

    Through the end of Fiscal Year 2001, $19 million has been 
spent on the cleanup (including UXO) at Adak. The projected 
remaining cleanup cost (including UXO) from Fiscal Year 2002 is 
$83 million. Therefore, the total cleanup cost at Adak (all 
years) is projected to be $277 million. Of this total, $60 
million is for UXO assessment and removal.

    Mr. Farr. Well, Mr. Chairman, I think that is one of the 
issues. Everybody is cleaning up, but there ought to be some 
priorities here of what is going to be the most important 
cleanup for end use. If you are going to have people living on 
the property, it is going to be a higher priority than if it is 
going to be passive recreation.
    Mr. DuBois. Most of it, as far as I understand it, it is 
withdrawn lands, which without specific legislation, will 
revert to the Fish and Wildlife Service's Bureau of Land 
Management, from which it was withdrawn during the Second World 
War, unless, of course, Senator Murkowski and Senator Stevens 
wish to change that.
    Mr. Johnson. In this case, a large portion is going to be 
transferred to the Aleut group, and some will go back to DOI as 
withdrawn land.
    Mr. Olver. Mr. Chairman, if I may ask, was the priority for 
this somehow related to the Native American land claims in the 
Alaska agreements. Is that why we are doing this one?
    I see Mr. Farr wondering why, where there is not large 
populations with the ordnance sitting there--here we have a 
very remote place for generally quite passive use. I think the 
people, the Aleuts say, would not consider it entirely passive. 
Would it be related to those negotiations of the land 
disposals?
    Mr. Johnson. Yes, sir, that is part of it. And there is 
going to be a land trade between the Aleuts and someone else 
involved. We respond to the request, and I will show you others 
that are quite different from this one, if I may continue, sir.
    Mr. Hobson. Yes.
    Mr. Johnson. Mare Island, a beautiful place. It was a 
shipyard before the Civil War; I think it was probably 1830s or 
so. The hospital there was approved by Abraham Lincoln, so it 
goes back a long way. But it was closed as part of 1993 BRAC. 
It was established in 1854.
    Mr. Hobson. Was it put on the historic register and you are 
going to maintain it?
    Mr. Johnson. Sir, we have more historic buildings on this 
base than you can think about. And it is beautiful; you would 
enjoy it. St. Peter's Chapel and so forth.
    Anyhow, most of the munitions at Mare Island were discarded 
munitions, which are quite different than UXO. They were never 
expended. There was an arsenal there that put weapons together. 
But we have been working with the regulators, the citizens and 
the city of Vallejo. And just within the week, we have 
transferred the largest, I call it, industrial area, the real 
item. There is a total of 668 acres that has been transferred 
to the city and a developer.
    Now, with that, you talked in your opening comments, sir, 
about working with the developer. $78 million to complete the 
cleanup will be given to the city and the developer. That is 
what we estimate is the cost. They will clean up as they 
develop. In other words, there will be no discussion about 
intended reuse because the reuse is as they see fit.
    Mr. Hobson. What if they run out of money? What happens?
    Mr. Johnson. We have an agreement for $78 million.
    Mr. Hobson. And that is the end of your liability?
    Mr. Johnson. The Department of Defense and, certainly, the 
federal government is always responsible under CERCLA. But we 
are confident that for this one, that is the right amount of 
money.
    Mr. Farr. How many dollars per acre is that?
    Mr. Johnson. I cannot do it that fast, but about $10? That 
is not right.
    Mr. Farr. How many acres is it?
    Mr. Johnson. Six hundred, sixty-eight, $78 million.
    That redevelopment is going well. The developer is on-site 
and using these historic properties that you talk about, Mr. 
Chairman, as part of the redevelopment.
    Now, the second part of that is 3,000--I am not a 
Westerner, I call it swampland. You probably call it the flats; 
in other words, no buildings will be there. There are 3,000 
acres there and so there are some funds to clean that too. That 
is on the governor's desk to sign, and we will transfer both of 
those parcels and the whole island to the city and state.
    We think these are win-win scenarios. They provide great 
efficiencies in the cleanup, but also you go directly to the 
end use, and you do not say, ``Well, we might do this, we might 
do that.'' That is where we get in trouble with the 
communities, doing what-ifs as opposed to knowing exactly what 
we have to do.
    There are substantial efficiencies in time and cost when we 
work very closely with the local redevelopment and state 
authorities. Like Mare Island, an ideal situation is cleanup is 
privatized. Even when we do cleanups, the private sector does 
the work for us. We contract directly with them. If we transfer 
it to the city developer team, they work directly with the 
cleanup contractors.
    We look forward to working with this committee to support 
the cleanup of our BRAC bases. We are trying to bring these 
properties back into public use in the communities, get it back 
on the tax rolls. And when we have good cooperation from the 
communities, we can move very quickly.
    Thank you, sir.
    [The prepared statement of H.T. Johnson follows:]


    
    Mr. Hobson. Do you want to comment for the record as to why 
the Navy doesn't go out and clean up its ordnance after it 
drops?
    Mr. Johnson. I will be glad to do that, sir. I think we do 
as well as the Air Force on that, but we will certainly provide 
that.
    [The information follows:]

    Both the Navy and Marine Corps conduct range clearance 
operations at land-based, operational ranges. Clearance 
activities are geared to (1) ensure continuing viability of the 
range, (2) support the mission of the range, and (3) minimize 
risks to both the personnel being trained and those conducting 
the clearance activities. Clearance and scrap removal is 
conducted in accordance with applicable laws, and DoD and Navy 
policy. Department of Defense Directive 4715.11 requires 
development of sustainable range management plans. DoD policy, 
as stated in the Directive, is to ensure the long-term 
viability of ranges while ensuring protection of human health 
and the environment. The Directive provides flexibility in 
determining the frequency and degree of range clearance 
operations but requires ``consideration of the safety hazards 
of clearance, each range's intended use, and the quantities and 
type of munitions expended on that range.'' Chief of Naval 
Operations Instruction (OPNAVINST) 8020-14 contains 
requirements for range clearance and establishes procedures for 
conducting hazard assessments prior to range clearance 
operations. This instruction applies to both Navy and Marine 
Corps ranges.
    There are many types of Navy and Marine Corps ranges with a 
wide variety of training missions and munitions used (small 
arms, air-to-ground, Naval gunfire, combined forces). Specific 
procedures and frequency of clearance are established by each 
range Commander based on the type and tempo of training or 
testing activities. Range clearance is funded under base 
operation and maintenance accounts.
    In most cases, range clearance addresses access roads, 
target areas, and other areas where UXO is most likely to be 
located, and not the entire range property area. Examples of 
operational range clearance programs follow:
    Naval Air Facility, El Centro, CA--cleared 4 times per 
year.
    Naval Air Station Jacksonville, FL (Pinecastle Range)--
cleared 5-6 times per year.
    Naval Air Station Fallon, NV--numerous ranges; cleared 4-5 
times per year.
    Marine Corps Air Ground Combat Center, Twentynine Palms, 
CA--cleared after each combined arms exercise; all range areas 
cleared a minimum of every two years.
    Marine Corps Air Station, Yuma AZ--Chocolate Mountains 
Aerial Gunnery Range cleared twice per year.
    In summary, both Navy and Marine Corps implement range 
clearance procedures tailored to the type of range, operating 
tempo, and range safety requirements.

    Mr. Hobson. I do not think your plan is the same. I do not 
know for a fact, but I am told that you do not go out and do 
the same things on your range when you drop as the Air Force 
does. We do not have to get in an argument about it, I would 
just like to know. If you do, fine; if you do not, why not? 
Because it is, kind of, interesting, what I have heard. But it 
is about $100,000, that is a lot of money to clean up.
    Mr. Farr. And that is not unexploded ordnance.
    Mr. Hobson. Well, it is stuff that is probably buried 
around places, they do not know where it is. I think that is 
one of the things we need to look at, is, you know, this 
detection ability to find. You know, the maps probably are not 
good. People used to just go out and dig places.
    Mr. Farr. The point is, any clean up at Mare Island is a 
lot cheaper than UXO.
    Mr. Johnson. It should be.
    Mr. Farr. What about Vieques? How many acres do you have to 
clean up there?
    Mr. Johnson. Sir, I would not want to hazard a guess.
    Mr. Hobson. That is a whole other hearing. [Laughter.]
    Ma'am.

                   Statement of Ms. Maureen T. Koetz

    Ms. Koetz. Thank you, Mr. Chairman, members of the 
Committee, Mr. Blumenauer. Very nice to be here on my initial 
performance as part of this particular team. The Air Force 
likes going fourth: It gives new meaning to the term ``hitting 
cleanup.''
    We do not have the same kind of BRAC issues that I think 
some of the other services do, so I am going to discuss our 
BRAC to the extent I think would satisfy your interest, but I 
will also talk a little bit about what we are doing to manage 
UXO more effectively in general, which I think is also of 
interest to the Committee, based on what I have heard.
    The Air Force currently manages over eight million acres of 
land, and that is largely vast open range lands used to test 
and train. These ranges are generally not contiguous to bases, 
and that is one of just the unique aspects of our operations 
that change our UXO profile.
    Very little of our range acreage has been subject to base 
closure. And there is a distinction in the base closure laws. 
As you probably know, some of the requirements are triggered by 
the population on the installation and other factors, and the 
ranges would not necessarily trigger those criteria. So there 
is a lot more flexibility in inactivating and/or closing these 
types of ranges than they are when they are contiguous to an 
installation.
    We fly over large areas for training, but our munitions are 
only dropped on targets, and that creates smaller areas 
requiring UXO management. And the munitions that actually 
contain high explosives are dropped in still a smaller set of 
targets. So we have certain minimization and mitigation 
activities that are just inherent in our operations.

                         ENVIRONMENTAL PROGRAM

    The land, airspace and water areas entrusted to the Air 
Force for range use are essential to the success of our 
military operations and training, and we are finding that out 
every day now. The Air Force is addressing our emerging need 
for UXO and munitions response under the already existing four 
pillars of our environmental program, and those consist of 
compliance, cleanup, conservation and pollution prevention, not 
necessarily in any order of importance.

                               COMPLIANCE

    But first, regarding compliance, that is our first order of 
business, and that is to comply with the rules and regulations 
regarding munitions throughout their life cycle, not just when 
they are used in our range or training operations.

                                CLEANUP

    Second, we are restoring or cleaning up sites that contain 
UXO when the sites are no longer needed for Air Force 
operations. We are using two different programs to do that, 
both base realignment and closure and our Defense Environmental 
Restoration Program.
    Under BRAC, we have addressed 745 acres at 13 sites subject 
to closure, and we spent $6.1 million. And just to give you an 
idea, though, that is pretty much the total of the munitions 
response required at BRAC installations for the Air Force. They 
were largely grenade ranges, and small-arms ranges.
    We are expanding our restoration program to include the 
cleanup of closed ranges; that is, sites that were retired or 
taken out of the inventory for reasons other than BRAC. We have 
about 80,000 acres in that category, and they are being handled 
through the Defense Environmental Restoration Program.
    We expect this effort to expand, and as has been mentioned, 
it is going to compete quite a bit for funding with other 
priorities.

                              CONSERVATION

    Our third environmental pillar is conservation. 
Environmental degradation can deny access to lands, undermine 
the realism and effectiveness of our training and limit our 
operational flexibility and productivity. And perhaps most 
important, it can pose safety risks.
    We manage UXO as an important part of conserving the land 
we hold in the public trust. Hence, our operational air-to-
ground ranges, we have had an ongoing policy since the late 
1940s to clear and dispose of UXO and residual material. And 
that is primarily scrap material; that is not the residuals 
that are perhaps the chemical constituents of what exploded or 
did not explode.
    Our scheduled UXO and residual material removal help us 
achieve our goals, which are effective and efficient management 
of our ranges throughout their life cycle, personnel safety, 
residue treatment and assured long-term environmental 
conservation restoration.

                          POLLUTION PREVENTION

    And our last pillar is pollution prevention, and this is 
also an emerging and very important arena for munitions as 
well. We are trying to develop technology to do things like 
take the magnetic structure of a range before we begin to use 
it. When we go back to do removals or UXO clearance, we can 
actually distinguish between a piece of metal that is not UXO 
and one that is. That way, we can do much more targeted 
responses and more cost-effective responses.
    We are also researching and developing plastic ordnance and 
reusable ordnance. All of these things will help us avoid some 
of the issues that we are trying to deal with today, as we find 
ourselves not in need of certain ranges.
    The same range operations and maintenance budget that fund 
readiness activities, such as providing realistic targeted 
electronic warfare training for our forces, also fund UXO and 
range residue removal. And just for your information, I think 
for the out-year budgets for the next few years, we will spend 
anywhere from $7 million to $10 million annually on clearance.
    The Air Force intends to fully comply with Sections 311, 
312 and 313 of the National Defense Authorization Act. And we 
are developing technology today to allow us to better inventory 
and understand the nature of our UXO response requirements.
    Over the coming months, the number of acres requiring 
cleanup is expected to increase. And we may have nearly 200 
ranges covering approximately 100,000 acres that require 
investigation for cleanup. We are still collecting data, and we 
are going to be feeding that into the efforts on the part of 
the Department of Defense to get the comprehensive report to 
Congress by its deadline.
    The Air Force faces many of the same challenges that you 
all have heard about today. And we are making a concerted 
effort to enhance our outreach activities with the community, 
our cooperation with the states and localities, to make sure 
that we can perform munitions response in a way that is going 
to meet the needs of all of the players involved.
    And I will be more than happy to answer questions that you 
have. Thank you.
    [The prepared statement of Ms. Maureen Koetz follows:]


    
    Mr. DuBois. Mr. Chairman, might I----
    Mr. Hobson. Yes.
    Mr. DuBois. There has been considerable discussion about 
how one prioritizes these sites, and Ms. Koetz mentioned in the 
last Defense Authorization Act, the Section 311 does require 
the department to establish so-called site prioritization 
protocols. And those protocols are being developed with the 
data-gathering activities on-going.
    We are going to put it out for public comment. And we then 
will report in our annual DERF report to Congress next year 
what those site prioritization protocols are. And I think it is 
important to recognize that there needs to be a well-understood 
set of steps as to which sites are going to get what amount of 
money over what time frame. I think that is very important.
    Mr. Johnson. Mr. Chairman, if I may correct an earlier 
statement, the money spent at Mare Island is the total cleanup, 
not just UXO or ordnance. It is total environmental cleanup.
    Mr. Farr. Mr. DuBois, the protocol you are going to be 
adopting is going to be for all the services, so that you will 
have one protocol for prioritization; is that correct?
    Mr. DuBois. Correct.
    Mr. Farr. But then what really happens is two different 
approaches. Mr. Fatz talked about the fact that they go at Ford 
Ord inch by inch, and Mr. Johnson talked about at Mare Island 
they just did a buyout, and at Mare Island they had the end-
user as part of that process.
    Mr. Fatz recommended a buy out at Fort Ord--I mean, he has 
testified before that you need a consistent national framework 
with all stakeholders involved.
    So I think that you need to create a second phase of 
prioritization. Once you have created the protocol for 
prioritization, you should have options of protocols within 
each priority. In some cases you will want to do a buyout--I 
hope that is what you will want to do--and in other cases you 
are going to want to do a cleanup, but you are going to need 
the end stakeholders to be part of that team. I think that, and 
what I hear today is that the services do not really need 
legislative authority to do buyouts, you all should consider 
this approach. I mean, the options that just witnesses at this 
table have come up with are different for the different 
services.
    The question that I have is, do you have, or you think you 
put enough money in the budget to do that? Mr. Fatz has 
indicated--at least the testimony he gave in Monterey last 
August, that the Army has spent--in this testimony today you 
say that you have cleaned 3,000 acres and you have spent $328 
million and that you estimate it is going to take another $326 
million to complete. I think you have said that you think it is 
going to take until the year 2015. Well, probably none of us 
will be here on this committee then, and probably most of the 
people in this room will not be here then. I mean, we would 
like to see this done on our watch.
    If you use Mr. Fatz's figures and you use the Mare Island 
approach of a buyout, what do you think the figures would be 
for a buyout of Fort Ord? You said cleanup for just UXO is $326 
million, and Mr. Johnson just said that the Mare Island buyout 
was more than just UXO or the--what would you call it, was not 
UXO?
    Mr. Johnson. Environmental cleanup.
    Mr. Farr. The whole environmental cleanup was how many 
million for that little island there in the middle of San 
Francisco Bay?
    Mr. Johnson. $78 million.
    Mr. Farr. For how many acres?
    Mr. Johnson. Six hundred, sixty-eight.
    Mr. Farr. That is the whole island or is that just an 
island part that is contaminated?
    Mr. Johnson. That is the non-flat part. The flats part is 
3,000 acres, and it cost $53 million there.
    Now the reason why there were contaminants there, people 
used to drop ordnance over the ship side when it was not needed 
anymore, it was not armed and so forth. They dredged the bay to 
fill the flats, and guess what happened? They dredged up the 
ordnance and they deposited it in the flats and now we have to 
clean that.
    So the answer is $78 million plus $53 million for the early 
transfer parcels.
    Mr. Farr. Fort Ord is right on the bay. We have not even 
talked about what is underwater there, because a lot of that 
shelling came from the Navy when they came in to practice and 
said, ``Well, you have a target site there inland. We will just 
shoot from the ocean.'' And some of the shells did not make it 
all the way to the shore.
    You can see our frustration, Mr. Chairman. I am familiar 
with one base in the United States. I am trying to get a handle 
on money and time. The people at the table control both.

                     PERFORMANCE-BASED CONTRACTING

    Ms. Koetz. Mr. Farr, perhaps I can elucidate a little bit 
for you, even those are not my bases in particular, but 
systemically. We are looking into a new tool. We call it 
performance-based contracting in the Air Force. I think you 
would refer to it as buyout type contracting, where you can get 
a private entity to come in, identify the needs for the 
cleanup, give a fixed price and essentially subcontract out the 
cleanup on that base.
    The way the private sector has come to the point where they 
can do that is because they can take what are essentially 
preliminary assessments and an understanding of the nature of 
the constituents that are present and how much that is likely 
going to take and how long it is going to take because it is a 
known entity now. We have had Superfund since 1980. We have 20 
years of experience under our belt on a lot of those things.
    And the point at which the private sector is willing to 
take on that risk at a fixed price cost is something they can 
measure and make a determination on when it is the type of 
materiel that there is, sort of, a knowledge bank, if you will.
    UXO may not actually be at that point just yet. We have not 
got the same level of preliminary assessment. We haven't got 
the same body of knowledge about the implications of what is 
there, what the environmental harm is, what the cleanup 
requirements are likely to be. We are simply not as far along 
in the process as we are with say, something we face all of the 
time, a trichloroethylene (TCE), or a solvent cleanup, or a 
fuel cleanup, where there is a body of knowledge and you can 
actually get insurance actuarials in there to do calculations 
using models and know.
    And so that is part of why you are not necessarily seeing 
some of the tools, like perhaps Mare Island or the performance-
based contracting we are considering, available just yet in 
UXO. We need to get a little further down the road in terms of 
understanding the nature of the problem.
    Mr. Fatz. You know, Mr. Farr, four years ago we did the 
Presidio in San Francisco. We did the so-called buyout where we 
just--and we came out and we figured----
    Mr. Farr. That did not have the UXOs.
    Mr. Fatz. That had no UXO. We have done guaranteed fixed 
remediation contracts at the sites, not with UXOs. We have done 
three last year at BRAC sites where we do a cooperative 
agreement, let the reuse authority--we give them the money that 
we reach agreement on they contract for everything.
    So we have tried a number of mechanisms.
    Mr. Farr. Would you do a buyout on UXO? I mean, you have 
strict liability forever, you stated that is always your issue 
no matter when it is discovered.
    Knowing that, do you need to be in control every inch of 
the way? The clean-up contractors are going to be the same 
because they have to be licensed by the same entity. So would 
you say it is really up to the local government as to whether 
they would like to get money up front and pay for clean up out 
of that stream, or whether to go through the congressional 
appropriations process every year, and wonder if there is going 
to be enough money to do the work.
    I mean that is what I see the difference being.
    Mr. Fatz. Particularly in the Army, where our problem is so 
much larger than the other services in UXO, we would welcome 
that.
    Mr. Farr. You would welcome a buyout?
    Mr. Fatz. If someone would come to us. And what made the 
Presidio of San Francisco doable was the insurance mechanism 
that existed that just started about four or five years ago.
    Mr. Farr. Have you done that yet on a UXO site?
    Mr. Fatz. It is not a UXO. It would take an insurance 
company to be able to say, ``I will do UXO.''
    In the Army, unlike Ms. Koetz explained how the Air Force 
uses their bombing ranges, you know, we have been firing on 
these ranges--well, Fort Ord since 1917. And we have a firing 
impact area. And we fire different ammunition and then we move 
to another area, and we are mobile. So it is a large impact 
area. Not a burial site like was at Mare Island; just a large 
area with a lot of ammunition.
    I think the three models that I mentioned to you and would 
be open to have anyone come at us and talk to us about UXO.
    Now, Presidio, the trust that was there, by Congress, took 
on the cleanup also for the Fish and Wildlife. And see at Fort 
Ord, you have several other entities there. Now you know we 
have started discussions with a company with individuals that 
are bringing proposals to us for a buyout at Fort Ord.
    Mr. Farr. You are going to talk about the buyout of Fort 
Ord. It seems to me you are already about $440 million on the 
table. Where does that $400 million come from?
    Mr. Fatz. Came out of the BRAC account. To date we put in 
$322 million approximately at Fort Ord. That was all out of the 
BRAC account. And then we have another $328 million to go.
    Mr. Farr. How much money are you requesting this year for 
base cleanup? Or how much are you allocating or Fort Ord's 
sake?
    Mr. Fatz. Fort Ord for 2003 is $20 million.
    Mr. Farr. $20 million.
    Mr. Fatz. All of our budgets go from the bottom up. Since 
1998, the request for Fort Ord, we have averaged an additional 
$8 million more each year. That is one of our priority bases. 
But it still has $197 million more to do on ordnance response.
    Mr. Farr. Mr. Houlemard, do you have a figure in your mind 
what it would take, you know, the environmental issues. Is $400 
million in the ball park?
    Mr. Houlemard. I think we have a lot of faith in the United 
States Army's estimates about what the upcoming costs are going 
to be for a buyout. The problem that we have had with even 
discussing the buyout is the question of the reliability of an 
appropriation for such a purpose.
    There is the question of, do you have $400 million in any 
one particular year or $197 million in any one particular year 
to do that kind of work?
    Mr. Hobson. You could not spend it that fast anyway.
    Mr. Houlemard. We do not think anyone could spend it that 
fast. We think we could spend it faster than the Army.
    Mr. Hobson. Well, that is probably true. [Laughter.]
    Mr. Houlemard. I think they would probably agree.
    But my comment is, the FORA board has looked at this option 
but does not have any real confidence in the ability to produce 
the revenues over a period of years. And the question is, if 
you had an appropriation that said you were going to have $50 
million a year for seven or eight years, or if you had $100 
million for three years, would you take on the responsibility 
and sign a contract to do 45 square miles of ordnance and 
explosives? That is what the question is.
    So yes, it is an option. Yes, it is something we would like 
to look at, because the opportunity to bring the private sector 
in, I think every base would want to look at the opportunity to 
get early transfers to bring the private sector in and be 
sufficiently funded to handle that cleanup. I do not know any 
reuse authority that would not look at that.
    Mr. Hobson. Okay. Well, we got to--John.
    Mr. Olver. Thank you, Mr. Chairman.
    I am prone to fall into this kind of trap each time we have 
this kind of a hearing, but my mind is blown by the enormity of 
this problem, truly.
    In your testimony, Secretary DuBois, you pointed out early 
in the testimony that the UXO problem we have is two distinct 
problems: the operational training on our ranges, which are 
those still in use apparently, and then everything else.
    And I was thinking, when I first saw that, ``Oh, the great 
problem is on the operation training places.'' But it is not 
there at all, it is in everything else, really. I thought, 
``Oh, that is miscellaneous and small.'' But the enormity of 
that one just goes all over the place, because it is the BRAC 
things, as you point out. It must also be those places which 
had been operational training ranges, which are still active 
sites, which are still being used and have not been BRACed, but 
where we have not really done anything much about the UXO.
    And then it is all the places where we have actually been 
in war, which includes the land mine places and the munitions 
dropped in Bosnia and Afghanistan, things of that sort. I mean, 
that is a UXO, but that is a non-specific site, in a sense. It 
is all over the place. And I do not know how that fits into our 
definition of UXO.
    Then there are the sorts of things which are not UXO in the 
sense that they were never actually used in active bombing--all 
the obsolete stuff. We were in Korea last year, the trip that 
you, I and the chairman were on, where there are thousands of 
tons of obsolete, kind of, stuff that we had not figured out 
yet what we are going to do with and how we are going to get 
rid of.
    In all of that, you have said--and those are just some few 
categories we have a budget of $250 million in the 2003 budget 
proposed, of which only $32 million is assigned for BRAC kinds 
of things.
    Mr. DuBois. $252 million is in the president's budget 
request----
    Mr. Olver. For UXO.
    Mr. DuBois. For UXO, of which $32 million----
    Mr. Olver. $32 million for BRAC sites, the 32 BRAC sites 
are the only ones that we really have primary responsibility.
    Now, does the $252 million, cover any of those other 
peripheral things? I do not even know where that money would be 
expended. Maybe you can explain to me where the other $220 
million would be intended to be expended by, sort of, big 
categories of kinds of places.
    Mr. DuBois. The biggest categories are, in two cases, site-
specific. One is Massachusetts Military Reservation, from your 
home state, sir, of $80 million in fiscal year 2002 
presidential budget request.
    Mr. Olver. I guess that is UXO, in part.
    Mr. DuBois. In part. That is UXO. $25 million to Hawaii, 
Kaho'olawe Range, which is a Navy situation. Those are the two 
largest. Of the $252 million, that is $105 million right there.
    Now, the formerly used defense sites, so-called FUD sites, 
of which the DOD----
    Mr. Olver. Which have not been BRACed, which are formerly 
used?
    Mr. DuBois. Right. But they are not being used by us at 
all.
    Mr. Olver. Okay.
    Mr. DuBois. Spring Valley is a FUD site here with the 
chemical weapons. The Army is our executive agent; that is to 
say, the executive agent of the Office of the Secretary of 
Defense. $70 million is being funded for that account, that 
line.
    Mr. Olver. Oh, at that----
    Mr. DuBois. That account, FUD sites, of which Spring Valley 
in 2003 will chew up----
    Mr. Fatz. $10 million, we have a program, but it will 
probably be a little bit more. That is an example of a site 
that keeps going up.
    Mr. DuBois. This points out two crucial issues. One, a site 
where we do not know what we do not know; that is a real 
problem. And number two, a site where there is clear and 
present danger to civilians living on that site, or military 
personnel were it to be on an active duty installation; i.e., 
contaminants in the ground, contaminants that may be affecting, 
in the case of Massachusetts Military Reservation, the ground 
aquifer.
    Other than the handling of this, the detection, the safety 
issues, which are paramount, the next and equally paramount 
issue is safety and health.
    So you apply those precious dollars in a priority fashion, 
but those two are the initial priorities. But here are some 
good examples that I pointed out.
    Mr. Olver. That is $170 million of the $220 million. Those 
are only three sites. We have hundreds of sites of various 
natures in this----
    Mr. DuBois. Correct. But as I said, of the UXO issues, in 
terms of BRAC sites, only nine constitute 96 percent. Seven of 
the nine are Army, two of the nine are Navy. And the largest 
one is the Aleutian Island situation, the Adak situation.
    Mr. Olver. Yes. I want to explore, because we got closest 
to some numbers, which have now gotten completely befuddled in 
my mind, in relation to Mare Island. The data, Mr. Secretary, 
that you gave gives 5,000 acres of the total acres, of which 
UXO is 983.
    Now, we have also heard, Mr. Johnson, you have said that 
there is something within this total of 5,000, if that is a 
correct total, that there is something like 3,000 of lowland, 
and did you say 68 or 690, or what was it where the real UXO 
is?
    Mr. Johnson. Six sixty-eight is the island, the lowlands 
are 3,000 acres.
    Mr. Olver. Six sixty-eight is the island. Well, all right, 
what you are saying the acreage is a bit different from what 
the Secretary is saying the acreage is. So there must be some 
other categories here somewhere along the way.
    If the island was 668, the lowlands, you have said that 
there was $53 million has been used or appropriated for 3,000 
acres.
    Mr. Johnson. Right. Environmental.
    Mr. Olver. And that is total environment.
    Mr. Johnson. Yes, sir.
    Mr. Olver. And the UXO is on the 668, the island itself?
    Mr. Johnson. There is also some in the lowlands. I talked 
about in the early days they dropped unused munitions over the 
side of the ships in the bay, then they dug out the bay and 
built the lowlands.
    Mr. Olver. Well, I do not expect these things to fit. There 
is a disconnect here in part.
    But the numbers, when you get down to it, if we are 
spending $78 million on the island for UXO, whether it is 600 
or whatever the acreage is where we expect to have the UXO--how 
many acres are we expecting the UXO to be? But it is also in 
the lowlands, because it has been dredged out of the lowlands 
or something.
    The lowland was tidewaters or something. What do we mean by 
that?
    Mr. Johnson. It is a marsh.
    Mr. Olver. A marsh.
    Mr. Johnson. And they dredged the port and in the 
dredgings, there were some munitions. And those numbers include 
UXO in the total.
    Mr. Olver. Yes, but that is of the order of $15,000 an acre 
in the lowland. The UXO part for $78 million on something under 
than a thousand, we are talking about more than $100,000 an 
acre in addition, on the 600 and some odd acres. If that is 
what it is, and not the UXO acres if possible UXO 983 whatever.
    The numbers are enormous. And this is just a small place.
    Mr. Hobson. But the total number for the base is $178 
million plus--add it together, $78 million and $52 million or 
something, wasn't it?
    Mr. Johnson. $53 million, yes, sir.
    Mr. Hobson. So it is $110 million, $210 million?
    Mr. Olver. Well, keeping this in proper categories, one has 
to have a fairly complex, sort of, spreadsheet analysis of each 
of these sites, if you want to get into the details of which? I 
think I should withdraw and get out of the details of this sort 
of thing at all.
    But then on top of that, the enormity of this, what are we 
doing for technology? The chairman says we have people out 
there in the field with a rope and a hook. And where is this 
picture of a munition detection array used at Adak? Are we 
doing R&D? Do we have people who are going to do--this is 
putting our personnel right in the center of this process.
    Mr. Hobson. I worry whether that thing does not work out 
there and that guy drops to the ground he is gone.
    Mr. Johnson. There are three technologies that are used, 
one is magnetic. Another one is infrared that works very well 
with sunrise and sunset differences in temperature cooling. And 
the third one is ground-penetrating radar. Now the success of 
doing it all is integrating it, taking the various----
    Mr. Olver. How many groups are doing R&D or producing for 
us systems that can do this with certainty?
    Because Mr. Houlemard is talking about if we do this only 
at the surface or the first six inches and then we want to go 
in and use it over again. Well, maybe we have not gotten things 
down deep enough. Who is then going to be liable for it? The 
liability is going to come back, I would assume. No private 
company going in there is going to take on that liability 
without clear ideas of where the buck finally stops, or they 
are out of business somewhere along the way.
    Ultimately, this liability is coming back to us, isn't it? 
Because our munitions are maybe three feet deep, and then when 
you want to put in housing, you run into a problem.
    Mr. Johnson. As Mr. Fatz discussed, and I am not sure we 
have done this for UXO, but environmental, you can buy an 
insurance policy if you are a local group. And the insurance 
company believes that that is the right amount, and they will 
insure it.
    Mr. Olver. But they have not done that for UXO yet?
    Mr. Johnson. Absolutely not.
    Mr. DuBois. Now with respect to R&D, as I indicated, 
technology is both a current constraint and a future 
opportunity. The department has asked for $26.8 million in 
fiscal year 2003 for R&D specifically for UXO. That is a pretty 
significant amount of money, and we hope it will yield--
actually, it is twice what it was two years ago, that request.
    Mr. Hobson. Well, you know, let me just interject 
something. Some group is going to kill me for saying this, but 
in some Third World countries, they have a real answer for 
technology. They get a herd of sheep--and I know that some 
group is going to be after me for this--and they run them out 
over the site. And you know, some startling events happen. And, 
you know, it does not cost a whole lot. [Laughter.]
    And it is a lot cheaper than, you know, sending a guy out 
there in some sort of contraption. But I know, you know, some 
people get upset about that.
    Mr. DuBois. And is that 100 percent, Mr. Chairman?
    Mr. Hobson. Well, run a second group out.
    But you have machinery that does this stuff. You have a 
thing that flails the ground for land mines and other types of 
stuff that I've seen. You have another type of roller--I mean, 
you have a thing that they put out in front of things that are 
heavy, and it rolls out. But they do not seem to use them very 
much, because when you get into combat with them, it is a 
different story.
    But it would seem to me that that kind of equipment would 
be much better used here than it could be used out in the front 
lines because it is cumbersome types of stuff. But I do not see 
anybody--I mean, I got a paper. Let me show you this picture of 
this thing. But I have not seen any pictures of that kind of 
stuff being used anywhere.
    I am sorry, John, go ahead.
    Mr. Olver. It is worse than that in Afghanistan where we 
were. Every week children are having their arms and legs blown 
off by land mines. We were not the ones setting the land mines 
as far as I know. Mostly it was an earlier thing, but they are 
there.
    Mr. Hobson. And they do not know where they are.
    Mr. Olver. How to deal with Afghanistan--that has to be 
dealt with. And we have to have technologies that are going to 
be much more sensitive.
    The chairman handed me a note that 90 percent of the UXO 
digs are false positives: beer cans is one.
    Well, there are mechanisms that you can tell whether there 
is a--I mean we are using magnetometers or something like that; 
we are not going to pick up aluminum I think.
    There are different sensitivities of mechanisms with 
computerization these days and the kind of analysis that is 
available to do on physical data that it ought to be possible.
    I am curious whether we really have a significant amount of 
work being done on the R&D for really sensitive kinds of--and 
is it enough?
    And then, of course, the other thing, I go back again. I 
just want to repeat this: The amount of money going in, $250 
million, with $32 million going to the BRAC things, is a drop 
in the bucket compared with what the totality is. It must be 
that what we are doing is wherever there is an enormous 
accident or incident, or a law case in the case of Alaska, 
whether that is partly the nature of whose there politically, 
but we are going there, where there has been a focus placed 
upon it of an enormous nature. Then it becomes exceptionally 
expensive to really do anything with that.
    Mr. Hobson. And it would be absolutely considered 
outrageous for anyone to put any add on that there might be 
more money needed here, because obviously someone of great 
authority has decided that this is the exact amount that should 
be put in. And any one who would do an add would be considered 
pillared by certain other people in not only the Congress, but 
within the administration, such as OMB, or the Defense 
Department, because only the Defense Department has the wisdom 
to make the decision that this is the right amount of money.
    Right? I know you do not want to go there. But I just 
thought I might say that because----
    [Laughter.]
    Mr. DuBois. Nobody here will go there.
    Mr. Hobson. No, nobody will go there because you all want 
to keep your jobs.
    The last person that went there got fired.
    So I will not get out, as Senator Byrd does and other 
people have done, my Constitution and show the branches of 
government here. But it is rather frustrating to sit here and 
see the kind of problem that is here and knowing of--and I sit 
on the other committee too--and knowing the enormity of the 
problems that we have elsewhere, but I do not know, the process 
is a little out of whack when it is a priority and it should be 
a priority that is there. And there are lots of other things 
too.
    But, as John says, it begins to just get beyond what you 
can almost quantitatively understand here in this short hearing 
about this problem.
    And I think it is the chem demil thing too, if you want to 
get into something--I do not want to get into that here now, 
but that is another problem where we have technology 
difficulties of trying to get at a problem that is a huge 
potential danger out there. It has been around for a long time. 
I mean it is not something that just occurred on this watch. 
But the inability to get agencies together to handle that too 
and to try to get enough money to get at that.
    And you know, Newport, Indiana, where there was a 
disaster--still is--waiting there to happen. I mean there is 
all of this stuff in canisters in a butler-type building, that 
is--and you know, it is all over the country like that.
    These numbers that have been put together in the White 
House or where they are put together, whether there was any 
realization or understanding because I do not think anybody 
ever visited Newport, Indiana, before us. This just happened 
since probably since September 11, although we were all talking 
about these things, as Valerie will tell you, in our previous 
bill, even before September 11, we in the Defense Committee had 
already begun to focus on that particular problem.
    So it is a frustration with us that we do not have more of 
a dialogue when these things are put together. And then we get 
into these language fights back and forth between people that 
we should not be having those with.
    So I am sorry, John. I am intruding.
    Mr. Olver. It is just too much.
    Mr. Hobson. Virgil?
    Virgil does not have unexploded ordnance with him down 
there. It is rice or something.
    Mr. Goode. It is rocks.
    Mr. Hobson. Okay.
    Mr. Goode. Mr. Secretary, the chairman mentioned that there 
might be some unexploded ordinance in the 5th District of 
Virginia. Could you read me where it is in Virginia?
    Mr. DuBois. I said that?
    Mr. Hobson. No, I said there may be some.
    Mr. Goode. Yes, he said----
    Mr. Hobson. That is how I got him here.
    Mr. Goode. That is how he got me to come down so quickly. 
[Laughter.]
    Mr. DuBois. I do not believe there is any unexploded 
ordinance in or near Mr. Jefferson's university, sir.
    Mr. Goode. What about Fort Pickett in Nottoway County 
Virginia?
    Mr. Hobson. Fort Pickett is a training site.
    Mr. Goode. Yes, it is.
    Mr. Fatz. That would have ordnance on it.
    Mr. Goode. And now the Virginia Army National Guard; it is 
their responsibility, right?
    Mr. Fatz. Yes, sir.
    Mr. Goode. Let me ask you, as a general question, I 
remember in the Virginia General Assembly we had a situation 
with asbestos in the old office buildings. And we spent 
millions upon millions of dollars to get all of that asbestos 
out. People came in with the suits and everything.
    And then about 15 years later the whole philosophy on 
dealing with asbestos was rexamined. And we probably would have 
been better off just leaving it alone, make sure it is all 
covered up and keep anyone away from it.
    And I am wondering if with some of this unexploded 
ordinance if we just couldn't put up some fences, and grow it 
in grass and trees. And if a few wildlife happen to step on an 
unexploded ordnance item and get exploded, that would just 
happen, but we would probably encourage more wildlife. All the 
CARA supporters would certainly like something like this. Why 
can't we do more of that, just do nothing?
    Mr. DuBois. I think in a number of situations that is the 
viable alternative, wherein the local redevelopment authority 
and the military department involved can agree that that makes 
the most sense. Because the cost is astronomical, the use of 
the land for critical habitat satisfies the natural resource 
management plan for that community and that area, that it does 
make sense, sir.
    Mr. Hobson. I just do not want to be the guy planting the 
tree.
    Mr. Goode. You want to put a fence up so they do not get in 
the trees.
    Mr. Hobson. When they plant the trees.
    Anything else, Virgil?
    Earl.
    Mr. Blumenauer. Well, I guess I am concerned, Mr. Chairman, 
that that is, in fact, what we have done in lots of places. 
Times change, people move into those neighborhoods. Children do 
not respect barbed wire fences. You were not here when Mr. Farr 
talked about the tragedy that has occurred. I see it in our own 
community where we have 3,800 acres, it has a couple of strands 
of barb wire, and there are still people who are going onto the 
former Camp Bonneville to hunt, to recreate, kids fooling 
around, to party.
    And I think we are starting to move in terms of 
characterization, but I guess I am concerned that we know what 
we are getting into and what is going to be the long-term use.
    When we have a forest fire in New York, that the people go 
out to fight the forest fires, and all of a sudden there are 
explosions because there were buried munitions from training 
that has occurred with West Point for the last 200 years, and 
all of a sudden people are at risk, it calls into question a 
couple of things for me.
    Mr. Goode. Would the gentleman yield on the question?
    The National Forest Service, in instances believes in 
burns. So just let the areas burn with a chain link fence all 
around them. If they explode, it will just hurt some wildlife. 
If you have a secure enough fence, I do not think you will have 
too many accidents.
    Mr. Blumenauer. But I find of great interest a lot of these 
places are recreational areas where people go now and we have 
already made it a decision to not wilderness. I have an 
interesting little notice that they have the Jefferson Proving 
Grounds now where there are what 40,000 acres that they give 
access to people that this is what you look for when you go out 
there.
    Mr. Olver. Is that a----
    Mr. Blumenauer. BRAC.
    Mr. Olver. BRAC, but it is not on the list of severe BRAC 
sites?
    Mr. Blumenauer. But when I talk to Senator Lugar or 
Congressman Hill, I get a sense that they think it is serious. 
My question, Mr. Chairman, is twofold. And I know we have a 
vote or something going on and I really appreciate your 
courtesy in allowing me to join in, but my question just as 
part of the record.
    Mr. Hobson. We are going to have to adjourn.
    Mr. Blumenauer. I will follow up, but number one, is just 
getting a sense of where this fits in terms of the 
prioritization for the Department of Defense research. $26 
million sounds like a lot of money, but I do not know how much 
we are doing in terms of everything from missile defense to a 
whole range of areas where this fits on the prioritization for 
the Department of Defense, the amount of money that we have 
here. So if you put it in context in terms of where we are 
going with it.
    The second question that I have deals with the impact of 
UXO hazard on non-BRAC installations that may be considered for 
closure. We know what we have now. Does the Department of 
Defense have an inventory for underused or lightly used or 
facilities that may need to be changed in the future? Do you 
have this, sort of, inventory for other facilities?
    Mr. DuBois. In terms of UXO?
    Mr. Blumenauer. In terms of UXO.
    Mr. DuBois. The letter that we sent to Congress last spring 
indicates that by 2003, we will have full census, if you will, 
of those sites. And to the extent to which we know we can 
characterize those sites, you will have that report. It is, as 
I tried to indicate, enormously complex, physically huge, and 
in layerings, if you will.
    And we talked about--you can see what is on the ground. I 
mean, I have walked the paths in the light impact area, the 
paths that have been cleared in Vieques. And you can look to 
the right and the left, and you can see the stuff sitting out 
on the ground. But what I do not see probably is more dangerous 
than what I see.
    Mr. Hobson. Well, you should have been down the road with 
us in Afghanistan. You could see red stones on one side, and 
white stones on the other side and you just hoped that the guy 
knew the right colors of paint when he was painting, and that 
nobody moved the rocks overnight as we went through there. So 
it exists everywhere.
    Mr. DuBois. I would always step in your footsteps. 
[Laughter.]
    Mr. Hobson. I do not have a lot of time but--we were in 
these--we were really targets. We were in Chevy Suburbans, the 
only Chevy Suburbans in Afghanistan. And they put a number of 
members in the first one. I was in the second one, and somebody 
in the first one said, ``Oh, that is neat. We are really 
important. We are going to be up front.'' Then he said, ``No, 
that is not true. We are the first ones if we hit a land 
mine.'' [Laughter.]
    John and I were in the second one. We let the others go 
first. [Laughter.]
    True military fashion.
    I am sorry, Earl. Go ahead.
    Mr. Blumenauer. Mr. Chairman, I would just submit a couple 
of questions for the record. And I really appreciate your 
courtesy and I have great sympathy for the challenge that these 
folks have and I hope that we can help them do that job.
    Mr. Hobson. Well, certainly let me say, it is a real 
challenge. And it is a challenge of technology. It is a 
challenge of dollars. But it is a real problem that we have to 
deal with.
    I know we have a war going on, and we have to fight the 
war, but we need to think not only about how we clean up, but 
it seems to me we need to be smarter about what we do as we go 
forward also. Not just with the cleanup but what we are doing 
on ranges now--that is why I asked you about what he is doing--
and what we are doing on small arm ranges.
    You know, are we going to continue to have outdoor small 
arm ranges, and if we do, are we going to have a way to clean 
those up when we do it? Or are we going to shoot into certain 
types of things that we can pull those off and then take those 
away and drop the material down? Or are we going to shoot in 
practice with a different type of bullet that maybe 
disintegrates itself but would have the same characteristics as 
it would be in live fire, but it disintegrates itself over a 
period of time? So we do not continue to have the same way, you 
know, with practice bombs. What do we do with those, and what 
do we do with live fire? We need to rethink that.
    For example, I understand the Navy does not pick up 
anything that goes in the water. Because it costs more to get 
it out of the water than it does, and so we just----
    Mr. Johnson. More dangerous, sir.
    Mr. Hobson. It is more dangerous, and so we just, kind of, 
forget about that. Someday that is going to be a problem 
somewhere. I do not know when but it will be.
    So, I think what I would like to get out of this is: one, I 
do not think there is enough money in it; two, I do not think 
there is enough technology going forward to really ferret it 
out; and three, I am really worried about the future too. Not 
just cleaning up the past, but that we are not creating a worse 
problem with some of the stuff we use today down the road.
    And since people have to rethink all of that as we go 
through this. And this frankly, in my opinion, is not as high a 
priority. And I think everybody in the room--there are other 
types of things, because it is something we can do later. And 
we need to stop thinking that way even though we are out there 
fighting a war now.
    Mr. Farr. And coordination.
    Mr. Hobson. And yes, the coordination between all of these 
agencies, that probably drives you all about as nuts as it does 
us.
    Mr. Olver. Mr. Chairman, if I could make just a very brief 
comment. The coordination--as Secretary DuBois has enumerated a 
number of things that he is doing, I think those are steps, 
great steps in the right direction; ones that needed to have 
been done earlier but they are now being done. I wish you the 
great success of it.
    But ultimately your three points are absolutely correct. 
The one on the dollars, we have gone through just little Mare 
Island, the smallest of the nine largest sites, spending $78 
million on a piece of it, on some part of it.
    With the other nine sites, they are much bigger in terms of 
their total, and we are getting $32 million for UXOs on BRAC 
places. It is just totally inadequate. It is orders of 
magnitude out of whack.
    Mr. Hobson. We are going to have to adjourn.
    [The prepared statement of the Honorable Sam Farr follows:]



    [Clerk's note.--Questions submitted for the record by 
Chairman Hobson.]
                               Inventory
    Question. What is the size of the UXO problem at closed bases? For 
example, how many acres are contaminated?
    Answer. The FY 2002 National Defense Authorization Act requires DoD 
to take several actions. Among these are:
    Develop and maintain an inventory of defense sites that potentially 
will require a munitions response. The initial inventory is due by May 
31, 2003.
    Develop a comprehensive assessment of munitions response 
requirements at current and former DoD facilities. That assessment, 
which is due in the 2003 Annual Report to Congress, will provide:
    --Estimates (high and low) of the aggregate projected costs 
associated with munitions responses for all operational ranges (DoD-
wide), and all other defense sites (DoD-wide).
    --A comprehensive plan for munitions responses at all defense 
sites--this does not include operational ranges--to include the funding 
required and the period of time over which such funding will be 
required.
    Given the above, a response at this time would be premature. The FY 
2002 Defense Environmental Restoration Program Report to the Congress 
will contain our assessment of military munitions response issues at 
specific installations.
    Question. Has the Department completed an inventory that fully 
identifies the types and extent of UXO present and the associated 
contamination at BRAC ranges/installations? If not, what efforts are 
being made to complete such an inventory?
    Answer. The FY 2002 National Defense Authorization Act requires DoD 
to take several actions. Among these were:
    Develop and maintain an inventory of defense sites that potentially 
will require a munitions response. The initial inventory is due by May 
31, 2003.
    Develop a comprehensive assessment of munitions response 
requirements at current and former DoD facilities. That assessment, 
which is due in the Annual Report to Congress in 2003, will provide:
    --Estimates (high and low) of the aggregate projected costs 
associated with munitions responses for all operational ranges (DoD-
wide) and all other defense sites (DoD-wide).
    --A comprehensive plan for munitions responses at all defense 
sites--does not include operational ranges--to include the funding 
required and the period of time over which such funding will be 
required.
    Given the above, a response at this time would be premature. The FY 
2002 Defense Environmental Restoration Program Report to the Congress 
will contain our assessment of military munitions response issues at 
specific installations.
                             Clean-Up Costs
    Question. How much funding has been provided in prior years to 
conduct UXO clean up at BRAC ranges/installations? Please provide a 
break out by fiscal year.
    Answer. Since FY00, military munitions have been funded as BRAC 
environmental restoration requirements. For the Army, the military 
munitions response funding for previous years are:

                        [In millions of dollars]

FY00..............................................................    19
FY01..............................................................    38
FY02 (planned execution)..........................................    20

    Additionally, the Navy is funding BRAC military munitions response 
activities using installation restoration funding within its overall 
BRAC environmental restoration investments. Funding for previous years 
are:

                        [In millions of dollars]

FY00..............................................................    13
FY01..............................................................     2
FY02 (planned execution)..........................................     7

    Question. How much funding is included in the fiscal year 2003 BRAC 
request for UXO clean up?
    Answer. As discussed in the testimony, the Department has 
identified $32M for FY03 munitions response actions on BRAC properties.
    Question. What is the estimated future cost to complete UXO clean 
up at BRAC ranges/installations? Does the Department believe this cost 
estimate is defensible?
    Answer. The FY02 cost-to-complete estimate for military munitions 
response at BRAC installations is about $398M. This estimate is based 
on our most current information on site-specific military munitions 
response requirements. DoD will update and refine the cost estimate as 
additional information and requirements are identified at BRAC 
installations.
                           Clean-Up Schedule
    Question. What is the estimated timeline for UXO clean up at closed 
bases?
    Answer. The Department's established timeline for completion of 
BRAC environmental restoration requirements, including munitions 
related responses, is to have final remedies in place at all sites by 
the end of FY 2005. However, a few sites may need additional time. In 
these cases, the Department plans to have remedies in place by FY 2015, 
and monitoring, where required, beyond that date.
                               Technology
    Question. What efforts are being made to develop new assessment and 
clean-up technologies? To what extent is funding an impediment to 
developing new technologies?
    Answer. DoD has been aggressive in developing new Unexploded 
Ordnance (UXO) assessment and clean-up technologies. Through 
investments in both the private sector and government labs, new 
research, development, and technology demonstrations are taking place 
to advance our capabilities to locate, identify, remove, and dispose of 
UXO. The DoD's defense-wide programs include the Strategic 
Environmental Research and Development Program (SERDP) and the 
Environmental Security Technology Certification Program (ESTCP) which 
have both been principle programs responsible for UXO related 
investments. Starting in FY02, the Army has significantly increased its 
investments, which are fully coordinated with the ongoing SERDP and 
ESTCP work. DoD will execute over $17 million in FY 2002 for UXO 
related Research, Development, Technology & Evaluation (RDT&E). A 
detailed description of the current UXO RDT&E investment and its impact 
on the UXO cleanup program will be provided in the Defense 
Environmental Restoration Program Report to Congress next year.

    [Clerk's note.--End of questions for the record submitted 
by Chairman Hobson.]
    [Clerk's note.--Questions for the record submitted by Mr. 
Farr.]
                              UXO Cleanup
    Question. For how many BRAC bases, where property transfer is 
pending, is UXO clean up a factor in delaying property transfer? How 
many acres does this represent for each of the military services?
    Answer. The Army has identified 12 installations that are known or 
suspected to require further military munitions response work (from 
FY01 Defense Environmental Restoration Program Annual Report to the 
Congress).
    The Navy identified ten installations in its testimony that have 
UXO issues. Eight of these have UXO work continuing past FY02.
    The Air Force indicates that it does not have UXO as a disposal 
issue.
    Each of these installations have UXO as a factor in property 
transfer, but it is premature to single out whether cleanup of UXO is 
the primary cause of transfer not occurring.
    The inventory report required by the Fiscal Year 2002 National 
Defense Authorization Act will include the required acreage 
information.
                                BRAC-UXO
    Question. Does DoD have inventory of non-BRAC installations that 
may have UXO hazards? How will the impact of UXO hazards affect the 
base closure decision-making process in the BRAC round upcoming in 
fiscal year 2005? Will the existence of UXO BRAC-proof an installation? 
Can you explain?
    Answer. The Department, in its September 2001 update to the 
``Management Guidance for the Defense Environmental Restoration 
Program'' (DERP), has initiated the collection and tracking of 
munitions response actions at sites that are closed, transferred, or 
transferring from Departmental control. This inventory forms the 
foundation of the munitions response program and also supports the 
Department's commitment to meet the inventory requirements stated in 
the National Defense Authorization act for Fiscal Year 2002, Section 
311. DoD Directive 4715.11, ``Environmental Explosives Safety 
Management on Department of Defense Active and Inactive Ranges Within 
the United States'' requires the Components to establish and maintain 
an inventory of its ranges and to develop a management plan for each 
range.
    In recommending military installation for closure or realignment 
during a BRAC round in 2005, the Department will ensure that military 
value is given primary consideration. The existence of unexploded 
ordnance hazards on an installation may affect the closure decision-
making process only if the hazards affect its military value. For this 
reason, the simple existence of unexploded ordnance hazards by itself, 
without military value consideration, will not ``BRAC proof'' an 
installation,
    Question. To what extent is it possible to fully assess the extent 
to which military property is contaminated by UXO and the likely future 
clean-up costs at the time base realignment and closure decisions are 
made?
    Answer. The Department has plans in place to determine the extent 
of the UXO issue on operational ranges and munitions response areas 
(which includes closed ranges on active installations). However, full 
accomplishments of the required investigation and characterization may 
take several years. To the extent that these plans are complete, they 
will provide information to support future base realignment and closure 
decisions. There are two primary drivers for these assessments. DoD 
Directive 4715.11, ``Environmental Explosives Safety Management on 
Department of Defense Active and Inactive Ranges Within the Untied 
States'' requires the design and use of DoD ranges and the munitions 
used on them, to the extent practical, to minimize both potential 
explosive hazards and harmful environmental impacts and to promote 
resource recovery and recycling. The Directive also requires each 
Component to establish sustainable range management goals in its long 
term planning efforts, and ensure that management plans are 
accomplished and reviewed every five years. The September 2001 update 
to the Defense Environmental Restoration Program Management Guidance 
requires the Components to designate closed ranges by 30 September 
2002.
    Question. What types of reuse plan exist for most of the BRAC 
acreage that is contaminated by UXO? How much of it is slated to go to 
other federal agencies such as the Bureau of Land Management versus to 
base reuse organizations for economic development purposes?
    Answer. Reuse plans run the gamut from residential development, 
like at Fort Ord, to a wildlife refuge at Fort Meade. However, the 
majority of the remaining UXO contaminated acreage is to be transferred 
to agencies within the Department of Interior.
    Question. To what extent is slowness in removing UXO a function of 
inadequate funding, the lack of agreements between DOD, federal and 
state, local agencies, and other environmental interests regarding 
clean-up methods?
    Answer. UXO imposes a complex set of safety, environmental, and 
regulatory issues, based on site specific characteristics and 
stakeholder involvement. In the process of conducting munitions 
response actions, DoD remains committed to working in collaboration 
with the regulators and the community to remove, where possible, and 
minimize any explosive safety hazards. While funding is always an 
issue, the ability to effectively and efficiently agree with 
stakeholders, including regulators and other government agencies on a 
response action, is the most significant determinant of the total cost. 
Determining what can be done with currently available technologies and 
the development or reuse plans which consider the UXO challenge are 
also major factors. Reuse and regulatory plans, such as habitat 
management plans, need the flexibility to address unforeseen changes in 
conditions, while also striving to achieve agreed upon goals.
    Question. To what extent are interim UXO clean-up efforts underway 
on BRAC properties for which agreement on ultimate clean-up 
requirements are still pending?
    Answer. Because of the safety hazard associated with UXO, interim 
military munitions response actions are taken at BRAC installations 
where an immediate UXO explosive safety issue presents itself. These 
actions are usually a part of a comprehensive plan to address the UXO 
at the installation. Through the end of FY01, seven interim actions 
were taken at BRAC military munitions sites.
    Question. How often do reuse plans change after closure decisions 
are made that impact the extent of UXO clean up (depth of removal) and 
costs?
    Answer. The adopted Reuse Plan is seldom changed after the nature 
and extent of UXO is characterized. If any change or adjustments are 
made, they are normally to a less intense reuse due to constraints 
imposed by the presence of UXO. An example is Fort Ord where a decision 
had been made to use a former impact area for residential development. 
However, after site characterization had been undertaken and UXO 
discovered the Local Reuse Authority began to look at viable 
alternatives and a recommendation was made to swap the type of reuse 
for two separate properties. This change makes sense by developing the 
residential portion of the adopted reuse plan at an alternative 
location not encumbered by UXO.
    Question. In March 2000, the Defense Department and the 
Environmental Protection Agency completed an interim management 
agreement addressing UXO response activities on closed, transferring 
and transferred training ranges. Still, it is our understanding that, 
despite many years of discussion between DoD and EPA on the processes 
to be used by the Department in cleaning up UXO on BRAC bases as well 
as other DOD sites, the issue remains unresolved. Describe briefly the 
processes being used today by the Department in identifying, 
investigating and cleaning up UXO contaminated property on BRAC bases 
and how does that process differ materially from the process advocated 
by the EPA? What would be the impact, in terms of required funding, 
schedule, and protection of human health and safety, if the Department 
adopted the EPA approach to UXO clean up?
    Answer. DOD and EPA developed the ``Management Principles for 
Implementing Response Actions at Closed, Transferring, and Transferred 
(CTT) Ranges'' (Interim Final, March 7, 2000) in response to an 
Environmental Protection Agency (EPA) letter to the Department in April 
1999. The principles were developed to assist in finalizing the ``Range 
Rule'', which was being developed to guide response actions at CTT 
ranges. The range Rule was never finalized; however, these principles 
remain valid. The National Association of Attorneys General and the 
Environmental Council of States expressed concerns about the Federal 
Government taking action without consulting with state stakeholders. In 
response, as was pointed out in the testimony, the Department has 
embarked on establishing a Munitions response Committee to develop 
collaborative decision-making processes for munitions response actions. 
This Committee includes representatives from state governments and the 
Environmental Protection Agency. Potentially affected tribes and the 
Departments of Interior and Agriculture (both as federal land managers) 
have been invited to participate on the Committee. As the Committee 
accomplishes its activities, and the Department develops the 
comprehensive plan required by the FY 2002 National Defense 
Authorization Act, the Department will be better able to answer the 
cost and schedule questions based on agreed, not adversarial, 
processes. This plan will be provided to the Congress in April 2003 as 
part of the Defense Environmental Restoration Program Report to 
Congress.
    Question. It is our understanding that DOD expects to spend about 
$3.5 billion in environmental clean-up costs beyond fiscal year 2001 at 
its BRAC bases. To what extent are UXO clean-up costs included in that 
estimate and how much is needed to clean-up. UXO? Further, how firm are 
these estimates and at what bases is UXO clean up required?
    Answer. As reported in the Defense Environmental Response Program 
Fiscal Year 2001 report to Congress, the cost-to-complete estimate for 
military munitions response activities is $398 million. This estimate 
is based on our best and most current information on planned actions to 
address known military munitions response sites at the following 12 
installations and is included in the total BRAC environmental 
restoration FY02-to-complete estimate of $3.7 billion.
           Fort McClellan, AL
           Presidio of Monterey (Fort Ord Annex), CA
           Sierra Army Depot, CA
           Pueblo Chemical Depot, CO
           Savanna Depot Activity, IL
           Jefferson Proving Ground, IN
           Fort George G. Meade, MD
           Fort Ritchie, MD
           Fort Wingate, NM
           Seneca Army Depot, NY
           Umatilla Chemical Depot, OR
           Camp Bonneville, WA
    Additionally, Navy is conducting military munitions response 
activities in FY02 and beyond at the following eight installations and 
estimates the total cost to be $61 million and has included it within 
the overall DoD FY02-to-complete environmental restoration estimate of 
$3.7 billion.
           Adak Naval Air Facility, AK
           Crows Landing Naval Auxiliary Landing Field, CA
           El Toro Marine Corps Air Station, CA
           Mare Island Naval Shipyard, CA
           Salton Sea Test Range, CA
           Treasure Island Naval Station, CA
           Cecil Field Naval Air Station, FL
           South Weymouth Naval Air Station, MA
    DoD will update and refine the military munitions response cost 
estimate as additional information and requirements are identified at 
BRAC installations.
    Question. To what extent have technologies and practices for UXO 
clean up changed over the past 5 years? Are there any substantial 
improvements on the horizon for UXO detection and remediation? To what 
extent is funding an impediment to developing new technologies?
    Answer. The state of UXO detection technology and practices for UXO 
clean-up has significantly improved over the past five years. Through 
the mid-1990s, the default technology was ``mag and flag.'' Independent 
evaluations of ``mag and flag'' practices demonstrated it has an 
unacceptably low rate of UXO detection and an excessive false alarm 
rate. High false alarm rates lead directly to higher costs for 
remediation. Improving beyond the default technology essentially began 
in the mid 1990s and has led the Department (with many technology 
partners) to develop, demonstrate, and implement a new class of UXO 
detection technologies that form its basis in modern digital 
geophysics. These novel approaches have led to a significant 
improvement in the probability of detection and assisted in reduced 
cost for cleanup. New characterization approaches are being used by 
industry on DoD UXO cleanup projects. In addition, DoD has made 
improvements to engineering controls and disposal options.
    While there is improving news on using new generation UXO 
technology, significant limitations remain. At all but the simplest 
sites, the false alarm rate is still quite high, and discrimination 
rates require further improvements to further reduce costs. Site and 
terrain conditions also limit the application of these new 
technologies. Next generation detection approaches offer the potential 
to increase the high probability of detection at all UXO contaminated 
sites, but more development is required to achieve the discrimination 
required to avoid digging holes to remove non-UXO items. DoD will 
continue to exploit these systems along with advances in signal 
processing, navigation, and improvements in platform performance.
    DoD will execute over $17 million in RDT&E funds in FY 2002 for 
UXO, an increase of over $4 million from FY 2001.
    A 1998 Report of the Defense Science Board Task Force On Unexploded 
Ordnance (UXO) Clearance, Active range UXO clearance, and Explosive 
Ordnance Disposal (EOD) Programs recommended that UXO site clean up 
activities be packaged and outsourced entirely to contractors to 
achieve more cost effective solutions. It went on to say that 
contractual arrangements should provide incentives to stimulate 
industry to invest in and use advanced technology. The objective was to 
have industry commercialize and apply DOD developed technologies as 
well as to develop their own proprietary products.
    Question. To what extent is UXO remediation work on BRAC bases 
contracted with the private sector?
    Answer. DoD retains control and management of the overall scope and 
direction of BRAC military munitions response actions with the 
overwhelming majority of the work, about 95% or more, carried out by 
the private sector.
    Question. To what extent is industry being given incentives to 
develop and apply advance technologies in UXO clearance?
    Answer. The UXO technology RDT&E program is predominately executed 
by industry. Funds are provided by the Components and DoD's defense-
wide programs; Strategic Environmental Research and Development Program 
(SERDP) and the Environmental Security Technology Certification Program 
(ESTCP). New UXO technologies are transitioned through direct 
industrial involvement so as to ensure the latest technology can be 
applied on DoD UXO cleanups. Contracts for operational cleanup 
encouraged the contractor to apply the most advanced technology 
appropriate for the site.
    Question. Can you explain the DOD's involvement in the private 
sector's efforts to develop new assessment and clean up technologies? 
What type of support does DOD provide to the process?
    Answer. The Department continues to engage the private sector in 
seeking new technologies for assessment and cleanup of UXO. This 
activity has been enhanced by our use of defense-wide programs like the 
Strategic Environmental Research and Development Program (SERDP) and 
the Environmental Security technology Certification Program (ESTCP) to 
complement Service activities. These two programs, like those of the 
Services, solicit directly from the private sector and award research, 
development, and demonstration and validation contracts to the private 
sector on a competitive basis. DoD has been successful with this 
approach and has enjoyed overwhelming response from the private sector. 
As an example, a recent SERDP solicitation for UXO technologies 
resulted in over 90 proposals being submitted from the private sector. 
In FY02, over 60% of the SERDP's UXO development effort is being 
executed by the private sector, and over 75% of ESTCP's UXO 
demonstrations are being executed by the private sector.
    Question. Has DOD been using new technologies to decrease the cost 
of unexploded ordinance assessment, remediation, and cleanup? Has DOD 
identified areas of UXO mediation that can benefit from technology 
investment? What techniques are available to detect munitions 
constituents in groundwater? Has DOD invested in Geographical 
Information Systems and mapping technologies?
    Answer. DoD is using new technologies to both decrease cost and 
ensure optimal risk reduction in the overall UXO cleanup program. New 
technologies are being deployed across all phases of the UXO program, 
from initial site characterization through disposal of excavated 
munitions. The DoD programs are designed to provide continuous 
improvements to UXO technology and make them accessible to our industry 
partners.
    DoD has identified technology gaps for both land and water ranges 
contaminated with UXO that can benefit from technology investments. 
These gaps include:
           Wide area assessment to perform rapid assessment of 
        large areas;
           Production ground and water surveys to provide 
        detailed site characterization;
           Cued identification technologies to non-intrusively 
        characterize suspected anomalies;
           Removal and disposal capabilities to reduce cost, 
        risk and environmental impact;
           Hazard assessment information and tools to aid in 
        the management of UXO risks.
    A number of laboratory techniques are commercially available for 
detecting explosives in groundwater and more rapid and cost effective 
techniques are under development. Environmental Protection Agency (EPA) 
standard laboratory methods were developed in the 1980s by DoD. Newer 
techniques that are field deployable are undergoing demonstration and 
validation under a joint DoD and EPA effort. Next generation techniques 
that can rapidly and at a lower cost help characterize groundwater are 
under development.
    DoD continues to invest in Geographical Information Systems (GIS) 
to aid progress in the UXO program. GIS and advanced mapping techniques 
continue to be a critical component to characterizing and managing UXO 
site work.
    Question. The diversity of UXO requirements has resulted in 
numerous organizations being involved with the UXO problem, many 
different projects, and different funding levels. The challenge is to 
make sure these diverse efforts are coordinated, unwarranted 
duplication eliminated, and appropriate information is shared. Have the 
various DOD organizations responsible for environmental compliance and 
cleanup (for UXO), such as the DOD Explosives Safety Board, Army Center 
for Environmental Excellence and the Air Force Center for Environmental 
Excellence, established a unified management structure for sharing best 
practices and implementing common cleanup standards? What is the 
process to make sure these diverse efforts are coordinated, unwarranted 
duplication eliminated, and appropriate information is shared?
    Answer. The broad variety of coordination and policy 
responsibilities cited fall under several Department of Defense (DOD) 
Organizations, including: the Joint Unexploded Ordnance Coordination 
Office (JUXOCO), the Defense Test and Training Steering Group (DTTSG) 
and the Department of Defense Explosive Safety Board (DDESB). Each of 
the Services has also established various committees that deal with 
different aspects of the UXO issue. The Operational and Environmental 
Executive Steering Committee for Munitions (OEESCM) acts as an 
overarching organization to tie the work of all these various 
organizations together, develop common policy concepts and guidance, 
share ideas, and prevent duplicative effort where possible.
    The OEESCM, established in 1998 by the Office of the Secretary Of 
Defense (OSD), has the mission of developing draft DoD policies, 
positions, and action plans related to the life-cycle management of 
munitions (including UXO). A key component of that mission is to 
support DoD readiness by ensuring a balance between operational needs, 
explosive safety, and environmental stewardship during the acquisition, 
management, use, and disposal of munitions (including UXO). Hence, the 
establishment of a unified management structure for sharing best 
practices falls under the umbrella of the OEESCM. The Military 
Departments, Defense Logistics Agency (DLA), JUXOCO, DDESB, Deputy 
Under Secretary of Defense for Installations and Environment 
(DUSD(I&E)), as well as several other DoD Offices and Organizations, 
are members of the OEESCM. Members come from operational, logistical, 
environmental, legal, and other disciplines. The OEESCM developed the 
Munitions Action Plan, a DoD strategy to address the issues of ranges 
and munitions in support of readiness. It contains diverse objectives 
ranging from policy development, Research, Development, Testing and 
Evaluation (RDT&E), to data gathering, to be implemented by the 
Services and DoD organizations.
    Question. Recently, DOD in a draft letter released to the public 
said it opposes legislation (H.R. 3212) attempting to include 
underwater live impact areas in DOD's range maintenance program for 
active military training ranges. Rather, DOD says it will address 
concerns over its operational ranges through its sustainable range 
initiative. Can you explain DOD's opposition to the legislation? How 
would DOD ``address'' underwater impact areas in its sustainable range 
initiative? Does DOD plan to release this initiative in the near 
future?
    Answer. The Department of Defense opposes this legislation. DOD 
believes that the existing laws, regulations and policies that apply to 
underwater munitions are sufficient to ensure the protection of public 
health and the environment.
    To address recent concerns raised regarding its operational ranges, 
the Department has commenced a sustainable range initiative. DoD is 
developing and implementing policies and programs to improve range 
sustainment. Specific to this issue, the goals of this initiative 
include establishing policy for use and management of operational 
ranges in a safe, environmentally friendly, and cost effective manner 
that will ensure their long-term availability. This initiative also 
includes assessment of the impact of munitions use on operational 
ranges to ensure that such use does not adversely affect surrounding 
properties or populations.
    Policies for range sustainment are currently undergoing 
coordination within the Department. A copy of the Department's official 
position on the proposed legislation is provided for your information.
                                Fort Ord
    It is our understanding the UXO clean-up is a serious problem at 
the former Fort Ord in California and that the cleanup could require 
hundreds of millions of dollars and not be completed until about 2015? 
With regard to the clean-up.
    Question. Would increased funding over the next several years allow 
the Army to accelerate the clean-up schedule?
    Answer. We have sufficient funds to manage the work that we can 
accomplish annually while still complying with the requirements of the 
Habitat Management Plan. The Army is preparing a Remedial 
Investigation/Feasibility Study (RI/FS) for its munition response at 
the former Fort Ord. The RI/FS is scheduled for completion in 2005. In 
the meantime, the Army is conducting interim response actions so as to 
make parcels available for reuse, particularly those that the local 
reuse authority has identified as a high priority. These actions are 
subject to community involvement and state and federal regulatory 
oversight. All these combined affect the level of the unexploded 
ordnance removal that the Army can accomplish each year.
    Question. To what extent are there other barriers present, besides 
funding, that requires an extended clean-up schedule?
    Answer. The Habitat Management Plan (HMP) supports burning as the 
preferred method for managing fire dependent habitat. Burning also 
supports our efforts to clear vegetation in order to access unexploded 
ordnance. The HMP, however, limits the number of acres that can be 
burned annually, so as not to damage the eco-systems ability to 
rejuvenate. In addition, the environmental and climatic conditions must 
be within prescribed parameters to support a burn. Litigation led to a 
decision by the U.S. 9th Circuit Court of Appeals that federal agencies 
cleaning up their facilities cannot avail themselves of the CERCLA 
section 113(h) protection of ongoing cleanups. Therefore, unlike 
cleanups elsewhere, our efforts can be stopped before they even get 
started. (This is the real reason cleanups cannot go forward at Ord).
    Question. Clean-up progress has been delayed in recent years by 
issues involving the Army's methods for clearing vegetation from the 
property (e.g. controlled burns versus use of mechanical devices). What 
progress is being made to resolve clearance issues and what impact have 
these issues had on the clean-up schedule? How are costs likely to be 
affected by the resolution?
    Answer. The Army and the local Air Board have reached a tentative 
settlement to complete specific actions to resolve the Air Board's 
current lawsuit that hinders the Army's plan for prescribed burning. 
The lawsuit delayed the Army's prescribed burn plan for at least a 
year. The Army expects to execute its burn plan this October, but the 
Air Board is not precluded from challenging that burn plan as well.
    In addition to continuing the Remedial Investigation/Feasibility 
Study (RI/FS) process, the Army is completing an Interim Action RI/FS 
to respond to high priority unexploded ordnance (UXO) sites. This study 
includes site preparation actions, such as burning.
    Costs are likely to increase. The mounting list of activities 
required to support our munitions response efforts has significantly 
increased the Army's cost per acre to remove UXO. Also, the cost of 
keeping UXO teams on site performing less critical tasks consumes 
resources that could otherwise be applied to critical tasks.
    Question. What viable opportunities exist to reduce the extent of 
clean up required on the former base and what impact would they have on 
the clean-up funding requirement and the ultimate reuse of the 
property?
    Answer. In regard to risk management, agreement by the local reuse 
authority and regulators to accept risk management standards compatible 
with development plans for specific parcels will save time and funds. 
Working with government and private sector technical experts can help 
identify these risk management standards.
    As to reuse, the end use of development parcels should consider the 
history of the parcels. The parties should avoid planning for 
residential development on parcels that are known or suspected to 
contain unexploded ordnance.

    [Clerk's note.--End of questions for the record submitted 
by Mr. Farr.]
    [Clerk's note.--Questions for the record submitted by Mr. 
Blumenauer.]
                               Technology
    Question. What is the priority of addressing unexploded ordnance in 
the Department of Defense's overall research priorities?
    Answer. Within the Environmental Quality Technology Area, research 
for the detection, discrimination and removal of Unexploded Ordnance 
enjoys the highest priority. In response to this priority, DoD's 
Science and Technology Area Plan for Environmental Quality includes a 
Defense Technology Objective to support the enhanced detection, 
discrimination, and characterization of buried unexploded ordnance for 
environmental remediation and active range clearance.
    Question. What is the impact of UXO hazards on installations that 
may be considered for closure in the future as part of the Base 
Realignment and Closure process?
    Answer. In recommending military installations for closure or 
realignment during a BRAC round in 2005, the Department will ensure 
that military value is given primary consideration. The existence of 
unexploded ordnance hazards on an installation may affect the closure 
decision-making process if the hazards affect its military value.
    Question. In 1998, the Defense Science Board recommended that the 
Defense Department put someone in charge of Munitions Response. Who's 
in charge now?
    Answer. As discussed in the testimony, the Deputy Under Secretary 
of Defense (Installations and Environment) designated the Assistant 
Deputy Under Secretary (Environment) to be in charge of the Munitions 
Response Program.
    Question. One of the successes of the Ft. Ord SMART Team has been 
the development of a comprehensive site security plan. Are similar 
plans being developed at other closed, transferred, and transferring 
ranges and other UXO sites? How long would it take the Defense 
Department to put rudimentary site security plans into effect at every 
property where UXO and other explosive hazards threaten the safety of 
the public or military families?
    Answer. The site-specific nature of potential UXO sites allows for 
generalized guidelines (DoD Directive 4715.11 Environmental and 
Explosives Safety Management and DoD Active and Inactive Ranges Within 
the United States), and precludes a one-size-fits-all approach. Hence, 
no DoD-wide standardized plans or procedures are in place to provide 
physical security at former (transferred or transferring) ranges that 
are known or suspected to contain UXO.
    Individual installations and commands are already required to 
restrict access to areas known or suspected to contain UXO. Like at 
Fort Ord, installations determine security requirements and how best to 
meet them, and then implement them and evaluate their effectiveness on 
a case-by-case basis. Options include protective fencing designed to 
local requirements, signage, and implementing a UXO safety program, all 
elements of a good program to control access and risk.
    With regard to UXO safety, the Army developed a UXO safety 
education program. This web-based program uses a ``toolbox'' approach 
to help reduce risk that stems from lack of knowledge and to meet the 
educational challenges faced in areas near properties on which UXO may 
be found. The Army released this program in February to the public side 
of our Defense Environmental Network Information Exchange at http://
www.denix.osd.mil/uxosafety. The Army intends to continue to improve 
this program and to provide the tools (videos, briefings, posters, 
etc.) installations, other federal agencies, and local communities need 
to educate the local public about the hazards of UXO and what to do if 
they encounter UXO. The Army BRAC office developed an UXO Awareness/
Safety Video and an UXO Awareness brochure, which contains various 
posters, signs and handouts, an effort designed to assist local 
installation commanders and their representatives in developing safety 
programs that provide education to individuals wanting to access BRAC 
sites after remediation projects are competed and the land has been 
reverted to local use.
    As for the requirements for ``closed'' ranges on active 
installations, the Services have in place a series of regulations and 
guidance documents that establishes minimum safety requirements for all 
ranges used for training. These include requirements to fence, as 
required, and place warning signs around the boundaries of areas known 
or suspected to contain UXO.
    Question. I appreciate the efforts that the Defense Department is 
making to improve technology for finding and removing UXO from former 
ranges. Does the Department expect to return later with more effective, 
reliable technologies to sites initially ``cleared'' with visual 
surface sweeps or ``mag-and-flag'' techniques?
    Answer. The Department conducts environmental remediation actions 
to support its determined or reasonably anticipated end use. The 
Department is committed to addressing its responsibilities for 
munitions response and investing in technologies to improve the 
efficiency and effectiveness of our efforts. As new technologies or 
promising innovations emerge, DoD will review how best to apply these 
tools in the conduct of both on-going munitions response efforts and 
other situations (e.g., review and maintenance of land use controls, 
long-term monitoring requirements, etc.) that may warrant their 
application.

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



                           W I T N E S S E S

                              ----------                              
                                                                   Page
Beckman, Bobbie..................................................   237
Blair, Adm. Dennis...............................................   363
Blumenauer, Hon. Earl............................................   597
Brubaker, Brig. Gen. D.A.........................................   185
Coleman, Brig Gen. (Select) Ronald...............................   143
Dishner, J. G....................................................   487
Douglas, Deborah.................................................   237
DuBois, Raymond.............................................1, 487, 625
Duignan, Brig. Gen. Robert.......................................   185
Fatz, Raymond....................................................   625
Finch, CMSAF F. J................................................   283
Fiori, M. P......................................................    81
Gibbs, Nelson....................................................   185
Helmly, Maj. Gen. J. R...........................................    81
Herdt, J. L......................................................   283
Johnson, H.T..............................................143, 487, 625
Johnson, Rear Adm. Michael.......................................   143
Kemp, Marie-Christine............................................   237
Koetz, Maureen...................................................   625
McLean, Phyllis..................................................   237
McMichael, SGT MAJ Marine Corps. A. L............................   283
Preston, Rear Adm. Noel..........................................   143
Prosch, G. G.....................................................   487
Ralsont, Gen. J. W...............................................   435
Robbins, Maj. Gen. E. O., II.....................................   185
Schwartz, Gen. Thomas............................................   363
Squier, Brig. Gen. M. J..........................................    81
Tilley, SMA J. L.................................................   283
Van Antwerp, Maj. Gen. R. L., Jr.................................    81
Zakheim, Dov.....................................................     1


                               I N D E X

                              ----------                              

                                Overview

                                                                   Page
Agricultural Land, Loss Due to Encroachment......................    69
Base Realignment and Closure.....................................    53
Chairman, Statement of...........................................     1
Chemical Demilitarization........................................    55
Child Care Centers...............................................    59
Defense Emergency Response Fund..................................    42
Defense Language Institute.......................................    75
DuBois, Prepared Statement of Raymond F., Jr.....................    19
DuBois, Statement of Raymond F., Jr..............................    16
Housing Privatization............................................    46
Housing..........................................................    68
NATO.............................................................    61
Schools..........................................................    66
Sustainment, Restoration and Modernization (SRM).................    44
Tyndall AFB......................................................52, 73
Zakheim, Prepared Statement of Dr. Dov S.........................     8
Zakheim, Statement of Dr. Dov S..................................     4
Army Property--Disposal of.......................................   120
Army, Non-Citizen Members of U.S.................................   123
Barracks.........................................................   118
Base Realignment and Closure--Fort Ord...........................   122
Base Realignment and Closure--Local Reuse Authorities............   132
Base Realignment and Closure Properties..........................   130
Base Realignment and Closure Properties, Disposal of.............   121
Centralized Installation Management............................119, 136
Centralized Management--Effect on Guard and Reserve..............   137
Chairman, Statement of...........................................    81
Chemical Demilitarization........................................   139
Commissioning....................................................   125
Defense Language Institute--Military Construction................   119
Efficient Basing, East.........................................114, 139
Environmental Restoration Nationwide.............................   128
Fiori, Prepared Statement of Dr. Mario P.........................    86
Fiori, Statement of Dr. Mario P..................................    83
Fort Ord, Environmental Restoration at...........................   127
Guard Facilities--Newport, Indiana...............................   125
Helmly, Statement of Major General James R.......................   112
Housing Affordability............................................   130
Joint Use Facilities.............................................   134
Korea, Internet Use in...........................................   123
MilCon Budget--FY 03 vs. FY 02...................................   116
MilCon Budget, Low.............................................117, 138
MilCon On Hold, Status of........................................   134
National Guard--Fort Knox........................................   125
Olver, Statement of the Honorable John...........................    83
Pueblo, Housing..................................................   126
Squier, Statement of Brigadier Michael J.........................   110
Supplemental Funding.............................................   116
U.S. Army South Headquarters Relocation..........................   132
Unexploded Ordnance--Smart Teams.................................   127
Unexploded Ordnance Cleanup......................................   129
Utilities Privatization..........................................   140
Van Antwerp, Statement of MG Robert L............................   109
West Point--Arvin Physical Development Center Reprogramming......   124

                                  Navy

Barracks Privatization...........................................   174
Chairman, Statement of...........................................   143
Commissioning....................................................   178
Demonstration Language...........................................   180
Homeport Ashore................................................169, 177
Housing Goal.....................................................   179
Johnson, Prepared Statement of H.T...............................   149
Johnson, Statement of H.T........................................   145
NATO Regional Command Headquarters...............................   178
Naval Postgraduate School--Future Plans for......................   180
Naval Postgraduate School........................................   165
Olver, Statement of the Honorable John...........................   144
Pier Replacement Program.......................................175, 177
Recapitalization Rate............................................   179

                               Air Force

Aricraft Lease...................................................   226
B-2 Beddown....................................................220, 223
C-17.............................................................   209
Chairman, Statement of...........................................   180
Commercial Airlines..............................................   230
Dover AFB........................................................   226
Family Housing Conventional and Privatization....................   211
Family Housing.................................................185, 209
Fiscal Year 2003 Budget..........................................   233
Force Protection.................................................   214
General Officer Quarters.........................................   227
Gibbs, Statement of the Honorable Nelson F.......................   185
Gibbs, Prepared Statement of the Honorable Nelson F..............   187
Guard and Reserve Military Construction..........................   215
Guard Projects...................................................   224
Holloman AFB.....................................................   212
Military Personnel...............................................   222
Privatization.............................................211, 214, 221
Tyndall AFB....................................................217, 218

                Quality of Life in the Military--Spouses

Beckman, Prepared Statement of Bobbie Sue........................   242
Chairman, Statement of...........................................   237
Cleaning Fees....................................................   251
Douglas, Statement of Mrs. Debi..................................   253
Olver, Statement of the Honorable John W.........................   239

            Quality of Life in the Military--Senior Enlisted

Chairman, Statement of...........................................   283
Child Care.......................................................   334
Dormitory Master Plan............................................   334
Education Benefits...............................................   333
Facilities Maintenance...........................................   350
Family Housing...................................................   334
Finch, Prepared Statement of Chief Master Sergeant Frederick J...   332
Finch, Statement of Chief Master Sergeant Frederick J............   332
Fitness Facilities...............................................   334
Herdt, Prepared Statement of Master Chief Petty Officer James L..   306
Herdt, Statement of Master Chief Petty Officer James L...........   304
Housing, Basic Allowance for.....................................   333
Korea, Soldier Housing in........................................   288
Maintenance and Facilities Privatization.........................   360
McMichael, Prepared Statement of Sergeant Major Alford L.........   321
McMichael, Statement of Sergeant Major Alford L..................   318
Military Construction and Privatization..........................   359
Military Construction Funding....................................   285
Military Pay.....................................................   332
Military Personnel...............................................   348
Olver, Statement of the Honorable John W.........................   284
Operations Tempo.................................................   351
Pay and Benefits.................................................   349
Point Source Improvements........................................   357
Quality of Life and Equipment Issues.............................   353
Quality of Life Improvements.....................................   290
Recruiting and Retention, Effects on.............................   357
Reserve Component Utilization....................................   290
Retention Rates..................................................   333
Tilley, Statement of Sergeant Major Jack L.......................   287
Tilley, Prepared Statement of Sergeant Major Jack L..............   292
Deployment Figures...............................................   348

                          U.S. Pacific Command

Blair, Prepared Statement of Admiral Dennis C....................   373
Blair, Statement of Admiral Dennis C.............................   367
Chairman, Statement of the.......................................   363
Guam, Future Needs for...........................................   427
Historic Preservation Issues.....................................   433
Host Nation Support..............................................   433
Japan............................................................   423
Land Partnership Plan............................................   422
Olver, Statement of the Honorable John W.........................   365
Pacific Command Budget...........................................   432
Personnel Issues.................................................   432
Reunification of North and South Korea...........................   428
Schools in Guam..................................................   426
Schwartz, Prepared Statement of General Thomas A.................   399
Schwartz, Statement of General Thomas A..........................   394
Wake Island......................................................   429

                         U.S. European Command

Barracks Upgrade Program.........................................   473
Bosnia U.S. Force Contribution...................................   469
Chairman, Statement of the.......................................   435
Efficient Base East..............................................   472
European Command Area of Responsibility..........................   437
Force Structure..................................................   468
Housing Costs....................................................   484
Housing Privatization............................................   467
Incirlik--Operation Northern Watch...............................   483
Infrastructure...................................................   439
Kosovo U.S. Force Contribution...................................   482
NATO Aspirants...................................................   464
NATO Member Nations, New.........................................   461
Olver, Statement of the Honorable John W.........................   436
On Post Living Percentages.......................................   484
Operations.......................................................   439
Personnel Locations..............................................   476
Ralston, Prepared Statement of General Joseph W..................   443
Ralston, Statement of General Joseph W...........................   437
Reserve/National Guard Contributions.............................   469
Unaccompanied Personnel..........................................   485
War Crimes, Persons Indicted for.................................   472

                         Housing Privatization

BAH..............................................................   563
Barracks Privatization...........................................   577
Base Closure and Realignment.....................................   562
Chairman, Statement of the.......................................   487
Consultants....................................................570, 592
Dishner, Prepared Statement of Jimmy G...........................   545
Dishner, Statement of Jimmy G....................................   541
DuBois, Prepared Statement of Raymond F., Jr.....................   493
DuBois, Statement of Raymond F., Jr..............................   489
Family Housing--Navy.............................................   590
Family Housing Master Plan.......................................   561
Fort Hood Housing................................................   586
General Officers Quarters........................................   578
Housing Privatization Budget Request.............................   584
Housing Privatization............................................   574
Housing, Inadequate..............................................   558
Johnson, Prepared Statement of H.T...............................   513
Johnson, Statement of H.T........................................   513
Korea............................................................   579
Navy Barracks Privatization......................................   591
Overseas Housing.................................................   557
Prosch, Prepared Statement of Geoffrey G.........................   527
Prosch, Statement of Geoffrey G..................................   524
RCI Program......................................................   587
Schools..........................................................   574

                          Unexploded Ordnance

Blumenauer, Prepared Statement of the Honorable Earl.............   604
Blumenauer, Statement of Honorable Earl..........................   600
BRAC-UXO.........................................................   707
Chairman, Statement of the.......................................   597
Clean-up Costs...................................................   706
Clean-up Schedule................................................   707
Cleanup..........................................................   679
Compliance.......................................................   679
Conservation.....................................................   680
DuBois, Prepared Statement of Raymond F., Jr.....................   629
DuBois, Statement of Raymond F., Jr..............................   625
Environmental Program............................................   679
Fatz, Prepared Statement of Raymond J............................   647
Fatz, Statement of Raymond J.....................................   645
Fort Ord.........................................................   712
Houlemard, Prepared Statement of Mr. Michael A...................   615
Houlemard, Statement of Mr. Michael A............................   610
Inventory........................................................   706
Johnson, Prepared Statement of H.T...............................   666
Johnson, Statement of H.T........................................   663
Koetz, Prepared Statement of Maureen T...........................   682
Koetz, Statement of Maureen T....................................   679
Olver, Statement of the Honorable John W.........................   598
Performance-Based Contracting....................................   692
Pollution Prevention.............................................   680
Technology.....................................................707, 713
UXO Cleanup......................................................   707

                                
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