U.S. GOVERNMENT PRINTING OFFICE

39–863 cc WASHINGTON : 1998

S. HRG. 105–275

MILITARY CONSTRUCTION APPROPRIATIONS FOR

FISCAL YEAR 1998

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS

UNITED STATES SENATE

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

ON

H.R. 2016

AN ACT MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION FOR

THE DEPARTMENT OF DEFENSE FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1998, AND FOR OTHER PURPOSES

Printed for the use of the Committee on Appropriations

(

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

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
(II)

COMMITTEE ON APPROPRIATIONS

TED STEVENS, Alaska, Chairman

THAD COCHRAN, Mississippi

ARLEN SPECTER, Pennsylvania

PETE V. DOMENICI, New Mexico

CHRISTOPHER S. BOND, Missouri

SLADE GORTON, Washington

MITCH MCCONNELL, Kentucky

CONRAD BURNS, Montana

RICHARD C. SHELBY, Alabama

JUDD GREGG, New Hampshire

ROBERT F. BENNETT, Utah

BEN NIGHTHORSE CAMPBELL, Colorado

LARRY CRAIG, Idaho

LAUCH FAIRCLOTH, North Carolina

KAY BAILEY HUTCHISON, Texas

ROBERT C. BYRD, West Virginia

DANIEL K. INOUYE, Hawaii

ERNEST F. HOLLINGS, South Carolina

PATRICK J. LEAHY, Vermont

DALE BUMPERS, Arkansas

FRANK R. LAUTENBERG, New Jersey

TOM HARKIN, Iowa

BARBARA A. MIKULSKI, Maryland

HARRY REID, Nevada

HERB KOHL, Wisconsin

PATTY MURRAY, Washington

BYRON DORGAN, North Dakota

BARBARA BOXER, California

STEVEN J. CORTESE, Staff Director

LISA SUTHERLAND, Deputy Staff Director

JAMES H. ENGLISH, Minority Staff Director

SUBCOMMITTEE ON MILITARY CONSTRUCTION

CONRAD BURNS, Montana Chairman

KAY BAILEY HUTCHISON, Texas

LAUCH FAIRCLOTH, North Carolina

LARRY CRAIG, Idaho

TED STEVENS, Alaska (ex officio)

PATTY MURRAY, Washington

HARRY REID, Nevada

DANIEL K. INOUYE, Hawaii

ROBERT C. BYRD, West Virginia

(ex officio)

Staff

SID ASHWORTH

C. RICHARD D’AMATO, Minority
(III)

CONTENTS

TUESDAY, MARCH 11, 1997

Department of Defense:

Department of the Navy .................................................................................. 1

Department of the Air Force ........................................................................... 35

THURSDAY, MAY 8, 1997

Department of Defense:

Department of the Army .................................................................................. 61

Defense agencies:

U.S. Special Operations Command .......................................................... 101

Assistant Secretary of Defense for Health Services Operations and

Readiness ................................................................................................ 101

Defense Logistics Agency .......................................................................... 101

Defense Finance and Accounting Service ................................................ 101
(1)

MILITARY CONSTRUCTION APPROPRIATIONS

FOR FISCAL YEAR 1998

TUESDAY, MARCH 11, 1997

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, DC.

The subcommittee met at 9:37 a.m., in room SD–192, Dirksen

Senate Office Building, Hon. Conrad Burns (chairman) presiding.

Present: Senators Burns, Stevens, Murray, Reid, and Inouye.

DEPARTMENT OF DEFENSE

DEPARTMENT OF THE NAVY

STATEMENT OF HON. ROBERT B. PIRIE, JR., ASSISTANT SECRETARY

OF THE NAVY, INSTALLATIONS AND ENVIRONMENT

ACCOMPANIED BY:

MAJ. GEN. JOSEPH STEWART, DEPUTY CHIEF OF STAFF, INSTALLATIONS AND LOGISTICS, U.S. MARINE CORPS

REAR ADM. DAVID NASH, CHIEF, NAVAL FACILITIES ENGINEERING

COMMAND, U.S. NAVY

CAPT. JOHN BRUNELLI, DEPUTY CHIEF, NAVAL RESERVE, U.S.

NAVY

OPENING STATEMENT OF CONRAD BURNS

Senator BURNS. Good morning and I will call the committee to

order. Senator Murray, the ranking member, is on her way.

The subcommittee this morning will hear testimony on military

construction, family housing, BRAC, and Reserve programs for the

Navy and the Air Force. I welcome this morning our new ranking

member of military construction, Senator Murray of Washington

State, and thank you for coming. I look forward to working with

her and her staff as we work our way through the 1998 military

construction programs.

We are pleased to hear from the Assistant Secretary of the Navy

for Installations and Environment, Robert B. Pirie, and we welcome you this morning. It is great to have you with us again. I certainly thank you for coming.

Would you please introduce the gentlemen that you brought with

you this morning.

Mr. PIRIE. Thank you, Mr. Chairman.

With me this morning are: Rear Adm. Dave Nash, who is the

Chief of the Naval Facilities Engineering Command; and Maj. Gen.

Joe Stewart, who is the Deputy Chief of Staff of the Marine Corps
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for Installations and Logistics; and Capt. John Brunelli, who is the

Deputy Chief of the Naval Reserve.

Senator BURNS. We thank you and want to commend you for

your commitment to the quality of life of our sailors and our marines, as well as their families. We recognize the Navy has a significant challenge to maintain the momentum in an area that we

want to work with you to achieve those objectives.

I think our missions have changed in the last 10 years. We continue to appropriate and be concerned with the quality of life of our

marines and sailors. We know that they are probably the most mobile of all of our military troops and we want to make sure that

they have everything that they need in order to make a really

fighting outfit like they are known to be.

We have asked you to address the fiscal year of 1998, the construction request for Navy housing, a portion of the base closure

account, and the request for the Navy reserves. So if you have your

opening statement, and I would tell you that your entire statement

will be made part of the record, and thank you for coming this

morning. You may proceed.

Mr. PIRIE. Thank you, Mr. Chairman. With your permission, I

will just hit some of the highlights.

Senator REID. I wonder if I could——

Senator BURNS. Oh, I am sorry. I better do this. I better recognize my ranking member this morning. Senator Murray, I am

sorry.

STATEMENT OF PATTY MURRAY

Senator MURRAY. Thank you, Mr. Chairman. I really appreciate

your arranging this early hearing on our Navy and Air Force military construction, BRAC, and housing programs, and I am very

pleased to serve as your ranking member on this very important

subcommittee, and I look forward to working with you, Mr. Chairman, and all of the committee in much the same fashion as my

predecessor Senator Reid, who is here with us today, worked so

successfully with you last year.

The programs the subcommittee oversees are crucial, focusing as

they do on the quality of life of our uniformed personnel here and

abroad and on the vital infrastructure that allows our forces to operate with assurance as the world’s sole superpower. These programs allow in the long run to defend our interests and those of

our allies and friends across an increasingly confusing and complicated world scene.

I recall that this committee was able to mark up and report its

annual bills out, get them through the Senate and the Congress

and to the President’s desk very early in the process. Even though

the committee added some $617 million to the request last year,

the President wisely signed it. It was overwhelmingly supported in

the Senate, much of that due to your excellent work, Mr. Chairman, in putting it together. I hope that we can repeat that performance this year.

Mr. Chairman, judging from the President’s request, it looks like

we are being invited to rewrite much of the budget submitted. The

request for our Guard and Reserve program is, as in the past several years, largely inadequate and perhaps deliberately so. For the
3

Guard and Reserve we appropriated $411 million last year. The request for fiscal year 1998 is for less than $173 million. So either

the administration is preparing to put the Guard and Reserve out

of business or, more likely, it expects us to add to the budget to

fund it appropriately, just as the committee did last year.

I have no doubt that we will together do just that. We admonished the administration last year not to repeat the budget history

of underfunding the Guard and Reserves, anticipating a huge plusup by the committee, but it seems to have done just that.

First, the overall request for the Guard and Reserve is two-thirds

less than the amount we appropriated for fiscal year 1997. In order

to match last year’s amount, we would have to add nearly $239

million to the budget.

Second, Mr. Chairman, the budget for housing has been reduced

by some 13 percent from last year’s appropriated amount. This is

the heart of quality of life and I am not certain that we can leave

it at the requested level. I know that the Department is attempting

to put into place a new public-private housing initiative, the Department of Defense family housing improvement fund, which allows the private sector to participate in our housing programs. I

fully support that initiative, and indeed one of the first of two of

these programs has just been announced at a naval base at Everett, WA.

But this program is in its infancy and I am not certain there is

any justification for the substantial reduction in the budget for

family housing.

Third, Mr. Chairman, I have looked through this budget and I

have found that the only category which actually experiences an increase over last year is for NATO infrastructure. The request is

slightly over last year’s amount, but is greater than the entire

amount requested for the Guard and Reserves. I have to ask, what

is wrong with this picture?

We gut the American National Guard and Reserve and plus-up

the amounts for allied construction in Europe. And I thought the

cold war was over.

Having said all this, Mr. Chairman, I warmly greet Messrs. Pirie

and Coleman, Assistant Secretaries of the Navy and the Air Force.

Each of them have been most helpful to this committee in the past

and I know that they are concerned about the budget problems

that I have just cited, and I know that whatever can be done to

correct them, each of us will do so.

So I welcome all of you back before us and, Mr. Chairman, I look

forward to working with you this year.

Senator BURNS. Thank you, Senator Murray.

Now my good friend from Nevada in this matter, and we have

been through these wars before and plan to go through them again.

Senator Reid from Nevada.

STATEMENT OF HARRY REID

Senator REID. Chairman Burns, thank you very much.

The reason I wanted to drop by today is to express publicly how

much I enjoyed working with Chairman Burns. This bill on two

separate occasions has been brought through the Congress by Senator Burns and, hopefully with my assistance, we have been able
4

to get the bill to the President. Our military construction bills were

the earliest and first signed bills of any of the appropriations bills

these past 2 years. Most of that is due to Chairman Burns’ ability

to work with his colleagues and those on the other side of the aisle.

I just want to say to Senator Burns how much I appreciate having had the opportunity to work with him.

I say to my colleague Senator Murray, she has done a lot of the

same things that I have done. She has had the experience of working with the legislative branch, which is a difficult bill, and now

she has the opportunity to work on this bill. I think these bills are

both extremely important.

I want to reiterate what Senator Burns has said about how the

Guard and Reserve has been neglected. Some day we are going to

just follow the submission of the President and then see what happens. We should probably do that except it would be, in my opinion, too drastic. It is just unfair to the Guard and Reserve.

Especially, I do not think the American public would understand

when, if you look through the budget, you find the only category

that maintains the same level of funding this year is for NATO infrastructure. It is a little hard for me to justify that we are going

to spend more money for NATO infrastructure and have these huge

cuts for Guard and Reserve.

So I would hope, Mr. Chairman, that with your attention you

will again direct money to the Guard and Reserve Forces, which in

my opinion are a very key component of making our military the

mightiest in the world.

I look forward to working with you and Senator Murray in this

Congress and the Congresses to come.

Senator BURNS. Thank you very much and thanks for the work

of both of you. It really is a pleasure to work with Senator Reid

and Senator Murray. I am sure we will get it to the President first

this time too, so we can be on vacation when everybody else is still

working. We will do that.

I have a statement from Senator Craig that I would like to put

in the record at this time.

Mr. Secretary, thank you.

[The statement follows:]

PREPARED STATEMENT OF SENATOR LARRY E. CRAIG

Mr. Chairman, it is indeed a pleasure to be a member of the Appropriations Committee and on this very important Subcommittee for Military Construction. Although military construction represents a small portion of the overall defense budget, it is the only portion that touches everyone within the service and their families.

Every type of facility and installation contributes to the quality of life. High quality installations contribute to personnel and family readiness, which translates directly to combat capability. That is why the success of your installations is just as

important as your next generation of new technology.

Mr. Pirie, I welcome you and note the Navy’s ongoing efforts to replace many antiquated facilities with a single composite facility at specific installations. Such a composite engineering and support facility is currently being constructed at the Naval

Surface Warfare Center at Bayview, Idaho. This effort will save future moneys by

reduced utilities and maintenance costs, necessary to operate the older facilities.

Likewise, Mr. Coleman, I welcome you and the efforts the Air Force has put forward in developing the new enhanced training range in Idaho. We are working

closely with your Air Force team, the Bureau of Land Management, our communities and environmentalists to ensure that the future range becomes a valuable

combat resource and a good neighbor to the community. I believe that ranges can
5

rival the importance of as our next air superiority fighter, and high quality ranges

can only be accomplished with solid planning and programming.

With the completion of the range, Mt. Home Air Force Base in Idaho, which the

Air Force considers one of the most successful composite wings today, will be the

model installation and wing for the Air Force of the 21st century.

Mr. Chairman, thank you for holding this hearing, and I look forward to working

with you to provide funding adequate for high quality installations, necessary housing and environmental protection for our lands. This the least a grateful Nation can

do for our service personnel and their families.

STATEMENT OF ROBERT B. PIRIE

Mr. PIRIE. Thanks. Good morning, Mr. Chairman, Senator Murray, and Senator Reid. I am really very glad to be here this morning to present the Navy’s military construction, family housing, and

base closure implementation program for——

Senator BURNS. Pull the microphone up.

Mr. PIRIE [continuing]. For fiscal 1998. Is that better?

Senator BURNS. Yes.

STATEMENT SUMMARY

Mr. PIRIE. Just to summarize some of the main points in my formal testimony, our fiscal year 1998 Milcon, family housing, and

BRAC request runs about $2.8 billion in total. That is down some

$800 million from the fiscal year 1997 level of $3.6 billion because

in the environment of downsizing, fiscal stringency, and the need

to beef up our investment accounts. Our judgment is that this is

about all we can afford in this area.

There is enormous and continuing pressure to reduce overall infrastructure costs and to increase our force modernization.

The fiscal year 1998 Milcon budget is down some $200 million

from fiscal year 1997, and that is something that I am not particularly happy about, but, in fact, we could not sustain, given the

other pressures within our budget, the fiscal year 1997 level. We

focus projects on those that support military readiness needs, and

that includes quality of life. About one-third of the fiscal year

1998–99 budget is for BQ construction. It will provide an additional

5,676 spaces and replace some 1,723 old substandard spaces in

BQ’s.

All permanent party BQ’s in the Navy that are built new will be

of the one plus one standard. The marines will replace their oldest

and worst facilities using an alternative called two plus zero, which

in our judgment is the fastest and best way to get the most marines into some acceptable dormitories.

The fiscal year 1998 family housing budget is down about $200

million from fiscal year 1997. The primary reduction is in the area

of new construction, and this is a result of a decision we made to

scale back the acquisition of houses that the Government would

own and operate. We looked in depth at the cost of housing our

sailors and marines in the private sector with housing allowances

versus in Government-owned and operated homes. We have concluded that building and operating Government houses is not a

good deal either for the taxpayer or the average sailor or marine. It costs about $15,000 a year to operate and maintain a Government-owned house on the average. We pay our members not in

Government housing about $8,000 a year in allowances, to which
6

they add about $2,000 a year on the average from their own pockets to get decent housing.

Our research indicates that in many locations the private sector

can provide appropriate housing at a price much closer to the allowance figure than to what it costs for a Government house. We

think it is a good idea at this point to go slow on Government-provided housing and to explore the possibilities open to us in publicprivate ventures and in enhanced allowances.

Last year’s BAQ increase and VHA floor are an enormous help

in this area, and this was something we are very grateful to the

Congress for providing. The Office of the Secretary of Defense is

now preparing a report and recommendations to remedy some of

the known defects in the current allowance indexing methodology.

The Navy is making public-private ventures a reality. We had a

groundbreaking last December for 404 homes in the Corpus Christi, TX, area. Occupancy will begin this November.

We provided congressional notification last month for 185 homes

in Everett, WA. The Navy is a limited partner in this endeavor and

contributing $5.9 million. The general partner contributes about

$12.9 million. We expect to sign that agreement this month and

have occupancy of these houses in May 1998.

Both projects give sailors and marines preference for renting and

a rent reduction of approximately $100 a month under comparable

homes in the locale.

BASE CLOSURE AND REALIGNMENT

With respect to base closure and realignment, the fiscal year

1998 BRAC budget is down about $400 million from fiscal year

1997, primarily because of lower BRAC Milcon needs. By the end

of the year 2000 we will have invested $10 billion in the implementation of four rounds of base closure. By that time we will already

have saved $15 billion, for a net savings of $5 billion, and we will

save $2.6 billion a year every year thereafter.

We are now on the down slope of BRAC implementation. We

have already completed 66 percent of all mandated closures and realignments. Thirty-one more are scheduled this year, including big

ones like Long Beach Naval Shipyard and the Naval Air Station at

Alameda.

Fiscal year 1998 is the last year with significant BRAC construction requirements. Our BRAC budget is transitioning from a closure and realignment phase to the completion of environmental

cleanup and the disposition of the property. We are, of course, committed to the cleanup of all BRAC property, but we give priority

in funding to sites with near-term reuse potential.

The general area of BRAC this year has seen the privatization

of the Naval Air Warfare Center in Indianapolis and the Naval

Ordnance Station in Louisville. These actions have saved the taxpayer money, saved jobs in the area, and opened the possibility of

continued productive use of the installations under the aegis of

local redevelopment authorities.

We are pleased with this result because it shows that we can,

working together with communities, get past the trauma of BRAC

rapidly.
7

We are pursuing a number of initiatives to reduce infrastructure

support costs, including outsourcing, privatization, and regionalization of functions. Details of these activities are provided in my full

testimony, Mr. Chairman, and that concludes my summary.

[The statement follows:]

PREPARED STATEMENT OF ROBERT B. PIRIE, JR.

Good day, Mr. Chairman and members of the Committee. I am Robert B. Pirie,

Jr., Assistant Secretary of the Navy for Installations and Environment. I appreciate

the opportunity to speak to you today on the Department of the Navy’s installations

and facilities programs.

My statement will cover a number of areas:

—The need for quality Naval facilities;

—The Department of the Navy’s overall infrastructure budget;

—Program highlights of our base closure implementation, military construction,

and family housing programs;

—Meeting the housing challenge; and

—The need for further infrastructure efficiencies.

THE NEED FOR QUALITY NAVAL SHORE FACILITIES

Naval Forces—Defending U.S. National Security

Naval forces provide unique capabilities in defending our national security interests around the world. Able to provide forward presence, power projection, sea control, maritime superiority, strategic deterrence, and strategic sealift, the Navy and

Marine Corps team continues to conduct operations around the world, 24 hours a

day, every day of the year. On any given day, roughly 30 percent of the Navy and

Marine Corps operating force, consisting of more than 50,000 men and women

aboard 100 ships, is deployed throughout the world. Last year, Navy ships made

over 1,600 port visits to 99 nations and conducted 160 major multinational and bilateral exercises with 64 different countries. Naval operations ranged from providing

humanitarian care in Bosnia, to promoting regional stability and freedom of navigation in the Straits of Formosa between China and Taiwan, to suppressing air defenses in the skies over Iraq.

Well-trained, highly motivated people are our most important asset in maintaining this military capability. We need to attract, properly train, outfit, and retain top

caliber people from across the United States if we expect to maintain a fully responsive military capability to support our national goals.

Shore Facilities—the Gateway to the Sea

Our shore facilities are the gateway to the sea. They are the home base for maintaining the readiness of our Naval forces. They provide the daily ‘‘at work,’’ ‘‘at

home,’’ and ‘‘at play’’ locations for our Sailors and Marines when they are not at

sea. Whether it is piers that provide berthing, electrical power, and support facilities

for ships in homeport; hangars that shelter aircraft; training facilities and ranges

where Sailors and Marines hone their war fighting skills; shipyards that provide the

industrial capability for ship repairs; or the housing that our Sailors, Marines and

their families call home—all are a critical ingredient in our ability to deploy Naval

forces when needed.

I know this Committee understands how high quality shore facilities bring out the

best in our people. Our mutual goal is to provide quality shore facilities to support

the current and future readiness of U. S. Naval forces.

Investing in the Shore Infrastructure

Our facilities are old. Nearly half were constructed between 1931 and 1950. We

are devoting about 1.7 percent of current plant value to real property maintenance.

The Center for Naval Analyses concluded that we must invest about 2.0 percent of

current plant value each year to maintain the present condition of our facilities.

Often, our repair and maintenance choices are limited to short-term cash flow alternatives rather than long-term investment strategies. Our military construction and

family housing budget represent only 2.3 percent of the Department of the Navy fiscal year 1998 budget. The current critical backlog of maintenance and repair

(BMAR) is $3.0 billion, and is projected to grow to $3.7 billion in fiscal year 1998.

Unfortunately, we cannot afford to invest more in our shore infrastructure. Budget constraints, the need to modernize the remaining force structure for the future,

existing pockets of excess shore capacity, and the potential for additional downsizing
8

limit larger infrastructure investments. We have been able to invest only limited

funds to support new and expanding mission needs.

While I would like to see us investing more money in our facilities, our situation

in the facilities business is certainly no worse than that of other parts of the Department of the Navy. As you know, it is very important that we recapitalize our force

structure. I strongly support this priority.

INFRASTRUCTURE BUDGET REQUEST

Facilities Investment Strategy

The Secretary of the Navy must carefully balance many competing demands. Our

shore infrastructure investment strategy consists of:

—Implementing the decisions of the four rounds of Defense Base Closures and Realignments (BRAC) to attain the expected savings and efficiencies;

—Investing in military construction projects that support readiness;

—Enhancing the quality of life of our Sailors, Marines and their families;

—‘‘Holding the line’’ on Base Operations Support (BOS) and Maintenance of Real

Property (MRP) funds; and

—Pursuing further shore infrastructure efficiencies.

Fiscal year 1998–99 Infrastructure Budget Request

This Subcommittee, and your colleagues in Congress, supported significant increases last year. The $9.6 billion added to the Department of Defense’s topline

budget included $209 million in Military Construction, Navy, and $96 million in

Family Housing, Navy, above the President’s fiscal year 1997 budget request. We

are grateful for the additional funds which will allow us to build important new

projects such as the BEQ at Marine Corps Air Station Kaneohe Bay, Hawaii, and

to renovate existing facilities such as the pier electrical upgrades at Naval Station

Norfolk, Virginia.

However, affordability and other budget priorities prevented the Department of

the Navy from sustaining that higher level of funding into the fiscal year 1998 and

fiscal year 1999 budget for military construction, and family housing. Our fiscal year

1998 military construction budget request of $554 million is on par with our fiscal

year 1997 budget request of $536 million. Our $1,255 million family housing budget

request maintains our focus on fixing what we own, but reduces new construction.

We have reduced our base closure budget request, not because of affordability, but

as a result of having completed much of the construction requirements needed to

relocate forces. Our BRAC budget is now transitioning from one with large construction and relocation costs to one that is focused on environmental cleanup and disposal of property.

[In millions of dollars]

Fiscal year

1996 1997 1998 1999

Military construction ...................................................................... 569 745 554 491

Family housing .............................................................................. 1,573 1,514 1,255 1,272

Base closure .................................................................................. 2,496 1,375 991 605

BOS/MRP ........................................................................................ 4,344 4,091 4,015 4,028

Total ................................................................................. 8,982 7,725 6,815 6,396

I will now discuss our budget request in greater detail.

BRAC IMPLEMENTATION

Implementation of the Four Rounds of BRAC

The base closure process is a challenging one for the Department of the Navy and

for the many communities who have hosted our ships, aircraft, Sailors and Marines

for so many years. Yet it is one we must pursue if we are to properly size our shore

infrastructure to reflect the smaller force structure of the Post Cold War era. As you

know, excess capacity in our shore facilities creates a significant financial drain on

the Department of the Navy’s budget.

We are implementing four rounds of base closure as directed by law, the first was

in 1988 under the Defense Authorization Amendments and Base Closure and Realignment Act of 1988 (Public Law 100–526), and three additional rounds in 1991,
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1993, and 1995, under the Defense Base Closure and Realignment Act of 1990 (Public Law 101–510). As a result of these decisions, we are implementing a total of 178

actions consisting of 46 major closures, 89 minor closures, and 43 realignments.

BRAC Implementation Strategy

Our implementation strategy focuses first on achieving operational closure at each

military installation selected for closure as quickly as possible. By that, I mean all

mission equipment and military personnel (with the exception of a small caretaker

cadre) have been disbanded or relocated to the ‘‘receiving’’ location and the military

mission has ceased. Second, we seek to expeditiously cleanup and dispose of BRAC

property to support local communities in their conversion and redevelopment efforts.

Rapid operational closure benefits both the Navy and the base closure communities. The faster we close a base, the sooner we attain savings. Operational closure

substantially reduces the costs for utilities, fire and police protection services, supplies, waste handling and disposal, administrative support personnel, and a host of

other landlord functions. The savings generated by not having to operate and maintain this excess infrastructure are significant. Annual savings first exceeded annual

implementation costs in fiscal year 1996, and total savings will exceed total costs

in fiscal year 1998. By the end of fiscal year 2001, when all BRAC actions must be

completed, we will have invested $10 billion and saved $15 billion, for a net savings

of $5 billion. We expect savings of $2.6 billion per year thereafter. We are counting

on these savings to recapitalize our force structure in the future.

Rapid operational closure also provides base closure communities with early opportunities for economic redevelopment. Effective community involvement and planning are central to conversion and redevelopment of our bases and to the retention

of a skilled labor force in the base closure communities. Our conversion and redevelopment efforts are guided by President Clinton’s Five-Point Plan for Revitalizing

Base Closure Communities: Job-centered property disposal as an economic incentive; Fast track environmental cleanup to facilitate reuse; Base Transition Coordinators to reduce red-tape; Ready access to redevelopment assistance; and Larger redevelopment planning grants.

BRAC IMPLEMENTATION STATUS

The Department of the Navy has completed two-thirds (118 of the total 178) of

the closures and realignments required under the 4 BRAC rounds. We plan to complete 31 more BRAC actions this year, 14 in fiscal year 1998, 12 in fiscal year 1999,

two in fiscal year 2000, and one in fiscal year 2001. Major closures planned in fiscal

year 1997 are Naval Air Facility Adak, Alaska; Naval Air Station Alameda, California; Long Beach Naval Shipyard, California; Naval Training Center San Diego, California; and Naval Station Treasure Island, California.

BRAC Budget

The Navy’s BRAC implementation budget request totals $991 million in fiscal

year 1998, and $605 million in fiscal year 1999, compared to $1.4 billion in fiscal

year 1997. There are 19 BRAC 93 construction projects and 15 BRAC 95 construction projects in fiscal year 1998. The BRAC 93 projects support closures of Naval

Air Station Barbers Point, Hawaii, and Marine Corps Air Station El Toro, California. The BRAC 95 actions include the relocation of Naval Sea Systems Command

headquarters, the closure of Naval Air Station Cecil Field, Florida and the realignment of Navy assets from Naval Air Station Miramar, California.

[In millions of dollars]

Fiscal year

1997 1998 1999

BRAC II ............................................................................................................. 88 117 59

BRAC III ............................................................................................................ 834 485 277

BRAC IV ............................................................................................................ 452 389 269

Total .................................................................................................... 1,374 991 605

The decline in the Navy’s BRAC budget occurs because the Navy is ‘‘over the

hump’’ on construction and relocation requirements. Fiscal year 1996 was the

Navy’s single largest year for the construction and O&M funds that were required

to relocate forces. Fiscal year 1996 and fiscal year 1997 are our largest years for
10

completing major closures and realignments. Our emphasis is now shifting from closure and realignment to environmental cleanup and property disposal.

We are proud of our execution performance. Through the end of fiscal year 1996,

we had obligated 93.8 percent of all BRAC funds allocated.

While our execution performance has been very good, it is a constant struggle to

balance construction plans, realignment schedules, and environmental cleanup priorities. The BRAC account has allowed a great deal of execution flexibility, due to

the statutory six-year BRAC implementation deadline. However, last year report

language was added requiring a Congressional reprogramming action if the award

of a construction project slipped and required funds in the following fiscal year. This

makes the BRAC account more restrictive than current reprogramming standards

for military construction accounts and complicates BRAC execution and management. I ask that the Committee review this area with the goal of applying the current military construction reprogramming standards to the BRAC process.

Privatization of Louisville and Indianapolis Facilities

We are particularly proud of our successful efforts last year to privatize the

former Naval Ordnance Station Louisville, Kentucky, (NOSL), and the Naval Air

Warfare Center Indianapolis, Indiana, (NAWC). NOSL was an engineering and industrial organization of approximately 1,600 employees and had a plant value of

$274 million, while NAWC Indianapolis was an engineering research and development activity with approximately 1,800 employees and a plant value of $147 million.

The BRAC 95 Commission recommended two options: close the facilities and move

the work to other government activities or privatize the work in place.

The Navy initially pursued both options, but soon realized that privatizing in

place could eliminate excess infrastructure and support the communities’ reuse

goals. Instead of simply turning the Navy’s work over to a private company, ‘‘privatization’’ would provide private industry with the facilities, equipment, workload, and

most importantly, the skilled people to perform the work in support of the Fleet.

Privatization in place had never been done in the Department of Defense. We relied on the skill, dedication, and persuasion of a team from the Navy, Members of

Congress and their staffs, the Environmental Protection Agency, State and city officials, the Local Redevelopment Authorities, and private industry to craft an agreement that was acceptable to all parties. The agreement was implemented just 10

months after the BRAC 95 decision was final for NAWC Louisville, and after only

15 months for NOSL.

Supporting Economic Redevelopment

In implementing BRAC closures, we want to convey property to communities expeditiously to advance their economic recovery—but not so quickly that we fail to

protect the public from contaminated soil, air and water, lead-based paint, and friable asbestos. We are also required by law to consider the impact of property disposal on the protection of wetlands, the coastal zone, endangered species, and archeological and historic sites. A final, approved reuse plan from the Local Redevelopment Authority (LRA) is critical to the process.

This process takes time, and in many ways, is far more challenging than the closure and relocation actions. We can provide interim leases of base closure property

to promote redevelopment, but as stewards of Federal land, we are required first

to prepare an environmental document known as the ‘‘Finding of Suitability to

Lease’’ (FOSL). To accelerate this process, we have been working with LRA’s to

identify the most attractive leasing prospects and to prepare the required documentation ahead of time. We also prepare the required ‘‘Finding of Suitability to

Transfer’’ (FOST) as soon as the property is environmentally suitable to convey title.

We have conveyed 7,835 acres of land to local LRA’s and other federal agencies at

27 activities to date.

FOST FOSL

Completed ................................................................................................................................... 25 533

Acres covered .............................................................................................................................. 7,234 4,696

Projected in fiscal year 1997:

Completed .......................................................................................................................... 134 332

Acres covered ..................................................................................................................... 5,417 5,038

Proceeding with Environmental Cleanup

Several communities have expressed concerns about the pace at which the Navy

is able to cleanup contamination on closing bases. Navy has occupied these Bases
11

for 50 to 100 years or more, many of them as industrial areas. We now know that

disposal practices that were acceptable in the past are no longer practiced because

of the environmental contamination they leave behind. However, environmental

problems posing an imminent risk to health and human life are rare, and in fact,

we give these problems immediate priority in our cleanup efforts. Cleaning up these

sites will be expensive—an estimated cost of $2.5 billion—and time consuming.

We have established BRAC cleanup teams comprised of Navy personnel and environmental regulators to assess, prioritize, and expeditiously perform the necessary

cleanup. We are working with regulators to tie cleanup standards to the nature of

the reuse. This will speed cleanup, save money, and still protect human health and

the environment. We have established detachments of former shipyard workers and

trained them to do the necessary cleanup work. We have put into place both national and local contracting authority to perform the work.

Nevertheless, budget constraints limit our ability to accomplish the cleanups

which do not pose an imminent threat but still must be performed before the property can be conveyed. There is simply not enough money to clean up every base at

once. Our goal is to target cleanup dollars on those sites that have the most immediate and definitive prospect for reuse. Those sites that are supported by approved

reuse plans with feasible reuse will get top priority for cleanup funds. Our intent

is to not let cleanup get in the way of reuse. We are also working with EPA and

state regulators to use the new Section 334 Amendments to CERCLA, which permits the conveyance of property before the cleanup has been completed.

The Department of Defense has categorized the environmental condition of property under the Comprehensive Environmental Response Facilitation Act (CERFA) to

provide a convenient breakout of the current status of our BRAC property. CERFA

categories 1–4 properties are environmentally suitable for transfer. CERFA category

5 indicates analysis is underway. CERFA category 6 includes property where the

actual cleanup is underway. CERFA category 7 property has not yet been completely evaluated.

Acres

As of 30 Sept. 96 (All BRAC)

CERFA Cat 1–4 ............................................................................................... 107,833

CERFA Cat 5 ................................................................................................... 11,260

CERFA Cat 6 ................................................................................................... 7,572

CERFA Cat 7 ................................................................................................... 39,194

Total ....................................................................................................... 165,859

MILITARY CONSTRUCTION

Military Construction in Support of Readiness

The Honorable William S. Cohen, the new Secretary of Defense, has stated that

maintaining readiness will continue to be the number one priority of the Department of Defense. Our military construction budget request, comprised of Military

Construction, Navy, and Military Construction, Navy Reserve appropriations, has

been structured to maintain Naval readiness into the future. These two appropriations provide the necessary investment funds to construct new and replacement facilities for the active and reserve forces of the Navy and Marine Corps.

[In millions of dollars]

Fiscal year

1998 1999

MC,N ........................................................................................................................... 540 475

MC,NR ......................................................................................................................... 14 15

Total .............................................................................................................. 554 490

Military planners view readiness in terms of ‘‘force,’’ ‘‘capability,’’ and ‘‘mobility.’’

‘‘Force readiness’’ provides well trained, highly motivated personnel that are needed

to carry out a particular mission. ‘‘Capability readiness’’ refers to the equipment

needed to perform the mission. ‘‘Mobility readiness’’ provides the flexibility to perform the mission wherever and whenever we can take advantage of our Naval

strengths and the adversaries’ weaknesses. Of course, we must comply with all environmental and safety requirements.
12

It is useful to view the military construction program in this manner, especially

since Fleet and Fleet Marine Force operators have a decisive input in establishing

military construction project priorities. Force Readiness provides the proper facilities to induct and train new recruits, to enhance the quality of life necessary to attract and retain the best and brightest Sailors and Marines, and to provide continuous skill training and educational opportunities for their professional development.

Force Readiness projects typically consist of training buildings, ranges, reserve

centers, barracks, other personnel support and quality of life facilities. Our fiscal

year 1998 military construction budget request includes a total of $162 million

Navy, $64 million Marine Corps, and $11 million Navy Reserve for force readiness

projects. Specific examples of such projects include an $8.7 million enlisted dining

facility at Marine Corps Air Station, Miramar, California; a $25.0 million barracks

at Administrative Support Center, Bahrain; a $4.4 million child development center

at Naval Shipyard Puget Sound, Washington; and a $6 million Marine Corps Reserve Training Center at Naval Weapons Station, Seal Beach, California.

Operational readiness projects include research, development and testing facilities

that allow us to design, engineer, develop, test and sustain the technological advantage in weapons systems and platforms that we now enjoy over our adversaries. It

also includes maintenance hangers, repair shops, utility systems upgrades, and pier

replacements. Our fiscal year 1998 budget request includes a total of $104 million

Navy, and $40 million Marine Corps for operational readiness projects. Specific examples include a $15.3 million Nuclear Aircraft Carrier Maintenance Facility at

Naval Air Station, North Island, California; a $21.9 million River Flood Control

Project on the Santa Margarita River at Marine Corps Base, Camp Pendleton, California; an $8.9 million Undersea Weapons Systems Laboratory at Naval Underwater

Systems Center at Newport, Rhode Island; and a $1.5 million Hangar Alteration

and Repair at Naval Air Reserve Center, Norfolk, Virginia.

Mobilization readiness projects supply the proper facilities to store war reserve

stocks, outload and embark forces and material, and sustain our deployed forces.

Typical projects include ammunition wharves and supply piers, facilities at forward

operating bases, warehouses and munitions magazines, air and port terminals. Our

fiscal year 1998 budget request includes a total of $48 million Navy and $10 million

Marine Corps for mobilization readiness projects. Specific examples include a $14.2

million Air Logistics Terminal at Naval Air Station Norfolk, Virginia; and $2.7 million Tactical Support Van Pads at Marine Corps Air Station New River, North Carolina.

Compliance projects ensure that our actions meet all Federal, state, and local environmental standards, allowing us continued access to and use of the sea, land and

air for training and operational missions. We must similarly comply with safety and

health regulations to ensure the well being of our military and civilian personnel.

Typical compliance projects include boiler plant modifications, hazardous waste

treatment plants, explosive handling aprons, and municipal sewer connections. Our

fiscal year 1998 budget request includes a total of $56 million Navy, and $3 million

Marine Corps for compliance projects. Specific examples include a $25.0 million Oily

Waste Collection System at Naval Station Pearl Harbor, Hawaii; and an $11.0 million Explosive Safety Ordnance Facility at Naval Air Facility El Centro, California.

Our fiscal year 1998 budget request also includes planning and design funds ($42

million in Military Construction, Navy; $2.5 million Military Construction, Naval

Reserve), and unspecified minor construction funds ($10 million for Military Construction, Navy; $0.6 million for Military Construction Naval Reserve).

We continue to invest in replacement and modernization projects. One-third of the

fiscal year 1998 Navy projects and more than three-quarters of the Marine Corps

projects are for replacement and modernization of existing facilities.

FAMILY HOUSING

Quality of Life

Quality of life programs include military pay and allowances, housing, medical

care, child care, family services, and morale, welfare and recreation programs. We

must invest in these programs just as we invest in technology, combat systems, and

weapon platforms.

The Secretary of Defense, with the enthusiastic support of the Service Secretaries

and Chiefs of Staff, has continued to make quality of life programs a top priority.

I will focus my comments on the family housing component of quality of life.

Family Housing Priorities

Several years ago, Navy adopted a Neighborhoods of Excellence (NOE) program

to ‘‘first fix what we own.’’ NOE used family housing improvement funds to upgrade
13

electrical and plumbing systems, replace windows and doors, install new insulation,

update kitchens and baths, and improve landscaping, street lighting, and utility

services for an entire neighborhood, rather than perform piecemeal improvements

on selected components of an individual house. The Marine Corps has adopted a

similar program in the Commandant’s Campaign Plan. In addition to revitalization,

we also program replacement construction projects for houses that can no longer be

economically repaired and maintained.

Family Housing Budget

Our fiscal year 1998–99 budget request reflects these priorities. Our Operations

and Maintenance accounts, the backbone of our family housing programs, remains

steady on a per unit cost basis. Funding reductions are the result of a 3,000 reduction in houses due primarily to BRAC. The increase in our leasing program is for

recruiters at high cost locations who are not supported by a nearby military installation; and additional leases in Italy. Although the total dollar value of our improvements program is down somewhat from fiscal year 1997, the number of homes being

renovated under our NOE effort remains about the same at 2,300 homes in 31 locations.

[In millions of dollars]

Fiscal year

1996 1997 1998 1999

Construction ................................................................................................... 207 272 90 61

Improvements ................................................................................................ 293 205 174 211

Design ............................................................................................................ 24 22 15 18

Leasing .......................................................................................................... 104 109 125 134

Operations ...................................................................................................... 411 397 389 385

Maintenance .................................................................................................. 534 509 462 463

Total ................................................................................................. 1,573 1,514 1,255 1,272

Our fiscal year 1998 family housing construction budget request is $90 million.

There are 2 replacement construction projects and 2 new construction projects,

which together provide 597 homes. All of these homes are for junior enlisted personnel. The fiscal year 1998 new construction request is a reduction of $182 million

below the fiscal year 1997 appropriated level. This reduction represents Navy’s decision to step back from acquiring new homes that the Government will own and operate. Let me explain the rationale for this decision.

Location and type Cost No. of homes

Fiscal year 1998:

NAS Lemoore, CA, replacement ............................................................. $14,800,000 128

MCB Camp Pendleton, CA, new ............................................................ 22,500,000 171

MCAS Miramar, CA, new ....................................................................... 28,900,000 166

MCAGCC Twentynine Palms, CA, replacement ...................................... 23,900,000 132

Total .................................................................................................. 90,000,000 597

MEETING THE HOUSING CHALLENGE

A Holistic Approach to Housing

As members of this Committee are well aware, we have an enormous challenge

before us to solve our housing shortfalls. These are long-standing, seemingly intractable problems for which we have made great plans in the past, but fallen short of

the mark in subsequent budgets. The necessity for the Department of Defense to

increase procurement spending to modernize aging weapon systems makes the prospect for gaining large increases in housing construction funds unlikely.

We cannot hope to solve this problem in isolation. Our past attempts to do so have

been unsuccessful. We must take a holistic approach to the housing problem, realistically examining both the facilities and the housing allowances. We completed a

number of housing studies this year that have done just that.
14

THE HOUSING PROBLEM

Family housing:

15,000 homes Navy deficit; solve by fiscal year 2020.

10,500 homes Marine Corps deficit; solve by fiscal year 2088.

36,000 unsuitable Navy homes; solve by fiscal year 2005.

13,000 unsuitable Marine Corps homes; solve by fiscal year 2037.

$2.5 billion Navy major repair/improvement backlog; solve by fiscal year

2005.

$2.0 billion Marine Corps major repair/improvement backlog; solve by fiscal

year 2037.

Bachelor quarters:

78,000 Navy spaces to convert to 1∂1 standard; solve by fiscal year 2075

but in interim moving to 2∂0 alternative by fiscal year 2005.

64,600 Marine Corps spaces to convert to 1∂1 standard; solve by fiscal year

2078 but in interim moving to 2∂0 alternative by fiscal year 2005.

$380 million Navy major repair backlog; solve by fiscal year 2004.

$110 million Marine Corps major repair backlog; solve by fiscal year 2005.

Housing Allowances

Three-quarters of Navy and Marine Corps families live in the community and receive housing compensation in the form of Basic Allowance for Quarters (BAQ) and

a supplemental Variable Housing Allowance (VHA). The stated intent of Congress

is that Service members absorb 15 percent of their housing cost. The absorption is

currently 19.6 percent even after the significant 4.8 percent BAQ funding increases

provided last year. While this absorption may be the same across the country, in

practice, personnel in high cost areas tend to have smaller, lower quality, more distant homes than in those low cost areas. The Navy and Marine Corps have a disproportionately larger number of Sailors and Marines living in these high cost

areas.

In addition to the increase in housing allowance, Section 606 of the Fiscal Year

1997 Defense Authorization Act established a minimum monthly amount of VHA for

those living in high cost housing areas. This VHA ‘‘floor,’’ which became effective

on 1 January 1997, applies to both single members as well as those with dependents, and will raise the VHA amount paid. It will provide additional money to very

junior personnel enabling them to better compete for housing in the community. We

are now trying to evaluate the effect that this will have on the overall deficit of family housing and bachelor quarters for Navy and Marine Corps.

The Department of Defense is preparing a Congressionally mandated report on

the pay and allowance system, including any inequities in the current BAQ/VHA

methodologies. One significant problem with the military housing allowance system

is that personnel in high cost areas often pay significantly more out of pocket for

housing than personnel in low cost areas. The Secretary of Defense, with the participation of the Services, is evaluating alternatives to address the problem. I strongly

support this study because I think the results could help us solve many of our housing problems. The report is due to the Congress next month.

Public/Private Ventures

The Fiscal Year 1996 Defense Authorization Act (Public Law 104–106) provided

important new tools for us to stimulate development and revitalization of housing.

This Act expanded the limited partnership authorization of the Fiscal Year 1995 Authorization Act, which was available only to the Navy.

We are making good progress. We entered into a limited partnership agreement

in July 1996 with Landmark Organization of Austin, Texas, to construct a total of

404 homes in South Texas. Three hundred homes will be built in Portland, Texas,

to serve personnel stationed at Naval Air Station Corpus Christi and Naval Station

Ingleside, and 100 homes will serve personnel assigned to Naval Air Station

Kingsville. Four homes have been set aside for use by the developer for management purposes. Navy contributed $9.5 million from the Department of Defense Family Housing Improvement Fund (FHIP), and the developer is contributing the remaining $22.5 million construction cost. The project will provide 76 two bedroom,

276 three bedroom, and 52 four bedroom homes targeted at an E–5 with dependents. Ground breaking ceremonies were held in December 1996, and we expect the

homes to be available for occupancy by November 1997. Military members receive
15

first preference for renting these homes and a lower monthly rent. The partnership

extends for 10 years, with an optional 5-year extension. The Navy will share in the

proceeds upon conclusion of the partnership.

The Under Secretary of Defense (Comptroller) provided Congressional notification

last month for Navy to enter into a limited partnership to construct 185 two, three,

and four bedroom homes at Naval Station Everett, Washington. Military members

will receive rental preference and a lower monthly rent. The target population is

an E–5 with dependents. We intend to transfer $5.9 million of Family Housing,

Navy, construction funds to the FHIP to fund our share of the $18.8 million development cost. The developer is now securing financing. Our plan is to begin construction this month and complete the project by May 1998. The partnership will continue for 10 years, with the developer planning to begin selling about 37 units per

year as condominiums at the 6 year point. Navy families interested in purchasing

these homes will be entitled to a lower purchase price, partial rent credit, and lower

sales commission. Navy will share in any profits at the conclusion of the agreement.

NAVY PUBLIC/PRIVATE VENTURES

404 homes now under construction in South Texas, to be completed in November 1997.

Congressional notification submitted for building 185 homes in Everett

Washington, to be completed in May 1998.

Navy and Marine Corps actively pursuing additional projects.

We are also proceeding with other privatization projects. The Navy has 10 projects

in various stages of development. The most advanced are projects to provide 824

homes at Norfolk, Virginia; 238 homes at Newport, Rhode Island; and another 100

homes at Everett, Washington. Site visits have been completed at these locations,

and project data are being developed. Site visits should be completed this spring at

six additional locations. The most advanced Marine Corps projects are at Marine

Corps Base Camp Pendleton, California where we plan to construct 204 new homes

and revitalize 512 others, and at Marine Corps Logistics Base Albany, Georgia

where we plan to dispose of 419 houses off-base and construct 160 new homes on

base. Four other projects are being developed at other locations including Marine

Corps Base Camp Lejeune, North Carolina; and Marine Corps Air Ground Combat

Center Twentynine Palms, California.

I am pleased with the progress made to date, but would prefer to have been further along. We are in unfamiliar waters. It requires an entirely different perspective—a cultural change in thinking for both Navy and private developers. We are

making sure we do this right.

We are working closely with the Housing Revitalization Support Office (HRSO)

in the Office of the Secretary of Defense to do the necessary analysis and scoping

of the projects in light of local market conditions. All of the Navy projects have previously authorized and appropriated Family Housing, Navy, construction money

available to fund these initiatives. The Marine Corps also plans to contribute land

and housing equity for some of their projects. I expect that by this time next year

we will have more projects underway using the tools provided in the 1996 Authorization Act.

Bachelor Quarters

Our job of solving the bachelor quarters problem is perhaps even more formidable

than that of family housing. Many of the BQs are as obsolete as our family housing

units. But, unlike members with dependents who live primarily in the community,

most unmarried members live on the Base.

Navy: 42 percent of bachelors live on base, 32 percent onboard ship, and 26

percent in the community.

Marine Corps: 89 percent of bachelors live on base, 11 percent in the community.

Our fiscal year 1998–99 budget request includes funding for an additional 5,676

bachelor spaces and replacement and modernization of 1,732 spaces. Comprising

over 30 percent of the Department’s military construction program in fiscal year
16

1998 and fiscal year 1999, the budget funds construction of 11 BEQ’s in the Continental United States, 2 in Puerto Rico, 2 in Hawaii, and 3 overseas.

Two years ago, the Secretary of Defense approved a new 1∂1 standard for permanent party BQs. The new standard is based on a module consisting of two individual

living/sleeping rooms with closets and a shared bath and service area. The module

contains up to 47 square meters of gross area, including 11 square meters of net

living area per living/sleeping room. This new standard does not apply to BQs that

house transients, recruits, and those receiving entry-level skill training.

The new standard will solve long-standing dissatisfaction from Service members

over the privacy and living space afforded under the old standard. Navy is designing

all of its permanent party BQ projects under the new standard and will convert

older BQs to as close to the 1∂1 standard as practicable. Under an exception to

the 1∂1 standard, the Marine Corps will initially emphasize construction of twoperson rooms, i.e., ‘‘2∂0,’’ to more quickly improve quality of life for a larger number of Marines, and later transition to the 1∂1 configuration. Each installation is

now developing detailed conversion plans for all of our permanent party BQs.

Housing Direction of the Future

I mentioned earlier that we had completed several housing studies. The conclusions were both illuminating and surprising to many. The studies, one performed

by the Center for Naval Analysis (CNA) and another by an outside consultant, concluded that it costs the Government far more to own and operate housing than it

costs the private sector. CNA found that it costs the Navy $13,000 per home per

year to operate and maintain its existing inventory in perpetuity. This amount excludes $2,000 per year in school impact aid that is not a direct part of the Navy

budget. In contrast, a family living off-base costs the Navy $8,000 per year in allowances, and the family pays about $2,000 out-of-pocket costs. Both studies concluded

that market forces tend to increase the efficiency of providing housing.

These studies, combined with changes in the VHA floor enacted last year, and the

possibility of further improvements in housing allowances, make it prudent to scale

back our family housing construction program. The goal here is not to put an additional financial burden on our families, but rather to provide them with the best

housing at the best overall value to both our members and their dependents, and

the Department of the Navy. We want to put less emphasis on acquiring new homes

that we will own and operate and focus on first fixing what we own. We would look

primarily to both a revised housing allowance structure and Public Private Ventures

projects in selected markets to solve our housing problems. We need to let these efforts continue to take root and blossom.

THE NEED FOR FURTHER INFRASTRUCTURE EFFICIENCIES

Infrastructure Efficiencies to Modernize Force Structure

The end of the Cold War has brought about dramatic changes in the political, social, military, and economic fabric of the world. Old allegiances have disintegrated.

New alliances have been formed. The threat of global war has diminished.

The domestic base closure process and overseas base closures such as Subic Bay,

Philippines, have eliminated substantial excess capacity in our shore infrastructure.

Nevertheless, even after implementing these closure actions, infrastructure reductions have not kept pace with our force structure reduction. We will have reduced

the plant replacement value of our shore infrastructure by only 17 percent since

1988, the first round of BRAC. This stands in sharp contrast to the 26 percent reduction in military end strength, and 40 percent reduction in ships over this same

time period.

We must continue our efforts to reduce unneeded infrastructure on remaining

bases, consolidate functions, and demolish unneeded structures to minimize operation and maintenance costs. Let me outline a few ways that we are accomplishing

that.

Competition and Outsourcing

Competition and outsourcing are business practices that hold enormous opportunities to reduce infrastructure costs. The 1995 Commission on Roles and Missions

of the Armed Forces recommended that the Department of Defense outsource commercial type work to save money. Last year, the Deputy Secretary of Defense directed the Services to make outsourcing and privatization a priority. A 1996 CNA

analysis estimated that the Navy spends over $10 billion each year performing inhouse functions that could be purchased from the private sector at lower cost. Savings could be obtained by competing these functions using the procedures set forth

in OMB Circular A–76, Commercial Activities Program. CNA’s analyses of past com-
17

petitions revealed that work was retained in-house in about half of the competitions,

with savings averaging 20 to 30 percent regardless of who won the competition.

In January 1997, I provided Congressional notification of Navy’s intent to compete

10,600 positions across the country under Circular A–76 standards. In this initial

effort, the bulk of the positions are in base support functions such as public works,

supply, berthing, and motor vehicle maintenance. There are also significant efforts

involving administrative support, data processing, and child care. To maximize potential savings, we want to compete entire business areas by consolidating similar

functions within a region where feasible. We hope to gain $3 billion in savings

through fiscal year 2003 under this initiative.

We have put a team of talented individuals in place to manage this process. The

Chief of Naval Operations established a new headquarters division, N47, headed by

a flag officer, to develop detailed execution plans to guide Navy wide execution.

Navy also established a new Outsourcing Support Office (OSO) as a joint effort by

the Naval Supply Systems Command and the Naval Facilities Engineering Command. OSO is preparing generic templates and work statements to simplify and

standardize cost comparisons.

Throughout this process, we want Commanding Officers, who will be in charge of

the competitions, to give their employees and unions every opportunity to participate in the cost comparison and to keep them fully informed of the progress as it

occurs. We will conduct fair and open competitions and we will minimize as much

as we can any disruption to our dedicated work force.

Privatization

Privatization transfers the control and ownership of government assets to the private sector with no impact on mission need. Besides the one time benefit to Navy

arising out of transfer of the asset, privatization reduces current and future infrastructure support costs.

We are studying the feasibility of privatizing Navy utility systems (electric, natural gas, potable water, and wastewater) at Public Works Center Jacksonville, Florida; Construction Battalion Center Port Hueneme, California; Naval Station

Pascagoula, Mississippi; and Naval Air Station Whidbey Island, Washington.

Regionalization of Base Support Functions

Many areas of large fleet concentration have multiple activities and tenants who

may perform duplicate and redundant base support functions. Does each base need

multiple managers for galleys? for barracks? for fire, security and police protection?

We want to achieve greater efficiencies by consolidating and centralizing functions

to provide less costly base operations services with equal or better service than before. Regionalization of base support functions at Naval Air Station Jacksonville,

Florida was our first attempt at regionalization and should save an estimated $20

million per year.

A similar effort is now underway at the Naval complex in San Diego, California that should save $40 million per year. We are trying to take base support functions

now being performed by 10 host activities down to just three host activities, and to

regionalize specific functions such as BQ management, security, food service, supply,

mail service, and safety under a single command. Regionalization at Pearl Harbor,

Hawaii would consolidate 8 host activities down to one, saving $18 million per year.

We are gathering data to pursue regionalization opportunities in Pensacola, Florida;

Washington, D.C; Puget Sound, Washington; and Norfolk, Virginia. The central

tenet that has emerged from all of these efforts is that:

—No tenant should do what a host can do more cost effectively;

—No host should do what a large Naval complex can do more cost effectively; and

—No large Naval complex should do what the surrounding community can do

more cost effectively.

Navy is also trying to reduce the number of major commands who have base support responsibilities, thereby eliminating much of the management overhead. These

efforts will try to identify those core functions that are necessary and what drives

them, those specific functions that can be regionalized, and those organizational

structures that are necessary to support regionalization.

We are also trying to take advantage of the competitive forces that are now at

work in the electric power industry. For example, we recently negotiated a new electricity rate with Virginia Power that should reduce our utility costs by about 10 percent this year and 15 percent each year thereafter through fiscal year 2002. We are

also working with the utility industry to implement demand side management.

Building Demolition

There are many old, unnecessary, under-utilized and economically obsolete facilities on our bases that are often an eyesore and reduce morale. More importantly,
18

they create a financial burden for police and fire protection and maintenance. We

have put $13 million in fiscal year 1998 in a centrally managed operations and

maintenance account to eliminate high cost excess facilities. The major claimants

can supplement this effort with their own Operations and Maintenance funds.

Regional Maintenance

Navy is restructuring and consolidating ashore maintenance functions for ships

and aircraft. The Regional Maintenance Concept seeks to right-size, level load, and

share the use of maintenance capacities and facilities. This will eliminate excess infrastructure and provide customers with a single provider of maintenance; strengthen battle force intermediate maintenance activities; and protect and strengthen

technical authority.

Eight Regional Maintenance Centers have been established, and Regional Repair

Center pilots are also being established. The next step is to establish a Ship Availability Planning and Engineering Center (SHAPEC) to consolidate ship maintenance

engineering and planning functions. Full implementation will continue until the

turn of the century.

Smart Base

Smart Base is an initiative to identify and implement innovative, commercially

available technology and better business practices to increase shore installation efficiency and reduce infrastructure costs. A Smart Base project team was established

in November 1996. An announcement was published in the Commerce Business

Daily to solicit responses from industry and academia for suggested technology and

management applications. Naval Station Pascagoula, Mississippi and Naval Shipyard Portsmouth, New Hampshire will serve as the test bases for Smart Base.

Other Possible Infrastructure Changes in the Future

Two other initiatives could alter the shape and composition of our infrastructure

program: the Quadrennial Defense Review (QDR) and Vision 21.

The QDR is a Congressionally mandated review of the future threats to the security of the Nation and the Department of Defense’s response to the threats. One of

the QDR panels is assessing current infrastructure capacity and support levels, and

considering whether any changes should be made. This panel is trying to gain more

savings out of infrastructure to support force modernization. I expect the QDR to

make some assessment concerning whether another round of base closures is necessary. The QDR report is due to the Congress on 15 May 1997. A National Defense

Panel will review the QDR report and provide its independent assessment to the

Congress in December.

Vision 21 is also a Congressionally mandated review of whether there is excess

capacity in the Department of Defense’s research and laboratory facilities. A multiservice, interdisciplinary Vision 21 work group has been collecting and analyzing existing capacity and workload requirements. The Vision 21 report will be provided

to Congress as part of the fiscal year 2000 budget.

Infrastructure Vision of the Future

For some time now we have been trying to formulate a more precise vision of exactly how to tailor our infrastructure needs to best support future Naval readiness.

After engaging headquarters leaders, fleet operators, facility managers, and the analytic prowess of CNA, we appreciate both the difficulty and enormity of the task.

The QDR and Vision 21 add a certain measure of uncertainty as well. We cannot

determine a baseline requirement for infrastructure until we know what force structure requirements result from these two efforts. Nonetheless, we continue our efforts to develop an analytical methodology to focus our infrastructure requirements.

We must establish an effective process for evaluating the relationship of force

structure to the infrastructure required to support it, for assessing future infrastructure needs, and for prioritizing recapitalization requirements to sustain those future

readiness needs. Towards that end, the Secretary of the Navy has established at my

urging a Department of Navy Infrastructure Steering Committee to recommend policy on the acquisition, disposal, operation, maintenance and recapitalization of the

Department’s infrastructure. The Committee will rely on an existing analysis group,

the Department of the Navy Organization Management and Infrastructure Team

(DONOMIT) to gather and analyze data to support strategic investments and policy

that best match the Department of the Navy’s infrastructure to core missions and

force levels.

That concludes my statement. I appreciate the support that this Committee and

its staff has given us in the past, and I look forward to continued close cooperation

in the future.
19

BIOGRAPHICAL SKETCH OF ROBERT B. PIRIE, JR.

Mr. Pirie was confirmed by the U.S. Senate as Assistant Secretary of the Navy

(Installations and Environment) on 15 March 1994. He has over thirty years experience in defense-related work in the armed forces, the civil service and in industry.

A Naval Academy graduate in the class of 1955, he was also a Rhodes Scholar, and

attended Oxford University from 1956–59. He served twenty years as a naval officer, culminating his service with three years in command of a nuclear attack submarine.

Upon retirement from the Navy in 1975 Mr. Pirie joined the newly formed Congressional Budget Office as Deputy Assistant Director, National Security. In 1977

Mr. Pirie became Principal Deputy Assistant Secretary of Defense (Manpower, Reserve Affairs and Logistics). He was nominated to be Assistant Secretary of Defense

(Manpower, Reserve Affairs and Logistics) by President Carter in December, 1978,

and served in that position until January, 1981. After leaving government service

he held a variety of positions in the private sector, including that of President of

Essex Corporation and Vice President of the Center for Naval Analyses and Vice

President of the Institute for Defense Analyses. He also directed the CNO Strategic

Studies Group from 1989 to 1992.

Mr. Pirie and his wife, the former Joan Adams of Barrington, Rhode Island, reside

in Bethesda, Maryland. They have three grown children; two sons, John and Carl,

and a daughter, Susan.

HOUSING CONSTRUCTION BUDGET

Senator BURNS. Thank you, Mr. Secretary. A couple of questions.

The housing construction budget is down more than 30 percent

from last year. Tell me, does this mean that we have a less severe

problem than last year or that we think that private housing will

solve that problem for—I think we have around a 15,000 unit deficit?

Mr. PIRIE. We have a fairly substantial deficit, Mr. Chairman.

And clearly our thinking is the latter, that access to private capital,

the public-private ventures, and the improvement of allowances for

the troops, which leverages us in two ways—one, it makes ordinary

housing in the private sector more affordable for them and more

available; and second, it makes our public-private ventures more

attractive to the people that we want to attract.

So we think the combination of that is the way to go in housing.

Senator BURNS. What is the average waiting list right now for

Navy and Marine Corps for family quarters?

Mr. PIRIE. It is between, I think, 1 to 6 months for Navy housing

and 15 months, if I am not mistaken, for Marine Corps housing.

Senator BURNS. I am sorry?

Mr. PIRIE. It is 15 months for Marine Corps housing, Mr. Chairman.

Senator BURNS. Do you think that privatization is going to help

that situation?

Mr. PIRIE. I think so. I think it will give us access to more houses

faster than if we depend simply on straight Government Milcon,

because that budget, as we have seen, is under intense pressure

from other demands.

Senator BURNS. Tell me about the risk in this in the private sector whenever we go into another round of BRAC, whenever a base

closes? How much exposure do we have out there on long-term situations that may be very costly to us?

Mr. PIRIE. Well, these deals can take different forms, but the

ones that we have entered into already, these are two limited partnerships, Mr. Chairman. So our liability is limited to the amount

that we have in the partnership.
20

Further, even if we close the installation and move away, the

housing is available to be used by the partnership and can be occupied by civilian people from the local area. So we do not believe

that the liability is very great.

Senator BURNS. Now, let us go back to another situation. Is El

Toro closed?

EL TORO BASE CLOSURE

Mr. PIRIE. El Toro still has not reached the operational closure

phase, but we are beginning to phase down. I think General Stewart can give you a little more detail on that.

Senator BURNS. Can you bring me up to date on what state we

are at El Toro?

General STEWART. Sir, we are moving along. We are moving to

Miramar. We have some units at Miramar already, but the closure

date for El Toro is not until the summer of 1999.

Senator BURNS. When we start in our environmental cleanup,

Mr. Secretary, so that that base can—then I assume it will be put

on the market and we will dispose of that. But the cleanup has to

take place first. I am told that the EPA now is working with us

and it will depend on what that base will be sold for as to the degree of cleanup.

Is that correct? Or have we got all those things worked out?

Mr. PIRIE. Yes, sir; generally, we consider what the use of the

base will be in standards of cleanup. So if it is going to be an airport and it has been an air station, we take that into account. We

do not clean it back up to national park standards. That is taken

account of, yes, sir.

Senator BURNS. Senator Murray.

Senator MURRAY. Thank you, Mr. Chairman.

HOUSING INITIATIVE—BANGOR, WA

Mr. Secretary, I understand that there was a proposal for this

budget submission to include a new public-private housing initiative at our Navy base at Bangor, WA. And I believe the amount

of public funding was to be $15.8 million. I also understand that

the planning at the base with regards to this initiative, which

would produce about 600 or more new housing units, was developing very well.

To my surprise, the funding was eliminated from the budget and

pushed out into the out-years. Can you explain why?

Mr. PIRIE. I will have to give you a detailed answer for the

record, Senator Murray. What I know about the issue is that the

justification for that particular project was considered less compelling than the justification for some others. But I will provide a detailed response for the record.

[The information follows:]

The Navy had project P–406 in the program for fiscal year 1998 to provide 118

homes for junior enlisted families at Naval Submarine Base Bangor, Washington at

a cost of $15,698 thousand. This project would have been a candidate for public/private venture and could conceivably provide two to three times the number of homes.

However, this project and three other housing projects at PWC San Diego, California were deleted in the final stages of budget preparation. As I mentioned in my

testimony before this Committee, we completed several housing studies this year

that concluded that it costs more for the Navy to own and operate housing than it
21

costs the private sector. These studies, combined with changes in the VHA floor enacted last year, along with the possibility for further improvements in housing allowance being pursed by the Department of Defense, made it prudent for us to scale

back our family housing construction program and let us focus on fixing what we

currently own. The Bangor housing project, along with the San Diego projects, were

new construction projects intended to reduce the housing deficit, and thus would

have added to our housing inventory. They were not replacement construction

projects as the other family housing projects that were retained in the Navy program and included in the President’s Budget Submission.

Senator MURRAY. I would like to see the justification for that.

Mr. Secretary, Senator Cohen on February 12 stated before the

Senate Armed Services Committee—and I want to quote it to you:

My first priority goes to people. We must continue to attract and retain the high

quality personnel necessary to preserve U.S. military superiority. The increasing

complexity of technology, the quickening pace of warfare, and growing unpredictability of the international scene require that our people be more adaptable and versatile than ever. The key to America’s military strength is the superb quality of our

uniformed men and women.

He then goes on to state his second priority is readiness and his

third priority is modernization. But your testimony conflicts with

Secretary Cohen in several locations because in your testimony you

say:

The necessity for the Department of Defense to increase procurement spending to

modernize aging weapons systems makes the prospect for gaining large increases

in housing construction funds unlikely.

On page 3 of your testimony you say that you are reducing the

funding for the construction of new housing. In fact, you have reduced the funding for new construction by 44 percent below last

year’s actual level.

I have to tell you that I represent a region of the country with

an increased Navy presence and a significant deficit in housing. I

also want to note that you have a chart that you provide which details the housing problem and the chart shows that you plan to

solve the Marine Corps housing deficit by the year 2088, which is

about 91 years away. I guess maybe that is long-term planning, but

I find that a little bit worrisome.

Do you think that the priorities that you have presented today

are consistent with Secretary Cohen’s?

Mr. PIRIE. Yes, ma’am, I do. I believe that we have protected the

quality of life accounts fairly successfully in the past and we have

protected readiness. I think we are under some pressure to think

about the consequences of a fair amount of block obsolescence in

the weapons systems and so forth, so that, having stood by quality

of life and readiness for the past few years, we are looking for other

ways to make funds available for the investment accounts.

I do not think our budget is inconsistent with Secretary Cohen’s

priorities.

Senator MURRAY. Well, it seems to me that if we want to attract

quality people and keep them in the service, one of the things we

have to do is make sure that they have adequate housing, places

to live, and feel comfortable. I certainly know, in talking to many

of the people in the Navy in my home State, that that is a high

priority.

Let me ask one other question, Mr. Chairman, at this time.

I note that the fiscal year 1998 military construction budget contains money for a medical-dental clinic at the Everett Naval Sta-
22

tion in Washington State. The new clinic is going to replace a series of trailers that are now used to provide health care services

and it is really needed by our people in Everett.

My staff and I were given information about this clinic indicating

that the facility would be used for active duty personnel only, and

I wanted to know if you can explain that to me. I was recently at

the Everett facility and I have to tell you this proposal to build an

active duty only health care facility really contradicts many of the

other family friendly initiatives that are being undertaken at Everett.

If you could explain the justification for active only, I would appreciate it. I am especially concerned because we have a new child

development center there. If a child is hurt or injured there that

needs medical attention, where do they go? Or if a family member

is injured at the recreational facility, where do they go?

Can you explain the justification for active duty only?

Mr. PIRIE. The policy with respect to the operation of our medical

facilities is not in my charter or area of responsibility, Senator

Murray. I can get you an answer from the appropriate officials for

the record.

Senator MURRAY. I would very much appreciate it if you would

do that for the record.

Mr. PIRIE. Yes, ma’am.

[The information follows:]

The existing Branch Medical Clinic at Everett provides care to active duty and

their family members. Family members will continue to receive health care in the

replacement clinic as long as capacity is not exceeded. If capacity is attained, then

family members will be enrolled in the civilian TRICARE managed care network

that has been established in the Everett/Bremerton area. This is a strong TRICARE

unit with over 35 primary care providers in the network.

Senator MURRAY. Thank you, Mr. Chairman.

Senator BURNS. Senator Stevens.

Senator STEVENS. My good friend was here ahead of me.

Senator BURNS. I am referee in this outfit. Senator Stevens,

would you proceed. [Laughter.]

Senator STEVENS. Well, all right.

Senator BURNS. And if you have a statement, I would make that

part of the record, or you can give your statement or whatever.

Senator STEVENS. I have no statement. I just want to ask a question of the Secretary.

ADAK NAVAL AIR FACILITY

What I am really interested in is Adak. Adak will close this year.

There are a series of controversies out there arising now. Have you

ever been to Adak?

Mr. PIRIE. Yes, sir; I was there last September.

Senator STEVENS. I think one of the things most people don’t realize about Adak was that it was the logistical center for not only

the Navy, but also for the various islands there, the Native villages, and the fishing industry. The commercial airlines went to

Adak and offloaded their material, even mail for the villages on

those islands, and the Navy tugboats delivered that material to

them. It was a courtesy that was developed over a series of years,

primarily due to the interest of the commander, the base com-
23

mander there, and it was a real interesting relationship that developed.

Now I understand the Navy is going to take the tugboats out of

there as it turns over the Adak base to the Aleut Corp. Are you

familiar with that?

Mr. PIRIE. I have just become aware of it in the last several days.

As I understand the situation, the Aleut Corp., if it, in fact, takes

over Adak, which is not yet absolutely certain, although we are

working to that end—but before they are in a position to do that,

there will be no one to maintain the tugboats in Adak and the Admiral in charge of this area believes that it would be best to take

the tugboats back to Puget Sound and keep them there.

If the Aleut Corp.——

Senator STEVENS. Are you going to surplus them when they get

down there?

Mr. PIRIE. As far as I know, they will be useful in the Puget

Sound area. We will certainly be able to maintain them and keep

them——

Senator STEVENS. Mr. Secretary, when I went out there I found

that we had surplused a whole series of trucks by taking them

down to the west coast, outside, as we call it, and the cost of taking

the trucks down exceeded the price that the Navy got for the

trucks.

Have you looked into what you are doing there in terms of incurring costs to move material that is useable to the people who are

going to take over, but it will cost more to move it than it is worth?

Mr. PIRIE. I am not familiar with the truck case, but I will look

into it, Senator.

[The information follows:]

I am not aware of any wholesale movement of surplus trucks from Adak to the

West Coast for disposition by sale. The non-appropriated Navy Exchange System

has, however, moved several vehicles off Adak as a business decision not affected

by the BRAC statutes. I can assure you that the small fraction of the total inventory

of personal property that has left the island has done so with good economic justification supporting Navy reuse and only after notification to the Adak Reuse Authority. No surplus appropriated material that I am aware of has left Adak for the

purpose of disposal by sale.

Mr. PIRIE. With respect to the other personal property, we have

taken less than 1 percent of the available personal property, which

includes trucks, fire trucks, cranes, and things of that kind. Less

than 1 percent of that has actually been moved out of Adak.

Senator STEVENS. There was a substantial portion of the personal property that was moved on. I congratulate the Navy on

some of that. The school, I think some members know, is named

after my first wife, Ann Stevens School, and all of the materials in

that school were distributed up and down the chain, which I

thought was a very nice thing to do.

But I really question the extent to which the Navy seems to

think that it ought to take everything out of there without regard

to the value of what they are taking. On the tugs, if those tugs go

away, did you know we are going to have to buy some for the BIA

or somebody to deliver the material that comes to Adak still that

goes to Native villages?

Mr. PIRIE. I am not aware of this arrangement, Senator. And it

is not clear to me who is going to operate the tugs if we leave them
24

in Adak, and we are very concerned about maintaining them. I

think they will be maintained better if they go to Puget Sound.

If the LRA, if the Aleut Nation, later needs them, we can transfer them back to them.

Senator STEVENS. When I came to the Senate there were two

vessels called the North Star One and North Star Two. They made

a trip annually in the summertime to the villages along the chain

and up the west coast of Alaska. That was their only annual supply.

They are gone now. One of the reasons they are gone now is because we have made arrangements, just sort of ad hoc arrangements, all the way along the line using military bases for the centers of distribution for the villages. It was worked out as an accommodation, as I said, through the generosity, really, and courtesy of

the military commander.

I would urge you to take a look at really what has been going

on out there in terms of how those facilities function to assist the

people who live in the area. Not all Native people; some are part

of the fishing industry. At one time there was a cannery there and

a fishing dock on the other side of Adak, away from the naval base,

that flourished and worked very well.

It is my understanding that that will be reopened, hopefully, and

it will mean that some of the equipment that is there in Adak will

be necessary to maintain the road and to have access to that other

area.

I know you have a job to do in terms of protecting the Government’s interest in this property. But I also hope that there is some

way. Let me ask you this: If you need further legal authority to

allow you to leave that material there so it can continue to provide

the services for the people in the Aleutians, would you let me

know?

Mr. PIRIE. Yes.

Senator STEVENS. I think Congress would understand that concept. We all know that when that material has been exhausted its

life is over. Whoever takes over Adak has got to find some way to

replace it. It is not going to be a permanent responsibility, but

right now the transition between having the tremendous amount of

assistance that was available—there were four naval bases on

Adak. I am not sure that people here even realize that was the seventh largest population center in my State.

Now, just 2 months from now, the Navy population will be zero.

Mr. PIRIE. We are committed to doing whatever we can, Senator,

to make this transition of Adak to whoever will be operating it in

the future as smooth and productive as possible, and to protecting

the interests of the citizens who remain in the area.

Senator STEVENS. One last question——

Mr. PIRIE. So we will work with you, sir.

Senator STEVENS. Are you familiar with the proposed meeting for

April in Anchorage with all the parties that are supposed to be interested in the transition at Adak?

Mr. PIRIE. Yes, sir.

Senator STEVENS. What level of naval people are going to go

there?
25

Mr. PIRIE. I believe Admiral Nash is planning to go, and my Deputy for Conversion and Redevelopment, Mr. Cassidy, is going to go.

Senator STEVENS. Both the Governor and I are interested in

being there if we possibly can. I will be in touch with you on that.

Mr. PIRIE. Yes, sir.

Senator STEVENS. Thank you.

Thank you, Mr. Chairman. And I thank my colleague from Hawaii. I do not agree with what he did.

Senator BURNS. Thank you.

Our good friend Senator Inouye from Hawaii.

FORD ISLAND DEVELOPMENT PLAN

Senator INOUYE. Thank you very much, Mr. Chairman.

Mr. Secretary, you may be aware that the causeway bridge that

connects Ford Island to the rest of Pearl Harbor will be operational

some time this year. I am aware that there are plans for the development of Ford Island. Are you prepared to discuss that with us

or is that a bit early yet?

Mr. PIRIE. It is a bit early. I have seen a conceptual plan for the

development of Ford Island and I know that the base commander

is at work. And I know that the base commander is at work with

that.

It would include a substantial amount of family housing, but also

a center which would include a museum and a tourist center and

things of that kind, and it has a place for the Missouri to be

moored and access to the Missouri. As a concept, it is a very attractive plan and I hope that we can continue to move in that direction

and build on it.

Senator INOUYE. It has not gone through the process in your

shop?

Mr. PIRIE. It is still in the thinking stage. So far there is no program money or anything like that behind it.

Senator INOUYE. Most of us in Hawaii are very excited about

this, so we look upon you for your lead.

Mr. PIRIE. Yes, sir.

Senator INOUYE. Thank you very much.

Mr. PIRIE. Yes, sir.

Senator INOUYE. Thank you, Mr. Chairman.

Senator BURNS. Thank you, Mr. Chairman.

ONE PLUS ONE BARRACKS REQUIREMENT

Mr. BURNS. Mr. Secretary, when do you anticipate the Navy will

meet its new one plus one standard under the current funding conditions?

Mr. PIRIE. I think our schedule for one plus one gets the Navy

there in about 2013, Mr. Chairman.

Senator BURNS. And the bachelor housing deficit in the Navy,

what is your deficit right now in that kind of housing? And also

in the Marine Corps, if I could get a figure on that?

Mr. PIRIE. I am going to have to provide that for the record. We

are not at all certain. Because of the fact that we have new authorities for bachelors to take housing in the private sector and be

given basic allowance quarters and a variable housing allowance
26

and things of that kind, I am not sure we have got the right numbers. But we will supply them, Mr. Chairman, for the record.

[The information follows:]

The Navy estimates that it will require $2.3 billion over the next sixteen years

to construct the 38,500 spaces necessary to satisfy its 1∂1 barracks requirement.

The Marine Corps cost is the same but the execution time frame significantly

longer. This is due to their strategy to first build enough 2∂0 barracks spaces to

erase their existing inventory of inadequate spaces. The 1∂1 construction that follows is estimated to cost $1.9 billion over 73 years to construct 35,500 spaces. FYDP

funding required to work towards the 1∂1 barracks standard goal is $0.7 billion for the Navy and $0.3 billion for the Marine Corps (cost of eliminating inadequate

spaces using 2∂0 configuration).

Senator BURNS. General Stewart?

General STEWART. Sir, in the Marine Corps we have 10,477 inadequate quarters, bachelor enlisted quarters, which is why we went

to the two plus zero standard, two marines in a room sharing a

head, as our standard to fix that more quickly, and that is an interim standard. But we plan on having our marines out of inadequate quarters by 2005.

Senator BURNS. Is the two plus working?

General STEWART. We think it is going to work, sir. We think

that, while we are still committed to the one plus one, we think

there is a lot of value to having two marines in the same room. It

is good for training, it is good for morale, it is good for unit cohesion. So we do not see it as a degradation to use two marines in

a room.

Senator BURNS. It is funny how times change. When I was in it

was 60. [Laughter.]

Senator BURNS. In a Quonset hut, and the air-conditioning that

you got if you were lucky enough to have a door on both ends,

those type of situations.

I want to just bring up a subject here that I think has caught

a lot of us, and I am not sure that this is the place to raise this

thing. I would like to know what is the situation at Long Beach,

CA, and what is happening there with the PRC? It caught a lot of

us in Congress off guard.

PORT OF LONG BEACH

Mr. PIRIE. The local redevelopment authority, which is a Long

Beach city organization, has a reuse plan which countenances the

naval station and the naval shipyard becoming part of the Port of

Long Beach. The Port of Long Beach then intends to lease part or

all of that port facility, which would be a major intermodal port,

to the China Ocean Shipping Co.

But this will be after the Port of Long Beach has essentially demolished the naval station and the naval shipyard and created an

intermodal port in the area. So there will be no naval facility there.

What we are talking about is an ultimate commercial deal between the Port of Long Beach and one of its customers, China

Ocean Shipping.

Senator BURNS. But the Long Beach—the civil authorities there

have complete control of the area of the old Long Beach Naval Station and Shipyard, is that correct?

Mr. PIRIE. They will when we turn it over to them.

Senator BURNS. When does that happen?
27

Mr. PIRIE. Let us see. I think the shipyard closes operationally

in October. When we will be able to lease—I am not certain when

we actually will be able to lease it to Long Beach and allow them

to actually start the demolition. I think that is probably beyond October but I am not sure. I will supply that for the record, Mr.

Chairman.

[The information follows:]

The shipyard operationally closes on 30 September 1997. A Lease in Furtherance

of Conveyance (LIFOC) is the mechanism by which control of the facility will be

passed to the Local Reuse Authority. Although interim leases between Navy and interested parties could be executed at any time (before or after closure), the master

lease approach (LIFOC) to transfer of control is strongly supported by the LRA and

the Port Authority. This LIFOC will be executed upon the issuance of the Environmental Record of Decision (ROD) which is expected by the end of the calendar year

1997.

The Naval Station is operationally closed (9/30/94). The LIFOC is in my office

with approval waiting for the resolution of a court order directed at the Port Authority (so as not to influence the court decision).

Senator BURNS. In other words, it is a lease arrangement? We

are still going to own the property, either the Federal Government

or the Department of Defense?

Mr. PIRIE. The Navy cannot transfer the property to Long Beach

until we have completed the final environmental impact statement

and the cleanup is complete. What we do in the interim is lease

it to the city of Long Beach to allow them to sublease it to the Port

of Long Beach, to allow them to build the new container port.

BRAC ENVIRONMENTAL CLEANUP

Senator BURNS. I understand the Navy is working hard to implement the BRAC round of decisions as well as the previous three

rounds. Long-term financial obligations—what obligations do you

think the Navy will incur as a result of these environmental cleanup activities? What is in the future and your plans, and how far

have you really planned out into the future, because I know the

goodly part of BRAC is environmental cleanup?

Mr. PIRIE. We figure that BRAC environmental cleanup will run us about $2.5 billion, Mr. Chairman, which is about one-quarter of

what it is going to cost us to implement the four rounds of BRAC.

And the cleanup will run beyond the year 2001 simply because, in

some cases, the technology does not allow you to clean these places

up that fast.

So we will then cover the environmental cleanup costs of BRAC

installations out of the ‘‘Environmental restoration, Navy’’ account.

We have plans to do that.

Senator BURNS. Have we incurred any problem now on turnover

that has been subject to environmental cleanup or any hangups?

Mr. PIRIE. We have had no problems. No turnovers have been delayed because of environmental problems.

BASE CLOSURE

Senator BURNS. Does the Navy need another round of base closure? How about a little loaded pistol to carry around in your pocket?

Mr. PIRIE. That is a fairly straightforward question, Mr. Chairman. Let me tell you what I know about that. I know that Sec-
28

retary Perry said some time ago that we would probably need another round, perhaps in 2001. And I know that the Chairman of

the Commission, former Secretary Dixon, picked the same year in

his valedictory. You are probably aware that the Navy recommended a number of installations for closure which the Commission denied.

So I believe that there is enough excess capacity for us to contemplate another round. The ‘‘Quadrennial Defense Review’’ [QDR]

has an infrastructure panel and it is quite possible that that panel

will recommend to the Secretary of Defense that he ask for another

round of BRAC.

Senator BURNS. With regard to that, your permanent base facilities—shoreline facilities, I think there has been—I have been questioned about it and I have some concern about the infrastructure

there, our investment in that infrastructure. Has that been adequate?

Mr. PIRIE. Well, it is never as much as I want, but it is about

as much as is permitted by the other funding pressures. Certainly

the facilities—piers, runways, hangars, and so forth—need to be

kept in good shape, and I wish we had more money to spend on

them.

I would say that we are accomplishing the art of the possible

there.

Senator BURNS. Mr. Secretary, could I ask you, you all have done

a study and you probably have a priority list in what infrastructures we invest more in than we do in others. I would imagine that

some of the facilities in your infrastructure that were recommended

for BRAC and then were denied by the Commission, the investment there would be more scrutinized for investment probably than

any other area.

Other than money, what other obstacles do we run into on dealing with our infrastructure?

Mr. PIRIE. I do not think we have any. I think Admiral Nash’s

command is quite capable of executing a substantial amount of

both the maintenance of real property and new construction. They

have been quite good at that in the past, so I do not think we have

got limitations other than money, Mr. Chairman.

Senator BURNS. I would like to visit with you sometime, just sit

in an office and sit down and take a look at those priorities. I have

a list somewhere, but I probably could not lay my hands on them.

I have got very capable people here.

But I would like to take a look at the situation of what you recommended for BRAC closure and see your priorities and maybe

work with you a little bit maybe on that infrastructure, because

there is some concern about that infrastructure. And if we could

work together, why, I am sure I would just like to do that.

Mr. PIRIE. I would be very glad to do that, Mr. Chairman.

Senator BURNS. Mr. Secretary, that is all the questions I have for

this panel. Senator Murray may have some followup questions.

COMMUNITY FACILITIES

Senator MURRAY. I just have one more general area I wanted to

ask you about and that is community facilities, like child care development centers, physical fitness centers, and community cen-
29

ters. How many, roughly, do you have in the budget for those kinds

of things?

Mr. PIRIE. Let us see. I think we have one child care center in

1997 and one in 1998. Is that right, Admiral Nash?

Admiral NASH. Two, one in Navy, one in Marine Corps.

Mr. PIRIE. Child care centers. With respect to gyms, community

centers, and other facilities, I will have to take that for the record.

[The information follows:]

In the fiscal year 1998 Department of the Navy military construction budget,

there is one Child Development Center, two Physical Fitness Centers, one Community/Recreation Center, and one Religious Education/Community Support Center.

There is one additional Physical Fitness Center in our BRAC budget.

Senator MURRAY. OK, because the Marsh Commission, I know,

on quality of life issues recommended 44 fitness centers and child

development centers. So I would like to know that information.

Also, if you can just give me your rough feeling on how many unfunded needs we have in that area?

Mr. PIRIE. I think we could spend a very substantial amount of

money in the area. The real question here is to what degree should

we depend on the private sector to support our child care needs,

to what degree should we depend on the private sector to provide

for gyms and other things? I think the wave of the future is to look

to other commercial activities to provide services that are not

strictly related to the operational needs of the forces.

If in some cases we appear to be dragging our feet, it is probably

because we are trying to figure out what the best way to provide

the best services for the people really is.

Senator MURRAY. Certainly it depends on what community you

are in. But I can tell you, Everett or Bangor, child care is a tremendous problem in the communities surrounding the bases, especially

with welfare reform coming down, it is going to have a dramatic

increased need for day care centers. We need to be ahead of the

curve so that the men and women on the base do not get caught

in a bind that there is nothing available for them.

Mr. PIRIE. Yes, ma’am.

Admiral Nash, do you want to say anything?

Admiral NASH. I know that this is not my area of expertise, but

I know that we are actively pursuing other alternatives in terms

of ways to provide child development. So we are not sitting back.

We are pursuing this as rapidly as we can.

Like everything, it kind of depends on the area, whether it is

housing privatization or child development. But we understand,

yes, ma’am.

Senator MURRAY. That is all I have, Mr. Chairman.

ADDITIONAL COMMITTEE QUESTIONS

Senator BURNS. Thank you, Mr. Secretary for your capable help

today. We appreciate your coming this morning. We have some

more questions that will be submitted for the record. And if other

committee members have questions, if you could respond to them

and to the committee, I would appreciate that.

Once again, thank you for your great cooperation that this committee enjoys with your Department, and we hope to continue that
30

right along through this process and we thank you for coming this

morning.

Mr. PIRIE. Thank you, Mr. Chairman.

Senator BURNS. Thank you.

[The following questions were not asked at the hearing, but were

submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED BY SENATOR MURRAY

Question. I understand that there was a proposal for this budget submission to

include a new public/private housing initiative at our Navy Base at Bangor, Washington. I believe the amount of the public funding was to be $15.8 million. I also

understand that the planning at the base in regards to this initiative, which would

produce some 600 or more new housing units, was developing well. To our surprise

the funding was eliminated from the budget, and pushed into the outyears. Why?

Answer. The Navy had project P–406 in the program for fiscal year 1998 to provide 118 homes for junior enlisted families at Naval Submarine Base Bangor, Washington at a cost of $15,698 thousand. This project would have been a candidate for

public/private venture and could have conceivably provided two to three times the

number of homes.

However, this project and three other housing projects at PWC San Diego, California were deleted in the final stages of budget preparation. As I mentioned in my

testimony before this committee, we completed several housing studies this year

that concluded that it costs more for the Navy to own and operate housing than it

costs the private sector. These studies, combined with changes in the VHA floor enacted last year, along with the possibility for further improvements in housing allowance being pursed by the Department of Defense, made it prudent for us to scale

back our family housing construction program and let us focus on fixing what we

currently own. The Bangor housing project, along with the San Diego projects, were

new construction projects intended to reduce the housing deficit, and thus would

have added to our housing inventory. They were not replacement construction

projects as the other family housing projects that were retained in the Navy program and included in the President’s Budget Submission.

INFRASTRUCTURE

Question. The infrastructure reductions resulting from the rounds of BRAC that

we have conducted amount to an overall DOD reduction of some 18 percent. While

this has been difficult, our overall force reductions have been far more substantial

than that, over 30 percent. Doesn’t this mean that we still have far too much infrastructure for our requirements, and that we should look again at reducing infrastructure. Would you support another round of BRAC? If not, why not?

Answer. Yes, I would support at least one more round of BRAC. After implementing four rounds of BRAC, we will have reduced the plant replacement value of our

shore infrastructure by only 17 percent since 1988, the first round of BRAC. That

stands in sharp contrast to the 26 percent reduction in military end strength, and

40 percent reduction in ships over this same time period.

We are pursuing a number of initiatives to further reduce infrastructure support

costs, including competition and outsourcing, privatization, regionalization of base

support function, building demolition, regional maintenance, and smart base technologies.

PRIVATIZATION OF UTILITIES

Question. I understand that privatization of utilities at our bases has been lagging. Is this the case? What is the problem in the privatization of utility infrastructure, and what can be done to speed this process up? I understand that the Administration has been considering proposed legislation for utility privatization—is this

the case, and what is the status of this legislative proposal?

Answer. The Navy initiated its utilities privatization effort in fiscal year 1996

with a pilot study comprised of four installations: PWC Jacksonville (large multilocation complex, well maintained); NAVSTA Pascagoula (small, new installation);

CBC Port Hueneme (medium, aging installation); and NAS Whidbey Island (medium large, aging installation).

The objectives of the pilot study are to identify and remove barriers to privatization and to establish criteria that the Navy can use to readily identify promising

privatization candidates. Although the study will not be completed until the end of
31

fiscal year 1997, one obstacle to privatization has been identified: no legal authority

exists to allow the government to transfer or lease non-surplus property to a private

entity.

The administration is proposing legislation to authorize the Services to privatize

utility systems when in the best economic interest of the Government and after notifying Congress. The lack of legislation allowing privatization requires that DOD

seek enabling legislation for each and every utility system it seeks to privatize. The

current process requires that the new owner be identified and an economic analysis

provided that documents the benefits of privatization before special legislation is requested. This process can take two years or more which is a disincentive to private

corporations to participate in the privatization process. The proposed legislation, if

enacted into law, will provide the legal authority for the Services to privatize utility

systems where in the best economic interest of the Government and subject to a

Congressional notification process. This will greatly streamline the process.

WAITING LIST FOR BASE HOUSING

Question. In general, can you characterize the problem of waiting lists for base

housing? What is the backlog, and what is the affect on morale? How can we eliminate this problem in the long run?

Answer. As of 30 September 1996, there were 25,000 Navy families and 6,000 Marine Corps families on waiting lists for family housing. Waiting times for assignment to family housing vary from a few months to several years depending on the

location, time of year, and other factors.

The waiting list reflects the quality, cost, and availability of housing, commuting

distances, surrounding support facilities, and availability of good schools. The Navy

and Marine Corps have a disproportionately larger number of members living in

high cost areas.

The best way to reduce waiting lists in the long run is to improve housing allowances. Improving the allowance system will reduce members’ out-of-pocket costs and

allow them to afford a wider selection of quality housing in the private sector.

We have also instituted aggressive housing referral efforts to identify and capture

the maximum supply of affordable community housing.

BUDGET BENEFITS OF PRIVATIZATION OF HOUSING

Question. The housing construction budget is down more than 30 percent from

last year. Does this mean we have a less severe problem than last year? What does

this say about our commitment to quality of life initiatives? Do you believe the housing budget is adequate for fiscal year 1998? What is the right number? How many

housing units does a 30 percent reduction represent?

Answer. The reduction in the family housing construction account represents our

decision to step back from acquiring new homes that the Government would own

and operate. The Department of the Navy plans to rely more on improved housing

allowances; privatization authorities; and enhanced housing referral services to

meet the housing needs of Navy and Marine Corps families. This decision reinforces

our commitment to quality of life and provides a balanced approach to reducing our

housing shortfalls.

Our fiscal year 1998 request supports our policy to ‘‘first fix what we own.’’ In

addition to revitalization, we budget for replacement construction projects for units

that can no longer be economically repaired and maintained. Although the dollar

value of our improvement request is down slightly from fiscal year 1997, the number of homes being renovated remains about the same at 2,300 homes in 31 locations. This year’s request also includes two projects for the replacement of 260

homes at Lemoore and Twentynine Palms, California, and two projects for a total

of 337 new homes at Camp Pendleton and Miramar, California.

The 30 percent reduction to our construction program request equates to about

$125 million. At a nominal cost of $142,250 per unit cost, this would be about 878

homes.

NEW PUBLIC/PRIVATE HOUSING INITIATIVE IN DOD

Question. What is your assessment of the Military Housing Privatization Initiative? What are the long-term impacts that we can expect in the way of Housing construction? Can the initiative be extended to the construction of barracks as well?

What can we expect to see in the way of projects in the current calendar year?

Answer. The DOD Military Housing Privatization Initiative (MHPI) is off to a

good start. It receives praise in public and private forums, and requests for activity

site visit evaluations continue to increase as installation Commanding Officers recognize the potentials for leveraging currently held land and housing assets as the
32

Department’s equity investment in Public-Private Venture (P/PV) deals. We are aggressively flattening the learning curve in the application of the MHPI Authorities

with the help of real estate industry consultants and, thereby, increasing the likelihood of a fair investment return and reduction of market risks to the developer.

With respect to long-term impacts on housing construction, the Department is

shifting course away from traditional Navy construction in pursuit of new acquisition methodologies. We anticipate being able to identify candidate P/PV projects as

part of the budget request in the future, but we are not there yet. Housing MILCON

funding serves two vital purposes. It: (1) provides the only liquid form of equity

available for P/PV deals; and, (2) keeps the Navy on track with its promise to ‘‘fix

what we own.’’ New housing Authorities, improved housing allowances, and enhanced housing referral services will be creatively matched with housing requirements to reduce operating costs, and multiply the return on our investment through

the careful leveraging of Navy assets.

The fiscal year 1996 MHPI legislation included language which authorized the

Services to address bachelor quarters construction requirements. We have been focusing our energies in pursuing P/PV initiatives for family housing, and have conceptually discussed possible BQ P/PV projects.

I cannot reasonably predict whether we will have any P/PV projects developed to

the point where we will provide Congressional notification on a solicitation for proposal or intent to sign a contract by the end of this calendar year. There are still

uncertainties that must be resolved, some of which are beyond our immediate control. We are proceeding with 10 projects in various stages of development. The most

advanced Navy projects are to provide 824 homes at Norfolk, Virginia and 238

homes at Newport, Rhode Island. Site visits have been completed at these locations

and project data are being analyzed. The most advanced Marine Corps projects are

at Marine Corps Base Camp Pendleton, California where we plan to construct 204

new homes and revitalize 512 others, and at Marine Corps Logistics Base Albany,

Georgia where we plan to dispose of 419 houses off-base and construct 160 new

homes.

COMMUNITY DEVELOPMENT FACILITIES

Question. What is in this budget in the way of community facilities, such as child

care or child development centers, physical fitness centers, community centers? How

many of each, roughly are in the budget? Is it true that there are only 2 gymnasiums and no Child Development Centers in the Air Force budget? The Marsh

commission on quality of life issues recommended 44 (forty-four) fitness centers and

child development centers. What is the need for such facilities? What is the unfunded need for these type of facilities?

Answer. The fiscal year 1998 Department of the Navy military construction budget includes one Child Development Center, two Physical Fitness Centers, one Community/Recreation Center, and one Religious Education/Community Support Center.

There is one additional Physical Fitness Center in our BRAC budget. We are evaluating the feasibility of contracting with private child care providers as a way to provide cost-effective care for more military families.

Question. Adequacy of funding for Maintenance and Repair of Military Family

Housing and Real Property Maintenance for Military Family Housing. What is the

adequacy of the budget request for these accounts, and what is the backlog?

Answer. The Department of the Navy’s fiscal year 1998 maintenance request provides sufficient funding to take care of routine maintenance, preventive maintenance, service calls, and change of occupancy, and work on the backlog.

The current critical backlog is $3.0 billion, and is projected to grow to $3.7 billion

in fiscal year 1998.

UNSPECIFIED MINOR CONSTRUCTION

Question. The Unspecified Minor Construction program supports urgent, unforeseen requirements that cannot wait for the normal military construction program

and a lump sum is appropriated to accomplish requirements that arise during the

year costing between $500,000 and $1.5 million. The Navy annual requirement for

this fund is about $14 million. However, only $10.6 million is requested. Is this account under strain, and what is the right number for the fiscal year 1998 budget?

Answer. While the Department would like to have more funds available to meet

unforeseen requirements, the need to balance competing demands for resources limited our request for UMC funding.
33

QUESTIONS SUBMITTED BY SENATOR REID

BRAC FUNDING FOR BACHELOR OFFICERS QUARTERS AT FALLON NAVAL AIR STATION

Question. Naval Facilities Engineering Command solicited for bids to build a

Bachelor Officers Quarters (BOQ) at Fallon Naval Air Station in fiscal year 1997.

This project was funded from the BRAC III account and construction was to begin

this year.

In February of this year construction on the BOQ was deferred. What happened

to the funds that were to be used to build this BOQ? How does this deferment affect

operations at Fallon Naval Air Station?

Answer. The BOQ project you refer to is the second phase of an earlier (fiscal year

1994) project in our BRAC III construction budget. The first phase, completed in

1996, provided 140 BOQ rooms; the second phase will provide 81 more rooms. The

fiscal year 1997 BRAC III budget you refer to anticipated income of $244 million

from land sales revenues to offset various implementation costs. The primary method of land conveyance to date has been Economic Development Conveyance which

have yielded significantly less revenue than anticipated when that budget submission was prepared. Funding for a number of BRAC construction projects was not

available due to this land sales revenue shortfall.

The operational impact on Fallon is minimal, and occurs during peak loading of

transient personnel at the base. During these peak times some transient personnel

may be berthed in local hotels. We now plan to construct the BOQ in fiscal year

1998.

FITNESS CENTER AT FALLON NAVAL AIR STATION

Question. In last year’s Military Construction Appropriation Bill this committee

directed that not less than $400,000 be made available for the design of a gymnasium at Fallon Naval Air Station (anticipated cost $5.7M). I understand that

planning for this project has not been initiated and that the gymnasium is not yet

in the FYDP.

I am deeply concerned, the Department of Defense echoes this concern, over the

quality of life for our military members. Conversations with Navy Fallon personnel

reveal that overcrowded conditions and long equipment waits prevent our Sailors

from maintaining their top physical conditioning.

When do you anticipate that this important project will arrive on the FYDP so

that we may move forward with construction? (NOTE: No progress has been made

on this contract even though the report language said that ‘‘this design contract is

to be awarded as early in fiscal year 1997 as practical.’’)

Answer. Preliminary design has been authorized for this project. It will be considered for inclusion in the FYDP during our program review this summer.

MESS HALL ADDITION AT FALLON NAVAL AIR STATION

Question. In last year’s Military Construction Appropriation Bill this committee

earmarked not less than $1.3 million for the acquisition of a mess hall addition at

Fallon Naval Air Station. Can you give me an update on this project?

Answer. Senate Report 104–287 which accompanied the Senate Appropriations

Committee markup of the fiscal year 1997 Military Construction Appropriation Bill

directed the Navy to use $1.3 million of the $9.973 million provided by the Committee for Navy Unspecified Minor Construction to construct a Mess Hall Addition.

However, because only $5.115 million was approved in Conference Report 104–721,

additional funds were not appropriated to allow us to proceed with this project.

Since the requirement remains valid, we hope to be able to award it with fiscal year

1998 funds.

NATO INFRASTRUCTURE FUNDING

Question. This military construction budget, at $8.4 billion, is 16 percent smaller

than what was appropriated in 1997 ($10 billion). Of all the account requests, I note

that each reflects an overall reduction from last year’s appropriation, with the exception of one: the NATO infrastructure account.

The request for NATO is greater than what was requested for all five of our reserve components. Is it wise to give such assistance to our allies at the expense of

our own guard and reserve forces?

Answer. Development of the NATO construction budget is not entirely within our

influence.

NATO is a collective security organization of sixteen sovereign nations. Program

and budget decisions for the NATO military construction program, now called the
34

NATO Security Investment Program, are based on consensus among those sixteen

nations. The U.S. contribution to the Alliance is determined by all sixteen member

nations during discussions at Ministerial meetings held in the spring. Procedures

and project execution decisions are likewise arrived at by consensus by member nations.

The Department of the Navy does program and budget for reserve military construction projects. The fiscal year 1998 President’s budget request includes $13.9

million budget in fiscal year 1998 and $15.3 million in the fiscal year 1999 Military

Construction, Naval Reserve appropriation. This amount reflects a balance between

Navy and Marine Corps reserve construction requirements and affordability given

all other funding requirements that the Department of the Navy must consider and

fund.

I would note that both active and reserve U.S. naval forces benefit from the availability of modern NATO support facilities.
(35)

DEPARTMENT OF THE AIR FORCE

STATEMENT OF HON. RODNEY A. COLEMAN, ASSISTANT SECRETARY

OF THE AIR FORCE FOR MANPOWER, RESERVE AFFAIRS, INSTALLATIONS AND ENVIRONMENT

ACCOMPANIED BY:

MAJ. GEN. EUGENE A. LUPIA, THE AIR FORCE CIVIL ENGINEER

BRIG. GEN. PAUL A. WEAVER, DEPUTY DIRECTOR, AIR NATIONAL

GUARD

BRIG. GEN. JOHN A. BRADLEY, DEPUTY TO THE CHIEF, AIR FORCE

RESERVE

REMARKS OF SENATOR BURNS

Senator BURNS. The military construction request for the U.S.

Air Force is $1.677 billion. Once again, we want to recognize the

Air Force the way it has handled its needs and its service to members. While it appears that the Air Force has managed its construction requirements, it seems many key quality of life projects are

being pushed out in the out-years, and I have a wee bit of a concern about that.

Representing the Department of the Air Force today is the Honorable Rodney Coleman, Assistant Secretary of the Air Force for

Manpower and Reserve Affairs, Installations and Environment. Sir,

we welcome you back to the committee this morning.

We have asked you to address the fiscal year 1998 military construction request for Air Force family housing, the Air Force portion of the base closure account, and requests for the Air Guard

and the Air Force Reserve. Secretary Coleman, may I ask you to

please introduce your witnesses, your backup witnesses, and you

may proceed with your statement. If you want to make your full

statement, that would be all right. But you can also submit your

statement and summarize if you so wish.

I would ask comments from my ranking member, Senator Murray. I will not forget that any more.

Senator MURRAY. I appreciate that, Mr. Chairman, and I will

just wait and ask questions after your testimony.

STATEMENT OF RODNEY COLEMAN

Mr. COLEMAN. Thank you very much. Thank you, Mr. Chairman,

Senator Murray.

With me today is the Civil Engineer of the Air Force, Maj. Gen.

Gene Lupia on my right. To my left is Brig. Gen. Paul Weaver,

Deputy Director of the Air National Guard. And on my far right

is Brig. Gen. John Bradley, Deputy to the Chief of the Air Force

Reserve.

We are pleased to be here to discuss with you our $1.68 billion

Milcon submittal for active duty Guard, Reserve, and family housing programs. Over the past 18 months, as you are well aware, the
36

Air Force has crafted a strategy which spells out the role of air and

space power for the Nation and the core mission capabilities critical

to that strategy.

Our responsibility is to skillfully forge a supporting facility and

infrastructure approach to that strategy. That approach includes

emphasis on supporting new mission beddowns, protecting the

quality of life for our people, and reinvesting in our few remaining

overseas bases.

We developed an integrated priority list based on the most urgent needs of the total Air Force, integrating new mission, current

mission, and environmental projects for Active, Guard and Reserve

components, and then identified the minimum requirements to sustain readiness and quality of life.

We are on target to demolish our worn out and obsolete facilities

and infrastructure in order to reduce operations and maintenance

costs. We are also looking very hard at maintaining only those facilities that we need to meet core mission requirements. We are

proceeding to effectively determine what we need and to look out

for opportunities to consolidate functions and retain facilities.

But even our best management of declining resources will not be

enough, Mr. Chairman. We have to stretch our dollars and use

every means available to protect our hard-fought position as the

world’s most respected air and space force.

Last year’s legislation that enabled us to pursue privatization of

family housing and dormitories hits the mark. We also welcome the

opportunity to privatize other assets of our fiscal plan where it

makes economical and operational sense. We can optimize our resources using better business practices, privatization, or what we

call corporate asset management. We must think outside the box

and embrace innovations which are not part of our current paradigms.

An example of that is our military housing and dormitory privatization program. Right now we have 10 privatization projects at 10

separate installations, which could produce as many as 4,000 new

or renovated housing units for our Air Force families.

Well, you may ask, so what? Can we not do that with our regular

Milcon funds? The difference—the answer is yes, but the difference

is that with privatizing we are leveraging our resources for about

a three to one return on our tax dollars, getting three times as

many units for the same dollar.

Our people are the foundation of our strength and we must recruit, train, and retain the highest quality force possible. In this

light, we take the needs of our people very seriously. Privacy remains the No. 1 concern among our airmen. We have focused on

the buyout of all remaining permanent party gang latrine dormitories. With your constant support, we will be able to fully

achieve this improvement in the quality living conditions with the

fiscal year 1999 Milcon program. Then we will focus on depleting

our 14,000 room dormitory deficit.

Our fiscal year 1998 quality of life Milcon request includes the

10 permanent party dormitory projects valued at $128 million and

two fitness centers valued at $6.5 million.

Military family housing is one of our most important programs.

We are requesting $139 million for fiscal year 1998 projects at 16
37

Conus bases that will construct 70 new houses, replace 899 existing

houses, and replace one housing support facility. The replacement

units will take the place of existing homes that are no longer economical to maintain.

Our housing budget request reflects our longstanding commitment to provide our Air Force families with homes and communities that are as comparable to private sector housing as we can

make them.

So in conclusion, Mr. Chairman, I want to thank the committee

for its strong support of the Air Force military construction program and its resulting benefits in Air Force readiness, recruiting,

training, retention, and the quality of life of our people. We are

ready to respond to any of your questions.

[The statement follows:]

PREPARED STATEMENT OF HON. RODNEY A. COLEMAN

INTRODUCTION

Mr. Chairman and members of the committee, good morning. I appreciate the opportunity to appear before you today to discuss the Department of the Air Force fiscal year 1998 military construction program.

OVERVIEW

As the Air Force recognizes its fiftieth anniversary, it is only fitting that we celebrate it during a watershed year. 1997 will see a remarkable series of events that

will define Air Force direction and capability for many years to come. Every member

of the Air Force will impact these events, and every member will be affected by

them. Our responsibility now lies in mapping out and understanding this journey’s

turning points and major objectives.

The major objectives of the military construction program must be in line with

the corporate Air Force. In that light, we will seek to follow the path outlined during

the long range planning effort. The plan’s vision, based on fundamentally sound core

values, includes creating a corporate identity based on a common understanding of

Air Force core competencies; sustaining our modernization and quality of life initiatives; and helping to ensure the success of the quadrennial defense review.

As a result of these goals to support Air Force core competencies, force modernization, and our people we are focusing on reducing our physical plant using private

sector partnerships and sound business practices. This will ensure that our infrastructure efficiently supports necessary Air Force missions and force structure. We

are pursuing this ‘‘rightsizing’’ of the Air Force physical plant using a variety of

means which include demolition, consolidation, divestiture and privatization.

We must also balance installation support requirements, while accepting a greater

level of risk, without diminishing readiness and/or quality of life. As with previous

submissions, installation programs continue to reflect hard decisions and tough

choices. The maintenance and repair of facilities and infrastructure at Air Force installations are essential to our core competencies. We are striving to maintain facilities and infrastructure where Air Force people work and live to preclude weakening

unit readiness, impairing mission accomplishment or degrading quality of life. The

Air Force corporate strategy for the installation support program includes:

—Ensuring our Milcon program places emphasis on supporting new mission

beddowns and current mission necessities, including redirecting limited capital

investment to our most pressing requirements.

—Maintaining our operations and maintenance programs to protect the quality of

life of our personnel and their families.

—Reinvesting in the few remaining overseas bases, which even after host-nation

burdensharing have numerous facility needs critical to Air Force core competencies.

—Maintaining a fundamentally sound, risk-based, environmental program in view

of fiscal constraints.

I must stress, however, that even our best stewardship of declining resources will

not be enough. The Air Force recognizes that we must look at our installation facility requirements differently than in the past. This is why the Air Force was very

supportive of the fiscal year 1996 legislation enabling us to pursue privatization of

military housing and dormitories. We also welcome the opportunity to privatize
38

other assets of our physical plant where it makes sense. One example is the privatization of our base utilities.

The actions outlined in this military construction budget will fundamentally influence our installation investment strategy and quality of life well into the next century. Properly done, these actions will be a powerful investment in the future.

Mr. Chairman, we are cognizant that the Air Force could not maintain the quality

of any of our facilities and the advantages they render without the strong support

we have always received from this committee, for which we are most appreciative.

With this background, Mr. Chairman, I would like to proceed now to discuss the

major program areas of our Milcon budget request. I will review the Active Force

Program—including military family housing—the Air National Guard Program, and

the Air Force Reserve Program. Finally, I will address the Air Force part of the Department of Defense budget request for base realignment and closure accounts.

AIR FORCE MILITARY CONSTRUCTION BUDGET

The Air Force Milcon program consists of three principal areas: new mission, current mission, and design and unspecified minor construction. New mission construction supports the beddown of new weapon systems and force structure realignments.

Current mission Milcon revitalizes existing facilities and infrastructure, and builds

new facilities to correct existing deficiencies. Design and unspecified minor construction includes funds to design our construction projects and a small program to handle urgent, unforeseen construction requirements.

Our total Air Force military construction budget request for fiscal year 1998 is $1.68 billion. This request includes $1.60 billion for Active duty military construction ($520 million for traditional Milcon and $1.08 billion for military family housing), $60.0 million for Air National Guard Milcon, and $14.6 million for Air Force

Reserve Milcon.

ACTIVE DUTY AIR FORCE MILITARY CONSTRUCTION PROGRAM

The Active Air Force’s fiscal year 1998 military construction and family housing

programs were developed using a facility investment strategy with the following objectives: maintain what we have; beddown new missions; support quality of life investment; optimize use of public and private resources; continue demolition program; reinvest overseas; and continue environmental leadership.

Program Overview

This year we significantly departed from the way Milcon allocation occurred in the

past. The major commands were tasked to submit an unconstrained list of their

budget requirements. Our Milcon integrated process team, the cornerstone of the

Air Force corporate structure, developed an integrated priority list based on the

most urgent needs of the total Air Force, and integrating new mission, current mission, and environmental projects for Active, Guard, and Reserve components. This

priority list was presented to the corporate structure—to include the Chief of Staff

and the Secretary of the Air Force—for review and approval.

Current Mission: Maintain What We Have

‘‘Maintaining what we have’’ is the investment strategy underlying our current

Milcon program. This concept results in identifying the minimum requirements to

sustain readiness and quality of life. This strategy is rooted in the stewardship entrusted to us for maintaining eighty-eight major installations. We are not looking

to increase our spending on infrastructure or new facilities. Conversely, we are

targeting demolition of worn out or obsolete facilities and infrastructure in order to

reduce reoccurring operations and maintenance costs. During the BRAC process, we

deliberately delayed funding for most of the current mission Milcon while we awaited final closure decisions.

With the BRAC 95 cycle complete, we are looking at our remaining installations

and assessing their infrastructure and facility needs—rather than what we would

like to have. We are looking very hard at keeping only those facilities which we

need to meet the core competencies stated by the corporate Air Force.

We will continue our vigil to effectively use available resources to determine what

we need, to care for what we own, and to look for opportunities to consolidate functions in retained facilities.

Beddown New Missions: Provide Timely Support to Modernization and Weapon System Beddowns

The Air Force is ever evolving, modernizing and realigning weapon systems to

guarantee future relevancy in an ever changing world. We are developing, testing

and fielding new aircraft, satellites, and communications systems. We are realigning
39

our aircraft to take better advantage of their capabilities. This year the integrated

prioritization process funded 62 percent of known mission requirements. We funded

those projects essential for our core modernization as well as some construction supporting force structure changes.

Military construction is needed to support programs such as the C–17; joint surveillance and target attack radar system (JOINT STARS); space based infrared systems;, ballistic early warning system; and conventional air launched cruise missiles.

C–17

The C–17 Globemaster III aircraft is designed to replace our aging fleet of C–141

Starlifters. It combines the airlift capabilities of the C–141, the C–5 galaxy’s ability

to carry oversize cargo, and the C–130 hercules’ ability to land directly on short,

forward-located airstrips. In November 1995, the Defense acquisition board determined that the C–17 met the Nation’s needs, after which, the Under Secretary of

Defense approved the purchase of all 120 aircraft requested.

At that time, McChord Air Force Base, Washington, was designated as the second

active duty operational base for the aircraft. We had already identified Charleston

Air Force Base, South Carolina, as the first active duty operational base, and Altus

Air Force Base, Oklahoma, as the C–17 training base. Since then we have identified

Thompson Field, Mississippi, as the Air National Guard operating location. Military

construction projects satisfying the total beddown requirement at Charleston Air

Force base total $144.4 million; with $87.4 million at Altus Air Force Base; and

$133.5 million at McChord Air Force Base. The fiscal year 1998 program includes

both an engine test cell facility and a maintenance hangar at McChord Air Force

Base at a cost of $10 million. Air National Guard beddown requirements at Thompson Field have not been determined.

JOINT STARS

JOINT STARS is an Army and Air Force system designed to detect, locate, and

classify targets. The system then provides the information to successfully execute

attacks against these targets. The Air Force main operating base for J–STARS is

Robins Air Force Base, Georgia, where we are requesting $18.7 million for five

projects. These projects will provide facilities needed for continuing beddown of the

JOINT STARS aircraft. Prior year Milcon to support JOINT STARS at Robins Air

Force Base totals $92.0 million. Future Milcon requirements at Robins Air Force

Base totals approximately $13.1 million. There are two forward operating locations

for J–STARS, one in Europe at Raf Fairford, United Kingdom, and the other in the

Pacific, at Kadena Air Base, Japan. These two locations will require minimal operations, maintenance, and support facilities for J–STARS due to reuse of existing facilities as a result of defense drawdowns in Europe and Japan.

Space Based Infrared System (SBIRS)

The goal of the SBIRS program is to consolidate all space based infrared systems

into one integrated architecture. SBIRS replaces the existing defense support program providing early warning and assessment. The SBIRS will consist of a mission

control station and two unmanned relay ground stations. It will consolidate the defense support program functional capability at the mission control station and enable us to close down two manned overseas ground stations.

The mission control station will be located at Buckley Air National Guard Base,

Colorado, and the two unmanned relay stations will be located in Australia and Europe. Fiscal year 1997 Milcon totaled $14.4 million and provided the mission control

station at Buckley Air National Guard Base. The $14.0 million Milcon project in fiscal year 1998 will construct the two unmanned remote ground stations.

Ballistic Missile Early Warning System (BMEWS)

The BMEWS Program provides continuous and supportable missile warning data

to North American Aerospace Defense Command and U.S. Space Command. The

$47 million fiscal year 1998 Milcon project allows BMEWS beddown at Clear Air

Station, Alaska. This upgrades the 1960’s technology to include installation of a precision acquisition vehicle entry/phased array warning system (PAVE/PAWS) radar

that increases the stations inherent operational capabilities. The technology is required to maintain the missile warning system well into the next century.

Quality of Life

The Department of the Air Force continues to believe that our people are the most

important asset of our service. The Secretary maintains that they are the foundation of our strength, and that we must recruit, train, and retain the highest quality

force possible. If we are to be successful, then this Air Force team must take care

of our people and their families.
40

Privacy remains the number one concern among our airmen in unaccompanied

personnel housing. As we mentioned last year, the Air Force has targeted the

buyout of all remaining permanent party central latrine dormitories. With your continued support, we will be able to conclude this immediate, and most pressing, improvement to quality living conditions with the fiscal year 1999 Milcon program.

The Air Force will then turn its attention to our 14,000 room deficit. The support

of this and other committees has enabled a one-half billion dollar investment of

Milcon and quality of life enhancement funds over the last two fiscal years—another

great stride in ‘‘putting our people first.’’

The Air Force is continuing its commitment to provide at least a private sleeping

room to every permanent party airman we house. We have began implementation

of new assignment policies which will phase our junior enlisted personnel into private rooms over the next six fiscal years.

I would be remiss if I didn’t report on how the Air Force used the additional funds

you gave us last year. The $58 million for dormitory Milcon enabled us to build and

revitalize over 1,000 rooms, and the $108 million in quality of life enhancement

funds allowed us to convert eighteen central latrine dormitories to provide privacy

and improve living conditions for our airmen. It also reduced our most pressing dormitory maintenance and repair requirements.

Our fiscal year 1998 quality of life Milcon request includes ten permanent party

dormitory projects valued at $128 million, and two fitness centers for $6.5 million.

Optimize Use of Public and Private Resources

While revolutionary changes in basing requirements are unlikely to occur over the

short term, careful planning is critical to achieving the desired structure at the appropriate future time without the unnecessary expenditure of constrained resources.

The first essential step in leveraging our resources is the movement towards better

business practices—privatization, or what we call corporate asset management

(CAM). The greatest obstacle in pursuing CAM is our comfort with the old and familiar ways of doing business. Unless we aggressively move beyond those ways with

all the ingenuity at our command, we will not be able to capitalize on the opportunities that await us.

As we prepare for the first quarter of the 21st century, we must think ‘‘outside

the box’’ and embrace innovations far removed from the paradigms we have today.

These include, but are not limited to, changes in military family housing and dormitory privatization. Right now we have ten privatization projects at ten installations which could produce as many as 4,000 new or renovated housing units for our

Air Force family. Well, you may ask so what * * * can’t we do that with regular

Milcon funds? The difference is that with privatization, we are leveraging our resources for a three to one return on our tax dollars—getting three times as many

units for the same dollar.

One final observation: We depend on corporate asset management to complement

our military family housing budget—not to take its place. We need housing Milcon

to meld with funds from the family housing improvement fund to act as seed money

for potential privatization initiatives. Without the Milcon funding base, privatization

as we know it today would not be possible.

Overseas Milcon

Air Force overseas basing and force structure is finally stable after years of base

closures and major force reductions. In Europe, we now have six main operating

bases: two in Germany, one in Italy, two in England and one in Turkey. In the Pacific, we have five such bases: two in Korea and three in Japan. During the recent

period of closures and force structure reductions, we refrained from investing in our

overseas installations. Now that things are more stable, we must prudently reinvest

in these installations. We are actively pursuing NATO funding, host nation funding,

and payment-in-kind; however, the need is bigger than available burdensharing opportunities can satisfy.

Our 1998 program for our European and Pacific installations includes $71 million

in unclassified Milcon. The program consists of a fire training facility at Kunsan Air

Base, Korea; four dormitory projects at Kunsan and Osan Air Bases in Korea: Raf

Lakenheath, England; and Spangdahlem Air Base, Germany; a water treatment

plant at Lajes Field, Portugal; and a utility upgrade project and a waste water disposal system project at Aviano Air Base, Italy. For all European projects, we are

sending a precautionary prefinancing statement to the NATO infrastructure committees. These statements will permit recoupment from the NATO infrastructure

program if eligibility is subsequently established.
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Environmental Milcon

As we continue our stewardship of the environment, we are dedicated to improving our already open relationship both with the regulatory community and with our

installation neighborhoods. We not only strive to ensure our operations meet all environmental regulations and laws, but we also seek out partnerships with local regulatory and commercial sector counterparts to share ideas and create an atmosphere

of trust. Our aggressive campaign to foster an environmental ethic within the Air

Force culture has enabled us to sustain operational readiness, be a good neighbor,

and leverage our resources to remain a leader in environmental compliance and

cleanup.

To that end, we have partnered with regulators and local communities to execute

projects supporting the Presidential mandate to reinvent environmental regulations.

These projects support our paradigm shift to implement pollution prevention

projects that eliminate future compliance requirements. This allows better business

decisions both for us and for others concerned with the fate of our shared environment.

As a result of these cooperative efforts, we have established schedules for cleanup

commensurate with funding levels, responded to community concerns, preserved

precious natural, cultural, and historical resources, while continuing to maintain a

high level of operational readiness. We also were able to decrease the number of

open notices of violations from 262 in fiscal year 1992 to 35 in fiscal year 1998. This

is important for today, and even more important for our future. Our environmental compliance Milcon request for fiscal year 1998 totals $32 million for eight, level-1 compliance projects. Our program focuses on environmental

projects for sanitary sewer systems, wastewater treatment facilities, and fire training facilities. All of these projects satisfy level-1 requirements. Level-1 compliance

requirements refer to conditions or facilities currently out of compliance with environmental laws or regulations, including those which are the subject of a compliance

agreement.

I would also like to draw attention to our stewardship of the Defense environmental restoration account. In fiscal year 1997 we obligated 34 percent of the budget on actual clean-up actions. This year we have turned the corner on studies and

will use the lion’s share of the account, 82 percent, for actual clean-up activities.

Unspecified Minor Construction (P–341 funds)

We have requested $9 million in fiscal year 1998 for unspecified minor construction funds (P–341), which will provide the Air Force with its primary means of responding to small, unforeseen Milcon requirements that cannot wait for the normal

military construction process. The rapid rate of change taking place in the Air Force

is putting a strain on this account. From fiscal year 1991 through 1995, a total of

$11.9 million was reprogrammed into the account to fund urgent requirements. The

fiscal year 1993 through fiscal year 1997 accounts are now fully committed.

Planning and Design

Our request for fiscal year 1998 planning and design is $41 million. These funds

are required to complete design of the fiscal year 1999 construction program and

to start design of our fiscal year 2000 projects.

MILITARY FAMILY HOUSING

As in years past, the Air Force leadership considers military family housing to be

one of our most important programs. We are convinced that no other facility program so greatly influences the performance and commitment of our people as much

as having quality homes for their families. Maintaining our commitment to the family housing program is even more important in this era of major force reductions

and increased operating and personnel tempo demands. because these factors are

so stressful for military families, it is imperative that we continue to emphasize

quality of life issues to mitigate the stress.

Due in large part to strong congressional support, our military family housing investment program has been sustained during recent force structure changes. Even

so, the average age of our family housing inventory is 34 years, and over 58,000

of our current 110,000 housing units do not measure up to contemporary standards.

While we definitely must continue our major improvement and replacement programs, the current funding stream won’t get the job done for at least 26 years.

The Fiscal Year 1996 Defense Authorization Act created the family housing improvement fund. The authorization act permits military family housing and dormitory privatization initiatives which enables us to accelerate improvement and replacement of our existing family housing inventory. We recently released a request

for developer proposals to provide 420 privately owned housing units at Lackland
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Air Force Base, Texas. So, in lieu of spending Milcon dollars for only 140 units, we

will get almost three times as many units for the same amount of money. That’s

good business. This is the first of several projects that will leverage Milcon funds,

existing houses, lands, and family housing improvement fund dollars with private

sector capital to satisfy a portion of our housing needs. We ask for your continued

strong support for our requested investment level so we have sufficient capital to

invest in an accelerated fix of our housing deficit.

Housing Improvements

The Air Force ‘‘whole house/whole neighborhood’’ improvement concept has been

extremely successful. Under this concept, we upgrade older homes to contemporary

standards—updating worn-out bathrooms and kitchens, replacing obsolete utility

and structural systems, providing additional living space as permitted by law, and

at the same time, accomplishing all required maintenance and repair. The result is

a very cost effective investment that extends the life of these houses 25 years. In

addition, the ‘‘whole neighborhood’’ program provides recreation areas, landscaping,

playgrounds and utility support systems to give us attractive and functional living

environments.

Our fiscal year 1998 improvement request is $102 million. This amount revitalizes

938 homes at 13 bases. This includes $73.9 million for 748 homes in the continental

United States, $21.6 million for 190 homes overseas, and $6.5 million for three

neighborhood improvement projects.

New Construction

We are requesting $139 million for fiscal year 1998 projects at 16 conus bases to

construct 70 new houses, replace 899 existing houses, and replace one housing support facility. The replacement units will take the place of existing homes that are

no longer economical to improve.

Operations, Utilities and Maintenance

Our fiscal year 1998 request for family housing operations, utilities and maintenance is $713 million. These funds are necessary to operate and maintain the

110,000 homes remaining in the fiscal year 1998 Air Force inventory, representing

a replacement value exceeding $12.5 billion. Approximately 75 percent of this requested funding represents the Air Force’s obligation as homeowners for items such

as utilities, refuse collection, and routine maintenance. The remaining 25 percent

is for major maintenance contracts to fix the deteriorating infrastructure, such as

repairs to electrical distribution systems, streets and roofs.

Leasing

We have requested $117 million for leasing both domestic and overseas houses.

Our fiscal year 1998 military family housing budget request reflects our commitment to provide our Air Force families with homes and communities that are comparable in design and amenities to private sector housing. This program continues

to put our people first by fostering a sense of community and supporting neighborhood identity. We seek to achieve a pride of place mentality within our family housing community. We ask for the support of the committee in approving the full request for our military family housing program.

AIR NATIONAL GUARD MILITARY CONSTRUCTION

The Air National Guard is an integral element of the total Air Force, and has

been a full partner in the Air Force mission for a long time. The Air Force is increasingly using Guard and Air Reserve Forces whenever and wherever it makes

good sense. Air National Guard personnel operate side-by-side with their active duty

counterparts in all theaters of operation as part of a true total force team. The Air

Guard remains a cost effective, community-based defense force trained and equipped

to rapidly and skillfully respond to the needs of our country, our states and our local

communities. The volunteer spirit of our Air Guard women and men continues in

the finest tradition, history and culture of the militia of this nation.

Program Overview

The Air National Guard Program for fiscal year 1998 totals $60.0 million, including $49.0 million for military construction, $4.0 million for unspecified minor construction, and $7.0 million for planning and design. This will support the readiness

of Air Guard units by modifying facilities to support mission beddowns and force

structure changes. It will also ensure compliance with environmental laws and regulations. It addresses only our most urgent needs, as identified and prioritized by our

integrated project matrix.
43

New Mission

The fiscal year 1998 new mission Milcon request supports the continuing trend

of transferring an increasing number of different missions to the Air National

Guard. The Milcon portion is $37 million, which comprises 62 percent of the Air

Guard Program.

This new mission budget request includes projects for the B–1 beddown at Robins

Air Force Base, Georgia; C–130 conversion at Boise Air terminal, Idaho; an aircrew

combat training system range support facility at Alpena County Airport, Michigan;

and upgrades of base infrastructure systems at Buckley Air National Guard Base,

Colorado.

Environmental Compliance

The Air Guard requests $12.0 million for environmental projects at eight locations. These projects will bring fire training facilities and fuel cell/corrosion control

hangars into compliance with environmental regulations, and also provide vehicle

washing facilities at two bases. This supports our goal to ensure that Air Guard

bases comply with all Federal, State and local environmental laws. Our staff continues to work closely with environmental agencies at every level to resolve and eliminate all Air Guard notices of violation.

Unspecified Minor Construction

We are requesting $4.0 million for this very important program on which we depend to satisfy urgent, unforeseen requirements that cannot wait for the fiscal year

1999 budget. As with past programs, the large majority of projects are expected to

be in direct support of aircraft conversion and modernization requirements.

Planning and Design

Our 1997 budget request for $7.0 million will allow us to complete and initiate

the design for those projects planned for inclusion in the respective 1999 and 2000

budget requests.

AIR FORCE RESERVE MILITARY CONSTRUCTION

The Air Force Reserve has emerged from another period of reorganization, force

structure reductions, and constrained budgets with an increased role in national defense. Our 73,300 reservists now work and train at 67 locations. The Air Force Reserve is host at four major installations and eight air Reserve stations, and is a tenant at 55 locations, mostly on Active Air Force bases.

Program Overview

The 1998 Reserve military construction budget request of $14.6 million represents

a sound facility investment strategy which is in line with the objective prioritization

matrix executed by the corporate Air Force. Though the budget is tight, it meets

the highest priority requirements supporting the total Air Force mission. The longrange strategy prioritizes our Reserve Milcon into four categories:

Included in our $14.6 million fiscal year 1998 Milcon budget request is $5.2 million for major construction of three projects at Youngstown Air Reserve Station,

Ohio, $4.6 million for unspecified minor construction, and $1.5 million in planning

and design. Our fiscal year 1998 request also includes two environmental compliance projects, a fire training facility at Westover Air Reserve Base, Massachusetts,

and a corrosion control facility at Minneapolis-St. Paul Air Reserve Station, Minnesota. This request adequately funds all Air Force Reserve new mission requirements.

Environmental Compliance

The top facility priority in our fiscal year 1998 program is to satisfy our level1 environmental compliance requirements. One project will provide an environmentally safe fire-fighter training facility, and the other will bring a corrosion control facility into compliance with stringent environmental laws.

New Mission

Having ensured environmental compliance, we then concentrate on new mission

requirements. In fiscal year 1998, we have three projects that support additional C–

130’s at Youngstown Air Reserve Station, Ohio.

Unspecified Minor Construction

The Air Force Reserve request $4.6 million in fiscal year 1998 for unspecified

minor construction. As in the case of the active duty Air Force and the Air National

Guard, this authority will provide the Reserve with its primary means of responding

to small unforeseen Milcon requirements. The current rapid rate of aircraft conver-
44

sions places extraordinary demands on this account. To respond to these and other

changes, we need the strong support of this committee for this request.

Planning and Design

Our planning and design request for fiscal year 1998 is $1.5 million. These funds

are required to complete design for the fiscal year 1999 Milcon program, achieve 35

percent design completion for our fiscal year 2000 program, and fully design all lateto-need 1998 new mission Milcon projects.

BASE CLOSURE ACCOUNTS

The Air Force requirements included in the Department of Defense fiscal year

1998 budget request for the base closure accounts are designed to support the President’s five-part program by continuing to transfer property at closure installations

as quickly and efficiently as possible to communities for economic reinvestment at

the earliest opportunity. As part of the Defense budget, the Air Force request reflects a thorough review of all remaining requirements and careful budgeting to fulfill validated requirements to the greatest extent possible within the budget constraints of the Defense Department. The Air Force has significantly improved execution of the BRAC Program, effectively minimizing the unobligated balances of past

years. As a result of these initiatives, we budgeted $139 million for the BRAC 1991 ac- count, $120.2 million for BRAC 1993, and $353.4 million to meet fiscal year 1998

requirements for BRAC 1995. Of these three fiscal year 1998 budget amounts,

$124.6 million support fiscal year 1998 military construction and family housing

construction requirements at realigned bases. This amount completes the construction programs for BRAC 93, and fully funds fiscal year 1998 construction requirements for BRAC 95.

The Department of the Air Force continues to be committed to timely, thorough

environmental restoration, and smooth transition of closing bases to civilian uses as

soon as possible. In addition to turning over closure bases for reuse, we continue

the realignment beddown process at remaining installations to ensure base closure

does not disrupt our operational requirements nor adversely affect quality of life issues. We appreciate the support of this committee in meeting these objectives.

CONCLUSION

In conclusion, Mr. Chairman, I thank the committee for its strong support of the

Air Force military construction program and the resulting benefits to the Air Force

in readiness, retention, recruiting, training and the quality of life for our personnel.

The fiscal year 1998 Air Force military construction submission reflects the corporate priorities supporting Air Force core competencies while working to maintain

our deteriorating plant. Our installations constitute a crucial factor in Air Force

readiness. We rely on our bases as places for people to work to effectively project

U.S. air and space power. This budget submission reflects our commitment to maintain the quality of Air Force installations to help ensure that the U.S. Air Force remains the world’s most respected air and space force.

Thank you Mr. Chairman and members of the committee. I will be happy to address any questions you may have.

BIOGRAPHICAL SKETCH OF RODNEY A. COLEMAN

Rodney A. Coleman is assistant secretary of the Air Force for manpower, Reserve

affairs, installations and environment, Washington, D.C. He is responsible for the

management and policy of all matters pertaining to the formulation, review and execution of plans and programs for Air Force military and civilian personnel, Reserve

and Guard forces, installations and environment. He assumed this position April 14,

1994.

Mr. Coleman was born Oct. 12, 1938, in Newburgh, N.Y. He earned a bachelor

of architecture degree from Howard University in 1963, and was commissioned as

a second lieutenant through the Air Force Reserve Officer Training Corps program.

He served on active duty from 1963 to 1973, attained the rank of captain and

compiled a distinguished career as an Air Force civil engineering officer. During his

Air Force career, he was directly responsible for the design and construction management of military facility projects valued in excess of $10 million. Among the numerous projects Mr. Coleman was involved in during his military career was serving

as the project architect for the million dollar renovation and addition to the prestigious Bolling Air Force Base Officers’ Club, the largest Air Force officers’ club in

the world.
45

Mr. Coleman is the recipient of the Bronze Star Medal, Republic of Vietnam Technical Services Honor Medal-First Class, Meritorious Service Medal and Air Force

Commendation Medal. He also served as an augmentee officer-in-charge of the elite

U.S. Air Force Honor Guard. In 1970 he was one of 17 individuals appointed by the

president as a White House Fellow, and served as a special assistant to the secretary of the interior.

After separating from the Air Force, he was appointed executive assistant to the

chairman of the District of Columbia City Council. From 1978 until 1980 he was

an architectural design consultant to the Pennsylvania Avenue Development Corp.,

Washington, D.C. He joined General Motors in 1980 and served successively as director of government relations, as director of municipal government affairs, and as

executive director of urban and municipal affairs. Among Mr. Coleman’s responsibilities during his GM career was coordinating the government relations activities with

local governments incident to the largest plant closing and consolidation activity in

the company’s history. More than 30 GM facilities were closed throughout the country during this rationalization process.

Mr. Coleman has two children, a son, Stephen, and a daughter, Terri.

EDUCATION

1963—Bachelor of architecture degree, Howard University, Washington, D.C.

1988—The Executive Development Program, University of Michigan Graduate

School of Business

CAREER CHRONOLOGY

1. June 1963, commissioned as a second lieutenant through the Air Force Reserve

Officer Training Corps program

2. June 1963–February 1965, chief, requirements and planning branch, U.S. Air

Force Civil Engineering Squadron, Dover Air Force Base, Del.

3. March 1965–April 1966, engineering officer, U.S. Air Force Civil Engineering

Squadron, Kunsan Air Base, South Korea

4. April 1966–August 1969, project architect, U.S. Air Force Civil Engineering

Squadron, Bolling Air Force Base, D.C.

5. September 1969–June 1970, Air Force representative, U.S. Air Force Institute

of Technology Education-with-industry program, Day and Zimmerman, Inc., Architects and Engineers, Philadelphia

6. September 1970–September 1971, White House fellow, Special Assistant to the

Secretary of the Interior, Washington, D.C.

7. October 1971–July 1972, chief, engineering and construction branch, 366th

Civil Engineering Squadron, Da Nang Air Base, South Vietnam

8. August 1972–October 1972, director, operations and maintenance branch, deputy chief of staff, civil engineering, Headquarters 7th Air Force, Tan Son Nhut Air

Base, South Vietnam

9. November 1972–July 1973, staff architect, Headquarters Tactical Air Command, Langley Air Force Base, Va.

10. August 1973–January 1979, executive assistant to the chairman, District of

Columbia City Council, Washington, D.C.

11. January 1979–October 1980, architectural design consultant, Pennsylvania

Avenue Development Corp., Washington, D.C.

12. November 1980–October 1985, director, government relations, foundry division

of General Motors Corp., Saginaw, Mich.

13. November 1985–March 1990, director, municipal government affairs, General

Motors Corp., Detroit

14. March 1990–April 1994, executive director, urban and municipal affairs, General Motors Corp., Detroit

15. April 1994–present, Assistant Secretary of the Air Force for manpower, Reserve affairs, installations and environment, Washington, D.C.

MAJOR AWARDS AND DECORATIONS

1996—The Howard University Distinguished Alumni Award for Postgraduate

Achievement in Corporate and Government Service

1996—The Lt. Gen. Benjamin O. Davis Jr. Distinguished Achievement Award,

East Coast Chapter of the Tuskegee Airmen

1996—The Black Engineer of the Year Dean’s Award

1994—The Newburgh Free Academy Distinguished Alumnus Award

1972—Bronze Star Medal

1972—Republic of Vietnam Technical Services Honor Medal—1st Class

1969—Outstanding Young Men in America
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1969—Meritorious Service Medal

1965—Air Force Commendation Medal

1960—PONY Baseball Man of the Year

PROFESSIONAL MEMBERSHIPS AND AFFILIATIONS

White House Fellows Association

Executive Leadership Council

Air Force Association

Tuskegee Airmen, Inc.

Senator BURNS. Thank you very much, Mr. Secretary, I have a

couple questions.

AVIANO AB, ITALY

I want to start off. We just completed a trip. We visited Aviano

and Prince Sultan. In our planning and our presence in that part

of the world, with security costs—we all understand what those

are, especially at Prince Sultan—what is our long-range liability,

because there is no housing at all for personnel at Aviano? What

is our liability there, and what does the Air Force have in mind as

far as our longevity at Aviano?

Mr. COLEMAN. I am going to have the civil engineer address that

in more detail. But Aviano is a permanent base for us. It is one

of our overseas bases, whereas Prince Sultan is not. We are looking

at all the leased housing that we can possibly do at Aviano, and

that is why—and some other Milcon at Aviano, to make that base

a base like any other that we have in our overseas network.

You want to fill in, Gene?

General LUPIA. Senator, I am on the senior executive review

group at Aviano that meets there every 3 months to go through the

construction program beddown, and we are, in fact, creating some

very permanent facilities there, mostly paid for by the NATO Program. As a matter of fact, the vast majority of the bill is paid for

by the NATO Program.

In terms of housing, we right now have given Aviano 1,000 lease

points, as we call them, to be able to lease houses off base. Most

of these houses are individually leased, and there are some very

small complexes, 22 houses, 24 houses, et cetera. But we have a

submission from our headquarters at Ramstein that would allow

the Italian developers to create a 500-unit housing complex for us.

They would not necessarily all be in one place. There could be a

number of parcels of property. But we would hope, through a privatization effort much like we have going on here in the United

States, that we would be able to release a request for proposal for

500 units of family housing, so that we could get our people closer

to Aviano.

The problem is that many of the people have to live a long way

and travel those very narrow, two-lane roads in order to get to

work. So we think we are on the verge of solving a good portion

of the housing problem.

This month, actually April, we will cut the ribbon on two big dormitories that have been constructed at Aviano for 552 of our airmen. So we will be able to get a number of our airmen back onto

base at Aviano. And we have additional dormitories in the program.
47

At Prince Sultan—I was through there I think just a little bit before you. At Prince Sultan, we are hoping that that housing complex will be paid for by the Saudis. Our Government has requested

that. I think the Saudis have responded favorably to that. And that

is how we would intend to solve the housing problem at Prince Sultan.

Senator BURNS. I think those negotiations were ongoing as we

were there, and I have not followed up.

General LUPIA. Yes, sir.

I believe the first commitment we got from the Saudis was that

they would pay $100 million toward the bill. Our Government responded that that was not enough, and that we are now up to a

commitment of about $180 million from the Saudis.

Senator BURNS. Well, General, I will tell you. I was there during

Desert Shield and just after Desert Storm. I could not believe my

eyes, because I think when the Air Force first went down there

during Desert Shield I do not even think you had a taxiway to the

main runway. I think everything had to be built, tarmac and the

whole thing. Is that correct?

General LUPIA. That is correct, sir.

Senator BURNS. Everybody was operating under tents.

Has the Air Force made progress in securing a lease for Aviano

with the Italian Government? Have we got a formal agreement

with the Italian Government for Aviano, or is that still——

General LUPIA. I do not know the answer to that question, Mr.

Chairman. I will have to provide it for the record.

[The information follows:]

HQ USAFE has leasing agreements throughout the Aviano area. These leases are

off-base for support purposes (e.g., hospital, school, regional support group administrative facilities, OSI facility, AAFES warehouse, etc.). The Italian government provided the Zappala area to the United States without a lease and at no cost. There

are no plans to lease Aviano Air Base. One hundred tents (greenbacks) are being

used there, solely for contingency purposes. HQ USAFE is working towards a formal

agreement with the Italian government for Aviano. The original basing agreement

is the 1954 Bilateral Infrastructure Agreement, which the Italians feel is outdated.

USAFE presence at Aviano is governed by a memorandum of understanding (30 Nov

93) and a technical agreement (11 Apr 94), both of which fall under the framework

of the 1954 Bilateral Infrastructure Agreement. In early 1995, the United States

and Italy agreed to standardize basing agreements and, when possible, develop a

subordinate and separate technical agreements for each location. The technical

agreement is part of the overall basing agreement being developed in Italy for the

purpose of updating the support procedures initiated under the Bilateral Infrastructure Agreement. The current Aviano technical agreement is being updated by HQ

USAFE and will be presented to the Italians in May 1997.

General LUPIA. I do know that the new piece of property we have

at Aviano, called the Zappola area, was given to us by the Italian

Government. But in terms of the actual country to country agreement for the lease at Aviano, I think we would have to provide that

for the record.

Mr. COLEMAN. We will supply that to you, Mr. Chairman.

Senator BURNS. When we were there there was no formal agreement and there was some concern on the committee, the Appropriations Committee. There was concern about that there should be

some formal agreement with regard to Aviano.
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MILITARY HOUSING PRIVATIZATION INITIATIVE

Your assessment, Mr. Secretary? Your assessment of military

housing privatization initiative? Should the initiative be extended

to barracks?

Mr. COLEMAN. Absolutely. We are looking at it for our barracks,

dormitories. We do not have a specific area where we are doing it

now because we are studying it, looking at it. But it makes sense,

sir, to look at every aspect of how we can bring in the private sector to assist us in our very stringent budget that we have. That is

why we are so happy that we have your support in doing this.

Senator BURNS. The extended housing and, of course, the

leveraging of those dollars, of course. And then when you go into

a BRAC round—and I want to congratulate you. I think the Air

Force and the Navy has done a very good job in protecting its liabilities in the event of a BRAC closing and what can be done.

I would suggest that the exposure, the liability exposure, be

somewhat kept to a minimum if we possibly can. Do you think we

will have another BRAC round for the Air Force?

Mr. COLEMAN. Do not know, sir. I would assume that—sir, you

and I know that we are——

Senator BURNS. All your flag officers, that money is going to go

to the Marine Corps. You remember that. We have got it at risk

here. [Laughter.]

Mr. COLEMAN. Sir, I think that we are looking at a few things

in our QDR exercise. What that reveals I do not know. I am working on the infrastructure panel. We are supplying some information

to that process. It has to be studied. All things have to be weighed.

We do not have a definitive list. I do not know what our exact excess capacity is. But all of that will come out in due time.

Senator BURNS. Senator Murray.

Senator MURRAY. Thank you, Mr. Chairman.

BUDGET FOR RESERVE COMPONENTS

On the budget request for the Air National Guard, $60.2 million,

that is less than one-third of the amount that this committee appropriated last year. Can you tell me if that is adequate and, if not,

what you think the appropriate amount should be?

Mr. COLEMAN. Senator Murray, as you know, the Chief said recently, and the Secretary, when they were up here that we have

used Milcon as a billpayer, and we did that for a definitive reason,

to get money into modernization. The racking and stacking through

the corporate process of what we have presented you includes

Guard and Reserve input and prioritization of their projects.

I will allow, of course—not allow, but I will ask the Guard and

Reserve to respond on their behalf with this. But we feel it does,

Senator. What the Guard and Reserve has in there is really adequate for their priorities at this juncture. We hope that after the

next two submittals, 1998 and 1999, that we are able to ramp up,

use our money more for military construction than we are on this

submittal.

Senator MURRAY. Well, I wonder if you can comment, because

the Air Force Reserve is also less than one-third of last year, if you

can comment on that.
49

Mr. COLEMAN. Well, we make no bones about it, that we did take

our money and prioritize it more toward modernization than we

have in the past.

Paul, John, if you wish to.

General WEAVER. Yes, ma’am. As you know, we sit at the same

table with our active duty counterparts and we have done that for

many years. And I think the Air Force—I know the Air Force sets

the standard as far as its use of the Reserve components. As Mr.

Coleman stated, we go through the process, through the Board, to

the Air Force councils as our constrained budget. We look at the

priorities both within the Air Force, the Air Force Reserve, and the

Air National Guard. And for what we have, within the constraints

of the budget, it is adequate. I mean, we have got a $1.4 billion backlog in current mission

Milcon. I know that, everyone else knows that.

MILCON BACKLOG

Senator MURRAY. 1?

General WEAVER. $1.4 billion.

Senator MURRAY. Backlog?

General WEAVER. Backlog, in the Air National Guard current

mission. And we are hoping to get better. We would need approximately about $160 million a year in the out years to help solve

that. With the budgetary constraints that we do have, and we understand that as a total force, that the priorities are set by the

Chief and the Secretary, and we totally support that.

We also totally support the great support that we have in Congress and from you all in allowing us the additional funds that you

do at times give us. And I can tell you and testify to you that every

dollar that you do give us for additional Milcon goes to our combat

capability, our combat readiness in the Air Force National Guard

and Air Force Reserve, and that is why you have got a Reserve

component in the Air Force that is the most combat-capable Reserve component in DOD, and in large measure as a result of the

additional add-ons that you have given us, and we enjoy that.

But we also support the President’s budget and we also have to

operate within the constraints of that budget, Senator.

General BRADLEY. Senator Murray, I would echo essentially what

General Weaver has said. The Air Force has had to make some

very difficult decisions with its budget levels and, as General Weaver has said, the Air Force Reserve has been very involved in the

Air Force prioritization process, in making all budget decisions,

whether it is in Milcon or in all other areas.

So we are very satisfied that we have been included in the process. We are adequately funded for this year and we appreciate

what the committee has done for us in past years as well.

We have needs in the Air Force Reserve. We want to have quality of facilities for our people. And we think that the levels that we

have this year are adequate. But we are very proud to be a part

of the Air Force team and be involved in the prioritization process.

We believe that the right thing to do is to make decisions for the

total Air Force, and we do that through the prioritization process

for Milcon projects that we have. So we believe that the level is correct for this year.
50

Senator MURRAY. What would be the immediate impact if we just

gave you the budget request that is in here this year?

General BRADLEY. Senator Murray, if we received what we have

asked for in the President’s budget, we will be just fine. We will

be able to operate without reducing any level of training or with

no reduced levels of readiness. The program we asked for in the

budget is adequate.

General WEAVER. Same with the Air National Guard.

Senator MURRAY. What will happen in the out-years if we do not,

if we funded this request this year and keep going down? What will

we eventually see?

General WEAVER. Eventually that will lead to our combat capability decreasing as well, absolutely.

Senator MURRAY. OK. So my question is how vital are the contributions of your agencies in a wartime situation?

WARTIME CONTRIBUTIONS OF RESERVE COMPONENTS

Mr. COLEMAN. Absolutely essential.

General WEAVER. We provide 40 percent of the combat capability

of the total Air Force between the Guard and Reserve. If you look

at the total Air Force budget, the $4 billion is our budget in the

Air National Guard and $3 billion in the Air Force Reserve. So if

you are looking at a $66 or $62 billion Air Force budget, we do provide a lot of combat capability of the total force with the Reserve

components.

Lessening our quality, our quality of life issues being the facilities in which our people work on the weekends, if we see a degradation in that it is also going to lead to a degradation of our combat capability as well.

Senator MURRAY. Are you going to be able to recruit?

General WEAVER. We still will be able to recruit.

Senator MURRAY. Will it make it more difficult?

General WEAVER. I think it will. Yes, it will.

General BRADLEY. Yes, ma’am. I would again agree with what

General Weaver has said. If these levels were to continue to reduce

in the future, it would certainly impact the quality of our facilities,

our ability to train and to maintain our readiness. It would certainly impact our recruiting ability and would impact retention

highly, because our people deserve, of course, to have good facilities

to train in. If we cannot in future years provide adequate facilities,

then our retention would suffer greatly.

It is a great quality of life issue, as General Weaver says, because we do not have housing for Reserve Forces, of course. The

facilities we work and train in as reservists and guardsmen are our

quality of life, and we do provide great combat capability for the

Air Force every day around the world. We are working side-by-side

with the Active Air Force. So we need to continue to fund our facilities in future years at the proper levels.

Senator MURRAY. Mr. Secretary, you say in your statement that:

The Air Force leadership considers family housing to be one of our most important

programs. Even so, the average age of our family housing inventory is 34 years and

over 58,000 of our current 110,000 housing units do not measure up to contemporary standards.
51

Given your testimony and the priorities that have been set by

the Secretary, it is somewhat perplexing to see that your budget

actually calls for a 20-percent reduction over last year’s actual appropriation for new construction of family housing. Do you think

that this reduction reflects an adequate emphasis on the quality of

life of Air Force personnel?

FAMILY HOUSING BUDGET REQUEST

Mr. COLEMAN. Yes, ma’am. Given what we have to work with in this overall budget, we are asking for about $1.08 billion for military family housing and about $595 million for Milcon. We feel,

given our long-range program—privatization, Milcon, outsourcing,

prudent RPM, taking care of other costs like utilities and infrastructure costs hopefully—that our plan to build out and to get all

of our housing up to our standards, we can do it.

Gene, if you want to.

General LUPIA. Senator, the Air Force request in the President’s

budget this year is actually larger than our request in the President’s budget last year. For new construction last year we asked

the Congress for $232 million. This year we are asking for $253

million.

Senator MURRAY. The appropriation was different than the request, though.

General LUPIA. Yes, Senator, it was. We were plussed up from the $232 million I just mentioned to $317 million for new construction. But our actual budget in the operations and maintenance account includes an increase of somewhere around 2 percent for increased cost of doing business.

At the same exact time, we went from a housing inventory of

114,000 down to 110,000 with the closure of March Air Force Base

or transfer of March Air Force Base, closure or lease, et cetera. So

we have a smaller inventory by 4,000 houses. We asked for a little

bit of money to take care of them. On the construction side, we actually increased our money by $20

million. The Air Force really is committed to housing and the dormitory program as well for enlisted folks.

USAF SURVIVAL SCHOOL

Senator MURRAY. Let me ask you one more question, Mr. Chairman. As you know, Fairchild Air Force Base is home to the USAF

Survival School to train our pilots how to survive difficult and traumatic situations, much like the survival school graduate Scott

O’Grady did in Bosnia. Would you regard the survival school program as part of what your testimony terms the ‘‘Air Force core

competencies’’?

Mr. COLEMAN. Absolutely.

Senator MURRAY. Well, given the priority to support these competencies, does your budget adequately support the facility at Fairchild Air Force Base?

Mr. COLEMAN. That I do not know specifically, if there is a line

item in there for the Fairchild site.

General LUPIA. Our emphasis, Senator, at Fairchild Air Force

Base is to bed down 135’s, the tankers. After the Air Force’s consolidation, we wound up with tankers in our Air Force at three
52

bases, one of which is Fairchild, as you know, Grand Forks and

McConnell. When we put additional squadrons into Fairchild, we

have really concentrated in our budget over the last few years and

in the coming years over building squadron operations and aircraft

maintenance units at Fairchild.

So that has really been the highest priority for us there.

Senator MURRAY. Thank you very much. I appreciate it.

General LUPIA. That is what is in our program again this year.

Senator MURRAY. Thank you.

AIR GUARD BUDGET REQUEST

Senator BURNS. Mr. Secretary, I have just a couple other questions. We have been looking at housing amounts and we are following up on that, and I appreciate your efforts there. I am, like Senator Murray, still concerned about the Guard. I do not think $60

million adequately does the job that I think we ought to do, especially if 40 percent of our mission depends on them being capable

and ready.

In my State I have F–16’s in my Guard. We are very proud of

the Montana Air Guard up there. I think they fulfill their mission,

although they have not been anywhere. That is where I got my 9G

pin, so I do not want to be fiddling around up there.

General WEAVER. They are an outstanding unit, sir. They are an

outstanding unit.

Senator BURNS. They really are, and I think they have a mission

and they do very good at it.

But I want to just caution you, I think. I want to work with you

on that particular end of this budget and with the President to

make sure that—40 percent is a big whack.

General WEAVER. Yes, sir.

Senator BURNS. You are not talking about 10 percent or 20 percent here. Should something happen—and we still, to my estimation, live in kind of a rough neighborhood, and I think we see

some serious things developing a lot closer to home than we think,

with some very bad situations that could develop into some major

confrontations.

So I want to work with you and the President to make sure that

we have got all of our bases covered, so to speak, especially when

we start talking about the Guard and Reserves. So I have sort of

a soft spot in my head for that.

That is all the questions I have. I want to thank you for coming

this morning.

ADDITIONAL COMMITTEE QUESTIONS

Do you have other questions?

Senator MURRAY. No; that is all I have.

Senator BURNS. We certainly appreciate your cooperation and

look forward to working with you as this process moves along.

Thank you very much.

Mr. COLEMAN. Thank you, Senator.

Senator BURNS. Thank you.

[The following questions were not asked at the hearing, but were

submitted to the Department for response subsequent to the hearing:]
53

QUESTIONS SUBMITTED BY SENATOR BURNS

Question. I have noted that the Air Force has several privatization projects under

development. However, I am concerned that these projects do not significantly reduce the housing deficit situation, but rather improve the quality of family housing.

What is your assessment of this issue ?

Answer. The Air Force’s housing investment plan puts primary emphasis on reducing the significant revitalization backlog on our existing housing units. As a result, our emphasis to date in housing privatization has been to leverage our investment funds to accelerate the buyout of our maintenance backlog. As we continue to

mature our housing privatization program, we will look at addressing the deficit situation.

Question. What is the Air Force overseas military construction requirement in the

fiscal year 1998 budget request? Answer. The Air Force fiscal year 1998 Milcon request includes $102M for overseas requirements.

Question. Are we asking our allies to help fund some of the Air Force’s requirements in overseas areas? Is this strategy working? How can we ensure that the U.S.

doesn’t pay the total bill for stationing our forces in their country?

Answer. We are asking our allies to support our facility requirements in overseas

areas to the maximum extent possible and they are contributing significantly. We

are aggressively screening all projects for potential allied funding eligibility to garner as much allied support as possible. We must continue to request Milcon to support urgent operational and quality of life requirements which are not eligible or

cannot wait for allied funding. Our allies have been providing support for Air Force

requirements as follows:

[In millions of dollars]

Country

Fiscal year

1994 1995 1996 1997 1

Germany (PIK) ..................................................................................................... ........ 1 18 13

Germany (FAG) .................................................................................................... 18 22 22 ..........

NATO .................................................................................................................... 69 105 108 235

NATO recoupment ................................................................................................ 8 24 5 31

Korea (RFCP) ....................................................................................................... 9 16 14 15

Korea (CDIP) ........................................................................................................ 6 11 13 10

Japan (JFIP) ......................................................................................................... 139 305 363 311

Totals ..................................................................................................... 249 484 543 615

1 The fiscal year 1997 column shows expected funding levels.

PIK: Payment in Kind.

FAG: Frankfurt Airport Authority, one-time agreement to construct facilities on Ramstein AB due to Rhein Main AB

drawdown.

NATO: North Atlantic Treaty Organization Security Investment Program.

NATO Recoupment: Repayment for U.S. prefinanced NATO eligible projects.

RFCP: Republic of Korea Funded Construction Program.

CDIP: Combined Defense Improvement Projects.

JFIP: Japanese Facilities Investment Program.

Question. How much money did the Air Force receive in fiscal year 1996 and anticipate receiving from NATO infrastructure fund? Are we getting our fair share? Answer. The Air Force received $108 million in fiscal year 1996 and anticipates receiving $235 million in fiscal year 1997 from the NATO Security Investment Program (NSIP). Additionally, we received $5 million in fiscal year 1996 and expect $31

million in fiscal year 1997 as recoupment for NATO eligible projects prefinanced

with U.S. dollars. Yes, the Air Force is getting its fair share.

Question. It appears that the only Air National Guard Milcon in the fiscal year

1998 budget request is to accommodate new missions and environmental compliance. Is the level adequate for the Air National Guard? What kind of things will

not get done with the proposed $60.2 million budget?

Answer. The Air National Guard (ANG) facility investment strategy prioritizes

military construction (Milcon) requirements as follows: environmental compliance,

new mission, and then current mission. Although the fiscal year 1998 budget does

address the ANG’s most urgent facility needs, some new mission and numerous current mission projects had to be slipped to later years. These requirements are identified in the ANG’s Future Years Defense Plan.
54

Question. The Air Force Reserve Budget again looks very slim this year. What

does the $14.5 million accomplish? Does it provide for any quality of life initiatives?

Answer. The Air Force Reserve Command’s $14.53 million fiscal year 1998 Milcon

budget request includes two (2) level 1 environmental compliance projects at $3.35

million, three (3) projects at $5.20 million that support the robust of C–130 aircraft

at Youngstown ARS, unspecified minor construction at $4.46 million, and planning/

design at $1.52 million.

Due to higher Air Force funding priorities, the Air Force Reserve Command was

unable to include any quality of life initiatives in the fiscal year 1998 budget request.

Question. How can the Reserve components maintain parity with the Active Air

Force unless they are truly resourced adequately, especially in military construction?

Answer. The Air Force Reserve Command can maintain military construction parity with the Active Air Force if adequately resourced.

QUESTIONS SUBMITTED BY SENATOR MURRAY

REQUEST FOR AIR NATIONAL GUARD

Question. Do you regard the budget request for the Air National Guard, at $60.2

million, less than one-third of the amount this committee appropriated last year, as

adequate? What is the right number for fiscal year 1998? What would be the result

if this committee decided to endorse the budget request, and added nothing to it?

Answer. The Air National Guard (ANG) was unable to fully fund its military construction (Milcon) requirements due to higher Air Force budget priorities. While the

fiscal year 1998 budget request is the lowest in 18 years, it does address the ANG’s

most urgent facility needs. If the committee decided to endorse the budget request,

the ANG would still be able to perform its missions. However, the deferral of Milcon

projects causes converting units to use inefficient workarounds for longer periods of

time and severe current mission facility deficiencies to remain uncorrected.

REQUEST FOR AIR FORCE RESERVE

Question. Do you regard the budget request for the Air Force Reserve, at $14.5

million, less than one-third of the amount appropriated last year? Is the $14.5 million adequate? Should we increase it? What is your professional recommendation?

Answer. Although the Air Force Reserve Command’s fiscal year 1998 budget request of $14.5 million is, indeed, one-third the amount appropriated last year, we

consider it adequate in the constrained military budget of today. If funds became

available to increase the Air Force’s Milcon program, the Air Force Reserve Command could execute an annual Milcon program of $86 million. This would include

$73 million for Milcon projects, $5 million for unspecified minor construction, and

$8 million for planning and design. If funds do become available, my recommendation is to increase our Milcon program to an executable level.

ROLE OF AIR GUARD AND RESERVE IN WAR

Question. Does the cut in the Military Construction Budget reflected in your request indicate that the Air Force can do without the Guard and Reserve in a wartime situation? How vital are the contributions of these agencies to the warfighting

capacity of the Air Force?

Answer. Our reduced total force Military Construction (Milcon) requests for the

next two years are a deliberate resource prioritization decision. We see this as a

temporary measure to help pay for critical force modernization in fiscal year 1998

and fiscal year 1999. The Air Force emphatically cannot do without the Air National

Guard (ANG) and the Air Force Reserve (AFR) in wartime or in peacetime—they

are an integral part of the Air Force’s operations daily and partners in the total

force. Today, for example, the Guard is providing 12 of the 30 combat aircraft flying

in Southwest Asia as part of Air Expeditionary Force 97–1. The Reserve is a vested

partner in every operational mission the Air Force has, from airlift and aerial refueling to fighters and bombers, to aeromedical evacuation and satellite operations.

Both the ANG and the AFR represent large portions of total Air Force combat capability and wartime contingencies only increase their participation.

HOST NATION SUPPORT

Question. We have in the budget a rather robust request for both U.S. facilities

construction abroad, and for NATO infrastructure funding. Are we sure that we
55

have gone as far as we can to secure supporting funding from host nations, particularly Germany, where these facilities are going to be built? I understand the Japanese pay for pretty much everything, but there are some who feel that the Germans

could be more supportive, and that the funding by NATO, and by the host nations

in terms of both funding and so-called ‘‘payment-in-kind’’ is insufficient and not

timely enough to meet our requirements. What is the situation?

Answer. The Air Force fiscal year 1998 Milcon request includes $102M for overseas requirements. Only one project, Spangdahlem Dormitories at $18.5M, is proposed for Germany. We significantly reduced overseas Milcon investment during the

overseas drawdown. The basing and force structure are now stabilized. We are asking our allies to support our facility requirements in overseas areas to the maximum

extent possible and they are contributing significantly. We must continue to request

Milcon to support urgent operational and quality of life requirements which are not

eligible or cannot wait for allied funding. Our allies have been providing support for

Air Force requirements as follows:

[In millions of dollars]

Country

Fiscal year

1994 1995 1996 1997 1

Germany (PIK) ..................................................................................................... ........ 1 18 13

Germany (FAG) .................................................................................................... 18 22 22 ..........

NATO .................................................................................................................... 69 105 108 235

NATO recoupment ................................................................................................ 8 24 5 31

Korea (RFCP) ....................................................................................................... 9 16 14 15

Korea (CDIP) ........................................................................................................ 6 11 13 10

Japan (JFIP) ......................................................................................................... 139 305 363 311

Totals ..................................................................................................... 249 484 543 615

1 The fiscal year 1997 column shows expected funding levels.

PIK: Payment in Kind.

FAG: Frankfurt Airport Authority, one-time agreement to construct facilities on Ramstein AB due to Rhein Main AB

drawdown.

NATO: North Atlantic Treaty Organization Security Investment Program.

NATO Recoupment: Repayment for U.S. prefinanced NATO eligible projects.

RFCP: Republic of Korea Funded Construction Program.

CDIP: Combined Defense Improvement Projects.

JFIP: Japanese Facilities Investment Program.

FUNDING FOR THE DORMITORY PRIVATIZATION EFFORT

Question. The fiscal year 1997 Appropriations Act provides $5 million to support

a dormitory privatization effort. How much is the fiscal year 1998 request, and is

that adequate?

Answer. The Air Force has no request for this purpose for fiscal year 1998. We

are studying the application of the housing privatization authorities in order to determine how to best integrate the privatization tools into our dormitory investment

plan. We plan to complete that study by May 1997.

AIR GUARD FUTURE YEARS DEFENSE PLAN

Question. This Committee in last year’s committee report directed that the ‘‘National Guard Bureau develop and provide a future years defense plan to the appropriate committees not later than April 20, 1997’’. What is the status of this planning

action?

Answer. In accordance with the fiscal year 1997 Appropriations Conference Report, the Air National Guard (ANG) included the Future Years Defense Plan

(FYDP) in its February 1997 fiscal year 1998/1999 President’s Budget submission.

The FYDP identifies the ANG’s military construction requirements through fiscal

year 2003.

INFRASTRUCTURE

Question. The infrastructure reductions resulting from the rounds of BRAC that

we have conducted amount to an overall DOD reduction of some 18 percent. While

this has been difficult, our overall force reductions have been far more substantial

than that, over 30 percent. Doesn’t this mean that we still have far too much infra-
56

structure for our requirements, and that we should look again at reducing infrastructure. Would you support another round of BRAC? If not, why not?

Answer. The need for another round of Base Realignment and Closure (BRAC)

and its timing depends on the results of the Quadrennial Defense Review, currently

underway, and appropriate legislation.

PRIVATIZATION OF UTILITIES

Question. I understand that privatization of utilities at our bases has been lagging. Is this the case? What is the problem in the privatization of utility infrastructure, and what can be done to speed this process up? I understand that the Administration has been considering proposed legislation for utility privatization—is this

the case, and what is the status of this legislative proposal?

Answer. Our long term goal is to turn utility systems over to the private sector

where there is no readiness impact and it makes economic sense. Currently, the

services have to seek specific legislative language for each utility privatization

project that they propose to accomplish. The process of privatization would go

quicker if more general legislative authority was provided to pursue these projects

with proper congressional notification. OMB has approved OSD release of proposed

legislation for inclusion in a general authorizations request to Congress.

WAITING LIST FOR BASE HOUSING

Question. In general, can you characterize the problem of waiting lists for base

housing? What is the backlog, and what is the affect on morale? How can we eliminate this problem in the long run?

Answer. There are housing shortages at 65 of 79 Air Force bases. The majority

of families on the waiting list are having to pay 20 percent out-of-pocket instead of

the Congressional intended 15 percent to supplement BAQ/VHA. Some families, including those with deployed member spouses, want to live on base for safety and

security as well as access to community support facilities.

There are 41,000 families on waiting lists for government-provided family housing. The average waiting time is from 12 to 24 months. This impacts morale as it

makes on-base housing impossible for families who then must seek off-base housing.

We are expanding our efforts to provide safe and affordable community housing

through a ‘‘Housing Set-aside’’ program. This provides for landlords and property

managers to house service members at below market rates for guaranteed rents

paid by allotment.

BUDGET BENEFITS OF PRIVATIZATION OF HOUSING

Question. The housing construction budget is down more than 30 percent from

last year. Does this mean we have a less severe problem than last year? What does

this say about our commitment to Quality of Life initiatives?

Answer. The Air Force requested $231 million for the fiscal year 1997 family

housing construction program. With strong support from Congress, the program was

increased by $86 million (Congress appropriated $317 million for the program). Due

to current budget constraints and the need to balance the requirements for both

modernization and quality of life, the Air Force requests $253 million in the fiscal

year 1998 budget. Although it is $64 million, or 20 percent, less than the fiscal year

1997 appropriated amount, it is an increase of $22 million, or 9.5 percent, to the

fiscal year 1997 budget request. The Air Force continues to have a backlog of housing revitalization needs, however; we are very much committed to our ‘‘people’’ program and support the Quality of Life initiatives.

Question. Do you believe the housing budget is adequate for fiscal year 1998?

What is the right number? How many housing units does a 30 percent reduction

represent?

Answer. We believe the fiscal year 1998 Air Force housing budget adequately addresses our most critical housing needs given the current budget constraints. With

the current funding level, it will take 26 years to reduce our revitalization backlog

of 58,000 units. An additional $100 million in fiscal year 1998 would be needed to

accelerate the revitalization from 26 years to a more manageable 20 years. The $64

million difference between the fiscal year 1997 appropriation and the fiscal year

1998 request represents renovation or replacement of about 600 housing units.

NEW PUBLIC/PRIVATE HOUSING INITIATIVE IN DOD

Question. What is your assessment of the Military Housing Privatization Initiative? What are the long term impacts that we can expect in the way of housing con-
57

struction? Can the initiative be extended to the construction of barracks as well?

What can we expect to see in the way of projects in the current calendar year?

Answer. We are very excited about the new housing privatization authorities and

are working an aggressive program to institutionalize these tools as an additional

way to address our family housing concerns. The request for proposal on our lead

privatization project at Lackland AFB was advertised on 11 Feb 97. The project

calls for a developer to design, construct, maintain, own, and manage a housing development of 420 units on 96 acres of outleased base property. Award is anticipated

in late 1997. We are also working to develop our other nine active family housing

projects and will notify you as we approach release of the request for proposal on

each project.

The Air Force is studying the application of housing privatization authorities in

order to determine how to best integrate the privatization tools into our dormitory

investment plan. We plan to complete that study by May 1997.

COMMUNITY DEVELOPMENT FACILITIES

Question. What is in this budget in the way of community facilities, such as child

care or child development centers, physical fitness centers, community centers? How

many of each, roughly are in the budget? Is it true that there are only 2 gymnasiums and no Child Development Centers in the Air Force budget?

Answer. The fiscal year 1998 budget includes two Physical Fitness Centers. There

are no Child Development Centers or Community Centers. The Military Construction (Milcon) Future Year Defense Plan (FYDP) includes 8 Child Development

Projects, 17 Physical Fitness Centers and 19 Community facilities. Additional

Milcon requirements exist beyond the FYDP.

Question. The Marsh Commission on Quality of Life issues recommended 44 (forty

four!) fitness centers and child development centers. What is the need for such facilities? What is the unfunded need for these type of facilities?

Answer. A 1995 AF-wide quality-of-life survey rated fitness centers as the most

important community support program by almost two-to-one (over four-to-one for

our junior enlisted personnel.) We have already conducted independent needs assessment studies that validate the need for major fitness center renovation or construction at many bases. Two fitness center projects, one for Maxwell AFB and one

for the Air Force Academy, are included in the 1998 Budget Request. Seventeen

other fitness center projects are currently in the Milcon Future Year Defense Plan

(FYDP) at the following locations:

Aviano AB, Italy

Barksdale AFB, LA

Davis-Monthan AFB, AZ

Grand Forks AFB, ND

Hanscon AFB, MA

Holloman AFB, NM

Kirtland AFB, NM

Langley AFB, VA

Little Rock AFB, AR

Los Angeles AFB, CA

MacDill AFB, FL

Malmstrom AFB, MT

Robins AFB, GA

Vance AFB, OK

Vandenberg AFB, CA

Wright-Patterson AFB, OH

Child development centers were ranked number two behind fitness centers. Despite the large number of centers constructed in recent years, we have also identified a need for additional child development centers. Eight of these child development projects are currently in the Milcon FYDP at the following locations:

Andrews AFB, MD

Bolling AFB, D.C.

Eglin AFB, FL

Falcon AFB, CO

Luke AFB, AZ

MacDill AFB, FL

Wright-Patterson AFB, OH (2 centers)

Scott AFB, IL

Question. Adequacy of funding for Maintenance and Repair of Military Family

Housing and Real Property Maintenance for Military Family Housing. What is the

adequacy of the budget request for these accounts and what is the backlog?

Answer. The $432M request in the fiscal year 1998 budget is adequate to address

the most pressing maintenance requirements for our houses. However, it is not

enough to satisfy all our requirements. The Air Force will need an additional $104M

to stop the growth of deferred maintenance and repair (DMAR), estimated at $1.06B

at the end of fiscal year 1998.

UNSPECIFIED MINOR CONSTRUCTION

Question. The Unspecified Minor Construction program supports urgent, unforeseen requirements that cannot wait for the normal military construction program

and a lump sum is appropriated to accomplish requirements that arise during the

year costing between $500,000 and $1.5 million. The Air Force annual requirements
58

for this fund is about $15 million. However, only $8.5 million is requested. Is this

account under strain, and what is the right number for the fiscal year 1998 budget?

Answer. The fiscal year 1998 $8.5M request is sufficient to meet our most urgent

needs.

QUESTIONS SUBMITTED BY SENATOR REID

PRIVATIZATION OF MILITARY HOUSING AND UTILITIES

Question. In your prepared statement you remarked that the Air Force was seeking to support its core competencies, force modernization, and quality of life. To do

this you are focusing on reducing the physical plant using private sector partnerships and sound business practices. You discussed that this would be accomplished

through the use of consolidation, divestiture, and privatization. Would you please

update me on your progress to privatize military housing and utilities.

Answer. In family housing we have an aggressive program with 10 active projects.

The request for proposal on our lead privatization project at Lackland AFB was advertised on 11 Feb 97. The project calls for a developer to design, construct, maintain, own, and manage a housing development of 420 units on 96 acres of outleased

base property. The units will be rented to E–3 through E–7 personnel from the

Lackland community. Award is anticipated in late 1997. We are continuing to work

the remaining projects and will notify you as we approach release of the request for

proposal on each project.

In regards to utilities, our long term goal is to turn these systems over to private/

public ownership where there is no readiness impact and it makes economic sense.

OMB has approved OSD release of proposed legislation for inclusion in a general

authorizations request to Congress.

AIR NATIONAL GUARD FUNDING LEVEL

Question. The fiscal year 1998 military construction request for the Air National

Guard is only $60 million. This is less than one-third of what was appropriated to

the Air National Guard for 1997. Do you regard this an adequate funding level?

What would be the long-term impact to the Air National Guard if Congress simply

endorsed this budget providing no plus ups?

Answer. The Air National Guard (ANG) was unable to fully fund its military construction (Milcon) requirements due to higher Air Force budget priorities. While the

fiscal year 1998 budget request is the lowest in 18 years, it does address the ANG’s

most urgent facility needs. If the committee decided to endorse this budget without

plus-ups, the long-term effects would be cumulative and eventually degrade ANG

readiness and quality of life. Deferring Milcon projects forces new mission units to

use inefficient workarounds for longer periods of time and severe current mission

facility deficiencies to remain uncorrected.

PARKING RAMP MODERNIZATION

Question. The Army National Guard estimates that 51 percent of their parking

ramps are inadequate in size or condition. Contributing factors to the untimely deterioration of these ramps include a modernized fleet, aging asphalt, and deferred

ramp maintenance. Has the Air National Guard accomplished any studies to determine if similar circumstances exist at their facilities?

Answer. The Air National Guard (ANG) performs a pavement condition survey for

each ANG base every five years. These surveys identify those pavements that do

not meet desired operational parameters and standards. The surveys also include

recommendations on the necessary maintenance and repair work. A review of the

40 most recent surveys indicates that 75 percent of the pavements are adequate and

only require maintenance efforts to remain operational. The other 25 percent require some type of repair work. In the last three years, the ANG executed Real

Property Maintenance projects for airfield pavements as follows:

[Dollars in millions]

Fiscal year No. of

projects Amount

1995 ................................................................................................................................ 9 $2.1

1996 ................................................................................................................................ 17 10.6
59

[Dollars in millions]

Fiscal year No. of

projects Amount

1997 ................................................................................................................................ 13 8.7

Currently, the ANG has identified $23.7 million of airfield pavement requirements

to be accomplished. Within this figure are 18 projects from local airport authorities

for which the ANG cost share totals $13 million. These projects are for joint use

pavements at civil airfields.

NATO INFRASTRUCTURE FUNDING

Question. The military construction budget, $8.4 billion, is 16 percent smaller

than what was appropriated in fiscal year 1997 ($10 billion). Of all the account requests, I note that each reflects an overall reduction from last year’s appropriation,

with the exception of one: NATO Infrastructure account. The request for NATO is

greater than what was requested for all five of our reserve components. Is it wise

to give such assistance to our allies at the expense of our own guard and reserve

forces?

Answer. The fiscal year 1998 request of $176.3 million in budget authority for the

NATO Security Investment Program (NSIP), formerly the NATO Infrastructure Program, is consistent with funds appropriated the past two fiscal years. The amount

appropriated for NSIP in fiscal year 1997 was $172 million and fiscal year 1996 was

$198.5 million, of which $37.5 million was in support of Bosnia. The fiscal year 1998

budget request provides the U.S. share of funds for the construction, upgrade, and

restoration of operational facilities; and other related programs and projects the

NATO Alliance requires in support of the agreed NATO Strategic Concepts and

Military Strategy. The NATO Security Investment Program is financed by 16 participating NATO nations on a cost sharing basis. The U.S. share is approximately

26 percent; therefore, 74 percent of any comparison between the NATO and Guard

and Reserve requests, the NATO request supports the Secretary of Defense’s commitment to the NATO Ministerial and is unrelated to the size of the request for the

Guard and Reserve.

SUBCOMMITTEE RECESS

Senator BURNS. The subcommittee will now stand in recess.

[Whereupon, at 10:50 a.m., Tuesday, March 11, the subcommittee was recessed, to reconvene subject to the call of the Chair.]

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MILITARY CONSTRUCTION APPROPRIATIONS

FOR FISCAL YEAR 1998

THURSDAY, MAY 8, 1997

U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC.

The subcommittee met at 9:35 a.m., in room SD–138, Dirksen

Senate Office Building, Hon. Conrad Burns (chairman) presiding.

Present: Senators Burns, Stevens, and Murray.

DEPARTMENT OF DEFENSE

DEPARTMENT OF THE ARMY

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

OPENING STATEMENT OF CONRAD BURNS

Senator BURNS. I call this subcommittee to order this morning.

First of all, let me apologize for being late, I got to listen to my

esteemed friend, Stephen Ambrose, this morning. So we will put

that up as we work our way through appropriations. It is called

‘‘Undaunted Courage.’’ For those of you who have not read the

book, it is Lewis and Clark’s expedition from St. Louis to Senator

Murray’s home State and through quite a lot of Montana.

And the Cannon Building is a hell of a long way from here.

Senator MURRAY. They went all the way through Montana and

Washington State.

Senator BURNS. That is right.

This morning we will hear testimony on the military construction, family housing, base realignment and closure [BRAC], and

Reserve component programs for the Army and the military construction programs for the Defense agencies. First we will hear

from the Department of the Army. We are pleased to hear from Assistant Secretary of the Army for Installations, Logistics, and Environment, Mike Walker.

Welcome, Mike, this morning. We are looking forward to hearing

your testimony. It is great to see everybody here showing a little

bit of flexibility and the awareness of our mission that we have in

front of us, and the ability to work together. I appreciate that very

much, especially with our ranking member, on what our mission is,

defining that mission, and trying to get there the best way that we

possibly can, serving our soldiers and our sailors that protect this

country.
62

The Army’s emphasis on replacing and renovating barracks is

critical to meeting the long-term recruiting and retention goals for

the Army and ensuring that our service members live in housing

that is comparable to those of civilian peers.

In 1998 the Army is recommending $45 million for Army National Guard military construction projects. This is a step in the

right direction, and you are to be congratulated for your leadership

in this area. Much remains to be done, however. Last year Congress added $134 million for the Army Guard and Army Reserve

military construction projects. We feel with the tendency moving

from the active Army into the Reserves and Guard that we have

an obligation to those people as well.

However, we do appreciate your efforts and look forward to ensure that the Reserve components, their critical elements, are met.

Secretary Walker, I would ask you to keep your statement short.

We are going to kind of hold down here for a little give and take

this morning.

Now I would like any opening statement that the ranking member, Senator Murray has from the great State of Washington.

Thank you this morning, and again my apologies for being a bit

late.

STATEMENT OF PATTY MURRAY

Senator MURRAY. Thank you, Mr. Chairman. I appreciate your

arranging for this hearing on our Army and Defense-related agencies military construction, BRAC, and housing program.

The programs the subcommittee oversees are crucial, focusing as

they do on the quality of life of our uniformed personnel here and

abroad, and on the vital infrastructure that allows our forces to operate with assurance as the world’s sole superpower. These programs allow us in the long run to defend our interests and those

of our allies and friends across an increasingly confusing and complicated world scene.

Last year, Mr. Chairman, your subcommittee was able to mark

up and report its bill out, get it through the Senate and conference

and to the President’s desk very early in the process. And even

though the committee added some $617 million to the request last

year, the President wisely signed it. It was overwhelmingly supported in the Senate, much of that due to your excellent work in

putting it together. I hope that we can repeat that performance

this year.

Mr. Chairman, judging from the President’s request, it looks like

we are being invited to rewrite much of the budget as submitted.

The request for our Guard and Reserve program is, as in the past

several years, largely inadequate, and perhaps deliberately so. For

the Army Guard and Reserve, we appropriated a total of $135.6

million last year. The request for fiscal year 1998 is for $84.5 million, a reduction in the Guard account of some 42 percent, and in

the Reserve account of 30 percent.

These are steep reductions. Perhaps the administration expects

us, as in the past, to increase the budget for these accounts, as this

committee did last year. We admonished the administration last

year not to repeat the budget history of underfunding the Guard
63

and Reserves, anticipating a huge plus up by the committee, but

it seems to have done just that.

The overall request for the Guard and Reserves is two-thirds less

than the amount we appropriated for fiscal year 1997. In order just

to match last year’s amount, we would have to add about $50 million to the budget for the Army Guard and Reserve.

Second, Mr. Chairman, the Army’s budget for housing construction has been reduced by some 53 percent from last year’s appropriated amount. This is the heart of quality of life, and I am not

certain that we can leave it at the requested level. I know that the

Department is attempting to put into place a new public-private

housing initiative, the Department of Defense family housing improvement fund, which allows the private sector to participate in

our housing programs. I fully support that initiative and indeed

one of the first of two of these programs has just been announced

at a naval base at Everett, WA.

But this program is in its infancy and I am not certain of any

justification for the substantial reduction in the budget for family

housing.

Third, Mr. Chairman, I note that press reports yesterday indicated that very substantial cuts were being discussed in the context

of the ‘‘Quadrennial Defense Review’’ in both Army and Army National Guard, and that additional base closings may be needed to

get our infrastructure costs down. We need to understand how

these proposals will affect the President’s budget request, if at all.

Having said this, Mr. Chairman, I warmly greet Mr. Robert

Walker, Assistant Secretary of the Army, as well as the representatives of the Defense-wide agencies, representing special operations,

health services, logistics, and the finance and accounting service.

Each has been most helpful to this committee in the past, and I

know they are concerned about the budget problems I have just

cited, and I know that whatever can be done to correct them, each

will do so.

So I welcome all of the gentlemen back before us and I look forward to their testimony.

Senator BURNS. Thank you, Senator Murray. Senator Stevens

has joined us from Alaska. Do you have an opening statement?

STATEMENT OF TED STEVENS

Senator STEVENS. Mr. Chairman, thank you very much. It is nice

to see you, Secretary Walker. I have to go to the floor rather quickly, so I will not stay to ask questions and I will ask the chairman

to put them in the record. They are addressed to you and Mr.

Baillie.

I do want to make a statement, though, concerning the Army

hospital at Fairbanks. That is a 74-bed hospital. It was built in

1950. It is ready now to be designed; a replacement hospital must

be designed. We put up $10 million last year to start planning.

The plan is to get a smaller hospital of approximately 50 beds,

and to solve one of the most challenging programs for the Army as

far as health delivery systems are concerned.

We seek now to see if we can get an agreement between the community hospital, the Indian Health Service hospital, and this new

Army hospital so that the trauma cases can go on base, the OB
64

cases go to the community hospital, and the Indian Health Service

hospital becomes the out-patient hospital.

We would have, for the first time, a real cooperative base in a

rural area, showing what could be done in a new way to share the

responsibility so that there will not be duplicated technology in

each one of those three hospitals, but with the Army specializing

in trauma, your people would have the best training in the world

in terms of trauma activity during peacetime, and they will have

the best hospital for OB and general family care. The base is almost right in town.

I think this is really a great opportunity to move forward, but I

do not know that the timeline is going to be sufficient. If we do not

get that other hospital on base, in place, the old hospital cannot do

this, and the community will have to move forward and build another hospital.

So we want to get this other hospital going and get it so the community knows what the timeline is so they will not proceed to add

additional space and so the Indian Health Service hospital will not

have to add additional space.

I would urge you to take a look at it, Mike, because I think it

is one of the finest plans I have seen so far, and it is the kind of

thing we ought to do on a cost-effective basis with military funds.

I look forward to your answer.

Thank you very much. Thank you, Mr. Chairman.

PREPARED STATEMENT OF SENATOR REID

Senator BURNS. Thank you, Senator Stevens. I know you are

pretty busy on the floor with the supplemental. I have an opening

statement from Senator Reid that I would like to put in the record

at this point.

[The statement follows:]

PREPARED STATEMENT OF SENATOR HARRY REID

Thank you Mr. Chairman. I would like to start off by thanking the Chairman for

calling this hearing. I look forward to the testimony of our distinguished panel, especially the testimony of Mr. Walker, and hope that we can effectively address some

of the quality of life issues which are so important in today’s environment of shrinking budgets.

This years budget has significant reductions in military construction spending for

fiscal year 1998. The President’s budget proposal calls for a requested budget authority of $8.4 billion. This is down 8 percent from the fiscal year 1997 request and

is 16 percent less than the $10 billion approved by Congress last year. The fiscal

year 1998 request for the Army National Guard is $45 million as compared to a fiscal year 1997 appropriation amount of $78 million, a reduction of more than 40 percent.

I was surprised at Secretary Cohen’s comments on Tuesday in which he advocated

two more rounds of BRAC, the first of which would take place as early as 1999. The

actual savings that would occur as a result of more base closures, especially in the

near term, is questionable. We know that savings from previous BRAC’s have not

proven to be as substantial as originally anticipated.

I question the idea of rushing into another round of BRAC until we are able to

attain a complete and thorough understanding of the military implications of additional base closures. To my knowledge, there has been no study which analyzes the

impact of previous base closures. Until we have a firm understanding of the impact

previous base closures have had on the readiness posture of our military, the decision to further reduce our infrastructure should be delayed.

We cannot look to the MilCon budget and to another BRAC in order to pay the

bill for the military’s weapons modernization program. Over the years, this subcommittee has worked very hard to ensure adequate funding for our defense infra-
65

structure. This established infrastructure is important and helps our military attract, sustain, and retain quality personnel. Consequently, I am very hesitant to sacrifice our infrastructure in order to fund military’s modernization efforts.

The programs this subcommittee oversees are crucial to our military and directly

affect our uniformed service members and their families. The Military Construction

Appropriations bill is the sole source of funds for our quality of life programs. At

many bases and installations throughout the United States, family housing, child

care centers, and gymnasium facilities are cited as being inadequate to meet the

needs of the installation. We must remain committed to improving the quality of

life for our soldiers and their families—it has a conclusive and profound impact

upon our military’s readiness.

I want to thank our panel members for their efforts in preparing for this hearing.

I know the work that goes into preparing for a hearing and so often the appreciation

is never expressed. Again, I appreciate your hard work and look forward to continuing this relationship in the coming months as we progress through the appropriation

process.

I also look forward to working with the other members of this committee in much

the same fashion as we worked so successfully together in the past. I am sure that

we can be as efficient this year as we were last. I am hopeful that we will be able

to markup and report the Military Construction Appropriation bill out of committee,

and get it to the President’s desk early in the legislative year.

STATEMENT OF ROBERT M. WALKER

Senator BURNS. Mr. Walker, we are ready for your statement.

Mr. WALKER. Thank you very much, Mr. Chairman. I appreciate

the opportunity to appear before the committee again. You know,

after 3 years of being on this side of the table, I still feel awkward.

I still feel like I ought to be sitting up there.

Senator BURNS. It is just a matter of moving that chair, you

know. [Laughter.]

Mr. WALKER. Sometimes I would love to ask myself some questions.

I do look forward to reading Steve Ambrose’s new book. I have

not read it yet. But I must say when you set it up there, ‘‘Undaunted Courage,’’ I was wondering what questions you had in

mind for me.

Mr. Chairman, I am accompanied this morning by Mr. Paul

Johnson, who is the Deputy Assistant Secretary of the Army for Installations and Housing, Brig. Gen. Evan Gaddis, who is the Acting

Assistant Chief of Staff for Installation Management, Brig. Gen.

William Bilo, who is Deputy Director of the Army National Guard,

and Brig. Gen. James Helmly, who is the Deputy Chief of the Army

Reserve.

Mr. Chairman, we very much appreciate the opportunity to appear before the committee to discuss the Army’s military construction and family housing request for fiscal year 1998.

I think we all agree that we do have the best Army in the world.

Our challenge is to keep it that way. While we may have the best

Army in the world today, I think we all know that that status is

not preordained. The fact is that in a good economy it is hard to

compete with the civilian job market.

Studies are showing that the propensity of young people to join

the Armed Forces is declining. This year, for instance, in the Army

we need to recruit almost 90,000 young men and women. When I

was sworn in 3 years ago, we were only recruiting 65,0000. And

then, once we recruit soldiers, they gain skills and training which

are valuable in the civilian job market.
66

So, Mr. Chairman, there is no guarantee that we will always be

able to attract and retain the kind of men and women we need to

protect this Nation’s security. That is why the work of this subcommittee is so very important.

Mr. Chairman, it is very imperative that we continue to provide

a good quality of life for our soldiers and their families. If ever our

soldiers perceive or believe that we have lost our focus on quality

of life, then the American Army will be in danger of losing its edge.

The request before you, Mr. Chairman, represents many months

of discussion and debate within the Department of the Army. The

guidance we received from then Secretary of Defense Bill Perry

was that we continue to emphasize military readiness as the first

priority, and that we provide the maximum pay raises allowed by

law.

Now, once we did that, all the other requirements had to compete

for the remaining resources. But, even so, Mr. Chairman, the request before the subcommittee does represent some progress. In the

fiscal year 1998 request we were able to increase the military construction and family housing accounts by over $300 million over

the amount we had originally planned for the fiscal year 1998

budget year.

As a result, the request before you, for the first time in many

years, provides more funding for Active Army military construction

than was approved by the Congress in the previous fiscal year. As

a result of this increase, we were able to fully fund our highest facility priorities, which are barracks and strategic mobility.

Mr. Chairman, since I have been an Assistant Secretary for the

last 3 years, I have found that today’s soldiers are very realistic.

They know that we cannot do everything right now. They understand that there are financial limits and budgetary pressures and

limitations.

But what they do want to know is that we have a plan to make

things better, and that we are working to execute that plan. Mr.

Chairman, we have developed a plan to replace or renovate single

soldier barracks in the United States by the year 2008, and overseas by the year 2012. The previous plan called for completing the

job by 2020. That was just too long.

So, Mr. Chairman, we deeply appreciate this committee’s support

for this effort, and we ask your assistance in helping to keep this

barracks plan on track in the future.

We have seen what just a little barracks money can do. When

the 1st Armored Division deployed from Germany to Bosnia in late

1995, they left behind some of the worst barracks in the Army’s inventory. And, with the help of Congress, we were able to begin the

rather long process of improving barracks at Baumholder and other

areas.

So when the soldiers redeployed back to Baumholder and back

to Germany, they came back and they saw some improvements.

They saw that there was a commitment there. They saw that their

country cared for them. And today I must tell you that that division, while it is one of the most deployed divisions and busiest divisions in the Army, it also has one of the highest reenlistment rates.

And one of the reasons reenlistments are so high is because we

demonstrated a commitment to soldiers’ quality of life.
67

I was just at Baumholder a few days ago, and I heard that repeated by soldiers over and over. So quality of life does make a difference to the readiness of the Army.

Now, Mr. Chairman, with regard to family housing, as Senator

Murray mentioned, the request before you does provide for plans

to replace or revitalize more than 1,000 units of family housing.

But, as you point out, we have almost 120,000 units of family housing. We cannot ask America’s soldiers to wait more than one century while we replace or renovate substandard housing.

The unfortunate reality is that the traditional methods of providing family housing will never be enough for us to meet all of the

family housing requirements. So we are looking at ways of

leveraging the private sector to help us to construct, renovate, operate and maintain family housing.

Mr. Chairman, I want to thank this subcommittee for approving

the seed money to implement the legislation that permits us to test

a wide range of housing privatization concepts.

I was recently at Fort Carson to review the Army’s first and the

Department of Defense’s most complex housing privatization effort,

and during fiscal years 1998 and 1999 we hope to proceed with an

additional 15 projects. So, Mr. Chairman, we ask for the committee’s continued support for our housing privatization initiatives.

Mr. Chairman, briefly with regard to our base closure program,

I am pleased to tell you that during the current fiscal year, fiscal

year 1997, we will begin to save more money from base closures

than we are spending, and by the end of fiscal year 2001 we will

be saving $1 billion annually from base closures and realignments,

even after we pay the large cost of environmental cleanup. So we

ask for the committee’s continued support for our request to fund

the base closure program.

Mr. Chairman, before I conclude and take your questions, I

would like to highlight one particular request before the subcommittee, and that is for our prepositioning program in the Persian Gulf region. Recently I visited our new prepositioning afloat

maintenance facility in Charleston, SC. And during my visit the

Army was loading the first LMSR—that is the acronym for the sixfootball field-size cargo ship that has joined our war reserve afloat

fleet at Diego Garcia.

And while I was walking around observing loading operations, I

asked a young PFC from Ohio what it all meant to him. And he

said, without thinking, ‘‘So Saddam Hussein will not make the

same mistake again.’’ I think that PFC was right on the money.

During Desert Shield it took us 20 days before we had even the

first M–1 tank in the desert. Last fall, when the President deployed

elements of the 1st Cav to Kuwait, we had a brigade of soldiers beginning to fall in on dozens of tanks in 96 hours.

That is deterrence, Mr. Chairman. But our existing prepositioning in the region is not enough for long-term deterrence or

enough to assure a strong enough, swift enough defense, should

Saddam or some other enemy of freedom decide to attack again.

A future enemy, I think we all know, is not going to do what

Saddam did the last time. He just sat there and he allowed us to

build up an offensive capability for 6 months. That will never happen again. So we need the additional prepositioning capability. Mr.
68

Chairman, the last phase of our prepositioning initiative in Qatar

is included in this request, and we respectfully ask for your support.

Now, Mr. Chairman, I have taken the last few minutes to talk

about some of the initiatives that are included in the budget. Let

me talk about some of those initiatives that you both had mentioned that are not included.

As we went through the programming process for this budget,

we, of course, found that every requirement could not make it to

the top, given the top line that we had. And because of the necessity to prioritize and to make tradeoffs in order to ensure adequate

funding for readiness and personnel, we were simply unable to provide increases for operational facilities or for Guard and Reserve

Milcon.

And that, quite frankly, is our challenge for the future. The

longer it takes us to revitalize infrastructure, the more it is going

to cost in the long run. So we know that we must find ways to increase our investment in these areas, and the requirement to increase our investment in these Milcon areas is also coming at a

time that we need to increase our investment in science and technology and equipment modernization.

So when we see that challenge before us, and when we factor in

a balanced Federal budget, we know that the budget for Milcon is

not going to grow appreciably. So that means that we are going to

have to continue to do some things better, to become more efficient,

to become more innovative, to adopt better business practices.

And as we found out already, doing that is not very easy. But

we are going to have to take that approach if we are going to find

the resources within our top line to make the facility investments

that are needed for a modern Army.

PREPARED STATEMENT

So, Mr. Chairman, we are going to need the help and support

and the suggestions of the subcommittee, and we look forward to

our continued partnership together on behalf of the men and

women who are the American Army.

Thank you very much, Mr. Chairman.

[The statement follows:]

PREPARED STATEMENT OF ROBERT M. WALKER

Mr. Chairman and members of the subcommittee, it is a pleasure to appear before

you to discuss the Active Army and Reserve Components’ military construction request for fiscal years 1998 and 1999. This request will provide new and renovated

facilities needed to improve Army readiness, quality of life and efficiency. These

matters are of considerable importance to Americas Army, as well as this committee, and we appreciate the opportunity to report to you on them.

Our statement is in four parts:

Part I—Military Construction, Army Family Housing, Army Homeowners Assistance Fund, Defense

Part II—Military Construction, Army National Guard

Part III—Military Construction, Army Reserve

Part IV—Base Realignment and Closure (BRAC).

PART I—MILITARY CONSTRUCTION, ARMY FAMILY HOUSING, ARMY HOMEOWNERS

ASSISTANCE FUND, DEFENSE

First, I am pleased to present the Active Army’s portion of the Military Construction budget request for fiscal years 1998 and 1999. This budget provides construc-
69

tion and family housing resources essential to support the Army’s role in our National Military Strategy.

The program presented requests fiscal year 1998 appropriations for Military Construction, Army (MCA) of $595,277,000, and $1,291,937,000 for Army Family Housing (AFH). No additional budget authority for the Homeowners Assistance Fund,

Defense, is required in fiscal year 1998. A companion request for authorization in

fiscal year 1998 includes $555,277,000 for MCA and $1,291,937,000 for AFH. For

fiscal year 1999, the program requests appropriations of $696,969,000 in MCA,

$1,255,908,000 for AFH, and $40,229,000 for Homeowners Assistance Fund, Defense. The fiscal year 1999 companion authorization request is $780,569,000 for

MCA, $1,255,908,000 for AFH and $40,229,000 for Homeowners Assistance Fund,

Defense.

Now, let’s discuss America’s Army. Today, ‘‘America’s Army’’ is a total force comprised of Active Duty, Reserve, National Guard, civilian employees, and family

members serving the Nation both at home and abroad. It is the world’s premier land

combat force, trained and ready to answer the Nation’s call. We are the Nation’s

full-spectrum force for the 21st Century.

America’s Army is important to our national security. Although smaller now than

at any time since before World War II, we are being called on for a increasing number of diverse missions around the world. Whether conducting operations in support

of national security policy, participating in joint or combined training exercises, providing support to civil authorities during natural disasters or stationed overseas,

American soldiers are the Nation’s standard bearers throughout the world. However, because we must continue to perform more demanding, more diverse and more

soldier intensive missions, our operational deployments have increased. The impact

of this increased mission is immense on both our soldiers and their families. We

have a duty to provide the best possible facilities and improved quality of life that

is necessary to retain these dedicated soldiers and their families.

In order to continue to undertake our diverse missions, it is imperative that we

achieve a predictable environment in the Army. To successfully meet these increasing operational commitments while simultaneously maintaining readiness, we require stability—in force structure, quality of life, installations and funding available

to carry out our missions.

An imperative to maintaining a trained and ready Army is retention of our high

quality people. They are the defining characteristic of a quality force and are the

overarching nucleus of our Army. Our numerous and diverse operations require soldiers who are skilled, well trained and well led. They must be capable of adapting

to complex, dangerous and ever-changing situations. High caliber quality of life programs are essential to ensuring that the Army continues to retain the soldiers necessary to maintain America’s Army. We must continue to focus on issues important

to these men and women who so bravely serve the nation. Programs like the Whole

Barracks Renewal, Whole Neighborhood Revitalization, Army Family Action Plan

and Army Communities of Excellence remain key in our focus.

Now, I would like to discuss our facilities strategy as it affects the Army and as

we move toward the 21st Century.

FACILITIES STRATEGY

The Army’s facilities vision is to provide comprehensive, adaptable power projection platforms with the quality facilities, infrastructure and services that are integral to the readiness of the force and the quality of life of our soldiers and their

families, while protecting the environment.

The Army’s facilities strategy is threefold. First, because resources are limited, we

must focus our investment on what is most important. To do this we must identify

required facilities, infrastructure and services and then focus our resources on those

to assure the desired level of readiness. Second, we must divest of all unneeded real

property. Third, we must reduce the total cost required to support our facilities and

related services, including management and maintenance of our real property inventory.

As part of our effort to better focus our investment, we have developed a decision

support tool, the Installation Status Report (ISR) Part One (Infrastructure), which

is fully fielded, Army-wide, worldwide, to help formulate and monitor our facilities

strategy. We are using it for the first time this year to assess the status of our facilities’ condition. This identifies critical areas for consideration of resource allocation.

Also, it assists in condition assessment of our facilities essential to the installation’s

mission, and quality of life.

We are reducing our requirement by rigorously eliminating excess facilities. Between our current facilities reduction program and base realignment and closure,
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we will eliminate over 200,000,000 square feet in the United States by 2003. We

continue to demolish one square foot for every square foot constructed and will

begin reducing our leasing costs significantly in fiscal year 1997. By 2003, with our

overseas reductions included, the Army will have eliminated over 400,000,000

square feet from its fiscal year 1990 peak of 1,157,700,000 square feet.

We are looking for innovative ways to reduce the cost of our facilities, including

privatization or outsourcing of certain functions. It is proving an effective solution

for installation utilities systems. Our goal is to privatize at least 75 percent of all

Army utilities by 2003. Privatization is also being considered to provide better housing for soldiers and their families, while reducing the Army’s inventory. Partnering

with civilian communities around an installation is also a viable alternative to the

Army maintaining some facilities.

At this time, I will discuss several of the highlights of the budget.

MILITARY CONSTRUCTION, ARMY (MCA)

Within our military construction request, we focus on three major categories of

projects: mission facilities, quality of life projects, and support programs such as infrastructure and environmental projects.

MISSION FACILITIES

In fiscal year 1998, there are six mission facility projects totaling $90,000,000. In fiscal year 1999, there are eight projects for a total of $103,000,000. Essential mission facilities include several initiatives such as the Army Strategic Mobility Program (ASMP) and Close Combat Tactical Training (CCTT) facilities.

Army Strategic Mobility Program.—Fiscal years 1998 and 1999 continue the upgrade of the strategic mobility infrastructure we started several years ago. In fiscal

year 1998, we have included $23,000,000 to complete the two-phased program at

Concord Naval Weapons Station, started in fiscal year 1997. This project upgrades

the ammunition pier to increase the throughput of ammunition on the west coast

to a level equal to that available on the east coast. Also in CONUS, we have included an upgrade to the infrastructure supporting the Army Strategic Maintenance

Complex at Charleston Naval Weapons Station, $7,700,000, and construction of a

container loading and shipping facility at Crane Army Ammunition Activity,

$7,700,000.

Fiscal year 1998 also completes the multi-phased Strategic Logistic Initiative

(SLI), that began in fiscal year 1996. This initiative constructs facilities in Southwest Asia for the pre-positioning of equipment and materiel needed to speed the deployment of forces during a contingency in that region. The budget requests the

final phase of the program, $37,000,000. This project will complete facilities and infrastructure required to preposition equipment, materiel, and supplies for a second

armored heavy brigade, along with unit equipment of a division base.

Fiscal year 1999 includes upgrades to facilities for air deployment at Fort Bragg, $31,000,000, and rail loading at Fort Hood, $33,000,000. Also included are container

and MILVAN loading and shipping facilities for McAlester Army Ammunition Plant,

$10,400,000; Tooele Army Depot, $5,000,000; Crane Army Ammunition Activity,

$7,100,000; Anniston Army Depot, $3,900,000, and Bluegrass Depot Activity,

$5,300,000.

Close combat tactical trainers.—CCTT facilities leverage technology to enhance

training and maintain readiness through a group of fully interactive, networked

emulators and command, control and communications work stations. When the first

CCTT becomes operational in 1997, it will reduce reliance on field exercises as the

single method for combined arms training and provide a long term, cost effective

option to field exercises. The budget request includes two trainers in fiscal year

1998 at Fort Carson and Fort Riley, $14,600,000, and one in fiscal year 1999 at Fort

Lewis, $7,300,000.

QUALITY OF LIFE PROJECTS

The Army remains committed to improving the quality of life of our soldiers and

their families, since it has a dominant impact on the Army’s readiness. Over 56 percent of the fiscal year 1998 request and over 44 percent of the fiscal year 1999 request is for projects in this category. This substantial effort will reduce the amount

of time to improve the living conditions of our single soldiers. This is our top MCA

priority. In CONUS, we will provide upgraded or new living facilities to our single

personnel by the year 2008, while overseas, we will complete the renewal by 2012.

The largest change in funding from previous years’ requests is in the area of overseas barracks. The Army has done little construction in Korea or Europe since the

1980’s. Now that both theaters are stabilizing after years of troop reductions, we
71

revised our investment strategies for overseas. This request addresses long standing

shortfalls in both Korea and Europe. Our programs reflect significant funding levels

for quality of life programs in line with the Department of Defense’s emphasis in

this area.

Whole barracks renewal initiative.—The Army’s Whole Barracks Renewal program

provides funding for new construction and modernization projects. It represents our

efforts to provide our single soldiers with a home, not just a place to live. We will

provide more space, more privacy and a quality of life for our single soldiers that

is comparable to living off the installation or that of our married soldiers. The

Whole Barracks Renewal program includes personal privacy, larger rooms, closets,

upgraded day rooms, centrally procured furnishings, additional parking, landscaping

and administrative offices separated from the barracks. In fiscal year 1998, we are

planning eighteen barracks projects at a cost of $337,800,000. This includes five

projects in Korea, $76,100,000, and four projects in Europe, $43,000,000, to address

the deplorable living conditions there. Our budget also funds the completion of the

Fort Knox barracks renewal complex, $22,000,000, that was authorized in fiscal

year 1997. Fiscal year 1999 adds another eleven projects totaling $312,500,000 for

CONUS and Korea.

SUPPORT PROGRAMS

Included in this area are those projects which provide vital support to installations and balance to the military construction program. We have requested six

projects in fiscal year 1998 for $98,000,000. The request includes two environmental

projects, one at Yakima Training Center, $2,000,000, to comply with an environmental remediation plan, and one to construct a replacement facility for a central

washrack, $5,400,000, at Fort A.P. Hill, Virginia. The fiscal year 1998 budget also

requests the appropriation of $18,000,000 to fund the second phase of the National

Range Control Center project at White Sands Missile Range that was authorized by

Congress in fiscal year 1997. Funding to construct a replacement facility for the disciplinary barracks at Fort Leavenworth, $63,000,000 is included in the fiscal year

1998 request. Additional projects at Charlottesville, Virginia, for design of the National Ground Intelligence Center and a classified location are included for

$9,600,000.

In fiscal year 1999, there are 18 projects totaling $206,950,000 in this budget

area. Projects include Child Development facilities for Germany and Belgium,

$11,850,000; a power plant and two unaccompanied housing projects for Kwajalein

Atoll, $77,500,000; four projects at Yakima Training Center—a central fuel facility,

$3,950,000, a central washrack expansion, $4,650,000, an ammunition supply point

expansion, $5,500,000, and a road upgrade project to comply with the environmental

mitigation plan, $2,000,000—to support stationing and training of the heavy brigade

at Fort Lewis, Washington. Included in this category in fiscal year 1999 is funding

for the first phase of the revitalization of the cadet physical development center at

U.S. Military Academy, West Point, $4,400,000. Two projects are requested for Fort

Irwin. The first is a maintenance hardstand for $11,000,000. The second project is

for the construction of a heliport at Barstow-Daggett for the National Training Center. The total cost of this project is $27,000,000; however, all but $7,000,000 will be

funded from prior year appropriations. Construction of the National Ground Intelligence Center at Charlottesville, Virginia, $46,200,000, is in fiscal year 1999. There

are five other projects at Fort Jackson, Fort Leonard Wood, Fort Sill, Fort Detrick

and Rock Island Arsenal for infra-structure and revitalization in the United States

totaling $32,900,000. Now, let me talk about one of the most important projects in

this category.

United States Army disciplinary barracks.—The fiscal year 1998 request includes

$63,000,000 for a replacement facility for the U.S. Army Disciplinary Barracks

(USDB) at Fort Leavenworth. This facility is required for the Army to perform its

executive agent role to confine military inmates from all services. Although there

is a memorandum of agreement to transfer some inmates that have been discharged

from the military to the Federal Bureau of Prisons (FBOP), over half of the current

USDB inmates are awaiting appeals or have not been discharged and are not eligible for transfer. Additional transfers would also exacerbate the overcrowding already experienced in FBOP facilities. The current facility was constructed in the

early 1900’s and is deteriorated, showing evidence of structural cracking and exposed reinforcement steel, which if not corrected may present a life safety problem.

The antiquated configuration and outdated facilities are expensive to maintain and

inefficient to guard and process inmates.
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BUDGET REQUEST ANALYSIS

The fiscal year 1998 MCA budget includes a request for appropriations of

$595,277,000, along with a companion request for authorization for $555,277,000.

The authorization request is lower, since we are using authority from fiscal year

1997 to fund the second phase of the Range Control Center at White Sands Missile

Range, $18,000,000, and the remainder of the Whole Barracks Renewal Complex at

Fort Knox, $22,000,000. The fiscal year 1999 MCA budget request includes a request for appropriations of $696,969,000, along with a companion request for authorization of $780,569,000. The authorization request includes full authority,

$88,000,000, for the U.S. Military Academy project to replace the Cadet Physical Development Center; however, only $4,400,000 in appropriations is required for the

first phase of this project. The request for appropriations for fiscal years 1998 and

1999, by investment focus, is shown in Table 1.

TABLE 1—INVESTMENT FOCUS APPROPRIATIONS

Category Appropriations Percent

Fiscal year 1998:

Whole Barracks Renewal ............................................................................. $337,800,000 56.7

Strategic Mobility ......................................................................................... 75,400,000 12.7

Environmental .............................................................................................. 7,400,000 1.2

Critical Mission ............................................................................................ 105,200,000 17.7

Planning and Design/Minor Construction ................................................... 69,477,000 11.7

Total ........................................................................................................ 595,277,000 100.0

Fiscal year 1999:

Whole Barracks Renewal ............................................................................. 312,500,000 44.8

Strategic Mobility ......................................................................................... 95,700,000 13.7

Environmental .............................................................................................. 2,000,000 0.3

Critical Mission ............................................................................................ 212,250,000 30.5

Planning and Design/Minor Construction ................................................... 74,519,000 10.7

Total ........................................................................................................ 696,969,000 100.0

TABLE 2 shows the fiscal years 1998 and 1999 distribution of the appropriations

request among the Army’s major commands.

TABLE 2—COMMAND SUMMARY MILITARY CONSTRUCTION ARMY

Command Appropriations Percent of

total

Fiscal year 1998:

Inside the United States:

Forces Command ................................................................................ $103,100 17.3

Training and Doctrine Command ....................................................... 127,000 21.3

U.S. Army, Pacific ............................................................................... 44,000 7.4

Army Materiel Command .................................................................... 33,400 5.6

Medical Command .............................................................................. 16,000 2.7

Military District of Washington .......................................................... 13,600 2.3

Military Traffic Management Command ............................................. 23,000 3.9

Intelligence and Security Command .................................................. 3,100 0.5

Assistant Chief of Staff Installation Management ............................ 6,500 1.1

Total ............................................................................................... 369,700 62.1

Outside the United States:

Eighth, United States Army ................................................................ 76,100 12.8

United States Army Central Command .............................................. 37,000 6.2
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TABLE 2—COMMAND SUMMARY MILITARY CONSTRUCTION ARMY—Continued

Command Appropriations Percent of

total

United States Army, Europe ............................................................... 43,000 7.2

Total ............................................................................................... 156,100 26.2

Total Major Construction ................................................................ 525,800 88.3

Worldwide:

Planning and Design .......................................................................... 63,477 10.7

Minor Construction ............................................................................. 6,000 1.0

Total ............................................................................................... 69,477 11.2

Total appropriations requested ...................................................... 595,277 100.0

Fiscal year 1999:

Inside the United States:

Forces Command ................................................................................ 211,600 30.4

Training and Doctrine Command ....................................................... 94,300 13.5

U.S. Army, Pacific ............................................................................... 49,000 7.0

Army Materiel Command .................................................................... 37,000 5.3

Medical Command .............................................................................. 27,100 3.9

Intelligence and Security Command .................................................. 46,200 6.6

United States Military Academy ......................................................... 4,400 0.6

Total ............................................................................................... 469,600 66.5

Outside the United States:

United States Army, Europe ............................................................... 11,850 1.7

Eighth, United States Army ................................................................ 63,500 9.1

United States Army Strategic Defense Command ............................. 77,500 11.1

Total ............................................................................................... 152,850 21.9

Total Major Construction ................................................................ 622,450 89.3

Worldwide:

Planning and Design .......................................................................... 64,519 9.3

Minor Construction ............................................................................. 10,000 1.4

Total ............................................................................................... 74,519 10.7

Total appropriations requested ...................................................... 696,969 100.0

ARMY FAMILY HOUSING

No single quality of life component matches the importance of proper housing for

Army soldiers and their families. The family housing program provides a major incentive necessary for attracting and retaining dedicated individuals to serve in the

Army. Yet, adequate housing continues to be the number one soldier concern when

they are asked about their quality of life. Out-of-pocket expenses for soldiers living

off post in the U.S. are typically 20 to 22 percent above their housing allowances.

Thus, the Army’s continuing challenge is maintaining and revitalizing our on-post

housing, and finding affordable, quality off-post housing for our soldiers and families.

In an effort to manage our installation family housing program in a more businesslike manner, the Army implemented the Business Occupancy Program in fiscal

year 1996. Under this program, family housing operating funds are allocated to our
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installations on the basis of housing units occupied rather than the total number

of units in the inventory. This provides an incentive to more effectively and efficiently manage occupancy and assets, since installation funding is now directly related to the number of units occupied, vice the total inventory. We saw a two percent increase in occupancy rates using the Business Occupancy Program during fiscal year 1996.

Additionally, the 1996 Defense Authorization Act provided new authorities under

the Military Housing Privatization Initiative, commonly referred to in the Army as

the Capital Venture Initiative (CVI). Fifteen housing projects are under development using these authorities, which will privatize part of our housing inventory. We

are working closely with the Office of the Secretary of Defense on efforts to further

privatize the acquisition, revitalization and management of housing assets.

Our fiscal year 1998 budget is $1,291,937,000 and includes $143,000,000 for a

modest replacement construction program for units no longer economical to revitalize; a modest housing revitalization program for our aging housing inventory; and

for planning and design of future construction projects. Funding for the annual costs

of operating, maintaining, and leasing housing units for military families in fiscal

year 1998 is $1,148,937,000.

Our fiscal year 1999 budget is $1,255,908,000 and includes $137,900,000 for a

modest replacement construction program for units no longer economical to revitalize; a modest housing revitalization program for our aging housing inventory; and

for planning and design of future construction projects. Funding for the annual costs

of operating, maintaining, and leasing housing units for military families in fiscal

year 1999 is $1,118,008,000. Table 3 summarizes each of the categories of the Army

Family Housing program.

TABLE 3—ARMY FAMILY HOUSING

Facility category

Fiscal year 1998 Fiscal year 1999

Appropriations Percent Appropriations Percent

New Construction ........................................................... $88,650 7 $81,000 6

Post Acquisition Construction ....................................... 44,800 3 49,650 4

Planning and Design ..................................................... 9,550 1 7,250 1

Operations ...................................................................... 180,756 14 183,267 15

Utilities .......................................................................... 265,732 21 269,582 21

Maintenance .................................................................. 468,393 36 423,698 34

Leasing .......................................................................... 234,053 18 241,458 19

Debt ............................................................................... 3 <1 3 <1

Total ................................................................. 1,291,937 ............ 1,255,908 ............

WHOLE NEIGHBORHOOD REVITALIZATION

This two year request continues the initiative the Congress first approved in fiscal

year 1992 to revitalize both the housing unit and the entire living environment of

the military family. The whole neighborhood revitalization program provides for systematically upgrading and repairing the existing housing inventory, while concurrently improving neighborhood amenities. The projects recommended for this program are based on life-cycle economic analyses and will provide units which meet

community standards. The combination of replacement and post-acquisition construction in fiscal year 1998 provides for an annual worldwide investment that is

on a 62 year replacement cycle, versus an Army goal of 35 year replacement cycle.

The fiscal year 1999 program represents a 69 year replacement cycle.

New construction.—The fiscal year 1998 new construction program provides whole

neighborhood revitalization projects for replacing 583 units at five locations, Fort

Bragg, Fort Hood, Fort Bliss, Fort Meade and Schofield Barracks, where it is more

economical to replace than renovate current housing. The fiscal year 1998 program

also includes a project for $2,300,000 to either purchase or construct eight housing

units in Miami, Florida, for senior key and essential officials of the Headquarters,

U.S. Southern Command. Further, the fiscal year 1999 program replaces 536 units

at four locations, Fort Bragg, Fort Hood, Redstone Arsenal and Schofield Barracks.

This replacement construction, which includes the supporting infrastructure, ensures that adequate housing is available for our soldiers and their families without

adding to the current inventory. At each location, the housing being replaced will
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be demolished. Each project is supported with a housing survey showing that adequate and affordable units are not available in the surrounding community.

Post acquisition construction.—The Post Acquisition Construction program is an

integral part of our housing revitalization program. In fiscal year 1998, we are requesting funds for improvements to 455 units at three locations in the U.S. and

three locations in Europe. Included in this request is a project to revitalize 120 units

at Fort Benning for $15,000,000, of which $2,000,000 will be funded from fiscal year

1996 appropriations. The fiscal year 1999 program improves 774 units at five U.S.

locations and two European locations. Also included within the scope of each of

these projects are efforts to improve supporting infrastructure, energy efficiency and

eliminate environmental hazards.

OPERATIONS AND MAINTENANCE

The operations, utilities and maintenance programs comprise the majority of the

fiscal years 1998 and 1999 budget requests. This budget provides for the Army’s annual expenditures for maintenance and repair, municipal type services, furnishings

and utilities. The requested amounts of $914,881,000 for fiscal year 1998 and

$876,547,000 for fiscal year 1999 are approximately 71 percent of the family housing

request.

LEASING

The leasing program provides another way of adequately housing our military families. Our fiscal year 1998 request is $234,053,000. We are requesting

$241,458,000 in fiscal year 1999. Our request will fund existing Section 2835 project

requirements, temporary domestic leases in the United States and nearly 11,300

units overseas. The fiscal year 1998 request is $6,538,000 more than appropriated

in fiscal year 1997. This increase reflects an increase in the number of leased units

overseas and approximately 60 new housing units in the Miami, Florida, area requested by the Commander-in-Chief of the Southern Command for junior enlisted

families assigned to Headquarters, U.S. Southern Command.

Our experience shows that the foreign leasing program generally saves the Army money. In fiscal year 1996, the average overseas housing allowance was $15,732 per

family, while our average lease cost was $14,566 per unit. Our foreign leasing program increases slightly from 10,800 units in fiscal year 1997 to 11,300 units in fiscal

year 1999.

The Army’s total leasing program request supports approximately 15,300 units in

fiscal year 1998, and 15,400 units in fiscal year 1999, to satisfy requirements in the

United States, Europe, Korea, Panama, and other locations. These are our high priority locations where providing flexible family housing solutions to commanders is

essential to improving the quality of life of our soldiers.

REAL PROPERTY MAINTENANCE

Real Property Maintenance (RPM) is the primary account in installation base support funding responsible for maintaining the infrastructure to achieve a successful

readiness posture for the Army’s fighting force. Installations are the power projection platforms of America’s Army and must be properly maintained in the present

condition to be ready for the support of current Army missions and any future deployments. The appropriations for this program are provided as a part of the Defense Appropriations Bill.

RPM consists of two major functional areas. The Maintenance and Repair of Real

Property account pays to repair and maintain buildings, structures, roads and

grounds, and utilities systems. The Minor Construction account pays for projects

under $1 million which are intended solely to correct life, health, or safety deficiencies. It also funds projects under $500,000 per project for the erection, installation or assembly of a new facility, and for the addition, expansion, or alteration of

an existing facility.

Within the RPM area, we have two programs that I would like to highlight. The

first program is our Barracks Upgrade Program. While 40 percent of our barracks

requirement will be revitalized or replaced through our Whole Barracks Renewal effort using major construction funding, the larger part of the inventory, 60 percent,

can be modified to the 1∂1 standard using RPM resources. In the fiscal year 1997

DOD Appropriations Act, Congress provided Army $149 million in a new two year

appropriation, Quality of Life Enhancements, Defense (QOLE, D) for maintenance

and repair of facilities key to quality of life. We have allocated all of these funds

to start a long-term initiative to repair our Volunteer Army era barracks inventory

to the 1∂1 standard. We call this our Barracks Upgrade Program (BUP). The Army

committed approximately $150 million per year in fiscal years 1998 and 1999 to this
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program, to continue the efforts to upgrade our single soldier’s quality of life. This

program, when combined with the Whole Barracks Renewal program, will reduce

the amount of time required to improve the living conditions of our single soldiers

to the current DOD standard by almost one half, so all barracks facilities worldwide

are revitalized or replaced by the year 2012.

The second is our long range strategy to provide reliable and efficient utility services at our installations. As discussed earlier, privatization or outsourcing of utilities

is the first part of our strategy. We are maximizing our efforts to partner with the

local communities utility departments and private utility companies to provide utility services that are more efficient and reliable. We have already successfully transferred twelve utility systems at ten installations. Additionally, eight other utility

systems are currently in the process of being transferred. The second part of the

strategy is the utilities modernization program to help upgrade those utility systems

that cannot be privatized, such as central heating plants and distribution systems.

We have requested $60,000,000 for utility modernization projects in fiscal year 1998.

Utility systems at unique or remote installations are particularly reliant on these

modernization projects. We are also funding energy saving projects which will further improve our energy efficiency. We have allocated $40,000,000 per year for this

effort.

HOMEOWNERS ASSISTANCE FUND, DEFENSE

The Army is the executive agent for the Homeowners Assistance Program. This

program provides assistance to homeowners by reducing their losses incident to the

disposal of their homes when the military installations at or near where they are

serving or employed are ordered to be closed or the scope of operations reduced. For

fiscal year 1998, there are no additional requirements for funds. The fiscal year

1999 request is for appropriations of $40,229,000, along with a companion request

for authorization and authorization of appropriations for the same amount.

The request will provide assistance to personnel at approximately 21 installations

that are impacted with either a base closure or a realignment of personnel, resulting

in adverse economic effects on local communities. The Homeowners Assistance Program is funded not only from the resources being requested in this budget, but is

also dependent, in large part, on the revenue earned during the fiscal year from the

sale of properties.

SUMMARY

Mr. Chairman, this budget is essential to ensure that there is a balance between

all Army programs affecting readiness and the support of our personnel. Our strategy can only be achieved through balanced funding, divestiture of excess capacity

and improvements in management. We will continue to work toward maintaining

the maximum flexibility for our installation commanders to use the resources available to them, to maintain maximum readiness and provide the needed support and

facilities. We will also continue to streamline, consolidate and establish community

partnerships that generate resources for infrastructure improvements and continuance of services. The fiscal year 1998 request for appropriations for Military Construction Army and Army Family Housing is $1,887,214,000. In fiscal year 1999, our

request for Military Construction Army and Army Family Housing is $1,952,877,000

and $40,229,000 for the Homeowners Assistance Program. With approval of this request we will continue to: improve our strategic mobilization posture, provide environmental compliant facilities; provide additional adequate housing for both our single and married soldiers and their families; and meet statutory and regulatory requirements. This request will provide for family housing leasing and operation and

maintenance of the current inventory. Approval of this request will provide the minimum level of facilities funding within the total funding available to the Department

of the Army in fiscal years 1998 and 1999. Thank you for your continued support

for Army facilities funding.

PART II—MILITARY CONSTRUCTION, ARMY NATIONAL GUARD

Next, I will present the Army National Guard’s Military Construction Program for

fiscal years 1998 and 1999.

The Guard’s fiscal year 1998 request for appropriations of $45,098,000 includes

$35,600,000 for major construction, $2,800,000 for planning and design and

$6,698,000 for unspecified minor construction. The fiscal year 1999 request of

$33,800,000 includes $23,640,000 for major construction, $3,160,000 for planning

and design, and $7,000,000 for unspecified minor construction. The companion request for authorization and authorization of appropriations is the same as the appropriation request for both fiscal years.
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The Army National Guard is America’s community based, dual-use reserve force,

‘‘A trained and ready citizen-Army,’’ and, by statute, an integral part of the first line

defense of the United States. It is balanced and ready. The National Guard is

manned with over 367,000 quality soldiers in 1,823 major units in over 2,700 communities nationwide.

The National Guard is a capabilities based force providing grass roots support to

America’s Army. They have demonstrated combat, combat support, and combat service support performance from the Pequot War of 1637 through the Gulf War of 1991.

Recently, the National Guard has supported missions in Somalia, Rwanda, Haiti,

and is in Bosnia in support of Operation Joint Endeavor today. The National Guard

has always performed its mission superbly. The National Guard has been an active

participant in every major American conflict. Today, they are engaged in over fifty

countries around the world. Last year they provided one and a half million mandays for Federal and State missions.

The National Guard is a relevant and accessible force. They are task organized

and readily available to both national and State authorities, for all foreign and domestic missions.

The National Guard is an expandable force. Five times this century, they have

served as the framework on which to build a larger land force to meet a growing

threat. The National Guard serves as ‘‘insurance’’ against an unknown future. They

can provide the maximum possible number of missioned units as part of the Army’s

force structure required to achieve directed capabilities. They have the expertise and

capability to respond to the needs of the Nation, both Federal and State.

The National Guard is affordable. The Guard provides a majority of the combat

force and over a third of the support units to America’s Army.

FACILITIES STRATEGY

The National Guard is accomplishing new missions and taking on new responsibilities in addition to its historic domestic and international roles. To do this, they

have higher quality soldiers, trained and equipped to a higher degree of readiness

than ever before. The support of our communities, States, the Active Army, and the

Congress have made this possible.

Readiness is the key factor of a strong force. To keep citizen-soldiers ready, the

most critical element is training time. We must minimize distractions, such as travel time to distant training sites, additional maintenance time on stored equipment,

and delays caused by working in inefficient and obsolete facilities.

Adequate facilities are necessary to meet the level of readiness demanded by the

American people. We have an obligation to provide safe, cost effective, and mission

essential facilities to keep our citizen-soldiers ready. Modern facilities enhance

training, maintenance, administration, quality of life, and the environment. We continue to pursue the use of joint installations and facilities by more than one reserve

component, in order to provide cost effective facilities. The Base Realignment and

Closure program has also conveyed facilities and training land to the National

Guard.

Our vision for the National Guard is a relevant force, missioned across the spectrum of contingencies, structured and resourced to accomplish its mission when

called, with trained citizen-soldiers committed to preserving timeless traditions of

service to our Nation and communities. Adequate facilities are necessary to provide

for the training, safety, health, and fitness of the force. We envision state-of-the-art,

community based installations and training sites. By virtue of their geographical

disbursement, these sites can be leveraged by the Active Army and facilitate communications, operations, training, and equipment sustainment from which to deploy

the force.

The facilities program for the Army National Guard benefits the local community,

the State, and the Nation. Federal funds for both military construction and real

property maintenance for many National Guard facilities are leveraged by States

contributing a share of the design, part of the construction costs, and the site for

the facility. Operations and maintenance costs are a State responsibility for many

State owned facilities. For other facilities, it is a shared responsibility which reduces

Federal costs.

Now, I will discuss several of the highlights of the budget that we are presenting

today.

MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCNG)

Within our military construction request, we focus on five investment areas:

ranges, training, maintenance support, readiness centers, and planning and design/
78

minor construction. We have grouped these into two major categories of projects:

mission facilities and readiness center projects.

MISSION FACILITIES

In fiscal year 1998 there are eight mission facility projects, totaling $26,139,000.

In fiscal year 1999 there are six such projects, totaling $19,112,000. Essential mission facilities include several initiatives such as training site modernization and

maintenance facility revitalization.

Training site modernization.—Fiscal year 1998 continues the slow process of

adapting existing State operated training sites to training strategies for the 21st

century. In fiscal year 1998 we have included a new project, at $10,229,000, for a

multipurpose training range at Camp Atterbury, Indiana. This will allow enhanced

readiness brigade units, both ground and air, in the central United States to conduct doctrinally correct crew collective gunnery qualification. It will also provide

lanes training for these same units so that they can maintain their readiness for

early deployment. In fiscal year 1999 we have included an additional remote electronic targetry system range, $1,023,000, at Camp Ripley, Minnesota. This project

greatly enhances the utilization and realism of the Camp Ripley range complex and

will permit year-round training in all types of weaponry for soldiers of all components in all services.

In fiscal year 1998 we have also included the final phase of the Battalion Training

Complex project at Camp Dodge, Iowa, for $4,529,000. This will permit full utilization of the Equipment Maintenance Center—CONUS, a national school house for

training general and direct support maintenance units for immediate worldwide deployment. The project further supports a regional school house, part of the Total

Army School System, which integrates training for all components of the Army.

Maintenance facility revitalization.—In fiscal year 1998 we have included five

projects, totaling $11,381,000, to continue the revitalization of Army National Guard

maintenance facilities. In fiscal year 1999 we have included an additional four such

projects, totaling $17,474,000. As the Army National Guard has assumed additional

real world deployment missions, it has received the current generation of equipment. Unfortunately, our maintenance facilities were built to accommodate the last

generation of equipment, which required less space and less sophisticated facilities.

These nine projects are part of a long standing effort. We need to replace our 1950,

1960, and 1970 era facilities with ones that permit our undermanned maintenance

shops to have the working environment necessary to keep our modern equipment

to readiness standards.

READINESS CENTER PROJECTS

Army National Guard soldiers require a training environment that provides the

morale enhancing facilities that will retain them and lessen the investment cost of

initial entry training of their replacements. A critical focal point of this training is

the soldiers’ readiness center. This is also the only place that many Americans see

America’s Army on display. Therefore, in fiscal year 1998 we have included in our

program three readiness center revitalization projects, totaling $9,461,000. In fiscal

year 1999 we have included an additional two projects, totaling $4,528,000.

OTHER PROGRAM HIGHLIGHTS

Unspecified minor military construction, Army National Guard.—The Army National Guard has allocated $6,698,000 in fiscal year 1998 and $7,000,000 in fiscal

year 1999 to be used worldwide for urgent, unforeseen projects.

BUDGET REQUEST ANALYSIS

This request includes a request for appropriations of $45,098,000 in fiscal year

1998 and $33,800,000 in fiscal year 1999, along with companion requests for authorization and authorization of appropriations for the same amounts.

The fiscal year 1998 appropriations request, by investment focus, is shown in

Table 1.

TABLE 1—INVESTMENT FOCUS APPROPRIATIONS

Category Appropriations Percent

Ranges .................................................................................................................. $10,229,000 22.6

Training ................................................................................................................. 4,529,000 10.0
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TABLE 1—INVESTMENT FOCUS APPROPRIATIONS—Continued

Category Appropriations Percent

Maintenance Support ............................................................................................ 11,381,000 25.3

Readiness Centers ................................................................................................ 9,461,000 21.1

Planning and Design/Minor Construction ............................................................ 9,498,000 21.1

Total ........................................................................................................ 45,098,000 100.0

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

Table 2.

TABLE 2—INVESTMENT FOCUS APPROPRIATIONS

Category Appropriations Percent

Ranges .................................................................................................................. $1,638,000 4.8

Maintenance Support ............................................................................................ 17,474,000 51.7

Readiness Centers ................................................................................................ 4,528,000 13.4

Planning and Design/Minor Construction ............................................................ 10,160,000 30.1

Total ........................................................................................................ 33,800,000 100.0

REAL PROPERTY MAINTENANCE

The States will continue to prudently manage their existing facilities, despite the

challenges of age and shrinking real property support funding. Facilities built during the last decade have played a major role in meeting force structure changes, accomplishing quality training, maintaining readiness, and improving soldier quality

of life.

The operation and maintenance of our physical plant is an issue of concern. The replacement value of all National Guard facilities exceeds $16 billion. Their average

age is 35 years. States take care of these facilities using the limited resources in

Real Property Maintenance accounts, as authorized and appropriated by Congress.

They do so, however, in a way appropriate to their unique Federal/State status.

The National Guard Bureau does not own, operate, or maintain these facilities. The

States, Territories, and Commonwealths perform these functions. The National

Guard Bureau transfers to the States money that Congress authorizes and appropriates for this purpose. This money supports critical training, aviation and

logistical facilities. For most of the facilities, the States, Territories and Commonwealths must contribute at least 25 percent of operations and repair costs.

The States, Territories, and Commonwealths then pay the utility bills, hire and

reimburse employees necessary to operate and maintain these facilities, buy the

supplies necessary for operations and maintenance, and contract for renovation and

construction projects. They also lease facilities when required.

The Construction and Facility Management Offices are making a herculean effort

to operate and maintain all National Guard facilities. They will do so for $1.56 a

square foot in 1998.

SUMMARY

The National Guard is a critical part of America’s Army. Today’s challenges are

not insurmountable and the National Guard will continue to provide the best facilities within the resources made available. The soldiers of the Army National Guard

wish to express their appreciation for the efforts that this subcommittee has made

in the past to support our requirements.

PART III—MILITARY CONSTRUCTION, ARMY RESERVE

Next, I present the Army Reserve, representing America’s citizen-soldier, an integral part of, and an essential and relevant partner in, America’s Army. This fact

is clearly evidenced by the fact that Army Reserve units and personnel currently

comprise 74 percent of American Reserve Component forces operating in Bosnia. In

addition to relying on Army Reserve forces to support major worldwide contingencies, the Army is increasingly dependent on its Army Reserve for support of a

wide variety of daily, ongoing missions at home and abroad during peacetime, in-
80

cluding an expanding role in commanding and controlling Army installations and

providing regional base operations support. Army Reserve units and soldiers will

continue to respond to national security needs and constrained resources into the

21st century. To ensure continued readiness, they must have the minimum essential

facilities resources with which to train, support, and sustain our forces.

FACILITIES STRATEGY

The organization, roles, and missions of the Army Reserve dictate the need for

a widely dispersed inventory of facilities. We occupy about 1,400 facilities, consisting

of more than 2,800 buildings and structures that have an average age of about 32

years. Army Reserve operated installations add another 2,600 buildings and structures to the total inventory. The average age of facilities on these installations is

about 47 years.

In order to effectively carry out our stewardship responsibilities toward the facilities inventory, the Army Reserve has adopted priorities and strategies that guide

the application of resources. The program is straightforward: provide essential facilities to improve readiness and quality of life; preserve and enhance the Army’s image

across America; and conserve and protect the facilities resources for which we are

responsible. Our priorities are: provide critical mission needs of Force Support Package units; address the worst cases of facilities deterioration and overcrowding; pursue modernization of the total facilities inventory; and carefully manage Reserve operated installations. Our strategy for managing Army Reserve facilities and installations in a resource constrained environment rests on six fundamentals: reduce

leases; dispose of excess facilities; consolidate units into the best available facilities;

use Base Realignment and Closure (BRAC) enclaves where practical; use the new

Modular Design System (MDS) to achieve long term cost savings in construction and

design costs; and finally, to pursue economies and efficiencies in installation management, base operations support, and facilities engineering.

PROGRAM HIGHLIGHTS

Readiness.—Army Reserve construction program requirements are different from

those of the Active Army. Army Reserve forces are community based, not installation based, requiring that forces and facilities be located in hundreds of cities and

towns across the Nation. This dispersion of forces and facilities reduces the opportunities for regional consolidation and wholesale reductions in facilities inventory.

Units and their facilities must be located in the communities where soldiers live and

where we can recruit. They must be sufficient to meet the readiness training requirements of the units stationed in them. Reserve facilities serve as locally based

extensions of the Army’s power projection platforms by providing essential and cost

effective places to conduct training, maintenance, storage of contingency equipment

and supplies, and preparation for mobilization and deployment that simply cannot

be accomplished elsewhere. Army Reserve operated installations support mission essential training for thousands of soldiers from each component of the Army each

year.

Quality of life.—Quality, well maintained facilities provide Army Reserve units

with the means to conduct necessary individual and collective training, to perform

operator and unit maintenance on vehicles and equipment, and to secure, store, and

care for organizational supplies and equipment. These facilities also provide other

important benefits. Fully functional and well maintained training centers have a

positive impact on recruiting and retention, unit morale, and the readiness of the

full-time support personnel who work in the facilities on a daily basis. In addition

to supporting the missions of units and support staffs, Reserve facilities project an

important and lasting image of America’s Army in the local community.

Modernization.—The plant replacement value (PRV) of Army Reserve facilities is

approximately $3.6 billion and an additional $1.9 billion for Army Reserve operated

installations. The budget requests for fiscal years 1998 and 1999 address the Army

Reserve’s highest priorities for modernizing and revitalizing the inventory and for

providing new facilities in response to new and changing missions.

Installations and base support.—The Army Reserve continues to undergo significant change as America’s Army shapes itself for the 21st Century. One of these

changes is the mission to command and control former Active Army installations.

These installations serve as high quality, regional training sites for forces of both

the Reserve and Active Components of the Army, as well as the other Armed Services; provide sites for specialized training; and offer a variety of supporting facilities.

To fulfill this important mission, we must be able to fund projects that support critical training, mobilization, and quality of life requirements at the installations. The

Army Reserve’s military construction program for fiscal years 1998 and 1999 in-
81

cludes a total of six projects at Fort McCoy, Wisconsin, one of the army’s fifteen

power projection platforms. These projects directly support training and readiness

of the force, aircraft operations and safety, and improved quality of life for thousands of soldiers and civilian employees who train at the Army Reserve Readiness

Training Center each year. The Army Reserve is also assuming greater responsibilities in managing base operations support and facilities engineering activities, using

the command, control, and management capabilities of its Regional Support Commands. This mission reinforces the Army reserve’s relevance and value to the total

Army as a provider of combat service support and other essential infrastructure

support in both peacetime and wartime.

BUDGET REQUEST ANALYSIS

The Military Construction, Army Reserve (MCAR) budget for fiscal year 1998 includes a request for appropriations of $39,112,000 and a companion request for authorization of $47,012,000. The amount of the request for appropriations reflects the

Army reserve’s application of unobligated prior year appropriations of $7,900,000 toward the fiscal year 1998 budget, as directed by the Department of Defense. The

amount of the companion request for authorization reflects the full authorization of

the cost of all projects in the budget request. The budget for fiscal year 1999 includes a request for appropriation and authorization of $66,140,000. These budget

requests for fiscal years 1998 and 1999, while constrained, provide adequate funds

for our highest priority, most essential requirements, and they are in line with our

commitment to operate successfully in an environment of constrained resources.

They also reflect the priority of maintaining near term force readiness and meeting

critical requirements for military construction that directly supports that readiness.

The MCAR appropriation includes three categories of funding: Major Construction,

Unspecified Minor Construction, and Planning and Design.

—(1) Major construction.—These funds provide for essential construction, revitalization, expansion, alteration, or conversion of facilities, and for land acquisition, when required. For fiscal year 1998, our request for an appropriation of

$34,012,000, with a companion authorization request of $41,912,000, will fund

the construction of one new Army Reserve center in California and four projects

at Fort McCoy, Wisconsin: a new billeting facility at the Army Reserve Readiness Training Center; provision of electrical power to various training ranges;

and revitalization of rifle and pistol ranges. The fiscal year 1999 requests for

appropriation and authorization of $58,640,000 will fund construction of three

Army Reserve centers in Michigan, Tennessee, and Virginia; an Aviation Support Facility in Virginia that supports new mission requirements; and two

projects at Fort McCoy, Wisconsin: a new airfield crash rescue station to replace

an inadequate and unsafe facility; and construction of a machine gun range to

support training readiness.

—(2) Unspecified minor construction.—These funds provide for construction of

projects not otherwise authorized by law, and which have a funded cost of less

than $1,500,000. Unspecified minor construction may include construction, alteration, or conversion of permanent or temporary facilities. This program provides an important means to accomplish small projects that are not now identified, but which may arise during the fiscal year, and that must be accomplished

to satisfy critical but unforeseen mission requirements. Based on the availability of unobligated prior year funds, the Army Reserve has adjusted its budget

request for fiscal year 1998 to include no funds for unspecified minor construction. The budget request for 1999 is $1,500,000.

—(3) Planning and design.—These funds provide for a continuous, multi-year

process of designing construction projects for execution in the budget years and

beyond. Planning and design activities include the preparation of engineering

designs, drawings, specifications, and solicitation documents necessary to execute major and unspecified minor construction projects. Planning and design

funds are also required to support the Army reserve’s share of the costs of the

continued development of the Modular Design System as an effective and cost

and time saving facility design tool. Our budget requests for planning and design are $5,100,000 for fiscal year 1998 and $6,000,000 for fiscal year 1999.

Real property maintenance (RPM).—Another important issue that is directly

linked to stewardship responsibilities for facilities and installations is funding for

real property maintenance (RPM). Although provided separately by the Operations

and Maintenance Army Reserve (OMAR) appropriation, these funds complement

military construction (MILCON) funds to round out the total resources necessary to

manage the Army reserve’s facilities inventory. Long term resource constraints in

both military construction and real property maintenance have a combined effect of
82

increasing the rates of aging and deterioration of facilities and infrastructure. In exercising our stewardship responsibilities for facilities that belong to the American

taxpayer, we are applying available resources to only the most critical military

maintenance and repair needs.

SUMMARY

In summary, as the national military strategy has changed to meet the challenges

of the next century, the Army Reserve has grown in its importance to the execution

of that strategy. The men and women of the Army Reserve have consistently demonstrated that they can and will respond to the missions and challenges assigned

to them. Our Reserve facilities and installations are valuable resources that support

force readiness and power projection, while serving as highly visible links between

America’s Army and America itself. We are grateful to the Congress and the Nation

for the support you have given and continue to give to the Army Reserve and our

most valuable resource, our soldiers.

PART IV—BASE REALIGNMENT AND CLOSURE (BRAC)

INTRODUCTION

Closing and realigning installations have been a major part of the Army’s reshaping efforts during the past decade. The Army is entering the final third of a 13 year

implementation effort that spans four rounds of closures. We are now saving more

than is being spent. By implementing BRAC, the Army is complying with the law,

while saving money that would otherwise support unneeded overhead. These closed

assets are now available for productive reuse in the private sector.

BRAC savings do not come immediately because of the up front costs for implementation and the time it takes to close and dispose of property. The resulting savings are not as substantial as originally anticipated because potential land, facilities

and equipment revenues are being converted to local economic opportunities that

create jobs and expand the tax base. Environmental costs are significant and are

being funded up front to facilitate economic revitalization. The remaining challenges

that lie ahead are implementing the final two rounds, BRAC 93 and 95, ahead of

schedule, disposing of property at closed bases, cleaning up contaminated property

and assisting communities with reuse.

In fiscal year 1998, we will begin to focus almost exclusively on BRAC 1995, the

last of the four rounds. The fiscal year 1998 and 1999 budgets are important because they contain over 40 percent of the resources needed over the six year implementation period in support of the BRAC 1995 round.

The Army is accelerating all BRAC actions to obtain savings and return assets

to the private sector as quickly as feasible. All of the five closures approved by the

1991 Commission have already occurred. In fiscal year 1997, we are closing Vint

Hill Farms Station, Virginia, two years early. This was the only closure recommended by the 1993 Commission. We are also closing the first of the installations

recommended by the 1995 Commission: Fort Chaffee, Arkansas; Fort Pickett, Virginia; Baltimore Publications Center; Maryland; Stratford Engine Plant, Connecticut; Fort Totten, New York; Detroit Tank Plant, Michigan; and Fort Missoula, Montana.

The fiscal year 1998 budget supports completing the disestablishment of the Aviation and Troop Command in St. Louis, Missouri; continuing a major construction

program at Fort Leonard Wood, Missouri, to house the military police and chemical

schools relocating from Fort McClellan, Alabama, and the closure of Fort

Indiantown Gap, Pennsylvania.

Although the extensive overseas closures do not receive the same level of public

attention as those in the United States, they represent the fundamental shift from

a forward deployed force to one relying upon overseas presence and power projection. Without the need for a Commission, we are closing about seven of ten overseas

sites in Europe, where we are reducing the number of installations by 68 percent.

Forty partial closures represent an additional 5 percent. Reductions in infrastructure roughly parallel troop reductions of 70 percent. In Korea, the number of installations are dropping from 104 to 83, or 20 percent. Another 8 percent are partial

closures.

While we constantly evaluate the role of forward deployed forces, overseas presence helps to reassure friends and deter potential enemies. It can reduce our response time in crises by positioning forces nearer potential trouble spots. On a typical day, the Army has 138,000 soldiers providing overseas presence in 120 countries.

This provides tangible proof of the Nation’s commitment to defend American interests and those of our allies.
83

The President’s Five Part Community Reinvestment Program, announced on July

2, 1993, speeds economic recovery of communities where military bases are closing

by investing in people, investing in industry and investing in communities. The

Army is making its bases available more quickly for economic redevelopment because of the additional authorities we now have.

The Army has been working with communities to convert military bases to public

and private uses. Just last year, the Army completed an economic development conveyance of the large maintenance facility at Tooele Depot, Utah, to the local community, which has completed a business arrangement with Detroit Diesel Remanufacturing Corporation to spur economic development and create jobs. Significant parcels of property were also conveyed at Fort Benjamin Harrison, Indiana, and Fort

Devens, Massachusetts. Local and State redevelopment authorities are projecting

new employment levels that far exceed those of the Army when the bases were active. We are also partnering with local reuse authorities to conduct cost effective

cleanup efforts, consistent with local reuse plans and prudent expenditure of resources.

BASE REALIGNMENT AND CLOSURE—OVERSEAS

On September 18, 1990, the Secretary of Defense announced the first round of

overseas bases to be returned. Since that time, there have been a total of 22 announcements. On January 14, 1993, DOD announced it will withdraw all U.S. military forces from the Republic of Panama and transfer all facilities by December 31,

1999. Of the 13 sites in Panama announced for closure, ten have been returned. The

total number of overseas sites announced for closure or partial closure is 664. Additional announcements will occur until the base structure matches the force identified to meet U.S. commitments. At this time, we do not see the need for many more

overseas closures.

Installations

Germany ................................................................................................................. 573

Korea ....................................................................................................................... 29

France ..................................................................................................................... 21

Panama ................................................................................................................... 13

Netherlands ............................................................................................................ 6

Turkey ..................................................................................................................... 6

United Kingdom ..................................................................................................... 5

Greece ..................................................................................................................... 4

Italy ......................................................................................................................... 4

Belgium ................................................................................................................... 3

664

Most of the 188 million square feet (MSF) of overseas reductions are in Europe,

where we are returning over 600 sites. This is equivalent to closing 12 of our biggest

installations in the U.S.—Fort Hood, Fort Bragg, Fort Benning, Fort Stewart, Fort

Leonard Wood, Fort Lewis, Fort Bliss, Fort Carson, Fort Gordon, Fort Meade, Fort

Campbell and Redstone Arsenal. Unquestionably, these reductions are substantial

and have produced savings to sustain readiness.

The process for closing overseas is much different than in the U.S. First, unified

commanders nominate overseas sites for return or partial return to host nations.

Next, the Joint Staff, various DOD components, National Security Council and State

Department review these nominations. After the Secretary of Defense approves

them, DOD notifies Congress, host governments and the media. The Army ends operations by vacating the entire installation and returning it to the host nation. If

we reduce operations, we end up keeping some of the facilities.

BASE REALIGNMENT AND CLOSURE 1988—BASE CLOSURE ACCOUNT (BCA) I

BRAC 1988 overview.—Though this round has been completed, the work of property disposal and environmental remediation will continue for several years. In late

1996, the Army completed the sale of the former Cameron Station, Virginia, to a

residential developer for $33 million.

BRAC 1988 financial summary.—The one-time cost to implement was

$1,361,279,000. The one-time savings during implementation were $721,011,000.

Annual recurring savings of $259,611,000 began in fiscal year 1996.

BRAC 1988 environmental cleanup and compliance.—Cleanup is complete at 460

of 885 (52 percent) sites. Eleven BRAC Cleanup Teams and nine Restoration Advisory Boards work on these environmental issues.
84

BASE REALIGNMENT AND CLOSURE 91 (BRAC 91)—BASE CLOSURE ACCOUNT (BCA) II

BRAC 91 overview.—Public Law 101–510, the Defense Base Realignment and Closure Act of 1990, established a new process for base realignment and closure actions

in the United States through 1995. The first phase of this new process is known

as BRAC 91 and the funding account is referred to as BCA II. The Army is currently in the final year of the six year execution period. All closures are completed.

The realignment of the Army Research Laboratory in Adelphi, Maryland in 1997

completes this round.

BRAC 91 financial summary.—One-time implementation costs during the period fiscal year 1992–97 totals $1,419,433,000. The largest component is military construction, which accounts for 38 percent of the program. Savings during the same

period are $1,181,201,000, primarily due to the elimination of 5,648 civilian positions and reduced operating costs for installations being realigned or closed. Recurring savings are estimated to be $303,825,000, starting in fiscal year 1997. Proceeds

from land sales are anticipated to be $37,498,000 million.

BRAC 91 environmental cleanup and compliance.—Cleanup is complete at 136 of

235 sites (58 percent). Five BRAC Cleanup Teams and five Restoration Advisory

Boards are working at closing sites.

BASE REALIGNMENT AND CLOSURE 93 (BRAC 93)—BASE CLOSURE ACCOUNT (BCA) III

BRAC 93 overview.—The Army is in its fourth year of a six year execution period.

During fiscal year 1997 the Army will close Vint Hill Farms Station, Virginia. The

Army is working very closely with the local redevelopment authority to expedite

reuse of the installation in support of economic recovery.

BRAC 93 financial summary.—One time implementation costs during the period

fiscal year 1994–97 totals $288,953,000. Savings during the same period are

$206,892,000, primarily due to the elimination of 1,113 civilian positions and reduced operating costs of installations being realigned or closed. We estimate our recurring savings to be $67,727,000, starting in fiscal year 1999. Land sales are expected to be deferred as part of the economic development conveyance process and

will be collected in the future as economic development occurs.

BRAC 93 environmental cleanup and compliance.—Cleanup is complete at 12 of

68 sites (18 percent). Three BRAC Cleanup Teams and three Restoration Advisory

Boards (RAB) are working to accelerate cleanup.

BASE REALIGNMENT AND CLOSURE 95 (BRAC 95)—BASE CLOSURE ACCOUNT (BCA) IV

BRAC 95 overview.—The Army is in its second year of a six year execution period.

The Army expects to close Fort Chaffee, Fort Pickett, Stratford Army Engine Plant

and several minor installations in fiscal year 1997. In fiscal year 1998, the Army

will complete the disestablishment of Aviation and Troop Command in St. Louis and

return Fort Indiantown.Gap to the State of Pennsylvania.

BRAC 95 financial summary.—One time implementation costs during the period

fiscal year 1996–2001 are currently estimated to total $2,140,995,000. Savings during the same period are $1,197,973,000, primarily due to the elimination of 4,247

civilian positions in the Army and reduced operating costs of installations being realigned or closed. An additional 1,431 positions from DOD’s medical program are

being eliminated as a result of the closure or realignment of medical facilities at our

installations. We estimate recurring savings to be $363,578,000 starting in fiscal

year 2002. Land sales are expected to be deferred as part of the economic development conveyance process and will be collected in the future as economic development occurs.

BRAC 95 environmental cleanup and compliance.—Cleanup is complete at 183 of

716 sites (26 percent). Twenty BRAC Cleanup Teams and seventeen Restoration Advisory Boards (RAB) are working to accelerate cleanup.

SUMMARY

Closing and realigning bases saves money that otherwise goes to unneeded overhead and frees up valuable assets for productive reuse. These savings permit us to

invest properly in the forces and bases we keep to ensure their continued effectiveness. Our debt to local communities keeps us dedicated to the rapid reuse of our

installations, so local communities can realize the opportunities that base closures

can bring. The Army is supporting the rapid redevelopment of communities affected

by BRAC by using the economic development conveyance authorities established by

the Congress. Real property assets are being conveyed to local communities, and

cleaned environmentally when necessary, thereby permitting communities to quickly

enter into business arrangements with the private sector. These business arrange-
85

ments are producing jobs and tax revenues at the local level which, over time, will

allow some revenues to return to the Army.

Mr. Chairman, this concludes my statement. Thank you.

BARRACKS PROJECTS OVERSEAS

Senator BURNS. Thank you, Mr. Secretary.

Mr. Secretary, the 1998 budget request contains eight barracks

projects overseas, for a total of about $119 million. I guess my

question is, is that inadequate, or are we investing too much overseas in new barracks in Europe and Germany as we have significant amounts of barracks domestically in this country sorely in

need of repair?

I cite Fort Sill. I saw some quarters there that really need replacing and some facilities that we need to replace on some of our posts

here in this country to meet the one plus one.

Are we making the investment in the wrong place? Are we investing in Europe and Korea and maybe not making the adequate

investment here?

Mr. WALKER. Mr. Chairman, we are trying to provide a balanced

program. In our barracks program, as I mentioned, we have taken

the old barracks renewal program, which said we would not finish

completing renovating barracks to the one plus one standard by the

year 2020, and we have rolled that back and now will complete all

barracks in the United States by 2008.

We are not going to complete that overseas until the year 2012,

out of recognition of what you say. But I must tell you that we

have some bad barracks all over, and some of the worst barracks

I have ever seen are in Korea and Germany. I have been going to

Korea, for instance, since the early 1980’s. We are still using 50-

year-old Quonset huts for American soldiers to live in that should

have been torn down when I first went to Korea in 1983.

So we have an obligation to our soldiers, wherever they may be,

and what we are trying to do is put an adequate amount of money

so we can conclude this barracks renewal program throughout the

Army as soon as possible.

Senator BURNS. It looks like throughout our part of the country

the Quonset Corp., still sells building—grain, machine sheds, this

kind of thing. Maybe they had better go over and take some pictures and see how long their product lasts?

Mr. WALKER. It is amazing.

Senator BURNS. I think we have done an adequate job of maintaining and using them a long time.

BRAC

I want to ask you now, in light of that, and with the announcement a couple of days ago, Secretary Walker—and I guess this

might be a little too quick, but I would give rise to the thought that

with the announcement from the Secretary of Defense and from the

President that they are suggesting another round of BRAC, base

realignment and closure, and when we start talking about making

investments, and then looking down the line—and I personally,

with the demand that has been put on the cleanup and especially

the underestimation of what our environmental liability was and

the cost of taking care of that liability on these closures—I am
86

wondering if you are starting to put together plans that right now

we have to start watching where we invest for this future round,

if it comes to pass, of BRAC.

Mr. WALKER. Well, Mr. Chairman, of course, Secretary Cohen

has not told us yet exactly what his plan is. That will be announced on May 19, I believe, Monday next.

We probably do need another BRAC, though, Mr. Chairman. The

numbers of soldiers have declined far faster than our infrastructure, although I must tell you that in the Army most of our soldiers

were taken out of Europe, where we have had large base closures

there.

Here in the United States, fewer soldiers have been reduced proportionately to the number of soldiers overall. But even with that

said, we still have some flexibility, I believe, in order to save some

funds for the future.

What we are finding with regard to base closures is what you

point out. It is very expensive on the front end. But the past four

BRAC base closures that we have had are going to result, by the

year 2001, in a savings to the Army budget of $1 billion, on an annual basis that we would not have saved. So if you can get past

the first few years—that is the difficult part—then you do end up

saving money.

Senator BURNS. With the new approach of providing the seed

money for off-base housing and a commitment to our family housing especially, whenever we close a base or that facility closes

down, we still have obligations in that area. Does that concern you?

Mr. WALKER. Well, of course, that has also been true for several

years. We had the 801 housing program, which had some very

large leases throughout all military services. That has been on the

books for some time. So we faced that before in base closure

rounds.

Senator BURNS. I bring that up, with the suggestion that we

have to start thinking in those kind of directions. It may change

our planners’ approach a little bit on how we plan for the future

and what facilities. I personally do not think another BRAC round

can probably start until maybe the year 2001, maybe 2002, because

we still have commitments from the old rounds that still have to

be met, and we can only support the closing of so many financially,

no matter what your feelings are about what size the Army ought

to be.

I am concerned about the declining numbers in Korea and Germany, and when we make those investments are we building a facility to abandon later on. I ask that because I think sometime we

better make the investment in this country.

Mr. WALKER. Well, I think the President has, and Secretary

Cohen on his recent trip to Korea, indicated the troop levels will

stay pretty much the same in Korea. And I think we are still looking at about 100,000 total, 65,000 Army, in Germany. So unless

QDR makes a change on that, we do not anticipate any substantial

change in the numbers of troops we have forward-deployed.

PLANNING/EXPANSION OF NATO

Senator BURNS. In your planning stages, the expansion of NATO,

does that enter the planning or the mindset of our planners at all?
87

Mr. WALKER. No, sir; we have not been asked to do anything on

that.

Senator BURNS. Senator Murray.

Senator MURRAY. Thank you, Mr. Chairman.

REDUCTIONS TO ACTIVE AND RESERVE FORCES

Secretary Walker, I noted that the lead article in the Washington

Post yesterday indicated that the quadrennial defense review process includes a proposal to cut the Army by 15,000 but also cut the

Army Guard and Reserves by some 70,000, most of that coming

from the Army Guard.

Is that report accurate and, if it is, does that represent a fair balance in reductions between the Active and Reserve and Guard

Forces?

Mr. WALKER. Well, Senator Murray, I read that same article yesterday, and I must tell you I regret I cannot confirm or deny, because I really do not know what the answer is. I do not know if

the Army staff coordinated their original proposal with the Army

National Guard or not.

But I do know that the Army staff did not coordinate their original proposal with the members of the Secretariat. I have not been

briefed, for instance, on any Army staff proposal. And, according to

another press report today, the Secretary of Defense had given the

service chiefs great latitude in determining the mix of cuts.

So, like you, I am very interested in seeing what the Army staff

has proposed, and I regret I do not know the answer to your question.

Senator MURRAY. Well, the Post indicated that the Guard had

been excluded from the decisionmaking process, and I wanted to

know if you knew if that was true or not and whether you thought

the Guard agreed with the level of reduction that was being proposed.

Mr. WALKER. You would need to ask the Guard. I understand the

leadership of the Guard is probably in town discussing that issue

today.

Senator MURRAY. Well, thank you. Let me move to another area,

then.

You mentioned in your opening remarks the propensity for young

people not to go into the Army today and the declining number of

people. One of the things I know when I talk to young people that

we are looking at recruiting is that they talk about the quality of

life issues.

CHILD DEVELOPMENT CENTERS

One of the issues that often comes forward is whether or not

there is any child development centers for young people and their

families. I notice that there are no child development centers in the

Army’s budget request. I thought DOD had a goal for providing

child care facilities. If you could tell me why we do not see that and

what is in the budget in terms of that, I would appreciate it.

Mr. WALKER. Senator, I think we have roughly 165 child development centers throughout the Army. The goal is to have 65 percent

of our eligible children in child development centers. This year I

think we are going to make 64 percent. We are almost there.
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In addition to organic child development centers on military

bases, we also have an aggressive program of inhouse child care,

where you certify homes for child care. So we think we are doing

a good job at child development. Even though there is not a new

child development center project in the budget, we think the right

thing is being done.

QUALITY OF LIFE ISSUES

Senator MURRAY. OK. What about other quality of life issues like

community centers or physical fitness centers, those kinds of

things, that really add to the quality of life?

Mr. WALKER. You are right. As I mentioned, you do not see very

many of them in the budget, very many of those kinds of facilities,

not very many of operational or mission facilities. We have put our

emphasis on quality of life in terms of barracks, and that is where

we are putting most of the money now.

We have many requirements out there like that that we have

still got to figure out a way to fund in the future.

Senator MURRAY. Do you know what the unmet need is?

Mr. WALKER. I do not, but I will be glad to provide that for the

record.

[The information follows:]

OTHER QUALITY OF LIFE FACILITIES

With regard to fitness centers, the U.S. Army emphasizes total fitness to meet its

contingency and mobilization requirements. Although facilities continue to need renovation or replacement (average age is 53 years), resources have been insufficient

to fund all of the Army’s infrastructure revitalization requirements. Our current Future Years Defense Program includes funding in Military Construction, Army (MCA)

of Physical Fitness Training Centers in: fiscal year 1999 at Fort Detrick ($3.5 million BRAC/$3.1 million MCA); fiscal year 2001 at Walter Reed Army Medical Center

($6.0 million); fiscal year 2003 at Fort Eustis ($4.3 million).

A Soldier Community Building is included as part of each Whole Barracks Renewal Complex. This facility provides social gathering areas, room for recreational

activities, and multi-purpose meeting space.

With regard to community centers, family centers, libraries, and other quality of

life facilities, resources have been insufficient to fund the Army’s requirements.

Senator MURRAY. I would really appreciate seeing that. I think

if we want to encourage young people to come into the Army—and

we do need to do that—that these are astute young people and they

are looking around at the other opportunities that are available,

and quality of life is absolutely critical.

Mr. WALKER. You are exactly right, Senator. It is a competition

out there. We are in competition with the rest of the civilian economy and we have got to compete.

FAMILY HOUSING IMPROVEMENT FUND

Senator MURRAY. I also notice that there is no appropriation request for the family housing improvement fund for fiscal year 1998,

and I wanted to know how the Army planned to execute this program next year.

Mr. WALKER. Senator, we will provide an answer for the record

for that.

Senator MURRAY. I would appreciate that.

Thank you, Mr. Chairman.

[The information follows:]
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FAMILY IMPROVEMENT FUND

The Office of the Secretary of Defense centrally manages programs and budgets

for the DOD Family Housing Improvement Fund (FHIF). The fund received direct

appropriations of $22 million in fiscal year 1996 and $25 million in fiscal year 1997.

These funds are available until expended; approximately $30 million remains available to finance projects.

Consistent with design of the initiative, project award will use cash, land, and/

or facilities depending on the site and terms of the contract. Some sites may not

require any up-front money. However, if cash is needed (for example, mortgage

guarantees), funds will come from either the family housing construction account at

that site, or the Army will request funding from the centrally managed FHIF.

RELOCATION OF SOUTHCOM

Senator BURNS. Let us talk about one of my favorite projects, the

relocation of the Southern Command. I think I have brought this

up 3 years ago—I do not know how long it has been. But I still

question the wisdom of moving from Panama to Miami. I do not

question the wisdom of moving it maybe back in the contiguous

States, but you have got a request in here for $2.3 million for general and staff officer housing.

And yet we are requiring some enlisted people to move into an

area where you have a very high cost of living and, you know, we

all have champagne tastes, but most of us are on Miller payrolls.

It does not lead to a very, very good situation, given the area in

which they are moving.

I have no problem with living in Miami year-round, but I also

know that these families—I have often wondered, as Senator Murray said a while ago, attracting young people to the military services, we hear the complaint of housing facilities.

I tell you what. That was the last thing that was on my mind

when I joined the U.S. Marine Corps in 1955. But I will say that

after you are in the service and you find that people that you want

to retain, then the amenities become very, very important in the

retention of qualified soldiers and people that we want to make career people.

So would you comment on this relocation and try to put my mind

at ease that we are doing the right thing in this situation, especially when we have facilities that might be located in Florida but

might not be in Dade County, to be specific?

Mr. WALKER. Senator, with regard to your general statement,

there is a saying in the Army that you enlist soldiers but you reenlist families. I think that is very true.

Since that is true, that was one of the concerns that we had with

the SOUTHCOM relocation when the Army was given the executive agency responsibility to execute that. We sent a team from the

Corps of Engineers down there to do a family housing survey to

find out if soldiers could afford living down there.

And they found in their survey that most soldiers could afford

adequate housing, given the housing allowances that are available.

But even with that said, we know that younger soldiers, junior enlisted, both single soldiers and junior enlisted with families, many

of them who have larger families or families with special needs still

have specific requirements.

So as a result of that, we will be moving about 225 enlisted into

the area totally. We have sought and secured the ability to lease

housing for about 120 of them, and we are going to be leasing 62
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junior enlisted housing for the larger families and those with particular situations and 60 junior enlisted unaccompanied housing

units in the area.

We are doing that for just the reason that you mentioned, because we feel that there would be a special burden on some of

those, and we hope that that will be sufficient to ensure that when

we check the next time the reenlistments of SOUTHCOM we will

find that the reenlistment rates are still high.

Senator BURNS. I have still got my questions, I guess, about that

move, but it does not make any difference what one guy thinks and

another guy. I just thought it sounded funny at the time.

DISCIPLINARY BARRACKS—FORT LEAVENWORTH

There is a $63 million project to build a new disciplinary barracks at Fort Leavenworth. That is about 10 percent of your total

Milcon allocation. It is my understanding that it houses prisoners

from all services and a significant number of these inmates participate in a work release program throughout the fort, such as barber

shops and different things.

Why are we building a prison facility at Fort Leavenworth that

is nicer and more modern than many barracks that we are trying

to fight so hard for on our military posts for the good soldiers?

Mr. WALKER. Mr. Chairman, I think when we finish the new facility it is not going to be a place any of us would like to live. It

is going to be a prison. There is no question about it. It is going

to be small rooms and small beds and a big door that slams closed

every night. I do not think we are going to see any soldiers trying

to trade their barracks room for it intentionally.

The truth is, we are using essentially the same kind of design

that the Federal Bureau of Prisons uses for their prisons. So it is

not going to be—these are long-term prisoners that will be there.

It is not going to be a very pleasant place to live.

It is a lot of money, and I will tell you honestly that the project

got slipped for the last 2 years because of other requirements. We

have reached the point that we really cannot slip it any longer. The

reason we are spending this amount of money for this project is because the current disciplinary barracks is, frankly, just unsafe.

The Corps of Engineers has gone in there and we have had three

other consultants go in there to verify that there is a safety problem there. It was built back in the early 1900’s by prison labor,

and, I will tell you, it is a challenge. The bricks just fall off the

wall.

Senator BURNS. What do you plan to do with the old building if

this project is approved?

Mr. WALKER. Well, we plan to mothball it. It is not going to be

used. We are not sure whether we can tear it down or not because

it falls under the National Historic Preservation Act. So there is a

process you have to go through there.

Senator BURNS. The only thing is, there at Fort Leavenworth I

think Custer’s horse is still there, isn’t he? [Laughter.]

Mr. WALKER. It is a very historic base.

Senator BURNS. I think so.
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FORT CARSON—HOUSING PRIVATIZATION

Fort Carson, a plan to privatize all family housing is at Fort Carson, CO. The initiative will revitalize, what, 1,824 existing units

and construct 840 units. Do you want to bring us up to date on

that?

Mr. WALKER. Yes, Mr. Chairman. The request for proposals is

out. There have been about, I believe, around 300 responses, which

is just an enormous response, much more than we expected. So we

believe as a result of that that we are going to see a very competitive project, a project that is going to result in family housing a lot

quicker for soldiers there than otherwise would have been.

At the current rates of funding that were going in there, it would

have taken 50 to 75 years to revitalize all that housing. Now, the

1,824 units of family housing that is there will be revitalized in 5

years and the additional units that are going to be built will be

built in 5 years.

We believe that the project is on track for an award sometime

this summer.

Senator BURNS. The BRAC announcement, would that change

emphasis on that project there, should it come to pass? You do not

know?

Mr. WALKER. Of course, we do not know what Secretary Cohen

is going to recommend at this point.

Senator BURNS. I think just as a suggestion, you know, if that

announcement is made on that BRAC, I would say that planners

will have to go back to work anyway. We may be having lots of

meetings and sitting down and reprogramming, and this type of

thing.

Senator Murray, do you have any more questions?

GUARD AND RESERVE BUDGETS

Senator MURRAY. Thank you, Mr. Chairman. I just have one

more. I continue to be concerned with the request for Guard and

Reserves that you just talked about for 1 minute.

Does the military construction budget reflected in your request

mean that the Army can do without the Guard and Reserve in a

wartime situation?

Senator WALKER. Well, no, we cannot. That is for sure. I just

came from Bosnia over the weekend, and there in Bosnia I think

we have got about 3,500 Guard and Reserve personnel. To give you

an example, at any given time, any day of the year we have about

30,000 soldiers who are deployed for a variety of missions. Of those

soldiers, 7,000 to 8,000 are Guard and Reserve, primarily Guard

soldiers or units that are deployed just like active duty.

Today in the European theater, when you add it all up, we have

about 6,000 that are Guard and Reserve. We saw demonstrated

very clearly in the Persian Gulf war that 60 to 70 percent, and it

may be more in the future, of our combat support and combat service support, for instance, has to come out of the Guard and Reserve. Other units, such as artillery units and others performed

magnificently.
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So we cannot go anywhere anymore as an Army, we cannot deploy without the Guard and Reserve. So it does not reflect that. It

reflects very simply that we did not have enough money.

Senator MURRAY. Thank you, Mr. Chairman.

Senator BURNS. Secretary Walker, thank you this morning. I am

sure there will be other questions and other committee members

may have some questions. If we could channel those letters to you

and if you could respond to the individual Senator and to the committee, I would certainly appreciate that. We will leave the record

open.

I think with the recent announcement—and I will tell you very

sincerely I appreciate your cooperation and we may be working together a little more closely on some projects as the world changes

and as our approach to national defense changes. So I appreciate

your thoughts and your cooperation.

ADDITIONAL COMMITTEE QUESTIONS

Mr. WALKER. I look forward to working with you.

Senator BURNS. Thank you very much.

Mr. WALKER. Thank you.

[The following questions were not asked at the hearing, but were

submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED BY SENATOR BURNS

NATIONAL GUARD MILCON FUNDING

Question. Mr. Secretary, I applaud the Army’s effort in securing some funding for

the Army National Guard. $45 million is a starting point, but I am concerned that

the proposed funding drops to $33.8 million in fiscal year 1999. What is the proposed funding for the Army Guard in the out years?

Answer. The military construction funding for the Army National Guard as published in the current Future Years Defense Plan (FYDP) submitted to Congress with

the fiscal year 1998 budget is as follows: fiscal year 2000, $44.9 million; fiscal year

2001, $31.137 million; fiscal year 2002, $34.037 million; and fiscal year 2003,

$36.937 million. However, the Army reviews these funding levels as it develops each

year’s budget for submission to Congress.

Question. How does the Department propose to continue this forward momentum?

Answer. Since the Army transitioned to six functional Program Evaluation

Groups in 1996, the avenues of communication between the Army National Guard

(ARNG) and the Assistant Chief of Staff for Installation Management (ACSIM) have

strengthened. The ARNG and ACSIM meet frequently on budget and planning issues. The ARNG has placed a senior officer on a series of short temporary active

duty tours to work full-time at the ACSIM. The ACSIM has integrated the ARNG

into their requirements generation model. The ARNG reports its facility issues

through the Army’s Installation Status Report. We believe that these actions will

continue the forward momentum.

Question. How does the Army determine what the priorities are between the various Guard projects competing for limited funding?

Answer. We set priorities by ranking projects using the following criteria: readiness priorities of the units supported by the facility (40 percent), the adequacy of

the existing facility (35 percent), and the priority the individual State places on the

project (25 percent). To break ties when preparing a budget we also examine the

design status of the project and the State’s proven ability to execute military construction.

Question. Mr. Secretary, I understand that the Army is proceeding with the full

privatization of family housing at Fort Carson with a contract award date of July.

With Secretary Cohen’s recent announcement that he wants two more rounds of

base closure, why would we want to endorse any leasing arrangement which provides guarantees against base closure?
93

Answer. First, the Army does not make its base closure decisions based solely on

investments in its installations, whether the investment is in facilities construction,

or in guarantees such as this.

Second, the housing initiative provides essential support to provide the adequate

housing we owe our military families. To accomplish a privatization initiative we

must include some type of guarantee for the contractor. The Army recognizes that

there is a future risk of base closure, but such a guarantee is the only way to make

the financial risk acceptable to the private sector.

Question. Any installation with a housing privatization deal would be protected

in future rounds of base closure, because of the costs to buy the government out of

the lease. This would seem to lock the Army into Fort Carson for the next 50 years,

is that correct?

Answer. No. We believe we can negotiate an equitable settlement. And, since the

criteria for establishing the military value of our installations has not been agreed

to, I would be speculating on those installations that should be retained, closed or

realigning. Further, the size and type of force structure will, if a new round of base

closures is approved by Congress, have an effect on those installations retained in

our infrastructure.

QUESTIONS SUBMITTED BY SENATOR FAIRCLOTH

BASE REALIGNMENT AND CLOSURE

Question. As I look over the portion of your statement on ‘‘Base Realignment and

Closure,’’ (BRAC), I’m very concerned about all the money that is being spent at the

time of closure. In fact, it is so great that in every case, from BRAC 1988 through

BRAC 1995, both your actual and planned spending exceeded or exceeds the actual

or planned savings over the six-year implementation period. For what is all this

spending? Why is so much new construction needed at a base that is being closed?

Answer. The majority of the costs associated with the closure or realignment of

an installation are for the movement or separation of personnel, transfer or procurement of equipment, environmental restoration of the excess land, and construction

of new facilities at the gaining installation. New construction is required at gaining

installations for the functions and missions that are transferred or realigned from

other installations. We are not constructing new facilities at installations that are

closing. Although there are expenses associated with each BRAC round, the resulting savings in infrastructure costs are far greater.

Question. Break down the savings over the implementation period. You say it is

primarily from elimination of civilian jobs. What portion is from this and what portion is from ‘‘reduced operating costs?’’

Answer. The following chart provides the annual savings by fiscal year and the

civilian personnel reductions.

Fiscal year

1989 1990 1991 1992 1993 1994 1995 1996 1997

BRAC 88 .... ¥23.0 ¥10.2 ¥34.8 ¥56.3 ¥119.8 ¥240.3 ¥259.6 ¥259.6 ¥259.6

BRAC 91 .... ............ ............ ............ ¥55.1 ¥105.5 ¥198.9 ¥241.3 ¥276.6 ¥303.8

BRAC 93 .... ............ ............ ............ ............ .............. ¥10.9 ¥1.6 ¥20.3 ¥48.5

BRAC 95 .... ............ ............ ............ ............ .............. .............. .............. ¥19.2 ¥16.6

CIV RED ..... ............ ............ 20.0 1,364.0 2,386.0 3,312.0 1,129.0 757.0 3,410.0

Fiscal year

Total

1998 1999 2000 2001 2002 2003

BRAC 88 ............................. ¥259.6 ¥259.6 ¥259.6 ¥259.6 ¥259.6 ¥259.6 ¥2,820.8

BRAC 91 ............................. ¥303.8 ¥303.8 ¥303.8 ¥303.8 ¥303.8 ¥303.8 ¥3,004.0

BRAC 93 ............................. ¥61.0 ¥67.7 ¥67.7 ¥67.7 ¥67.7 ¥67.7 ¥480.8

BRAC 95 ............................. ¥195.7 ¥255.4 ¥347.5 ¥363.6 ¥363.6 ¥363.6 ¥1,925.2

CIV RED .............................. 2,856.0 647.0 380.0 101.0 .............. .............. 16,362.0
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The Army has eliminated 16,362 civilian positions during the first four rounds of BRAC. These eliminations account for $831 million of the $994 million annual recurring savings. The remainder of the savings is from reduced base operating costs.

Question. You indicated that resulting savings are lower than anticipated. By how

much? What are these ‘‘local economic opportunities that create jobs and expand the

tax base?’’ Are you giving away moneys that you had originally intended would come

back to the Federal Government? How are these moneys transferred?

Answer. The Army originally over-projected potential land sale revenues. In the first two BRAC rounds $1.7 billion in savings were projected, however, $108 million

has been realized to date.

The Army uses Economic Development Conveyance, as authorized by Congress,

as a vehicle for local economic opportunities that create jobs and expand the tax

base. Following the July 1993 announcement of the President’s program to revitalize

base closure communities, Congress created a new property conveyance authority,

designed specifically to ease the economic hardship caused by base closures. Section

2903 of Title XXIX, Public Law 101–510, gives the Department of Defense the authority to transfer property to Local Redevelopment Authorities, for consideration at

or below fair market value to spur economic redevelopment and job creation. If any

loss is incurred by the Federal Government it would be lost land sales revenues that

might have been generated if property were at fair market value. No BRAC moneys

are transferred to state or local governments.

DOD does provide grants to Local Redevelopment Authorities through the Office

of Economic Adjustment (OEA) to assist the local communities in developing reuse

plans and other activities required to transition properties to civilian reuse. The

money granted by OEA is not part of the BRAC account, but is appropriated as a

line item in the defense wide Operation and Maintenance Appropriation.

Question. Can we count on the ‘‘recurring savings’’ as all federal revenue, or are

some of these savings transferred to the local economy? For how many years will

the ‘‘recurring savings’’ continue to flow in? How can we be certain that these annual savings will not be lower than anticipated, just as the savings over the implementation were and are?

Answer. The ‘‘recurring savings’’ generated as a result of BRAC are not revenues.

They are costs that are avoided as a result of a closure or realignment. When an

installation is closed, the Army no longer incurs the costs for operating that facility.

This includes, but is not limited to, civilian payroll and base operations costs (utilities, and repair and maintenance). These ‘‘recurring savings’’ are permanent and

will continue indefinitely.

Question. Would you send up the detailed economic analyses that accompany

BRAC decisions? I would like to see the original estimates of costs and savings and

a comparison of the actual costs and savings that you are sure of today. What was

the original, estimated payback period, and what has the actual payback period

turned out to be? I’m assuming that the costs turned out to be higher than anticipated and the savings turned out to be lower than anticipated. Is that a correct assumption?

Answer. All original estimates are contained in the Defense Base Closure and Realignment Commission’s final reports to the President. Attached is a summary of

the Commissions final analysis. Also attached is a summary of the Army’s current

budget submission of costs and savings to date. BRAC closure and realignment decisions were based on a decision modeling tool called COBRA (Cost of Base Realignment Actions). Office of the Secretary of Defense policy did not permit the consideration of environmental costs in BRAC decisionmaking since clean-up would have to

be accomplished whether or not a base is closed. In fact, budgeted costs are higher

with longer payback periods than the original COBRA estimates since they include

environmental restoration costs. Without these added costs, the totals are close to

what were originally projected. While there are differences between actual and projected savings due largely to unrealistic assumptions regarding land sale revenues,

the figures continue to support the original decisions.

Question. You indicate that environmental costs are significant. What is the nature of these environmental problems on a facility that all of the sudden makes uninhabitable after the military leaves, when it was perfectly fine for habitation when

the facility was in operation? Are these environmental costs a portion of the costs

over the implementation period?

Answer. Applicable Federal and State environmental laws and regulations require

the Army to complete this environmental work prior to transferring the property to

non-federal purchasers. The Army has an ongoing program to cleanup environmental contamination on many active installations. Although we have very few imminent threats to human health and the environment, there are levels of contamination, mostly from past practices, that require remedial actions. The BRAC pro-
95

gram includes funding to support environmental restoration of the excess property

at closing and realigning installations.

The Army works with the local communities to clean properties to support reuse

plans that on occasion differ from the current military use of the property while considering affordability of required cleanup actions. Cleanup standards do change with

some of the differences in reuse, and negotiations with the local communities include affordability of required cleanup in determining the reuse scenarios.
96
97
98

Question. Why are you funding environmental costs up-front? How much per year

is this unique financing costing taxpayers?

Answer. We are funding environmental costs up-front as required by various applicable Federal and State environmental laws. The BRAC account is the exclusive

funding source for environmental restoration of any property made excess to the

needs of the Department of Defense under BRAC. In addition, the law states that

this restoration must be carried out as soon as possible given the funds available

for that purpose. The Army is spending between $80 and $350 million per year for

environmental restoration at BRAC installations.

Question. Can I assume that savings for closing overseas bases will give us a better return than for closing U.S. bases? Give me the same analyses on these closures

also, please.

Answer. The closure of overseas bases is funded from the Army’s operating accounts. As such, we do not have data on the actual cost to implement these overseas

actions. Generally, the infrastructure is excess due to unit realignments to CONUS

or unit eliminations in place. These types of realignments do not require much construction at the gaining installations and civilian personnel relocations are minimal.

Differences in these implementation costs differences do not change the fact that

there are significant operational savings generated by the closure of both U.S. and

overseas bases.

QUESTIONS SUBMITTED BY SENATOR REID

ARMY GUARD FACILITIES—CARSON CITY ARMORY

Question. The Army National Guard is taking on many new missions and responsibilities in addition to its more traditional domestic roles. The Army National

Guard has been an active participant in every major American conflict, and has always performed admirably. In order to maintain a strong National Guard Force, we

must first supply the Army National Guard with the tools and facilities necessary

to do the job.

In Carson City, Nevada, our Army National Guard is operating out of woefully

inadequate facilities. According to federal criteria, the current Armory is undersized

by 32,000 square feet. Additionally, the roof is in such disrepair that it leaks every

time it rains.

I understand that there are significant problems with many of Army National

Guard facilities throughout the nation. Does the Army have a long-term modernization plan for the National Guard armories?

Answer. The Army does have a long-term modernization plan for the National

Guard Armories. In an attempt to fully delineate the cost of modernizing and revitalizing the existing infrastructure of the Army National Guard, a study was prepared outlining a 25-year long-term plan. This study was based on the use of the

individual State Long Range Construction Programs which were consolidated into

a prioritized list. This list was developed using the following parameters: the readiness priority of unit(s) which the project supports (40 percent); adequacy of the existing facility (35 percent); and the state’s priority (25 percent). Armories are considered as part of the overall readiness factor, along with aviation, maintenance, logistic, and training facilities.

Question. Do you know where Carson City armory is on that list?

Answer. The Carson City armory is currently in the Army National Guard’s Future Years Defense Program for fiscal year 2003.

EFFECTS BRAC HAS HAD ON THE READINESS

Question. Last Tuesday, Secretary Cohen announced that he intended to seek two

more rounds of base closings. The first round is proposed to occur in 1999 with another one in the year 2000. In the last nine years, the Army has closed nearly 100

bases in the United States, and more than 600 bases overseas. In light of Secretary

Cohen’s comments on Tuesday, do you know of any research being accomplished

which addresses the long-term effects of these base closures on the Army’s readiness

posture?

Answer. No specific research has been undertaken to compare base closures and

readiness. However, base closures can improve readiness since they result in considerable savings which can be reinvested in readiness accounts.

Question. In 1996, the Army implemented the Business Occupancy Program. As

I understand it, the Business Occupancy Program was initiated to incentivise the

Army housing program and was intended to ensure more effective and efficiently

managed occupancy rates. Can you expand on the progress and the success of this
99

program? Will the Business Occupancy Program in anyway change the long-term

need for additional or rejuvenated military family housing?

Answer. The Business Occupancy Program presently covers the entire Armyowned family housing inventory. The Business Occupancy Program achieved its goal

to increase the family housing in occupancy rate by 2 percent in fiscal year 1996

and is on track to meet the goal of another 1 percent increase in fiscal year 1997.

The Business Occupancy Program will not affect the long-term need for family

housing. The Business Occupancy Program is used as a means of distributing annually appropriated funds for family housing operation and maintenance. It is not a

factor in determining either the need for family housing or the funding necessary

for renovating housing.

Question. In 1996 the Defense Authorization Act provided new authorities under

the Military Housing Privatization Initiative. I understand that as a result of this

initiative the Army now has fifteen housing projects under development which will

privatize part of the Army’s housing inventory. When do you anticipate that you will

be able to first move families into these units? Do you plan on expanding these efforts to further privatize the management of Army housing?

Answer. The Army expects to award the first privatization project at Fort Carson

this summer. The project involves the construction of 840 new units and the revitalization of the 1,824 existing units. Occupancy of the 840 new units is planned over

a four-year period with the first completed units expected to come on line early

1999. All of the existing, 1,824 units will be revitalized within five years.

The Army’s current objective is to pursue privatizing all U.S. family housing over

the next several years.

PARKING RAMP MODERNIZATION

Question. I have seen a study which stated that 51 percent of the Army National

Guard parking ramps are inadequate in size or condition. Contributing factors to

the untimely deterioration of these ramps include a modernized fleet, aging asphalt,

and deferred ramp maintenance. Now that the Army National Guard is getting

newer more advanced aircraft; parking locations, pavement bearing capacities, and

ramp clearances will need to be increased. This is a long term problem which cannot

be corrected in the 11th hour.

Is there a mechanism in place, sort of a parking ramp modernization panel, which

is addressing the inadequacies of the Army National Guard’s parking facilities?

Answer. The Army National Guard is addressing the issue as a matter of special

emphasis through regular aviation staff channels and its aviation advisory council.

These groups have identified 62 aircraft parking ramp maintenance and repair construction projects with a cost of $50.7 million and 14 additional projects for which

cost estimates have not yet been determined. The Army National Guard has made

such projects a priority item for the use of fiscal year 1997 Quality of Life Enhancement-Defense funds. However, a number of these projects have not been executed

because they require a State matching share.

Question. Is there a strategic plan for the future that is prioritizing ramp construction, renovation, and repair projects based on risk analysis and cost effectiveness for maintenance and repair?

Answer. The Army National Guard aviation staff has proposed a parking ramp

modernization program that addresses the following: conducting engineering surveys of ramp conditions to identify and prioritize construction or repair needs based

on risk analysis and cost effectiveness; providing construction funding for projects

currently designed, projects programmed to correct urgent safety deficiencies, and

in support of priority units; and establishing a phased schedule for construction, or

repair and maintenance, based on engineering survey data and cost effectiveness.

Projects identified in this program will compete for operations and maintenance or

military construction funding, as appropriate, through established prioritization

processes. The ability of these projects to compete will depend on the readiness priority of the supported units, the adequacy of the existing ramps, and individual

State priorities. Repair projects will also require a 25 percent State matching share.

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DEFENSE AGENCIES

U.S. SPECIAL OPERATIONS COMMAND

STATEMENT OF GARY W. ROBINSON, COMMAND ENGINEER

ASSISTANT SECRETARY OF DEFENSE FOR HEALTH SERVICES

OPERATIONS AND READINESS

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

AND READINESS)

DEFENSE LOGISTICS AGENCY

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

DEFENSE FINANCE AND ACCOUNTING SERVICE

STATEMENT OF BRUCE M. CARNES, DEPUTY DIRECTOR FOR RESOURCE MANAGEMENT

Senator BURNS. We will now hear from the second panel, representing the Defense agencies this morning. We appreciate all the

folks. We have Mr. Gary Robinson, who is U.S. Special Operations

Command; Brig. Gen. Robert Claypool, Defense Medical Facility

Office; Fred Baillie, the Defense Logistics Agency; and Bruce

Carnes, Defense Finance and Accounting Service.

We welcome and appreciate you being here today, and we look

forward to hearing your testimony. I think it will provide the subcommittee an overview on your respective agencies’ proposed 1998

budget. I ask again if your statements could be shortened up. Your

full statement will be included in the record for everybody. So I ask

you to keep those statements a little bit on the short side.

We have a vote coming up or scheduled for 10:30, and we will

try to get as much done here as we possibly can.

Mr. Robinson, if we could hear from you and if you would proceed, please. Thank you.

STATEMENT OF GARY W. ROBINSON

Mr. ROBINSON. Thank you, Senator. Mr. Chairman, members of

the committee, I am pleased to discuss the U.S. Special Operations

Command 1998 military——

Senator BURNS. You might want to pull that microphone a little

closer to you. Thank you.

Mr. ROBINSON [continuing]. The fiscal year 1998 military construction budget request. Our Milcon program has a direct positive

impact on our training and operational capabilities. The highly specialized skills and equipment required to successfully execute a full
102

spectrum of special operations missions also demand a modern

array of operations, training, maintenance and storage facilities.

The current program is planned to provide facilities that will improve this force capability, increase the readiness of complex weapons systems, and support our diverse training needs. Our Milcon budget request for fiscal year 1998 is $29.8 million

for seven major construction projects, plus our required unspecified

minor construction and planning and design funds.

PREPARED STATEMENT

This committee’s support in prior years has greatly improved our

operations capability. We look forward to working with your committee to acquire facilities needed by USSOCOM to perform our

missions and ensure we have a fully trained and capable force in

the future.

Thank you.

[The statement follows:]

PREPARED STATEMENT OF GARY W. ROBINSON

INTRODUCTION

Mr. Chairman and members of the committee, I am pleased to present the United

States Special Operations Command (USSOCOM) fiscal year 1998 Military Construction (MILCON) submittal. Our MILCON program has a direct, positive impact

on our training and operational capabilities. The highly specialized skills and equipment required to successfully execute the full spectrum of special operations missions also demand a modern array of operations, training, maintenance and storage

facilities.

PURPOSE

The long term goal of the USSOCOM facilities program, of which MILCON is one

part, is to have all units and individuals working and living in adequate facilities

in order to maximize training and operations capabilities. Facilities requirements

are generated by the need to support new weapons systems, force structure, and

missions or by the need to modernize or replace inadequate facilities. The current

program is planned to provide facilities that will improve force capability, increase

the readiness of complex weapons systems, and support diverse training needs. In

particular, the program provides facilities to support new special operations systems, such as the Mark V Special Operations Craft and the AC–130U (Gunship).

It also provides facilities for the 160th Special Operations Aviation Regiment where

no facilities exist and replaces substandard facilities for the 75th Ranger Regiment.

These facilities will accommodate an improved and expanded special operations

forces (SOF) capability. All of the individual construction requests are part of a component master construction plan. Component MILCON projects are integrated at

the USSOCOM level to ensure that the most needed projects are constructed at the

right place, on time, and with the highest return on investment.

Your support in prior years has aided immeasurably in improving our operations

capability. We look forward to working with your committee to acquire facilities

needed by USSOCOM to perform its mission and ensure we have a fully trained

and capable force in the future.

MILCON PROGRAM

The seven military construction projects in this program include two projects for

the Air Force Special Operations Command, three for the Army Special Operations

Command, one for the Naval Special Warfare Command and one for the Joint Special Operations Command. Included in the seven are two projects totaling $3.05 million designed to improve the resistance of our facilities against terrorist attack. Our

MILCON budget request for fiscal year 1998 totals $37.6 million: $29.8 million for

major construction, $3.7 million for unspecified minor construction, and $4.1 million

for planning and design. Approximately 45 percent of the construction supports new

mission requirements, and 55 percent support current mission requirements. This

budget request recognizes the need to balance construction requirements against ac-
103

quisition programs and the high state of readiness required of all special operations

forces.

Following is a brief description of each of the seven projects listed by state:

Waterfront operations support facility NAS North Island, CA—$7.4 million

This project constructs a new building to house operations, warehouse, maintenance/repair, armory and administrative requirements for the new Mark V Special

Operations Craft. The Mark V provides a medium range insertion and extraction

capability for Special Operations personnel in a low to medium threat environment.

There are currently no facilities to accommodate this new program.

Squadron operations/AMU, AC–130 Hurlburt Field, FL—$6.1 million

Construction provides a squadron operations facility and aircraft maintenance

unit for thirteen AC–130U model Gunships and 551 personnel. This facility provides

space for planning and briefing combat crews and for directing flight and maintenance operations. The commander and his staff require administrative space to plan

and conduct mission briefings and related command activities. Space to maintain,

store and issue flying clothing and maintenance equipment is also required. The

squadron is currently accommodated in temporary leased modular facilities pending

construction of this project.

Perimeter fence/vehicle barrier system Hurlburt Field, FL—$2.45 million

This project will provide a security fence around the flightline and upgrade the

existing boundary fence. A concrete ditch will prevent vehicle entry to the airfield

to prevent access to combat aircraft aprons except at authorized locations. Pipe

bollards and movable concrete barriers will channelize and slow traffic at base entry

gates.

Battalion and company operations facility Fort Benning, GA—$9.81 million

Construct a battalion command and control facility with classrooms, company operations and administrative facilities for the 3rd Battalion, 75th Ranger Regiment.

This battalion occupies Korean War era deteriorated barracks buildings that are inadequate for battalion operations. The facility layout is inefficient and impedes

smooth synchronized operations. The facilities’ heating, ventilation and air conditioning systems are inadequate and failing. Soldiers’ workplace quality of life is substandard. This project will provide a consolidated, permanent, adequate command

control facility capable of supporting sophisticated intelligence and communications

systems.

Company operations facility Hunter Army Airfield, GA—$2.5 million

This project will provide a permanent adequate facility to support the operations,

administration, and supply functions for the headquarters, two flight companies and

a maintenance company of the 3rd Battalion of the 160th Special Operations Aviation Regiment. Requirements include company operations and briefing functions,

company supply, NBC personnel equipment area, arms room, storage for individual

equipment and communications work areas. The unit currently uses space within

the aircraft maintenance hangar. Functions that would normally occupy hangar

space are located in WWII wood buildings remote from their aircraft maintenance

responsibilities. This dispersion and improper use of maintenance space causes inefficiencies and impedes smooth and synchronized operations.

Electronics maintenance facility Fort Bragg, NC—$1.0 million

Constructs an electronics maintenance facility to support mission needs. This

project is required to provide permanent and adequate space to receive, maintain

and issue multi-million dollar electronic systems and equipment. The new facility

will provide proper climate control and security. Currently, the electronics maintenance functions are being conducted in two 2,400 square foot temporary metal buildings. These facilities lack adequate power, proper security and environmental controls.

Security upgrades Fort Bragg, NC—$0.5 million

Project will install mylar window film (shatter protection) on various facilities.

Mylar window film is designed to minimize the impact of flying glass and debris

in the event of a terrorist attack. Facilities included in this project generally house

150 to 450 military and civilian employees and are located close to uncontrolled high

volume traffic areas and parking lots. Many of the Command’s facilities were constructed and sited prior to the establishment of government-wide standards for security. As a result, these facilities have minimal setback and are located on or near

uncontrolled high volume vehicle traffic areas. Since Fort Bragg is an ‘‘open installation,’’ facilities are extremely vulnerable to random terrorists acts. Installation of
104

mylar window film will provide a quick method to minimize injury and loss of life

in the event of an attack.

SUMMARY

Our proposed fiscal year 1998 MILCON budget for facility investments will significantly improve the operational and training capability of special operations

forces. Approval of this program is essential to ensure the continued development

of our nation’s Special Operations Forces.

STATEMENT OF BRIG. GEN. ROBERT G. CLAYPOOL

Senator BURNS. General Robert Claypool, Defense Medical Facility Office.

General CLAYPOOL. Thank you, Mr. Chairman. I am pleased to

be here before this committee and I would like to state that if I develop a cough during the middle of my testimony I indulge your

apologies. I feel quite well, but it is an occupational hazard being

a grandfather, so I get these coughing spells.

Senator BURNS. I was going to get even with you. I have a

daughter graduating medical school this June. I was going to send

her to the Army and get even with you. [Laughter.]

General CLAYPOOL. On behalf of Dr. Martin, the Acting Assistant

Secretary of Defense for Health Affairs, I thank you for this opportunity. I would like to address the composition of our fiscal year

1998 program.

Fiscal year 1998 contains a budget request for 14 projects, unspecified construction, planning and design, for a total appropriation request of $156.425 million.

We are requesting $20 million for the last phase of the Walter

Reed Army Institute of Research at Forest Glen, MD. This project

was fully authorized in previous budget submissions.

And a project at Fort Detrick, MD, for $4,650,000, funded with

base realignment and closure funds to accommodate the Fort

Detrick beneficiaries and mitigate the impact of migration from

beneficiaries from the closure of Fort Ritchie. The BRAC portion of

this project is an additional $650,000.

My testimony includes, and at the request of your instruction,

sir, I will keep it short, and the testimony will include the six clinics that we are submitting for this year, a total of six clinics, and

a Naval Undersea Medical Institute addition/alteration at New

London, CT, which will renovate the current facility into an adequate and properly configured training facility to present the curriculum in a centralized facility that provides the kind of learning

environment that is necessary.

The environmental and preventive medicine unit at San Diego

Naval Air Station will consolidate operations from the North Island

and Mare Island units into San Diego.

We are also requesting $3 million for a blood donor center at

Lackland Air Force Base in Texas and this new blood donor center

is necessary to meet the increasing demand for blood products from

Wilford Hall Medical Center, the Audie L. Murphy VA, and the

Armed Forces Whole Blood Program.

The Department intends to improve the clinical capability of 17

small inpatient facilities by reengineering from ones that provide

low concentrations of inpatient care to facilities that provide im-
105

proved access to ambulatory care for our beneficiaries and ensure

that care is rendered of the highest quality.

Two ambulatory health care centers are being rightsized from

hospitals. The first is McGuire Air Force Base, the second is the

ambulatory health care center at Robins Air Force Base in Georgia.

We are also requesting $2,750,000 for a composite medical facility alteration at Wright-Patterson Air Force Base to alleviate overcrowding and inefficiencies, and we also have a request for unspecified minor construction.

There are two projects we are requesting authorization for only,

sir. We are not seeking appropriation for an aeromedical clinic at

Andersen Air Force Base and for an occupational health clinic at

Tinker AFB, OK. We have submitted language to utilize the dollars

from the BRAC-directed cancellation of a fiscal year 1995 funded

McClellan project, which was a life safety upgrade project, and we

intend to use those dollars to finance the Andersen and Tinker

projects. We ask for your support on this action.

For fiscal year 1999, we are asking for $256,959,000 for 24

projects, as well as $12 million for unspecified minor construction

and $18.8 million for planning and design.

A few of the details include funding of $34,954,000 for the final

phase of the Portsmouth Naval Hospital and, as I think you are

aware, sir, the draft GAO report which had delayed this for 1 year

has suggested and supported fully renovating building 215 as a

practical option.

One of our projects is conjunctively funded with base realignment

and closure funds. The alteration at Bremerton Naval Hospital

modifies a facility built in 1979. Our request for construction is $30

million, and the BRAC portion of this at an additional $11 million

has been canceled due to lack of projected workload from homeporting.

We also request funds for two hospital addition/alteration

projects—Pensacola Naval Air Station Hospital in Florida for

$20,400,000 to construct an outpatient clinic; and the Royal Air

Force Lakenheath Hospital annex replacement to support the RAF

Lakenheath/RAF Mildenhall communities for $10 million. The current annex is an old Quonset hut construction.

There are a total of 11 clinics included in the 1999 budget request. One is at Moody AFB, GA, for $11 million; one at Fort Stewart, GA, for $10,400,000; and two at Camp Pendleton Marine Corps

Base, CA. There is a fifth clinic at Barksdale Air Force Base which

will consolidate flight medicine, pediatrics, and immunizations clinics.

The sixth clinic is a medical/dental clinic for Grand Forks Air

Force Base; the seventh clinic is an aerospace medical clinic at Edwards Air Force Base, and the eighth clinic is a clinic replacement

at McChord Air Force Base in Washington to provide outpatient

emergency care to flight crews and other military personnel.

The ninth clinic is a health clinic addition at Carlisle, PA; the

tenth is an occupational health clinic and bioenvironmental engineering laboratory facility at Wright-Patterson AFB, OH. And the

last clinic is an $11 million primary care clinic to provide primary

care in the COSCOM area at Fort Hood.
106

We are also requesting three warehouse projects, to include the

44th Medical Brigade war reserve materiel warehouse at Fort

Bragg, a second one in Yongsan, Korea, and a third war readiness

materiel warehouse at Holloman Air Force Base.

Our program contains a blood donor center at Fort Hood to support the armed services blood program there. Our program also includes a physiological support division addition/alteration project at

Beale AFB, CA.

We are requesting three instruction facilities in 1999. The first

is the medical applied instruction facility at Fort Sam Houston at

a cost of $23 million to renovate the old beach pavilion. A second

is an aviation physiological training facility at Kanoehe Marine

Corps Station in Hawaii. And the third is an addition at Great

Lakes Naval Station for $7 million.

The last request is $700,000 for a bioenvironmental engineering

facility replacement at Kessler Air Force Base.

PREPARED STATEMENT

This concludes my overview of and a condensed version of my

statement and I thank you for the opportunity to present our budget and welcome any questions.

[The statement follows:]

PREPARED STATEMENT OF BRIG. GEN. ROBERT G. CLAYPOOL

Thank you, Mr. Chairman. I am Brigadier General Robert G. Claypool, Deputy

Assistant Secretary of Defense (Health Affairs) for Health Services Operations and

Readiness. I would like to submit a written statement for the record and open with

some brief remarks.

Mr. Chairman and Members of the Subcommittee: On behalf of Dr. Edward Martin, the Acting Assistant Secretary of Defense for Health Affairs (AASD(HA)), I

thank you for the opportunity to present the Department of Defense’s fiscal year

1998 and fiscal year 1999 Medical Military Construction Program budget request.

First I would like to address the composition of our fiscal year 1998 program.

FISCAL YEAR 1998

Fiscal year 1998 contains a budget request for 14 projects, Unspecified Minor Construction, and Planning and Design funds for a total appropriation request of

$156,425,000.

We are requesting $20,000,000 for the last phase of the Walter Reed Army Institute of Research at Forest Glen, Maryland. This project was fully authorized in previous budget submissions. The project at Fort Detrick, Maryland for $4,650,000 is

conjunctively funded with Base Realignment and Closure funds (BRAC) to provide

a Health/Dental Clinic replacement for the Fort Detrick beneficiaries and mitigate

the impact of migration of beneficiaries resulting from the closure of Fort Ritchie.

The BRAC portion of this project is an additional $650,000.

Six additional clinics are included in our fiscal year 1998 request. The Troop Medical Clinic at Fort Campbell, Kentucky, at a cost of $13,600,000 will consolidate six

old, widely disbursed, Korean War vintage clinics.

The second clinic is a Medical/Dental clinic located at Everett Naval Station,

Washington that will replace seven temporary portable modular facilities put in

place in 1994 to support the new homeport mission which moved from the Sand

Point Base in fiscal year 1994. The cost for this replacement project is $7,500,000.

The third clinic is a Medical Clinic Addition for the Naval Aerospace Medical Institute (NAMI), at Pensacola Naval Air Station, Florida at a cost of $2,750,000. It

will provide clinical and training space.

The fourth clinic is a Medical/Dental Clinic Replacement at Quantico Marine

Corps Base, Virginia at a cost of $19,000,000. It will provide primary medical/dental

care to the eligible beneficiary population in and around Marine Corps Base,

Quantico.
107

The fifth clinic is an outpatient Clinic Addition to the existing clinic adjacent to

the main hospital at Hill Air Force Base, Utah for $3,100,000. It will replace a

Flight Medicine Clinic currently housed in a modular building.

Our last clinic in this program is a Dental Clinic Replacement at Holloman Air

Force Base, New Mexico. The clinic will replace an old, deteriorating and obsolete

facility that is functionally inadequate and undersized for the delivery of modern

dental care. We are seeking $3,000,000 for this facility.

The Naval Undersea Medical Institute Addition/Alteration, at Naval Sub Base

New London, Connecticut will renovate the current facility into an adequate and

properly configured training facility to present curriculum in a centralized facility

that provides a learning environment conducive to training officers and corpsmen

in undersea medicine and radiation health. We are requesting $2,300,000 for this

project.

The Environmental and Preventive Medicine Unit Addition/Alteration at San

Diego Naval Air Station, California will consolidate operations from the North Island and Mare Island Units into the San Diego unit. The existing building will receive alterations and an addition at a cost of $2,100,000.

We are requesting $3,000,000 for a Blood Donor Center at Lackland Air Force

Base, Texas. A new Blood Donor Center is required to meet the increasing demand

for blood products from Wilford Hall Medical Center, Audie L. Murphy Veterans

Hospital, and the Armed Forces Whole Blood Program.

The Department intends to improve the clinical capability of 17 small inpatient

facilities by re-engineering from ones that provide low concentrations of inpatient

care to facilities that provide improved access to ambulatory care for our beneficiaries and ensure that care rendered is of the highest quality. The goals of the

initiative are to:

(1) Improve beneficiary access.—The most common beneficiary complaint is inadequate access to ambulatory care. Staff and physical plant currently used for inefficient inpatient care will be used to significantly increase ambulatory capability.

(2) Maintain quality.—Low inpatient loads result in challenges for providers to

maintain skills.

(3) Efficient use of resources.—Small inpatient facilities are inefficient users of resources due to the intensity of inpatient staffing requirements and overhead.

(4) Maintain readiness.—The expansion beds provided by these hospitals are excess to wartime requirements. Referral of some inpatient work to military tertiary

care facilities will provide increased physician experience in the appropriate clinical

setting that will receive wartime casualties.

Two Ambulatory Health Care Centers being rightsized from hospitals are requested in this program. The first is a replacement facility at McGuire Air Force

Base, New Jersey for $35,217,000. The second is an Ambulatory Health Care Center

Addition/Alteration at Robins Air Force Base, Georgia, for $19,000,000.

We are also requesting $2,750,000 for a Composite Medical Facility Alteration at

Wright-Patterson Air Force Base, Ohio to alleviate overcrowding and inefficiencies

in providing medical services to the Air Force Material Command and eligible beneficiaries of the base.

In addition to our specific line item projects, we are requesting $7,958,000 for Unspecified Minor Construction and $10,500,000 for planning and design efforts in our

fiscal year 1998 program.

There are two projects for which we are requesting authorization only. We are not

seeking appropriation for an Aeromedical Clinic Addition at Andersen Air Force

Base, Guam for $3,700,000 and an Occupational Health Clinic Replacement at Tinker Air Force Base, Oklahoma for $6,500,000. We have submitted language to utilize the dollars from the BRAC directed cancellation of the fiscal year 1995 funded

McClellan Air Force Base, California, Life Safety Upgrade project to fund the Andersen and Tinker projects. I ask for your support on this action.

FISCAL YEAR 1999

Our fiscal year 1999 request seeks $256,959,000 in appropriation for 24 projects

as well as $12,005,000 for Unspecified Minor Construction and $18,800,000 for planning and design. I would like to provide a few details on our projects in this year.

We seek funding of $34,954,000 for the final phase of the Portsmouth Naval Hospital, Virginia project. Congress has appropriated $316,400,000 to date for this

project. This project requested no funding in fiscal year 1998 due to an ongoing GAO

study. We do not anticipate any changes from the GAO study that will alter the

planning of this project. We continue to ask your support for this important teaching

hospital which serves the largest population in the Navy.
108

One of our projects is conjunctively funded with Base Realignment and Closure

(BRAC) funds. The Hospital Addition/Alteration project at Bremerton Naval Hospital, Washington, modifies a facility built in 1979. Our request for this construction

is $30,000,000. The BRAC portion of this project is an additional $11,000,000.

We also request funds for two hospital addition/alteration projects in fiscal year

1999. The Pensacola Naval Air Station, Florida Hospital Addition/Alteration requires $20,400,000 to construct an Outpatient Clinic addition and to renovate a

major portion of the existing hospital. Companion Operations and Maintenance

projects will complete the renovation. Royal Air Force (RAF) Lakenheath requires

a Hospital Annex Replacement to support the RAF Lakenheath/RAF Mildenhall

communities for $10,000,000. The current annex is a group of primarily World War

II era ‘‘Quonset huts’’ connected together with a common corridor.

Eleven additional clinics are included in our fiscal year 1999 budget request. A

CMF/Alteration and a Dental Clinic addition is required at Moody Air Force Base,

Georgia at a cost of $11,000,000.

Three Medical/Dental Clinic Replacements are requested, one at Fort Stewart,

Georgia, for $10,400,000, and two at Camp Pendleton Marine Corps Base, California, Margarita and San Mateo for $3,050,000 each.

The fifth clinic, an addition/alteration is sought at Barksdale Air Force Base, Louisiana. This clinic will consolidate the operations of the Flight Medicine, Pediatrics,

and Immunization clinics which are located in separate buildings throughout the

base. We ask $3,450,000 for this clinic.

The sixth clinic, a Medical/Dental Clinic Addition/Alteration is required for Grand

Forks Air Force Base, North Dakota to provide an adequate aeromedical service facility and a replacement dental clinic for $5,500,000.

The seventh clinic, an Aerospace Medical Clinic Addition/Alteration is required at

Edwards Air Force Base, California to provide adequate space for several Aerospace

medical clinic functions: Flight Medicine, Physical Exams, Public Health, Bioenvironmental Engineering, and Optometry at a cost of $6,000,000.

The eighth clinic is a Clinic Replacement at McChord Air Force Base, Washington

to provide outpatient and emergency care to flight crews, other military personnel,

and eligible beneficiaries for a cost of $17,500,000.

The ninth clinic is a Health Clinic Addition required at Carlisle Barracks, Pennsylvania at a cost of $4,550,000 to expand the existing health care clinic.

The tenth clinic is an Occupational Health Clinic/Bioenvironmental Engineering

Laboratory Replacement facility at Wright-Patterson Air Force Base, Ohio. We seek

$3,600,000 for this facility.

The last clinic is an $11,000,000 Primary Care Clinic to provide family practice

health services to active duty personnel assigned to the COSCOM area of Fort Hood,

Texas and their eligible beneficiaries. This project also consolidates functions from

a troop medical clinic which is located at Hood Army Airfield.

We are also requesting funding for three warehouse projects. The first is a 44th

Medical Brigade War Reserve Materiel Warehouse for $6,500,000 at Fort Bragg,

North Carolina to provide a consolidated humidity controlled facility for storage of

medical supplies and other medical logistics operations.

The second is a Medical Supply Warehouse Replacement at Yongsan, Korea for

$2,800,000 to provide an adequate receiving, storage and issuing facility with a climate controlled environment for the holding of medical equipment and for equipment that requires technical review by medical maintenance personnel prior to issuing to the customer.

The third is a War Readiness Material Warehouse at Holloman Air Force Base,

New Mexico at a cost of $1,250,000 to accommodate the peacetime storage of propositioned medical war readiness material resources.

Our program contains a Blood Donor Center at Fort Hood, Texas for $3,100,000

to support the Armed Services Blood program to provide blood components to military medical treatment facilities in the continental United States, Panama, Hawaii,

and Alaska.

The program includes a Physiological Support Division Addition/Alteration project

at Beale Air Force Base, California for $3,350,000 to modify a 30 year old facility

to provide adequately sized and properly configured space to meet the Aerospace

Medicine Physiological Support division requirements.

We are requesting three instruction facilities in fiscal year 1999. The first is the

Medical Applied Instruction Facility Alteration project at Fort Sam Houston, Texas

at a cost of $23,100,000. This project is required to provide consolidated training facilities for the Army Medical Department Center and School (AMEDDC&S) to train

Army, Navy, Air Force, Army Reserve, Navy Reserve, National Guard, and foreign

national students.
109

The second project is an Aviation Physiological Training Facility at Kaneohe Marine Corps Air Station, Hawaii for $3,800,000 required to meet all of the aviation

physiological training needs of the Department of Defense aviation personnel in the

mid-Pacific.

The third project is the Hospitalman ‘‘A’’ School Addition at Great Lakes Naval

Station, Illinois for $7,100,000. This project will provide adequate and properly configured training facilities to present curricula in a centralized facility that provides

a learning environment conducive to Navy Hospitalman ‘‘A’’ School training in one

location.

The last request is $700,000 for an Bioenvironmental Engineering Facility Replacement at Keesler Air Force Base, Louisiana to consolidate all of the Bioenvironmental Engineering functions necessary to support the industrial function of the

base.

CONCLUSION

This concludes my overview statement of the fiscal year 1998–99 medical military

construction budget request. The programs stand as a testament to our commitment

to provide quality medical care to the men and women of our Armed Forces and

to maintain our medical readiness. I thank you for the opportunity to present our

budget and I welcome your questions on any aspect of the budget before you now.

STATEMENT OF FREDERICK N. BAILLIE

Senator BURNS. Thank you very much, General Claypool.

The Executive Director of the Defense Logistics Agency, Frederick Baillie. You know, I want to add a little note here. There

were some of us who really did not appreciate what logistics do if

you were not here during the time of Desert Shield and Storm. I

really appreciate, because this is one little agency that sits down

there at the end of the corridor and does not get much acclaim. But

I want to sincerely thank you for what you do, and I want you to

know that this committee takes your work very seriously because

you are a key. We do not do anything until logistics has been run

properly.

So I want to just say that publicly on the work that you do and

how important you are. Thank you for coming this morning.

Mr. BAILLIE. Thank you, Mr. Chairman. Mr. Chairman, Senator

Murray, the Defense Logistics Agency’s fiscal year 1998 military

construction request is $141.8 million for 12 projects.

Our program this year continues the tasks started in fiscal year

1996 of integrating the management of bulk petroleum for the Department of Defense. Seven of the projects we are requesting are

fuel related and support the services’ operational requirements.

These projects include fuel receipt and storage facilities at several

military installations as well as a hydrant fuel system project to

support strategic mobility.

The projects we are proposing will increase the mission responsiveness, eliminate environmental hazards, and improve health,

safety, and the quality of working conditions at our activities. A

large portion of this request, 93 percent, to be exact, is for projects

to replace old and deteriorated facilities. At critical military installations we propose to replace fuel storage tanks and piping systems

that are more than 40 years old, cannot meet current operational

requirements. Due to their condition, these facilities also pose a serious environmental hazard.

Our program also includes the second phase of a hydrant fuel

system project to improve the Department of Defense’s strategic

inroute fueling capability.
110

At two of our most active distribution depots we plan to replace

inefficient World War I-era warehouses with automated warehouses to consolidate operations and improve productivity. We will

also modify an existing warehouse to refurbish gas cylinders to recover and recycle ozone-depleting substances within the Department.

Further, we are continuing our program to construct hazardous

waste storage facilities that conform with the requirements of the

Resource Conservation and Recovery Act.

Finally, we are requesting funds to build a child development

center at our colocated supply center and depot in Richmond, VA.

PREPARED STATEMENT

In summary, our military construction request reflects our efforts

to support military readiness, protect the environment, and provide

safe and healthful working conditions for our military and civilian

work force. We believe these are worthy investments with significant benefits.

Mr. Chairman, this concludes my oral statement. Thank you for

asking me to appear today.

[The statement follows:]

PREPARED STATEMENT OF FREDERICK N. BAILLIE

Mr. Chairman, and members of the Subcommittee: I am Frederick N. Baillie, Executive Director of Business Management, Materiel Management business area at

the Defense Logistics Agency (DLA). I am pleased to have the opportunity to provide

information about DLA’s fiscal year 1998 Military Construction request.

MILITARY CONSTRUCTION REQUEST

Our total Military Construction request for fiscal year 1998 is $141,831,000. The

program consists of 12 projects that will increase mission responsiveness, eliminate

environmental hazards, and improve facility readiness at our activities in support

of the Agency’s missions. This request includes: —$78.8 million for replacing or constructing additional fuel storage tanks, fuel unloading facilities, direct refueling systems, and fuel pipelines at six Air Force

and Navy bases. —$14.4 million for completing the final phase of a project to replace a deteriorated, obsolete hydrant fuel system at a critical Air Force base. —$35.2 million for replacing two deteriorated World War I-era warehouses with

an addition to an existing distribution center at the DLA distribution depot in

New Cumberland, Pennsylvania, and the construction of one high-bay general

purpose warehouse at the DLA distribution depot in Norfolk, Virginia. The request also includes the conversion of an existing warehouse for processing cylinders for recycled ozone depleting substances at our distribution depot in Richmond, Virginia. —$2.1 million for constructing a new child development center at DLA’s Defense

Supply Center, Richmond, Virginia. —$11.3 million for constructing conforming storage facilities for the disposal of

DOD generated hazardous waste at various DLA sites.

NEW FUEL MISSION RESPONSIBILITIES

In fiscal year 1996, DLA assumed new responsibilities for programming fuel-related MILCON projects for bulk and intermediate fuel storage and hydrant fuel systems at the Services’ installations. The Office of the Secretary of Defense approved

this responsibility transfer from the Services in fiscal year 1992 in its Plan for the

Integrated Management of Bulk Petroleum. In carrying out this responsibility, we

are requesting approval of seven fuel-related projects at $93.2 million, which is 66

percent of our total program request. Four of these projects (at Elmendorf AFB, AK;

Andersen AFB, Guam; Westover Air Reserve Base, MA; and, Moron Air Base,

Spain) are priorities of the Joint Chiefs of Staff since the projects will provide critical fuels infrastructure to support strategic en route mobility. The remaining three
111

projects (at NAS Jacksonville, FL; Truax Field, WI; and Craney Island, VA) are necessary to meet environmental compliance and operational requirements.

Fuel Receipt and Storage Facilities

Our proposed investment of $78.7 million is to replace or add fuel storage, distribution, and piping systems at six locations. These projects will overcome shortfalls affecting support of the bases’ missions and eliminate potential environmental

liabilities.

At Elmendorf AFB, AK, we will construct a $21.7 million fuel storage facility. It

will replace existing on-base bulk fuel storage tanks that have failed or are failing

due to their age and mechanical condition. Recent tank failures account for a loss

of 63 percent of the base’s storage capacity, and have forced the Agency to store

some of the base’s critical war-reserve fuel stock at other locations in the northwest

Pacific. This new facility will allow the base to consolidate its war-reserve and

peacetime fuel stocks in storage tanks that comply with state and Federal environmental regulations. Six aboveground storage tanks will be demolished as part of this

project.

At Andersen AFB, Guam, we will replace the two existing 200 millimeter (mm) aboveground crosscountry pipelines with one underground 250 mm pipeline for $16

million to meet peacetime and contingency operations. Currently, the base receives

its entire supply of jet fuel from one of these two existing pipelines, which are more

than 40 years old and are severely corroded. One pipeline has been removed from

service due to severe deterioration. The new pipeline and improvements to the main

transfer pumping station are necessary to deliver fuel at the required rate to support Andersen AFB and to protect the environment from fuel contamination caused

by a potential rupture of the existing pipeline. The new pipeline will include features to protect it from the harsh environment and will employ a leak detection system. The existing pipelines will be demolished. A $4.7 million project at Westover Air Reserve Base, MA, will provide for the construction of a jet fuel storage complex to support operations of assigned C–5A aircraft and other transient aircraft. Westover lacks onbase bulk fuel storage to support strategic en route mobility operations. Commercial storage and pipeline systems are too small to meet fuel requirements during contingencies.

At Craney Island, VA, we will provide aboveground fuel storage to replace deteriorated underground bulk storage tanks that have been in service for more than 50

years. Our proposed $22.1 million replacement project will provide the tanks, spill

containment structures, piping, and mechanical controls to meet current environmental standards and reduce the potential for costly fuelspill cleanups. The project

includes the decommissioning of 17 existing underground tanks.

At Naval Air Station, Jacksonville, FL, we will replace 11 old, deteriorated under- ground storage tanks (UST) with three new aboveground storage tanks. This $9.8

million project will fulfill an environmental compliance consent agreement with the

State of Florida to take these 40 year old UST’s out of service by December 31,

2000.

At Truax Field, WI, we propose a $4.5 million project to construct a jet fuel storage complex to replace the existing 40 year old underground storage tanks. This

project is necessary to meet environmental compliance requirements. The facility

supports assigned units of the Wisconsin Air National Guard. The existing facility

does not meet safety regulations, environmental statutes, or operational requirements, and is located in an environmentally contaminated area that must be remediated.

Hydrant Fuel Systems

We propose to complete the final phase of the replacement of the hydrant fuel systems at Moron Air Base, Spain. Phase 1 of this project was approved in the DLA

fiscal year 1997 MILCON program for $13 million. The existing system, built in the

1950’s, is technologically obsolete and incapable of meeting current wide-bodied aircraft refueling requirements. Because this system is obsolete, repair parts are no

longer available; they must be individually fabricated or salvaged from other inoperable systems. The $14.4 million project provides a new hydrant fuel system, storage

tanks, and supporting facilities constructed to current standards. This project is not

eligible at this time for NATO Security Investment Program funding.

DISTRIBUTION AND SUPPLY CENTER INVESTMENTS

Distribution Depots

We propose to invest $35.2 million to replace or modify warehouse facilities at

three locations. These projects will eliminate inefficiencies with the use of aging lowbay facilities by allowing us to consolidate and mechanize storage and distribution.
112

At the Defense Distribution Depot in New Cumberland, PA, we propose a $15.5

million addition to DLA’s Eastern Distribution Center. This high-bay facility will

provide additional pallet rack storage to enhance the automated throughput capabilities of one of DLA’s primary distribution sites for the storage of highly active

stock. The warehouse addition of 6,850 square meters (73,733 square feet) replaces

one World War I-era warehouse totaling more than 18,900 square meters (203,500

square feet). This wooden warehouse, now storing some of this fast moving stock,

will be demolished as part of this project.

A new general purpose warehouse will replace a deteriorated warehouse built in 1939 at the Defense Distribution Depot in Norfolk, VA. The proposed $16.6 million

warehouse will have pier-side accessibility for the receipt, storage, packaging, and

distribution of nonperishable materiel to ships berthed at the Norfolk Naval Base.

This project supports DLA’s plan to consolidate depot storage and vacate by fiscal

year 2001 more than 260,000 square meters (2.8 million square feet) of storage

space in aging warehouses remotely located from the depot’s primary customers at

the pier.

At the Defense Distribution Depot in Richmond, VA, we propose to convert an existing warehouse to a processing center for the refurbishment of steel gas cylinders

and the recycling of ozone depleting substances (ODS). This facility will provide

clean, refurbished cylinders to the Services to recover ODS from worldwide DOD locations and will directly support the recycling of these substances within the Department. This depot is the Department’s storage site for the reserve of this material that is critical to the national defense.

Supply Centers

Our Child Development Center project will provide a facility for 99 children at

the Defense Supply Center, Richmond, VA (DSCR), and the collocated Defense Distribution Depot Richmond. There are no facilities on or near DSCR that can be used

to satisfy the needs of the 3,400 military and civilian employees at this location. The

estimated cost of this center is $2.1 million.

Conforming Storage

Since 1980, DOD has tasked DLA with disposing hazardous waste generated by

DOD components. Before disposal, DLA must store this hazardous waste in conformance with federal and state environmental regulations implementing the Resource Conservation and Recovery Act (RCRA). In fiscal year 1998 we are requesting $11.3 million to build conforming storage facilities at several of our Defense Reutilization and Marketing Offices to comply with these environmental requirements.

We will proceed with those projects that receive RCRA permits from state regulators—a process that is lengthy and somewhat unpredictable. Consequently, as in

prior years, we are requesting single-line-item funding for this program so that we

may award projects as we receive these permits. We will continue to notify the appropriate committees before construction of each project.

SUMMARY

DLA’s Military Construction request reflects our efforts to support military readiness, protect the environment, and provide safe working conditions for our military

and civilian work force. Seven of the 12 projects provide vital fuel facilities to support the Services. The remaining five are needed to meet the Agency’s other mission

requirements and provide quality of life facilities to sustain operations into the 21st

Century. I believe these are worthy investments with significant benefits.

Thank you, Mr. Chairman, for this opportunity to present our fiscal year 1998 requirements.

STATEMENT OF BRUCE M. CARNES

Senator BURNS. Thank you, thank you.

Bruce Carnes, Defense Finance and Accounting Service. Whatever accounting you use is foreign to me. [Laughter.]

If there is one thing in this Government, it is the accounting system. Thank you for coming this morning.

Mr. CARNES. Thank you, Mr. Chairman, Senator Murray. Thank

you for the opportunity to talk about the Defense Finance and Accounting Service [DFAS] request for fiscal year 1998 Milcon funds.

Senator, we are asking for funds for four projects totaling $55

million. One of the projects is for the final tranche of funds to com-
113

plete our Columbus center. We have five major centers. This funding, $24 million, will complete the construction of that building.

In addition, we are asking for approximately $31 million spread

across three operating locations, in essence regional offices for

DFAS.

I will just add one more word on that, if I could, Mr. Chairman.

We are closing 330 field level installation-based finance and accounting offices. We have closed two-thirds of those. By the end of

this year we will have closed all but about 25 of those, and will

complete closing all of them within the next 18 months.

PREPARED STATEMENT

We are locating them in these regional operating locations, 21 of

which have been designated by the Deputy Secretary of Defense.

When we finish that, we will save $120 million per year in operating costs. That is an annual savings in operating costs that offsets

the cost of the renovation of some of these regional offices that we

are going into.

Mr. Chairman, that concludes my opening statement. I look forward to your questions.

[The statement follows:]

PREPARED STATEMENT OF BRUCE M. CARNES

Mr. Chairman, members of the committee, thank you for the opportunity to appear before you today to discuss Military Construction requirements for the Defense

Finance and Accounting Service (DFAS) for fiscal year 1998.

The military construction request for the Department of Defense for fiscal year

1998 includes $55.0 million for the Defense Finance and Accounting Service. Of this,

$23.9 million supports Phase III (the final phase) of the construction of the Columbus Center. The renovation of three other Department of Defense facilities into adequate administrative facilities for finance and accounting operations will cost $29.7

million, and the remaining $1.4 million will be used for planning and design.

The Columbus Center project, collocated with the Defense Supply Center, Columbus, is under construction. When it is complete, the building will provide a multistory 580,000 square-foot administrative facility with space for 3,200 people. DFAS

Columbus Center employees will provide contract pay, travel pay, commercial vendor pay, installation accounting, and financial systems design support to the Department of Defense. The move to the new facility is scheduled to begin in June 1999,

and the consolidation of DFAS into the facility should be completed by the end of

fiscal year 1999.

The other three projects we request funding for are renovations to existing buildings. These buildings are up to 65 years old; one is currently configured as a training facility, one is a warehouse, and one is the location for Fleet Electronic Systems

equipment. Renovation of these facilities will provide modern, efficient workplaces

which will accommodate current and emerging technologies such as electronic commerce/electronic data interchange and electronic data management. Renovations at

all sites include the installation of communications lines, increased electrical capacity, and improved heating, air conditioning and ventilation systems, and would

bring the buildings into compliance with current building codes. The interior design

of the facilities emphasizes an open space concept to the greatest extent possible.

This concludes my formal remarks. I have provided a copy of my briefing slides

for the record and am prepared to respond to any question that you might have concerning these projects.
114

DEFENSE FINANCE AND ACCOUNTING SERVICE FISCAL YEAR 1998–99 MILITARY

CONSTRUCTION PROGRAM

DFAS inherit—total

6 Centers

327 Activities

30,500 Employees

In fiscal year 2001

5 Centers

19 Operating locations

21,500 Employees

Fiscal Year 1998 DFAS Milcon Program

[In millions of dollars]

Columbus, OH ............................................................................................... 23.9

Honolulu, HI .................................................................................................. 10.0

Memphis, TN ................................................................................................. 6.9

Norfolk, VA .................................................................................................... 12.8

Planning and Design .................................................................................... 1.4

Total .................................................................................................... 55.0

COLUMBUS CENTER PROJECT—OHIO

Office and support space for Columbus Center and Financial Systems Activity—

Columbus

Replaces 8 buildings and 5 trailers on 2 installations (including Air Force

Plant # 85, 50 year old aircraft manufacturing facility)

48,800 square meters

Co-located with Defense Supply Center Columbus

Funded over 3 years

Total Cost—$80.7 million

Fiscal year 1998—Final phase of $23.9 million

HONOLULU OPERATING LOCATION, PEARL HARBOR, HAWAII

OPLOC

9 DAO’s

304 Personnel

Vendor pay, disbursing, accounting and travel functions

Building 77, Ford Island

2 stories

9,414 SM (101 KSF)

Constructed prior to WWII

Configured for Fleet Electronic Systems Equipment

35 percent Design Complete

$10.0M
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MEMPHIS OPERATING LOCATION, MILLINGTON NAVEL AIR STATION, TENNESSEE

OPLOC

26 Corps of Engineers Finance and Accounting Offices

400 Personnel

Vendor pay, disbursing and accounting functions

Building 787

1 story

10,223 SM (110 KSF)

Configured as special purpose training space

35 percent design complete

$6.9M

NORFOLK OPERATING LOCATION, CINCLANTFLEET, NORFOLK, VIRGINIA

OPLOC

12 DAO’s

515 Personnel

Vendor pay, disbursing, accounting and travel functions

Building Z133

5 stories, renovate 4 floors (21⁄2 DFAS, 11⁄2 Navy)

12,949 SM (139 KSF)

Conjunctively funded project with Navy

Configured as warehouse

Constructed in 1940’s

35 percent Design Complete

$18.9M (DFAS $12.8M, Navy $6.1M)

Fiscal Year 1999 DFAS Milcon Program

[In millions of dollars]

Seaside, CA .................................................................................................... 20.0

Pensacola, FL ................................................................................................ 17.7

Lexington, KY ............................................................................................... 8.6

Planning and Design .................................................................................... 2.2

Total .................................................................................................... 48.5

SEASIDE OPERATING LOCATION, FORT ORD, CALIFORNIA

OPLOC

3 DAO’s

105 Personnel

Vendor pay, accounting and travel functions

Defense Manpower Data Center

400 Personnel

Manpower, personnel, training and financial analysis

Building 4385

8 stories

13,521 SM (146 KSF)

Constructed in 1972, configured as hospital

Installation closed

$20.0M
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PENSACOLA OPERATING LOCATION, PENSACOLA NAVAL AIR STATION, FLORIDA

OPLOC

7 DAO’s

525 Personnel

Civilian pay, vendor pay, accounting and travel functions

Building 603

4 stories

12,077 SM (130 KSF)

Configured as administrative and warehouse space

Constructed late 1930’s

$17.7M

LEXINGTON OPERATING LOCATION, LEXINGTON-BLUE GRASS DEPOT ACTIVITY,

KENTUCKY

Building

1 story

12,367 SM (133 KSF)

Constructed in 1943

Configured as administrative space

Closed installation

35 percent design complete

$8.6M

Senator BURNS. Mr. Carnes, while we are fresh in that conversation, it seems like we have been building on Columbus forever, ever

since I have been here anyway.

Mr. CARNES. Yes, sir.

MOVEMENT OF FINANCIAL DATA

Senator BURNS. Tell me, when you close these different offices,

that information has to get to you from our different locations for

processing in Columbus. In moving that information, do you move

that electronically, or is that done hard copy, courier, or comail?

How do you move that information?

Mr. CARNES. We move it by a variety of means. Obviously, we

are trying to get it all done or as much of it done electronically as

we can. Because that means we will also be able to reduce our

staffing.

When we started that operation, it was all hard copy. We had

miles and miles of hard copy files—just almost impossible to wrestle with. We are imaging some of those documents. We are instituting electronic commerce so that we will have electronic interchange

of data between our customers and ourselves and those organizations that we pay.

Senator BURNS. When you move things electronically, are you

satisfied with the security of moving those documents?

Mr. CARNES. Yes; in fact, we think that the use of electronic

means is far superior to any other means not only because it is

cheaper but because it is more accurate and because there are security provisions built into these systems so that they are probably

more secure. In fact, I feel certain they are more secure than the

present system of hard copy documents.
117

Senator BURNS. The reason I ask you that is because we are

going through quite a debate now on encryption and this type thing

and moving things electronically, and the information that you

move tells us as much about our military capabilities as looking at

a base or looking at hardware or anything else. I just happen to

believe that there are people who have an analytical mind that can

read finance records. Of course, they are a lot smarter than I am,

I tell you that.

Senator Murray.

MEDICAL/DENTAL CLINIC, EVERETT, WA

Senator MURRAY. Thank you, Mr. Chairman. I just have a few

questions for General Claypool.

In your testimony you referred to the medical/dental clinic that

is located at Everett Naval Station in Washington. I have been to

that several times recently, and I can really attest personally to the

need for this facility, so I am really pleased that it is in your budget request.

But I do have a question about that. I have been told by personnel on the ground that this facility is only going to be available for

active duty personnel, and I wanted to know if that is true. If so,

can you provide me with the justification for the decision to exclude

family members, particularly since we have children on-site at the

day care center there—children and family members?

General CLAYPOOL. Senator, I will have to get back to you for the

record on that. I do not know. I made the comment that at some

places some of the troop medical clinics that we have do take care

of active duty service people and health clinics take care of family

members as well. That might be the reason behind that, but the

specifics I will have to provide.

[The information follows:]

The Station has limited space and the site itself is very small. The Station is so

small that full Navy Exchange, Commissary and BOQ are off-site. From the earliest

point of planning the Everett Homeport (1990 or earlier), directions had come from

the Commander Naval Surface, Pacific and Commander Naval Base, Seattle that

Everett would provide active duty medical/dental needs and civilian occupational

health needs only. The Station is a constrained, active industrial base with no civilian traffic unless directly related to ships’ services. The Managed Care Plan for family members and retirees is to contract with a local Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) to provide both routine and

specialty outpatient care, as well as inpatient treatment. TRICARE was implemented in Washington State March 1995. Parking for workers, civilian and military,

is on the periphery of the base. Buildings are sited for walking, not vehicle traffic

(except for industrial vehicles such as forklifts and cranes).

Senator MURRAY. I would really appreciate that.

You also refer in your testimony to several additional Washington State health facilities, including the Milcon project at Naval

Hospital Bremerton. In your testimony you said that this is a fiscal

year 1999 item. Is there any reason we cannot move that up to

1998?

General CLAYPOOL. It is not ready for design yet. That would

prohibit that.
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MEDICAL TRAINING AT MC CHORD AIR FORCE BASE

Senator MURRAY. OK. We also understand that there is a medical training facility request for McChord Air Force Base on the Air

Force accelerated priority list for 1998. Your testimony did not

mention this and I wanted to know if that project is ready for construction in fiscal year 1998 and would you support the inclusion

in the construction budget?

General CLAYPOOL. It is under design right now and not yet

ready for execution.

Senator MURRAY. Thank you.

Senator BURNS. Tell me about the situation at Portsmouth. Evidently we did not plan far enough or should have planned further.

Can you bring us up to date on what is happening there?

General CLAYPOOL. Yes, sir; as I understand it—I have not yet

visited the place and I plan to do that—over the life of the entire

project, health care and health care delivery and how the place is

going to be utilized has changed, and at the present time, under

the managed care environment that we have, there is a need for

administrative kinds of functions to support the managed care program, TRICARE.

So I think to utilize the rest of 215, which is the old medical facility, there are plans to relocate administrative functions, the

TRICARE support office and a naval environmental health center

in that building.

Senator BURNS. Do you have planned downsizing there? Is there

a planned downsizing?

General CLAYPOOL. Sir, no; I think the answer to that is no. We

are reconfiguring in this day and agree of how we do less inpatient,

less overnight kinds of surgery, more same-day surgery, more ambulatory care. So I think the work that is being done there will be

the same. The actual average daily patient load of inpatients, that

likely will change.

DLA CHILD CARE CENTER

Senator BURNS. Mr. Baillie, you might bring us up to date on,

for me, the requirement for a child care center at Richmond, VA,

as contained in this budget request.

Mr. BAILLIE. Yes, sir; right now, Mr. Chairman, there are approximately 3,400 military and civilian employees working at both

the supply center and the distribution depot at Richmond. There

currently are no child care facilities for them at all, neither Government-supported nor in the immediate area surrounding the operation.

What this requires is for our folks to have to go through some

extraordinary means to make arrangements to care for their children, so we believe that this is a project that is definitely needed

to improve the quality of work life at that facility.

Senator BURNS. That is just about all the questions that I have

for this panel. Senator Murray, do you have any followup?

Senator MURRAY. I just have one, if I could. General, I do have

in front of me a memorandum for the record dated March 17, 1997,

from the Air Force with the accelerated priority list that includes

military construction money. The McChord medical training facility
119

is on here. You indicated it is not ready to go forward. If it is not

ready to go forward, why is it on the accelerated priority list?

General CLAYPOOL. I understand, Senator, that it is proposed to

be accelerated in 1999.

Senator MURRAY. It is a letter for fiscal year 1998. It is on the

accelerated priority list.

General CLAYPOOL. We will have to get back to you for the

record.

Senator MURRAY. If you could, I would appreciate it, because

that is a very important one for us.

Thank you.

[The information follows:]

Based on the best information available to us (General Fogleman’s letter to Senator Thurmond dated 13 March 1997), the McChord Training Facility referred to in

the referenced letter is a notional list of unfunded military construction requirements from the Air Force Reserves. These types of facilities do not fall under the

purview of DMFO’s medical military construction program.

ADDITIONAL COMMITTEE QUESTIONS

Senator BURNS. We may have other questions that will arise as

we work our way through this process. We appreciate you coming

this morning. I think other Senators will have questions too. If you

could respond to them and the committee, we will make your statements and those responses part of the record.

[The following questions were not asked at the hearing, but were

submitted to the Agencies for response subsequent to the hearing:]

QUESTIONS SUBMITTED BY SENATOR BURNS

PORTSMOUTH NAVAL HOSPITAL

Question. General Claypool, why did DMFO not perform a comprehensive review

of medical requirements at Portsmouth before January 1997? What action

precipitated the review?

Answer. DMFO has performed numerous reviews of the Portsmouth project

throughout its development including but not limited to:

—Economic Analysis of 1988 (Proposed renovation of buildings 1 and 215 (partial)

and construction of a new acute care facility)

—Space program review of 1990 (finalized the space requirements based on economic analysis)

—Revalidation of 1992 (identified some reduction in space requirements)

—DOD IG Review of 1993 (reduction of 101 beds)

—Health Care Requirements Analysis for Renovation of Building 215, Phase IX,

May/June 1995 (validated the requirements based upon the condition of the

present buildings, viability of the Portsmouth mission and projected health care

needs of the Tide Water beneficiaries)

—GAO Review of 1997 (concluded that total renovation of building 215 is costeffective)

—Revalidation of 1997 (full renovation of building 215 is the best economic solution)

The Senate Appropriations Committee Conference Report for the fiscal year 1997

Military Construction Bill directed the GAO to review the requirements and funding

which has been appropriated for the Naval Hospital at Portsmouth.

Question. Has DMFO been a rubber stamp for Navy plans at Portsmouth? Did

DMFO play a role in reducing the scope or cost of this project?

Answer. DMFO has never rubber stamped Navy plans at Portsmouth. DMFO and

Navy have been working together as a team to contain scope and cost increase on

this project. This project has been designed to or less than the DOD’s space criteria

to meet these goals. Consolidation of requirements in the Tidewater area have been

thoroughly reviewed and analyzed to arrive at the most efficient and cost-effective

solution for the Portsmouth Naval Hospital complex. In fact, Navy agreed to reduce

scope by 101 beds following the 1992 Health Affairs and DOD IG review. DOD and
120

Navy also eliminated hyperbaric medicine capability at a cost avoidance of $13.6

million until considered ‘‘medically efficacious’’ at some point in the future.

Question. What impact will the elimination of more than half of the Graduate

Medical Education programs have on the space requirements or use at Portsmouth?

Answer. Elimination of Graduate Medical Education (GME) will have no effect on

space requirements at Portsmouth. The proposal to terminate 7 of the 12 GME programs would have eliminated or realigned 87 of 198 resident billets. To accommodate the projected workload, these residents would have to be replaced by 50 staff

physicians who would require the space under construction. The proposal to reduce

GME has been withdrawn by the Navy.

Question. Although the revalidation is ongoing, can you describe the preliminary

results?

Answer. Revalidation of the Phase IX, MILCON project at Portsmouth has just

been completed. It concludes that the requirement to renovate Building 215 for both

medical and administrative/support occupancy has been and continues to be a reality and full renovation of Building 215 is the best economic solution. Timing is

critical due to the linkage between the pending Phase–9 renovation of Building 215

and all prior construction currently underway at NMC Portsmouth. More than 1,000

people are scheduled to occupy the renovated 215. In the event scheduled renovation

work is delayed or canceled, nearly two-thirds of them could be stranded in trailers

or moved off base into leased office space at substantial cost to the government. Any

further delays may result in additional real costs due to construction schedule interruption.

Question. Has DMFO done any studies comparing the cost of contracting for certain medical and support functions, rather than funding additional DOD infrastructure for this?

Answer. DOD and Navy have done numerous studies for contracting functions

and both Departments continue to do so. Prior to undertaking the Portsmouth

project, an Economic Analysis compared the cost of direct care with discounted contract care. Across virtually every clinical area and for each beneficiary category, direct care at Portsmouth was found to be the best economic solution. DOD follows

this process for each military treatment facility to determine the best economic solution.

Question. Do you have any plans for consolidation of hospitals or clinics?

Answer. Navy plans consolidating health care administration in the northeast.

Also, Navy is closing NH Millington and downsizing three other hospitals at Groton,

Corpus Christi and Patuxent River. Base Realignment and Closure resulted in the

closure of naval hospitals at Philadelphia, Long Beach, Oakland, and Orlando. Navy

also turned over F. Edward Ebert hospital in New Orleans to the Chief of Naval

Reserve Forces retaining only a clinic in the building. On-going studies are reviewing the future roles of health care facilities worldwide. In the fiscal year 1998 budget submission, one project consolidates six troop medical clinics into one and two

projects rightsize hospitals to clinics. Other consolidations may occur as Services decide on realignment or rightsizing of its forces and market conditions determine the

best economic solution.

USSOCOM SECURITY MEASURES

Question. Mr. Robinson, please explain what kind of security measures are contained in your fiscal year 1998 budget request? Are these upgrades a result of the

Khobar Tower bombing?

Answer. The budget request contains two security improvement projects:

—Hurlburt Field, FL: Perimeter Fence/Vehicle Barrier System ($2.45M)

—Fort Bragg, NC: Security Upgrades ($500K)

Both were identified during an OSD-directed review of security requirements last

fall. Several other security upgrade requirements identified were satisfied with

O&M or Procurement funding.

USSOCOM CRITICAL FUNDING REQUIREMENTS

Question. In the past few years, the Congress has been instrumental in adding

MILCON projects outside the normal budget process. What efforts are you taking

to ensure that your most critical funding requirements are met through the budget

process?

Answer. With one exception, our current MILCON investment program only allows funding for roughly $30 million in construction projects each year. We have determined that we need about double that amount as a continuing baseline to replace

and renovate our aging facilities and to solve facility space deficits. Funding for

MILCON investment has been necessarily limited within our total funding level in
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order to protect our force structure and readiness demands. Given a higher level of

construction spending, we could begin to move projects from the unfunded into the

funded program and achieve improvement to our operations and training capability

in a much more reasonable timeframe. An excellent example is replacement facilities for the 4th Psychological Operations Group and the 96th Civil Affairs Battalion;

these units are among our most heavily tasked organizations and also are among

the last on Fort Bragg, North Carolina, to still be in World War II era wooden facilities.

USSOCOM makes decisions on strategic planning, program, and budget issues

through the Board of Directors—a group made up of the CINC, the Deputy Commander, the Commanders of our four component organizations, and the Assistant

Secretary of Defense for Special Operations and Low-Intensity Conflict. At this time,

the board intends to fund our planning and design in fiscal year 1999 at a level

which will support a program level, beginning in fiscal year 2000, of about $60 million per year in constant dollars.

STREAMLINING INFRASTRUCTURE

Question. Mr. Baillie, what actions has the Defense Logistics Agency taken to reduce and streamline its infrastructure in keeping with the overall downsizing of the

Department of Defense? Are your MILCON requirements for fiscal year 1998 reflective of this restructuring?

Answer. The Defense Logistics Agency (DLA) announced on April 15, 1997, a new

strategy to restructure its distribution depot system while maintaining readiness

and affordability of its services. DLA has been reducing its distribution costs commensurate with the decline in military force structure for several years and has significantly reduced many of the direct costs of operations. This action, which began

on April 15 and will be completed over the next several years, is intended to adjust

the management overhead and reduce overall distribution infrastructure to recognize the changing way in which DLA has to do business to provide its military customers responsive and affordable support.

In 1993 DLA’s distribution management organization was comprised of four regional offices and a staff element at DLA headquarters. Today, the regional offices

have been reduced to two. (Stockton, California (Defense Distribution Region WestDDRW) and New Cumberland, Pennsylvania (Defense Distribution Region EastDDRE)). Because additional measures must be taken, the first step in DLA’s restructuring strategy is to realign, streamline, and further consolidate headquarters

distribution management, eliminating duplication, reducing overhead costs, and

thereby creating a more efficient single DLA Distribution Center.

In May 1997, a site selection team began its analysis to determine the best single

location for DLA’s distribution management organization. Selection will be completed by September 1997. The total streamlining effort is expected to eventually

eliminate approximately 850 positions. This reduction will generate a projected annual savings of about $34 million in fiscal year 2000 and beyond.

In addition to the Management Center, DLA operates 22 smaller distribution depots throughout the United States and Europe. DLA has been able to make great

steps in reducing the number of depots through Base Realignment and Closure

(BRAC) Commission decisions in 1993 and 1995 from 30 depots in 1992 to 24 now

(including Primary Distribution Sites (PDS’s)); 13 in the Eastern Region and 11 in

the Western Region. There will be 19 depots remaining after BRAC-designated depots have been closed.

Although a considerable amount of excess storage space and inventories have

been reduced at its distribution depots, DLA’s downsizing has not kept pace with

the 35–40 percent reductions in military force structure which have occurred within

the Department of Defense since fiscal year 1988. To accelerate downsizing further,

DLA has determined additional actions are required.

Accordingly, the second step of the restructuring strategy calls for a program to

subject all DLA distribution depots (excluding PDS’s and those depots designated

for closure by BRAC) to public-private competition on a site-by-site basis. DLA has

selected this process as a fair and effective method of creating rapid and significant

cost reduction in its shrinking distribution operations. Plans call for the new Defense Distribution Center, teaming with the depots, to be the Government’s bidder

for the depot work.

DLA plans call for implementation to be completed by 2001, with projected savings in depot operating costs to be at least 20 percent. These savings and reductions

will be over and above those generated by separate, additional downsizing and efficiency measures already planned.
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A similar restructuring effort was also announced for the Defense Reutilization

and Marketing Service business area on April 10, 1997. Plans call for a 25 percent

reduction in headquarters staffing and a reduction in Defense Reutilization and

Marketing Offices from 148 to approximately 60 major sites in the continental United States to be effected over the next two years.

FISCAL YEAR 1998 MILCON REQUIREMENTS

Question. Are your MILCON requirements for fiscal year 1998 reflective of this

restructuring?

Answer. Yes. Our strategy is to invest only in those facilities that provide a long

term return on investment and is in accordance with our strategic plan.

CHILD CARE CENTER

Question. Describe for me the requirement for a Child Care Center in Richmond,

Virginia, as contained in the fiscal year 1998 Budget request?

Answer. The feasibility study for the construction of a child care facility at Defense Supply Center Richmond (DSCR) went through several rigorous reviews to include a needs assessment of the population and assessment of available child care

centers in the local area. A needs assessment was conducted in June 1992 with a

total of 3,699 surveys distributed and with a 21 percent (789) return. Of those responding, 37 percent (292) indicated an immediate need for child care facilities.

The Department of Defense (DOD) views early childhood programs as a workforce

priority. The emphasis is on providing personnel at least one affordable options for

a high quality, safe and developmentally appropriate early childhood experience.

National accreditation is required by Public Law 101–189, Title XV, Military Child

Care, Accredited Child Care Center.

In the Richmond area, child care demand is high in the civilian community. Nationally accredited civilian child care centers within an 8 mile radius of DSCR,

which is located in an industrial area outside the Richmond metropolitan city area,

do not offer the capacity to meet the needs of our DOD population. Within this radius, none of the accredited child care centers offer infant care. When an accredited

civilian facility in the area recently opened, it rapidly filled to capacity in less than

8 weeks.

PERSONNEL LEVELS

Question. How many military personnel are assigned to this facility? Does this

number justify building a child care center when child care is available in the local

community?

Answer. The facility is designed to support the 2,940 DOD personnel assigned to

DSCR. Of these, 58 are military and 2,882 are DOD civilians. It will also be available to the 37 military families residing on the installation (DSCR) but are assigned

elsewhere.

Department of Defense policy states the purpose of child care programs is ‘‘to assist DOD military and civilian personnel in balancing the competing demands of

family life and the accomplishment of DOD mission and to improve the economic

viability of the family unit.’’ Priority is given to working parents, both military and

civilians.

DLA strongly supports this MILCON project for the child care center at DSCR.

This initiative supports key work/life issues impacting on personnel performance,

the corporate ‘‘bottom line,’’ and successful accomplishment of our combat support

mission. Child care programs support the President’s initiatives on the Family

Friendly workplace, federal policies on early childhood development, and the National Goals for Education 2000.

REVIEW OF DFAS OPERATIONS

Question. Mr. Carnes, I understand that the DOD Comptroller has directed DFAS

to reexamine its operations in light of new business practices that have been adopted. I further understand that this may impact the total number of DFAS facilities

required by DFAS. When is this review scheduled to be complete?

Answer. Preliminary results of the study will be presented to the DOD Comptroller in the summer of 1997.

FISCAL YEAR 1998 MILCON REQUEST

Question. I am concerned about the requirement to renovate the three centers in

the fiscal year 1998 budget. Why should we appropriate money for these projects
123

when the DOD Comptroller certification has not happened yet and the review process is still ongoing?

Answer. Funds should be appropriated for the renovation of three of our Operating Locations, as requested in the President’s fiscal year 1998 budget proposal, for

two reasons. First, we expect that during the summer the DOD Comptroller will certify the need to renovate certain Operating Locations, but that this certification will

occur after the Subcommittee has marked up the appropriation. Thus, funds would

not be available if the Subcommittee required certification prior to the appropriation.

Second, the appropriation of funds will neither obviate nor supersede the requirement that the Comptroller certify as to the need for these facilities in order to spend

funds to renovate them. However, should the Subcommittee not appropriate the

funds but the Comptroller certify as to the need for the facilities, the absence of the

appropriation would make it impossible for us to renovate those facilities.

QUESTIONS SUBMITTED BY SENATOR STEVENS

REPLACEMENT FOR BASSETT ARMY COMMUNITY HOSPITAL

Question. The Army intends to build a 50-bed hospital at Fort Wainwright, Alaska. What does the timeline look like for the construction of this new facility?

Answer. Bassett Army Community Hospital will be a 32-bed facility, not a 50-bed

facility. Following is the current scheduled timeline for the programmed fiscal year

2000 design and construction of this facility:

—35 percent design complete: 24 July 1998;

—RTA for Construction: 1 September 1999;

—Contract Award: 30 November 1999;

—Construction start: April 2000.

Question. What is the approximate size of the facility and what part will it play

in the Alaska health care partnership?

Answer. The replacement facility will be a 32-bed hospital. Bassett Army Community Hospital does not ‘‘directly’’ play a part in the Alaska Federal Health Care

Partnership. It does support the Partnership, as the new facility design continues

to support current levels of service at Bassett. The existing Alaska Federal Health

Care Partnership is primarily an inter-agency contracting support agreement. There

are no TRICARE wrap-around contracts in Alaska. DOD depends on individual provider contracts for TRICARE services. Through the Alaska Federal Health Care

Partnership, federal agencies can more effectively negotiate as a unit in Alaska’s

non-competitive environment.

ELMENDORF TANK FARM

Question. Could you please explain how DFSC intends to spend the $3 million

that we added for planning and design for the Elmendorf Tank Farm? I understand

that money was intended for design and planning, not a new hydrant system.

Answer. These funds will be used to install and upgrade pipelines to improve fuel

distribution to current and planned tanks and hydrant fuel systems at Elmendorf

AFB, AK. Congress added the $3 million to the Defense Agencies’ construction account, not the planning and design account. Neither information in congressional reports nor any communication with DLA described the purpose of these funds. Lacking any guidance, DLA developed a project, after the funds were appropriated, based

on information provided to the staff of the Senate Armed Services Committee on

April 26, 1996, when they initially asked us about additional needs at Elmendorf

AFB. At that time, we said these funds would be used to improve the base’s fuel

distribution pipelines to support the construction of a $21.7 million fuel farm replacement project programmed for fiscal year 1998. We formally notified the appropriate Congressional committees of the scope of this project on February 10, 1997,

before beginning design work.

Design of these pipeline improvements is 30 percent complete. Design of the

250,000-barrel tank farm is 50 percent complete. DLA funded these designs from

the Defense Agencies Planning and Design accounts. If Congress approves the fiscal

year 1998 project, we will solicit one construction contract to accomplish both

projects. The expected contract award date is March 1998.

WHITTIER TANK FARM

Question. What is DFSC schedule to turn back to the Army the Whittier Tank

Farm Facility? What potential problems do you envision with environmental concerns?
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Answer. DFSC completed fuel contract operations at Whittier on May 30, 1997.

All DLA product has been removed and the fuel tanks cleaned. DFSC is currently

coordinating the schedule for return of the Whittier facility with the Army. We understand the Army intends to make the Whittier facility available for lease to interested commercial activities in the near future.

DFSC will require continued access to the Whittier facility for environmental assessment and any required remediation during the initial portion, at least, of the

proposed lease period. They are developing a Memorandum of Understanding

(MOW) with the Army addressing continued access and lease requirements in order

to limit DOD’s environmental liability to only remediation required as a result of

past DFSC fuel operations. The environmental assessment and any required remediation of the terminal is a long-term process (probably 3–5 years). DFSC will need

unconstrained access for the environmental assessment/remediation contractor during that time.

DFSC has completed the site characterization phase; the risk assessment will be

finished in 1998. Based on the results of the risk assessment, cleanup standards will

be established, and construction of any required remediation system will proceed.

CONCLUSION OF HEARINGS

Senator BURNS. With that, I thank you for coming this morning

and we appreciate your participation and your time.

These proceedings are recessed.

[Whereupon, at 10:45 a.m., Thursday, May 8, the hearings were

concluded, and the subcommittee was recessed, to reconvene subject to the call of the Chair.]
(i)

LIST OF WITNESSES, COMMUNICATIONS, AND

PREPARED STATEMENTS

Page

Baillie, Frederick N., Executive Director, Business Management, Department

of Defense ............................................................................................................. 101

Prepared statement .......................................................................................... 110

Bradley, Brig. Gen. John A., Deputy to the Chief, Air Force Reserve, Department of the Air Force, Department of Defense .................................................. 35

Brunelli, Capt. John, Deputy Chief, Naval Reserve, U.S. Navy, Department

of the Navy, Department of Defense .................................................................. 1

Burns, Hon. Conrad, U.S. Senator from Montana, questions submitted

by.................................................................................................................. 53, 92, 119

Carnes, Bruce M., Deputy Director for Resource Management, Department

of Defense ............................................................................................................. 101

Prepared statement .......................................................................................... 113

Claypool, Brig. Gen. Robert G., Deputy Assistant Secretary of Defense (Health

Services Operations and Readiness), Assistant Secretary of Defense for

Health Services Operations and Readiness, Department of Defense .............. 101

Prepared statement .......................................................................................... 106

Coleman, Rodney A., Assistant Secretary of the Air Force for Manpower,

Reserve Affairs, Installations and Environment, Department of the Air

Force, Department of Defense ............................................................................. 35

Prepared statement .......................................................................................... 37

Craig, Hon. Larry E., U.S. Senator from Idaho, prepared statement ................. 4

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

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

Air Force, Department of Defense ...................................................................... 35

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

by........................................................................................................................... 30, 54

Nash, Rear Adm. David, Chief, Naval Facilities Engineering Command, U.S.

Navy, Department of the Navy, Department of Defense .................................. 1

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

Prepared statement .......................................................................................... 7

Reid, Hon. Harry, U.S. Senator from Nevada:

Prepared statement .......................................................................................... 64

Questions submitted by ............................................................................ 33, 58, 98

Robinson, Gary W., Command Engineer, U.S. Special Operations Command,

Department of Defense ........................................................................................ 101

Prepared statement .......................................................................................... 102

Stevens, Hon. Ted, U.S. Senator from Alaska, questions submitted by ............. 123

Stewart, Maj. Gen. Joseph, Deputy Chief of Staff, Installations and Logistics,

U.S. Marine Corps, Department of the Navy, Department of Defense ........... 1

Walker, Robert M., Assistant Secretary for Installations, Logistics, and Environment, Department of the Army, Department of Defense ............................ 61

Prepared statement .......................................................................................... 68
Page

ii

Weaver, Brig. Gen. Paul A., Deputy Director, Air National Guard, Department of the Air Force, Department of Defense .................................................. 35
(iii)

SUBJECT INDEX

DEPARTMENT OF DEFENSE

DEFENSE AGENCIES

ASSISTANT SECRETARY OF DEFENSE FOR HEALTH SERVICES OPERATIONS AND

READINESS

Page

McChord Air Force Base, medical training at ....................................................... 118

Medical/dental clinic, Everett, WA ......................................................................... 117

DEFENSE FINANCE AND ACCOUNTING SERVICE

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

DEFENSE LOGISTICS AGENCY

Distribution and supply center investments ......................................................... 111

DLA child care center .............................................................................................. 118

Fuel mission responsibilities, new .......................................................................... 110

Military construction request ................................................................................. 110

U.S. SPECIAL OPERATIONS COMMAND

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

Purpose ..................................................................................................................... 102

DEPARTMENT OF THE AIR FORCE

Aviano AB, Italy ...................................................................................................... 46

Budget request:

Air Guard .......................................................................................................... 52

Family housing ................................................................................................. 51

Milcon backlog ......................................................................................................... 49

Privatization initiative, military housing .............................................................. 48

Reserve components:

Budget for .......................................................................................................... 48

Wartime contributions of ................................................................................. 50

Survival school, USAF ............................................................................................. 51

DEPARTMENT OF THE ARMY

Active and Reservce Forces, reduction to .............................................................. 87

Barracks projects overseas ...................................................................................... 85

BRAC ........................................................................................................................ 85

Budgets, Guard and Reserve .................................................................................. 91

Child development centers ...................................................................................... 87

Family housing improvement fund ........................................................................ 88

Fort Carson, housing privatization ........................................................................ 91

Fort Leavenworth, disciplinary barracks ............................................................... 90

NATO, planning/expansion of ................................................................................. 86

Quality of life issues ................................................................................................ 88

SOUTHCOM, relocation of ...................................................................................... 89

DEPARTMENT OF THE NAVY

Adak Naval Air facility ........................................................................................... 22
Page

iv

Bangor, WA, housing initiative .............................................................................. 20

Base closure ............................................................................................................. 27

And realignment ............................................................................................... 6

BRAC environmental cleanup ................................................................................ 27

Community facilities ............................................................................................... 28

El Toro base closure ................................................................................................ 20

Ford Island development plan ................................................................................ 25

Housing construction budget .................................................................................. 19

One plus one barracks requirement ....................................................................... 25

Port of Long Beach .................................................................................................. 26

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