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[Senate Hearing 106-649]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 106-649

       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2001

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                                   on

                           H.R. 4425/S. 2521

    AN ACT MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION FOR THE 
 DEPARTMENT OF DEFENSE FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2001, 
                         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

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
62-803 cc                   WASHINGTON : 2001

_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402

                      COMMITTEE ON APPROPRIATIONS

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

                 Subcommittee on Military Construction

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

                           Professional Staff
                              Sid Ashworth
                       Christina Evans (Minority)
                         Sonia King (Minority)

                         Administrative Support
                            Mazie R. Mattson

                            C O N T E N T S

                              ----------                              

                       Tuesday, February 29, 2000

Department of Defense:
    Department of the Navy.......................................     1
    Defense agencies:
        U.S. Special Operations Command..........................    33
        Defense Logistics Agency.................................    33
        Department of Defense Education Activity.................    33
        TRICARE Management Activity..............................    33

                         Tuesday, March 7, 2000

Department of Defense:
    Department of the Army.......................................    61
    Department of the Air Force..................................    95

 
       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              

                       TUESDAY, FEBRUARY 29, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:15 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Conrad Burns (chairman) presiding.
    Present: Senators Burns, Craig, and Murray.

                         DEPARTMENT OF DEFENSE

                         Department of the Navy

STATEMENT OF HON. ROBERT B. PIRIE, JR., ASSISTANT 
            SECRETARY OF THE NAVY FOR INSTALLATIONS AND 
            ENVIRONMENT
ACCOMPANIED BY:
        REAR ADM. LOUIS SMITH, CIVIL ENGINEER CORPS, U.S. NAVY, 
            COMMANDER, NAVAL FACILITIES ENGINEERING COMMAND/CHIEF OF 
            CIVIL ENGINEERS
        BRIG. GEN. HAROLD MASHBURN, U.S. MARINE CORPS, DEPUTY CHIEF OF 
            STAFF FOR INSTALLATIONS AND LOGISTICS
        REAR ADM. JOHN COTTON, U.S. NAVAL RESERVE, DEPUTY DIRECTOR, 
            NAVAL RESERVE

               OPENING STATEMENT OF SENATOR CONRAD BURNS

    Senator Burns. We will call to order this Subcommittee on 
Military Construction of the Senate Appropriations Committee, 
and first of all, we want to thank everybody this morning here. 
We wanted to get a jump on it, and I was late. We had a Chinese 
delegation, trade delegation, who visited Montana last week, 
and they were in town this morning, so we felt we had better 
meet with them, as we didn't get to meet with them in the 
State.
    We will hear first this morning from the Department of the 
Navy. We're pleased to have before us this morning Assistant 
Secretary of the Navy for Installation and Environment, Mr. 
Pirie. Secretary, it's good to see you again. We have sat 
across this table more times than we both want to admit, but 
we're still grazing the green side, and that has something to 
say about the relationship. It's always a pleasure to have you 
with us and to lay out some things. We have Admiral Smith, 
Major General Mashburn, and Admiral Cotton, and we appreciate 
all of you coming this morning.
    Compared to last year's budget submission proposal, the 
fiscal year 2001 budget appears to be in somewhat better shape. 
We still have some wrinkles to iron out, but nevertheless, I 
think there's no real mountains here to climb, but just to 
smooth out the edges a little bit. However, there is still 
insufficient funding in the budget for adequately addressing 
those critical mission and quality of life shortfalls. We're 
disappointed in that area. Although if your fiscal year 2001 
budget attempts to provide funding for a limited number of 
barracks, family housing, water projects and airfield 
facilities, it's more of a question of allocating shortages 
across the Department of the Navy.
    Also of great concern is a loss of the 5 percent 
contingency fund for all military construction and family 
housing projects. I'm worried about this and the impact it may 
have, and I have to ask are we compromising our quality 
standards, and are we slowing up the projected execution and 
possible deferment of some projects? I'm concerned about that.
    I look forward to hearing about this and the potential 
impact of all the witnesses as they present their testimony. We 
look forward to working with you to ensure that the most 
critical requirements are met in the budget, and, yes, we are 
very, very sensitive to retention and recruitment and the 
quality of life of our military people because we feel like 
that this is very, very important to our overall national 
structure, force structure, and, of course, our national 
defense.
    I would ask you this morning if you could keep your 
statements brief. Your entire statement will be made a part of 
the record, and then we can start a dialogue. It's my pleasure 
to see Senator Murray here this morning. We have worked 
together on this committee now for the third or fourth year in 
a row, and it is always a pleasure working with her and her 
staff. Thank you for coming this morning.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Thank you very much, Mr. Chairman. I 
especially appreciate your scheduling this hearing today on the 
fiscal year 2001 military construction programs proposed by the 
Navy and our Defense agencies. I welcome all of our witnesses 
today, and I look forward to your testimony.
    I was pleased and I'm sure you were, too, Mr. Chairman, to 
see that this year's proposed military construction is back on 
track. It is a 1-year budget and not hitched to a 2-year 
funding wagon as it was last year.
    Having worked as hard as we did to fully fund the fiscal 
year 2000 military construction appropriations bill without 
impacting readiness, I would have welcomed a stronger effort on 
the part of the Services to more robustly fund this year's 
military construction budget, particularly for the Reserves. 
Congress made great progress last year in addressing readiness 
issues, and I am encouraged to see Secretary Cohen's emphasis 
on improving housing and health care opportunities in this 
year's defense budget, but I would have liked to have seen a 
corresponding increase in military construction funding.
    That said, I do see some promising trends in this budget. I 
am especially interested in the Navy's homeport ashore program, 
and I look forward to hearing more about that. I am also very 
interested in the status of the school facilities studies being 
undertaken by the defense education activity, and I appreciate 
the effort that has been put towards that study this year. 
However, I also see some disturbing trends in this budget, 
including the decision by DOD to eliminate the 5 percent 
contingency funding for military construction projects.
    I understand from your advance testimony, Mr. Pirie, you 
also have some concerns in this regard, and I would be 
interested to hear you elaborate on those.
    Finally, I look forward to hearing more about the Navy's 
family housing and barracks privatization plans, particularly 
as they apply to Washington State. I think there is merit in 
the privatization program, but there are also a lot of 
questions, and I think it is important that we keep a close eye 
on that program.
    Mr. Chairman, thank you again for scheduling this hearing, 
and I thank our witnesses for coming. I look forward to hearing 
from all of you.
    Senator Burns. Thank you, Senator Murray. Secretary Pirie, 
welcome this morning, and we look forward to your statement.

                   STATEMENT OF ROBERT B. PIRIE, JR.

    Mr. Pirie. Thank you, Mr. Chairman. Good morning. And good 
morning, Senator Murray. I am glad to be back here once again. 
As you say, I think it would be best if I simply summarize a 
few points from my testimony.
    On balance I think the budget that we have submitted to 
Congress this time is the strongest one that we have put 
forward during my 6-year tenure in this job.
    There is good news in the area of housing. The Secretary of 
Defense proposes to reduce the out-of-pocket housing expenses 
for members who own or rent homes in the community. An increase 
in the basic allowance for housing would cut out-of-pocket 
expense from 19 percent to 15 percent in fiscal year 2001 and 
eliminate it by fiscal year 2005. That will make housing more 
affordable for the nearly three quarters of Navy and Marine 
Corps families and the many single sailors and Marines who live 
in private sector housing.
    We have renewed our commitment to family housing 
construction. We are asking you to approve six Navy and two 
Marine Corps projects for the next fiscal year. These projects 
would build a total of 861 homes, all of them in the United 
States. And in keeping with our philosophy of fixing what we 
own, nearly all of these replace deteriorated homes that we 
still need but are beyond economical repair.

                                HOUSING

    We are proceeding with our housing privatization efforts. 
We have seven pilot projects that were previously authorized 
and appropriated and are in various stages in the acquisition 
process. Any necessary funding will come from prior year 
appropriations. We are not asking for any new PPV funds in this 
budget.
    I think we are approaching success here. Later this year I 
expect to provide Congress with the required notification of 
our intent to award contracts for most of these PPV projects 
because we have been slower than we hoped, we will not have all 
the data we would like about how our Public-Private Ventures 
(PPVs) will work. Nevertheless, I continue to believe they are 
important to getting better housing sooner for our people, and 
I ask your support for extending the PPV authority for another 
5 years.
    We are also exploring an initiative to dramatically improve 
housing for our most junior sailors assigned to ships. When 
deployed away from homeport, all sailors must endure bunk beds, 
sharing cramped spaces with dozens of shipmates, and living out 
of a small locker. When they return to homeport, their peers 
who are married or assigned to aviation squadrons or submarines 
get housing ashore. Shipboard E-1s through E-4s, however, must 
continue to live aboard the ship in homeport.
    The proposed new homeport ashore program would provide 
these sailors with housing, either in a Bachelor Enlisted 
Quarters (BEQ) or in the community, when their ship is in 
homeport. In order to create space within the housing budget 
for the rapid buildup of Bachelor Quarters (BQ) spaces that 
would be required for this initiative, we would build new 
spaces to the 2 plus 0 configuration rather than the 1 plus 1 
that is the current Department of Defense (DOD) standard.
    Ultimately we intend to return to the 1 plus 1 standard, 
but in the meantime, we will have provided decent places for 
our young bachelor sailors in homeport. As we work out the 
details of implementing this initiative, we will keep the 
committee informed.
    I am very proud of our efforts to clean up closed bases and 
get the property into the hands of local communities. Through 
four rounds of Base Realignment and Closure (BRAC), we have a 
total of 178 closures and realignments to accomplish. Only two 
remain. Both will be completed next year. Cleanup and property 
disposal are now the major focus in this activity.
    With respect to BRAC funding, the apparent large increase 
in funding requested in fiscal year 2001 requires some 
explanation. Last year's advance appropriation scheme shifted 
fiscal year 2000 funds to 2001 based on expected outlays in 
military construction, family housing construction, and BRAC 
accounts. The Congress rejected the idea of advanced 
appropriations, but made us whole--for which I am indeed very 
grateful--in fiscal year 2000 by restoring funds to the 
military construction and family housing construction accounts.

                                  BRAC

    However, BRAC funding was not restored. This left our 
fiscal year 2000 BRAC program severely short. We are doing our 
best to work with communities to make do with much smaller than 
planned fiscal year 2000 funds. The fiscal year 2001 funds are 
critical to continue the work begun this year and get us--and 
community redevelopment plans--back on track. Cleanup delays 
will inevitably stretch our property disposal schedules and be 
a major setback to community redevelopment plans.
    We have accomplished two ``Section 334'' early transfers of 
BRAC property. The former fleet industrial and supply center, 
Oakland, California, transferred to the Port of Oakland in 
June. This transfer is unique in that, with funding from us, 
the Port will do the cleanup as part of their redevelopment 
plans, saving both time and money for all parties.
    We also transferred the former Naval Air Station, Memphis, 
Tennessee, to the Millington Municipal Airport Authority. In 
this case we will continue to do the cleanup but also in 
concert with the community's redevelopment effort.
    While we have avoided including a major irritant this year 
such as advance funding for Military Construction (MILCON) and 
family housing, there are aspects of our budget that may be 
problematic. One such item is the lack of contingency funding 
for MILCON and family housing. Now, we will certainly do our 
best to manage our projects carefully, but inevitable fact of 
life changes will confront us with the need to downscope 
projects or reprogram for increased costs. I do not propose to 
compromise on quality.

                           HISTORIC QUARTERS

    Another issue that we are working but have not arrived at a 
complete solution is that of historic and flag officer housing. 
These historic buildings represent a part of our national 
heritage, of which the Navy Department is the steward. We need 
to preserve these places for the benefit of present and future 
generations of Americans. As a general rule, these places are 
difficult and expensive to maintain. There is a real question 
in equity whether the family housing account should bear this 
burden when we have shortages elsewhere.
    The idea of creating a separate account, however, has 
proved very unpopular. I have created a working group in the 
Department of the Navy to seek a long-term solution, and I will 
keep you informed also about our progress in that area. Ideas 
are certainly welcome at any time.

                           PREPARED STATEMENT

    Mr. Chairman, it has been a pleasure to work with the 
members of this committee over the course of the last 6 years. 
I am extremely grateful for your consideration both of the Navy 
and its programs and of me personally, and I look forward to 
continuing this dialogue. Thank you.
    [The prepared statement follows:]

            PREPARED STATEMENT OF HON. ROBERT B. PIRIE, JR.

    Good day, Mr. Chairman and members of the Committee, I am Robert B. 
Pirie, Jr., Assistant Secretary of the Navy (Installations and 
Environment). I appreciate the opportunity to speak to you today on the 
Department of the Navy's (DON) installations and facilities program.
    My statement today will cover these areas:
  --The infrastructure budget;
  --Program highlights for family housing, military construction, real 
        property maintenance, and Base Realignment and Closure (BRAC);
  --Infrastructure efficiency efforts.

                       THE INFRASTRUCTURE BUDGET

A perspective

    I am quite pleased with our fiscal year 2001 infrastructure budget. 
It is, on balance, the strongest budget submitted to the Congress 
during my nearly 7-year tenure in this position. Our military 
construction, family housing, real property maintenance, and base 
closure accounts are in sum above last year's budget request.
    This budget builds on the significant additions supported by this 
Committee in last year's budget; it represents a 2-percent increase 
over last year's enacted level. The military construction budget 
request is larger than at anytime since 1992; our family housing 
construction request has not been exceeded since 1997; our base closure 
account represents the largest single-year effort we have ever made to 
clean up contamination on our closed bases, thereby helping communities 
turn these bases into economic engines for local redevelopment and job 
creation. We are embarking on a new quality of life initiative for our 
shipboard Sailors.
    Basic Allowance for Housing (BAH) is outside of the infrastructure 
budget, but it directly affects our ability to adequately house our 
Sailors, Marines and their families. As you know, BAH is a housing 
stipend paid to the military member. I strongly support the Secretary 
of Defense's initiative to reduce out-of-pocket expenses, now 19 
percent, to 15 percent in fiscal year 2001, and eliminate it entirely 
by fiscal year 2005. The BAH increases will make housing more 
affordable for our members and their families, and help reduce the 
inequity between those living in government quarters (no out-of-pocket 
expenses) and those living in the private sector.
    This success at the budget table is a result of the continued 
commitment to quality of life by the Secretary of the Navy, the Chief 
of Naval Operations, and the Commandant of the Marine Corps. As the 
Department of the Navy, and indeed the Department of Defense as a 
whole, struggles to attain the proper balance between short-term needs 
(e.g., readiness, personnel, quality of life) and long-term needs 
(e.g., modernization of weapon systems), we are putting into place 
strong programs to support our people where they live and where they 
work.
    Let me describe our budget highlights in more detail.

Compared with overall DON fiscal year 2000 budget

    The Department of the Navy installation budget includes these 
appropriations: Military Construction, Navy (MCON); Military 
Construction, Naval Reserve (MCNR); Family Housing, Navy and Marine 
Corps (FHN); Base Realignment and Closure (BRAC); and Environmental 
Restoration, Navy. Base operations support and real property 
maintenance functions are included in the Operation and Maintenance 
accounts. In aggregate, our fiscal year 2001 installation program 
totals $7.9 billion, or about 8.6 percent of the DON fiscal year 2000 
budget of nearly $92 billion.

Compared with fiscal year 2000

    Our fiscal year 2001 installation program (MCON, MCNR, FHN, BRAC) 
of $2.5 billion is 7 percent more ($166 million) than the fiscal year 
2000 enacted level of $2.34 billion, and 15 percent more ($329 million) 
than our fiscal year 2000 budget request of $2.18 billion.
    A large portion of this increase is in the BRAC account. It is the 
remnant of last year's Advance Appropriation request.
    You will recall that last year's budget request proposed the use of 
Advance Appropriations for all Department of Defense construction 
accounts, including BRAC. That budget request shifted large portions of 
the fiscal year 2000 appropriation request to fiscal year 2001. About 
half (i.e., $254 million) of the Department of the Navy's fiscal year 
2000 BRAC budget request was moved to fiscal year 2001. The Congress 
rejected the use of this financing technique, and added money to fully 
fund military construction, and family housing construction and 
improvement projects. However, no such funds were added to make the 
BRAC account whole. The result is that we are left with a much smaller 
BRAC program in fiscal year 2000 than we needed, and a seemingly high 
BRAC request in fiscal year 2001. Nearly all of the BRAC funding is for 
time-critical cleanup of contamination at closed bases to support 
property disposal and community reuse efforts. Because of the 
distortion caused by last year's Advance Appropriation request, I ask 
that you look at our fiscal year 2001 BRAC program as a two-year 
(fiscal year 2000 and fiscal year 2001) window. I will explain in more 
detail the importance of this funding and how we are managing program 
execution later in my statement.
    Our military construction (active and reserve) request, though 
below last year's enacted level, is nearly on par with last year's 
authorization request, which was highly leveraged due to Advance 
Appropriations. Our fiscal year 2001 appropriation request of $769 
million is the largest we have submitted during this Administration. 
The Military Construction, Navy request comprises 49 projects totaling 
$552 million for the Navy, and 19 projects totaling $130 million for 
the Marine Corps. It also includes $8 million in unspecified minor 
construction, and $63 million in planning and design. Most of the 
projects are for operational, maintenance and training facilities, 
barracks, and other quality of life projects. The Military 
Construction, Naval Reserve request comprises six Navy projects 
totaling $8 million and one Marine Corps project of $6.4 million. It 
also includes $2 million in planning and design funds.
    Our fiscal year 2000 Family Housing program is summarized in the 
following table. We have renewed our commitment to the new construction 
program as we proceed with our privatization efforts. Our budget 
request includes funds for six Navy and two Marine Corps housing 
construction projects. All are for enlisted personnel, and all located 
in the United States. We are not requesting any funds in the Department 
of Defense Family Housing Improvement Fund, relying on prior year 
construction and improvement funds to proceed with our pilot 
privatization efforts. Our Family Housing Operations and Maintenance 
request declines primarily due to inventory reductions of about 600 
homes and reduced utility costs due to energy conservation measures. 
The reduction in leasing is due to expected delays in individual leases 
at six locations in Europe.

                          [Dollars in millions]
------------------------------------------------------------------------
                                               Fiscal year
                                ----------------------------------------
                                                   2001
                                 2000 enacted    requested    2001 homes
------------------------------------------------------------------------
Construction...................       $339.3        $362.8   ...........
    New Construction...........       [133.9]       [159.3]          861
    Improvements...............       [187.7]       [183.5]        2,292
    Planning & Design..........        [17.6]        [20.0]
Operations & Maintenance.......        741.4         739.9   ...........
Leasing........................        145.3         142.7         7,446
                                ----------------------------------------
      Total Family Housing,            1,226         1,245   ...........
       Navy & Marine Corps.....
------------------------------------------------------------------------

    Our fiscal year 2001 Real Property Maintenance (RPM) request of 
$1.7 billion is $276 million above the fiscal year 2000 level. RPM 
funds in the Operation and Maintenance account are for repairs, 
preventive and recurring maintenance, minor construction and centrally 
managed demolition. Despite putting more money into this program, I 
must note that our backlog of Maintenance and Repair Projects is 
projected to grow by $237 million, crossing the $4 billion threshold in 
fiscal year 2001. The Department of Defense has not requested any funds 
in fiscal year 2001 for the Quality of Life Enhancements, Defense 
account.

Elimination of contingency funding

    While there are many positive aspects of our program, two items 
will lead to execution challenges. The Department of Defense has opted 
to eliminate all contingency funding in our military construction, 
family housing construction, and family housing improvement projects 
for fiscal year 2001 and future years. A total of $52 million was cut 
from our construction projects. Previously, the budget cost of each 
project included a 5 percent allowance to cover construction 
uncertainties such as unknown subsurface conditions, unfavorable bid 
climate, material cost changes, or requirements that are discovered 
after the design is completed. (As you know, the construction cost 
estimates submitted in the budget are based on having completed at 
least 35 percent of the design of the project or parametric cost 
estimates, not 100 percent design.)
    The Department of Defense deleted contingency in the construction 
accounts in part because of the concerns expressed by the Congress last 
year that contingency funds were being used to ``gold plate'' projects. 
That is not the case.
    I believe the absence of contingency funds may compromise our 
ability to maintain full project scope, high construction standards, or 
ability to execute all fiscal year 2001 authorized projects. We will 
pursue innovative acquisition strategies and implement even more 
stringent management of cost growth to execute within available funds. 
However, in construction, as in life, we cannot predict the unforeseen.

Across-the-board rescission

    The Consolidated Appropriations Act 1999 (Public Law 106-113) 
directed an across the board rescission of fiscal year 2000 
appropriated funds which, for the Department of Defense, amounted to 
0.52 percent after exclusion of military pay accounts.
    We have applied this reduction with an eye to preserving maximum 
execution flexibility. In the military construction appropriations, an 
across the board reduction was taken against all construction projects 
to ensure no single project was significantly impacted or cancelled. We 
hope our design build construction efforts can produce enough savings 
to offset this reduction.
    The allocation for our Operation and Maintenance accounts, however, 
is more problematic. These accounts total $26.4 billion in fiscal year 
2000. A number of options were evaluated by the Secretary of the Navy. 
All were troublesome. The nature of Operation and Maintenance makes 
targeting specific programs and separating least critical funding very 
difficult. Everything funded in these appropriations is in some way 
connected to force readiness. In the end, the decision was made to 
target the entire $136 million O&M rescission to the real property 
maintenance accounts. This action avoids immediate readiness problems, 
and can be done with the least risk of reduction-in-force or furloughs. 
It also provides the greatest potential for amelioration during the 
course of the year or even late in the year if additional assets or 
resources become available.
    Nonetheless, this decision amounts to a 9 percent reduction in 
fiscal year 2000 Real Property Maintenance funds, and clearly 
contributes to the growth in the backlog of maintenance and repairs 
previously mentioned. All types of facilities, including barracks and 
other quality of life facilities, will be impacted. The impact will 
generally be greater on the Navy than the Marine Corps, as the Navy has 
more facilities, and they tend to be in worse condition as measured by 
facility readiness C-ratings \1\ and the size of the critical backlog 
of repairs. The fiscal year 2001 budget is sufficient to fund Navy 
mission critical facilities (waterfront, airport, training, bachelor 
housing, and utilities) to a C-2 facility readiness level, while all 
other facilities (e.g., supply, administrative, etc.) are funded to C-3 
readiness. Unless additional Real Property Maintenance funds are found, 
even these mission critical facilities will be funded to a C-3 
readiness condition this year.
---------------------------------------------------------------------------
    \1\ A C rating refers to the facility condition criteria used as 
part of the overall readiness rating. It is based on subjective and 
objective criteria unique to that type of facility (e.g., criteria for 
air operations includes a pavement condition index, while port 
operations include dredge depth vs. design depth at berth). Generally, 
C-2 means operations are impacted 5-10 percent of the time. C-3 means 
operations are impacted 10-20 percent of the time.
---------------------------------------------------------------------------
    The across-the-board reduction to the Family Housing Operation and 
Maintenance account was also applied to maintenance and repair.

                             FAMILY HOUSING

The family housing triad

    Our family housing strategy consists of a triad:
  --access to housing in communities surrounding our bases;
  --use of traditional military construction and leasing funds to 
        improve or acquire housing either on base or in the community; 
        and
  --developing public/private ventures to leverage private sector 
        capital to provide housing that is available on a priority 
        basis to our members.
    We traditionally rely first on the private sector to provide 
housing for our Sailors, Marines and their families. Our bases have 
housing referral offices to help newly arriving families find suitable 
homes in the community. They are aggressively pursuing rental 
agreements with private sector property owners to house Navy and Marine 
Corps families. In fiscal year 1999, about 74 percent of Navy families 
and 65 percent of Marine Corps families worldwide lived in a home they 
owned or rented in the community. The substantial pay raise enacted 
last year, combined with the proposed 3.7 percent pay raise and BAH 
increases included in the fiscal year 2001 budget, will certainly make 
housing more affordable for our members assigned at U.S. locations.

Fix what we own

    Even with full implementation of BAH, there will remain many 
locations where there are not enough suitable \2\ homes in the 
community for our members. In such locations, we have used family 
housing funds to build or acquire additional homes. At the end of 
fiscal year 1999, the Navy had an inventory of 60,515 homes worldwide 
and the Marine Corps had 22,780 homes. We also lease homes both here in 
the United States and abroad. At the end of fiscal year 1999, the Navy 
had about 5,200 and the Marine Corps had 1,000 leased homes.
---------------------------------------------------------------------------
    \2\ Suitability is based on the following DOD criteria: location 
(within one hour commute); cost (rent, utilities, etc. meets DOD 
criteria); size (minimum square footage and number of bedrooms); 
condition (unit is well maintained and structurally sound). All owner 
occupied housing is deemed suitable.
---------------------------------------------------------------------------
    Our core family housing philosophy remains to first fix what we 
own. The Navy's Neighborhoods of Excellence, and the Marine Corps 
Family Housing Campaign Plan, embody the Department's efforts to 
revitalize major home components for an entire neighborhood, rather 
than piecemeal improvements on individual homes. We use family housing 
new construction funds when an economic analysis indicates that 
replacement construction is the more viable alternative. Our fiscal 
year 2001 program provides for the construction of 861 homes, a 22-
percent increase over the enacted fiscal year 2000 level. This funding 
level demonstrates that we will continue to use housing new 
construction funds as a tool to revitalize our inventory of government 
owned homes.

                          [Dollars in millions]
------------------------------------------------------------------------
                                                    Number of
                     Location                         Homes       Cost
------------------------------------------------------------------------
NAS Lemoore, CA...................................        160      $27.8
CNB Pearl Harbor, HI (Hale Moku)..................         98       22.2
CNB Pearl Harbor, HI (Pearl City).................         62       14.2
CNB Pearl Harbor, HI (Radford Terrace)............        112       23.7
NAS Brunswick, ME \1\.............................        168       18.7
NAS Whidbey Island, WA \2\........................         98       16.9
                                                   ---------------------
      Subtotal Navy...............................        698      123.5
                                                   ---------------------
MCAGCC Twentynine Palms, CA.......................         79       13.9
MCB Kaneohe Bay, HI...............................         84       21.9
                                                   ---------------------
      Subtotal Marine Corps.......................        163       35.8
                                                   =====================
      Total.......................................        861      159.3
------------------------------------------------------------------------
\1\ Includes 16 new homes and 152 replacement homes.
\2\ Includes 2 new homes and 96 replacement homes.

    Using traditional family housing funds, our fiscal year 2001 
improvement program renovates 1,781 Navy homes at 12 locations inside 
and two locations outside the United States at a cost of $155 million. 
It also renovates 511 Marine Corps homes at 2 locations inside and 1 
outside the United States at a cost of $28 million.
    Examples of housing improvement projects include:
  --$18.7 million for 184 enlisted homes at Naval Sub Base, New London, 
        CT. This project will replace kitchens and baths; upgrade 
        electrical and plumbing systems; abate lead and asbestos; 
        install new vinyl siding; replace roofs, doors, and windows; 
        replace the heating system; provide neighborhood repairs.
  --$25.0 million for 332 enlisted and officer homes at Marine Corps 
        Base, Camp Pendleton, CA. This project will upgrade fixtures 
        and electrical, plumbing and mechanical systems; perform 
        structural, architectural and site improvements; allow interior 
        and exterior repairs; install fire suppression systems; and put 
        in new landscaping.

Public/Private ventures

    As the members of this Committee recognize, the pace of new and 
replacement construction and improvements would not let us eliminate 
the backlog of repairs and shortage of homes. We worked closely with 
the Congress to establish ground breaking new authorities in fiscal 
year 1995 and fiscal year 1996 to use public/private ventures (PPV) as 
a housing tool. Under a 5-year pilot program that expires next year, we 
can provide cash, direct loans and loan guarantees, and differential 
lease payments (DLP). We can also convey land or lease land, housing 
and facilities to a developer in exchange for renovation or 
construction of homes for our military members and their families.
    As the Secretary of Defense announced a few years ago, our 
objective was to use these tools to solve a 30-year housing problem in 
10 years. Using a mix of family housing construction, improvement funds 
and public/private ventures, both the Navy and the Marine Corps remain 
on track to meet the Defense Planning Guidance goal to eliminate the 
repair/improvement backlog by fiscal year 2010.

Pilot Project PPVs

    These powerful new tools provide exciting new opportunities, and 
prompted a mountain of dialogue on how best to apply them. All of us--
the Congress, the Department of the Navy, and private developers--share 
the same goal: to provide appropriate, affordable housing for all Navy 
and Marine Corps members and their families and to operate and maintain 
it in the most cost-effective and efficient manner.
    We have worked extremely hard to build consensus across many 
constituencies within the Navy and the Marine Corps--from the Sailor or 
Marine on the deckplate to the senior leadership at Fleet headquarters 
and at the Pentagon; to developers; and to the members of the 
Authorization and Appropriation Committees who must review and endorse 
a PPV project before we can award it. All of us want to do the right 
thing with these new tools.
    There are many paths to success. Last year, we used the fiscal year 
1996 authorities to institute differential lease payments (DLPs) in our 
existing projects in Texas and Washington State to ``buy down'' rents 
so that member's BAH can fully cover their rents and average utilities. 
The first monthly payments were made to the PPV partnership (not the 
member) in October 1999, amounting to about $200 per month for an E-5. 
With the new BAH initiative, we expect that the DLP payments for these 
units will be reduced. We are pleased with the performance of these 
early projects.
    We are proceeding with a pilot project approach for five Navy and 
four Marine Corps projects, seven of which are in various stages in the 
acquisition process. These projects provide a mix of backlog reduction 
and deficit reduction:
  --Four projects (Everett 2, Kingsville 2, Albany, Camp Pendleton) are 
        in exclusive negotiations with a single entity;
  --Three projects (San Diego, South Texas, New Orleans) are in, or 
        about to enter, the technical proposal/evaluation phase;
  --Two projects are in internal review. Congressional notification was 
        given in June to issue a solicitation at both Stewart Army 
        SubPost in Newburgh, NY and Chicopee, MA. We are planning to 
        re-notify the Committees of our plan to move forward with the 
        Stewart project, but defer Chicopee pending a Marine Corps 
        review of requirements. We also expect to provide notification 
        of our intent to issue a solicitation for a Beaufort/Parris 
        Island project in the near future.
    We are continuing to look at other opportunities to either reduce 
the shortage of family housing or revitalize our existing inventory 
through the use of the privatization authorities. We will continue to 
propose additional locations that we determine to be feasible 
privatization candidates.
    I believe we are on the cusp of providing the required notification 
to the Congress of our intent to award contracts for most of these 
projects this year. I am optimistic that our first notification may 
occur this spring for Kingsville 2. We have the necessary funds from 
prior year appropriations to proceed with these projects. The Navy and 
the Marine Corps are retaining $89 million/$39 million respectively to 
fund these pilot projects. We have released all other prior year family 
housing construction and improvement funds. All of the previously held 
projects are scheduled for award before the end of this fiscal year.

New BAH rate impact on housing

    The Secretary of Defense's BAH initiative represents a major 
turning point in our efforts to improve living conditions for our 
single and married Sailors, Marines, and their families. It will 
directly affect almost three-quarters of Navy and Marine Corps families 
and approximately 27 percent of our single Sailors and Marines who live 
in private sector housing.
    In the short-term, the BAH increase will influence the dynamics of 
rental income streams for PPV projects, while also making private 
sector housing more affordable. We have initiated studies to help us 
analyze the long-term impacts of this initiative on the supply and 
demand for military housing. Our first opportunity to address possible 
impacts will be when we provide the Family Housing Master Plans due to 
the Congress in July. These master plans will provide a base-by-base 
identification of how we will meet the goal to eliminate our inadequate 
family housing units by fiscal year 2010. A note of caution: we may be 
able to model outcomes based on assumptions about supply and demand, 
but the real effects will have to await how individual and market 
forces react. Our ultimate objective is to strike the appropriate 
balance between reliance on the private sector and, where necessary, 
the provision of government quarters.

Legislation to extend the fiscal year 1996 PPV authorities

    The existing PPV authorities implemented in the Fiscal Year 1996 
Defense Authorization Act (Public Law 104-106) expire in February 2001. 
The Department of Defense is submitting legislation to extend these 
authorities for another five years. I ask your support for this 
extension. We will need PPVs in our toolbox to accomplish the DOD goal 
to eliminate the backlog of inadequate homes by fiscal year 2010. We 
continue the staff work necessary to develop PPV family and bachelor 
housing projects for the future.

                         MILITARY CONSTRUCTION

    Our military construction program continues our approach of 
budgeting for those projects that meet the highest priority of 
readiness and quality of life needs of the Fleet and Fleet Marine 
Force, and their Reserve Components. The Navy convenes a Shore 
Facilities Programming Board and the Marine Corps convenes a MILCON 
Program Evaluation Group each year to consider, evaluate, and 
prioritize military construction projects. Projects are selected based 
on a number of different criteria, including fleet priorities and the 
most critical readiness, quality of life, and compliance needs.
    Military Construction policy, like Family Housing, focuses on first 
fixing what we own. To this end, 59 percent of the active and reserve 
military construction program for the Navy and 75 percent for the 
Marine Corps is dedicated to replacement and modernization projects.

Phased funded projects

    I should point out that four projects in our fiscal year 2001 
program have a total cost above $50 million, and under existing 
Department of Defense criteria, are phased funded over two or more 
years. We ask for full authorization for each project in the first 
year, and request in appropriations language to fund fiscal year 2001 
and subsequent increments needed to completed these projects. We 
commonly resort to phase funding pier replacement projects because they 
are very expensive, and require a lengthy construction period. Many of 
our piers and wharves were built in the 1940s, and cannot support the 
deep draft, power intensive ships in the Fleet today. We must rebuild 
them to meet the needs of today and tomorrow. The fiscal year 2001 
program includes:
  --$12.8 million to complete the second increment of a berthing wharf 
        at Naval Air Station North Island, San Diego, CA. Phase one was 
        funded in the fiscal year 2000 budget;
  --$35.7 million for the first of two increments for a $53.2 million 
        repair pier at Naval Station San Diego, CA;
  --$38 million for the first of two increments for a $62.5 million 
        pier replacement at Naval Ship Yard Bremerton, Puget Sound, WA;
  --$35.6 million for the second of three increments of a $86 million 
        CINCPAC headquarters at Camp HM Smith, HI. Phase one was funded 
        in the fiscal year 2000 budget.

Operational and training facilities

    Our construction program funds 26 \3\ operational facilities 
totaling $268 million. Examples include:
---------------------------------------------------------------------------
    \3\ Includes the phased funded projects.
---------------------------------------------------------------------------
  --Taxiway extension and lights at Naval Air Station Norfolk, VA.--
        This $6.4 million project provides a full-length taxiway so 
        that large, ordnance laden aircraft no longer have to taxi past 
        an air passenger terminal, and updates approach landing lights 
        to meet Federal Aviation Administration criteria.
  --Combat Aircraft Loading Apron at Marine Corps Air Station Yuma, 
        AZ.--This $8.2 million project provides an efficient, safe, and 
        properly sized aircraft ordnance loading/unloading area, 
        resolving a flight safety operations waiver.
    There are also seven training projects totaling $67 million. 
Examples include:
  --Physical Training Facility at Naval Training Center, Great Lakes, 
        IL.--This $35.0 million project will provide an indoor track, 
        fitness, aerobics and free weight areas, replacing several 
        buildings constructed in the early 1940s that have serious 
        structural flaws.
  --Urban Assault Course at Marine Corps Air-Ground Combat Center, 
        Twentynine Palms, CA.--This $2.1 million project will construct 
        a live fire range with simulation capability to support urban 
        assault training now being conducted with blank ammunition.

Maintenance, storage, and compliance facilities

    There are 16 maintenance and storage projects totaling $99 million. 
Examples include:
  --Aircraft Maintenance Hangar at Naval Station, Norfolk VA.--This 
        $13.3 million project is the third of five projects planned to 
        replace nine old WW II maintenance hangars designed for 
        aircraft no longer used by the Navy.
  --Operations/Maintenance/Storage Facility at Camp Lejeune, NC.--This 
        $14.0 million project replaces five buildings constructed in 
        the late 1940's that have inadequate space, insufficient 
        electrical power, and is without climate control or indoor 
        plumbing.
    There is one environmental compliance project and two safety 
projects which together total $19 million. One example is:
  --Chemical Metallurgical Laboratory at Naval Shipyard Bremerton, 
        WA.--This $9.4 million project consolidates functions now 
        performed in two trailers and four buildings constructed more 
        than 60 years ago. These buildings compromise laboratory 
        testing functions, have numerous safety violations, and 
        resulted in the laboratory operations to not be reaccredited by 
        the American Industrial Hygiene Association.

Quality of life

    There are important quality of life projects included in our fiscal 
year 2001 budget. The single largest effort is for the construction and 
modernization of Bachelor Enlisted Quarters (BEQs).
    The DOD adopted a 1+1 construction standard in 1995 for permanent 
party personnel. This configuration consists of two individual living 
and sleeping rooms with closets, and a shared bath and service area. 
The Marine Corps has been granted a permanent waiver to use an 
alternate 2+0 configuration for junior enlisted, i.e., two persons per 
room with a shared bath. This allows the Marine Corps to foster team 
building and build unit cohesion. The 1+1 standard does not apply to 
recruits, students, and transients. Overseas locations may also have 
unique considerations.
    The Navy has seven BQ projects totaling $205 million.
  --Four projects are being built to the 2+0 configuration for 
        permanent party enlisted personnel. They provide a total of 912 
        bed spaces \4\. These projects are located at Naval Air Station 
        Lemoore, CA; Naval Support Activity Naples, Italy; Naval 
        Station Pearl Harbor, HI; and at an undisclosed location.
---------------------------------------------------------------------------
    \4\ Bed spaces reflects maximum capacity for E1--E4 personnel.
---------------------------------------------------------------------------
  --One project at Norfolk Naval Shipyard is being built to the 2+0 
        configuration for transients. It provides 400 bed spaces.
  --Two open bay projects at Naval Recruit Training Center Great Lakes, 
        IL that will provide 2,112 bed spaces for recruits.
    The Marine Corps has three BQ projects totaling $50 million: 
Washington Marine Barracks, Washington, D.C.; Marine Corps Base Kaneohe 
Bay, HI; Marine Corps Base Camp Lejeune, NC. All three Marine Corps 
projects are being built to the 2+0 standard. They provide a total of 
1,032 bed spaces for junior enlisted personnel.
    There are also five other quality of life projects totaling $51 
million in the fiscal year 2001 program. Examples include:
  --Navy Museum Annex at the Washington Navy Yard, Washington DC.--The 
        Navy museum now only has sufficient space to display U.S. Naval 
        artifacts from Revolutionary times through WW II. This $2.4 
        million project will provide permanent exhibit space to safely 
        display and preserve Cold War, Korean War, and Vietnam 
        artifacts. This is the official museum of the Navy Service, 
        with over 400,000 visitors per year.
  --Child Development Center, Marine Corps Base Camp Lejeune, NC.--This 
        $4.4 million project will provide affordable on-base child care 
        facilities for 305 children.

Navy homeport ashore program

    In our continued commitment to improve the quality of life of our 
Sailors, the Navy is addressing one of its most pressing challenges--
the 25,000 E-1 through E-4 enlisted unaccompanied Sailors who now live 
aboard ship when in homeport \5\. Studies, surveys, and my own personal 
observation have shown that these young Sailors have the worst 
accommodations in the Department of Defense. When deployed, these 
Sailors have no choice but to endure sleeping in bunk beds in cramped 
spaces with dozens of their shipmates, with little more than a small 
locker to store their personal belongings. When the ship returns to 
homeport, these Sailors must continue to live aboard ship. In contrast, 
unaccompanied E-1 through E-4s assigned to aviation squadrons or 
submarines live aboard ship when deployed, but merit BEQ spaces when 
the ship is in homeport. A 1999 Navy Quality of Life Domain Study 
concluded that shipboard life and standards of living are major 
dissatisfiers for target retention groups.
---------------------------------------------------------------------------
    \5\ Another 15,000 shipboard E-1 through E-4 personnel are deployed 
with their ships at any given time.
---------------------------------------------------------------------------
    The Secretary of the Navy and the Chief of Naval Operations have 
committed to developing a Homeport Ashore program that will provide 
these Sailors accommodations, either in a BEQ or in the community, when 
their assigned ship is in homeport. We have a pilot project underway at 
Naval Base Pearl Harbor, HI, where a unique combination of recent fleet 
reductions, a large initial inventory of BEQ spaces, and a desire of 
more senior enlisted to live in the community, has made BEQ spaces 
available. So far about 900 shipboard E-1 through E-4 at Pearl Harbor 
have ``moved ashore'' into BEQ spaces, with plans to house the rest 
ashore by this summer. Initial results are extremely positive.
    The Navy remains committed to providing housing that meets the 
``1+1'' barracks construction standards. As an interim step to kick 
start the Homeport Ashore effort, my office granted a waiver to use the 
``2+0'' configuration to construct the fiscal year 2001 Navy BQ 
projects. Because ``2+0'' spaces cost about one third less than 
``1+1,'' we were able to provide spaces for more than 400 single 
Sailors than we would have been able to do under the ``1+1'' standard. 
These ``2+0'' spaces would be converted in the future to equivalent 
``1+1'' spaces through assignment policy.
    While I am pleased to announce this broad commitment, there are key 
aspects that must still be resolved. I will keep the Committee informed 
on our progress with this important quality of life initiative:
  --Legislation is needed to pay BAH to E-4s assigned to large ships if 
        adequate quarters ashore are not available.
  --An implementation plan is being developed to address timing, 
        phasing, and funding approaches. This plan is to be completed 
        by this summer.

                      BASE REALIGNMENT AND CLOSURE

Realignment and closure status

    We are implementing four rounds of base realignment and closure 
(BRAC), 1988 under Public Law 100-526 and 1991, 1993, and 1995 under 
Public Law 101-510. As a result of these decisions, we are implementing 
a total of 178 actions consisting of 46 major closures, 89 minor 
closures, and 43 realignments.
    We will complete the actual closure and realignment of the bases by 
the statutory deadline of July, 2001--97 percent are already completed. 
Only two remain:
  --Naval Management Systems Support Office Chesapeake, VA will close 
        in March 2001;
  --Naval Sea Systems Command, Arlington, VA will realign to the 
        Washington Navy Yard in July 2001.

BRAC costs and savings

    We have closed or realigned bases to make the Navy's shore 
infrastructure more proportional to its force structure and to provide 
resources to recapitalize our weapons systems and platforms. We are 
reaping the financial rewards of our past investments: as of the end of 
fiscal year 1999, we had spent $9.1 billion on all four BRAC rounds to 
construct new or adapt existing facilities, move personnel, equipment, 
ships and aircraft to their new homeports, and clean up contamination. 
We will have saved $10.5 billion from no longer having to operate, 
maintain, and staff these bases. The result is a net savings of $1.4 
billion. And by the end of fiscal year 2001, when all four rounds will 
be completed, we project that the DON will have achieved net savings of 
$5.8 billion. Beginning in fiscal year 2002, we will save an additional 
$2.6 billion each year. These net savings estimates have been validated 
by several independent sources.

Environmental cleanup

    Our main focus is now on finishing environmental cleanup and 
completing property disposal. This is no easy task. We have already 
spent more than $1 billion through fiscal year 1999 on environmental 
work at our BRAC bases for environmental baseline studies to identify 
potential contaminated sites and assess the nature and extent of 
contamination prior to doing the cleanup, removing underground storage 
tanks, and closing hazardous material storage facilities.
    Each base has established a BRAC cleanup team composed of remedial 
managers from the Navy, the State, and the Environmental Protection 
Agency to review, prioritize, and expedite the necessary cleanup 
consistent with reuse plans. We recognize the dynamics of reuse and 
stand prepared to phase our cleanup plans as needed to support a 
community's redevelopment needs.
    One measure of our progress in cleanup of contaminated property is 
the number of acres that have become suitable for transfer under the 
Comprehensive Environmental Response, Compensation and Liability Act 
(CERCLA) and the Community Environmental Response Facilitation Act 
(CERFA). Four years ago, 65 percent of all BRAC acres were 
environmentally suitable for transfer, compared to 89 percent as of the 
end of fiscal year 1999. Four years ago, 28 percent of BRAC property 
had not been completely evaluated, compared to only 5 percent as of the 
end of fiscal year 1999.
    There are about 1,000 contaminated sites at 53 BRAC installations. 
A contaminated site crosses the ``cleanup finish line'' when it 
achieves Remedy-in-Place/Response Complete (RIP/RC) and the 
environmental regulator subsequently concurs. As of the end of fiscal 
year 1999, we had achieved RIP/RC status at 56 percent of all BRAC 
sites. By the end of fiscal year 2001, when BRAC ends, we expect to 
have completed cleanup at 88 percent of all BRAC sites. Cleanup at the 
remaining sites will extend through fiscal year 2010.
    We are using promising cleanup technologies and as studies reach 
completion, are finding that for a number of sites, monitored natural 
processes will control and eliminate the contaminants. We continue to 
work with regulators and communities to tie cleanup standards to 
realistic reuse needs. We use a BRAC Cost-to-Complete (CTC) index as a 
measure of our efforts to reduce cleanup costs. At the beginning of 
fiscal year 1996, our BRAC CTC estimate was $2.8 billion. At the end of 
fiscal year 1999, it was $1.2 billion. The CTC reduction of $1.6 
billion is the result of execution of $1.12 billion in appropriated 
funds and $480 million in cost avoidance, such as changes in risk based 
approaches to cleanup, new information on the nature and extent of 
contamination, and use of new technologies for study or cleanup.

Section 334 early transfer

    Section 334 of the Fiscal Year 1997 Defense Authorization Act 
established a framework for the DOD to initiate an early transfer of 
contaminated property to the community. This authority allows DOD to 
defer the CERCLA requirement that all remediation actions have been 
taken before the date of property transfer.
    Section 334 requires that we first meet a number of conditions. We 
must obtain concurrence from the governor of the State where the 
property is located. If the property is listed on the National 
Priorities List, the Administrator of the U. S. Environmental 
Protection Agency must also concur with the early transfer. 
Furthermore, we must determine that the property is suitable for 
transfer for the use intended by the transferee. We may place 
restrictions in the deed limiting the use of the property, if 
necessary, to protect human health and the environment. This authority 
does not relieve us from full compliance with CERCLA.
    I am pleased to report that we completed two early transfers of 
BRAC property under this authority last year:
  --The former Fleet Industrial and Supply Center Oakland, CA was 
        conveyed to the Port of Oakland in June 1999. The conveyance 
        involved the entire main site comprising 528 acres, including 
        submerged land. This transfer is unique in that Navy contracted 
        with the Port of Oakland to do the cleanup. The Port was able 
        to receive title to the property four years earlier than 
        planned, allowing it to integrate clean up with its commercial 
        development. This opportunity for the Port to begin 
        construction early saved both the Navy and the Port millions of 
        dollars, and greatly enhanced the Port's economic development. 
        The Port assumed responsibility for the entire cleanup and 
        long-term monitoring, buying insurance to cap its environmental 
        cleanup costs. The Navy remains responsible under CERCLA only 
        for ``catastrophic'' unforeseen cleanup, if any are 
        encountered.
  --The former Naval Air Station Memphis, TN was conveyed to the 
        Millington Municipal Airport Authority in December 1999. This 
        conveyance, which involves 142 acres to be used for airfield 
        operations at the municipal airport, occurred three years 
        earlier than initially envisioned. The site contains residual 
        trichloroethylene groundwater contamination from solvents used 
        in past Navy aircraft operations. The Navy continues to conduct 
        the cleanup.
    Nearly a dozen other early transfer candidates are being evaluated, 
including portions of Naval Station Barber's Point, HI; Naval Air 
Station, Guam; and Naval Shipyard Mare Island, CA. At these sites and 
others, the necessary documents (e.g., Finding of Suitability for Early 
Transfer; National Environmental Policy Act Record of Decision) are 
complete or nearly complete. Local Redevelopment Authorities and 
environmental regulators are fully engaged in the process. I am 
optimistic we will accomplish several more early transfers this year.

Advance appropriation aftermath

    I have already explained that the apparent increase in fiscal year 
2001 BRAC funds is due to the Department of Defense shifting half of 
the planned fiscal year 2000 BRAC funds to fiscal year 2001 prior to 
submission of the fiscal year 2000 budget. We have kept that increment 
of fiscal year 2000 funds in the fiscal year 2001 column of this 
budget, and view it as critical to completing cleanups in support of 
community reuse efforts.
    We are dealing as best as we can with the $197 million available in 
fiscal year 2000, which, after other congressional reductions, is less 
than half of what we had planned for execution. We notified regulators 
and local redevelopment authorities of the funding situation, and are 
working with them to make the best allocation of available resources. 
We are seeking to recoup prior year unobligated or unexpended funds in 
all BRAC accounts and realign them to pressing BRAC environmental 
fiscal year 2000 needs. This is a painstaking process of reviewing and 
tracking accounting records for individual projects through different 
accounting systems. We have recovered and reapplied $21 million to 
date, but I am not optimistic there is much more to be had. We are also 
re-phasing our contract work orders into smaller, but more numerous 
task orders. This action will increase work that we can get underway, 
but also raises administrative costs for both the Navy and the 
contractor.
    Despite these actions, we are already experiencing cleanup delays 
at some of our bases. Loss of the fiscal year 2001 funds will slow 
cleanups, requiring us to stretch out property disposal plans and 
schedules, and limit promising opportunities for early property 
transfers. The greatest burden, however, will be on the BRAC 
communities' redevelopment plans and time frames. They have made 
tremendous strides to prepare mature and realistic redevelopment plans 
that will be seriously undermined by cleanup and disposal delays.

Property reuse

    The National Environmental Policy Act (NEPA) of 1969 requires that 
we consider the potential environmental impacts of disposal and reuse 
of base closure property before we convey property. We evaluate issues 
involving historic preservation, air quality, noise, traffic, natural 
habitat, and endangered species. The NEPA process concludes with the 
issuance of a Record of Decision (ROD). All disposal RODs should be 
completed this calendar year except for one (Naval Activities, Guam) 
which is scheduled for September 2001.
    As the Local Redevelopment Authorities develop and refine their 
reuse plans, we strive to support immediate reuse opportunities through 
Interim Leases and Leases in Furtherance of Conveyance. We must first 
prepare a Finding of Suitability to Lease (FOSL) document. At the end 
of fiscal year 1999, we had approximately 125 FOSLs in place.
    At the end of fiscal year 1999, we had 121 interim leases in place 
between the Navy and LRAs, plus 4 Leases in Furtherance of Conveyance. 
Leased property is being used for a variety of purposes: port usage, 
movie production, steel fabrication, general manufacturing and repair, 
education, housing, child care, shipbreaking, and police facilities. 
These leases have created several thousand jobs to help communities 
recover from the loss of the Navy and the Marine Corps presence. The 
leases include protection and property maintenance clauses and generate 
significant revenue for the LRAs.

Property disposal

    While leases are desirable, they are only an interim step to the 
ultimate BRAC goal of property disposal. The DON must dispose of 434 
parcels of land covering 166 thousand acres at 91 BRAC bases. Each BRAC 
base has a disposal strategy tailored for that base that incorporates 
LRA reuse plans with environmental cleanup timetables, NEPA 
documentation, conveyance plans and schedules.
    Like the FOSL, a Finding of Suitability to Transfer (FOST) is 
needed before we actually convey property. Here again, we are making 
good progress.
    As of the end of fiscal year 1999, we had completed 146 FOSTs 
covering nearly 20,000 acres.
    Through the end of fiscal year 1999, we had conveyed through 
economic development conveyances, negotiated sales, public sales, or 
Public Benefit Transfer over 1,850 acres.
    After a base closes, disposal of the base closure property presents 
the most complex challenge. Section 2821 of the National Defense 
Authorization Act for Fiscal Year 2000 (Public Law 106-65), amended the 
Department of Defense's Economic Development Conveyance (EDC) authority 
to give us the authority to transfer property to local redevelopment 
authorities for no consideration for job creation purposes. Section 
2821 also provides authority to modify previously approved EDC 
agreements if a change in economic circumstances necessitates such a 
modification. Although we expect many of the LRAs to apply for a ``no 
cost'' EDC of our remaining bases, this will only expedite disposal of 
base closure property to a certain extent. LRAs must still satisfy 
certain regulatory criteria to acquire property by way of an EDC, and 
the real key to disposal of BRAC property is environmental remediation 
of the property.

                   INFRASTRUCTURE EFFICIENCY EFFORTS

Need for two more rounds of BRAC

    I have discussed our investment plans to improve our existing 
infrastructure. However, we still have significantly more 
infrastructure remaining after four BRAC rounds than needed to support 
the conceivable force structure of the future. The Quadrennial Defense 
Review, Defense Reform Initiative, the National Defense Panel, and an 
April 1998 DOD Report to Congress all concluded that more rounds of 
BRAC are required to further shrink the military infrastructure. Our 
estimates show that DON infrastructure has only decreased 17 percent 
since the first round of BRAC, compared to a 40 percent reduction in 
ships and a 30 percent reduction in Sailors.
    I again ask your support for two more BRAC rounds.

Re-inventing shore infrastructure

    As we ask for two more rounds of BRAC, we have not been sitting 
idle. Under the leadership of the Secretary of Defense, the Secretary 
of the Navy, the Chief of Naval Operations and the Commandant of the 
Marine Corps, we have a multitude of initiatives well underway to make 
our infrastructure more effective and less costly.
    We have charted an ambitious course. Many of these initiatives 
require us to invest money, sometimes significant sums of money up 
front to do the necessary analyses. We are carefully evaluating 
proposals, and where the potential payback appears convincing, we are 
putting money in the budget to pursue the most promising initiatives. A 
group of senior flag officers and senior executives representing the 
Fleet, System Commands, and headquarters elements of the Navy, Marine 
Corps, and Secretariat meet periodically to review and coordinate 
initiatives.
    Here are some examples:
    Strategic Sourcing.--Our outsourcing efforts have evolved to one 
based on Strategic Sourcing. In short, we consider eliminating, 
consolidating, restructuring, or re-engineering our activities and 
process before we make a sourcing decision (i.e., retain in-house or 
contract out) via the traditional Office of Management and Budget 
Circular A-76 procedure. After submission of the fiscal year 2000 
President's Budget, the Department of the Navy refined its objectives 
and identified in excess of 90,000 civilian and military positions to 
be reviewed as part of Strategic Sourcing. We hope to achieve annual 
net savings of $1.7 billion by fiscal year 2005. One good example is in 
the area of child care, where laws and regulations require higher 
professional development standards than are often competitively 
available. Over 50 percent of our child development program employees 
are military spouses who form a well trained, transferable pool of 
invested talent. We are using the wealth of data previously accumulated 
to best re-engineer our child care centers in efforts to meet the DOD 
child care goals and still reduce cost.
    Demolition.--The demolition program eliminates aging, unneeded and 
often unsightly facilities and their associated operating and 
maintenance costs. The Navy plans to demolish over 9.9 million square 
feet by fiscal year 2002, and the Marine Corps 2.2 million square feet 
by fiscal year 2000. Both the Navy and the Marine Corps have centrally 
managed demolition programs with funds included in Real Property 
Maintenance Operations and Maintenance accounts. Through the end of 
fiscal year 1999, the Navy has invested about $57 million and the 
Marine Corps $10.8 million to demolish 4.6 million and 1.5 million 
square feet of space respectively. The Navy added an additional $9 
million for demolition in the budget, for a total of $39 million in 
fiscal year 2001. The Marine Corps has budgeted $5 million in fiscal 
year 2001 to continue its demolition efforts. One good example is the 
demolition last year of an old, vacant reserve center in Youngstown, 
OH. The center was in a residential neighborhood across the street from 
a high school. It was a public eyesore, a security/problem, and a 
safety hazard for the community. After demolition, the real estate was 
returned to the City.
    Privatization of Utilities.--Defense Reform Initiative Directive 49 
directed the Services to privatize all their natural gas, water, 
wastewater and electrical systems except where uneconomical or where 
the systems are needed for unique security reasons. This is expected to 
reduce costs while providing quality utility services. The Department 
of the Navy has a total of 998 systems at 122 activities worldwide. 
There are three key Department of Defense milestones: a determination 
by 30 September 2000 of which utility systems to try to privatize; 
issue all Requests for Proposals by 30 September 2001; and award all 
contracts by 30 September 2003. We are making good progress on this 
effort. The first to be privatized was Refuse Derived Fuel Power Plant 
at Naval Shipyard Norfolk, VA in July 1999.
    Claimant Consolidation/Regionalization of Base Operating Support 
(BOS).--Effective 1 October 1998, the Navy consolidated 18 major 
commands with BOS responsibilities to 8. Regional BOS Commands have 
been established and BOS delivery services have been standardized. 
Regional planning is underway, better accounting systems are being 
evaluated, and better business process metrics are being developed. 
This initiative will have a powerful synergistic effect with our 
Strategic Sourcing efforts.
    Energy Efficiency.--Executive Order 13123 requires federal agencies 
to reduce energy consumption 30 percent by fiscal year 2005 and 35 
percent by fiscal year 2010, using fiscal year 1985 as the baseline. To 
meet the fiscal year 2005 goal, we must cut consumption at a rate of 
1.5 percent per year, and then at a rate of 1 percent per year from 
fiscal year 2006 through fiscal year 2010. I am pleased to say that we 
have met and exceeded that benchmark with a cumulative reduction of 22 
percent through fiscal year 1999. We are using a variety of efficiency 
technologies and energy awareness programs, combined with internal and 
third party financing available through Demand-side Management and 
Energy Savings Performance Contracts to reduce energy consumption to 
meet these goals.
    Smart Base.--Smart Base brings off-the-shelf modern technology and 
business practices to Navy needs. One example is the PortMaster 
automated port operations management system. It provides a tool for the 
regional commander to manage all port operations while improving 
services and scheduling, yet lowers manpower needs. This system has 
been deployed through the mid-Atlantic region and is being expanded to 
airfield operations.
    Smart Work.--Like Smart Base, this initiative substitutes capital 
for labor with the goal of reserving Sailor and Marine time for high 
value-added work and combat training. Off the shelf tools can ensure 
safe, healthy, and efficient working conditions. One example is 
construction of a sewage line to connect ships in port at Gaeta, Italy 
to the municipal sewage system, replacing the use of contract barges, 
with a return on investment in less than one year.

                               CONCLUSION

    In conclusion, I believe the DON infrastructure program is in a 
strong position as we begin the new millennium. Our infrastructure 
budget request for fiscal year 2001 is the best it has been during my 
tenure. We have robust military construction and family housing 
construction programs that are focused on fixing what we own. I believe 
that we will soon be bringing notification to this Committee and the 
other Military Construction Committee of our intent to award PPV 
contracts. We have embarked on a new quality of life initiative aimed 
at improving the living conditions of junior enlisted Sailors assigned 
to ships. We have preserved the increment of fiscal year 2000 BRAC 
environmental funds that shifted to fiscal year 2001 during last year's 
proposed use of Advanced Appropriations to accomplish time critical 
cleanups to support community reuse and redevelopment of closed BRAC 
bases. We are proceeding with numerous promising initiatives to make 
our infrastructure more responsive and less costly.
    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 through the remainder of the 
Administration.

                              CONTINGENCY

    Senator Burns. Thank you, Mr. Secretary. Let us maybe look 
into a little further, with the loss of the contingency funds, 
we realize those contingency funds are used in some areas. The 
loss of--the reduction could change the overall scope of things 
because we have always used those contingency funds in some 
areas where we incurred overruns. How would you deal with that? 
Have you given that any thought, as we know there is less 
dollars there now?
    Mr. Pirie. While the horseback answer is that when we run 
into unforeseen contingencies--and all of them are unforeseen--
we will be faced with a choice of either downscoping the 
project or reducing the quality of the construction or coming 
back to you for a reprogramming, and a large outburst of 
reprogramming actions will clog up the works between here and 
the other side of the river, it seems to me, and that is not a 
particularly desirable situation. Admiral Smith will actually 
have to deal with this problem on the ground. Perhaps he can 
add to that.
    Admiral Smith. Thank you, sir. Mr. Chairman, as the 
execution agent, as the head of Naval Facilities Engineering 
Command (NAVFAC) for the military construction program, the 
subject concerns me and my staff worldwide very greatly. I 
spent a lot of time looking at the construction industry, and I 
would tell you that industry standard cost growth on new 
construction runs somewhere between 12 and 15 percent, 
depending on where in the United States you are.
    Historically both the Corps of Engineers and those of us in 
the Navy at NAVFAC have run between 8 and 9 percent cost 
growth. We are trying new and innovative contracting strategies 
such as design build that can bring cost growth down to 4 to 5 
percent. The problem is virtually no one can run a new 
construction project with zero percent cost growth.
    Senator Burns. Tell me, will the loss of these funds slow 
up execution?
    Admiral Smith. Ultimately, sir, I would expect that will 
happen, and I say that because as Secretary Pirie said, we do 
not want to compromise scope, we do not want to compromise 
quality, which will lead us ultimately to reprogrammings. We 
have been very fortunate almost over the last decade in getting 
good bids from the construction industry, but, of course, 
construction, like the rest of the economy, is booming right 
now, and I do not think we can rely on just getting good bids 
to save us for the foreseeable future.
    Senator Burns. Last year you informed us on the committee 
the Navy spent approximately 1.7 to 1.8 percent of its plant 
replacement value per year on facility maintenance. We had 
quite an experience of upgrades in I think the last 2 years. 
Has that number changed? Will you still operate in that 
particular 1.7-1.8 percent range?
    Mr. Pirie. I think that is about the value. Our real 
property maintenance budget for fiscal year 2001 is, in fact, 
an increase over prior years, and I think it is headed--we are 
headed towards 2 percent.

                                VIEQUES

    Senator Burns. Tell me about the situation in Puerto Rico, 
the current situation there with respect to the island and the 
announcement that was made yesterday.
    Mr. Pirie. The announcement made yesterday has to do with 
the conveyance of 110 acres to the Federal Aviation 
Administration (FAA) to be later conveyed to the Puerto Rican 
airport facility, and it has to do with airport expansion. It 
was an action that was in the works, has been in the works for 
several years, and was ready to go before the unfortunate 
incidents of the last year. But it was put on hold until the 
resolution of the Vieques controversy could be reached. So it 
really--while we think it is an expression of goodwill to turn 
this over and expand the Vieques airport, it really was an 
action that was already in train.
    Senator Burns. Now, also in conjunction with that, I 
understand we have got to come up with $40 million in economic 
development funding, and that is dependent on the resumption of 
training. Now, I understand--I just asked Sid here where that 
$40 million was coming from, and I guess that is going to come 
out of supplemental, but it is going to come out of other 
places than military construction, which I was worried about 
that, coming in this morning.
    Mr. Pirie. As I understand it, it is not going to come out 
of the defense budget at all but will be in the Department of 
Commerce budget.
    Senator Burns. Tell me, the directive allows no more than 
90 days of annual training down there. Is 90 days enough?
    Mr. Pirie. I am not the expert in this area. I know that 
the Commandant and the Chief of Naval Operations were in these 
negotiations hard and fast every minute. I think it is a 
judgment, it is fair to say, that has been made by them. I 
would defer to my military colleagues.
    Senator Burns. Admiral, would you like to comment? Does 
anybody want to comment on that?
    Admiral Smith. No, sir. Again, as the civil engineer, I 
know the Chief of Naval Operations was personally involved in 
those negotiations.
    Mr. Pirie. And the Commandant of the Marine Corps as well.
    General Mashburn. The Commandant was deeply involved.
    Senator Burns. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman. Mr. Pirie, I noted 
in my opening remarks that I was interested in the Navy's 
homeport ashore initiative you talked about. That is of 
particular interest to me as Naval Station Everett is and 
obviously will continue to be a carrier homeport, but it is 
also of interest to me in the broader impact that this 
initiative will have on recruitment, retention, and quality of 
life factors. Would you explain to us how this program is going 
to work and what impact it will have on homeport communities 
like Everett?

                            HOMEPORT ASHORE

    Mr. Pirie. What we would like to do is build enough BQ 
spaces so that we can accommodate something approximating 
20,000 single sailors in pay grades E-1 through E-4 that are on 
ships who have no shore accommodation now when they're in 
homeport. So the real question is can we accelerate the 
building of BQs within our limited resources to make that 
happen. The scheme that we have come up with involves backing 
off the 1 plus 1 standard, which is the current DOD standard, 
to a 2 plus 0 standard, using the resources that are saved in 
that way to accelerate the building of these BQs.
    The first two of them are, in fact, in the fiscal year 2001 
budget. We are currently--I do not want to use the word haggle, 
but we are currently negotiating within the Department of the 
Navy how fast we can do this. I, of course, want to do it as 
fast as we possibly can. Then there is a question about the 
phasing of who benefits first. Do we accommodate our shore 
deficit with these BQs first or do we start moving the sailors 
off the ships now? I think we will do a little of both.
    Senator Murray. Do you know how many sailors would be 
affected?
    Mr. Pirie. I think it is on the order of between 16,000 and 
20,000 sailors. It is--I think it is an important move.
    Senator Murray. Do you know how much it will cost?
    Mr. Pirie. I have seen various estimates, and it really 
depends on how fast we want to do it. I have seen estimates 
that would increase our BQ requirements by something like $80 
million a year. That is the fast track. I would like to see the 
fast track. There is a real question inside the Navy Department 
about priorities and whether we can break loose that much 
money.
    Senator Murray. I am very interested in this. Hopefully we 
will work toward that, assuming no disparities in the basic 
allowances for housing, it has caused a lot of concern in my 
home state of Washington. I understand that Secretary Cohen has 
ordered an end to the disparities in the Basic Allowance for 
Housing (BAH) rates. Has that order taken effect yet? And if 
not, when is it going to take effect?
    Mr. Pirie. In the fiscal year 2001 budget, there is 
adequate resources to reduce the out-of-pocket, average out-of-
pocket expenses from where it is now, 19 or a little more 
percent down to 15 percent, but in the future year defense 
program, there are resources to reduce it to zero by 2005. This 
is an important move. This will make a big difference.
    Senator Murray. Explain to me exactly how it is going to 
look in the future.

                                  BAH

    Mr. Pirie. Well, over the course of the next five years, 
incrementally we will buy down the 15 percent which will be 
left over at the end of fiscal year 2001. We will put 
increasing amounts of money into the budget to increase the BAH 
allowances, so that by our calculations the average out-of-
pocket expense over and above their allowances which sailors 
will have to undergo to get housing in the community will be 
reduced.
    It is a rather complicated business because it depends on 
surveys of housing costs, and I have to say the surveys are not 
my business, they are the business of my colleague, Carolyn 
Becraft, the Assistant Secretary for Manpower and Reserve 
Affairs and fundamentally of the office of the Secretary of 
Defense. I have not been particularly pleased by some of the 
survey news that I have heard, and I think we need to pay very 
careful attention to how these are done so that we do not see 
serious inequities.
    I think going into the BAH concept and going to the concept 
of reducing the out-of-pocket expenses for those who draw BAH 
was a really important way to get rid of one inequity which was 
that people living in government housing were subsidizing 
people who were living not in government housing. So we have 
gotten that inequity behind us. Now we have to be careful that 
these surveys do not create other inequities.
    Senator Murray. That is exactly what happened in Washington 
State. I understand what your long-range goal is, but the 
short-range effect was that many people were going to get less 
BAH and they really saw that as a real slap in the face in 
Washington State, but I understand Secretary Cohen has ordered 
an end to that disparity. Does the Defense Department intend to 
seek congressional approval to make changes retroactive, and, 
if so, retroactive to when?
    Mr. Pirie. Retroactive changes?
    Senator Murray. In the BAH.
    Mr. Pirie. Not that I know of. I do not know. We will look 
into it and let you know.
    [The information follows:]

    The roll-back to 1999 rates for low cost areas went into 
effect on March 1, 2000, however the money for March will not 
be seen until the 1 April paycheck. OSD intends to seek 
legislative authority to allow retroactive payment from January 
1, 2000 to February 29, 2000 for all members who transferred 
into these low cost areas during that time.

    Senator Murray. I appreciate that. Naval Station Everett is 
one of the Navy's public-private venture housing sites. Can you 
give me an update on the status of that project currently?
    Mr. Pirie. We have--as you know, we do have a project at 
Everett and another one going in, and it is one of the seven 
that are currently in negotiation. And we have finally worked 
through the supplemental to buy down the rates for the first 
project to be a more tolerable rate for the people, but do you 
have further news?
    Admiral Smith. The procurement is going along very well. We 
are in active discussions in what we call Everett 2. There 
really are, probably as you know, three contracts there. The 
first was one of our first PPVs. It went extremely well with 
beautiful units. I hope you get a chance to see them. We then 
modified that contract and put in what we call a Differential 
Lease Payment (DLP), something that brings a little more money 
to the table for the people living in the housing, and enables 
them to get to a zero out-of-pocket condition.
    What we are doing now we call Everett 2 because it is 
basically the original contract, the original concept. We are 
in active negotiations. I hope by the summer or early fall to 
come over to you all with a proposed award, but it is going 
very well, and I visited both the naval station and the 
Marysville site. It is very pretty.
    Senator Murray. Yes, it is very nice. I look forward to 
working with you on that. Thank you. Thank you, Mr. Chairman.
    Senator Burns. Senator Craig.
    Senator Craig. I am here to talk about our naval bases in 
Idaho.
    Mr. Pirie. We have a terrific base at Lake Pend Oreille.
    Senator Craig. I was testing your knowledge. And, of 
course, Bayview is an important facility. A lot of folks do not 
realize that we have that naval installation in our state, and 
I think it has been recognized as probably a premier facility 
when it comes to acoustical testing, extremely valuable for our 
submarine fleet and probably for other surface vessels also.
    I guess my question, and my frustration, because I see what 
is being offered by the administration as it relates to plant 
replacement value, and I see our goal of reaching 3 percent of 
plant replacement value for naval facilities for annual real 
property maintenance, I watched Bayview, and I know that the 
reason we have a good relationship there and some positive 
things going on is because of Congress intervening and helping, 
and we will continue to do that, and I guess my question of you 
is what are you doing to reach the goal of allocating 3 
percent?
    Mr. Pirie. The real property maintenance budget is 
generally problematical for us. We do not have--I mean, other 
than the 3 percent number, we do not really have good industry 
standards at the moment for maintaining the property we have, 
and we do not have a scheme that gives us hard and fast 
requirements numbers in this area. As a result, in the internal 
budget allocation process in the Navy Department, higher 
priority items such as readiness funding, procurement of major 
weapons systems, imperatives in that area tend to impact 
negatively into our real property maintenance budget.
    I would certainly be the first to agree that we ought to 
take our stewardship of Federal facilities seriously and work 
to maintain these properties in good shape for the long term, 
and my small voice in the resource allocation discussions that 
go along over in the Pentagon tends to that effect. We could 
use more money for real property maintenance, there is no 
question about it. These questions become very important from 
time to time, including the procurement budget and concerns 
about whether we will be able to sustain the 300-ship Navy or 
be able to sustain the air wings that we put on the carriers.
    When those questions appear on the horizon, the question 
about keeping the buildings in good shape sometimes gets pushed 
to one side.
    Senator Craig. Well, I appreciate that answer because that 
is a struggle we face and are going to continue to face. This 
committee has made an effort to step in where the 
administration has chosen not to go, and we will continue to do 
that, I hope. It is a matter of maintenance, it is a matter of 
the ability to deliver. It is also a quality of life factor for 
a good many of our folks in uniform, and to be in a competitive 
marketplace today, I think that is something we have to be 
terribly sensitive to. Not of your watch, but I did have a 
windshield tour of my air base the other day out in Idaho 
looking at housing, and I am not at all happy with what I am 
seeing, and we are struggling to keep our airmen and women, and 
it is not just the bonus, it is the overall environment in 
which they live, and I think that is true in the other 
services. We have got to be sensitive to that. Acoustical 
research detachment, the one I am talking about on Lake Pend 
Oreille, and the growing importance of stealth technology, do 
you see other missions coming our way?
    Mr. Pirie. Once again, I am way out of my depth here. I 
could defer to my military colleagues, and I assume it is the 
acoustical testing that is done so preeminently there.
    Admiral Smith. Sir, having been to that beautiful lake and 
the fine facility that is there, you know, we are the Navy, we 
exist to float, the hydrodynamic research as well as the 
acoustic research that is there gets more and more important to 
us every day, and I look at what we are doing in the Navy 
meteorological command as well as the research and development 
fields within the Naval Sea Systems Command, and it just gets 
more and more advanced and you need cleaner and cleaner water 
where you can do that kind of work. That is one of the beauties 
of that site, so it certainly has an active life, but you would 
have to talk to a slightly different kind of engineer than a 
civil engineer, I am afraid.
    Senator Craig. I will continue to pursue that. Thank you, 
gentlemen, very much. Mr. Chairman, thank you. Let me ask 
unanimous consent my opening statement be a part of the record.
    Senator Burns. Without objection, it will be a part of the 
record.
    [The statement follows:]

               Prepared Statement of Senator Larry Craig

    Mr. Chairman, it is truly a pleasure to serve on the Military 
Construction Subcommittee. I am proud of the accomplishments and impact 
which we have had on not only the Department of Defense, but also on 
the men, women and their families who serve diligently in defending 
this great nation of ours. We have worked hard in the past to ensure 
funds are provided and available for the crucial projects needed at our 
all important military installations, and unfortunately we are required 
to work even harder this year to keep funding at even an adequate 
level.
    As we all know, the military construction budget is to provide 
necessary funding for the planning, design, construction, alteration, 
and improvement of military facilities world-wide. Over the last couple 
of years I get the feeling this has been lost on the Clinton-Gore 
Administration. Both Houses of Congress have continually debated with 
the current administration about whether military construction funding 
and long-term planning are adequate.
    The Department of Defense's stated goal for real property 
maintenance is 3 percent, which is below funding used for public 
facilities nationwide. In light of this, it is mind boggling to think 
that some of the Services are budgeting only 1 percent of the plant 
replacement value. How can we expect to keep our military 
infrastructure maintained at a functioning level when the maintenance 
budget won't even cover the day-to-day replacement costs due to normal 
aging?
    Due to the lack of adequate budgeting and planning, Congress has 
felt the need to intervene and fund programs which we fill are in the 
``best interest'' of the services. A good example of this cooperation 
between Congress and the Navy is the Acoustic Research Detachment, 
located at Lake Pend Oreille in Bayview, Idaho. This facility develops 
and evaluates advanced submarine technology. The lake's depth and mild 
currents provide an unmatched environment to test the stealthness of 
our submarine designs. In fact, I heard that it was Admiral 
Giambastiani who said, ``for the Navy Submarine Fleet, the most 
important body of water is Lake Pend Oreille.''
    However, in spite of the successes, I feel that Congress is being 
held hostage by the Clinton-Gore Administration. They know that we will 
not let our men and women of the armed forces down and will increase 
the funding for military construction, which the Congress has done to 
the tune of about $3,500,000,000 over the last 5 years.
    Although military construction is not the most glamorous issue, it 
is becoming more and more important in the quality of life and morale 
of our troops and their families. I will continue to support projects 
which enhance mission readiness and quality of life initiatives which 
will help in retaining our superb men and women of the armed forces.

    Senator Burns. Thank you very much. I just have a couple of 
more questions. When we look at overall spending and 
everything, Mr. Secretary, and this type thing, and we knew 
what we were doing last year, but despite everything the BRAC 
is more than doubled, it goes up to $477 million this year. 
Now, does that get done what we need to get done? Do we have 
shortfalls there also?
    Mr. Pirie. No. That will get--if we have that money----
    Senator Burns. That fulfills our obligation, that is what I 
am concerned about?
    Mr. Pirie. Yes, sir, and it is really a question of does 
Admiral Smith have enough confidence that the money is going to 
be there so that he can continue to spend and keep these things 
going right up to September 30 so that on October 1st there is 
the new checkbook to start writing from. We confront a fairly 
massive number of conveyances in this next year, and the 
cleanup is key to that. I will provide counsel a copy of what 
is called our star chart, the number of conveyances that we 
have to get done this year. It is truly impressive.
    [The information follows:]

  Department of the Navy--Fiscal Year 2001 BRAC Environmental Funding

    The Department of the Navy's planned fiscal year 2000 BRAC funding 
was significantly reduced as $255 million of fiscal year 2000 funds 
were moved to fiscal year 2001 as part of the Administration's proposed 
use of Advance Appropriation for the military construction accounts in 
the fiscal year 2000 President's Budget Submission. Although the 
Congress denied the use of Advance Appropriations and restored full 
funding for the Military Construction and Family Housing Construction 
accounts, BRAC was not restored. The bulk of the funds that shifted 
from fiscal year 2000 to fiscal year 2001 last year, remain in the 
fiscal year 2001 budget. Thus the steep increase in BRAC funds from 
fiscal year 2000 to fiscal year 2001.
    The impacts of this shift in funds have been reduced site cleanups, 
increased project administration costs due to required contract 
changes, strained relations with the regulatory community, and a loss 
of credibility among the public, regulators and the redevelopment 
community as pertains to cleanup schedules and commitments. The impact 
of delayed funding also impacts transfer opportunities across the 
program. Facilities, utility systems, installed equipment, and 
infrastructures deteriorate rapidly after base closure. Redevelopment 
authorities and other federal agencies are not motivated to take on 
property with deteriorated infrastructure or where Navy's commitments 
to timely cleanup are questionable. Nor do they view opportunities for 
early transfers as viable options when we delay funding with direct 
impacts on agreed upon cleanup schedules supporting community 
redevelopment projects.
    The Navy has worked hard to mitigate funding obstacles to meet 
FOST, regulatory and transfer dates. To do so, we reworked project 
schedules and contract documents coupled with stop-gap incremental 
funding methods to keep the maximum number of projects moving forward. 
This effort was accomplished by dividing hundreds of task orders into 
smaller phases, and adjusting contract award and completion schedules 
to match the expected appropriations cycle rather than accelerated 
cleanup and transfer schedules. As a result, we are positioned to 
obligate the fiscal year 2001 increment of these critical projects very 
early in the first quarter of fiscal year 2001, thereby restarting the 
delayed work as quickly as possible. This rework has resulted in some 
changes in the fiscal year 2001 budget request, where nearly all of the 
BRAC funds are for environmental cleanup. The continued execution of 
the fiscal year 2000/2001 program will only work if fiscal year 2001 
funding is received in full. The following list outlines those areas 
where 74 percent of all fiscal year 2001 BRAC funds are being spent.
    Despite these actions to maintain momentum with limited funds, we 
have already experienced some unavoidable impacts:

Mare Island

    Reduced or delayed funding in fiscal year 2001 will result in 
conveyance delays. Mare Island is divided into 22 parcels, which were 
delineated with the environmental cleanup schedules as a primary 
consideration. Reduced or delayed funding would impact disposal of 14 
parcels, or a total of 5,000 acres.
    The majority of the developed and developable land was requested 
for transfer under an Economic Development Conveyance application, 
which was approved in September 1999. Most of this property is 
scheduled to be conveyed in fiscal year 2002 when the environmental 
work would be completed if we proceed as currently scheduled. There are 
two developers now working under a LIFOC. Further postponements of 
remediation projects on EDC parcels will delay deed transfer, which 
will adversely impact the community's ability to raise capital to fund 
redevelopment projects.
    Large portions, approximately 3,600 acres, of the wetlands revert 
to the State of California. Currently these parcels are scheduled for 
conveyance in 2004 and 2005. There is interest in an early transfer of 
these parcels to support a commercial dredging operation in the Bay 
Area. Additionally, the LRA has informally notified Navy they are 
planning to make application for an early transfer of all other parts 
of the Mare Island complex this year as well. Reduced or delayed 
funding would seriously jeopardize our ability to make a meaningful 
commitment to early conveyance of this property in fiscal year 2001.

FISC Oakland

    Funding included for the Fleet Industrial Supply Center (FISC) 
Oakland is for two installations--FISC Alameda Annex and Naval Fuel 
Depot Point Molate. Both of these sites were the subject of special 
legislation and will be transferred via a quit claim deed. We are 
pursuing an agreement between the Navy and the City of Alameda, 
California, to transfer the FISC Alameda Annex property to the City in 
April 2000 with Navy to complete environmental cleanup to support the 
City's redevelopment project. The City's $100 million development 
project will be jeopardized if environmental cleanup funding is delayed 
from fiscal year 2001 to an outyear.
    Point Molate NEPA will be completed this fall. Navy could then 
convey the property except that environmental cleanup will not have 
been completed. If funding is delayed, transfer of the first two 
parcels, or 40 acres, currently scheduled for December 2003 will not be 
met. City is actively considering early transfer and has hired 
consultant(s) to assess their risks and advise them on early transfer. 
In that case, lack or delay of funding in fiscal year 2001 would also 
undermine our ability to commit to an early transfer in the near term.

Naval Air Station in South Weymouth, MA (NAS SOWEY)

    The limited fiscal year 2000 funding affected our opportunity for 
an early transfer of NAS SOWEY. The Local Reuse Authority (LRA) for NAS 
SOWEY has put together a redevelopment plan that includes retail 
shopping, office space and recreational parks. The centerpiece of the 
redevelopment is a one million square foot shopping mall. The Mills 
Corporation, developers of the mall, is prepared to begin construction 
in January 2001. However, Mills cannot begin construction without a 
long-term lease (LIFOC) or ownership of the property. Mills also 
requires a connector road to access the mall. This road would go 
completely across the base. The mall and the connector road are the 
keys to redevelopment of NAS SOWEY.
    In order to meet the January 2001 construction start date, the LRA 
had asked Navy to provide property transfer or LIFOC for the Mall 
Parcel and Connector Parcel by 1 October 2000. The shift in funding 
greatly affected Navy's ability to either transfer or reach LIFOC for 
the Mall Parcel and the Connector Parcel. A number of remediation 
projects must occur in fiscal year 2000 to meet the mall construction 
schedule. Any delay in fiscal year 2001 funding will make it impossible 
to achieve a FOST by the date requested by the LRA. This will delay the 
start of Mills' construction and may even drive the Mills Corporation 
out of the project completely thereby destroying the reuse plan.

Moffett Field

    At Crows Landing, the land has been transferred from NASA to 
Stanislaus County. The new owner wants to convert this base to an 
Agricultural Airport for rapid transportation of perishables produced 
by the farmers in the area. Any delays will affect the farms that 
surround the base. A regional Treatment System, which is integral to 
redevelopment, was planned to be in place by August 2000; but due to 
the fiscal year 2000 budget reduction, the cleanup implementation has 
been pushed out one year to August 2001. We intend to utilize recovered 
monies from prior year unobligated/unexpended balances to fund fiscal 
year 2000 requirements at Moffet. However, if funds are unavailable in 
fiscal year 2001, the schedule will be further impacted.
    At Moffett Field, the main base real estate has already been 
transferred to NASA. Due to the reduction in fiscal year 2000 funding, 
the cleanup of Site 22 was delayed from August 2000 to August 2001. If 
fiscal year 2001 is not fully funded, it will have a ripple effect on 
remediation work carried out, such as the cleanup at ecologically 
sensitive areas (Site 27). This will also affect the agreement Navy has 
signed with NASA as it impacts their future land use plan. Moffett is a 
National Priorities List site. Public reaction is also expected (a very 
active RAB exists at Moffett); they have already questioned the budget 
cuts at several RAB meetings.

NAS Alameda

    Shortfalls or delayed funding in fiscal year 2001 would result in 
EDC Parcels 1, 2, 6, 7, 8, 9, 10, 11, 14, 16 and Fed 2, 4 conveyance 
and cleanup delays. A planned 575-acre wildlife refuge is also 
affected. Delays would result in missed milestones contained in the 
pending Federal Facilities Agreement, with possible payment of 
stipulated penalties. Reuse and development delays will cost the city 
millions of dollars in revenue. Since the community has been an active 
participant in the cleanup process, additional cleanup delays will 
increase public resentment and outrage. If all parcels at Alameda must 
be cleaned before transfer, the final transfer to the City would not 
occur until May 2007. In all likelihood, a delay of this length will 
cause the City to miss the prevailing positive economic cycle, which 
could leave this parcel undeveloped for this entire decade.

NAS Memphis

    Memphis is the first early transfer where Navy agreed to continue 
environmental cleanup after transfer. As such, it is being watched by 
other BRAC communities considering similar opportunities to accelerate 
reuse. Memphis has a cleanup schedule specified in the Covenant 
Deferral Request. We are currently conducting the Corrective Measures 
Study at Memphis, with the remedies to be selected the second and third 
quarter of fiscal year 2001. We may not be able to pursue cleanup at 
Memphis as negotiated with the State of Tennessee if fiscal year 2001 
funds are reduced. This would send a strong adverse signal to the other 
states considering early transfers. Navy would loose all credibility 
for any schedule established and future conveyance agreements that 
would rely on post-conveyance environmental cleanups.

Charleston Naval Complex

    The Redevelopment Authority has indicated a willingness to 
entertain early transfer in the summer of 2000 because of a fixed price 
environmental restoration contract already signed that uses private 
sector insurance to guarantee the price and cleanup. This contract is 
incrementally funded over two years and places the investigative and 
cleanup requirements on one prime contractor for expedited transfer and 
environmental closure. Reduction in funding of the fiscal year 2001 
budget request would have an extremely adverse impact on the time 
schedule and total cost of the contract as well as the timeline for 
transfer of the property. The FOST date for EDC phase 3 would be 
delayed at least a year.

NAVSTA Treasure Island

    Reduced or delayed funding in fiscal year 2001 would result in 
conveyance and cleanup delays from fiscal year 2007 to fiscal year 
2009, igniting public resentment. Seven conveyance parcels on Treasure 
Island would be directly impacted. The planned reuse/development, for 
housing, film studios, ferry terminal and a marina, has high political 
interest in California and in Congress. Reuse and development delays 
could cost the city millions of dollars in revenue. More importantly, 
the Navy would be in direct violation of the signed Federal 
Facilities--State Remediation Agreement resulting in possible 
stipulated penalties.
    The City of San Francisco has expressed interest in early transfer 
of Treasure Island this year. There are basically two scenarios 
possible: (1) Fixed-price buy-out with cleanup included in 
redevelopment by the new owner, and (2) Early transfer with cleanup to 
be completed by the government after conveyance. Congressional 
reductions in Navy's fiscal year 2001 budget requests would eliminate 
any possibility of a fixed-price buy-out because funds would not be 
available when needed to consummate such a deal. Fiscal year 2001 
funding delays or reductions would also significantly undermine the 
City's confidence in timely federal cleanup following an early 
transfer. Our best hope to accelerate conveyance and economic 
development of this property is full funding of Navy's request in 
fiscal year 2001.

Hunters Points NSY

    Navy is currently exploring early transfer of Hunters Point with 
the City of San Francisco and their master developer. Congressional 
support of Navy's fiscal year 2001-2003 budget requests will be 
absolutely critical to consummating an early transfer for this troubled 
property. The City's economic development cycle is in high-gear and 
accelerated development of Hunters Point is a City imperative since 
this is one of the last major parcels of undeveloped waterfront real 
estate in the San Francisco area. Even if early transfer and fixed-
price buy-out negotiations are unsuccessful, any funding reductions in 
fiscal year 2001 would adversely impact Site 78 on Parcel F. Because of 
reduced fiscal year 2000 funding, the Regional Sediment Report will be 
incrementally funded. If the balance of funds is not provided in fiscal 
year 2001, the Navy will be in violation of the Federal Facilities 
Agreement schedule. These delays will require approval from the BRAC 
Cleanup Team (in particular, the regulatory agencies). If funds are not 
provided until fiscal year 2002, this will delay the Remedial 
Investigation phase, followed by the Feasibility Study phase, Record Of 
Decision, Remedial Action phases and the planned transfer date of 
January 2004 (which would be pushed to January 2005) to the City of San 
Francisco.

NAS Dallas

    Early transfer is being pursued for the Navy's ``L'' Parcel with 
the City of Dallas. Cuts in fiscal year 2001 would delay both the FOST 
and disposal date. On the property leased from the city of Dallas, the 
Navy is negotiating with the City regarding the extent of cleanup 
required and a possible cooperative agreement, with cleanup funding 
passed from the Navy to the City. Funding reductions would probably end 
discussions on a cooperative agreement and most likely lead to lawsuits 
and a judicial solution.

NOS Louisville

    The Navy anticipates an early transfer of the entire property with 
cleanup being finished by the Navy after transfer. Funding cuts would 
not allow us to meet the FOST dates specified; and the early transfer, 
which the district's Congressional representative champions as a must 
have for the local economy, would be in jeopardy. This would negate all 
reuse planning to date and require a total reevaluation of the reuse 
plan.

NAS Cecil Field

    The FOSTs for six parcels would not be met if funding is reduced in 
fiscal year 2001. These include parcels already delayed from both the 
PBCs and EDCs by earlier budget reductions. The FOSTs for two parcels 
scheduled for November 2000 would not be met if fiscal year 2001 
funding is delayed. Delays must be avoided to preserve the community's 
reuse plan since the aircraft related activities could easily relocate 
to another facility in the southeast portion of the country, leaving 
the property undeveloped for years to come.

NAWC Indianapolis

    The FOSTs for two parcels scheduled for fiscal year 2003 will not 
be met if fiscal year 2001 funding is shorted. This property is leased 
until transfer is complete. Should the cleanup effort be suspended or 
postponed, the lease could be terminated and the property abandoned.

NTC Orlando

    The FOST for three parcels scheduled for 2001 will not be met if 
fiscal year 2001 funding is reduced. We expect delays to most of the 
currently scheduled FOSTs and transfers of property, and delays in 
pursuing ultimate cleanup.

                                SUMMARY

    Navy has accommodated the incremental impacts in fiscal year 2000 
by restructuring the cleanup contracting strategies across the program. 
Increased labor and increased costs of the cleanup work are inevitable. 
Some delays are already occurring but the promise of full follow-on 
funding in fiscal year 2001 has been used effectively to allay 
community and regulator concerns. Navy is also actively pursuing early 
transfers and fixed-price buyouts at several major bases. Reductions or 
even indications of potential reductions in Navy's BRAC budget request 
during congressional reviews over the next few months will have 
devastating affects on timely and successful conclusion of the BRAC 
program. Impacts to community redevelopment efforts and job generation 
will result across the country.

[GRAPHIC] [TIFF OMITTED] T09FE29.000

    Senator Burns. Mr. Secretary, if you could, and then sort 
of detail some of those, where those conveyances will be made 
and kind of keep the committee informed, I would like that, and 
I know that you have a pretty robust schedule this year with 
regard to that, and we appreciate that, but you know every time 
you see a spike in there, that always draws a little bit of 
attention. How come we are doing that, and of course some of 
that, some of the steps we have taken in the past 2 years has 
caused part of that, too, we also understand that. And we will 
work with you. But if you could provide the committee on those 
conveyances and where we are in our cleanup with more detail, I 
would certainly appreciate that.
    Mr. Pirie. Definitely. I have got a memorandum on some of 
the trapeze acts that we have had to do with the communities 
just to get through this year, and I will provide that as well.
    [The information follows:]

Memorandum for Stakeholders in the Department of the Navy Environmental 
                          Restoration Program

                    FISCAL YEAR 2000 CLEANUP FUNDING

    Funding for cleanups at installations undergoing Base Realignment 
and Closure (BRAC) is provided from the Navy's BRAC account, which is 
part of the Military Construction appropriation. When the Department of 
the Navy developed the BRAC budget, $382 million, in environmental 
projects was planned for fiscal year 2000. This figure represented a 
$107 million real increase from fiscal year 1999 to fiscal year 2000 
and would have funded our fiscal year 2000 BRAC environmental 
requirements. During final budget deliberations within the Department 
of Defense, $233 million was shifted from fiscal year 2000 to fiscal 
year 2001 leaving $149 million (about 40 percent) available for BRAC 
account fiscal year 2000. This shift of funds, called an Advanced 
Appropriation, was based on the premise that not all funds are needed 
in the year a cleanup project is initiated. After a project is 
initiated by awarding a contract, work progresses over many months and 
progress payments are made to the contractor accordingly. Only when the 
contractor ``cashes'' the government checks are funds expended from the 
federal treasury. Historically, the BRAC cleanup program has expended 
about 40 percent of funds in the first year, with the remaining funds 
expended over the following 12-18 months. Having pre-approved, future 
appropriations (an Advanced Appropriation) would have allowed the 
military services to contract for the same BRAC cleanup projects as 
planned in fiscal year 2000 and have funds available for cleanup 
projects as they progressed into fiscal year 2001. Congress did not 
approve the Advanced Appropriation concept. We have been unsuccessful 
in restoring fiscal year 2000 BRAC funds to the level first planned.
    Fiscal year 2000 will be a difficult year for Navy execution of the 
BRAC environmental program. Because funds have not been appropriated, 
we will not be able to contract for all the cleanup projects we had 
planned. We have asked the Naval Facilities Engineering Command and 
their field divisions to consult with stakeholders at BRAC bases to 
ensure we make the best use of available funds. The risk to human 
health and the status of property reuse actions will be prime factors 
in prioritizing our efforts. However, we are aware that not all 
requirements can be satisfied in fiscal year 2000. We appreciate your 
understanding and cooperation as we strive to meet our regulatory 
obligations and commitments to your community.

------------------------------------------------------------------------
                                                          Disposal date
                     Installation                      -----------------
                                                         Month     Year
------------------------------------------------------------------------
Adak..................................................        3     2001
Agana.................................................        9     2001
Alameda...............................................        6     2005
Annapolis.............................................        9     2001
Barbers Pt............................................        9     2001
Brooklyn..............................................        9     2002
Cecil Fld.............................................        9     2002
Chastn Com............................................       12     2001
Chase (Goli)..........................................        2     2000
Coconut Gr............................................        2     2000
Dallas................................................       12     2002
Davisville............................................        1     2001
El Toro...............................................        5     2004
Glenview..............................................        2     2001
Guam PWC..............................................        9     2001
Guam SRF..............................................       12     1999
Hunters Pt............................................        9     2005
Huntsville............................................       11     1999
Indianapolis..........................................       11     2003
Jamestown.............................................        3     2000
Key West..............................................        1     2001
Long Bch Sy...........................................       12     2000
Long Bch NS...........................................        1     2000
Louisville............................................       10     2003
Mare Island...........................................       12     2005
Memphis...............................................       12     1999
New London............................................        6     2000
Oakland Fisc..........................................        7     2004
Oakland NH............................................        3     2000
Oakland NRL...........................................        4     2000
Orlando NTC...........................................        6     2001
Perth Amboy...........................................        5     2000
Philadel NH...........................................       10      200
Philade NS............................................  .......     2002
Pittsfield............................................        1     2000
Salton Sea............................................       12     1999
San Diego.............................................        3     2002
San Fran PWC..........................................        1     2002
Sand Point PU.........................................       12     1999
South Weymo...........................................        9     2002
Staten Island.........................................        1      200
Stockton CA...........................................        3     2000
Treasure Is...........................................        3     2003
Trenton Naw...........................................        7     2000
Tustin................................................        2     2003
Warminster............................................        9     2000
------------------------------------------------------------------------

    Senator Burns. Well, you have made it through that 
minefield pretty good. We think you have done a good job. And 
of course I would say to my good Marine friends, you know, 
everybody else is worried about housing. We would take some of 
your housing at probably Home Air Force base. We Marines are 
used to sleeping just in a tent, you know.
    Senator Craig. I have heard those lines from you before. I 
don't believe them.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Burns. You guys have to get a life. I have no 
further questions for this panel, and I appreciate you coming 
this morning. Again, we look forward to working with you as we 
complete this process, and if we can be of any help to you, we 
are certainly here to provide that for you. Thank you, Mr. 
Secretary, for coming this morning.
    Mr. Pirie. Thank you, Senator.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

              Questions Submitted by Senator Conrad Burns

                             FUNDING LEVELS

    Question. The Navy's fiscal year 2001 overall budget represents a 
two percent increase over last year's enacted level, about $166 
million. However, a large portion of this increase is in the BRAC 
account. Their construction program is in fact below last year's 
enacted level.
    Secretary Pirie, while your fiscal year 2001 budget looks stronger 
than last year's budget, a good portion of the increase is actually 
allocated to the BRAC account. Why is this a good news story?
    Answer. Yes, most of the increase is in the BRAC account, because 
that area had the greatest need. During the fiscal year 2000 budget 
deliberations within the Department of Defense, Navy BRAC environmental 
funds were shifted from fiscal year 2000 to fiscal year 2001 as part of 
a request for Advanced Appropriation in the construction accounts. 
Congress did not approve the Advanced Appropriation concept, and fully 
funded the fiscal year 2000 military construction and family housing 
construction accounts. BRAC funding, however, was not similarly 
restored. Thus, the large increase in fiscal year 2001 BRAC funding 
represents requirements and funding, nearly all of which is to cleanup 
BRAC properties, deferred from fiscal year 2000 and added to our fiscal 
year 2001 requirements. These projects are closely tied to 
redevelopment and reuse of the property by Local Redevelopment 
Authorities and need to be completed to stay on schedule with 
redevelopment plans.
    Our fiscal year 2001 request retains this higher level of funding. 
We consider this funding vital to support redevelopment efforts by 
town, communities and cities adversely affected by base closures, and 
to keep the disposal of excess Navy property on schedule so that the 
savings can be applied elsewhere in Navy's budget. Fiscal year 2001 
represents the single largest year for planned property transfers for 
the Department of Navy.
    Our fiscal year 2001 request is also higher than fiscal year 2000 
in other areas as well. Our Family Housing Construction appropriation 
request is seven percent above the fiscal year 2000 enacted amount. Our 
Real Property Maintenance request is nine percent greater than the 
fiscal year 2000 enacted level, after inclusion of the Department of 
the Navy's share of Quality of Life Enhancement, Defense in fiscal year 
2000 and the effect of the fiscal year 2000 rescission. Our Family 
Housing Operations and Maintenance account, and Base Operations Support 
are about the same as the fiscal year 2000 enacted level. Only our 
Military Construction, Navy and Military Construction, Naval Reserve 
accounts are below the fiscal year 2000 enacted level. They are, 
however, similar to the fiscal year 2000 budget request level before 
Department of Defense decision to eliminate contingency funding.
    Overall, this is the strongest facilities budget submitted to the 
Congress during my six year tenure in this position.
    Question. What will be the impact of taking all of the fiscal year 
2000 across-the-board reduction for the operation and maintenance 
account against only the real property maintenance accounts?
    Answer. Targeting the entire $136 million operation and maintenance 
rescission to the real property maintenance accounts, although 
difficult, avoids immediate readiness problems and can be done with the 
least risk of reduction-in-force or furloughs. Nonetheless, the 
decision amounts to a nine percent reduction in fiscal year 2000 Real 
Property Maintenance funds, and contributes to the growth in the 
backlog of maintenance and repairs. Unless other sources of funds can 
be found, all types of facilities, including barracks and other quality 
of life facilities, will be adversely impacted. Even mission critical 
facilities (e.g. waterfront, airport, Bachelor Quarters, and training) 
that we fund at a C-2 facility readiness level will be funded at the 
reduced level of C-3 readiness this year as a result.

                     PUBLIC/PRIVATE VENTURES (PPV)

    Question. Secretary Pirie, how will Secretary Cohen's recent 
announcement to buy out the basic allowance for housing for those 
Service members living on the economy impact family housing 
privatization?
    Answer. The impact of this initiative on family housing 
privatization is uncertain at this time. We have begun efforts to 
analyze the long-term impacts of this initiative on the supply and 
demand for military housing. Preliminary analysis of on-going 
privatization projects indicate that all remain viable and meet 
applicable statutory thresholds for Government participation. Our first 
opportunity to address possible impacts will be when we provide the 
Family Housing Master Plans due to congress in July. Our objective is 
to strike the appropriate balance between reliance on the private 
sector and, where necessary, the provision of Government quarters, 
through public/private ventures and traditional military construction.
    Question. I understand the Navy is looking at privatizing barracks. 
Please describe how such an initiative would work?
    Answer. The Navy is evaluating the feasibility of a private 
Bachelor Quarters (BQ) project for Naval District Washington (NDW). The 
proposed scope is a 200 unit, apartment-style project intended for 
single sailors in paygrades E-5 and E-6 stationed in the Washington 
D.C. area.
    The Navy is also evaluating the feasibility of a BQ privatization 
effort at Mitchel Field, Long Island, New York, as part of a combined 
bachelor and family housing PPV project.
    Under both projects the Navy would provide land to a developer who 
in turn would build apartments that our unaccompanied Sailors could 
rent within their Basic Allowance for Housing (BAH). There would be no 
guaranteed rental rates to the developer. Presently the Navy does not 
anticipate the need to provide any up front cash investment.
    The Marine Corps is exploring the possibility of privatizing a 
Bachelor Officer Quarters at The Basic School in Quantico, Virginia. 
The Marine Corps is currently conducting industry interviews.
    We are continuing to explore the potential use of unaccompanied 
housing privatization to support the Navy's new initiative to berth 
shipboard Sailors ashore in homeport. Additional projects may be 
developed if they are cost effective and consistent with single Sailor 
policy objectives.
    Question. I continue to be concerned about how installations with 
family housing privatization ventures and other privatization ventures 
will be treated in future rounds of BRAC. Have we created a system of 
``haves'' and ``have-nots'' with regards to BRAC?
    Answer. In future rounds of BRAC, decisions to close or realign 
bases will be made independently of the presence (or absence) of 
privatized housing. The Department of the Navy's approach to family 
housing privatization will provide flexibility in the event of changing 
conditions such as base closures or realignments. The Department of the 
Navy is not using any BRAC guarantees in its housing privatization 
program. Also, the Navy's Public Private Venture business approach, 
which involves becoming a minority partner in a public-private entity 
through investment, results in the right to participate in certain key 
decisions, including decisions on how to react to fluctuations in 
military housing requirements. Options that would be available to 
respond to reduced military demand include renting units to civilians 
at market rates or the selling of assets in a market-based sale. The 
Department of the Navy then would return its share of the proceeds to 
the Family Housing Improvement Fund for future use.

                           DEMOLITION PROGRAM

    Question. Last year we discussed the Navy's demolition program. It 
would appear that this program has been quite successful. Do you have 
an estimate of how much money the Navy has saved by demolishing old 
facilities?
    Answer. The Centralized Demolition program has been a success story 
for the Navy and Marine Corps over the last several years. We estimate 
a ``cost avoidance'' vice savings of $2 per square foot of the 
facilities we are demolishing. To date the Navy and Marine Corps have 
demolished nearly 1,700 buildings and structures and eliminated 8.7 
million square feet of unneeded space.
    Question. When do you expect to complete the program? Will this 
allow your limited real property maintenance dollars to go further?
    Answer. Defense Reform Initiative Directive (DRID) #36 established 
demolition goals for each service. The Navy's goal is 9.9 million 
square feet by the end of fiscal year 2002; the Marine Corps goal is 
2.1 million square feet by the end of fiscal year 2000. We are on 
target to meet these goals and actually expect to exceed them. Since 
1996, the Navy/Marine Corps team has executed over 200 projects to 
remove nearly 1,700 buildings and structures and eliminate 8.7 million 
square feet from the inventory. We expect to demolish an additional 2.9 
million square feet in fiscal year 2000.
    We plan to continue the program beyond established goals as long as 
it is cost effective. The Centralized Demolition Program places an 
increased emphasis on demolishing excess and obsolete facilities which 
reduces the infrastructure to be maintained and ultimately allows our 
limited RPM dollars to be invested in the facilities we need to retain.
    Question. What kind of buildings are you demolishing? Is it 
primarily World War II wood facilities?
    Answer. The Department of the Navy has demolished a variety of 
buildings and structures over the last few years including facilities 
constructed from wood, concrete, concrete masonry unit block wall and 
steel. Examples of facilities demolished are supply warehouses, fuel 
tanks, administrative buildings, officer clubs, radar towers, 
substandard bachelor enlisted quarters and aircraft hangars. Some have 
been WWII vintage wood facilities, but it would not be accurate to say 
they are primarily WW II wood facilities.

                FISCAL YEAR 2001 CONTINGENCY ELIMINATION

    Question. Could this reduction cause a change in overall scope of 
the projects? What other challenges will this cause?
    Answer. The Department of the Navy does not plan to change the 
scope of construction projects as a result of eliminating contingency 
funds. The absence of contingency funds may compromise our ability to 
execute some fiscal year 2001 projects during the fiscal year.
    Question. When a project encounters cost over-runs, how will the 
Navy treat a shortfall without the contingency account?
    Answer. The Department of the Navy is committed to maintaining 
required scope and quality of authorized and appropriated projects. In 
the absence of contingency funds to cover unforeseen construction 
requirements, additional funds, if necessary to complete a project, 
will have to come from reprogrammings, deferrals, or cancellations of 
other projects.

                                VIEQUES

    Question. Secretary Pirie, please describe the current situation 
with respect to Vieques?
    Answer. The Navy is working to implement the two presidential 
directives that were issued on January 31, 2000. RADM Kevin Green, 
COMUSNAVSO, and his staff are established in Puerto Rico and working 
with representatives of both the community and the Commonwealth.
    Question. When does the Navy anticipate being able to use the 
Vieques ranges to conduct fleet training? I understand that the $40 
million of economic development funding is dependent on the resumption 
of training.
    Answer. No date has been set for resumption of training. Navy is 
working with the representatives of the Commonwealth to methodically 
implement the elements of the presidential directives and establish the 
conditions necessary to conduct training. Once these conditions have 
been set, training will be scheduled.
    The $40 million funding is dependent on the resumption of training 
and continuous availability of the Live Impact Area for use of inert 
ordnance.
    Question. The presidential directive allows no more than 90 days of 
annual training. Is this sufficient to train the fleet before 
deployment?
    Answer. Yes.
                                 ______
                                 

               Questions Submitted by Senator Larry Craig

    Question. What are you doing to reach the goal of allocating 3 
percent of the plant replacement value of Navy facilities for annual 
real property maintenance?
    Answer. While the private sector uses 2-4 percent of the plant 
replacement value for annual real property maintenance, the Navy's goal 
is 2.1 percent and the Marine Corps' goal is 1.75 percent to arrest 
backlog growth. Competing priorities have not enabled the Department to 
achieve the desired goals.
    Question. With the ever growing importance of stealth technology, 
are there any other missions for the Acoustic Research Detachment at 
Lake Pend Oreille, which are applicable to the surface fleet?
    Answer. The Navy presently has no identified mission requirement or 
funding in the Future Years Defense Program (FYDP) to support such 
testing at Lake Pend Oreille for surface ships.

                            Defense Agencies

                    U.S. Special Operations Command

STATEMENT OF LT. GEN. NORTON SCHWARTZ, DEPUTY COMMANDER 
            IN CHIEF

                        Defense Logistics Agency

STATEMENT OF MARSHALL BAILEY, DIRECTOR OF SUPPORT 
            SERVICES

                Department of Defense Education Activity

STATEMENT OF RAY TOLLESON, INTERIM DIRECTOR

                      TRICARE Management Activity

STATEMENT OF DIANA TABLER, DEPUTY EXECUTIVE DIRECTOR

    Senator Burns. We will now hear from the second panel 
representing the defense agencies. The witnesses are Lieutenant 
General Norton Schwartz, U.S. Special Operations Command, Mr. 
Marshall Bailey, Director of Support Services, Defense 
Logistics Agency, Mr. Ray Tolleson, acting director, Department 
of Defense Education Activity, Ms. Diana Tabler, deputy 
executive director, TRICARE Management Activity.
    Gentlemen and madam, we welcome you this morning and look 
forward to your testimony. This will provide the committee an 
overview of the respective agencies' proposed new budget 
request, and I ask you to keep your statements, if you could 
summarize your statements, as we work our way through this.
    I have a conference this morning on the orbit bill, and we 
are trying to get that issue put to bed, so to speak, and so we 
are looking forward to your testimony this morning. We will 
start with General Schwartz.
    General Schwartz. Mr. Chairman, Senator Craig, good 
morning. It is a pleasure to appear before you here today to 
present the United States Special Operations Command fiscal 
year 2001 military construction budget request, and as you 
mentioned earlier, I am Lieutenant General Norton Schwartz. I 
work for General Pete Schoomaker, the Commander in Chief of the 
U.S. Special Operations Command, and with your permission I 
would like to enter my formal statement into the record.
    Senator Burns. Without objection, your full statement will 
be made part of the record.
    General Schwartz. Thank you, sir. Unlike my counterparts 
who testified here a moment ago who must address a much larger 
array of requirements, we at the U.S. Special Operations 
Command focus on Special Operations Forces' mission needs and 
support requirements, given the authorities vested in the 
Commander in Chief of the U.S. Special Operations Command by 
Congress and the Secretary of Defense (SECDEF).
    That support provides essential facilities to preserve and 
improve capability, increase readiness of complex weapons 
systems, and support demanding training in our particular 
military discipline. We recommend 15 projects for your 
consideration this year. Thirteen in the continental United 
States and two overseas--one in the Pacific and one in the 
Atlantic region. The request totals $74.5 million, of which 
$70.7 million is for major construction and $3.8 million for 
planning and design.

                           PREPARED STATEMENT

    Sir, we look forward to working with you and your staff to 
secure the facilities, to underwrite the readiness and 
capability of your Special Operations Forces with the 
straightforward goal of meeting the high expectations that the 
military commanders in chief and the civilian leadership have 
for these forces, and, sir, that is my statement for this 
morning.
    [The statement follows:]

               Prepared Statement of Gen. Norton Schwartz

                              INTRODUCTION

    Mr. Chairman and members of the committee, I am pleased to present 
the United States Special Operations Command (USSOCOM) fiscal year 2001 
Military Construction (MILCON) 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 the full spectrum of special operations missions also demand a 
modern array of operations, training, maintenance and storage 
facilities.
                                PURPOSE

    The long term goal of the USSOCOM facilities program, of which 
MILCON is one part, is to have all units and individuals working and 
living in adequate facilities in order to maximize training and 
operations capabilities. Facilities requirements are generated by the 
need to modernize and replace inadequate facilities and the need to 
support new weapons systems, force structure, and missions. The current 
program is planned to provide facilities that will improve force 
capability, increase readiness of complex weapons systems, and support 
diverse training needs. Examples of construction projects that meet 
this criteria are; a new media operations complex for the 4th 
Psychological Operations Group at Fort Bragg, North Carolina, upgraded 
air field facilities for the 16th Special Operations Wing at Hurlburt 
Field, Florida, and a flight simulator for the 160th Special Operations 
Aviation Regiment at Fort Campbell, Kentucky. All of the individual 
construction requests are part of a component master construction plan. 
Component MILCON projects are integrated at the Headquarters 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 special operations forces (SOF) to 
perform their missions and ensure we have a fully trained and capable 
force in the future.

                             MILCON PROGRAM

    The fifteen military construction projects for our component 
commands in this program include five projects for the U.S. Army 
Special Operations Command, six for the Naval Special Warfare Command 
and four for the U.S. Air Force Special Operations Command. Our MILCON 
budget request for fiscal year 2001 totals $74.5 million: $70.7 million 
for major construction, and $3.8 million for planning and design. The 
majority of our program supports replacement and renovation of current 
mission facilities. This budget request recognizes the need to balance 
construction requirements against acquisition programs and the high 
state of readiness required of all special operations forces.
    Following is a brief description of each of the fifteen projects 
listed by state:

Applied Instruction Facility

                        [In thousands of dollars]

NAB Coronado, California......................................     4,300

    Constructs a Naval Special Warfare Center's Applied Instruction 
building to eliminate overcrowded conditions for Basic Underwater 
Divers/Swimmers training and advanced courses. This facility is the 
primary training building for Naval Special Warfare Command. It was 
constructed in 1971 and is not configured or wired to support state of 
the art audio-visual teaching equipment or training aids. The facility 
is overcrowded and ill suited to meet the training need of the Naval 
SOF community.

Small Craft Berthing Facility

                        [In thousands of dollars]

NAS North Island, California..................................     1,350

    This project will provide a concrete finger pier and a series of 
floating docks to facilitate the entry and removal of the MK-V patrol 
craft from the water. The finger pier will allow a straddle lift crane 
to quickly place or recover the craft while the docks will facilitate 
loading and unloading personnel and equipment. The current method of 
using construction cranes to move the MK-V is inefficient and 
unreliable.

Airfield Readiness Improvements

                        [In thousands of dollars]

Hurlburt Field, Florida.......................................     3,000

    Constructs a parallel apron and taxiway along the East apron to 
allow safe and efficient movement of helicopters between the runway and 
parking spaces. Additionally, the taxiway will facilitate access to the 
East apron for heavy airlift aircraft, e.g. C-5 and KC-10. Currently 
helicopters must be respotted to allow access by large aircraft or 
towed to the West apron for deployment.

Hot Cargo Pad

                        [In thousands of dollars]

Hurlburt Field, Florida.......................................     7,354

    Constructs a parking apron for loading munitions and dangerous 
cargo on to aircraft. This project is required to enable two C-5s or 
three C-141s to be loaded simultaneously with munitions. It provides 
access taxiways, a munitions holding area, access road, and space for 
aircraft support equipment. The existing area is not large enough to 
accommodate C-5s and C-141s. These aircraft must be parked on the main 
taxiway during munitions operations interrupting the efficient flow of 
aircraft in and out of the airfield.

Corrosion Control Facility

                        [In thousands of dollars]

Hurlburt Field, Florida.......................................     8,100

    Constructs an adequate facility for corrosion control and composite 
repair of three different types of aircraft. An effective corrosion 
control program will extend the operational life of all aircraft. The 
existing facility is an open-air covered wash rack. Required corrosion 
control operations are severely limited by climatic conditions. Health 
and explosive safety requirements cannot be maintained in this 
facility. There is no existing facility to perform repairs on composite 
materials.

Aerospace Ground Equipment Maintenance/Dispatch Complex

                        [In thousands of dollars]

Hurlburt Field, Florida.......................................     4,750

    Constructs two aerospace ground equipment (AGE) maintenance 
dispatch complexes to support aircraft on the West and East aprons. The 
proposed shops provide space for inspection, maintenance, repair, and 
servicing of AGE. The existing facility provides less than 50 percent 
of the required space to service over 1,300 pieces of AGE. There is no 
facility on the east side, requiring AGE to be towed or driven around 
the end of the runway to move from servicing to operational areas, a 
distance of two miles.

AH/MH-6 Flight Simulator

                        [In thousands of dollars]

Fort Campbell, Kentucky.......................................     5,400

    The proposed construction project will provide the facility to 
house the simulator for the Light Assault/Attack helicopter. This 
facility will include operational areas, computer room, mission 
briefing and planning rooms, classrooms, library/learning center, 
projection areas, secure vault, SCIF, simulator modules and support 
areas. Currently, aircrews train in actual aircraft. This method of 
training is very costly in terms of aircrew hours, maintenance man-
hours and extra wear and tear on the aircraft.

Tactical Equipment Complex

                        [In thousands of dollars]

Fort Campbell, Kentucky.......................................     6,400

    Builds a consolidated tactical vehicle equipment shop facility for 
the 160th Special Operations Aviation Regiment. The new facility will 
replace deteriorated WWII wood structures which are functionally 
inadequate and too small for the 326 vehicles and 33 maintenance 
personnel servicing the 160th's mission.

Equipment Maintenance Complex

                        [In thousands of dollars]

Fort Campbell, Kentucky.......................................     4,500

    Constructs a tactical vehicle equipment shop, deployment storage 
building, equipment storage buildings and parking for the 5th Special 
Forces Group (Airborne). Additional facility space is needed for the 
Special Forces' expanded L-Series Table of Organization and Equipment 
(LTOE) and fielding of the Desert Mobility Vehicles, trailers, and 
motorcycles. Currently, this maintenance function is accomplished in 
WWII wooden buildings.

Media Operations Complex

                        [In thousands of dollars]

Fort Bragg, North Carolina....................................     8,600

    Constructs a media production complex for the 4th Psychological 
Operations Group (4 POG). To provide space for print, media and radio 
operations. The 4 POG is modernizing their print and media production 
as well as their communications/radio capabilities with the latest 
digital equipment. The mission requires space for video and radio 
production and transmission, mass production of video/radio media, 
storage and administrative areas. The mission also requires space for 
print production, printing presses, storage of print materials and 
administrative personnel. The current facility is undersized and 
inadequate for the needs of a modern media production center. The 
facility lacks sound-proofing to conduct media production or radio 
broadcasts while the print presses are operating. The facility also 
lacks adequate power, communications and heating, ventilating and air 
conditioning systems to support the latest digital equipment utilized 
by the 4 POG.

Operations Support Facility

                        [In thousands of dollars]

NAS Oceana, Virginia..........................................     3,400

    Constructs a pre-engineered hangar and on-site storage for mission 
critical logistical support. Currently, commercial facilities are 
leased at Norfolk International Airport, limiting mission response 
time.

Air Operations Facility

                        [In thousands of dollars]

NAB Little Creek, Virginia....................................     5,400

    Constructs an air operations and paraloft tower multi-story 
facility for Naval Special Warfare Group 2. The facility will include 
gear storage, parachute-rigging platforms and parachute loading, 
rinsing, drying, packing and repair areas, office space, and 
classrooms. The existing facility is severely undersized limiting air 
delivery cargo size and/or requiring air operations preparations to be 
conducted outside only during fair weather.

Operations Support Facility

                        [In thousands of dollars]

FCTC Dam Neck, Virginia.......................................     5,500

    The project constructs a two-story building to support Naval 
Special Warfare ordnance operations. A facility is required to provide 
a safe working environment for operations personnel involved in 
research, development, testing, and evaluation of ordnance procedures. 
Administrative and storage space is necessary to support the unit's 
administrative and planning functions and to accommodate the 
substantial quantity of administrative materials, testing equipment, 
and personnel gear.

Boat Maintenance Facility

                        [In thousands of dollars]

Naval Station Roosevelt Roads, Puerto Rico....................     1,241

    Constructs a boat maintenance facility, boat ramp and finger piers. 
Currently, the boat maintenance function is performed in temporary, 
loaned facilities. Launch and recovery is being performed by crane 
operations due to lack of an available boat ramp. These facility 
deficits adversely impact the ability of the unit to perform required 
mission.

Tactical Equipment Maintenance Complex

                        [In thousands of dollars]

Taegu Air Base, Korea.........................................     1,450

    Constructs a tactical equipment maintenance complex consisting of a 
vehicle maintenance shop, deployment storage facility, petroleum, oils, 
and lubricants (POL) storage building and organizational vehicle 
parking. There are no existing facilities available for this function. 
Until this project is constructed, vehicle maintenance will have to be 
performed outside subject to adverse weather conditions.
                                summary
    Our proposed fiscal year 2001 MILCON budget for facility 
investments will significantly improve the operational and training 
capability of USSOCOM. Your support of this program is essential to 
ensuring the continued development of our nation's special operations 
forces.

                    STATEMENT OF MARSHALL H. BAILEY

    Senator Burns. Thank you, General. Now, Dr. Bailey, we look 
forward to your statement this morning.
    Mr. Bailey. Thank you, Mr. Chairman, Senator Craig. I would 
like to also ask that my prepared statement be included for the 
record, and I will just give some overriding comments.
    Mr. Chairman and members of the subcommittee, the Defense 
Logistics Agency's 2001 military construction request for 
appropriations is $192.2 million. That's for 17 projects and 
for planning and design. As in previous years, the agency 
continues its emphasis on sustaining and enhancing the 
department's fuel storage and distribution infrastructure.

                   REBUILD AMERICA STRATEGIC NOBILITY

    Through your support, our program to rebuild America's 
strategic en route fuel infrastructure is on schedule for 
completion in 2005. In fact, more than 40 percent of these 
projects are already operational or under construction.
    Now, this year's request includes six more projects for 
$112 million to support strategic mobility at several critical 
military installations. Equally important in our fuel area is 
our need to correct serious environmental deficiencies at seven 
fuel storage sites to satisfy agreements with State and local 
regulators. Now, without this $45 million investment, these 
storage facilities could potentially be shut down and 
operational impacts would be severe.
    In the agency's other business areas, we propose to replace 
a World War I wooden warehouse with a modern controlled 
humidity warehouse at our primary distribution depot in New 
Cumberland, Pennsylvania. We need this warehouse for the 
inspection, repair, and storage of parachutes and other air-
delivery materials.
    At this installation, we also plan to replace an existing 
inadequate child development center. This overcrowded facility 
was previously the post jailhouse during World War II. And 
finally, at one of the agency's remaining supply centers we 
will replace a 40-year-old fire station and consolidate police 
physical security and safety functions in a single modern 
facility.

                           PREPARED STATEMENT

    In summary, our military construction program reflects the 
Defense Logistics Agency (DLA) vision to be America's premier 
logistics combat support agency, providing vital facilities 
that enhance the service's war fighting capabilities. Mr. 
Chairman, this concludes my oral statement. Thank you for 
asking me to appear today. If you have any questions, I will be 
glad to respond.
    [The statement follows:]

              Prepared Statement of Dr. Marshall H. Bailey

    I am Marshall H. Bailey, Director of Support Services, at the 
Defense Logistics Agency (DLA). I am pleased to have the opportunity to 
provide information about DLA's fiscal year 2001 Military Construction 
request.

                     MILITARY CONSTRUCTION REQUEST

    The Defense Logistics Agency has requested $192.2 million to 
support our fiscal year 2001 Military Construction program. This 
program consists of 17 projects that will enhance strategic en route 
fueling capability, increase mission responsiveness, reduce 
environmental hazards, and improve facility readiness at our activities 
in support of the Agency's missions. This request includes:
  --$168.2 million for replacing deteriorated, obsolete hydrant fuel 
        systems and fuel storage tanks, or providing new systems, at 13 
        critical Air Force, Navy, and Marine Corps installations;
  --$13.0 million for a modern controlled-humidity warehouse at the 
        Defense Distribution Depot Susquehanna (New Cumberland), 
        Pennsylvania (DDSP);
  --$4.7 million for replacing an inadequate child development center 
        at DDSP;
  --$4.5 million for replacing an existing fire station to consolidate 
        public safety functions at DLA's Defense Supply Center in 
        Richmond, Virginia;
  --$1.8 million for planning and design of future strategic en route 
        fuels projects.

                     FUEL FACILITIES INFRASTRUCTURE

    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 
Agency places a high priority on sustaining and enhancing the 
Department's fuel distribution, storage, and handling infrastructure. 
This year, our requested funding for critical fuel facilities 
improvements amounts to 88 percent of our total military construction 
program. This level of funding supports the priorities of the Joint 
Chiefs of Staff to provide critical fuels infrastructure to support 
strategic en route mobility and correct environmental deficiencies at 
Defense Fuel Support Points.

                 STRATEGIC EN ROUTE FUEL INFRASTRUCTURE

    In support of strategic en route mobility requirements, our 
proposed investment to replace old and deteriorated hydrant fuel 
systems, or provide new bulk fuel storage tanks at critical overseas 
bases, is $111.8 million. With Congressional support, our program to 
rebuild America's strategic en route fuel infrastructure is on schedule 
for completion in fiscal year 2005. More than 40 percent of these 
projects are already operational or under construction.
    At Andersen Air Force Base (AFB), Guam, we will replace an existing 
hydrant fuel system for wide-bodied aircraft supporting strategic en 
route mobility requirements in the Pacific with a modern, pressurized 
hydrant system of 19 outlets for $20.0 million. This project provides 
the second of four hydrant systems needed to meet a total requirement 
of 67 hydrant outlets. Currently, the base operates a 45-year-old 
hydrant system that is failing and cannot support peacetime missions or 
en route mobility requirements in contingency or wartime operations. As 
with other obsolete hydrant systems elsewhere, repair parts are no 
longer commercially available and must be salvaged from other similar 
systems or individually fabricated. In addition, the underground piping 
system lacks cathodic (corrosion) protection. The new hydrant system 
will include features to protect it from the corrosive marine 
environment and will employ a leak detection system. The existing 
hydrant system will be demolished.
    A second project at Andersen AFB will construct two 100,000-barrel 
(15,900-kiloliter (kL)) fuel storage tanks for $16.0 million to replace 
fuel tanks previously demolished due to structural integrity 
deficiencies. This storage capacity is needed to support strategic en 
route fueling operations and contingency planning requirements.
    We propose to replace a hydrant fuel system at MacDill AFB, 
Florida. The $17.0 million project will provide a system of 12 modern, 
pressurized fuel hydrant outlets for KC-135 fuel-tanker aircraft. The 
existing 50-year-old hydrant systems are technologically obsolete, 
failing, and incapable of supporting current wide-bodied aircraft 
refueling requirements.
    At RAF Mildenhall, United Kingdom, we propose to replace a 50-year-
old hydrant system with a new 20-outlet system for wide-bodied aircraft 
and provide fuel truck unloading facilities. These unloading facilities 
will give the base an alternate means of receiving fuel to supplement a 
pipeline system that delivers fuel at too low a rate to support 
contingency operations. This project will cost $10.0 million. A 
precautionary prefinancing statement has been submitted to NATO for the 
future recoupment of funds from the NATO Security Investment Program.
    Two bulk fuel storage projects in Japan at Misawa Air Base ($26.4 
million) and Marine Corps Air Station Iwakuni ($22.4 million) each will 
provide two 100,000-barrel (15,900-kL) tanks and supporting facilities 
for additional fuel storage capacity for strategic en route refueling 
and force projection in the Pacific. At both locations, there is 
insufficient on-site storage capacity to satisfy the projected fuel 
demand during a contingency. Both projects are ineligible for funding 
consideration by the Japanese Facilities Improvement Program (JFIP).
    Lastly, we request an additional $1.8 million to provide for 
Architect-Engineer design services, surveys, and associated design 
agent costs to meet our goal of programming all strategic en route fuel 
projects by the end of fiscal year 2005.

                       ENVIRONMENTAL STEWARDSHIP

    Our military construction program also includes a request for $45.4 
million to correct serious environmental deficiencies at seven fuel 
storage sites. The table below details the location, title, and cost of 
the projects for which we are requesting approval.

               TABLE 1.--DLA ENVIRONMENTAL MILCON PROJECTS
                        [In millions of dollars]
------------------------------------------------------------------------
             Location                       Title             Amount
------------------------------------------------------------------------
NAS North Island, California......  Replace Fuel Storage            $5.9
                                     Tanks.
NAS Patuxent River, Maryland......  Replace Operating                8.3
                                     Tanks.
NAS Fallon, Nevada................  Replace Operating                5.0
                                     Fuel Tanks.
NAS Oceana, Virginia..............  Replace Fuel Storage             2.0
                                     Tanks.
NAS Sigonella, Italy..............  Replace Bulk Fuel               16.3
                                     Storage.
MCAGCC Twentynine Palms,            Replace Fuel Storage             2.2
 California.                         Tanks.
MCAS Cherry Point, North Carolina.  Replace Fuel Storage             5.7
                                     Tanks.
------------------------------------------------------------------------

    At North Island, Patuxent River, Fallon, Cherry Point, and 
Sigonella, we must replace deficient, non-compliant underground fuel 
storage tanks to meet state regulatory requirements; previous 
agreements with regulators; or, at Sigonella, Italian Final Governing 
Standards. In each case, we propose to replace the existing tanks with 
fully compliant aboveground storage tanks to avoid notices of violation 
or mandatory tank closures, which would have severe operational 
impacts.
    At NAS Oceana, Virginia, we will replace an aboveground tank, which 
failed state regulatory standards due to structural deficiencies and 
was subsequently removed from service. This loss of storage capability 
jeopardizes NAS Oceana's ability to conduct sustained flight 
operations.
    The Marine Corps Air Ground Combat Center Twentynine Palms, 
California, lacks permanent jet-fuel storage tanks to support its 
training requirements. Jet fuel is stored in a system of tactical fuel 
bladders, which are not compliant with state regulations for permanent 
aboveground fuel storage systems. We propose to build two 4,200-barrel 
(668 kL) aboveground steel tanks to meet state regulatory requirements

                    OTHER FUEL MISSION REQUIREMENTS

    Our one remaining fuel project in this request is for a hydrant 
fuel system at McConnell AFB, Kansas. This $11 million project will 
provide 14 hydrant outlets for KC-135 fuel-tanker aircraft assigned to 
this base. The project supports the U. S. Transportation Command's 
requirements for critical deployment infrastructure.

     DISTRIBUTION AND SUPPLY CENTER INVESTMENTS DISTRIBUTION DEPOTS

    At our Defense Distribution Depot Susquehanna (DDSP) in New 
Cumberland, Pennsylvania, we propose a $13.0 million Controlled 
Humidity Warehouse to replace a World War I wooden warehouse currently 
used to store parachutes and other air delivery materials managed by 
the depot. The new warehouse will provide suitable facilities for the 
inspection, repair, and storage of this specialized, high-value 
material and consolidate these operations, which are now scattered in 
several facilities on the depot. A World War I warehouse will be 
demolished as part of this project.
    At this installation, we also plan to replace an existing 
inadequate child development center with a new child and youth 
development center. The $4.7 million project will provide services now 
being accomplished in two separate buildings-one a converted World War 
II jailhouse and the other a religious education center. Neither of the 
existing facilities complies with the stringent fire, safety, or 
facilities standards established for the Department's accredited child 
development centers. Moreover, the capacity of these facilities is 
insufficient to meet the needs of DDSP and its tenant organizations.

                             SUPPLY CENTERS

    Finally, at DLA's Defense Supply Center in Richmond, Virginia, 
(DSCR) we propose to construct a new emergency services facility to 
replace an existing, inadequate fire station and consolidate police, 
physical security, medical clinic, and health-and-safety personnel. 
This workforce, all part of the installation's Public Safety Division, 
is now scattered in four locations on the Center. Temporary office 
trailers and metal sheds currently augment the existing 40-year-old 
fire station because it is too small to fit new fire and emergency 
vehicles. A chemical decontamination room to treat employees involved 
in hazardous chemical accidents will be collocated with the medical 
clinic and emergency services personnel. This facility is particularly 
important at this installation because it hosts the Agency's 
centralized hazardous material storage depot.

                                SUMMARY

    DLA's fiscal year 2001 Military Construction request reflects our 
efforts to support military readiness, protect the environment, and 
provide safe and adequate working conditions for our military and 
civilian work force. Fourteen of the 17 projects provide vital fuel 
facilities to support the Services' warfighting requirements. The 
remaining three are needed to meet the Agency's non-fuel mission 
requirements to sustain operations into the 21st Century.
    Thank you, Mr. Chairman, for this opportunity to present our fiscal 
year 2001 Military Construction program.

                       STATEMENT OF RAY TOLLESON

    Senator Burns. Thank you very much, Dr. Bailey. Mr. 
Tolleson.
    Mr. Tolleson. Thank you, Mr. Chairman, Senator Craig. I am 
Ray Tolleson, the acting director for the Department of Defense 
Education Activity. I would also like to request that my oral 
statement be a part of the record.
    Senator Burns. Without objection, it shall be.
    Mr. Tolleson. Mr. Chairman and members of the committee, I 
am honored that you invited me to appear before you today to 
discuss the Department of Defense Education Activity's (DoDEA) 
military construction program. This committee has had a long-
standing tradition of advocacy with DoDEA programs.

                             DODEA PROGRAMS

    You recognize, as we do, the critical necessity and value 
of providing a first-rate educational program to the children 
of our servicemen and women. Attracting and retaining the best 
people is the foundation of our national defense. America's 
military members are willing to risk their lives for their 
country, but they are not willing to sacrifice their children's 
future in the process. Therefore, quality education has been a 
central quality of life issue for our military.
    Modernizing our school facilities is an integral part of 
delivering the quality education. The changing curriculum and 
the growing need for integrating technology into the classroom 
pose additional challenges to not only our aging school 
structures, but also to those in the nation. With your help and 
guidance, we have made many advances over the years in the 
Department of Defense MILCON program, and we are deeply 
grateful for your sustained support.
    To set the stage for our discussion today, I would like to 
share with you something about the Department of Defense-
operated elementary and secondary schools that exist to provide 
a quality education to the dependents of our military 
personnel.
    This year, this segment of the United States public 
education is serving well over 100,000 students in 225 schools 
in 13 countries, seven states, one commonwealth, and one 
territory. We are staffed with approximately 10,000 teachers 
and school administrators. Students vary in background and 
heritages as widely as the regions within the United States.
    Our professional educators draw on rich backgrounds in the 
field of education and first-hand diverse cultural experiences. 
They have developed a keen international perspective in their 
careers while serving military families. Their insight is 
particularly valuable in our classrooms today as we become a 
global economy and a tightly interrelated society.
    Over the last decade, the school system has undergone 
dramatic changes with the realignment of troop strengths, 
particularly in Europe. We pared down the school system in 
keeping with these shifts in the military mission. During the 
same period, we have strengthened our educational programs.
    The groundwork for improvements was laid with a multi-year, 
data-driven community strategic plan crafted in 1995 with our 
stakeholders. This plan identified a common vision, strategic 
direction, goals, and benchmarks. DoDEA took its direction from 
the President's education initiatives and eight national 
educational goals. One of the most far-reaching efforts in 
early childhood and student achievement represents how these 
goals drive systemic changes.

                          READINESS FOR SCHOOL

    In support of goal 1, readiness for school, we have 
embarked on a 5-year initiative to increase the half-day 
kindergarten program to full day in overseas schools. In this 
same 5-year period, we will reduce class size in grades 1 
through 3 to an average of 18 students to one teacher.
    But these educational initiatives have required substantial 
funding to modernize school facilities and the department has 
provided the necessary funding. These schools are part of an 
exceptional and unique model of education that can be 
attributed in large part in unparalleled military and parental 
support.
    Our military construction program is important in enabling 
us to provide state-of-the-art competitive and rigorous 
educational programs for our students. The condition of the 
Department of Defense schools and the quality of education 
provided to the students are also of great concern to our 
military personnel.
    Quality of life has proven to be one of the most important 
factors in maintaining readiness and morale of our personnel 
wherever they are stationed. Military commanders have strongly 
supported our construction program and have reiterated the need 
for high quality education facilities as an important component 
in our quality of life for personnel. The department has placed 
a priority on modernizing our school facilities.

                             DODEA SCHOOLS

    DoDEA's schools face many of the same challenges as those 
of public school districts in the United States. Aging 
infrastructure, overcrowded classrooms, and the need for 
improvements to meet today's demand for technology create an 
added burden on an already stressed budget to maintain our 
facilities.
    Of our 225 schools, 133 of them are of the 1960s vintage or 
older and are not equipped to handle the needs of today's 
curriculum. Many have multiple additions over the years to meet 
the changing curriculum requirements and increased enrollments, 
and not unlike other schools, regrettably, we have had to 
postpone maintenance of our buildings to offset emergent 
priority needs. Ultimately this has required more expensive 
replacements.
    Over the next five years, the department will invest 
approximately $340 million in school modernization initiatives. 
This includes approximately $68.7 million in both operation and 
maintenance and MILCON projects over 5 years to phase in the 
implementation of full-day kindergarten and class size 
reductions in grades 1 through 3 to an average of 18 students 
to one teacher.
    In my written testimony, I highlight the fiscal year 2000 
and 2001 projects to give you some sense of our facility 
modernization effort.
    I would like to turn my attention for a brief moment to 
support needed for our military students in schools operated by 
the local educational agencies.
    As I stated earlier, our military parents place a high 
value on the education for their children. They are expecting 
that there will be no degradation in the quality of education 
for their children when they move from one duty assignment to 
another.
    To satisfy this expectation, we must resolve the 
educational challenges faced by the mobile life-style of 
military members and their families. We recognize that we must 
strengthen our connections with our civilian communities to 
better serve the Department of Defense students.
    To begin to better understand the challenges and facilitate 
solutions, we are working on a proposal reduction that would 
position DoDEA to develop an agenda for improvements. This 
includes creating community school partnerships to plan jointly 
and collaborate on the educational needs of our military 
students.

                             FACILITY COSTS

    We will also work with the Department of Education and the 
Congress in ensuring that a plan is developed similar to the 
one that the Department of Defense operated schools to address 
the additional facility costs that result from the significant 
impact of the military mission.
    On this point, Congress has recognized the facility needs 
of the United States public schools have been heavily impacted 
by military mission stationing requirements. To assist some of 
the heavily impacted schools in offsetting the extraordinary 
cost of educating military students, Congress allocated $10.5 
million in fiscal year 2000 for grants to local educational 
agencies. These grants are to be used for repairs and 
improvements required to meet classroom size requirements. 
Grants have been distributed to qualifying school districts.
    This year, Congress also allocated $5 million for fiscal 
year 2000 to provide assistance to public school systems that 
have unusually high concentrations, specific and special needs 
military students. It is the intent of Congress that this money 
be appropriated to schools in Hawaii. Accordingly, our military 
officials in the Pacific Command (PACOM) are working with 
officials in Hawaii to develop a plan to apportion the money. 
As soon as we receive the plan, the department will release the 
money.
    We also are completing a report requested by this Committee 
in fiscal year 1999 on military construction appropriations 
bill to assess the conditions and adequacy of school facilities 
owned by the Federal Government and school facilities at two 
school districts operated by the local education agency, 
Central Kitsap in Washington and Waynesville, Missouri. A final 
review of the cost analysis included in the report is now 
underway, and the report will be forwarded to your committee.
    I have provided the status of this report in my written 
testimony, and I can answer any questions you may have. I had 
hoped to have that report today, and there is one more review, 
but the 1999 military construction request will be available 
very shortly.
    Further, we are preparing a new report requested by the 
fiscal year 2000 Senate report. This report requirement will 
focus on the adequacy of special education services and 
facilities in schools on military installations, schools that 
have experienced an increase in enrollment of 20 percent or 
more due to BRAC during the past five years, and schools 
supporting installations designated as compassionate assignment 
posts. This report will be due to Congress by the end of April, 
and we fully expect that that will be available.
    DoDEA has abundant facility challenges ahead of us. Our 
schools must measure up to fulfilling their fundamental role--
educating students in environments conducive to learning. We 
must invest in permanent facilities that can accommodate the 
integration of technology into our curriculum. This means 
creating sufficient resources to allow computers in all 
classrooms, libraries, and other learning centers. It means 
replacing and upgrading the electrical and the heating, 
ventilation, and air conditioning (HVAC) requirements to 
provide the necessary energy and power connectivity. Therefore, 
the structures that were not intended for long-term use as 
schools must be replaced.
    In closing, I want you to know that my 30 years of 
experience in administering and leading public school programs 
in California tell me that Congress and this department have 
much to be proud of with these schools. Your efforts and 
investments in these schools are ensuring that the students of 
our military services are receiving a high-quality education. I 
feel fortunate to be part of this effort, even if only for an 
interim period, and honored to have served my country once 
again in support of such a worthy endeavor.

                           PREPARED STATEMENT

    Thank you for this opportunity to share our progress and 
our vision for the future of the education of our Defense 
children. Your strong support has helped immeasurably to build 
the Department of Defense MILCON program we have today. I would 
be pleased to answer any questions you might have.
    [The statement follows:]

                   Prepared Statement of Ray Tolleson

    Mr. Chairman and members of the Committee, I am honored that you 
invited me to appear before you today to discuss the Department of 
Defense Education Activity (DODEA) military construction program. This 
Committee has had a long-standing tradition of advocacy for DODEA's 
programs. You recognize, as do we, the critical necessity and value of 
providing a first rate educational program for the children of our 
Service men and women. Attracting and retaining the best people is the 
foundation of our national defense. America's military members are 
willing to risk their lives for their country, but they are not willing 
to sacrifice their children's future in the process. Therefore, quality 
education has been a central quality of life issue for our military. 
Modernizing our school facilities is an integral part of delivering a 
quality education. As you know, the changing curriculum and the growing 
need for integrating technology into the classroom pose additional 
challenges to not only our aging school structures but also to those in 
the nation. With your help and guidance, we have made many advances 
over the years in the DOD MILCON program, and we are deeply grateful 
for your sustained support.

                WHO WE ARE AND WHAT HAVE WE ACCOMPLISHED

    To set the stage for our discussion, today, I would like to share 
with you something about the DOD-operated elementary and secondary 
schools that exist to provide a quality education to the dependents of 
our military personnel. This year, this segment of U.S. public 
education is serving 107,976 students in 225 schools in 13 countries, 7 
states, one Commonwealth, and one Territory. We are staffed with 
approximately 10,000 teachers and school administrators. Students vary 
in background and heritages as widely as the regions within the United 
States. Our professional educators draw on rich backgrounds in the 
field of education and first-hand diverse cultural experiences. They 
have developed a keen international perspective in their careers while 
serving military families. Their insight is particularly valuable in 
our classrooms today as we become a global economy and a tightly, 
interrelated society.
    Over the last decade, the school system has undergone dramatic 
changes with the realignment in troop strengths, particularly in 
Europe. We pared down the school system in keeping with these shifts in 
the military mission. As an example, in our overseas school system, our 
student population decreased by 51 percent and our personnel strength 
by 44 percent. We gained efficiencies by consolidating functions and 
eliminating redundant layers of management and duplication of 
functions. In the next two years, we will reduce further our above-
school level personnel strength by 108 additional positions.
    During this same period, we strengthened our educational programs. 
The groundwork for improvements was laid with a multi-year, data-driven 
Community Strategic Plan crafted in 1995 that identified a common 
vision, strategic direction, goals and benchmarks. Our military 
leaders, parents, teachers, and school administrators came together to 
help us develop our strategy. DODEA took its direction from the 
President's education initiatives and eight National Educational Goals. 
One of our most far-reaching efforts in early childhood and student 
achievement demonstrates how these goals drive systemic changes. In 
support of Goal 1, Readiness for School, we have embarked on a five-
year initiative to increase the half-day kindergarten program to full 
day in our overseas schools. In this same five-year period, we will 
reduce class size in grades 1-3 to an average of 18 students to 1 
teacher. Both of these educational initiatives have required 
substantial funding to modernize the necessary school facilities, and 
the Department has provided the necessary funding. The fiscal year 2001 
budget contains $17.9 million, including $10.4 million in MILCON and 
the FYDP contains $50.8 million, including $40.5 million of MILCON from 
fiscal year 2002-2005 for this effort.
    The DOD schools are part of an exceptional and unique model of 
education. This can be attributed, in large part, to the unparalleled 
level of military community and parental support that DODEA enjoys. The 
military community values and supports education as a critical element 
of its quality of life and military readiness.
    We are very proud of the accomplishments of our students. Students 
consistently score well on national tests of academic performance. This 
year when the results of the National Assessment of Educational 
Progress tests were released, the country took notice of this 
exceptional performance. National publications such as The Wall Street 
Journal, The Boston Globe, The New York Times, and The Sacramento Bee 
featured or editorialized about the remarkable performance of students 
in DOD schools, seeing keys to improving student performance in other 
schools. The performance of DOD's minority students is particularly 
noteworthy. Throughout the country, African American and Hispanic 
students were scoring below the expected levels, while in DOD schools, 
those same student groups ranked number one and two when compared to 
their peers nationally. DOD schools also had the highest percentage of 
students scoring in the ``advanced'' category. We attribute that to the 
focused effort of the Community Strategic Plan, the excellent teaching, 
and a culture that values and supports education as a critical element 
to its quality of life. And, while we are pleased with our rankings, we 
know we still have a long way to go before all our student performance 
meets our expectations.

             ABOUT OUR DODEA MILITARY CONSTRUCTION PROGRAM

    Our military construction program is important in enabling us to 
provide a state-of-the-art, competitive, and rigorous educational 
program for our students. Studies have indicated a direct correlation 
between the quality of the learning environment and the success rate of 
the students involved. In one study, after controlling for other 
variables such as student's socioeconomic status, students in school 
buildings in poor condition had achievement that was six percent below 
those in schools in fair condition and 11 percent below schools in 
excellent condition.
    Moreover, the condition of the DOD schools and the quality of 
education provided to dependents are also of great concern to our 
military personnel. Quality of life has proven to be one of the most 
important factors in maintaining the readiness and morale of our 
personnel wherever they are stationed. Military commanders have 
strongly supported our construction programs, and have reiterated the 
need for high quality educational facilities as an important component 
in the quality of life of their personnel. Consequently, the Department 
has placed a priority on modernizing our school facilities.
    DODEA's schools face many of the same challenges as those of public 
school districts in the United States. Aging infrastructure, 
overcrowded classrooms, and the need for improvements to meet today's 
demand for technology create an added burden on an already stressed 
budget to maintain our facilities. Of our 225 DOD schools, 133 schools 
are in buildings that are 1960's vintage or older and are not equipped 
to handle the needs of today's curriculum. Many have added multiple 
additions over the years to meet changing curriculum requirements and 
increased enrollments. And, not unlike other schools, regrettably, we 
have had to postpone maintenance of our buildings to offset emergent 
priority needs. Ultimately, this has required more expensive 
replacements. However, our schools encounter additional problems due to 
their divergent geographical locations. Maintaining aging school 
facilities in tropical locations like Okinawa or in extreme heat 
conditions found in Guam or the severe climatic conditions like Iceland 
taxes our facility improvement budgets and often creates requirements 
for unexpected, expensive improvements.

                   GOALS OF THE DODEA MILCON PROGRAM

    Now, I would like to turn my attention to the current goals for the 
DODEA military construction program. The events of the day tell us that 
we must pursue three goals: First, we must replace the most aged 
facilities and those that are least able to provide an environment 
conducive to the teaching and learning process. Second, we must 
integrate technology capabilities in all our schools so that every 
student has ready access to the high-speed information highway. Third, 
we must update all our learning environments to accommodate the 
rigorous and challenging academic programs aligned to meet the goals 
and objectives of our Community Strategic Plan. I will explain how 
these goals have manifested themselves in program changes over the past 
year and how I see they will help form a stronger military construction 
program for the students of our Service members and their families.
    Over the next five years, the Department will invest approximately 
$340 million in a school modernization initiative. This includes 
approximately $68.7 million in both Operation and Maintenance and 
MILCON projects over five years to phase-in the implementation of full-
day kindergarten and class size reduction in grades 1-3 to an average 
of 18 students to 1 teacher. Full-day kindergarten has already been 
available in most of our domestic schools. The reduction in class sizes 
is consistent with the Department of Education Appropriations Act of 
1999, which provided $1.2 billion for the reduction of class sizes in 
U.S. public schools. This national initiative will help ensure that 
every child receives personal attention, gets a solid foundation for 
further learning, and learns to read independently and well by the end 
of the third grade.
    I would like to highlight the fiscal year 2000 and fiscal year 2001 
MILCON program. For fiscal year 2000, the total MILCON program is $78 
million. This will enable us to:
  --Replace the gymnasium at Lakenheath Middle School Feltwell, 
        England, which is housed in a converted World War II era, 
        leaking, aircraft hangar;
  --Replace the dilapidated, 35 year old Tarawa II Elementary School at 
        Camp Lejeune, North Carolina;
  --Replace the temporary elementary school facilities at Andersen AFB, 
        Guam, that were used to start up school with your help and 
        support in fiscal year 1998; and,
  --Modernize three schools with additions and renovations at Rota 
        Elementary School, Rota, Spain; Feltwell Elementary School, 
        Feltwell, England; and Laurel Bay, South Carolina. These 
        additions will primarily accommodate the increased enrollments.
    With our Operation and Maintenance funds, we will also complete 77 
percent of the full-day kindergarten requirement and 48 percent of the 
primary grade, class size reduction requirement by the end of fiscal 
year 2000.
    Although not as ambitious as the fiscal year 2000 program, the 
fiscal year 2001 MILCON construction program of $30 million will:
  --Replace the outdated high school at Hohenfels, Germany;
  --Replace the 47 year old facility at Russell Elementary School, Camp 
        Lejeune, North Carolina; and
  --Complete classroom additions to the six overseas schools and one 
        DOD domestic school.
    Further, by the end of fiscal year 2001, we will have completed 79 
percent of the full-day kindergarten requirement and 54 percent of the 
primary grade, class size reduction requirement. In the fiscal year 
2002-2005 MILCON program, we will replace five additional aging 
schools: Lakenheath Middle School, Feltwell, England; Russell ES in 
Quantico, VA; Tarawa Terrace I ES and Berkley Manor ES at Camp Lejeune, 
North Carolina; and Seoul Middle School, Korea. This new construction 
will be complemented with many smaller projects, including renovations, 
additions, and improvements at schools throughout the world. By fiscal 
year 2005, we will have reduced our older facility inventory, i.e. 
schools of 1960 and older, by four percent, and will have completed 100 
percent of the full-day kindergarten and primary grade, class reduction 
initiative. This five-year period represents a remarkable track record 
of program and facility improvements.

                ASSISTANCE TO LOCAL EDUCATION ACTIVITIES

    As I stated earlier, our military parents place a high value on 
their education of their children. They are expecting that there will 
no degradation in the quality of education for their children when they 
move from one duty assignment to another. To satisfy this expectation, 
we must resolve the educational challenges faced by the mobile 
lifestyle of military members and their families. We recognize that we 
must strengthen our connections with our civilian communities to better 
serve all DOD students. To begin to better understand the challenges 
and facilitate solutions, we are working on a proposal now that would 
position DODEA to develop an agenda for improvements. This includes 
creating community school partnerships to plan jointly and collaborate 
on the education needs of our military students. We will also work with 
the Department of Education and the Congress in ensuring that a plan is 
developed, similar to the one in the DOD operated schools, to address 
the extraordinary facility costs that result from the significant 
impact of the military mission.
    On this point, Congress has recognized the facility needs of many 
of the U.S. public schools that have been heavily impacted by military 
mission stationing requirements. To assist some of the heavily impacted 
schools in offsetting the extraordinary costs of educating military 
students, Congress allocated $10.5 million in the fiscal year 2000 
Defense Appropriation Bill for grants to local educational authorities. 
These grants are to be used for repairs and improvements required to 
meet classroom size requirements. Grants of $1.5 million each have been 
distributed to the following school districts:
  --Silver Valley Unified School District (Ft. Irwin)
  --Fort Sam Houston Independent School District (Fort Sam Houston)
  --Lackland Independent School District (Lackland AFB)
  --Randolph Field Independent School District (Randolph AFB)
  --North Chicago District #187 (Great Lakes Naval Training Center)
    The remaining balance was distributed in grants of $736.5 thousand 
to the following four districts:
  --Grand Forks AFB School District #140
  --Fort Huachuca Accommodation Schools
  --Fort Leavenworth Unified School District 207
  --Minot AFB District #160
    Additionally, this year Congress allocated $5 million in fiscal 
year 2000 to provide assistance to public school systems that have 
unusually high concentrations of special needs military dependents 
enrolled, with special consideration given to school systems in states 
that are considered overseas assignments. Accordingly, we are in the 
process of working with the congressional staffers to facilitate the 
distribution of these funds.
    Also, this Committee requested in the fiscal year 1999 Military 
Construction Appropriations Bill that DOD assess the conditions and 
adequacy of school facilities owned by the Federal government and the 
local districts that support military installations. You voiced concern 
that these school facilities are in desperate need of repair, 
renovation, and replacement and that they have experienced tremendous 
enrollment increases because of base closures, realignments, and 
changes in the military mission. You further noted that this situation 
has been aggravated by an increase in the number of special needs 
students.
    We apologize for the delay in responding to you. The complexity and 
scope of the project could not be met with in-house capabilities, and 
we contracted with an outside firm to gather and compile information 
required to complete the report. The study was originally structured in 
three phases. The first phase reviewed the DOD Domestic Dependent 
Elementary and Secondary Schools and two Special Arrangements Schools 
(Dover AFB, Dover, Delaware and Hanscom AFB, Massachusetts). The second 
phase included the field testing of a facility survey instrument to 
distribute to eligible school districts for the assessment of their 
school facilities. Two stateside, school districts that have been 
experiencing specific problems related to the presence of military 
dependents were selected to field-test the survey instrument. They were 
Central Kitsap, Washington, and Waynesville, Missouri. Central Kitsap 
has a significantly higher number of special needs children attending 
their schools as a result of the nearby Bangor Submarine Base's 
designation as a compassionate assignment by the Navy. At Waynesville, 
Missouri, the influx of students from Ft. Leonard Wood, where 
realignment has created an increase in the number of active duty 
military, additional classroom space is required to absorb the increase 
in enrollment. Site visits were made to each of these districts to 
fully assess the impact of the presence of DOD dependents.
    As we prepared to begin the third phase, the assessment of all 
other eligible school districts, we received the fiscal year 2000 
Senate Report. This report changed the focus of the fiscal year 1999 
Senate Report by requesting DOD to report on the adequacy of special 
education services and facilities in schools on military installations, 
schools that have experienced an increase in enrollment of 20 percent 
or more due to BRAC during the past five years, and schools supporting 
installations designated as compassionate assignment posts. 
Consequently, the original survey instrument was modified, and 
assessments at locations meeting the new criteria are underway. We are 
currently reviewing the cost analysis prepared for phases one and two 
of the fiscal year 1999 Senate Report, and we anticipate forwarding 
these results to this Committee shortly. The fiscal year 2000 Senate 
Report requirement is due to Congress by the end of April. This effort 
is on schedule, and we fully anticipate meeting our deadline.
    Congress further recognized the impact experienced at Central 
Kitsap, and provided $1,000,000 in fiscal year 1999 for the design of a 
new special education center to help offset this cost. With appropriate 
authorizing language, we will be able to forward these funds to Central 
Kitsap.

                           FUTURE CHALLENGES

    DODEA still has abundant facility challenges ahead of us. Our 
schools must measure up to fulfilling their fundamental role--educating 
students in environments conducive to learning. We must invest in 
permanent facilities that can accommodate the integration of technology 
into our curriculum. This means creating sufficient space to allow 
computers in all classroom, libraries, and other learning centers. It 
means replacing and upgrading the electrical and HVAC requirements to 
provide the necessary energy and power connectivity. Therefore, 
structures that were not intended for long-term use as schools must be 
replaced. This includes, for example, consolidating the 13 buildings at 
Lakenheath Middle School, Feltwell, England for students in grades 6-8; 
replacing the Guam Elementary/Middle School on the Naval Activity and 
the high school currently located in renovated office space; and 
replacing portable facilities that have long outlived their shelf life. 
It not reasonable to expect that our new learning methodologies can be 
integrated in such outdated facilities.
    This is an unprecedented time in U.S. history. Education has become 
a national priority, and historic investments and improvements in 
education are being sought. Our U.S. military members join our civilian 
parents nationwide in demanding a competitive, rigorous education 
program that enables their children to become productive and 
contributing members of society in this century. The Department of 
Defense has placed education high on its list to ensure the education 
in our DOD operated schools is a coveted incentive for military 
service.
                               CONCLUSION

    In closing, I want you to know that my 30 years of experiences in 
administering and leading public education programs in California tell 
me that Congress and this Department have much to be proud of with 
these schools. Your efforts and investments in these schools are 
ensuring that the students of our military Services are receiving a 
high-quality education. I feel fortunate to be part of this effort, 
even if for only an interim period, and honored to have served my 
country once again in support of such a worthy endeavor.
    Thank you for this opportunity to share our progress and our vision 
for the future of the education of our Defense children. Your strong 
support has helped immeasurably to build the DOD MILCON program we have 
today.

                       STATEMENT OF DIANA TABLER

    Senator Burns. Thank you, Mr. Tolleson. We appreciate that. 
Ms. Diana Tabler. Thank you very much, and we are looking 
forward to your testimony on TRICARE.
    Ms. Tabler. Thank you very much, Mr. Chairman, and members 
of the Committee. I am Diana Tabler, Deputy Executive Director 
of the TRICARE Management Activity in the office of the 
Assistant Secretary of Defense for Health Affairs. We have as 
part of our responsibility, planning and oversight of tri-
service medical construction request each year.

                FUNDING FOR MAJOR CONSTRUCTION PROJECTS

    Our request this year is for funding for 13 major 
construction projects for medical, totaling $202.887 million. 
The largest feature seeks the second phase of the hospital 
replacement project at Fort Wainwright, Alaska. That $44 
million we are asking for will begin the construction of the 
main structures of the new 32-bed hospital.
    In addition, we are requesting $43.85 million which will 
allow us to purchase the completed medical/dental facility at 
Naples, Italy. This is a major quality of life improvement for 
the Commander in Chief (CINC) in Europe and also satisfies the 
direction of this committee to look at the overall anticipated 
life cycle cost of our long-term lease there. This is the best 
decision and the best request for the taxpayers and will result 
in a very good hospital scheduled to open later next summer.
    At Eglin Air Force Base in Florida, we are asking $37 
million for a significant life safety upgrade to the inpatient 
facilities of the old hospital and consolidation of some 15 
outlying buildings. This is one of the busiest hospitals in the 
Air Force, seeing something like 80,000 beneficiaries.
    This request also includes some very important projects at 
Camp Pendleton for our Marines, including the space for our 
fleet hospital operations and three new primary care clinics at 
Horno, Las Flores, and Las Pulgas at Camp Pendleton. Finally, 
there are several other clinics including two overseas clinics 
in Germany. None of our overseas projects qualifies for any 
North Atlantic Treaty Organization (NATO) funding or host 
nation support. We are also requesting funding for a veterinary 
treatment facility at Fort Drum.
    Two projects of interest to this committee, the Armed 
Forces Institute of Pathology and the Graduate School of 
Nursing for the Uniformed Services University, though not in 
this budget, are in intense review and evaluation in the 
department and will be forthcoming in future programs. We will 
have reports up to you this spring for that.

                           PREPARED STATEMENT

    That concludes my brief statement. I will be happy to 
answer any questions you have about our budget.
    [The statement follows:]

                   Prepared Statement of Diana Tabler

    Thank you Mr. Chairman and Members of the Subcommittee. I am Diana 
Tabler, Deputy Executive Director for the TRICARE Management Activity, 
Office of the Assistant Secretary of Defense for Health Affairs.
    On behalf of Dr. Sue Bailey, the Assistant Secretary of Defense for 
Health Affairs and Dr. James Sears, the Executive Director, TRICARE 
Management Activity, I thank you for the opportunity to highlight the 
Department's fiscal year 2001 Medical Military Construction Program 
budget request. I'd like to present a brief overview of our fiscal year 
2001 Medical Military Construction Program.
    Our mission is to protect our forces before, during and after 
operational deployment as well as provide preventive health care 
services to other eligible beneficiaries of the Department of Defense. 
Our fiscal year 2001 program requests appropriations of $177,887,000 
for 13 major construction projects. We are also seeking $3,000,000 for 
unspecified minor construction and $22,000,000 for planning and design 
efforts to complete designs on fiscal year 2002 projects and to 
commence design on projects identified for fiscal year 2003. The total 
request for this appropriation is $202,887,000.
    This budget seeks the second phase of the $133 million Hospital 
Replacement project at Fort Wainwright, Alaska. The $44,000,000 
requested will start the construction of the main structures of the new 
32-bed hospital to replace the current Bassett Army Community Hospital 
built in 1951 as a 300-bed facility. $18,000,000 has been appropriated 
to date for this project. We ask your continued support for this 
hospital.
    The hospital purchase at Naples, Italy requires a total of 
$43,850,000 in military construction appropriations. The United States 
Government will purchase a completed Medical/Dental Facility (Hospital) 
to support relocation of Naval activities as part of the U.S. Naval 
Support Initiative. The project is sited on leased land of the U.S. 
Naval Support Site. This project is a Commander-in-Chief, European 
Forces, Quality-of-Life priority to ensure the health and well being of 
our beneficiaries in the Naples area. This project satisfies the 
Congressional direction in the fiscal year 1998 House Appropriations 
Report 105-150 which strongly encouraged the Department to reevaluate 
the anticipated life-cycle costs for the hospital and to request to 
buy-out the lease at the most opportune time. This facility will 
provide health care in support of the U. S. Naval Support Site, 
currently located approximately 30 kilometers from its present location 
in an existing inadequate leased facility.
    The Hospital Addition/Alteration/Life Safety Upgrade at Eglin Air 
Force Base, Florida requires $37,600,000 in appropriations. This 
hospital provides support to over 80,000 eligible beneficiaries. This 
is one of the largest beneficiary catchment area populations in the Air 
Force. The project provides consolidation of services from 15 outlying 
buildings on a very large base and also provides life safety and 
utilities upgrades for the hospital to meet current life safety and 
fire codes.
    This budget request includes one medical readiness project, the 
Fleet Hospital Operations Training Command Support Facilities, at Camp 
Pendleton, California for $2,900,000.
    Our budget request also includes eight medical and/or dental 
clinics that are either replacements or additions/alterations. They 
are:
  --Medical/Dental Clinic Replacement at Horno, Camp Pendleton, 
        California for $3,950,000;
  --Medical/Dental Clinic Replacement at Las Flores, Camp Pendleton, 
        California for $3,550,000;
  --Medical/Dental Clinic Replacement at Las Pulgas, Camp Pendleton, 
        California for $3,750,000;
  --Medical Clinic Replacement/Dental Clinic Alteration at Edwards Air 
        Force Base, California for $17,900,000;
  --Medical Clinic Replacement at Patrick Air Force Base, Florida for 
        $2,700,000;
  --Medical Clinic Addition/Alteration at Tyndall Air Force Base, 
        Florida for $7,700,000;
  --Health/Dental Clinic Addition/Life Safety Upgrade at Kitzingen, 
        Germany for $1,400,000; and
  --Health/Dental Clinic Addition/Alteration at Wiesbaden, Germany for 
        $7,187,000.
    We also have a Veterinary Treatment Facility at Fort Drum, New York 
for $1,400,000. This facility will be a state-of-the-art Veterinary 
Treatment Facility for the Tri-Service, DOD mission. It will provide 
administration offices for the food inspection mission that covers 
sixty facilities across the state of New York. It will provide full 
veterinary services for military working dogs and will ensure our 
veterinarians and technicians maintain and practice their professional 
skills so vitally important to the safeguarding of our troops and their 
assigned mission.
    No portion of the three overseas facilities, Kitzingen, Germany, 
Wiesbaden, Germany, and Naples, Italy, is eligible for NATO funding or 
host nation funding.
    The fiscal year 2000 Authorization Conference Report 106-301 
directed the TRICARE Management Activity to submit a plan to fix the 
Armed Forces Institute of Pathology facility deficiencies as part of 
the President's fiscal year 2001 Budget Submission. The requirements 
are being defined, evaluated, and validated. No decision has been made 
yet how to fund the preliminary estimated project requirement of over 
$200 million. I would expect a final report to be submitted to you in 
April 2000. This facility is in urgent need of corrective action and we 
are exploring all avenues of possibilities.
    The Uniformed Services University of the Health Sciences is seeking 
to consolidate its graduate school of nursing. The school is currently 
split between the University and off-campus leased spaces. The fiscal 
year 2000 House Appropriations Report 106-221 directed that this 
project be included in the fiscal year 2001 medical budget request. The 
Navy Bureau of Medicine and Surgery (BUMED), as the executive agent for 
the University, is currently conducting a study to revalidate the 
requirements and determine the best economic solution. The study is 
expected to be complete in July 2000. After that a decision will be 
made on an appropriate year of funding.

                               CONCLUSION

    This committee has been very supportive of our medical construction 
program in the past and I look forward to working with you. The fiscal 
year 2001 program stands as a testament to our commitment to maintain 
our medical readiness and provide quality health care services to the 
men and women of the Armed Forces. I thank you for the opportunity to 
present our budget. This concludes my overview statement of the fiscal 
year 2001 Medical Military Construction budget request.

    Senator Burns. Thank you very much. I think Senator Craig 
has some questions with regard to TRICARE. Senator Craig.
    Senator Craig. Well, thank you very much, Mr. Chairman, and 
Ms. Tabler. While your primary responsibility may be 
construction at hospitals, I am going to ask you to take a 
message back to your boss. We are having a struggle in Idaho 
and in rural western states with military facilities as it 
relates to TRICARE and the willingness on the part of the 
private health care providers to accept TRICARE when in many 
instances, and I know it is certainly true in Idaho, doctors 
still reject the Health Maintenance Organizations (HMOs) in a 
general sense.

                       MEDICAL CARE UNDER TRICARE

    As a result of that, Idaho is having a very difficult time 
recruiting doctors to provide medical care under TRICARE, and 
straightaway TRICARE rates are less than Medicare, so there is 
in some instances no monetary incentive for doctors to pick up 
our military personnel and their families. So I need an answer, 
and we have been working on this, we have got to resolve it.
    Several of our wings and part of Mountain Home Air Force 
Base has been in Europe and in the desert almost consistently 
since Desert Storm. Many of those airmen leave their families 
behind and worry--and they do, and they have expressed to me 
directly that they cannot have health care or they are now 
sacrificing and taking it out of their personal benefits in a 
way that should not happen.
    So what is the alternative? Well, if you know the 
demographics--not the demographics, but the geography and the 
distance of Mountain Home Air Force Base and Salt Lake City 300 
miles away and Seattle 600 miles away, that is quality health 
care. That has got to get resolved.
    Now, TRICARE is working in other parts of the country. I 
have spent some time looking at it, but it is not working here, 
and instead of saying, well, it is just a bump, that means that 
people are taking the bumps, not the system. People. Airmen and 
women in this instance. And I am saying to you that I have 
nudged this system around and studied it for the last couple of 
years with not much resolution, some slight improvements.
    We need to look at making exceptions unique to areas where 
these kinds of conflicts or frustrations exist. One size is not 
fitting all in this instance, and so this is not the last time 
that we will be visiting about this, but I hope it is an 
ongoing dialogue that resolves it.
    Ms. Tabler. Sir, I thank you. We totally acknowledge your 
concern in this area and in fact are taking steps through our 
regulatory process to revise the way that we pay physicians in 
remote areas, such as the Mountain Home area where, as you say 
so accurately and eloquently, we have problems recruiting 
people into not only the TRICARE program, but to Medicare as 
well, quite honestly, and our maximum allowable payment under 
TRICARE is equal to or greater than that paid under Medicare.
    Nonetheless, in some remote areas, that continues to be a 
problem. Our payments have increased significantly in recent 
years. Our recent update in February of this year was 7 percent 
over last year, and so we have seen over the last three years 
increases each year----
    Senator Craig. That seems to be helping a bit.
    Ms. Tabler [continuing]. And I think that will help, but I 
will be happy to come back to you and provide detail on our 
proposed strategy for targeting payments where access to care 
is truly impeded by the limited number of providers in areas 
such as yours.
    Senator Craig. And with these increases, I think we ought 
to go right back in and look at them and see, is this gaining 
us, is this providing the access we need or thought it would, 
and if it is not, we ought to, instead of waiting--I mean, it 
does not take very long to understand whether it is working or 
not and review it again to see whether we need to make some 
additional adjustments.
    Ms. Tabler. Yes, sir, we totally agree.
    Senator Craig. Thank you. Thank you, Mr. Chairman.
    Senator Burns. Thank you, Senator Craig. I have a couple of 
questions for Mr. Tolleson. I am very interested, when I visit 
military facilities and see the education facilities, I am 
happy about that, and I am happy about your enthusiasm. I also 
want to go a little bit different direction. Do you oversee and 
are you in charge of, let us say, continuing adult education 
also that we find on our military installations?

                           DISTANCE LEARNING

    Mr. Tolleson. No, we are not. We are not responsible. That 
is handled in a different area.
    Senator Burns. That is in a different area?
    Mr. Tolleson. Yes.
    Senator Burns. Distance learning as far as remote schools 
on bases?
    Mr. Tolleson. We handle distance learning for our students 
in our schools that are on military bases. We offer some 16 
different courses right now. We have an enrollment of about 500 
students, I believe, systemwide.
    Senator Burns. I see. Well, I would like to talk about 
continuing education because we find that that is pretty 
important, too. In fact, it is becoming more important all the 
time with our people in uniform. And I know it is especially 
whenever you say we are moving force structure, what is it, 52 
percent of our military now are in Reserves and Guard? And 
there is continuing pressure to be put on our Guard, and when 
they are called up for special duties, and that happens to be a 
part of that.

                     ADDITIONAL COMMITTEE QUESTIONS

    I have no other questions for General Schwartz or Dr. 
Bailey or any of you this morning. We will go through and work 
with you as we work through this process. If we have any 
questions, why, make sure if you want to respond, respond to 
the full committee, and we will be happy to work with you as we 
work our way through this thing.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                                ------                                

             Questions Submitted to General Norton Schwartz

              Questions Submitted by Senator Conrad Burns

          STATUS OF SOF RELOCATIONS FROM PANAMA TO PUERTO RICO

    Question. General Schwartz, will you describe the status of the 
relocation of Special Operations Forces from Panama to Puerto Rico?
    Answer. The United States Southern Command Special Operations 
Command (SOCSOUTH) has successfully completed its relocation from Fort 
Clayton and Corozal, Panama, to Roosevelt Roads, Puerto Rico, and is 
fully operational.

    ROOSEVELT ROADS INFRASTRUCTURE CHALLENGES AND VIEQUES IMPACT ON 
                                TRAINING

    Question. What are the infrastructure challenges that your forces 
face at Roosevelt Roads, Puerto Rico, such as aviation hangars, 
barracks, and family housing? Does the situation on Vieques impact your 
ability to train?
    Answer. The infrastructure challenges that special operations 
forces (SOF) face at Roosevelt Roads include the renovation and 
construction of hangar, maintenance, armory, operations, and 
headquarters facilities, as well as barracks and family housing. Many 
of the Roosevelt Roads based SOF units are operating from temporary 
facilities, but plans have been developed to move them into permanent 
facilities by fiscal year 2002-2003. For example, helicopters of Delta 
Company, 3rd Battalion, 160th Special Operations Aviation Regiment 
(Airborne) are not sheltered and maintenance is being performed in the 
open or in Navy hangars on a space available basis. In support of the 
unit, Program Budget Decision (PBD)-715R programmed fiscal year 2002 
construction of a headquarters, operations, and maintenance hangar. 
Additionally, the Special Operations Facility supporting Naval Special 
Warfare Unit FOUR military construction project was awarded on February 
4, 2000. However, the Navy subsequently directed a ``stop work'' on the 
project pending resolution of the Vieques training range issues in 
Puerto Rico. Therefore, construction of this facility is on hold. With 
regards to housing, Roosevelt Roads lacks an adequate supply of 
permanent and transient quarters, as well as adequate on-base housing. 
Currently, Roosevelt Roads has over 2,500 active duty and family 
members residing off base. Additional military construction projects 
are planned to construct sufficient barracks for SOF personnel needs. 
In short, sir, facilities at present are adequate to sustain mission 
activity, but they require immediate attention. Our people deserve our 
best effort here.
    Finally, training on Vieques offers Fleet SEALs an unparalleled 
opportunity for realistic training as part of Carrier Battle Groups 
(CVBG), Amphibious Ready Groups (ARG), SUBLANT and AIRLANT assets or in 
independent across-the-beach scenarios.

                       MILCON CONTINGENCY FUNDING

    Question. Will losing MILCON contingency funding in the fiscal year 
2001 budget impact the Command's ability to execute projects?
    Answer. The loss of contingency funds is not expected to result in 
the cancellation or delay of U.S. Special Operations Command (USSOCOM) 
construction projects, but there is an increased risk that the 
reduction will compromise USSOCOM's ability to maintain full authorized 
project scope and high construction standards. A modest management 
reserve is common practice across industry and elsewhere in government. 
Eliminating these funds will ultimately diminish project content.

                 Questions Submitted to Marshall Bailey

              Questions Submitted by Senator Conrad Burns

    Question. Mr. Bailey, I see that there are six projects in the 
fiscal year 2001 budget to replace existing Hydrant Fuel Systems or 
Fuel Storage Tanks. Please describe the long-term plan to replace the 
aging DOD fuel infrastructure?
    Answer. In December 1991, DLA was assigned with MILCON funding 
responsibilities for base level and intermediate petroleum storage and 
hydrant systems. The majority of the systems DLA inherited were 40-50 
years old. Additionally, in 1997 the Commanders-In-Chief (CINC's) 
identified numerous shortfalls in strategic airlift en route fuel 
infrastructure. At that time DLA estimated that the backlog of fuels 
MILCON projects to be over $1 Billion.
    The backlog of proposed projects is reviewed annually with the 
Joint Staff, geographic CINC's, U.S. Transportation Command and 
Military Services to establish priorities. The projects are categorized 
by requirements as en route, environmental, or operational:
  --En route projects support strategic mobility requirements. These 
        facilities are old and deteriorated. All currently identified 
        en route projects are programmed in the DOD Future Year 
        Development Plan (FYDP). Our en route MILCON program is on 
        schedule for completion in 2005. In fact, more than 40 percent 
        of these projects are already operational or under 
        construction.
  --Environmental projects replace deteriorating fuels infrastructure 
        to meet CONUS and overseas environmental standards. Projects to 
        correct all currently identified non-compliant environmental 
        conditions are programmed in the current DOD FYDP. Projects 
        which remain unfunded address overall environmental goals to 
        maintain compliance or prevent pollution. These projects will 
        be programmed in subsequent FYDPs.
  --All other projects not classified as en route or environmental are 
        classified operational. Funding requirements and execution 
        timeframes currently extend beyond the current DOD FYDP.
    DLA and the Military Services are aggressively pursuing 
alternatives to fuels MILCON. Alternate funding sources include host 
nation support, privatization, and maintenance and repair projects. 
These initiatives are expected to result in a modest reduction in fuels 
MILCON requirements in the future.
    Question. Please describe your MILCON program associated with 
environmental compliance?
    Answer. Our environmental compliance MILCON program closely follows 
Defense Planning Guidance. Based on this direction, we give priority to 
projects that correct non-compliant environmental conditions. These 
projects replace deteriorating infrastructure to meet CONUS and 
overseas environmental standards. All currently identified 
environmental projects in this category are programmed in the current 
DOD FYDP. Projects which remain unfunded address overall environmental 
goals to maintain compliance or prevent pollution. These projects will 
be programmed in subsequent FYDPs. The following is a list of our 
MILCON projects driven by environmental compliance as shown in the 
FYDP:

                        [In millions of dollars]
------------------------------------------------------------------------
         Fiscal year              Location         Project       Amount
------------------------------------------------------------------------
01..........................  Sigonella, IT..  Replace Bulk         16.3
                                                Fuel Storage
                                                Facility.
01..........................  Patuxent River,  Replace               8.3
                               MD.              Operating Fuel
                                                Tanks.
01..........................  Twentynine       Fuel Storage          2.2
                               Palms, CA.       Facility.
01..........................  Fallon, NV.....  Replace               5.0
                                                Operating Fuel
                                                Tanks.
01..........................  Cherry Point,    Replace Fuel          5.7
                               NC.              Storage Tanks.
01..........................  North Island,    Replace Fuel          5.9
                               CA.              Storage Tanks.
01..........................  Oceana, VA.....  Replace Fuel          2.0
                                                Storage Tank.
03..........................  Eielson, AK....  Construct Fuel        9.4
                                                Storage Tank.
03..........................  Fairford, UK...  Replace Hydrant      14.8
                                                Fuel System.
03..........................  Rota, SP.......  Construct             1.0
                                                Marine Loading
                                                Arms.
03..........................  Kaiserslautern,  Relocate Scrap    \1\ 2.4
                               GE.              Yard.
03..........................  Various          Conforming            1.5
                               Locations.       Storage
                                                Facilities.
04..........................  Minot, ND......  Replace Hydrant      15.2
                                                Fuel System.
04..........................  Ft Carson, CO..  Replace Bulk          6.7
                                                Fuel Storage
                                                Facility.
04..........................  Roosevelt        Construct Fuel    \1\ 1.6
                               Roads, PR.       Storage.
04..........................  Roosevelt        Replace               3.0
                               Roads, PR.       Pipeline.
04..........................  Eglin, FL......  Construct Fuel        1.5
                                                Unload Pier.
04..........................  Various          Conforming            3.1
                               Locations.       Storage
                                                Facilities.
04..........................  New Cumberland,  Replace Boilers   \1\ 2.0
                               PA.
05..........................  Ft Polk, LA....  Construct Fuel        1.6
                                                Storage
                                                Facility.
05..........................  Key West, FL...  Construct Tank.       1.9
05..........................  Pearl Harbor,    Replace Fuel          9.5
                               HI.              Tanks.
05..........................  Langley, VA....  Hydrant Fuel         10.5
                                                System.
05..........................  Pope, NC.......  Replace Hydrant      12.9
                                                Fuel System.
05..........................  Various          Conforming            3.1
                               Locations.       Storage
                                                Facilities.
05..........................  Ft Meade, MD...  Hazardous             1.4
                                                Property
                                                Facility.
05..........................  Colorado         Hazardous             0.5
                               Springs, CO.     Property
                                                Facility.
------------------------------------------------------------------------
\1\ Projects with environmental and operational requirements.

    Question. Will the loss of DLA's contingency funding in the fiscal 
year 2001 budget impact the agency's ability to successfully execute 
your MILCON program?
    Answer. We do not anticipate any adverse impact in fiscal year 
2001. We are hoping to cover any shortfalls with savings resulting from 
favorable bids on other fiscal year 2001 and prior-year projects, as 
allowed by existing MILCON statutes. However, construction changes do 
occur, and we cannot predict future construction bidding trends. We do 
expect adverse impacts on the program in the outyears if contingency 
funds continue to be eliminated.
                                 ______
                                 

                  Questions Submitted to Ray Tolleson

              Questions Submitted by Senator Conrad Burns

            DEPARTMENT OF DEFENSE DEPENDENT SCHOOLS (DODDS)

    Question. Mr. Tolleson, I understand that the Department has been 
surveying their schools and will report to the Congress within the next 
couple of months. Can you describe some of the preliminary assessments 
of the review?
    Answer. There are essentially two separate reports that respond to 
the Congressional inquiry.
    The first report addresses the conditions and adequacy of 
facilities for students, including those with special needs at the DOD 
Domestic Dependent Elementary and Secondary Schools (DDESS), two 
special arrangement schools (Dover Air Force Base (AFB) and Hanscom 
AFB), as well as Waynesville, Missouri and Central Kitsap, Washington.
    The second report addresses the adequacy of special needs services 
and facilities at school districts throughout the U.S. that have been 
heavily impacted by changes in military stationing, and Local Education 
Agency and Department of Education-owned schools on military 
installations. The second report assesses the impact of increased 
special education requirements and the adequacy of special education 
services and facilities, and recommends corrective measures. Within 
this report, data is provided that identifies costs that can be 
attributed to military dependents receiving special education services.
    Question. The fiscal year 2001 Budget requests funding for 
classroom additions at seven locations. What will these projects 
accomplish and why are they so important?
    Answer. These seven projects are necessary to provide additional 
classroom space needed to implement full-day kindergarten and reduced 
class sizes in grades 1-3. These programs were implemented in DODEA 
schools beginning in school year (SY) 1999-2000 at locations where 
existing facilities were already available. In SY 2000-2001, these 
programs will be offered at additional schools where space could be 
provided through Operation and Maintenance funded renovation or 
construction work. During the next three fiscal years, DODEA will be 
executing Military Construction projects at the remaining elementary 
school sites to enable both programs to be fully implemented in all 
DODEA elementary schools by SY 2004-2005.
    Question. How will full-day kindergarten and reduced-class size 
initiatives impact the Department of Defense school system?
    Answer. Full-day Kindergarten. Research confirms that attendance in 
a full-day kindergarten results in measurable academic and social 
benefits for students. Full-day kindergartners exhibit more independent 
learning, classroom involvement, and productivity in work with peers, 
and reflectiveness than students in half-day programs. Increased time 
in the program results in less stress for children, decreased 
discipline problems, and increased time and emphasis on language 
development and appropriate preliteracy experiences. Teachers have more 
time to assess students, individualize instruction, and develop 
children's social skills (including conflict resolution strategies). 
Finally, parents have more satisfaction with a full day program. Early 
indications from DODEA's full-day programs are that more children are 
beginning to read and write at earlier stages than in the half-day 
programs.
    Reduced Class Size. Reducing class size in the primary grades 
provides teachers the ability to give more individual attention to 
students and to manage more orderly classrooms. As noted in the 
National Academy of Sciences report, ``Preventing Reading Difficulties 
in Young Children,'' smaller classes combined with quality professional 
development promote effective teaching and learning. This is especially 
important in the early years when all children must learn to read well. 
In Project STAR, a major Tennessee study, researchers found that 
students in smaller classes earned significantly higher scores in basic 
skills tests. Follow-up studies have shown that these achievement gains 
continued after the students returned to regular size classes. As a 
result of the DODEA reduced class size initiative, we expect all 
children to be able to read on grade level by third grade, discipline 
problems to be decreased thereby leaving more time for instruction, and 
teachers to be better able to identify and address students' needs on 
an individual basis. These effects are expected to result in increased 
student achievement and decreased achievement gaps among student 
groups.
                                 ______
                                 

              Questions Submitted by Senator Patty Murray

    Question. Mr. Tolleson, as you noted in your prepared testimony, 
the fiscal year 2000 Military Construction Appropriations bill contains 
language requiring a study of the adequacy of special education 
services available to military dependents on installations identified 
as ``compassionate assignment'' posts. I appreciate the effort that 
your office has given to this study since the fiscal year 2000 bill was 
enacted, and I wonder if you could elaborate on the status of that 
study. Can you give me a preview of your findings?
    Answer. The study has been completed, and the Final Report is 
presently being coordinated. Essentially, the Report identifies school 
districts with schools located on military installations, school 
districts that have experienced an increase in enrollment of 20 percent 
or more during the 5-year reporting period between 1993/94 and 1998/99 
resulting from BRAC, and school districts supporting compassionate 
assignment posts. The Report further assesses the impact of increased 
special education requirements, the adequacy of special education 
services and facilities, and recommends corrective measures. Data is 
provided to identify the costs attributable to military dependents 
receiving special education services in regards to needed improvements 
in facilities and services.
    Question. Could you describe the nature of a ``compassionate 
assignment'' post, where these bases are located in the continental 
United States, and how they are impacted by special needs children?
    Answer. The Department of the Navy is the only military service 
that has established ``compassionate assignment'' posts for its service 
members who have dependents with special needs. There are five such 
locations within the continental United States, and they are: 
Bremerton, Washington; Jacksonville, Florida; Norfolk, Virginia; San 
Diego, California; and Washington, DC. Compassionate assignment posts 
are defined as those locations that have adequate medical facilities 
and services for military dependents with special needs. Improved 
services and facilities are highly desirable and would contribute to 
improving the overall quality of special education services. However, 
it was found that school districts serving compassionate assignment 
posts meet the standards of the Individuals with Disabilities Education 
Act (IDEA).
    Question. Based on the information that you have received to date, 
can you draw any conclusions as to what type of federal assistance 
these bases will need to adequately meet the educational requirements 
of special needs students?
    Answer. The report recommends that existing federal programs such 
as Impact Aid or the authorization of Block Grants be expanded to cover 
the additional costs experienced by local school districts that have 
resulted from the military stationing decisions.
    Question. As you know, the designation of Washington's Bangor 
Submarine Base as a compassionate assignment post has had a major 
impact on the Central Kitsap School District. The school facilities 
study language in the fiscal year 2000 bill stipulates a recommendation 
for corrective measures. What type of corrective measures are you 
considering in your study?
    Answer. The Department of the Navy does not designate individual 
installations as compassionate assignment posts, but rather locations 
within the continental United States that serve one or more 
installation in the region. Hence, Bremerton, Washington is designated 
as a compassionate assignment post, and not just the Bangor Submarine 
Base. Bangor Submarine Base is within the compassionate assignment area 
and is serviced by three separate and distinct school districts; 
namely, Bremerton School District 100-C; South Kitsap School District; 
as well as Central Kitsap School District. Corrective measures 
considered in the report include one-time costs for facility 
construction or renovation to enhance the special needs programs, as 
well as costs associated with hiring and training of new teachers; 
procurement of teaching tools and supplies; and other one-time costs 
the districts have identified as needed to improve the services 
provided to special needs students.
    Question. In the testimony that you submitted to this Committee, 
you also referenced the $1 million in planning funds that his Committee 
appropriated in fiscal year 1999 for a special education center to 
serve the military personnel assigned to Bangor Submarine Base. 
Planning and design money is regularly appropriated for projects that 
are not yet authorized or even included in the Future Years' Defense 
Plan. Why is it your opinion that this provision requires a separate 
authorization before you will release the funds?
    Answer. The Department of Defense has determined that the project 
at Bangor Submarine Base is not a military construction project since 
ownership of the completed facility would be with the Central Kitsap 
School district rather than the Department of Defense. See the attached 
January 27, 2000 letter.
    Question. It appears, from reading your testimony, that DODEA's 
fiscal year 2001 Military Construction budget is less than half of the 
total fiscal year 2000 budget ($30 million in fiscal year 2001 as 
compared with $78 million in fiscal year 2000). Given the 
infrastructure challenges that you are facing, do you believe that is 
an adequate amount of funding?
    Answer. DODEA's fiscal year 1999 military construction program 
included construction of a $44 million elementary school at Andersen 
AFB, resulting from a Secretary of Defense decision in 1997 to 
establish DOD schools for military dependents on Guam.
    Like school districts across the United States, many of DODEA's 
facilities are old and in need of replacement or major repairs. We are 
addressing the most urgent of those requirements and hope to increase 
the funding earmarked for this purpose during the next few years. In 
support of this effort, we plan to complete a comprehensive study of 
our facilities worldwide in order to determine the best solution for 
our schools and program future projects accordingly.
    Much of the focus of DODEA's military construction efforts during 
the next 3 years will be to provide additional classroom space 
necessary to implement a full day kindergarten program and reduced 
class sizes in grades 1-3. Implementation of these programs began 
during school year 1999-2000, mirroring the Presidential initiatives 
for stateside public schools.
    The construction program for overseas schools, in particular, was 
relatively dormant throughout the 90's as military drawdown and 
realignment took place throughout Europe. Now that military stationing 
and student enrollments have stabilized, a concentrated catch-up effort 
is required to address deficiencies. In addition, new requirements to 
provide technology in the classroom and anti-terrorism measures needed 
at many of our schools have created a greater need for military 
construction projects throughout DODEA.
    Construction efforts providing these classrooms at six sites in 
Europe now appear to be more expensive than initially envisioned, and 
require additional funding in fiscal year 2001 to be completed. Site-
specific construction requirements, anti-terrorism measures, and higher 
than expected construction costs have created a deficit of $7.7 million 
needed to fully construct these projects. While DODEA is working with 
the Corps of Engineers and others to reduce these costs, the 
implementation of these educational initiatives at some locations may 
be delayed if additional funding is not secured.
    Question. I also note in your testimony that 133 of the DOD schools 
are in buildings that are of 1960s vintage or older, and yet your 
MILCON budget calls for reducing the inventory of these older 
facilities by only 4 percent by 2005. This seems like a very low 
replacement rate. How will this pace affect the backlog of aging 
schools in the years beyond 2005?
    Answer. DODEA operates a large number of schools in aging 
facilities that need to be replaced. The current replacement rate is 
not sufficient in the long term to adequately address these 
requirements. DODEA plans to request additional military construction 
funding in future years so that outdated facilities can be replaced as 
soon as possible with state-of-the-art, purpose built schools which 
meet the needs of today's educational requirements. Completion of the 
survey of DODEA facilities will provide a basis for future military 
construction requirements.
    Question. Fairchild Air Force Base in Washington State is the site 
of an antiquated DOD-built elementary school that is now operated by 
the local school district. The school is in deplorable condition; 
according to the school district, it is no longer cost effective to 
continue trying to repair it. The school is on the base, it is for the 
dependents of base personnel, and the school district cannot afford to 
build a new school. I know that you recognize the importance of good 
schools as part of the quality of life package that we owe our military 
personnel. Given the age of your infrastructure inventory, Fairchild is 
probably not the only base in this situation. What is the solution?
    Answer. There are many schools owned by the federal government or 
local school districts located in the United States that are in need of 
major repair or replacement. While all of these schools are important 
in maintaining a high quality education for military dependents, 
repairs or replacements of schools not operated by the Department of 
Defense has been under the purview of the Department of Education. 
Historically, the Department of Education has not been funded to the 
level required to replace these older facilities on a systematic basis. 
To properly address the existing facility deficiencies that these 
districts face, additional funding should be provided through the 
Department of Education to replace or upgrade outdated school 
facilities supporting military dependents where local financial 
assistance is not available.
    Question. In your testimony, you note that DODEA is working on a 
proposal to develop an agenda for improvements to civilian operated 
education facilities serving DOD dependents, including community school 
partnerships. Would you please elaborate on the details of your 
proposal, and provide a time frame for when you anticipate completing 
it.
    Answer. An office has been established within the Ofice of the 
Deputy Assistant Secretary of Defense for Military Community and Family 
Policy (MC&FP). A major responsibility of this office will be to 
interface with local school districts. The proposal is still being 
developed and we will forward it to you when it is finalized.
                                 ______
                                 

                  Questions Submitted to Diana Tabler

              Questions Submitted by Senator Conrad Burns

                         DOD MEDICAL FACILITIES

    Question. Ms. Tabler, please describe the two big hospital projects 
intended for Alaska and in Naples, Italy.
    Answer. The Bassett Army Community Hospital (BACH) Replacement 
project at Fort Wainwright, Alaska was authorized for $133 million in 
the Fiscal Year 2000 National Defense Authorization Act. This five-
year, phase-funded project constructs a new 32-bed inpatient facility 
and outpatient clinics to replace the existing 1950s-era, 300-bed 
inpatient facility to support approximately 25,000 military 
beneficiaries at Ft. Wainwright, nearby Eielson and Clear Air Force 
Bases. It will be the only military inpatient treatment facility within 
interior Alaska. Phase I (site preparation) of this project will be 
under construction soon.
    Naval Hospital Replacement project at Naples, Italy is under 
construction as part of the lease/build/buy agreement signed by the 
Navy with a private developer in 1998. This project replaces and 
relocates the existing inadequate leased facility from Agnano location 
to Gricignano (30 KM away) support site as part of the congressionally 
approved Naples Improvement Initiative. The project builds a new 26-bed 
hospital to meet healthcare requirements of the U.S. military 
beneficiaries in the Naples area.
    Question. Ms. Tabler, you have a fairly robust medical military 
construction program in fiscal year 2000. What is the backlog of your 
medical/dental construction/renovation requirements?
    Answer. Our fiscal year 2000 and fiscal year 2001 programs may 
appear fairly robust on the surface, but we have a huge backlog of 
construction and renovation requirements for our healthcare facilities. 
In the military construction arena, this backlog is over $3.3 billion 
as identified in the Services' fiscal year 2002-07 POM submission.
    Question. What is the average recapitalization period for 
Department of Defense Medical Facilities? How does that compare to the 
private sector?
    Answer. Based on our current plant replacement value of 
approximately $17 billion in fiscal year 2000 dollars and planned 
(fiscal year 2002-07 FYDP) expenditure of $166 million per year in 
major construction, our average facility replacement cycle is 102 
years. This assumes no further erosion of planned MELCON funding and 
adequate funding for the routine facility sustainment, operation and 
maintenance. Our goal is a 50-year replacement cycle for all military 
healthcare facilities, including medical training and research 
facilities. Based on preliminary data available, the private sector 
standard is less than 25 years. This does not mean that the private 
sector plans to replace the facilities every 25 years but merely 
implies that a major renovation will be required every 25 years to stay 
competitive. In the meantime, adequate investment will be made to 
sustain and maintain the building infrastructure. Private sector 
investment is based on first-cost tax incentives, whereas federal 
investment must be based on mission and life cycle cost analysis.

                          SUBCOMMITTEE RECESS

    Senator Burns. The next hearing of the subcommittee will be 
on March the 7th. We will hear from the Army and the Air Force 
with military construction, and we appreciate everybody coming 
this morning. If we have questions for you, we will certainly 
be in touch with you. Thank you very much. This hearing is 
recessed.
    [Whereupon, at 10:20 a.m., Tuesday, February 29, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]

       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              

                         TUESDAY, MARCH 7, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:03 a.m., in room SD-116, Dirksen 
Senate Office Building, Hon. Conrad Burns (chairman) presiding.
    Present: Senators Burns, Craig, Stevens, and Murray.

                         DEPARTMENT OF DEFENSE

                         Department of the Army

STATEMENT OF PAUL W. JOHNSON, DEPUTY ASSISTANT 
            SECRETARY (INSTALLATIONS AND HOUSING)
ACCOMPANIED BY:
        MAJ. GEN. MILTON HUNTER, DIRECTOR OF MILITARY PROGRAMS, U.S. 
            ARMY CORPS OF ENGINEERS
        MAJ. GEN. ROBERT L. VAN ANTWERP, JR., ASSISTANT CHIEF OF STAFF 
            FOR INSTALLATION MANAGEMENT
        BRIG. GEN. ROBERT M. DIAMOND, DEPUTY CHIEF, U.S. ARMY RESERVE
        BRIG. GEN. MICHAEL J. SQUIER, DEPUTY DIRECTOR, ARMY NATIONAL 
            GUARD

                           OPENING STATEMENT

    Senator Burns. Senator Murray is on her way. While she is 
getting here, I can be making my statement.
    The Subcommittee on Military Construction of the 
Appropriations Committee is officially open this morning. I 
want to welcome everybody here. This also covers family 
housing, Base Realignment and Closure (BRAC) and Reserve 
component programs for the Army and the Air Force for fiscal 
year 2001. And, of course, it is always good to welcome our 
Army here, the Secretary, and all of his representatives.
    It is good to see friendly faces. You have been here 
before, and we have been doing business quite a while, we 
appreciate that. I have General Hunter of the Corps of 
Engineers; Major General Antwerp, who is the Chief of Staff for 
Installation and Management; and, General Diamond. Good to see 
you and the other folks. It looks like we are going to end up 
with less money this year, which is no surprise to us.
    I got to looking back on figures when I was put on this 
committee. I think our budget was up around $11 billion, 
something like that, or a little over $11 billion. Now we are 
at $8 billion. So, in military construction, we have taken 
savings and took it very seriously.
    However, there is still, I think, some insufficient 
funding. We need some more funding in some areas. We still are 
trying to do better in our quality of life for our soldiers and 
our airmen--we have some shortfalls in that area.
    Although the fiscal year 2001 budget attempts to provide 
funding for the limited number of barracks, family housing, and 
mission modernization projects, it is more a question of 
allocating shortages across the Departments of the Army and the 
Air Force than it is increasing their money. Also, the great 
concern is the loss of the 5 percent contingency fee from 
military construction this year for family housing projects. I 
am worried about the impact on compromising quality standards, 
slowing project execution, and possible deferment of some 
projects entirely.
    But I look forward to hearing about this. I know that the 
folks we have in front of us today have a little imagination 
and a little entrepreneurship to them, and we can make it 
through this critical time.
    Secretary Johnson, I would ask you to keep your statement 
short, and I will tell you that your entire statement will be 
made part of the record, and we look forward to hearing from 
you.
    Senator Craig, do you have a statement this morning? And we 
will wait on Senator Murray, while she is getting here.
    Senator Craig. I would be happy to fill time, Mr. Chairman.
    Senator Burns. Fill time? Well, it is yours to fill, sir.

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Mr. Chairman, thank you very much.
    I say with pride that I serve on this subcommittee with 
great interest in the accomplishments that we make in behalf of 
our men and women in uniform. I am also frustrated by the very 
statements of our chairman, that we are not where we ought to 
be, gentlemen, on the spending levels that are necessary. In 
fact, I look at where we have come from and I think this 
administration has lost the real feeling of where we need to be 
with our military and what we need to provide to those men and 
women in uniform.
    I look at our real property maintenance goal of 3 percent 
and find that we are only at 1 percent as it relates to 
replacement values. And that is not acceptable. And we are 
going to have to find a way to do better. The chairman of the 
full committee has just arrived, and I know his commitment to 
our military, and he is going to help us get there.
    We have already made major steps in the right direction in 
the last 2 years, and we will continue to do that. Day-to-day 
preventive maintenance does not necessarily provide the kind of 
facilities we need or the readiness that we want on behalf of 
our military.
    In my State of Idaho, the Enhanced Training Range--and I 
will be talking to those folks in the blue uniforms in a 
moment--is of a critical nature to the whole of our Air Force 
and to the Mountain Home Air Force Base. Obviously the 366th 
Wing at Mountain Home Air Force Base and what it does with the 
composite wing is a tremendous contribution to our country. I 
will also be discussing with our Air Force the housing 
situation at Mountain Home and our failure to keep up with what 
we need there.
    Let me also say, in behalf of the Army Corps, you are 
engaged in a project now on the Snake and Columbia River 
systems, where wise and judicious efforts are going to be 
critical to the future of the Pacific Northwest and the 
management of those two river systems. You are there in a major 
way from the standpoint of systems management, dredging, the 
transportation on the river, and of course the critical issue 
of salmon and the endangered species that are listed on that 
river.
    There are some who would like to return that river to pre-
European man's existence in the Pacific Northwest--and how 
foolish they are. Because their goal is to stop growth and to 
cause those of us who like to live in that region and provide 
an economy for people who want to live there. So it is very 
frustrating to me with some of the efforts I see put forth.

                           PREPARED STATEMENT

    What the Army Corps is doing now is critical as it relates 
to a management plan to save our fish and to manage those 
rivers in a way that work and will continue to work, not just 
for Mother Nature, but also for that other dominant species in 
the region now called the human species. And I would hope that, 
in the end, we find a compatible way to get that done. And the 
Army Corps is going to play a key role in that.
    Mr. Chairman, thank you.
    [The statement follows:]

               Prepared Statement of Senator Larry Craig

    Mr. Chairman, it is truly a pleasure to serve on the Military 
Construction Subcommittee. I am proud of the accomplishments and impact 
which we have had on not only the Department of Defense, but also on 
the men, women and their families who serve diligently in defending 
this great nation of ours. We have worked hard in the past to ensure 
funds are provided and available for the crucial projects needed at our 
all important military installations, and unfortunately we are required 
to work even harder this year to keep funding at even an adequate 
level.
    As we all know, the military construction budget is to provide 
necessary funding for the planning, design, construction, alteration, 
and improvement of military facilities world-wide. Over the last couple 
of years I get the feeling this has been lost on the Clinton-Gore 
Administration. Both Houses of Congress have continually debated with 
the current administration about whether military construction funding 
and long-term planning are adequate.
    The Department of Defense's stated goal for real property 
maintenance is three percent, which is below funding used for public 
facilities nationwide. In light of this, it is mind boggling to think 
that some of the Services are budgeting only one percent of the plant 
replacement value. How can we expect to keep our military 
infrastructure maintained at a functioning level when our maintenance 
budget won't even cover the day-to-day preventative maintenance 
expenses?
    Because of the lack of adequate budgeting and planning, Congress 
has felt the need to intervene and fund programs which we feel are in 
the best interest of the services and the country as a whole. We are 
entering into the final phase of funding one of these programs, the 
Enhanced Training Range, which is of significant importance to the Air 
Force and the United States.
    Idahoans have proudly supported America's national security 
interests through our long running alliance with both the Air Force, 
the Navy, and the Idaho National Guard and Reserve.
    As you know, the 366th Wing at Mountain Home Air Force Base is the 
Air Force's only air intervention composite wing which is ready to 
fight and intervene anytime, anywhere. These aircrews have been 
successfully training in southern Idaho for more than 50 years, and 
with the new Enhanced Training Range, they will have the unequaled 
ability to train in southern Idaho for another fifty years.
    The Acoustic Research Detachment in North Idaho plays the key Naval 
role in model testing for our submarines. This installation, at Lake 
Pend Oreille, is unique in its location and function. The Detachment's 
hydro acoustic testing of advanced submarine stealth technology feeds 
into recommendations for engineering designs for new and current fleet 
vessels. Although there is no military construction request for Bayview 
this year, I would like to point out that some Navy experts claim that 
Lake Pend Oreille is the most important body of water for the Navy. I 
agree.
    At Gowen Field in Boise, the Idaho Guard and Reserve have long 
supported ongoing military operations throughout the world. This year, 
I will press for projects that are extremely important to Gowen, but 
more important, the Guard and Reserve overall. One project would 
provide for the construction of a 41,600 square yard asphalt concrete 
assault landing strip. It would include facilities to address landing 
and takeoff overruns, as well as turn around pads for each end, 10 foot 
unpaved shoulders, and airfield lighting, fencing, and access roads.
    Without this initiative, the Guard will be forced to continue 
flights of long sortie duration, with the associated wear and tear on 
aircraft and increased fuel usage. Only the minimum air crew 
proficiency for assault landing capability will be maintained, because 
of the valuable flying hours depleted and the restricted training 
availability of traditional guardsmen. In addition, there is no local 
airfield available that provides air traffic control requirements 
needed to meet C-130 assault landing training criteria or traffic 
prioritization on the optimum landing surface needed for C-130s.
    Another project that I encourage the Army Guard to consider for 
future years construction is for the Mobilization Readiness Center for 
the Army Guard. The Idaho National Guard faces a significant shortage 
in readiness space at its facilities at Gowen Field, which resulted 
from the DOD-directed reorganization of the 1-183rd Aviation Battalion 
and the 1-189th Aviation Medical Detachment. This shortage could impact 
readiness and the ability of the Idaho National Guard to effectively 
and efficiently prepare for deployment. The Mobilization Readiness 
Center modifications and additions are needed to provide space for Army 
Guard units currently located in World War II-era buildings or other 
facilities that are overcrowded and inadequate for that purpose. I urge 
the National Guard Bureau to place this project in the FYDP at the 
earliest practicable date.
    I am extremely proud of the role that the men and women of in 
uniform in Idaho play in ``keeping the peace'' around the globe. I have 
to tell you that I recently had the pleasure of visiting these 
outstanding men and women at Mountain Home, but I was shocked at the 
conditions in which they and their families must live and work. These 
brave men and women, who put their lives on the line, day-in and day-
out, need better housing and working conditions.
    To rectify the housing situation will cost approximately $110 
million over five years. Funding for this plan is not scheduled to 
begin until 2003 and continue through 2007. I don't know how the 
maintenance personnel will be able to keep this property in livable 
condition until this funding becomes available.
    I would encourage you to look at your priorities and reconsider 
Mountain Home. I was very discouraged and disappointed by the living 
conditions during my recent visit. The men and women of the 366th Wing 
deserve better, and you have the ability to make a difference.
    Once again, I feel that Congress is being held hostage by the 
Clinton-Gore Administration. They know that we will not stand for this 
atrocity and will increase the funding for military construction, which 
the Congress has done to the tune of about $3.5 billion over the last 
five years.

    Senator Burns. Thank you, Senator.
    Senator Murray.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Thank you, Mr. Chairman, for scheduling 
this hearing. And I welcome all of our witnesses and look 
forward to hearing from all of you.
    Mr. Chairman, I will tell you that, frankly, I was 
disappointed when I looked over the fiscal year 2001 military 
construction budgets of the Army and the Air Force. In the 
second year in a row in which the overall defense budget is on 
a significant upswing, military construction (MILCON) funding 
continues on a downward spiral. The MILCON budgets of both the 
Army and the Air Force represent a troubling decrease over last 
year's appropriated amount.
    As our witnesses have so eloquently stated to this 
committee before and no doubt will do so again today, 
infrastructure, both mission critical and quality of life, is 
an essential element of readiness and a vital tool in 
recruitment and retention of our troops. Simply put, you cannot 
continue to starve MILCON without sapping the strength of the 
rest of our Nation's military operations.
    I know that our witnesses understand the need for safe, 
modern and well-equipped working areas, for secure and 
comfortable family housing, for decent barracks and community 
assets such as child care centers and physical fitness centers. 
I know that they are doing the best they can in difficult 
circumstances. But I believe that we have to do more. I believe 
we can do more. And I believe we can do it without sacrificing 
readiness.
    To the contrary, we are more likely to affect readiness if 
we do not address the military's basic infrastructure needs. 
You cannot continue to field the finest military forces in the 
world if you do not have adequate training centers or adequate 
facilities in which to maintain their equipment. And you cannot 
expect our men and women in uniform to willingly deploy to hot 
spots throughout the world on short notice if they must leave 
their families behind in substandard housing with limited 
community support services.
    Mr. Chairman, you deserve a tremendous amount of credit for 
your efforts to secure adequate levels of military construction 
funding for our services, and particularly for the emphasis 
that you have continually placed on quality-of-life projects 
which are so important to men and women in uniform. I look 
forward, Mr. Chairman, to working with you again this year to 
fashion a product that will fit the growing needs of the 
services in the crucial areas of military construction. Thank 
you.
    Senator Burns. Thank you, Senator Murray. I have not done 
as good a job as you have given me credit for, I will guarantee 
you that. We need some more. But we have the chairman of the 
full committee and chairman of the Defense Subcommittee here 
this morning. Maybe we can make our appeal now.
    Senator Murray. Good.
    Senator Burns. I know that is just exactly what he wanted 
to hear.
    Senator Stevens, welcome this morning. You have a 
statement.

                    STATEMENT OF SENATOR TED STEVENS

    Senator Stevens. Thank you very much. We have other 
subcommittee meetings, so I will not stay long. But I do want 
to say you should not pick on these guys. They are not the ones 
that made the cuts that offend me, particularly in the area of 
contingencies, in the area of catching up with the backlog in 
maintenance and in making the kind of response we should have 
made to the chiefs' lists in all four services. The chiefs' 
lists were basically ignored when it came down to the fine 
tuning, I think we have to do something about that.
    So I would urge you to listen to the witnesses about what, 
and ask the questions to make sure we understand what were 
their priorities. We do believe we will have a little bit more 
money available--I think we will--than the Office of the 
Secretary of Defense thought they would have available. So I 
want to make sure it goes to the places where it is needed, 
particularly to prevent the obsolescence of our basic systems 
that support the military.
    I think it is a pretty good bill from the point of view of 
quality of life. We will have to do a little bit more about 
housing. I am going to be interested to see what you all do 
with the request that you are going to present today. And I 
urge you all to tell us what you need and not what this budget 
tells us you need.
    Senator Burns. Very well.
    Secretary Johnson, thank you.
    Senator Craig. Mr. Chairman, let me ask unanimous consent 
my full statement be a part of the record.
    Senator Burns. It will be made a part of the record.
    Thank you for coming this morning. We are starting out a 
little earlier in your day than normal I would imagine. But you 
know us farmers, we like to get done before noon, and then we 
like to sleep in the afternoon.
    Mr. Johnson, thank you for coming this morning.

                      STATEMENT OF PAUL W. JOHNSON

    Mr. Johnson. Mr. Chairman and members of the subcommittee, 
it is a pleasure to appear before you to discuss the Army's 
military construction request for fiscal year 2001. With me 
today are Major General Van Antwerp, the Assistant Chief of 
Staff for Installation Management; Major General Hunter, Deputy 
Commanding General of Military Programs for the Army Corps of 
Engineers; Brigadier General Diamond, Deputy Chief, Army 
Reserve; and Brigadier General Squier, Deputy Director of the 
Army National Guard.
    Our combined written statement, as you indicated, I would 
like for that to be put in the record.
    Senator Burns. Your full statement will be made part of the 
record.
    Mr. Johnson. Thank you.
    Before we answer any of your specific questions regarding 
the budget submission, I would like to highlight a few of our 
key initiatives in the Army's Active and Reserve components. 
Forty-seven percent of our budget, or $427 million, is 
dedicated to providing facilities that help the well-being of 
our soldiers, their families and civilians. This includes our 
top military construction priority to get soldiers out of 
inadequate barracks and to provide new and upgraded barracks to 
over 136,000 soldiers.
    The fiscal year 2001 Military Construction Army (MCA) 
budget request of $367 million for barracks will provide modern 
housing for over 3,100 soldiers worldwide. Our strategic 
mobility program is on track for completion in the year 2003. 
We realize that we will be examining our entire strategic 
mobility requirement as part of transforming the Army to a more 
strategically responsive force. But, based on current plans, 
our MCA program has been responsive to the requirements of the 
Army.
    The Army's family housing program contains a total of $154 
million. Over $100 million of this is construction of new, 
replacement housing or revitalization of current housing within 
the United States, and $54 million to improve our housing 
overseas. Together with our housing privatization initiative 
and Secretary Cohen's initiative to eliminate service members' 
out-of-pocket costs for off-base housing in the United States, 
this MILCON funding will help improve the living conditions of 
our married soldiers.
    The Army National Guard fiscal year 2001 MILCON budget 
request focuses on training, site modernization, readiness 
centers, and Army National Guard division redesign study (ADRS) 
projects. The Army National Guard's participation in the Army 
division redesign study will better provide needed forces to 
the commanders in chief. ADRS will convert some National Guard 
combat force to combat service support forces that are needed 
by the Army to implement the National Military Strategy. For 
the Army Reserve, the budget provides the essential military 
construction resources for Army Reserve centers, their backbone 
for training, readiness and mobilization.
    Mr. Chairman, our fiscal year 2001 budget permits us to 
execute the Army's military construction programs. Our long-
term facilities strategy can be accomplished only through 
balanced funding, reduction of excess capacity, and improvement 
in management. We plan to work closely with you to streamline, 
consolidate and establish partnerships that generate resources 
for infrastructure improvement and continuance of service.

                           PREPARED STATEMENT

    With the support of this committee and approval of our 
budget, we will be better able to support the Army and soldiers 
and their families who serve our Nation. Thank you, Mr. 
Chairman. We are now ready to respond to your questions.
    [The statement follows:]

                 Prepared Statement of Paul W. Johnson

    Mr. Chairman and members of the subcommittee, it is a pleasure to 
appear before you to discuss the Active Army and Reserve Components' 
military construction request for fiscal year 2001. This request 
includes initiatives of considerable importance to America's Army, as 
well as this committee, and we appreciate the opportunity to report on 
them to you.

    PART I--MILITARY CONSTRUCTION, ARMY FAMILY HOUSING, HOMEOWNERS 
                        ASSISTANCE FUND, DEFENSE

    I am pleased to present the Active Army's portion of the Military 
Construction budget request for fiscal year 2001. This budget provides 
construction and family housing resources essential to support your 
Army's role in our National Military Strategy. It is also the first 
budget that supports the Army's new Vision and transformation strategy.
    The program presented herein requests fiscal year 2001 
appropriations of $897,938,000 for Military Construction, Army (MCA), 
and $1,140,381,000 for Army Family Housing (AFH). The companion request 
for authorization of appropriations is $897,938,000 for MCA and 
$1,140,381,000 for AFH. There is no request this year for the 
Homeowners Assistance Fund, Defense.
    For the past 224 years, the Army has had a contract with the 
American people to fight and win the Nation's wars. We continue to 
fulfill this contract in executing the National Security Strategy and 
the National Military Strategy across the full spectrum of military 
operations. Since 1989, we have deployed forces for contingency 
operations, on average, once every 14 weeks. The Army has successfully 
answered the Nation's call 35 times in the last 10 years.
    To prepare for an uncertain future, the Army announced a new Vision 
to forge a more strategically responsive, yet dominant, force for the 
21st Century. The new force will be more mobile and sustainable, and 
still have the capability to respond to the full spectrum of 
operations. It also continues a rigorous training program, full 
integration of the Active and Reserve Components, comprehensive 
initiatives to protect the force, and provides sufficient installations 
from which to project our forces. Implementation of our Vision is 
currently underway. Although we do not know the precise effects on Army 
installations and facilities, we are working closely with the 
Transformation Task Force to ensure installation needs are identified 
and addressed.
    The Army must sustain a force of high quality, well-trained people; 
acquire and maintain the right mix of weapons and equipment; and 
maintain effective infrastructure and power projection platforms to 
generate the capabilities necessary for meeting the warfighting 
requirements and engagement priorities of the commanders-in-chief 
(CINCs) of the combatant commands.
    The new Vision charts the course for the Army to transform itself 
into a force that has these desired characteristics and can sustain 
dominance at any point on the spectrum of operations. Throughout all 
phases of the transformation, the Army will pursue changing our 
concepts and doctrine as well as the institutional base. Our budget 
request fully supports the missions of the transformed Army. We are 
working in tandem with the transformation efforts to ensure our 
installations and facilities meet the needs of our warfighting 
soldiers. Keeping the changes in our installations and facilities 
synchronized with the transformation of the force will ensure the Army 
retains the capability to meet its national security mission throughout 
the transformation process.
    Now, I would like to discuss the Army's installations and 
facilities strategy for fiscal year 2001 and beyond and how it supports 
our new Vision. As the Army transforms, we must also take similar giant 
strides to ensure that Army installations are not left behind. As we 
look ahead, we intend to help the Army achieve its new vision by 
implementing a complementary vision for our installations: By the year 
2020, Army posts will more fully support and satisfy our warfighting 
needs, while providing soldiers and their families with a quality of 
life that equals that of their peers in civilian communities. The Army 
will soon publish a white paper, Managing Army Posts: Tenets for the 
Twenty-First Century, which will provide the framework and principles 
for achieving this new vision for Army installations.
    We estimate that the bill to upgrade, replace and build facilities 
to currently acceptable levels is simply impossible to reach without 
the ability to unlock the value in our installation assets and 
operations. Our current facilities strategy has us on the right path 
but, by itself, will not take us to our new vision.

                          FACILITIES STRATEGY

    The Army's current facilities strategy is threefold. First, we must 
focus our investments to gain the most benefit from limited resources. 
We must identify required facilities, infrastructure and support 
services necessary for the desired level of readiness. We must make a 
dedicated effort to stop further deterioration of existing required 
facilities and continue to focus our limited modernization dollars on 
mission critical and well being projects. Currently our focus is on 
barracks modernization and strategic mobility projects. As the Army 
transforms, the facilities strategy will adapt to support transforming 
Army requirements while continuing to support legacy Army requirements. 
Second, we must divest all unneeded real estate. Third, we must reduce 
the total cost required to support our facilities and related services, 
including maintenance of our real estate inventory.
    As part of our effort to better focus our investment, we have 
developed a decision support tool, the Installation Status Report, to 
help formulate and monitor our facilities strategy. We use it to assess 
the status of our facilities' condition. This identifies critical areas 
to consider in resource allocation. Also, it assists us in assessing 
the condition of our facilities essential to the installation's mission 
and the well being of our personnel.
    We continue to eliminate excess facilities. Our current facilities 
reduction program and base realignment and closure process will result 
in disposal of over 200 million square feet in the United States by 
2003. This year we continue our policy of demolishing one square foot 
for every square foot constructed. We are also making progress reducing 
our leasing costs. Between fiscal years 1998-2001, we project an annual 
savings in leasing costs of $26,600,000. By 2003, with our overseas 
reductions included, the Army will have disposed of over 400 million 
square feet from its fiscal year 1990 peak of 1,157,700,000 square 
feet. Although these savings are substantial, we need to achieve even 
more. Therefore, the Army supports additional rounds of BRAC in fiscal 
years 2003 and 2005.
    We are pursuing innovative ways to modernize our infrastructure and 
reduce the cost of our facilities, including privatization or 
outsourcing of certain functions. One example is installation utilities 
systems. Our goal is to privatize all utility systems in CONUS by 2003, 
where it is economically feasible, except those needed for unique 
security reasons. Another initiative, the Value Improvement Program, is 
being launched this year to improve the value the Army receives from 
its facilities construction and operations dollars. We have also 
established a pilot program to test privatization authorities for 
military family housing in an effort to provide better housing for 
soldiers and their families. We continue to seek partnering 
opportunities with civilian communities around our installations to 
provide some facilities as a viable alternative to Army ownership 
facilities.
    Executive Order 13123, ``Greening The Government Through Efficient 
Energy Management,'' sets higher goals for reducing energy consumption. 
We are depending on the use of Energy Savings Performance Contracts 
(ESPC), and other forms of alternative financing, to implement this 
executive order, to help reduce energy consumption, reduce pollutants, 
and improve the well being of our personnel at our installations. We 
awarded the largest ever ESPC contract within the Federal government 
for implementing a minimum of $67 million in energy saving projects for 
five installations in the Military District of Washington. We are 
aggressively pursuing all opportunities to purchase electrical power 
generated from renewable sources such as wind, solar and geothermal. We 
have also installed hundreds of solar lighting systems that use no 
energy in our facilities and are expanding this further.
    Next, I will discuss the highlights of the budget.

                             CONTINGENCIES

    Funding for contingencies was eliminated for all military 
construction and family housing projects, based on the concern that 
contingency funding was being used to support upgrades to projects. 
Although the Army's past construction program execution experience has 
indicated that contingency funding is required for mandatory 
construction changes after contract award, the Army will execute the 
program by implementing more stringent program management controls. The 
real impact will not be known until the year of execution.

                   MILITARY CONSTRUCTION, ARMY (MCA)

    We are focusing on four major categories of projects: mission 
facilities; well being; support programs; and chemical 
demilitarization. I will explain each area in turn.

                           MISSION FACILITIES

    In fiscal year 2001, there are six mission facility projects for 
the Army's Strategic Mobility Program. These improvements facilitate 
movement of personnel and equipment from CONUS bases for both the 
Active and Reserve components to meet Army and Defense timelines for 
mobilization operations.
    Army Strategic mobility Program.--Our budget request continues the 
program to upgrade our strategic mobility infrastructure enabling the 
Army to maintain the best possible power projection platforms. We are 
requesting appropriations, authorization and authorization of 
appropriations of $67,300,000. The fiscal year 2001 projects will 
complete 79 percent of the Strategic Mobility program that is scheduled 
for completion in fiscal year 2003.
    Our fiscal year 2001 request includes six projects. We are 
improving our rail deployment capability by improving the railyard 
infrastructure at Fort Bliss and a railroad equipment maintenance 
facility at Sunny Point Military Ocean Terminal. Our request for Phase 
3 of the railhead at Fort Hood will complete this project begun in 
fiscal year 1999.
    We are continuing to improve our air deployment by constructing an 
ammunition holding area adjacent to the airfield at Fort Bragg and a 
fixed wing aircraft parking apron at Fort Benning. To improve our 
ammunition outloading and shipping capability, we have included a 
project for an ammunition container complex at Red River Army Depot.

                          WELL BEING PROJECTS

    The well being of our soldiers, their families and civilians has a 
significant impact on readiness. Therefore, almost half, 47 percent, of 
our budget is dedicated to providing these types of facilities. Our 
priority is to get soldiers out of gang latrine type barracks and to 
provide new or upgraded barracks to house 136,000 single soldiers. 
Additionally, we are requesting other facilities that will improve not 
only the well being of our soldiers but also the readiness of the Army. 
We are requesting appropriations and authorization of appropriations of 
$426,500,000, with an authorization of $427,700,000 for well being 
projects this year.
    Whole Barracks Renewal Initiative.--Modernization of barracks for 
permanent party soldiers continues to be the Army's number one 
facilities priority for military construction. It provides single 
soldiers with a quality living environment that more nearly 
approximates conditions off the installation, or enjoyed by our married 
soldiers. New or renovated barracks include increased personal privacy 
and larger rooms, closets, upgraded day rooms, new furnishings, 
adequate parking, and landscaping, in addition to administrative 
offices, which are separated from the barracks.
    In fiscal year 2001, we are planning 17 projects. This includes 5 
projects in Europe and 2 projects in Korea. Our budget completes the 
Fort Campbell barracks complex that was authorized in fiscal year 1999 
and the Fort Stewart barracks complex that was authorized in fiscal 
year 1998. We are also completing the Fort Benning and Fort Riley 
barracks that were authorized and incrementally funded in fiscal year 
2000. Our budget includes the second increments of barracks complexes 
at Fort Bragg and Schofield Barracks that were authorized in fiscal 
year 2000. Fort Bragg's large soldier population and poor barracks 
conditions require sustained high investment to provide quality housing 
and meet the fiscal year 2008 buyout. Thus, we are requesting full 
authorization and Phase 1 funding to start two additional barracks 
complexes at Fort Bragg. With full authorization of these projects, we 
plan to award each complex, subject to subsequent appropriations, as a 
single contract to gain cost efficiencies, expedite construction, and 
provide uniformity in building systems.
    With the approval of the fiscal year 2001 program, as requested, 
barracks at the new standard will be funded for 70 percent of our 
permanent party soldiers. Our plan is to invest between fiscal years 
2002 and 2008 an additional $4.4 billion in MCA and host nation funds, 
supplemented by $0.6 billion in Real Property Maintenance (RPM) to fix 
barracks worldwide to meet our goal of providing improved living 
conditions to our single soldiers. Between fiscal year 1994 and fiscal 
year 2000, we invested $3.5 billion from all sources to improve the 
well being of our single soldiers. While we are making considerable 
progress on installations in the United States, we will need to 
significantly increase funding for Germany and Korea in future 
programs. Because a higher proportion of soldiers assigned overseas 
require barracks space than those stationed in the United States, 42 
percent of our total barracks requirement is to house soldiers assigned 
to Europe and Korea. For the past several years the overseas regions 
have been funded at lower levels than United States installations; 
therefore, approximately half of the remaining modernization effort is 
required in these areas.
    This substantial effort with significant funding in later years 
keeps our barracks program on track to build new or renovate all 
barracks to the 1+1 or equivalent construction standard worldwide by 
2008. Barracks conditions in Korea are considered the worst in the Army 
because we are forced to assign soldiers to Quonsets, H-relocatables or 
force them to live off-post. Thus, Korea is currently using a modified 
2+2 standard which incorporates the same amenities but expedites 
getting soldiers into quality facilities.
    Other well being projects.--To improve the barracks for our new 
Army recruits, we are requesting appropriations and authorization of 
appropriations of $38,600,000, along with full authorization of 
$61,200,000, for the first phase of a basic trainee complex at Fort 
Leonard Wood. In addition, we are requesting a project to improve the 
housing for unaccompanied personnel at Kwajalein Atoll.
    Our budget also includes construction of a new child development 
center in Kaiserslautern to replace the failing facility supporting the 
Landstuhl Hospital. We are requesting appropriations, authorization and 
authorization of appropriations of $3,400,000 for this project.

                            SUPPORT PROGRAMS

    This category of construction projects provides vital support to 
installations and helps improve their readiness capabilities. In our 
budget, we have requested 12 projects with appropriations and 
authorization of appropriations of $119,032,000, and with an 
authorization request of $81,180,000.
    Our budget completes the Digital Multi-purpose Training Range at 
Fort Knox that will improve training of both our active forces as well 
as the reserve components. This project was authorized by Congress in 
fiscal year 1999. We are continuing our range modernization program by 
requesting appropriations and authorization of appropriations for Phase 
1 of the Digital Multi-purpose Training Range at Fort Hood for 
$16,000,000, along with the request for full authorization of 
$26,000,000.
    Phase 2a of the United States Military Academy Cadet Physical 
Development Center, begun in fiscal year 1999, is also included. We are 
requesting appropriations and authorization of appropriations of 
$13,600,000 for this phase. The entire project was authorized in fiscal 
year 1999.
    The budget includes three projects to meet the Army's goal to get 
out of leased space. The construction of two military entrance 
processing stations at the Defense Supply Center, Columbus, Ohio, and 
at the Defense Distribution Center, Pennsylvania, and of the Space and 
Missile Defense Command Building at Redstone Arsenal will permit us to 
vacate costly leased facilities.
    With Phase 2 of the Consolidated Soldier Support Center at Fort 
Drum, we are completing a project that was authorized and begun in 
fiscal year 2000. The Chemical Defense Qualification Facility at Pine 
Bluff Arsenal was also authorized in fiscal year 2000 and we are 
requesting funding for construction in this budget.
    Additional projects in the budget include a Central Vehicle Wash 
Facility at Fort Richardson, a Field Operations Facility at Fort 
Huachuca, an Academic Research Facility at Carlisle Barracks, and a 
classified project.

                      AMMUNITION DEMILITARIZATION

    The Ammunition Demilitarization (Chemical Weapons Demilitarization) 
Program is designed to destroy the U.S. inventory of lethal chemical 
agents, munitions, and related (non-stock-piled) materiel. It also 
provides for emergency response capabilities, while avoiding future 
risks and costs associated with the continued storage of chemical 
warfare materiel.
    The Office of the Secretary of Defense devolved the Chemical 
Demilitarization program to the Department of the Army in fiscal year 
1999. Although Congress authorized and appropriated funding for the 
fiscal year 2000 Chemical Demilitarization construction program to the 
Department of Defense, the overall responsibility for the program 
remains with the Army and we have included it in this year's Army 
budget.
    We are requesting appropriations, authorization and authorization 
of appropriations of $3,100,000 to construct a Munitions Assessment/
Processing System Facility to provide a safe, controlled environment 
for the treatment and disposal of unexploded ordnance. An 
appropriations and authorization of appropriations request for 
$172,300,000 is included in the Army's fiscal year 2001 budget to 
continue the Chemical Demilitarization projects previously authorized. 
An advance appropriation of $304,540,000 is requested to complete these 
projects. Table 1 summarizes our request:

                                 Table 1

                           [Fiscal Year 2001]

        Installation/Type                                         Amount
Aberdeen Proving Ground, MD/Ammun Demil Facility........     $45,700,000
Aberdeen Proving Ground, MD/Munitions Assess System 
    Facility............................................       3,100,000
Blue Grass Army Depot, KY/Ammun Demil Facility..........       8,500,000
Newport Army Depot, IN/Ammun Demil Facility.............      54,400,000
Pine Bluff Army Depot, AR/Ammun Demil Facility..........      43,600,000
Pueblo Army Depot, CO/Ammun Demil Facility..............      10,700,000
Umatilla Army Depot, OR Ammun Demil Facility............       9,400,000
                    --------------------------------------------------------
                    ____________________________________________________
    Total...............................................     175,400,000

    The destruction of the U.S. stockpile of chemical weapons by the 
2007 deadline in the Chemical Weapons Convention is a major priority of 
the Army, DOD and the Administration. The MILCON funding for the 
chemical weapons destruction facilities is essential to achieving that 
goal.

                          PLANNING AND DESIGN

    The fiscal year 2001 MCA budget includes $72,106,000 for planning 
and design. This request is based on the size of the two succeeding 
fiscal years' military construction programs. The size of the fiscal 
year 2001 request is, therefore, a function of the construction 
programs for two fiscal years. The requested amount will be used to 
complete design on fiscal year 2002 projects and initiate design of 
fiscal year 2003 projects.
    Host Nation Support (HNS) Planning and Design (P&D).--The Army, as 
Executive Agent, provides HNS P&D for oversight of Host Nation funded 
design and construction projects. The United States Army Corps of 
Engineers oversees the design and construction to ensure the facilities 
meet our requirements and standards. Lack of oversight may result in an 
increase in design errors and construction deficiencies that will 
require United States dollars to rectify. Maintaining the funding level 
for this mission results in a payback where one dollar of United States 
funding gains $60 worth of Host Nation Construction. The fiscal year 
2001 budget request for $22,600,000 will provide oversight for 
approximately $1 billion of construction in Japan, $50 million in Korea 
and $50 million in Europe. The budget includes $3,100,000, which is 
dedicated to the oversight of facilities associated with the Government 
of Japan funded initiative to consolidate and relocate United States 
Forces on Okinawa.
    Let me show you the analysis of our fiscal year 2001 MCA request.

                        BUDGET REQUEST ANALYSIS

    Summary: The fiscal year 2001 MCA budget includes a request for 
appropriations of $897,938,000 and companion request for authorization 
of appropriations of $897,938,000.
    Authorization Request.--The request for authorization is 
$688,988,000. The authorization request is adjusted for those projects 
previously authorized in fiscal years 1998, 1999 and 2000. These 
projects include Phase 2 of the West Point Cadet Physical Development 
Center, Phase 3 of the Fort Knox Digital Multi-purpose Training Range, 
and the remainder of the Whole Barracks Renewal Complex at Fort 
Campbell, Fort Benning, Fort Riley, Fort Stewart, and the second 
increment at Fort Bragg and Schofield Barracks. Additionally, it is 
modified to provide full authorization of $296,800,000 for the Fort 
Leonard Wood Basic Training Complex, two new barracks complexes at Fort 
Bragg, and the Multi-purpose Digital Training Range at Fort Hood. Only 
$126,200,000 in appropriations is required for the first phases of 
these projects.
    The fiscal year 2001 request for appropriations and authorization 
for fiscal year 2001, by investment focus, is shown in Table 2:

                                  TABLE 2.--INVESTMENT FOCUS--FISCAL YEAR 2001
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Percent
                            Category                               Authorization  Appropriations   Appropriation
----------------------------------------------------------------------------------------------------------------
Well Being/Barracks.............................................        $427,700        $426,500            47.5
Mission/Strategic Mobility......................................          67,300          67,300             7.5
Support.........................................................          81,182         119,032            13.3
Planning & Design/Minor Construction............................         109,706         109,706            12.2
                                                                 -----------------------------------------------
    Subtotal Army MILCON........................................         685,888         722,538            80.5
                                                                 -----------------------------------------------
Chemical Demilitarization.......................................           3,100         175,400            19.5
                                                                 -----------------------------------------------
    Total Program...............................................         688,988         897,938           100.0
----------------------------------------------------------------------------------------------------------------

    Table 3 shows the fiscal year 2001 distribution of the 
appropriations request among the Army's major commands:

 TABLE 3.--COMMAND SUMMARY--MILITARY CONSTRUCTION ARMY--FISCAL YEAR 2001
                         [Dollars in thousands]
------------------------------------------------------------------------
                                                            Percent of
                 Command                  Appropriations       Total
------------------------------------------------------------------------
Inside the United States:
    Forces Command......................        $306,100            34.1
    Training & Doctrine Command.........          57,550             6.4
    Army Materiel Command...............         191,700            21.3
    Military Entrance Processing Command           5,532             0.6
    Military Traffic Management Command.           2,300             0.3
    United States Military Academy......          13,600             1.5
    Intelligence and Security Command...           1,250             0.1
    Space & Missile Defense Command.....          23,400             2.6
    United States Army, Pacific.........          93,200            10.4
    Classified Project..................          11,500             1.3
                                         -------------------------------
      Subtotal..........................         706,132            78.6
                                         ===============================
Outside the United States:
    Space & Missile Defense Command.....          18,000             2.0
    Eighth, United States Army..........          33,700             3.8
    United States Army, Europe..........          30,400             3.4
                                         -------------------------------
      Subtotal..........................          82,100             9.2
                                         -------------------------------
      Total Major Construction..........        788,2328             7.8
                                         ===============================
Worldwide:
    Planning and Design.................          94,706            10.5
    Minor Construction..................          15,000             1.7
                                         -------------------------------
      Subtotal..........................         109,706            12.2
                                         ===============================
      Total Appropriations Requested....         897,938           100.0
------------------------------------------------------------------------

    Now, I will explain our Army Family Housing request.

                          ARMY FAMILY HOUSING

    No single program is more important than adequate housing for 
soldiers and families. The family housing program provides a major 
incentive necessary for attracting and retaining dedicated individuals 
to serve in the Army. Adequate housing continues to be the number one 
soldier concern when we ask them about their well being. Maintaining or 
finding adequate, quality housing for our soldiers and families is one 
of the Army's continuing challenges. The Secretary of Defense has 
announced an initiative to eliminate service members' out-of-pocket 
costs for off-base housing in the United States. This action will 
reduce service members' costs for housing from approximately 19 percent 
in 2000 to 15 percent in 2001, with continued reductions each year 
thereafter, eliminating those out-of-pocket costs entirely by 2005.
    DOD has set a goal to eliminate inadequate family housing by 2010. 
Currently, 78 percent of our housing is inadequate--needing either 
replacement, major renovation or repair. The Army's unfunded bill to 
meet the DOD goal is $4.9 billion.
    The Army plans to utilize privatization authorities granted in the 
1996 MHPI to help meet the DOD goal. Fort Carson, Colorado, is the 
Army's first privatization project. The contract was awarded in 
September 1999, and the developer assumed operational control of the 
existing housing in November 1999. Under this contract, the developer 
will renovate all existing base housing and construct 840 additional 
units within a five year period. Soldiers' rent will be capped at their 
Basic Allowance for Housing (BAH).
    Three pilot projects are being developed under the Residential 
Communities Initiative (RCI) and solicited using a Request for 
Qualifications (RFQ) process. The pilot sites are Fort Hood, Texas; 
Fort Lewis, Washington; and Fort Meade, Maryland. The RFQ process is a 
concept well proven in industry and government. It allows the 
Government to select a private housing and community developer based on 
each firm's qualifications and experience; to jointly develop a 
Community Development and Management Plan; and to negotiate an 
agreement with the developer to implement that plan. This process is 
faster, less costly for developers to compete, and provides more 
flexibility to develop projects that better meet the needs of all 
concerned parties. Throughout the RFQ process, the emphasis is on 
partnering with the private entity to develop residential communities 
in consultation with all ``stakeholders'' including the Congress.
    Fort Hood is the first RCI project being solicited under the RFQ 
process and an award is expected early this year. The Fort Lewis RFQ 
was issued in December 1999, and we expect to issue the Fort Meade RFQ 
in April 2000.
    In summary, to meet DOD's goal in the 50 states, the Army plans to 
use a combination of traditional MILCON, BAH increases, and 
privatization initiatives. To this end, the Army supports extending the 
MHPI legislation beyond the February 2001 expiration. In Europe and 
Korea, we intend to reach the goal by funding AFH programs and 
revitalizing inadequate housing through traditional means and by 
returning unneeded units to host nations.
    Our fiscal year 2001 request for appropriations, authorization, and 
authorization of appropriations is $1,140,381,000. Table 4 summarizes 
each of the categories of the Army Family Housing program.

                                  TABLE 4.--ARMY FAMILY HOUSING--FISCAL YEAR 2001
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                           Authorization                  Appropriations
                Facility Category                ---------------------------------------------------------------
                                                      Amount        Percentage        Amount        Percentage
----------------------------------------------------------------------------------------------------------------
New Construction................................         $91,974               8         $91,974               8
Post Acquisition Construction...................          63,590               6          63,590               6
Planning and Design.............................           6,542               1           6,542               1
Operations......................................         180,370              16         180,370              16
Utilities.......................................         198,101              17
Planning and Design.............................           6,542              Saudi Arabia). The Army National Guard's equally 
vital role is providing assistance and support to our 54 States and 
Territories during domestic and community support missions. Local 
governments in 44 States requested emergency support through their 
State Governments a total of 267 times in fiscal year 1999. The Army 
National Guard provided over 281,000 soldier man-days in response to 
these requirements to meet the critical support needs in local 
communities.

                          FACILITIES STRATEGY

    The goal of the Army National Guard is to provide state-of-the-art, 
environmentally sound, community based power projection platforms that 
integrate all functions required to sustain and enhance unit readiness 
and community support. Our objective is to maximize the number of units 
that are manned, trained, equipped, resourced and ready for Federal as 
well as State and/or domestic missions.
    In order to improve on the Federal side, the Active Component (AC) 
and Army National Guard (ARNG) are in the process of forming two AC/
ARNG Integrated Divisions, Division Teaming developments and the AC/
ARNG command exchange initiative. In addition, the ARNG is 
participating in an Army Division Redesign Study (ADRS) to better 
provide needed forces to the commanders-in-chief (CINCs). ADRS will 
convert ARNG combat force structure to combat support/combat service 
support forces that are needed by the Army to implement the National 
Military Strategy. With this change of mission, the ARNG will have to 
alter many of our facilities to be able to meet the needs of our new 
charge.
    As an Army partner, one of the Army National Guard's strategies is 
to follow a rigorous and disciplined process to establish priorities 
for military construction requirements using Army standards. One such 
tool is the real property development plan (RPDP). RPDP is being 
adopted by an additional 12 States in fiscal year 2000 bringing the 
total to 42. This planning tool is providing the States with a decision 
making guide for long-range acquisition, utilization, and development 
of real property. By 2001, all 54 States and Territories will have 
started their Development Plans.
    The Army National Guard needs to ensure that it continues to 
provide the forces needed to meet the needs of the community, the Army, 
and the Nation. One way to support this necessity is to possess quality 
facilities. To reach this objective, we are designing, operating and 
maintaining our facilities using private sector business practices, 
21st Century technologies, and commercial off-the-shelf facilities 
software.

           MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCNG)

    Within our military construction request, we focus on five 
investment areas: training site modernization, readiness centers, Army 
National Guard Division Redesign Study (ADRS) projects, minor 
construction, and planning and design. These projects are mission 
focused and are centered on the well being of our soldiers.

                           MISSION FACILITIES

    In fiscal year 2001, there are 28 mission facility projects. The 
amount of $52,630,000 will be used to construct these facilities. 
Essential mission facilities include several initiatives such as 
maintenance support shops, readiness centers and a training site 
complex.
    Training Site Modernization.--Fiscal year 2001 continues the 
process of adapting existing State operated training sites to training 
strategies for the 21st Century. We have included a Regional Training 
Institute at Fort Bragg, North Carolina, to our training site 
modernization program. This complex will replace several World War II 
barracks that are now used. The Training Institute will include a 
Soldier Development Center, a Long Distance Learning Center, and a 
Synthetic Theater of War Range Training Facility, and will serve as the 
headquarters of the Combat Arms Brigade of the Total Army School System 
(TASS) Region C.
    Readiness Centers.--We have included in our fiscal year 2001 budget 
request five readiness centers: Mankato, Minnesota; Hancock Field, New 
York; Baker City, Oregon; and Bremerton and Yakima, Washington. 
Mankato, Hancock Field, Baker City and Bremerton readiness centers will 
replace facilities built from 1913 to 1954. The 287 person facility at 
Yakima will replace a 180 person tank armed forces reserve center.
    Maintenance Support Shops.--As a part of the ADRS initiative, we 
have included 22 organization maintenance shops for addition/
alteration. Sites in California, Indiana, Kansas, Michigan, Montana, 
and Nebraska have been selected to begin the conversion process. These 
projects are essential for the units to successfully maintain the 
additional heavy equipment they will receive during ADRS phase I.

                        BUDGET REQUEST ANALYSIS

    This MCNG budget request includes a request for appropriations, 
authorization and authorization of appropriations of $59,130,000 for 
fiscal year 2001.
    The fiscal year 2001 request, by investment focus, is shown in 
Table 5:

                                  TABLE 5.--INVESTMENT FOCUS--FISCAL YEAR 2001
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Percent
                            Category                               Authorization  Appropriations  Appropriations
----------------------------------------------------------------------------------------------------------------
Maintenance Support Shops.......................................         $22,972         $22,972            38.9
Readiness Centers...............................................          20,922          20,922            35.4
Training Site Facilities........................................           8,709           8,709            14.7
Minor Construction..............................................           2,295           2,295             3.9
Planning and Design.............................................           4,232           4,232             7.1
                                                                 -----------------------------------------------
    Total Program...............................................          59,130          59,130           100.0
----------------------------------------------------------------------------------------------------------------

    Table 6 shows the fiscal year 2001 distribution of the request 
among the 54 States and Territories:

                      TABLE 6.--MILITARY CONSTRUCTION ARMY NATIONAL GUARD--FISCAL YEAR 2001
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Percent of
                   Location                               Project Title           Appropriations       Total
----------------------------------------------------------------------------------------------------------------
Mankato, MN...................................  Readiness Center................          $4,681             7.9
Fort Bragg, NC................................  Educational Training Facility...           8,709            14.7
Hancock Field, NY.............................  Readiness Center................           5,376             9.1
Baker City, OR................................  Readiness Center................           3,122             5.3
Bremerton, WA.................................  Readiness Center................           2,639             4.5
Yakima, WA....................................  Readiness Center................           5,104             8.6
CA, IN, KS, MI, MT, NE........................  ADRS-Organizational Maintenance           22,972            38.8
                                                 Shops add/alt.
Various.......................................  Planning and Design.............           4,232             7.2
Various.......................................  Minor Construction..............           2,295             3.9
                                               -----------------------------------------------------------------
    Total Appropriations Requested............  ................................          59,130           100.0
----------------------------------------------------------------------------------------------------------------

                       REAL PROPERTY MAINTENANCE

    The States will continue to prudently manage their existing 
facilities, despite the challenges of age and shrinking real property 
support funding. They are committed to executing the programs you 
authorize as expeditiously and as efficiently as possible. Facilities 
built during the last decade have played major roles in meeting force 
structure changes, accomplishing quality training, maintaining 
readiness, and improving soldier well being.
    The operation and maintenance of our physical plant is an issue of 
concern. The replacement value of all National Guard facilities is over 
$19 billion. Their average age is over 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 and Territories perform these 
functions. The National Guard Bureau transfers to the States money that 
Congress authorizes and appropriates for this purpose. This money 
supports critical training, aviation and logistical facilities. For 
almost half of these facilities, the States and Territories must 
contribute at least 25 percent of operations and repair costs.
    The States and Territories then pay the utility bills, hire those 
reimbursed employees necessary to operate and maintain these 
facilities, buy the supplies necessary for operations and maintenance, 
and contract for renovation and construction projects. They also lease 
facilities when required. The Construction and Facilities Management 
Offices are making a herculean effort to operate and maintain all 
National Guard facilities.

                                SUMMARY

    The fiscal year 2001 request for appropriations, authorization, and 
authorization of appropriations is $59,130,000.
    The National Guard is a critical part of America's Army. Today's 
challenges are not insurmountable and the National Guard will continue 
to provide the best facilities with the resources made available. As we 
look forward to another successful year in Army National Guard Military 
Construction, we thank you for your continued support of our program.

             PART III--MILITARY CONSTRUCTION, ARMY RESERVE

    It is now my privilege to present the Army Reserve's military 
construction budget request for fiscal year 2001. This budget provides 
essential military construction resources to address the Army Reserve's 
highest priority projects, and it will allow the Army Reserve to 
continue to operate in a resource constrained environment. Like all of 
America's Army Reserve programs, the military construction will focus 
on Resources to Readiness.
    The program presented requests $81,713,000 for appropriations, 
authorization, and authorization of appropriations for fiscal year 
2001.
    The Army Reserve, which is on duty in 65 countries around the 
world, is an integral part of, and an essential and relevant partner 
in, America's Army. This fact is clearly evidenced by the Army Reserve 
units and personnel who comprise 68 percent of the Army Reserve 
Component Forces serving in Operation Joint Forge. In addition to 
relying on Reserve forces to deploy and support major worldwide 
contingencies and warfighting, the Army is increasingly dependent on 
its Army Reserve for support of a wide variety of daily, ongoing 
missions at home and abroad during peacetime, including an expanding 
role in commanding and controlling Army installations and providing 
regional base operations support. Those missions include the provision 
of trained and ready combat support/combat service support units to 
rapidly mobilize and deploy; providing trained and ready individual 
soldiers to augment the Army; and projecting the Army any time to any 
place to achieve victory. Army Reserve units and soldiers will continue 
to respond to national security needs and domestic missions that face 
our nation. To ensure readiness, we must have the minimum essential 
facilities resources in which to train, support, and sustain our 
forces.

                          FACILITIES STRATEGY

    The organization, roles, and missions of the Army Reserve dictate 
the need for a widely dispersed inventory of facilities. It provides a 
military linkage in 1,315 communities throughout America, its 
territories, and overseas locations. Those facilities have an average 
age of about 37 years. The six Army Reserve operated installations have 
an average age of facilities of about 48 years. The Army Reserve 
military construction strategy relies on its demonstrated capability to 
convert the precious resources authorized and appropriated by Congress 
into quality facilities that support the readiness of soldiers and 
units. Since 1981, the Army Reserve has executed more than 300 military 
construction projects that represent a $1.3 billion investment by the 
Nation.
    To effectively carry out its stewardship responsibilities toward 
the facilities inventory, the Army Reserve has adopted priorities and 
strategies that guide the application of resources focused on 
readiness. The essence of our program is straightforward: provide 
essential facilities to improve readiness and well being for our 
personnel; preserve and enhance the Army's image across America; and 
conserve and protect the facilities resources for which we are 
responsible. Our priorities are: (1) provide critical mission needs of 
Force Support Package units; (2) address the worst cases of facilities 
deterioration and overcrowding; (3) pursue modernization of the total 
facilities inventory; and (4) carefully manage Reserve operated 
installations. Our strategy for managing the Army Reserve 
infrastructure in a resource constrained environment rests on four 
fundamentals: eliminate leases when economical; dispose of excess 
facilities; consolidate units into the best available facilities; and 
use the new Modular Design System (MDS) to achieve long term savings in 
construction and design costs.
    Significant benefits have been realized from Base Realignment and 
Closure (BRAC). The Army Reserve acquired facilities from all Services 
that offset military construction requirements. The facilities acquired 
through BRAC provided a military construction cost avoidance of 
$123,300,000. Other facilities acquired through the BRAC process 
permitted the Army Reserve to relocate units from leased property to 
quality, Government owned centers. That effort allowed the Army Reserve 
to reduce its lease costs by $6,070,000.

                           PROGRAM HIGHLIGHTS

    Readiness.--Army Reserve construction program requirements are 
quite different from those of the Active Army. Army Reserve forces are 
community based, not installation based, requiring that forces and 
facilities be dispersed in hundreds of cities and towns across the 
Nation. This dispersion of forces and facilities reduces the 
opportunities for regional consolidation and wholesale reductions in 
facilities inventory. Facilities must be located in the communities 
where soldiers live and where their units are based. They must be 
sufficient to meet the readiness training requirements of the units 
stationed in them. Reserve facilities serve as locally based extensions 
of the Army's power projection platforms by providing essential and 
cost effective places to conduct training, maintenance, storage of 
contingency equipment and supplies, and preparation for mobilization 
and deployment that simply cannot be accomplished elsewhere. The 
Reserve operated installations support mission essential training for 
thousands of soldiers each year.
    Well being.--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 well 
being of units and support staffs, Reserve facilities project an 
important and lasting image of America's Army in the local community.
    Modernization.--The plant replacement value (PRV) of Army Reserve 
facilities and installations is approximately $10.6 billion. The budget 
request for fiscal year 2001 addresses the Army Reserve's highest 
priorities for modernizing and revitalizing the inventory and for 
providing new facilities in response to new and changing missions.
    Installations and base support.--The Army Reserve continues to 
undergo significant change as America's Army continues to shape itself 
for the 21st Century. One of these changes is the growing mission to 
command and control its six installations, all of them former Active 
Component installations. These installations serve as high quality, 
regional training sites for forces of both the Reserve and Active 
Components of the Army, as well as the other Services; provide sites 
for specialized training; and offer a variety of supporting facilities. 
To fulfill this important mission, we must be able to fund projects 
that support critical training, mobilization, and quality of life 
requirements at the installations. The Army Reserve continues to 
support the Army's strategic mobility platforms. Those projects 
directly support training and readiness of the force, and environmental 
stewardship. The Army Reserve is also assuming greater responsibilities 
nationwide in managing base support operations and facilities 
engineering activities, using the command, control, and management 
capabilities of its Regional Support Commands. This mission reinforces 
the Army Reserve's relevance and value to the total Army as a provider 
of combat service support and other essential infrastructure support in 
both peacetime and wartime.

                       BUDGET REQUEST ANALYSIS
 
   The fiscal year 2001 Military Construction, Army Reserve (MCAR) 
budget request for appropriations, authorization, and authorization of 
appropriations is $81,713,000. It reflects the realities of maintaining 
near term force readiness and still meeting critical requirements for 
military construction that directly supports that readiness. The MCAR 
appropriation includes three categories of funding: Major Construction, 
Minor Construction, and Planning and Design. Table 7 summarizes each of 
the categories of the Military Construction, Army Reserve program.

                                  TABLE 7.--INVESTMENT FOCUS--FISCAL YEAR 2001
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Percent
                            Category                               Authorization  Appropriations   Appropriation
----------------------------------------------------------------------------------------------------------------
Major Construction..............................................         $73,396         $73,396            89.9
Unspecified Minor Const.........................................           1,917           1,917             2.3
Planning and Design.............................................           6,400           6,400             7.8
                                                                 -----------------------------------------------
    Total Program...............................................          81,713          81,713           100.0
----------------------------------------------------------------------------------------------------------------

    Real Property Maintenance (RPM).--Another important issue that is 
directly linked to the Army Reserve's overall ability to be good 
stewards of its facilities and installations, is that of funding for 
real property maintenance (RPM). Although provided separately by the 
Operation and Maintenance Army Reserve (OMAR) appropriation, these 
funds complement military construction (MILCON) funds to round out the 
Army Reserve's total resources to manage its facilities inventory. Long 
term resource constraints in both military construction and real 
property maintenance have a combined effect of increasing the rates of 
aging and deterioration of our valuable facilities and infrastructure. 
Historically, the budget has provided RPM resources to only fund the 
most critical maintenance and repair needs. The fiscal year 2001 budget 
includes $114,704,000 for RPM which funds 74 percent of Army Reserve 
real property maintenance requirements. We solicit your support of real 
property maintenance as an essential adjunct of construction.

                                SUMMARY

    As the national military strategy has changed to meet the 
challenges of the next century, the Army Reserve will grow in its 
importance and relevance in the execution of that strategy. The men and 
women of the Army Reserve have consistently demonstrated that they can 
respond to the missions and challenges assigned to them. Our Reserve 
facilities and installations are valuable resources that support force 
readiness and power projection while serving as highly visible links 
between America's Army and America itself. This budget provides 
essential military construction resources to address the Army Reserve's 
highest priority projects, and it will allow the Army Reserve to 
continue to successfully operate in a resource constrained environment. 
Like all of America's Army Reserve programs, the military construction 
will focus Resources to Readiness.
    The fiscal year 2001 request for appropriations, authorization, and 
authorization of appropriations is $81,713,000 for Military 
Construction, Army Reserve. We are grateful to the Congress and the 
Nation for the support you have given and continue to give to the Army 
Reserve and our most valuable resource, our soldiers.

              PART IV--BASE REALIGNMENT AND CLOSURE (BRAC)

    Our facilities strategy strives to meet the needs of today's 
soldiers while also focusing on the changes required to support the 
Army of the 21st Century. We are requesting appropriations and 
authorization of appropriations of $303,000,000. This budget represents 
the Army's final budget required to implement the first four rounds of 
BRAC closure and realignment actions. In fiscal year 2000, the Army is 
saving $911 million and will save $944 million annually upon completion 
of these first 4 rounds of BRAC. Although these savings are 
substantial, we need to achieve even more, and bring our infrastructure 
assets in line with projected needs. We must reduce the total cost 
required to support our facilities and manage and maintain our real 
property inventory. BRAC has significant investment costs, but the 
results bring to the Army modern and efficient facilities at the 
remaining installations. The resulting savings are critical to 
modernization, sustainment, and infrastructure improvements. Therefore, 
the Army supports additional rounds of BRAC in fiscal years 2003 and 
2005.
    The BRAC process has proven to be the only viable method to 
identify and dispose of excess facilities. The Army is in the process 
of closing 112 installations and realigning an additional 26 as a 
result of the first four rounds of BRAC. We are now in the final 2 
years of the 13 year process to implement these first four rounds. By 
implementing BRAC, the Army is complying with the law, while saving 
money that would otherwise support unneeded overhead. These closed 
assets are now available for productive reuse 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 made available to support local economic opportunities that 
create jobs and expand the tax base. Environmental costs are 
significant and are being funded up front to facilitate economic 
revitalization. The remaining challenges that lie ahead in implementing 
the final round, BRAC 95, ahead of schedule include cleaning up 
contaminated property, disposing of property at closed bases, and 
assisting communities with reuse.
    The fiscal year 2001 budget includes the resources required to 
continue environmental cleanup of BRAC properties. These efforts will 
make 10,767 acres of property available for reuse in fiscal year 2001 
and complete restoration activities at 10 additional locations. This 
budget includes the resources required to support projected reuse in 
the near term and to continue with current projects to protect human 
health and the environment.
    The Army is accelerating all BRAC actions to obtain savings and 
return assets to the private sector, as quickly as available resources 
will allow. In 2000, the Army plans to close East Fort Baker, 
California, and realign the Kelly Support Center, Pennsylvania. These 
actions will nearly complete all planned closure actions with only 3 
remaining for fiscal year 2001: Savanna Army Depot, Seneca Army Depot 
and Information Systems Support Command leased space.
    The President's Five Part Community Reinvestment Program, announced 
on July 2, 1993, and the recent No Cost Economic Development (EDC) 
authority in the fiscal year 2000 National Defense Authorization Act 
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 is also processing 9 recently submitted EDC proposals 
from local communities. The EDC proposals are from Bayonne Military 
Ocean Terminal, Personnel Support Center in Philadelphia, Defense Depot 
Memphis, Fort Chaffee, Fort Ord, Fort Pickett, Fort Ritchie, Savanna 
Army Depot and Sierra Army Depot. These actions help local communities 
create new private sector jobs and lessen the impact of the base 
closure actions.

                 BASE REALIGNMENT AND CLOSURE--OVERSEAS

    Although the extensive overseas closures do not receive the same 
level of public attention as those in the United States, they represent 
the fundamental shift from a forward-deployed force to one relying upon 
overseas presence and power projection. Without the need for a 
Commission, we are closing about 7 of 10 overseas sites in Europe, 
where we are reducing the number of installations by 68 percent. 
Reductions in infrastructure roughly parallel troop reductions of 70 
percent. In Korea, the number of installations is dropping 20 percent.
    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 24 announcements. As of December 31, 1999, the United 
States withdrew all military forces from the Republic of Panama and 
transferred all facilities. The total number of overseas sites 
announced for closure or partial closure is 702 (see Table 8).

                                 Table 8

                                                           Installations
Germany...........................................................   585
Korea.............................................................    30
France............................................................    24
Panama............................................................    13
Netherlands.......................................................    23
Turkey............................................................     5
United Kingdom....................................................     5
Greece............................................................     8
Italy.............................................................     6
Belgium...........................................................     3

    Additional announcements will occur until the base structure 
matches the force identified to meet United States commitments.
    Most of the 188 million square feet (MSF) of overseas reductions 
are in Europe, where we are returning over 600 sites. This is 
equivalent to closing 12 of our biggest installations in the United 
States--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 bases is much different than in 
the United States First, unified commanders nominate overseas sites for 
return or partial return to host nations. Next the Joint Staff, various 
DOD components, the National Security Council and the 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 only reduce operations, we retain a portion of the 
facilities.

              BASE REALIGNMENT AND CLOSURE PROGRAM STATUS

    The Army has completed all realignments and closure actions from 
the BRAC 88, BRAC 91 and BRAC 93 rounds. The Army continues with 
environmental and disposal actions to make the property available to 
local communities for economic redevelopment. Introduction of economic 
development conveyances and interim leasing have resulted in 
accelerating property reuse and jobs creation at installations that 
were previously unavailable pending completion of environmental 
restoration efforts.
    The Army continues to accelerate the implementation of the BRAC 95 
rounds. The Army is in the fifth year of the implementation of BRAC 95, 
after which 26 of the 29 closure and 6 of 10 realignment actions will 
be complete. Interim leases and no cost economic development 
conveyances are making properties at these installations available to 
the local communities earlier in the process. Negotiations and required 
environmental restoration continue at closed and realigned 
installations, and additional conveyances are likely in the near 
future.
    The Army has completed environmental actions at 1,032 of a total of 
1,944 environmental cleanup sites through fiscal year 1999. 
Environmental restoration efforts were complete at 67 installations 
through fiscal year 1999, out of a total of 116 installations. The Army 
remains focused on supporting environmental cleanup actions required to 
support property reuse and will continue to fund environmental cleanup 
actions that are required in support of property transfer and reuse of 
the remaining approximate 200,000 acres.

                                SUMMARY

    Closing and realigning bases saves money that otherwise would go to 
unneeded overhead and frees up valuable assets for productive reuse. 
These savings permit us to invest properly in the forces and bases we 
keep to ensure their continued effectiveness. Continuation of 
accelerated implementation requires the execution of the fiscal year 
2000 program as planned and budgeted. We request your support by 
providing the necessary BRAC funding for fiscal year 2001.
    We remain committed to promoting economic redevelopment at our BRAC 
installations. We are supporting early reuse of properties through no 
cost economic development conveyances, as well as the early transfer 
and interim leasing options made possible by Congress last year. Real 
property assets are being conveyed to local communities, permitting 
them to quickly enter into business arrangements with the private 
sector. Local communities, with the Army's support and encouragement, 
are working to develop business opportunities that result in jobs and 
tax revenues. The successful conversion of former Army installations to 
productive use in the private sector is something all of us can be 
proud.
    Mr. Chairman, this concludes my statement. Thank you.

                         CONTINGENCY REDUCTION

    Senator Burns. Thank you, Mr. Secretary.
    I want to congratulate the Army. I think you have been 
very, very good in moving ahead on your commitment to ensure 
that soldiers have a decent place to live, and their families. 
I am concerned about the loss of the contingency fund, because 
we use that, as you well know, for picking up some loose ends.
    I want to ask you at this time, the loss of that 5 percent, 
does that slow up your execution in any projects? What do you 
think the overall impact of that may be?
    Mr. Johnson. I will just answer a little bit, then I would 
like to ask General Hunter to respond more specifically to it. 
It will not slow anything down. What will happen--and I have 
never seen a perfect project, and we usually need some 
contingency in a project--however, we will continue with the 
execution of the program as far as we can go. There may be some 
projects at the end that we have got to borrow money from to 
fund contingencies if that is necessary.
    I would like for General Hunter to expand further on that.
    General. Hunter. Sir, Secretary Johnson is absolutely 
right. There has virtually been no project in our construction 
experience that has not had some changes that are generally 
mandatory because of changed site conditions and some unknown 
that could not be picked up in the planning process. So what we 
will have is an impact on the speedy resolution of those 
changes to keep the contractors' work progress moving forward. 
That is the impact we see.
    As he mentioned earlier, we would probably have to delay 
award of some projects into the next fiscal year to have monies 
to complete those projects, to keep on schedule.
    Senator Burns. General Hunter, in a case like this, do you 
kind of build in your own little contingency fund for things 
that may go awry or increased costs that may be incurred?
    General. Hunter. Only as we put it in the line item for 
contingencies. And so when we build a project, we do build in a 
contingency. But once it is taken out, it puts us sort of at 
the bare contract amount.
    Senator Burns. In another area--and I want to ask this 
question and then I want to move on to other members--we 
continue to be concerned about the Army is responsible for the 
chemical demilitarization program, as you well know. Do you 
have any concerns about executing this program as we proceed to 
construction of more facilities? Right now, I think we only 
have two facilities; is that correct?
    General. Hunter. Two in operation.
    Senator Burns. Do you have any concerns about that?
    Mr. Johnson. We do not have any concerns about it. There is 
$175 million in this program. We support that program because 
it has been devolved to the Army to execute. We would be 
executing construction anyway, but we will have to admit that 
that does put a little spike in our program.
    Senator Burns. We have been trying to get it moved to the 
Department of Defense, as you well know, out of MILCON, and we 
have not had a lot of luck at that. Have you tried to help us 
on that in any way along the line?
    Mr. Johnson. It was devolved to us and put in our budget by 
the program budget decision, so there it is.
    Senator Burns. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.

                     INTERIM BRIGADE AT FORT LEWIS

    Mr. Johnson, you mentioned in your statement the Army's 
transformation effort. And as part of that transformation, 
there is an interim brigade combat team that is to be developed 
at Fort Lewis, in my home State of Washington. Can you give me 
an idea of the timeframe for developing that brigade and what 
the impact will be on Fort Lewis as that is developed?
    Mr. Johnson. I would like to pass that on to General Van 
Antwerp.
    General Van Antwerp. I can take that. It is ongoing. 
Actually, some equipment is already arriving on site right now. 
So the initial stages of forming the interim brigade is 
ongoing. We hope to, by this summer, have some training events. 
By the end of this year, we plan to have those units manned at 
100 percent strength.
    One of the goals is, by September 2000, to have all of 
those initial brigades at 100 percent strength and the 10 
divisions in the Army at 100 percent strength.
    Senator Murray. Is that going to require an increased 
number of personnel and facilities?
    General Van Antwerp. We are really scrubbing that right 
now. At Fort Lewis we are taking a heavy brigade and a light 
brigade and making initial or interim brigades. We think 
probably the heavy may be a donor and the light will be an 
acceptor. So we are hoping that it is close to a wash. But it 
will probably be a small increase in people. We do think we 
have the barracks space and the other functional space to 
accommodate that, though.
    Senator Murray. That is available time?
    General Van Antwerp. Right.
    Senator Murray. And your timeframe for that is September?
    General Van Antwerp. Right.
    Senator Murray. As I understand it, this is an interim step 
towards a final objective force structure. What is the 
anticipated timeframe for that completion of the transformation 
to the final objective?
    General Van Antwerp. That is a great question. It is 
actually kind of a three-phased project. First, is these 
initial brigades at Fort Lewis. Then there will be probably 
between four and eight of what we are calling an interim 
brigade. And then, by 2003, we hope to have made an equipment 
decision of primarily what is the armored vehicle that will be 
used. And by 2012, or in that neighborhood, we will stand up 
the objective brigades. They will be on line.
    So we need to make the buy decision on just the equipment 
aspects of this. So at Fort Lewis right now, they are testing a 
lot of different equipment, trying to get what we call the 
operational techniques and procedures. And then, in 2003, make 
an equipment decision. And then begin to field the objective 
brigades, which is the final brigades.
    Senator Murray. Well, they are very excited about this, so 
we look forward to it.
    General Van Antwerp. It is an exciting time. General Hill 
and everyone is working very closely with the folks out there.
    Senator Murray. The Army Guard and Reserve are playing more 
and more of an important part in all of this. What will be the 
impact on them as we go through this?
    General Van Antwerp. I will defer to Mike and Bob here, but 
great impact and great teamwork of the three components.
    General Squier. Yes, ma'am, from the Army National Guard, 
we will be participating with the Army as we design and develop 
what the objective force will be. We will be in support of the 
Army as we go through this initial brigade they are standing up 
at Fort Lewis, where we can, and then as General Van Antwerp 
talked about, in going to the interim brigades, the four to 
eight yet to be determined by the Army, which they are working 
through that process, we know that at least one of those will 
be in the Army National Guard, and potentially more. And then, 
as we go to the objective force, depending on how the force is 
arrayed for the future, we are going to look at all of our 
brigades in the Army transitioning to this objective force.
    Senator Murray. Will this have an impact on your 
infrastructure needs?
    General Squier. It is undetermined at this point, depending 
upon where they put the interim brigade. But, yes, we see this 
as a work in progress and it will have to be developed. It will 
be more in the sustainment piece, the types of equipment that 
we are going to be transitioning to, and in the training piece. 
Of course we do not have barracks in our category requirements.
    General Van Antwerp. If I might add, I think we are going 
to go to school on Fort Lewis on the facilities aspect of this. 
We feel that probably we will need more training type 
facilities for built-up areas, cities, and we call those 
Military Operations in Urban Terrain (MOUT) training sites. We 
think we will need more in probably the strategic mobility area 
to allow more aircraft to park on ramps for faster loading, to 
have more rail heads for getting the force out and deployed 
quicker.
    And then, the other part of it is to make sure we have the 
tactical equipment shops, the maintenance shops, for this new 
equipment, and all the supporting things. So those are the 
three primary areas we are looking for in the future.
    Senator Murray. Mr. Chairman, this is an exciting project. 
I know you love coming to my State. It is a great excuse to go 
out there and take a look, if you have an opportunity.
    Senator Burns. The last time I was out there, I could not 
go anywhere.
    Senator Murray. Well, you have to pick your times better 
than the World Trade Organization (WTO).

                       NATIONAL GUARD RAID TEAMS

    Let me ask another question about National Guard and then I 
will turn it over to Senator Craig.
    Your request is $59 million, and your construction deficit 
for fiscal year 2001 appears to be $334 million. I also note 
that you have estimated a need of $35 million for planning, 
design and construction related to the National Guard civil 
support teams, formerly known as the raid teams. I do not see 
that reflected in your budget.
    I am particularly interested in your implementation plans 
for the National Guard raid teams, because one of them is 
designated for Camp Murray--a good name--in Washington State.
    So can you explain to me how you are budgeting for needed 
construction improvements at the 27 raid teams?
    General Squier. Yes, ma'am, I can. First of all, this is a 
work in progress in developing this new strategy for how we 
will be able to support the first responders. We have the 10 
initial teams that have been put on the ground, as you are 
aware, and we are adding an additional 17 through 2002. In the 
planning for this particular new organization, we have 
determined that we will use existing facilities to house these 
new organizations until we get more fidelity to the 
requirements and how they are going to operate.
    As we have designed and developed that--and we are still 
working through that process--we have found that there is a 
need for some improvements to the facilities that we have 
chosen that will allow them to be more effective and more 
operationally capable to meet their future requirements. So all 
of our States have come in with the requirements that would 
enhance, in the unspecified minor categories, that would 
enhance their ability to be more operational in a timely 
fashion to support the civil first responders.
    Senator Murray. Very good. Thank you, Mr. Chairman. I have 
some other questions I will submit for the record.
    Senator Burns. Thank you, Senator Murray.
    I think Senator Murray brings up a good point, General 
Squier. As we have been going through this restructuring and 
more of the force structure is being moved to Reserve and 
Guard, and then we have spent some money in Guard facilities 
and infrastructure, especially in my State of Montana, where we 
were still in World War II-type facilities and now we are kind 
of getting caught up.
    And as that force structure depends more and more on that, 
we have to build infrastructure to provide for our Reserve and 
our Guard, it becomes more important now than it did just 10 
short years ago, where the emphasis is. So we are concerned 
about those shortages, as reflected in--and I think the Senator 
brings up a good point--that we have to pay more attention to 
that now than we used to in the past.
    Senator Craig.
    Senator Craig. Mr. Chairman, thank you.
    General Squier, I think the question that Senator Murray 
asked is an operative question for me also because of the raid 
team being released now in the field. Are those assessments in 
from the States yet where these teams are being placed and 
formed?
    General Squier. Yes, sir.
    Senator Craig. As it relates to any additional construction 
that will be needed?
    General Squier. Yes, sir, we have gone out and asked all 
the States to give us, now that they have some fidelity, as to 
how they are going to operate, especially the first 10, and 
asked them for their assessments of what they could use to 
improve the posture of their facilities.
    Senator Craig. Well, we are very proud of what we have been 
able to do at Gowen Field and at our Orchard Range and the 
regional kind of training facility that has developed there. 
And we are really making it that kind of first-class facility.
    The chairman broached, of course, the restructuring, the 
force restructuring. I guess the concern that I have had in 
talking to General Kane and others is our ability to sustain 
ourselves with a Guard when we are constantly asking more of it 
and taking these soldiers that attempt to find a living out on 
the ground in the structure of the Guard and yet they are 
finding we are going to be asking more and more of their 
employees in their absence. I think we have to be extremely 
careful there or we may find ourselves in a much hollower 
structure than we wanted, because we are not going to be able 
to get the quality people.
    The economy, as good as it is right now, if they leave for 
2 or 3 or 4 months, it takes an awfully benevolent employer to 
say, fine, walk away, instead of saying, we will just replace 
you with somebody else and you may have a job when you get 
back. We have had that kind of relationship with the private 
sector for a long while in this country, and my frustration is, 
as some people we ought to be the traffic cops of the world, we 
are going to put pressure on our men and women in uniform in a 
way that will destroy that relationship. I think we have to be 
extremely careful with that.
    Thank you, Mr. Chairman.
    Senator Burns. I think that is just about all I have. I 
guess there are some more questions on installations and the 
contingency fund is probably my biggest concern right now, and 
also the facilities. General Squier, just for my information, 
are we getting more resistance now from employers because we 
are asking the Guard to do more?
    General Squier. Sir, obviously there are some indications 
that there may be some problems out there with employers. We 
are very proud of what we provide for our Army and there is a 
big need to use all of the total Army to meet the needs of what 
the Army does around the world today whether we, the Nation, 
choose to do that or not.
    We have not had that significant of numbers to date, but it 
is going to increase significantly. We have Idaho going in in 
2002. We have the 49th Division that is taking over today from 
the division that is presently there. And we see more of that 
for the future.
    We have to balance this, though, as a nation, as to how we 
are going to employ our Reserve components for the future. And 
we are very concerned about the points that you make, sir, from 
Idaho and from our Nation. And we are just going to have to 
find some solutions that will allow us to be more effective. 
That may be some shorter deployment time lines, which is some 
of the things that are being talked about right now to help the 
process.
    Senator Burns. Up in Montana we have an Air Force at 
Malmstrom. We have an integrated Red Horse there that 
integrates Air Guard and regulars. And that has worked out, I 
think, pretty well. I think we have to look at that in the 
future.
    I like the idea of training Reserve, Guard and regulars on 
a regular basis. I like that idea for the simple reason that 
they know each other should something happen and they have to 
serve together. I think we tear down some of those 
communication barriers. But I think we become a lot more 
efficient, too.
    I think the Red Horse situation in Malmstrom has worked out 
fairly well. Well, we will continue to work with you on this, 
and we will try to get you some more money.
    Senator Murray. Mr. Chairman, one more question.
    Senator Burns. Yes, ma'am.

                          DUAL-USE FACILITIES

    Senator Murray. One more question on the Guard that has to 
do with dual-use facilities. And I wanted to find out, it seems 
to be a fairly cost-effective way for the National Guard to 
work with community counterparts, and I wanted to find out from 
you what your views were on dual-use emergency management of 
Federal National Guard facilities.
    General Squier. A very good question, ma'am, and very 
attuned to some ideas that are evolving out in the State of 
Washington. We obviously support shared use as a way to be more 
efficient in meeting national needs and supporting our needs. 
And of course we are a community based force. That linkage with 
community is very important to us.
    Of course, by law, we are restricted to only being able to 
fund our portion of the requirements to train and provide 
administration and sustainment of the National Guard.
    Senator Murray. Right.
    General Squier. We would like to encourage that. We have a 
prime example in what we are doing with distributive training 
technology around the States, where we are leveraging the 
shared use, where we can go into universities or to medical 
facilities or whatever and share that capability. So I see some 
very positive synergy in that direction and we want to work 
those the best we can within the limitations that we have 
within our Federal departments.
    Senator Murray. Do you know when we will be able to get the 
one going in Spokane, Washington?
    General Squier. We still are working through what the exact 
requirement is, ma'am. I heard briefly about that. Again, I 
have to go back to I think there is a philosophical problem. 
The intent is for the Federal Government to pick up the whole 
facility, and then they pay their fair share. By law, that does 
not work for us. We have got to find some common ground, where 
they can pay their fair share and we pay our fair share for our 
piece of the responsibility.
    We are working through that. I see some good opportunities. 
We just have not gotten there yet.
    Senator Murray. Okay, I would like to work with you on 
that.
    General Squier. Yes, ma'am.
    Senator Murray. Thank you.
    Thank you, Mr. Chairman.
    Senator Burns. I will also put a footnote on that. On your 
distance learning and your facilities in Montana, and all the 
States, around the States and around the region, I want to 
congratulate you on that project, too. General Pendergast is 
very excited about what he is getting done out there. And that 
is very good.

                     ADDITIONAL COMMITTEE QUESTIONS

    Okay, gentlemen, thank you very much for coming this 
morning. As we work our way through this, we will probably have 
questions from other members of the committee. And if any other 
questions arise, we will present them to you and you can 
respond to the individual Senator and to the committee. And we 
appreciate that this morning, so thank you for coming.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted by Senator Conrad Burns

                             FUNDING LEVELS

    Question. Secretary Johnson, while your fiscal year 2001 budget 
looks stronger than last year's budget, a good portion of the increase 
is actually allocated to the BRAC account. Why is this a good news 
story?
    Answer. In last year's budget, the Army asked for advanced 
appropriations in the amount of $196 million. The Congress denied the 
advance appropriations in fiscal year 2000, therefore, the Department 
included the requirement in the fiscal year 2001 budget request which 
now totals $303 million. This budget request is the final funding 
required to implement all remaining closure and realignment actions. 
What also remains is property cleanup and disposal, which will require 
several additional years in some cases. However, the Army continues to 
make progress with property disposal and support of local community 
reuse plans. The Army has completed cleanup efforts at 67 installations 
through fiscal year 1999 and plans to complete an additional 23 
installations in fiscal years 2000 and 2001. These efforts will result 
in the transfer of 60,000 acres during this same period.

                       FAMILY HOUSING MAINTENANCE

    Question. What will be the impact of taking all of the fiscal year 
2000 across-the-board reduction for the operation and maintenance 
account against only the real property maintenance accounts?
    Answer. Reductions to the maintenance and repair account will 
result in less funding available to installation commanders to execute 
major repairs on family housing. The approximate $5 million reduction 
is the equivalent of the complete renovation of 72 houses, which must 
be deferred until funding can becomes available.

                             FUNDING LEVELS

    Question. What percent does the Army spend of Plant Replacement 
Value (PRV) per year on facility maintenance?
    Answer. In fiscal year 2000, the Army spent .87 percent of the 
Plant Replacement value on facility maintenance. This is based on the 
fiscal year 2000 Plant Replacement Value of $202.6 billion, and the 
Real Property Maintenance funding of $1.8 billion. Historically, the 
Army has consistently spent less than 1 percent of the PRV on facility 
maintenance. Studies have shown that we should be spending about 1.75 
percent of the PRV to properly maintain our facilities

                     PUBLIC/PRIVATE VENTURES (PPV)

    Question. I understand that the Army's family housing privatization 
project at Fort Carson is proceeding well. Early reports indicate that 
this project is a success and that the community and the Army families 
are very pleased. With this success in hand, is the Army pursuing this 
approach at any other installation? If not, why not?
    Answer. No, the Army is not pursuing this approach at other 
privatization sites even though the Fort Carson housing privatization 
effort is on track and shows great promise. We are applying early 
lessons learned from the Fort Carson privatization project, which used 
the Request for Proposal (RFP) procurement process, to improve the 
process at future sites. In July 1998, the Army began the Residential 
Communities Initiative (RCI). For the RCI program, we are using the 
Request for Qualifications (RFQ) procurement process, which is a major 
reform in the acquisition process and we believe will enable the Army 
to acquire the necessary expertise and experience more quickly and less 
expensively than the traditional RFP methods. This approach seeks to 
maximize opportunities for interchange between developers, the local 
community and the Army in preparing a Community Development and 
Management Plan (CDMP) which lays out the scope and details of the 
partnership. The three RCI projects following Fort Carson are Fort 
Hood, Texas; Fort Lewis, Washington; and Fort Meade, Maryland. As we 
privatize these additional sites and incorporate the lessons learned 
from each site, the Army will be able to provide the best value for the 
Army and families.
    Question. Secretary Johnson, how will the Secretary Cohen's recent 
announcement to buy out the basic allowance for housing for those 
service members living on the economy impact family housing 
privatization?
    Answer. Current law and policy requires that service members living 
in privatized housing receive the same Basic Allowance for Housing 
(BAH) as their counterparts living in other private sector housing. 
Overall, there would be minimal impact on the RCI program if BAH were 
raised to cover 85 percent of housing costs allowable by law. However, 
changing the law and raising BAH to cover 100 percent of the average 
housing costs would likely impact demand for privatized housing, but we 
do not know to what extent at this time.
    Question. I continue to be concerned about how installations with 
family housing privatization ventures and other privatization ventures 
will be treated in future rounds of BRAC. Have we created a system of 
``haves'' and ``have-nots'' with regards to BRAC?
    Answer. We do not believe that privatization will have an impact on 
the BRAC decision making process. The decision to close an installation 
is based on criteria resulting in a military value for each 
installation.

                FISCAL YEAR 2001 CONTINGENCY ELIMINATION

    Question. Secretary Johnson: The Army has greatly improved their 
construction project execution the past several years. How will the 
loss of contingency funding potentially impact your rate of execution?
    Answer. Execution of the Army's fiscal year 2001 program will be a 
challenge with the elimination of contingency funds for contract 
changes subsequent to award. The lack of adequate funds to handle 
changes during construction, those that are the result of revisions to 
criteria or safety requirements, the discovery of unexpected site 
conditions, design deficiencies, variations in expected quantities, and 
mission changes, reduces our ability to maintain construction progress 
by handling and approving changes quickly.
    Question. Could this reduction cause a change in overall scope of 
the projects? What other challenges will this cause?
    Answer. We are designing projects to full scope with no compromise 
in quality but with a target to award and complete projects within the 
requested amounts. We also have re-emphasized the importance of 
thorough value engineering efforts to bring costs of full-scope 
projects to within the available funds. The lack of adequate funds 
increases the potential for increased costs due to contractor delays 
and claims; with less construction funding available. The Corps of 
Engineers' management effort required to maintain timely funding of 
legitimate changes will increase.
    Question. When a project encounters cost over-runs, how will the 
Army treat a shortfall without the contingency account?
    Answer. No construction project can be expected to be completed 
without some changes. The funding of changes will be dependent on 
general bid savings, otherwise significant program disruption can be 
expected. The need to borrow funds from un-awarded projects may delay 
award of some projects until the start of the next fiscal year.

                   CHEMICAL DEMILITARIZATION PROGRAM

    Question. Mr. Johnson, we continue to be concerned that the Army is 
responsible for the Chemical-Demilitarization Program. Do you have any 
concerns about executing this program as we proceed to construction of 
more facilities?
    Answer. To date, the Department has adequately funded this program. 
Unless future reductions occur, we fully expect to effectively execute 
this program as we proceed to construction of more facilities.
    Question. What happens if one or several of these projects runs 
into funding problems with cost variations? What will be the source of 
these funds? Will the Army be stuck paying the bill?
    Answer. The budget has been carefully developed to preclude serious 
future funding issues. By intensely managing changes during 
construction and adjusting the contractor's execution plan, risk of a 
major cost overrun can be reduced. If one or several of these projects 
should run into funding problems, cost overruns should be minimal and 
management will evaluate options available to mitigate the increases. 
However, if additional funds are required, the source to offset the 
requirement will be identified at that time.
    Question. In the past, the Congress has directed the Department of 
Defense to make this a defense-wide account. Do we need to include bill 
language to that effect?
    Answer. The Defense Reform Initiative devolved oversight and 
management for most chemical demilitarization activities from the 
Office of the Secretary of Defense to the Department of the Army in 
fiscal year 1999. The Department of Defense determined that in the 
interest of organizational efficiency the program should remain within 
the Army.
                                 ______
                                 

              Questions Submitted by Senator Patty Murray

          WASHINGTON STATE ARMY NATIONAL GUARD MILCON FUNDING

    Question. The Washington State Guard, as a result of report 
language that this committee included in the fiscal year 2000 Military 
Construction Appropriations Bill, is eager to proceed with planning and 
design for the Readiness Center at Yakima and Spokane. I recognize that 
the Yakima Center, and another Readiness Center at Bremerton, are in 
the President's budget, and that planning and design has commenced, 
apparently financed by the State.
    Answer. You are correct. We anticipate design will be initiated in 
April 2000.
    Question. The President's budget requests $5.104 million for the 
Yakima armory. Unfortunately, it has come to my attention that the 
actual amount needed is $6.5 million. Likewise, the President's budget 
requests $2.6 million for the Bremerton Readiness Center when the 
actual amount needed is $4.3 million. Would you agree that the higher 
sums do represent the real funding requirements for these centers?
    Answer. Yes. The project costs in the President's Budget satisfy 
the requirements for the existing units stationed at the Readiness 
Centers. However, since the budget was submitted, the State determined 
that it would be best to incorporate the new Army National Guard 
Redesign Study (ADRS) requirements into the new Readiness Centers.

                   MILITARY CONSTRUCTION REQUIREMENTS

    Question. Secretary Johnson: Is it true that your validated 
military construction requirements exceed those in the future years 
defense plan (FYDP)? If so, by how much? Where may we find these 
requirements not listed in the FYDP?
    Answer. Yes, the Army's valid construction requirements far exceed 
the Future Years Defense Program (FYDP) which contains only those 
projects for which funding is programmed or budgeted. We project our 
annual requirement based on revitalizing all required facilities in the 
inventory over 57 years and buying out deficit construction 
requirements over 25 years. For fiscal year 2001, the cost of this 
requirement exceeds our budget request by over $2.4 billion--more than 
$1.5 billion for the Active Army, more than $0.5 billion for the Army 
National Guard, over $0.1 billion for the Army Reserve, and nearly $0.3 
billion for Army Family Housing. With the exception of the National 
Guard, the Army does not keep an official list of projects that exceed 
the FYDP because it is too costly and time consuming to do so. However, 
the Guard is required to compile their entire construction backlog in 
their Infrastructure Requirements Plan, which is updated and provided 
to the Congress annually.

                          HISTORIC PROPERTIES

    Question. The Army has a large, and growing, number of historic 
properties. These properties cost an inordinate amount of money to 
maintain and renovate. Is the Army working on a master plan to deal 
with the issue of historic property preservation and renovation?
    Answer. Historic properties do cost more to maintain and renovate, 
but with the longer life-cycle of historic materials, the cost per 
square foot tends to average out very close to the levels for modern 
construction. The Army is taking multiple steps to improve its 
management of the historic property inventory, including streamlining 
regulatory approaches and testing new management approaches. In 
response to Congressional requests in 1997 regarding compliance with 
the National Historic Preservation Act, the Army embarked on 
alternative procedures for compliance. Working with the Advisory 
Council on Historic Preservation (ACHP), the Army is developing a 
process to achieve compliance with the National Historic Preservation 
Act while maximizing benefits from efforts to meet the DOD requirement 
to prepare Integrated Cultural Resources Management Plans. The new 
approach, which has recently undergone significant revisions and is 
being staffed within the Army, allows Army installations to consult 
with the State Historic Preservation Office, the ACHP, Native peoples, 
and interested parties on the Historic Properties Component of the 
management plan. Upon reaching agreement on historic property 
management techniques, the installation then operates without specific 
project reviews of all activities identified in the plan for a period 
of 5 years. This streamlined approach is designed to allow 
installations to focus on resolving technical preservation issues, 
minimize paperwork, and reduce overall project costs.
    In another effort to bring improved management to this function, 
the Assistant Secretary of the Army for Installations and Environment 
directed the establishment of an Historic Properties Initiative. The 
five components of this program are:
  --Explore and test creative uses and reuses of Army historic 
        buildings. The Army currently has approximately 12,000 historic 
        buildings listed on or eligible to be listed on the National 
        Register of Historic Places. Another 85,000 buildings and 
        family housing quarters must be evaluated for historic 
        significance over the next 20 years. The Army is working with 
        the Department of Defense and the other Services to categorize 
        these facilities to define classes that do not qualify for 
        further consideration as historic properties. This action would 
        eliminate the potential cost to evaluate all aging properties 
        and allow the Army to focus on the reasonable utilization of 
        the remaining historic properties. A component of effective 
        inventory management is efficient use and reuse by the Army.
  --Pursue innovative funding and operating methods. The Army is 
        challenged to meet the funding requirements for proper care of 
        its historic buildings. Alternative funding sources and 
        methods, such as expanding gift acceptance authority, seeking 
        sponsors, leasing to third parties and establishing a trust 
        fund, are being explored to reduce costs and improve care.
  --Stimulate private investment in preservation, maintenance and 
        reuse. When Army use is not economically feasible or 
        practicable and buildings are suitable for out-leasing or 
        excessing, we will explore non-Army use of historic buildings. 
        Other federal agencies, state or local governments, and the 
        private sector will be evaluated as potential users.
  --Engage public, private and non-profit partners to support Army 
        goals, leveraging Army assets with other resources. The Army 
        has entered into cooperative agreements with the Advisory 
        Council on Historic Preservation and the National Trust for 
        Historic Preservation to utilize their expertise in various 
        aspects of historic property management.
  --Increase awareness of historic properties and recognize 
        innovations. In order to improve the compliance record and take 
        a proactive stance in management, we intend to educate Army 
        leadership and soldiers about the resources and the services 
        available to assist in their daily care and maintenance. 
        Creative management procedures and efforts to preserve historic 
        properties through better utilization and cost reduction will 
        be encouraged, recognized and rewarded throughout the Army. The 
        first annual Secretary of the Army Awards for Historic 
        Preservation will be presented during National Preservation 
        Week (mid-May) this year.

                      Department of the Air Force

STATEMENT OF RUBY B. DEMESME, ASSISTANT SECRETARY, 
            (MANPOWER, RESERVE AFFAIRS, INSTALLATIONS 
            AND ENVIRONMENT)
ACCOMPANIED BY:
        MAJ. GEN. EARNEST O. ROBBINS, II, HEADQUARTERS USAF, CIVIL 
            ENGINEER, DEPUTY CHIEF OF STAFF, INSTALLATIONS AND 
            LOGISTICS
        BRIG. GEN. CRAIG R. MCKINLEY, DEPUTY DIRECTOR, AIR NATIONAL 
            GUARD
        BRIG. GEN. ROBERT E. DUIGNAN, DEPUTY TO THE CHIEF, AIR FORCE 
            RESERVE

                       Introduction of witnesses

    Senator Burns. We will now move to the United States Air 
Force. It is good to see you again. We are pleased to have the 
Assistant Secretary of the Air Force for Manpower, Reserve 
Affairs, Installations and Environment, Ms. DeMesme, with us 
today. It is nice to see you again, and thank you for coming.
    We have Major General Robbins, the Air Force Civil 
Engineer; General McKinley, Deputy Director of the Air National 
Guard; and General Duignan, Deputy to the Chief of the Air 
Force Reserve.
    Madam, we appreciate you coming today and talking about 
military construction and allied appropriations. I would ask 
you to keep your statements brief, if you would. Your complete 
statement will be made a part of the record, and we look 
forward to your testimony.
    Do you have any opening statement, Senator Murray?
    Senator Murray. No, Mr. Chairman.
    Senator Burns. We look forward to your statement.
    Senator Craig. I will make my statement in the form of a 
question.
    Senator Burns. Thank you.

                      STATEMENT OF RUBY B. DEMESME

    Ms. DeMesme. Good morning, Mr. Chairman, members of the 
committee. I am very pleased to have the opportunity to present 
to you the Air Force fiscal year 2001 Military Construction 
(MILCON) program. And, Mr. Chairman, I want to thank you and 
this committee for your continuing support for our uniformed 
members and their families, especially during the last budget 
cycle. Your support of our compensation and benefit packages 
sent a very powerful message to our members and their families 
that you are aware of their many sacrifices and that you care 
about their well-being.
    Mr. Chairman, I also want to thank this committee for 
support of last year's Kosovo supplemental bill. Because of 
your action, we were able to fund more quality of life, force 
protection, and environmental projects at our overseas bases, 
and we continue to work with our European and Asian partners to 
burden-share the cost of these facilities to the maximum extent 
possible.
    Mr. Chairman, we remain committed to our mission and our 
people. Our goal is to balance the needs of the total force so 
as to minimize any adverse impact on unit readiness and 
modernization and quality-of-life programs. I have submitted my 
written statement for the record and will take this time to 
highlight a few areas in our fiscal year 2001 Total Force 
MILCON program, which includes Military Family Housing (MFH), 
privatization initiatives, and Base Realignment and Closure 
(BRAC) program actions.
    Our $1.65 billion total force MILCON budget request 
supports our readiness objectives for our highly mobile 
aerospace force. Our program includes support for the F-22 
fighter, the C-17 airlifter, the B-2 bomber, and construction 
of a training range in Idaho, and more. As you are aware, the 
constant high operational tempo and the allure of the 
opportunities created by a robust economy are making it 
difficult to keep our people in uniform. Many have grown weary 
of long periods of separation from their families, and many 
work and live with their families in facilities which are below 
the standards of their surrounding communities.
    We need to do more in the quality-of-life arena. This is 
why MILCON is so important to us. By targeting MILCON, we can 
improve working conditions and provide quality, affordable and 
safe living environments for more of our uniformed members and 
their families. Our housing program is designed to do just 
that. Part of our comprehensive program includes housing 
privatization.
    Mr. Chairman, in January, I had the privilege of 
participating in the ribbon-cutting ceremony of the first 92 of 
420 privately owned units at Lackland Air Force Base in Texas; 
and this is a true success story. Our housing program includes 
six new privatization initiatives, for a total of 6,921 
additional units. And I want to thank this committee for your 
support of our housing program.
    In the area of utility privatization and asset management, 
we have identified 435 of our 640 systems as potential 
privatization candidates. And we issued a request for proposals 
for 34 utility systems in January of 2000. We will complete our 
evaluation of 225 systems by December 2000, and expect to award 
additional systems by January of 2001.
    We continue to look for ways to leverage our scarce 
resources, which brings us to our Brooks City Base Concept. We 
believe this concept will reduce base operating expenses and 
free up funds for our higher priority programs. We look forward 
to sharing the results of our efforts and any subsequent plans 
with this committee as we work together to maintain faithful 
stewardship of our Nation's assets.
    Our installations play a very important role in executing 
United States national strategies and are the platforms from 
which diverse missions and strategies are launched. To meet our 
objectives, we cannot afford to continue spending our scarce 
resources on obsolete facilities. Which is why additional BRAC 
rounds are so important.
    I want to thank this committee for its support of the BRAC, 
no-cost economic development conveyance (EDC) legislation. This 
legislation allows communities the opportunity to request 
relief from existing debts and to use those funds for reuse. I 
have personally approved four no-cost EDC's to date for Lowry 
Air Force Base, Colorado, Myrtle Beach Air Force Base, South 
Carolina, and March Air Force Base, California, as well as 
Kelly Air Force Base in Texas. We estimate that these will save 
communities over $140 million.
    Although our successes are many, we still have a lot of 
excess infrastructure. Mr. Chairman, BRAC is the most effective 
tool we have to address the excess infrastructure at our 
installations and to help us reshape our infrastructure to 
match our missions and our modernization plans. We strongly 
support the Secretary of Defense's request for two additional 
rounds of base closures.
    While we continue to work within existing authorities to 
reduce Air Force infrastructure, there is no substitute for 
BRAC. We would appreciate this committee's support for two 
additional BRAC rounds.
    In conclusion, we realize the Air Force would not be the 
world's premier aerospace force without your strong support 
over the years. This budget submission provides a delicate 
balance among our people, readiness and modernization needs, 
but it also reflects our commitment to provide better working 
and living environments for our people and the quality of life 
at Air Force installations around the world for our total force 
members.

                           PREPARED STATEMENT

    So thank you, Mr. Chairman and members of this committee. I 
am happy to answer any questions you might have at this time.
    [The statement follows:]

                 Prepared Statement of Ruby B. DeMesme

                              INTRODUCTION

    Mr. Chairman and members of the committee, good day. I appreciate 
the opportunity to appear before you today to discuss the Department of 
the Air Force fiscal year 2001 Military Construction (MILCON) program. 
The MILCON program reflects a delicate balance among our people, 
readiness, and modernization needs, which are vital to sustaining a 
decisive and premier aerospace fighting force. Mr. Chairman, this 
committee's continuing support of the Air Force MILCON program is 
greatly appreciated and, on behalf of our uniformed members and their 
families, I want to thank you and this committee for your support, 
especially during the last budget cycle.

                                OVERVIEW

    The United States Air Force is the most technologically advanced 
and powerful aerospace force in the world today. To maintain this 
strategic advantage, we continue to balance a myriad of missions around 
the world ranging from major conflicts and peacekeeping operations to 
humanitarian relief efforts. Although the number of uniformed Air Force 
members is the lowest since the end of the Cold War, the constant high 
operational tempo far exceeds the tempo of that era when we had over 
twice the number of people. Consequently, the demands placed on our 
people, and the allure of the opportunities created by a robust 
economy, make it very difficult to keep them in uniform without 
addressing their concerns, which range from health care and pay, to 
providing better conditions for them and their families to live, work, 
play, and worship. As a result of the constant high operational tempo, 
the Air Force is paying a heavy price to meet the challenges in the 
areas of recruiting and retention. This is why we consider our MILCON 
and housing programs as vital components in addressing these 
challenges.
    As one of the primary pillars supporting Air Force quality of life 
initiatives, the MILCON program provides better working facilities and 
safe, affordable, and quality housing for our people and their 
families. Regrettably, the fiscal year 2001 MILCON funding continues on 
a downward trend, which began in the 1980's, and our budget submission 
reflects only one-third of our total validated MILCON requirements. The 
Air Force continues to under-invest in a number of programs, including 
MILCON, Military Family Housing (MFH), and Real Property Maintenance 
(RPM), because of the many high priorities competing for limited 
funding. Consequently, because of the large number of unneeded 
facilities and infrastructure remaining after the Defense Base Closure 
and Realignment Commission decisions, we are compelled to continue 
investing scarce resources to maintain them.
    The Air Force seeks to balance the needs of the Total Force so as 
to minimize any negative impact on unit readiness and modernization and 
quality of life programs by targeting scarce resources towards our most 
critical needs. Our installation programs continue to reflect hard 
decisions based on tough choices, but the Air Force recognizes that 
every dollar invested in MILCON is an investment in our people, our 
most treasured resource. Our Total Force of active-duty members, 
Guardsmen, Reservists, civilians, and contractors are the backbone of 
our aerospace force and are the reason our Air Force is the premier 
aerospace force in the world today.
    The transition from a Cold War garrison force to the revolutionary 
Expeditionary Aerospace Force (EAF) construct is enabling the Air Force 
to meet the Nation's demands for deployed forces, and to respond to the 
stresses being placed on our uniformed members and their families by 
the constant high operational tempo. We continue to ensure the highest 
priorities of the Total Force are satisfied first, using the following 
methodology:
  --Maintain our operations and maintenance programs to preserve 
        mission support infrastructure, as well as the quality of life 
        of our personnel and their families.
  --Ensure that our MILCON program places emphasis on supporting new 
        mission beddowns and current mission necessities, to include 
        redirecting limited capital investment to our most pressing 
        requirements.
  --Ensure realistic training for our aircrews and access to ranges.
  --Reinvest in the few remaining overseas bases, which, even after 
        host-nation burdensharing, require funds to maintain critical 
        facilities necessary to sustain Air Force core competencies.
  --Focus on cleaning up our Active and Base Realignment and Closure 
        (BRAC) installations to protect human health and the 
        environment, and facilitates reuse at BRAC bases.
    To meet these daunting challenges and leverage our limited dollars 
that support people, readiness, and modernization needs, we look for 
better business practices through private sector business ventures. We 
are pleased to report on our first military family housing 
privatization success story.
    In January 2000, the Air Force celebrated the grand opening of 
Frank Tejeda Estates at Lackland AFB, Texas, named after the former 
Congressman from Texas. This 8:1 return on investment is providing 420 
housing units for our lower ranking airmen several years ahead of the 
conventional MILCON process. This is a great example of leveraging our 
limited resources, and I thank this committee for its support.
    Although not part of the MILCON appropriations, I want to briefly 
touch upon a significant concern for us, the Air Force RPM. Our RPM 
funding is at what we call the Preventive Maintenance Level, which 
sustains mission operations, until we can upgrade facilities and 
infrastructure through the MILCON program. Although we fund our RPM 
account at 1 percent of our overall plant replacement value, the 
backlog of maintenance and repair continues to grow past the current 
$4.3 billion level, placing additional strain on our people who are 
working in deteriorated facilities. We know that you share our concerns 
and are appreciative of the additional funds this committee has 
provided over the past four years for quality of life enhancements.
    Mr. Chairman, I will now discuss the major programs in our fiscal 
year 2001 MILCON budget request. I will review the Total Force MILCON 
program, which includes the MFH program and privatization initiatives. 
And, I will address the Air Force BRAC account and our perspective on 
the need for two more rounds of base closures.

                TOTAL FORCE MILITARY CONSTRUCTION BUDGET

    The Total Force MILCON program consists of five principal areas: 
Current Mission; New Mission; Planning & Design and Unspecified Minor 
Construction; Environmental; and BRAC. Current Mission construction 
revitalizes existing facilities and infrastructure, and builds new 
facilities to correct existing deficiencies. New Mission construction 
supports the beddown of new weapon systems and force structure 
realignments. Planning & Design and Unspecified Minor Construction 
include funds to design our construction projects and to fund a small 
program to handle urgent, unforeseen construction requirements. The 
environmental program supports those regulatory compliance projects, 
which, by law, requires accomplishment, or to avoid any health or 
safety risks to people on or off our installations. The BRAC program 
supports the closure and realignment of bases previously selected by 
the Defense Base Closure and Realignment Commissions and includes 
environmental cleanup and compliance costs at closed bases.
    For fiscal year 2001, we are requesting a program of $1.65 billion 
for MILCON. This request includes $1.58 billion for active duty MILCON 
($531 million for traditional MILCON and $1.05 billion for MFH); $50 
million for Air National Guard (ANG); $15 million for Air Force Reserve 
(AFR); and $12.8 million for BRAC MILCON.

               TOTAL FORCE MILITARY CONSTRUCTION PROGRAM

    Our Total Force MILCON and MFH programs are developed using the 
following facility investment strategy:
  --Sustain and Operate What We Own
  --Beddown New Missions
  --Uphold Quality of Life
  --Optimal Use of Public and Private Resources
  --Reduce Infrastructure
  --Environmental Leadership

                            PROGRAM OVERVIEW

    Our facility investment strategy identifies and distributes funds 
based on the most urgent needs of the Total Force. The strategy 
provides a mechanism for allocating funds based on the priorities of 
the Major Commands (to include the ANG and AFR), Chief of Staff, and 
Secretary of the Air Force.
    To determine priorities, each Major Command submits a prioritized, 
unconstrained list of its construction requirements. Subsequently, we 
use a weighted matrix to establish a priority list based on the most 
urgent needs of the Total Force. The Air Force leadership reviews and 
approves the final priority list.

Sustain and operate what we own

    Our fiscal year 2001 current mission MILCON program consists of 39 
projects totaling $363 million. These projects include significant 
infrastructure improvements to airfield ramps and water distribution 
systems; upgrade operations, maintenance and corrosion control 
complexes; and, in the spirit of joint cooperation, our continued 
support for air operations on Army installations. With these projects, 
we continue the ``sustain what we own'' concept to identify the most 
urgent priorities of the Total Force, while constantly looking for 
opportunities to consolidate functions and reduce infrastructure.

Beddown new missions

    The F-22, C-17, and B-2 are new weapon systems designed to enhance 
the capabilities of our forces. These systems will provide the rapid, 
precise, global response that enables our combat commanders to respond 
decisively to conflicts in support of national security objectives.
    Our MILCON program supports new weapon system requirements to 
include, but not limited to, the F-22 fighter, C-17 airlifter, B-2 
bomber, and the enhanced training range in Idaho (Juniper Butte Range). 
Our fiscal year 2001 new mission MILCON program consists of 20 
projects, totaling $130.8 million.

F-22 Raptor

    The F-22 Raptor is the Air Force's next generation air superiority 
fighter replacement for the F-15. The proposed location for two 
training squadrons is Tyndall AFB, Florida. The fiscal year 2001 MILCON 
includes two F-22 projects at Tyndall AFB totaling $25 million.

C-17 Globemaster-III

    The C-17 Globemaster-III aircraft will replace our fleet of C-141 
Starlifters. The C-17 has established an outstanding track record as a 
rapid global mobility asset by combining the C-141's reliability, with 
the C-5's capability to carry oversize cargo, and the C-130's 
capability to land and maneuver on short, unimproved forward-located 
airstrips. To support this program, our budget request includes 
facilities at McChord AFB, Washington; Charleston AFB, South Carolina; 
and our first Air National Guard location at Jackson International 
Airport, Mississippi. The fiscal year 2001 C-17 MILCON program includes 
four projects totaling $23 million.

B-2 Spirit

    The B-2 is a multi-role bomber capable of delivering both 
conventional and nuclear munitions. The bomber represents a major leap 
forward in technology and is an important milestone in the United 
States bomber modernization program. Our fiscal year 2001 MILCON 
program includes two projects at Whiteman AFB, Missouri, totaling $12 
million.

Enhanced training range in Idaho (Juniper Butte)

    The Air Force is building a training range and modifying airspace 
in Southwest Idaho, which will enhance local training for aircrews from 
Mountain Home AFB, Idaho. This project is an excellent example of how 
the Air Force strikes an effective balance between training and 
readiness requirements and local environmental, cultural, and economic 
concerns. The new range will include acreage for drop zone sites; no-
drop zone sites; simulated target areas; and emitter sites. This multi-
year request includes $10 million in fiscal year 2001 for phase III.

Air National Guard B-1 Beddown at Robins AFB

    This $9 million project supports the conversion from F-15 to B-1 
aircraft and the relocation from Dobbins ARB, Georgia, to Robins AFB, 
Georgia. The facility space will support munitions build-up and 
storage, munitions maintenance training, and administration.

Uphold quality of life investments

    Our national security policy relies on aerospace presence around 
the world, which means the Air Force must be ready to respond anywhere 
in the world on very short notice. While modern technology enables our 
forces to perform their missions more effectively, technology cannot 
substitute for high quality people. By continuing to support quality of 
life initiatives, we are letting our people know that we are aware of 
their many sacrifices in support of national objectives and are 
committed to addressing their concerns. Yes, we acknowledge that we are 
spreading our people thin, but we also realize that it is much cheaper 
to retain them than to train new people, and we need experienced 
warriors to maintain our systems and to train junior airmen. This is 
why our MILCON and housing programs are very important when it comes to 
retention, which directly affects readiness.
    The Air Force dormitory program is a proven quality of life force 
multiplier. An update on our three-step dormitory investment strategy, 
as outlined in the Air Force Dormitory Master Plan as follows: (1) 
buyout of all permanent party central latrine dormitories (now complete 
given the generous congressional support in fiscal year 1999); (2) the 
conversion to 1+1 room configurations; and (3) the replacement of our 
worst existing dorms is on track for 2009.
    This year's MILCON program funds ten enlisted dormitory projects 
identified as among the most critical requirements in our dormitory 
master plan for a total of $91.5 million. Other quality of life 
initiatives include a child development center at Bolling AFB, DC; and 
fitness centers at McGuire AFB, New Jersey; Davis-Monthan AFB, Arizona; 
Los Angeles AFB, California; and Little Rock AFB, Arkansas; for a total 
of $38 million.
    Now that our housing program is in progress, we are constructing a 
Fitness Center Master Plan. Physical Fitness Centers continue to rate 
high in our quality of life surveys, and are needed to help our members 
develop and maintain their physical fitness requirements. They also 
provide a place where stress, tension, and anger can be channeled into 
non-violent activities.

Overseas MILCON: Significant need to reinvest

    First, I thank this committee for supporting the Department of 
Defense Kosovo Supplemental Bill last year. The additional funding will 
enable us to fund mission critical facilities that are vital for 
deployed forces supporting contingency operations.
    The Air Force realizes that not all threats to the United States 
national security are conventional in nature. These non-conventional 
threats necessitate we invest in force protection infrastructure, 
safety, and quality of life at our overseas locations, as well as at 
home. We now have eleven overseas main operating bases, of which six 
are to the East: two in England, two in Germany, one in Italy, and one 
in Turkey; and five bases in the Pacific: three in Japan and two in 
Korea. After years of base closures and force reductions, we have 
achieved stability in the overseas theaters. Because of reduced MILCON 
investment, coupled with restrictive host-nation funding, we cannot 
sustain overseas requirements. We are actively pursuing NATO funding, 
increased host-nation funding, and payments-in-kind to realize a good 
measure of success. But, the quality of life improvements we owe to our 
personnel stationed overseas remain greater than available burden-
sharing funding can satisfy.
    Our fiscal year 2001 MILCON program for our European and Pacific 
installations total $48 million. The program consists of a fire 
training facility at Incirlik AB, Turkey; and two water distribution 
system upgrade projects in Korea; one at Osan AB and one at Kunsan AB. 
The program also includes a munitions storage igloo project that will 
support the Bomber Forward Operating Locations (FOLs) concept at Diego 
Garcia, British Indian Ocean Territory; and a project that constructs 
replacement facilities, enabling the out-year phased construction of 
sixteen wide-body aircraft parking spaces at Rota Naval Station, Spain. 
These parking spaces will provide an en-route strategic airlift hub 
critical to United States strategy. There are also two overseas 
dormitory projects; one at Aviano AB, Italy, and another at Osan AB, 
Korea. We strongly ask for your support of these crucial operational 
and quality of life projects, which represent critical requirements for 
airmen stationed overseas.
    We understand the desire to maximize the contributions of others 
where possible, and we take advantage of every opportunity. We are 
sending a precautionary prefinancing statement to the NATO 
infrastructure committees for all NATO-eligible European projects. 
These statements will permit recoupment from the NATO infrastructure 
program if eligibility is subsequently established.
    Although we do not have projects in the budget for Rhein Main AB, 
Germany, I want to make you aware of the Air Force's recently signed 
agreement with various functions in Germany to transfer the mission 
capabilities of Rhein Main AB to Ramstein AB and Spangdahlem AB, 
Germany. This agreement will ensure the facilities and infrastructure 
are in place to provide the same support for United States operations 
in Europe. However, the agreement was never intended to, and will not, 
address current mission facility or housing requirements for Ramstein 
and Spangdahlem, so we must continue to support these requirements. We 
must not continue to ask our people stationed overseas on the front 
lines to excel every day in support of our Nation's security interests 
while living and working in deteriorated, deplorable conditions, which 
suffer from years of minimal funding. We strongly solicit your 
favorable support of our overseas program.

Optimize use of public and private resources

    As we continue to operate in a constrained fiscal environment, we 
must look for ways to free up scarce resources for the preservation of 
our existing assets. To do this, we are adopting modern business 
practices, e.g., eliminating redundancy; using competition to improve 
quality and reduce costs; and reducing support infrastructure. While we 
look for advantages through out-sourcing and privatization efforts, we 
are mindful of the impact it may have on national security and on our 
people and strive to seek a careful, balanced approach to the 
exploration of new asset management initiatives.

Housing privatization

    The Air Force is pleased with its first housing privatization 
project at Lackland AFB, Texas, awarded in August 1998. As stated 
earlier, on January 28, 2000, we participated in a ribbon cutting 
ceremony for the first 92 units. We also have three more projects under 
solicitation review at Robins AFB, Georgia; Elmendorf AFB, Alaska; and 
Dyess AFB, Texas. While the Lackland AFB project took longer than we 
would have liked, the experience gained in developing housing 
privatization policies and procedures will enhance our handling of 
future challenges. We are consulting with national real estate and 
financial institutions to improve our performance in housing 
privatization, and we firmly believe that through privatization, we can 
provide improved housing to more airmen in less time than using the 
standard military construction process. We request your support by 
extending the housing privatization authorities beyond February 2001.

Utilities privatization

    We are implementing the defense reform initiative to privatize 
utility systems. Our goal is to privatize utility systems where it 
makes economic sense and does not negatively impact national security. 
We have identified 435 of our 640 systems as potential privatization 
candidates. We issued a request for proposals for 34 utility systems in 
January 2000. We have now reached a critical time in our privatization 
effort, as we transition to the execution phase. We are working 
diligently to ensure that we meet the goals established by the 
Department of Defense to privatize all utility systems by 2003.

Laboratory infrastructure

    Another private sector venture the Air Force is exploring is the 
Brooks City Base Concept. Brooks AFB, Texas, is a science and education 
oriented installation that houses some of the most prestigious Air 
Force schools and organizations. Under recently enacted legislation, we 
are assessing innovative ideas to improve Air Force asset management by 
reducing base operating costs, which in turn will free up funds for 
higher priority programs. We are considering a plan to convey the 
entire base's real property to the City of San Antonio and will then 
lease back facilities required to accomplish the Air Force missions. 
This greater reliance on the private sector and local government for 
base support services will result in the receipt of municipal services 
at no cost, a share of future development revenues, and other 
compensation from the City of San Antonio as fair market value 
compensation for the base property. The initiative would also allow the 
local community to have access to the facilities currently at Brooks, 
and would provide a valuable place for future industrial and commercial 
development while retaining areas for parks and recreation.
    These partnerships with local communities have great potential and 
may, with the approval of this committee, become models for future Air 
Force infrastructure plans. We look forward to sharing the results of 
our efforts and any subsequent plans with this committee as we work 
together to maintain faithful stewardship of our Nation's assets.
Reduce infrastructure: Demolish and consolidate
    Our commanders continue to express their concerns about having to 
spend their scarce resources to operate and maintain excess and 
obsolete facilities. While we strive to increase our RPM dollars for 
infrastructure or new facilities, we must continue to demolish worn out 
or obsolete facilities in order to reduce recurring operations and 
maintenance costs. Over the past four fiscal years, we have demolished 
approximately 11 million square feet of obsolete facilities. Our fiscal 
year 2001 budget submission continues this commitment.

Environmental MILCON: Lead by example

    As our record demonstrates, we are dedicated to enhancing our 
already open relationships with both the regulatory community and the 
neighborhoods around our installations. We strive to ensure that our 
operations meet environmental regulations and laws, and we seek out 
partnerships with local regulatory and commercial sector counterparts 
to share ideas and create an atmosphere of trust.
    Our continuing efforts to foster an environmental ethic within the 
Air Force, both here in the United States and abroad, has enabled us to 
enhance operational readiness, be a good neighbor, and leverage our 
resources to ensure that we remain a leader in environmental 
compliance, cleanup, conservation, and pollution prevention. Our record 
speaks for itself. We have reduced our open enforcement actions from 
245 in fiscal year 1992 to just 10 at the end of fiscal year 1999.
    Our environmental compliance MILCON request for fiscal year 2001 
totals $19 million for seven, level-1 ``must pay'' compliance projects. 
All of these projects satisfy level-1 requirements, which refer to 
conditions or facilities currently out of compliance with environmental 
laws or regulations, including those subject to a compliance agreement. 
Our program includes two fire-training facilities, which are closed due 
to fuel-contaminated property and potential ground water contamination. 
These fire-training facilities are located at Incirlik AB, Turkey; and 
Fort Smith ANGB, Arkansas. We have water treatment facility projects at 
Beale AFB, California; and Moody AFB, Georgia; a hazardous material 
storage facility at Eielson AFB, Alaska; a water distribution system 
upgrade project at Vandenberg AFB, California; and a generator fuel 
storage facility at Cape Romanzof Radar Site, Alaska.

Planning and design

    Our request for fiscal year 2001 planning and design is $66 
million. These funds are required to complete design of the fiscal year 
2002 projects and to start design of our fiscal year 2003 projects.

Unspecified minor construction

    We have requested $18 million in fiscal year 2001 for unspecified 
minor construction, which will provide the total Air Force with a 
primary means of responding to small, unforeseen facility requirements 
that cannot wait for normal MILCON. From fiscal year 1996 through 
fiscal year 1999, an additional $7 million was reprogrammed into the 
account to fund urgent requirements. The fiscal year 1996 through 
fiscal year 1999 accounts are fully obligated, or committed, to valid 
projects.

                        MILITARY FAMILY HOUSING

    As in years past, family housing is one of our most important 
quality of life programs. We are convinced that no other facility 
program so greatly influences the performance and commitment of our 
people than having quality homes. To reinforce this commitment, in 
August 1999 we published our first-ever Family Housing Master Plan that 
will guide our MILCON, O&M, and privatization efforts through fiscal 
year 2010. The average age of our housing inventory is 36 years and 
65,000 of our 106,000 units require revitalization.
    Maintaining our responsibility to the family housing program is 
even more important in this era of major force reductions and increased 
frequency and length of deployments. Because these factors are so 
stressful for military families, particularly overseas, it is 
imperative that we continue to emphasize quality of life programs to 
mitigate the stress. Consequently, we have developed, consistent with 
the corporate priorities of the Air Force, a housing program to best 
serve the most urgent needs of our families.
    Our family housing investment has three equally important prongs: 
the replacement/improvement program, the operation and maintenance 
program, and the leverage we can obtain through a balanced 
privatization program. Our $224 million fiscal year 2001 family housing 
replacement and improvement program will construct two units and 
replace 270 worn-out units at two separate locations. We also propose 
to improve 1,278 units at 12 locations, and seek authority for six new 
privatization initiatives for 6,921 units, and continuation of the 
efforts at Tinker AFB, Oklahoma. The housing operations & maintenance 
program totals $826 million. It supports ``must pay'' requirements such 
as refuse collection, snow removal, utilities, leases, and critical 
housing maintenance tasks. These are necessary to keep the houses in 
good condition. Finally, we will use privatization at selected 
locations to leverage our funds, while meeting the strict criteria 
established by our leadership, economic viability and severability. 
Privatization is just one tool that allows us to accelerate the buyout 
of repairs to inadequate homes, and we are committed to a careful, 
measured approach to balance privatization initiatives with traditional 
MILCON.

Housing improvements

    The Air Force ``whole house/whole neighborhood'' improvement 
concept has proven extremely successful. Under this concept, we upgrade 
older homes to contemporary standards by updating worn-out bathrooms 
and kitchens, replacing obsolete utility and structural systems, 
providing additional living space as permitted by law and, at the same 
time, accomplishing required maintenance and repair. The result is a 
cost-effective investment that extends the life of these houses a 
minimum of 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 2001 improvement request is $174 million. This 
amount revitalizes or privatizes 8,199 homes at 24 bases as identified 
in the Housing Master Plan. This includes $56 million for 7,147 homes 
stateside, $112 million for 1,052 homes overseas, and $6 million for 
seven infrastructure improvement projects. In the development of our 
Housing Master Plan, Air Force engineers traveled to every location in 
the Air Force, except Italy and Turkey. They assessed every housing 
type and 108 items within each house. After a year of analysis, our 
results show that most of the worst housing in the Air Force is located 
in Germany and the United Kingdom. The significant amount of 
improvement funding identified for overseas reflects, not only 
consistency with the Master Plan, but our commitment to our personnel 
and their families overseas to improve their quality of life now, 
rather than years from now.

Housing construction

    We are requesting $37 million for fiscal year 2001 projects, all at 
three stateside bases to construct two houses and replace 270 existing 
houses that are no longer economical to maintain.

Operations, utilities, maintenance, and leasing

    Our fiscal year 2001 request for family housing operations, 
utilities, maintenance, and leasing is $826 million. These funds are 
necessary to operate and maintain the 106,000 homes in the Air Force 
inventory and for 7,200 leases worldwide. Approximately 75 percent of 
this request represents ``must-pay'' requirements due to the Air 
Force's obligation as the landlord for items such as utilities, refuse 
collection, leases and other key services. The remaining 25 percent of 
the funds are for essential maintenance of homes and infrastructure. 
Our fiscal year 2001 request includes $114 million for leasing 284 
domestic homes, 3,027 foreign homes, and 3,835 Section 801 homes. The 
leasing program supports critical missions in non-traditional 
locations, such as foreign sites where family housing is not available, 
and for recruiters in the United States not located near military 
installations.

Planning and design

    We have requested $13 million for planning and design. This 
includes planning and design for new construction and improvement 
programs.

                          BASE CLOSURE ACCOUNT

    First, I thank this committee for your support of the BRAC No-Cost 
Economic Development Conveyance (EDC) legislation. This legislation 
authorizes the Air Force to transfer property at closed or realigned 
military installations without consideration, via an EDC, to support 
local redevelopment as a result of changed local economic 
circumstances. This legislation has been instrumental in allowing 
communities, such as the former Lowry AFB, Colorado, to expedite their 
reuse efforts and is a win-win situation for local communities and the 
Department of Defense.
    The Air Force fiscal year 2001 BRAC program request reflects a 
thorough review of remaining requirements and careful budgeting to 
fulfill validated requirements to the greatest extent possible within 
the budget constraints. We continue to use the full flexibility of the 
account to manage our requirements and we appreciate your support of 
using BRAC funds until expiration within the environmental program.
    Included in the $369.7 million Air Force BRAC submission is a $12.8 
million project for a Defense Reutilization and Marketing Office (DRMO) 
facility at Fort Sam Houston, Texas. This project supports the fiscal 
year 1995 BRAC decision to realign Kelly AFB, Texas.
    We continue to work closely with communities to ensure that we 
achieve our common goal to expeditiously transfer property to the local 
redevelopment authorities to help facilitate reuse, and we are pleased 
to report a few of our successes. At Reese AFB, Texas, we implemented 
the last remedy in place (LRIP) cleanup milestone four years faster 
than predicted and achieved a cost avoidance of $10 million in capital 
costs through close coordination with our regulatory partners. In 
fiscal year 1999 we also completed the LRIP milestones at Roslyn ANGS, 
New York; Eaker AFB, Arkansas; and Bergstrom AFB, Texas. In May 1999, 
we celebrated the grand opening of the Austin-Bergstrom Airport. This 
monumental event saved the community $200 million by relocating the 
planned airport to the former Bergstrom AFB. Therefore, we consider 
Bergstrom an environmental and reuse success story.
    I also highlight the closure and realignment of the Illinois Air 
National Guard's 126th Air Refueling Wing, which operates the KC-135, 
from the former Chicago O'Hare ARS to Scott AFB, Illinois. In exchange 
for the Air Force's property at O'Hare International Airport, the City 
of Chicago paid over $102 million to fund the movement of personnel, 
equipment and construction of facilities at Scott AFB. A portion of the 
former O'Hare ARS is now the planned site for the International 
Headquarters of United Airlines and the Illinois Air Guard is now the 
owner of world-class facilities that complement the mission of Scott 
AFB.
    The final success story I want to highlight happened at the former 
Loring AFB, Maine. In fiscal year 2000, the base also completed its 
critical LRIP milestone and are in the final stages for complete 
turnover of operations to the redevelopment authority. We continue to 
learn many lessons as we close and realign our BRAC bases, and intend 
to apply them to future base conversions should the Congress approve 
additional rounds of closures.
    As we focus on closing our BRAC environmental restoration sites, we 
remain committed to the selection of cleanup remedies that are 
protective of human health and the environment. In addition to 
converting bases to civilian reuse, we are continuing the realignment 
beddown process at remaining installations to ensure base closure 
actions neither disrupts our operational requirements nor adversely 
affects quality of life. We appreciate the support of this committee in 
helping us meet these objectives.
    Mr. Chairman, I would like to make one final comment on BRAC. We 
cannot overemphasize how the reductions in Air Force manpower and force 
structure have outpaced those in infrastructure. Since 1989, the 
Department of Defense has reduced force structure by 36 percent, but 
infrastructure has only been reduced by 21 percent. Only additional 
BRAC rounds can correct this disparity. We cannot afford to continue 
spending our scarce resources on unneeded infrastructure. Furthermore, 
cost savings generated from two additional BRAC rounds are necessary to 
ensure we have the proper force structure and topline to address our 
priority needs for people, readiness, and modernization. We strongly 
support the Secretary of Defense's request for two additional rounds of 
base closures. Mr. Chairman, while we continue to work within existing 
authorities to reduce Air Force infrastructure, there is no substitute 
for BRAC. We would appreciate this committee's support for two 
additional BRAC rounds.

Conclusion

    In conclusion, Mr. Chairman, I want to again thank this committee 
for its strong support of the Air Force MILCON program, which supports 
Air Force people, readiness, and modernization needs. I also want to 
thank this committee for sending a powerful message to our uniformed 
members and their families that you are aware of their many sacrifices 
and appreciate their dedication to the defense of this great nation by 
approving the military pay and compensation package. This action 
coupled with your continued support of the Air Force MILCON program 
sends a positive message to our people that we not only hear them but 
we care about them and want to keep them in uniform. We realize we 
cannot continue as the world's premier aerospace force without our 
people, and providing better working and living conditions demonstrate 
our commitment to them.
    Our installations serve as our launch platforms to expeditiously 
project aerospace power around the world when called upon, as well as 
to provide places for our people to live and work. This budget 
submission reflects our commitment to maintain quality Air Force 
installations around the world for our Total Force members.
    Thank you Mr. Chairman and members of the committee.

                           CONTINGENCY FUNDS

    Senator Burns. Thank you, Madam Secretary.
    I want to start off. Just like with the Army, we lost some 
5 percent of our contingency fees, and I will ask you the same 
question. How do you think this will affect our goal of 
facilities and quality-of-life projects that we have already 
got in the planning stage and also in the execution stage for 
the Air Force?
    Ms. DeMesme. The contingency issue is one that is very dear 
to us. We certainly believe that it is important that we 
maintain contingency funds. We are vulnerable when we are 
unable to adjust to unplanned and unforeseen situations as we 
are constructing buildings.
    At the present time, there is some impact on our programs. 
I am going to let General Robbins explain to you what those 
are.
    General Robbins. Sir, you are right about Red Horse.
    It is a great success.
    Senator Burns. In bridge, is that a jump shift?
    General Robbins. Yes, sir.
    I would echo what General Hunter said. The pain that we 
will feel with the loss of contingency will be shown after the 
projects are awarded and construction is underway. There will 
be a bow wave effect at some point, when you have diverted 
money from upcoming projects to fund contingencies, and those 
are underway, you ultimately find projects that you can no 
longer execute.
    When we saw this reduction coming in the budget, we did an 
analysis of the last 5 years of our program, and found that we 
have averaged 7-8 percent cost change in our projects. About 80 
percent of that has come due to unforeseen site conditions, 
design errors, acts of God in terms of weather delays and so 
forth; and then 20 percent has come as a result of changes in 
mission, user requirements, and equipment changes from the time 
the project was originally designed.
    So there will definitely be an impact on us. To quantify it 
and specify it in this particular project, you do not know 
until it happens. The Air Force has typically budgeted 5 
percent contingencies for new construction and 10 percent for 
those projects that are renovations, because you do not do 
destructive testing necessarily when you go in and find out the 
problems before you begin.

                          KELLY AIR FORCE BASE

    Senator Burns. Another troubling thing, Madam Secretary and 
gentlemen, what is going on at Kelly? The announcement by the 
Secretary the other day, we are asked to reinforce our funds in 
BRAC and then ask for two more rounds of BRAC, and then we hear 
the announcement of the Secretary within the last 2 weeks of 
some forgiveness of some obligations that were made at Kelly. 
Tell me about that, and can we expect any other announcements 
like those? Or do you have any details on that?
    Ms. DeMesme. General Robbins, do you have details? I do not 
have the details, sir.
    General Robbins. No, sir.
    Ms. DeMesme. I will get some information back to you on 
that one.
    [The information follows:]

                               Kelly AFB

    The Greater Kelly Development Authority, which is the Local 
Redevelopment Authority (LRA) for Kelly Air Force Base (AFB), submitted 
a request for a modification to their Economic Development Conveyance 
(EDC) for Kelly AFB to reduce their debt of $108 million to $5.2 
million, the amount required to fund the treasury reserve account for 
the depreciated value of the commissary surcharge fund and/or non-
appropriated fund investment in facilities within the EDC footprint. 
The Deputy Under Secretary of Defense (Installations) concurred with 
the modification and the Secretary of the Air Force (SECAF) signed the 
modified EDC documents on February 29, 2000.
    In addition to Kelly, four other modifications to existing EDCs 
have been completed. These modifications are in accordance with the 
provisions of Section 2821 of the National Defense Authorization Act 
(NDAA) for fiscal year 2000 (Pub. L. 106-65). The modifications for 
Lowry, Myrtle Beach, and Norton AFBs were for the amount already paid 
to the Air Force. The EDC for Carswell AFB was for the amount required 
to fund the treasury reserve account for the commissary surcharge and/
or the non-appropriated funds investments in facilities within the EDC 
footprint: December 9, 1999--Lowry AFB--Reduced the debt from $32.6 
million to $7.7 million. December 29, 1999--Myrtle Beach AFB--Reduced 
the debt from $8.5 million to $1.1 million. March 6, 2000--Carswell 
AFB--Reduced the debt of $3.2 million to $171 thousand. April 13, 
2000--Norton AFB--Reduced the debt of $30.2 million to $2.3 million.
    The Air Force anticipates receiving a request for a modification to 
three more EDCs:
  --Mather AFB to eliminate their total remaining debt of $7.9 million.
  --McClellan AFB to reduce their debt of $90 million to $2.4 million, 
        the amount required to fund the treasury reserve account for 
        the commissary surcharge and/or the non-appropriated funds 
        investments in facilities within the EDC footprint.
  --Reese AFB to eliminate their total remaining debt of $3.2 million.

    Senator Burns. Well, it is very concerning to me. Because 
we continue to look at BRAC and closing these bases and 
facilities, and to hear what happened at Kelly, that is sort of 
disturbing. Because that is money that was hard to come by, 
that kind of money. It really is.
    Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.
    I want to bring to your attention a problem that we are 
having at Fairchild Air Force Base in Washington State.
    Senator Burns. You are not getting any fuel up there. We 
can talk more about that.
    Senator Murray. Okay, we will work on that one.
    My problem has to do with fog today.
    Senator Burns. Well, we told them that would happen when 
they moved the airplanes to Great Falls.
    Senator Murray. Great Falls does not have any fog.
    Fog is a problem. First of all, it causes a lot of 
diversions and cancellations, but it is also a safety hazard 
for the crew that is there. They are looking for an 
installation of a centerline runway light that would greatly 
improve their operating conditions there. I know that that is a 
project in the fiscal year 2005 budget, but if Congress were to 
provide full funding for that project this fiscal year, could 
you start that project immediately? And if so, how quickly 
could it be completed?
    Ms. DeMesme. We have certainly been looking at this 
project, and realize that there is a great need. If we were to 
get an insert, we would do our utmost to get that done this 
year. I think we would be able to meet the needs and get the 
project funded and underway.

                       REAL PROPERTY MAINTENANCE

    Senator Murray. Okay, good. I understand that the fiscal 
year 2001 Air Force budget for military construction is one-
third of the validated need. This is an old story, and every 
year the need far outstrips the resources that are allocated to 
MILCON. We have seen the backlog in real property maintenance 
build up as a result of deferring needed repairs. Are we 
creating that same kind of backlog in military construction?
    Ms. DeMesme. Unfortunately yes. We are trying to take a 
balanced approach to our budget by meeting the modernization 
needs, the people needs, and the MILCON needs. And, we have not 
been able to meet them all adequately. In our current budget, 
we are working on the worst facilities first, working along a 
list that we have. It is not the optimal way to operate. And we 
do believe that if we continue in this vein, we will exacerbate 
our problems.
    Senator Murray. What kind of impact will it have on MILCON 
budgets a few years out?
    Ms. DeMesme. In balancing, unless we are able to acquire 
additional funding, I do not believe we will be able to change 
the priorities that we have set forth at this time.
    Senator Murray. One other question, Mr. Chairman. The 
maintenance and renovation of historic military properties is 
becoming a real drain on all of our services. Is the Air Force 
developing any kind of master plan to deal with the upkeep of 
historic properties?
    Ms. DeMesme. Yes, we are. We have taken a good look at our 
properties. We have determined what the needs are. We are 
putting together some guidelines for ways to address these 
needs and how to fund them. And we are continuing to examine 
exactly what we will need to keep up with needs.
    Right now, we are not experiencing a big problem with them. 
Our inventory of historical facilities are not that large--not 
high enough that we need to change the way we fund them. But we 
will continue to keep abreast of that and modify and change our 
polices as necessary. Right now, we are trying to comply with 
congressional guidelines and Office of the Secretary of Defense 
(OSD) policies on those.
    Senator Murray. Okay. Thank you very much.
    Senator Burns. Senator Craig.
    Senator Craig. Thank you, Mr. Chairman.
    Madam Secretary, let me hand you that picture. I feel like 
Ross Perot today.

                      MOUNTAIN HOME AIR FORCE BASE

    Please do not credit me with thinking like that.
    This is a result of a windshield tour that I took of 
Mountain Home Air Force Base about 3 weeks ago. And I use this 
as an example, because while I have been on the base and I am 
extremely proud of what is going on at Mountain Home--in the 
composite wing, the work that is being done there, the 
construction of the hangar and maintenance facility and all of 
that and all that we need for the composite and for additional 
missions, the expansion of the training range that you 
mentioned which is so critical to the life of that base, but 
also to the Air Force's capabilities--we have fallen, in my 
opinion, dramatically behind in housing.
    Now, I know you spoke of the privatizing, but it did not 
work at Mountain Home. In fact, we have discontinued it. 
Military dollars on that base, construction dollars out of this 
budget, is what is going to do this, not privatizing. And this 
is unacceptable, in my opinion, for any of our men and women in 
uniform. The stress we put our folks under at Mountain Home, as 
we have had them out in the desert ongoing, and they have 
performed beautifully well and we are so proud of what they do. 
At the same time, they leave their families in these situations 
and return home to these situations.
    I do not know of another more dramatic way to say that. And 
I am not in awe. I want Senator Murray to hear this. I am not 
going to criticize her at all, because I am proud of what goes 
on at Fairchild. But I have done kind of a glance at MILCON 
dollars at Fairchild over the decade and at Mountain Home--$15 
million more a year across the border in the State Washington. 
Now that we have the kind of missions we are wanting for 
Mountain Home, the air space that we have there, the new 
training range capability, we have got to change this.
    Ms. DeMesme. Yes, sir.
    Senator Craig. And we do not need to spread it out over a 
decade's worth of budget. That does not solve our problem. We 
need to get at the business of focusing on this with the kind 
of intent necessary to resolve it in a reasonable time frame, 
either with the modernization of current facilities--some of 
these ought to be razed.
    Ms. DeMesme. Yes, sir.
    Senator Craig. They were built at a time when they were 
viewed as somewhat temporary, and that was probably 40 years 
ago.
    Ms. DeMesme. Yes, sir. We are trying to look at all of our 
bases. As I said, we have a master plan, a family housing 
master plan. And right now, the Mountain Home program is in our 
fiscal year 2004 and 2005 program, based on urgency of need. 
We, unfortunately, have other bases with similar housing 
problems. And we agree that we would like to do it sooner if we 
had the funds to do so. We are committed to improving the 
housing for our families.
    Senator Craig. I know you are. The reason I bring this to 
your attention, depending on the location of the base, the 
beauty of Mountain Home is, in part, its isolation, in a 
positive way. It creates the air space we need. It gives us the 
capability and the flexibility we need. But it also means that 
you cannot go to an immediate metro area to live.
    Ms. DeMesme. That is true.
    Senator Craig. You have to commute long distances, to 
Boise, if you choose to live there, and some are now living 
there. Their spouses are working in the Boise environment. 
Mountain Home, as a community, has tried to hustle to improve 
housing, at a time when predominantly the housing was on base. 
But still, base efforts are very, very necessary there. And I 
would hope that these conditions could change before 2004.
    Ms. DeMesme. Sir, we appreciate your concern. We share it. 
And we will be looking at our master plan as time goes on. We 
are constantly evaluating to determine that we have the right 
focus. And if we can, we will. But right now that is where we 
are unless something happens between now and then. I do not 
know that we could move on that sooner.
    Senator Craig. Well, we will maybe try to help you make it 
happen. And I do not mean just for Mountain Home. I mean for 
the totality of the Air Force.
    Ms. DeMesme. We would appreciate any help we could get.
    Senator Craig. Thank you.
    Senator Murray. Mr. Chairman, can I just ask Senator Craig 
a question?
    Is the reason the privatization effort did not work is lack 
of private companies willing to invest in that area?
    Senator Craig. In part that, yes. It did not work the way 
it was anticipated it might. Now, in some areas, apparently it 
is working better.
    Ms. DeMesme. Yes, it is.

                             FAMILY HOUSING

    Senator Craig. There, we have got to make that kind of 
investment. I do not think there is any question about it.
    Senator Burns. There is no doubt about that. And that is 
what kind of brings us to our concern about that. Just from the 
looks of your budget as it has been proposed now, you have 
placed a lower priority on family housing. And that concerns 
some of us. So if we can help you along with restructuring some 
of that, we might do that.
    Ms. DeMesme. We certainly would appreciate it, sir. That 
was the only area that we could really afford a little risk in 
as we looked at modernization and our other technological 
readiness programs. It is not the desired way to proceed.

          KELLY AIR FORCE BASE ECONOMIC DEVELOPMENT CONVEYANCE

    Sir, you asked a question earlier about Kelly Air Force 
Base. I think the answer to that is that we have the no-cost 
EDC legislation that we got from Congress last year, which 
means that we must forgive the debt on some of these facilities 
and programs that we had originally planned to collect monies 
for. And the program in Texas, the facilities part of that EDC 
was a no-cost conveyance that we are, by law, required to 
respond to. There might be others of those as we move along.

                         ENVIRONMENTAL CLEANUP

    Senator Burns. It is concerning as we go through this BRAC 
thing. And of course we have moved. For instance, we got no 
funds, but I will tell you that they are being used to the 
limit. Remember the radar stations for low-altitude bombing 
runs across there. We have moved some of those. The counties or 
the cities took over those facilities.
    There is kind of a success story. The one at Conrad, 
Montana, which now we have people that applied, as a retirement 
complex, from the East Coast to go to Conrad, Montana. Now, 
folks, those of you who have been to Conrad, Montana, there is 
not a lot there. It is just out there on the flats on the 
eastern front. I suspect somebody here was stationed at 
Malmstrom and probably understands where Conrad is. But they 
are full, if you can believe it, and people are moving out of 
the East Coast cities and retiring there because of safety more 
than anything else. So they are being used.
    Questions on plant improvement and stuff like that, I think 
we will do all this in private talks as we move through this. 
But tell me about your environmental cleanup. Give me a status 
report on how we are doing on those facilities that we are 
cleaning up and getting ready to move into private hands.
    Ms. DeMesme. We are doing quite well, sir. It is taking 
longer than we had originally thought, but we have developed 
good working relationships in all of our locations. We are down 
to less than five problematic issues a year. We are funding all 
of our level 1's to make sure that we are in compliance. And I 
am satisfied right now that we are on target and moving 
forward.
    Senator Burns. I am sorry, we have run into some problems 
with the tower reconstruction in Florida, but we will work our 
way through those kind of situations, too.
    Thank you for coming this morning. And further comments 
from any of you would be welcomed. Are there any other 
questions from the committee?

                     ADDITIONAL COMMITTEE QUESTIONS

    Other members may have questions. If so, we will submit 
them and you may respond to those questions to the committee 
member or to the committee.
    Ms. DeMesme. Thank you, sir. And again, thank you and this 
committee for your support of our programs. It has meant a lot 
to our men and women to understand that people are listening 
and providing the tools we need to make their lives better.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

              Questions Submitted by Senator Conrad Burns

                             FUNDING LEVELS

    Question. Madame Secretary, your fiscal year 2001 budget looks much 
weaker than what was enacted last year or the amount proposed last year 
for fiscal year 2001. Why is the air force placing such a low priority 
on military construction and family housing?
    Answer. We have not put a low priority on our military construction 
and family housing. These areas are very important to the Air Force but 
constrained funding forces the Air Force to accept certain risks where 
we thought we could afford to, specifically in the area of 
infrastructure. We must balance funding among the priorities of the 
people, readiness, modernization, and infrastructure. The fiscal year 
2001 President's Budget reflects a balanced approach across all areas 
due to fiscal constraints and affordability. We are prepared to meet 
the demands of on-going security commitments and executing the national 
military strategy. We accomplish this by only funding minimal 
infrastructure support and modernizing at less than optimal rates. Our 
fiscal year 2001 request is about $3.5 billion short of what we believe 
is a good mix among people, readiness, modernization, and 
infrastructure. We need sustained increases in funding to substantially 
improve the condition of our infrastructure, and strengthen our 
modernization efforts.
    Question. I was distressed to learn that the Air Force is only 
recapitalizing their infrastructure at a rate of one percent of their 
plant replacement value (PRV). What are the long term implications to 
our facilities of maintaining this funding strategy?
    Answer. We recognize that we are taking some risk with the current 
level of funding for our infrastructure programs. The long-term 
implications of recapitalizing the Air Force plant at reduced levels 
will result in greater need to repair and maintain aging systems and 
facilities. Our current level of MILCON funding results in a 
recapitalization rate of over 200 years. Likewise, our fiscal year 2001 
real property maintenance (RPM), which is funded at 1 percent of PRV 
limits our day-to-day maintenance to emergency and most critical work 
requirements only. Degraded facility conditions can affect combat 
capability, productivity and quality of life in the work place that 
impacts retention and morale. We will continue to focus our resources 
on the highest priority requirements as we balance our investment needs 
between people, readiness, modernization and infrastructure.
    Question. How do we in the Congress get the Department of Defense 
to place more emphasis on fixing this situation?
    Answer. There is no easy solution to the situation resulting in the 
underfunding of military construction, family housing, and real 
property maintenance within the Air Force. The fiscal year 2001 
President's Budget reflects the Air Force's priorities of people, 
readiness, modernization, and infrastructure. These competing 
priorities are balanced to produce the best possible aerospace force 
within the given Total Obligating Authority. Possible ways of improving 
funding in the infrastructure accounts are to reduce the overall size 
of the Air Force's infrastructure through a combination of closure 
actions and privatization efforts.

                     PUBLIC/PRIVATE VENTURES (PPV)

    Question. I understand that the Air Force's family housing 
privatization project at Lackland AFB is proceeding well. Early reports 
indicate that this project is a success. What is the time line for the 
other family housing privatization initiatives that will follow?
    Answer. Excluding Lackland AFB, the following represents current 
projected dates relative to Air Force housing privatization project 
execution:

----------------------------------------------------------------------------------------------------------------
                                      Scope      Notify Congress of    Notify Congress of
         Project Location            (units)        Solicitation              Award                Closing
----------------------------------------------------------------------------------------------------------------
Robins AFB, GA...................          670  Oct. 1998...........  June 2000...........  July 2000
Elmendorf AFB, AK................          828  Dec. 1998...........  June 2000...........  July 2000
Dyess AFB, TX....................          402  June 1999...........  July 2000...........  Sept. 2000
Kirtland AFB, NM.................        1,890  May 2000............  Oct. 2000...........  Nov. 2000
Wright-Patt, AFB, OH.............        1,536  June 2000...........  Dec. 2000...........  Jan. 2001
Patrick AFB, FL..................          960  July 2000...........  Dec. 2000...........  Jan. 2001
Dover AFB, DE....................          450  Aug. 2000...........  Dec. 2000...........  Jan. 2001
McGuire AFB, NJ..................          999  TBD.................  TBD.................  TBD
Tinker AFB, OK...................          730  TBD.................  TBD.................  TBD
                                  -------------
      Subtotal...................        8,465
                                  =============
Little Rock AFB, AR..............        1,535  Sept. 2000..........  Feb. 2001...........  Mar. 2001
Moody AFB, GA....................          696  Sept. 2000..........  Feb. 2001...........  Mar. 2001
Vandenberg AFB, CA...............          506  Sept. 2000..........  Mar. 2001...........  Apr. 2001
Offutt AFB, NE...................        2,580  Oct. 2000...........  May 2001............  June 2001
Charleston AFB, SC...............          488  Nov. 2000...........  June 2001...........  July 2001
Hill AFB, UT.....................        1,116  Dec. 2000...........  July 2001...........  Aug. 2001
                                  -------------
      Subtotal...................        6,921
----------------------------------------------------------------------------------------------------------------

    Question. The Department of Defense has been criticized because of 
the long time it takes from solicitation to closing of family housing 
privatization deals, especially with interest rates so volatile. How is 
the Air Force working to shorten this time?
    Answer. The Air Force has already taken actions to minimize or 
delete ``no-value-added'' steps in our project execution process as a 
result of lessons learned during the execution of the Lackland, 
Elmendorf, Robins, and Dyess projects. Many of these steps precede 
solicitation, however, we are also taking steps to accelerate the 
solicitation portion of the process. The Air Force has explored the 
possibility of executing privatization projects through leading members 
of industry. Further, we are pursuing an accelerated solicitation 
methodology with the competitive re-solicitation of the Elmendorf AFB 
project, and expect to cut as much as 3-4 months from the process. 
Finally, we are pursuing a competitive solicitation methodology through 
the Air Force Center for Environmental Excellence that uses contractor 
support to a greater extent to assist in speeding up the process. If 
successful, we intend to implement these concepts for follow-on 
projects.
    Question. How will Secretary Cohen's recent announcement to buy out 
the basic allowance for housing for those service members living on the 
economy impact family housing privatization?
    Answer. Any basic allowance for housing (BAH) increase could give 
the Air Force an opportunity to reduce the amount of loans provided to 
developers. This would decrease the Office of Management and Budget 
(OMB) scored ``up front'' cost required to close a privatization deal. 
Our initiatives will be designed such that developers will not receive 
a windfall as a result of major BAH increases. BAH increases excess to 
project needs will be directed to a holding account and ultimately to 
the Family Housing Improvement Fund. The BAH impact on future 
privatization initiatives will be addressed in updates to the Air Force 
Family Housing Master Plan. We intend to update our Master Plan 
annually to address the effects of long term planning factors, such as 
BAH, on future military and privatized housing requirements. The Master 
Plan is scheduled to be updated in December 2000.

                FISCAL YEAR 2001 CONTINGENCY ELIMINATION

    Question. Madame Secretary, the Air Force has greatly improved 
their construction project execution the past several years. How will 
the loss of contingency funding potentially impact your rate of 
execution?
    Answer. Lack of contingency funds will impact timely response to 
unforeseen conditions during construction, leading to costly delays/
work stoppages. We are working award and funding strategies with our 
design/construction agents to ensure sufficient funds are available for 
each project so construction can proceed as necessary to meet need 
dates and avoid costly delays. However, elimination of contingency 
funding for fiscal year 2001 MILCON projects increases the possibility 
of deferring projects to provide funds to complete projects under 
construction. The elimination of contingency funding for fiscal year 
2001 family housing projects increases the possibility of reducing 
project scope to provide sufficient contingency funding during 
construction.
    Question. Could this reduction cause a change in overall scope of 
the projects? What are other challenges will this cause?
    Answer. For Military Construction (MILCON), the Air Force's goal is 
to award all projects at full scope. However, elimination of 
contingency funding increases the possibility of deferring projects to 
provide funds to complete projects under construction. The Air Force 
will fund its most urgent requirements first. This includes new mission 
and weapons systems beddowns and projects required by law or treaty. We 
will award all remaining projects in order of bid opening until fiscal 
year 2001 funds are exhausted. The Air Force plans to fund all 
unawarded fiscal year 2001 projects as soon as fiscal year 2002 funds 
are available. Deferring projects in this manner shifts the funding 
burden to the following program year, greatly increasing the potential 
for unsatisfactory execution of future MILCON programs.
    For Air Force Housing, the Air Force goal is to award projects at 
full scope. However, the number of units within each project may be 
reduced at project award or during construction to account for 
contingency requirements. Such scope reductions will result in fewer 
completed housing units for Air Force families.
    Question. When a project encounters cost over-runs, how will the 
Air Force treat a shortfall without the contingency account?
    Answer. If an awarded fiscal year 2001 project experiences 
unforeseen requirements that exceed funding generated from bid-savings, 
the Air Force will be forced to defer unawarded fiscal year 2001 
projects or use fiscal year 2002/2003 MILCON funds to complete 
construction. We are working with our design/construction agents to 
ensure construction cost growth is minimized and sufficient funds are 
available for each project so construction can proceed to completion 
without costly delays and work stoppages. In addition, for family 
housing projects, the number of units within each project may be 
reduced at project award or during construction to accommodate 
unforeseen requirements.

               AF UNACCOMPANIED ENLISTED HOUSING PROGRAM

    Question. Madame Secretary, in order for the Air Force to meet its 
goals for dormitories by 2009, what level of funding each year is 
required?
    Answer. The Air Force has committed to an $80-90 million per year 
annual level of MILCON investment for dormitories. This investment, in 
conjunction with OSD Quality of Life supplemental funding which 
averages $25 million per year over the President's Budget Future Years 
Defense Plan (FYDP), will allow us to reach our goal to eliminate our 
dormitory deficit and replace our worst existing dormitories by 2009.
    Question. What kind of feedback are you getting from airmen about 
these new dormitories? Will it help recruitment and retention?
    Answer. Senior leaders have received favorable comments about the 
new dormitories. Airmen indicated that these dormitories are modern, 
comfortable, and provide the space and privacy to study, relax, and 
sleep. In addition to the number of positive responses to One-Plus-One 
dorms, there are also some recommendations for improvements. Some 
airmen express a desire for a private bath, but by and large most of 
the comments center around space and the absence of basic allowance for 
subsistence. While the issues airmen have regarding One-Plus-One dorms 
concern Air Force leadership, the complaints are not totally 
unexpected. We have a group of people who have never lived in the old 
dorms. The feeling of joy people felt from moving from the old dorm to 
the new one is yesterday's news. It has been five years since we 
instituted the construction standard. It is a good time to take a look 
at the design standards.
    The Chief of Staff of the Air Force (CSAF) commented recently that 
``junior enlisted personnel are the bedrock of our Air Force and how we 
take care of them is inextricably linked to readiness, recruitment, and 
retention.'' Quality-of-life issues such as increased TEMPO, medical 
care, and pay and compensation are the major detractors in our current 
retention environment. However, Air Force leadership has an inherent 
responsibility to provide an adequate standard of living for our 
members and the One-Plus-One dormitory enhances individual quality of 
life. In fact, quality of life in the Air Force is one of several 
factors that influence an individual's decision to join the Air Force. 
Providing more privacy and amenities are important in addressing 
quality of life concerns raised by our single military members. In 
1995, 88 percent of airmen living in dormitories said their number one 
quality of life concern was privacy. The One-Plus-One dormitory 
addressed these particular concerns and enhances quality of life. The 
1999 CSAF Survey showed that 73 percent of single enlisted members were 
satisfied with their current housing, up from 49 percent in 1997. 
Additionally, Air Force leadership has received indications that 
providing safe and adequate housing for our single airmen is directly 
related to motivating and retaining a top-quality professional force. 
They are committed to this important quality-of-life issue and will 
continue to work to take care of these deserving professionals.
    Question. What criteria determines which installations get their 
dormitories modernized faster?
    Answer. The Secretary of the Air Force (SECAF) and Chief of Staff 
of the Air Force (CSAF) approved Dormitory Master Plan prioritizes the 
Air Force's most urgent requirements taking into account the size of 
the installation's dormitory room deficit and condition of existing 
dormitories with added emphasis for overseas locations.
                                 ______
                                 

               Question Submitted by Senator Larry Craig

                       NATIONAL GUARD AND RESERVE

    Question. The Idaho National Guard has two very important military 
construction projects that are vital to Gowen Field and the continued 
support of the Guard and Reserve.
    The proposed assault strip for the Air Guard is essential for the 
combat readiness of the Air Guard's 189th Airlift Squadron. Remote 
airfields require transit time that expend limited flying hours and 
finite resources. At present, the C-130 Assault Strip is in the FYDP 
for 2003. I plan to work to have this project expedited. It appears to 
me that a cost-benefit analysis of the proposed assault strip would 
show cost savings for the Air Force, as soon as the Assault Strip were 
up and running. Please provide a cost-benefit analysis of this project 
in terms of flying hours, training, manpower, and readiness issues.
    I am extremely concerned about the growing reliance on the National 
Guard and Reserve. As you know, Idaho's Army National Guard will deploy 
to Bosnia in 2002. The greater burden on the citizen-soldier has so 
intensified that there is legitimate concern about a soldier's 
willingness to stay or join those units. I was pleased to see the 
Army's decision to limit overseas deployments of Guard and Reserve 
units to six months. However, more must be done. One important avenue 
to improve the situation is through military construction. The Idaho 
National Guard faces a significant shortage in readiness space at its 
facilities at Gowen Field, which resulted from the DOD-directed 
reorganization of the 1-183rd Aviation Battalion and the 1-189th 
Aviation Medical Detachment. This shortage is impacting readiness and 
the ability of the Idaho National Guard to effectively and efficiently 
prepare for deployment. The Readiness Center is needed to provide space 
for Army Guard units currently located in World War II-era buildings or 
in other facilities that are over crowded and inadequate for that 
purpose. I strongly recommend that the National Guard Bureau 
immediately place this project on the FYDP. I welcome your thoughts or 
comments on this issue.
    Answer. Reference the cost-benefit analysis of the Assault Strip. 
The nearest assault strip which can be used by the unit is located at 
McChord AFB, WA. Travel to and from this location for training adds 3 
hours to each sortie. Training minimums for the unit require 120 
sorties per year. The additional flight time for these sorties costs an 
extra $624,600/year in aviation fuel and maintenance costs. These 
annual savings yield a 10 year payback on the project which is 
excellent given a pavement life cycle of 20 years. Additional, less 
quantifiable, benefits will be gained in readiness for the local unit 
and surrounding units who will have an additional training asset. Other 
units that can use the assualt strip include active Air Force units in 
the adjoining states, Nevada Air National Guard, Air Force Special 
Operations Command (AFSOC) and the Idaho Army National Guard.
    Reference the Army National Guard Readiness Center. We recognize 
the importance of the Readiness Center at Gowen Field. Funding 
limitations prevented its inclusion in the Future Years Defense Plan 
submitted with the President's Budget. However, the project was 
priority #27 on the Infrastructure Requirements Plan, which the Army 
National Guard forwarded to you in compliance with your annual 
requirement. On that plan the project was associated with fiscal year 
2001, had there been sufficient funds to meet annual recurring military 
construction requirements. In addition, the project appeared in fiscal 
year 2001 on the unfunded Future Years Defense Plan, which the 
committee requested subsequent to the submission of the President's 
Budget.

                         CONCLUSION OF HEARINGS

    Senator Burns. Well, from our standpoint of working with 
you, Madam Secretary, thank you for your cooperation. It has 
been great working with you on this committee, too. Thank you.
    [Whereupon, at 10 a.m., Tuesday, March 7, the hearings were 
concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]

 
       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Bailey, Marshall, Director of Support Services, Defense Logistics 
  Agency, Department of Defense.................................. 33,37
    Prepared statement...........................................    38
    Questions submitted to.......................................    54
    Statement of.................................................    37
Burns, Hon. Conrad, U.S. Senator from Montana:
    Opening statement............................................     1
    Questions submitted by .................30, 53, 54, 55, 58, 89, 111

Cotton, Rear Adm. John, U.S. Naval Reserve, Deputy Director, 
  Naval Reserve, Department of the Navy, Department of Defense...     1
Craig, Hon. Larry, U.S. Senator from Idaho:
    Prepared statement ..........................................23, 63
    Questions submitted by .....................................32, 114
    Statement of.................................................    62

DeMesme, Ruby B., Assistant Secretary, (Manpower, Reserve 
  Affairs, Installations and Environment), Department of the Air 
  Force, Department of Defense...................................    95
    Prepared statement...........................................    97
Diamond, Brig. Gen. Robert M., Deputy Chief, U.S. Army Reserve, 
  Department of the Army, Department of Defense..................    61
Duignan, Brig. Gen. Robert E., Deputy to the Chief, Air Force 
  Reserve, Department of the Air Force, Department of Defense....    95

Hunter, Maj. Gen. Milton, Director of Military Programs, U.S. 
  Army Corps of Engineers, Department of the Army, Department of 
  Defense........................................................    61

Johnson, Paul W., Deputy Assistant Secretary (Installations and 
  Housing), Department of the Army, Department of Defense........    61
    Prepared statement...........................................    67
    Statement of.................................................    66

Mashburn, Brig. Gen. Harold, U.S. Marine Corps, Deputy Chief of 
  Staff for Installations and Logistics, Department of the Navy, 
  Department of Defense..........................................     1
McKinley, Brig. Gen. Craig R., Deputy Director, Air National 
  Guard, Department of the Air Force, Department of Defense......    95
Murray, Hon. Patty, U.S. Senator from Washington:
    Questions submitted by ...................................... 56,91
    Statement of................................................. 2, 64

Pirie, Robert B., Jr., Assistant Secretary of the Navy for 
  Installations and Environment, Department of the Navy, 
  Department of Defense..........................................     1
    Prepared statement...........................................     5
    Statement of.................................................     3

Robbins, Maj. Gen. Earnest O., II, Headquarters USAF, Civil 
  Engineer, Deputy Chief of Staff, Installations and Logistics, 
  Department of the Air Force, Department of Defense.............    95
Schwartz, Lt. Gen. Norton, Commander in Chief, U.S. Special 
  Operations Command, Department of Defense......................    33
    Prepared statement...........................................    34
    Questions submitted to.......................................    53
Smith, Rear Adm. Louis, Civil Engineer Corps, U.S. Navy, 
  Commander, Naval Facilities Engineering Command/Chief of Civil 
  Engineers, Department of the Navy, Department of Defense.......     1
Squier, Brig. Gen. Michael J., Deputy Director, Army National 
  Guard, Department of the Army, Department of Defense...........    61
Stevens, Hon. Ted, U.S. Senator from Alaska, statement of........    65

Tabler, Diana, Deputy Executive Director, TRICARE Management 
  Activity, Department of Defense................................    33
    Prepared statement...........................................    50
    Questions submitted to.......................................    58
    Statement of.................................................    49
Tolleson, Ray, Interim Director, Department of Defense Education 
  Activity, Department of Defense................................    33
    Prepared statement...........................................    44
    Questions submitted to.......................................    55
    Statement of.................................................    41

Van Antwerp, Maj. Gen. Robert L., Jr., Assistant Chief of Staff 
  for Installation Management, Department of the Army, Department 
  of Defense.....................................................    61

                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF DEFENSE

                            Defense Agencies

                    U.S. SPECIAL OPERATIONS COMMAND

                        DEFENSE LOGISTICS AGENCY

               DEPARTMENT OF DEFENSE EDUCATION ACITIVITY

                      TRICARE MANAGEMENT ACTIVITY

                                                                   Page
Additional committee questions...................................    53
America strategic nobility, rebuild..............................    37
Construction projects, funding for major.........................    49
Department of Defense Dependent Schools (DoDDS)..................    55
Distance learning................................................    52
DOD Medical Facilities...........................................    58
DODEA:
    Programs.....................................................    41
    Schools......................................................    42
Facility costs...................................................    43
MILCON contingency funding.......................................    54
Roosevelt roads infrastructure challenges and Vieques impact on 
  training.......................................................    53
School, readiness for............................................    42
SOF relocations from Panama to Puerto Rico, status of............    53
TRICARE, medical care under......................................    51

                      Department of the Air Force

Additional committee questions...................................   110
AF unaccompanied enlisted housing program........................   113
Contingency:
    Elimination, fiscal year 2001................................   112
    Funds........................................................   105
Environmental cleanup............................................   110
Family housing...................................................   109
Funding levels...................................................   111
Introduction of witnesses........................................    95
Kelly Air Force Base.............................................   106
    Economic development conveyance..............................   109
Mountain Home Air Force Base.....................................   108
National Guard and Reserve.......................................   114
Public/private ventures (PPV)....................................   111
Real property maintenance........................................   107

                         Department of the Army

Additional committee questions...................................    89
Chemical Demilitarization Program................................    91
Contingency:
    Elimination, fiscal year 2001................................    91
    Reduction....................................................    83
Dual-use facilities..............................................    88
Family housing maintenance.......................................    90
Fort Lewis, interim brigade at...................................    84
Funding levels .................................................  89,90
Historic properties..............................................    92
Military construction requirements...............................    92
National Guard raid teams........................................    86
Public/private ventures (PPV)....................................    90
Washington State Army National Guard MILCON funding..............    91

                         Department of the Navy

Additional committee questions...................................    29
BAH..............................................................    20
BRAC.............................................................     4
Contingency......................................................    17
    Elimination, fiscal year 2001................................    32
Demolition Program...............................................    31
Funding levels...................................................    30
Historic quarters................................................     5
Homeport ashore..................................................    19
Housing..........................................................     3
Public/private ventures (PPV)....................................    30
Vieques ......................................................... 18,32
                                  
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