U.S. GOVERNMENT PRINTING OFFICE

54–227 cc WASHINGTON : 2000

S. HRG. 106–273

MILITARY CONSTRUCTION APPROPRIATIONS FOR

FISCAL YEAR 2000

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS

UNITED STATES SENATE

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

ON

H.R. 2465/S. 1205

AN ACT MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION FOR

THE DEPARTMENT OF DEFENSE FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2000, AND FOR OTHER PURPOSES

Printed for the use of the Committee on Appropriations

(

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

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0–16–059975–X
(II)

COMMITTEE ON APPROPRIATIONS

TED STEVENS, Alaska, Chairman

THAD COCHRAN, Mississippi

ARLEN SPECTER, Pennsylvania

PETE V. DOMENICI, New Mexico

CHRISTOPHER S. BOND, Missouri

SLADE GORTON, Washington

MITCH MCCONNELL, Kentucky

CONRAD BURNS, Montana

RICHARD C. SHELBY, Alabama

JUDD GREGG, New Hampshire

ROBERT F. BENNETT, Utah

BEN NIGHTHORSE CAMPBELL, Colorado

LARRY CRAIG, Idaho

KAY BAILEY HUTCHISON, Texas

JON KYLE, Arizona

ROBERT C. BYRD, West Virginia

DANIEL K. INOUYE, Hawaii

ERNEST F. HOLLINGS, South Carolina

PATRICK J. LEAHY, Vermont

FRANK R. LAUTENBERG, New Jersey

TOM HARKIN, Iowa

BARBARA A. MIKULSKI, Maryland

HARRY REID, Nevada

HERB KOHL, Wisconsin

PATTY MURRAY, Washington

BYRON DORGAN, North Dakota

DIANNE FEINSTEIN, California

RICHARD J. DURBIN, Illinois

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

LARRY CRAIG, Idaho

JON KYL, Arizona

TED STEVENS, Alaska (ex officio)

PATTY MURRAY, Washington

HARRY REID, Nevada

DANIEL K. INOUYE, Hawaii

ROBERT C. BYRD, West Virginia

(ex officio)

Professional Staff

SID ASHWORTH

CHRISTINA EVANS (Minority)

Administrative Support

MAZIE R. MATTSON

EMELIE EAST (Minority)
(III)

CONTENTS

TUESDAY, MARCH 16, 1999

Department of Defense:

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

Defense agencies:

U.S. Special Operations Command .......................................................... 39

TRICARE Management Activity .............................................................. 39

Defense Logistics Agency .......................................................................... 39

Personnel Support, Families and Education ........................................... 39

TUESDAY, MARCH 23, 1999

Department of Defense:

Department of the Army .................................................................................. 71

Department of the Air Force ........................................................................... 113

WEDNESDAY, JULY 14, 1999

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

Operations ............................................................................................................ 133
(1)

MILITARY CONSTRUCTION APPROPRIATIONS

FOR FISCAL YEAR 2000

TUESDAY, MARCH 16, 1999

U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC.

The subcommittee met at 10 a.m., in room SD–192, Dirksen Senate Office Building, Hon. Conrad Burns (chairman) presiding. Present: Senators Burns, Stevens, and Murray.

DEPARTMENT OF DEFENSE

DEPARTMENT OF THE NAVY

STATEMENT OF ROBERT B. PIRIE, ASSISTANT SECRETARY OF THE

NAVY (INSTALLATIONS AND ENVIRONMENT)

ACCOMPANIED BY:

REAR ADM. LOUIS M. SMITH, COMMANDER, NAVAL FACILITIES ENGINEERING COMMAND

MAJ. GEN. GEOFFREY B. HIGGINBOTHAM, USMC, DEPUTY CHIEF

OF STAFF FOR INSTALLATIONS AND LOGISTICS, HEADQUARTERS MARINE CORPS

REAR ADM. JOHN B. TOTUSHEK, CHIEF OF NAVAL RESERVE

OPENING STATEMENT OF CONRAD BURNS

Senator BURNS. We will call the committee to order this morning.

Thank you to the panel, we appreciate your delaying here just

a little bit. We are going to talk about military construction and

how it affects the United States Navy and the United States Marine Corps. First we will hear from the Navy.

Secretary Pirie, it is nice to have you back again. I appreciate

our working relationship, it has been very good, and I appreciate

the efforts you have put into it. We hope that we can do some good

things for our people in uniform. This is probably the fifth or sixth

time you have been before this committee since I have been here.

You are probably getting tired by now. But we appreciate your efforts.

I have some concerns—and my statement will be very, very

short—the way the Department of Defense is starting to deal with

the military construction budget. I am very concerned about it. Incremental funding has risen. Some concerns have come up, that

maybe that will slow our execution and what our mission is and

what the eventual bottom-line cost to the taxpayers at the end of

those projects will be. Also, it appears to me that we are assuming

some risk that would not necessarily have to assume.
2

Senior defense officials have told me that one-time-only funding

technique advance appropriations of all projects. However, the

same fiscal challenges that the Department faced putting together

the fiscal year 2000 budget will still be there for years to come. We

still have got a big challenge ahead of us. The danger will be that

we begin not to fully fund military construction up front, but

spread those costs over 2, 3, and as many as 5 years.

I tend to oppose incremental funding, and believe it is a wrong

way that the Department should proceed. I think it will strike a

major blow to revitalizing our aging infrastructure and improving

the quality of life of our members that are in uniform, and their

families. I can assure you that we will approach this situation with

a great deal of care and consideration and with the cooperation of,

Mr. Secretary, you and your staff that we have always enjoyed before. I think we can be very candid and very frank with one another on what your opinions are on this and how we should proceed

and how we should work together on it, to make sure that the risk

to the taxpayer and the total cost, bottom line, is taken into consideration before we go into such an action.

The Navy has 12 bachelor quarters projects in its budget. The

Marine Corps has three such projects, and that is a good start. We

look forward to working with you, of course, on these critical requirements, because we are also very much aware of retention in

our military. Where I see our biggest problem, or our biggest challenge, ahead of us, is that we are not building Non-Commissioned

Officers (NCO’s) like we did. NCO’s are getting out of the service,

and we need those people.

I want to relate to you a story. We met with some Air Force people in the Middle East. Two women, in particular, really got my attention, one was a tech sergeant; one was a staff sergeant, skilled

people—radar technicians on AWACS. Very, very important jobs,

and they were going to separate themselves from the Air Force.

And that, after gaining those ranks and obtaining those skills in

very sensitive areas, concerns all of us in the retention of good people. And I, coming from the ranks of the enlisted, I am very concerned that we are not building NCO’s, people who are really the

backbone of our military.

So, Secretary Pirie, we will look forward to your statement this

morning. We will have some questions and discuss some of the ongoing projects, and also what you see on the horizon as far as how

we tend to the quality of life, and also carry out our mission of national defense. We welcome you here this morning, and Admiral

Smith, General Higginbotham, Admiral Totushek.

I mentioned to Senator Biden at one time, I always thought it

was a great talent that when you get to the weakest part of your

argument you can elevate the volume on your speech, and you may

have to do that this morning.

So, thank you for coming this morning. We look forward to your

statement. If you want to capsulize that, that is fine. Then we will

have some questions.
3

STATEMENT OF ROBERT B. PIRIE

Mr. PIRIE. Thanks, Mr. Chairman. With your permission, I will

submit my lengthy, formal statement for the record. And I just

have a few summary remarks, if I may.

Senator BURNS. That is fine. Your full statement will be made

a part of the record.

Mr. PIRIE. I am very pleased to be back here again, one more

time, Mr. Chairman. And I appreciate your extremely kind remarks about our working relationship, which I think has been terrific from our point of view, and I look forward to continuing to get

good things done together.

As you said, Major General Higginbotham, Deputy Chief of Staff

of the Marine Corps for Installations and Logistics, is here, on my

right. On my left is Admiral Louis Smith, who is the Chief of the

Naval Facilities Engineering Command. And on my extreme left is

Admiral John Totushek, who is Chief of the Naval Reserve.

Senator BURNS. A good Irish name. His day is coming up, on the

17th. [Laughter.]

NAVY BUDGET OVERVIEW

Mr. PIRIE. As I said, I am pleased, Mr. Chairman, to be here to

discuss the Department of the Navy’s fiscal year 2000 budget for

shore infrastructure and military construction. In many ways, the

budget we are presenting this year is better than last year’s. We

project the backlog of maintenance and repair to grow more slowly

as a result of real property maintenance and demolition programs.

We have got a more robust Military Construction (MILCON) proposal, with numerous piers, compliance projects, and quality-of-life

projects. Our Base Realignment and Closure (BRAC) request is down. But

that reflects the fact that we are coming to the end of four rounds

of BRAC.

On the whole, we think this year’s budget is a good one, and we

hope that you will continue to support us as you have in the past.

I recognize the concern that the administration’s request for advanced appropriations may have caused. And I can only refer to

what has been said by Dr. Hamre and Mr. Lynn: It is a one-time

expedient to allow inclusion of high-priority readiness and modernization programs. It was undesirable but unavoidable. We expect to be able to execute the projects we have requested without

undue delay or expense.

With respect to the military family housing, the projects for public/private ventures that we propose are not subject to advance appropriations, and we expect to proceed with them in due course.

For fiscal year 2000, we anticipate five projects, encompassing

some 2,196 homes. And we currently have five other projects which

may affect over 15,000 homes, awaiting resolutions of concern expressed by the House Appropriations Subcommittee on Military

Construction. We hope to resolve the questions that they have

raised, and proceed with the projects soon.

But I would like to underscore that our Public/Private Ventures

(PPV) program is not about saving money, it is not about getting

out of the housing business. It is about getting better, more afford-
4

1 A facility is a separate and individual building, structure, or other real property improve- ment.

able housing for sailors and marines, and getting it sooner than we

could using past practices. The committee has been very supportive

of this in the past, and we hope you will continue that support now

that we are on the point of making significant progress. In the area of BRAC, we are, as I said, approaching the end of the first four rounds, and we have closed 165 of 178 affected facilities. It is important to note that closure is the point at which significant savings begin to accrue. We still have major hurdles to

clear in cleanup and conveyance of the property. Cleanup is proceeding reasonably well, as you may note by reference to the table

on page 12 of my full testimony. We have not delayed any phase

of BRAC action because of cleanup.

Conveyance is more problematical. In many cases, communities are not willing or able to take title to the property when we are

ready to turn it over. We are pursuing an aggressive policy of interim leasing in order to allow productive reuse of the property

while all of the myriad details that go with conveyance are accommodated. But we would prefer to hand over the property earlier

rather than later in the process. In this and other areas of base closure, we may be able to improve over the first four rounds, but I

believe we should go forward now, as requested by the administration.

Thanks, Mr. Chairman. That concludes my remarks.

[The statement follows:]

PREPARED STATEMENT OF ROBERT B. PIRIE, JR.

Good day, Mr. Chairman and members of the Committee, I am Robert B. Pirie, Jr., Assistant Secretary of the Navy for Installations and Environment. I appreciate

the opportunity to speak to you today on the Department of the Navy’s (DON) installations and facilities program. My statement today will cover a number of areas: Shore infrastructure challenges; The infrastructure budget in perspective; Program highlights for family housing,

military construction, and Base Realignment and Closure (BRAC) and Infrastructure efficiency efforts.

SHORE INFRASTRUCTURE CHALLENGES

Naval forces provide presence and project power around the world to preserve American security through peacetime engagement and deterrence. At any given

time, more than 50,000 Sailors and Marines are deployed around the world aboard

100 ships. The Navy-Marine Corps team responded to a national tasking, on average, at least once every three weeks during 1998. This is a five-fold increase from

the days of the Cold War. I am certain that members of this Committee will agree that in many respects, our shore infrastructure is the launch pad for the readiness of our military forces.

Piers provide berthing, electrical power, and support facilities for ships in

homeports. Runways support rapid deployment and transit of people, material and

supplies. Hangars shelter valuable aircraft for maintenance and repair work. Training facilities and ranges allow Sailors and Marines to learn and hone their war

fighting skills. Shipyards provide the industrial capability for ship repairs. Maintenance and operations facilities make our ground forces and their equipment combat

capable. Laboratories transform science into new fleet technologies. Military housing

and community facilities are the place our Sailors, Marines and their families call

home. All provide a critical ingredient in our ability to deploy Naval forces when

needed.

U. S. taxpayers have made a considerable investment in our shore infrastructure. After BRAC is completed, the Navy will have over 88,000 facilities,1 400 piers and

wharves, and 180 runways with a plant replacement value of $100 billion on 2.1

million acres of land. The Marine Corps will have over 38,000 facilities, 10 piers and
5

2Substandard means it is capable of supporting current use, but requires repair or modification; inadequate cannot be economically made adequate. 3 Environmental, safety, mission, and quality of life projects that should not be deferred.

4The only exception is MILCON projects above $50 million that are phased over several years.

5Family Housing PPV projects in the DoD Family Housing Improvements Fund (FHIF) are

not affected.

wharves, and 50 runways with a plant replacement value of $25 billion on 1.6 million acres. As we fund current shore operations, we must consider our stewardship

responsibilities and invest in the maintenance and repair of these facilities to preserve their use for the future.

Yet, we face the twin challenges of needing to invest more in our facilities, while at the same time needing to rid ourselves of excess capacity. Most of our piers and

wharves were built in the early 1940s and 1950s. Fifty-seven percent of the pier

space and 40 percent of the wharf space is substandard 2 or inadequate. Additionally, the Navy and Marine Corps has over 32 million square yards of runway paving, 48 percent of which is substandard or inadequate. Our backlog of maintenance

and repair (BMAR) continues to grow. The Navy’s critical 3 BMAR is currently $2.4 billion and increases to $2.9 billion in fiscal year 2003 before stabilizing. The Marine

Corps BMAR is currently $689 million and stabilizes at $722 million in fiscal year

2003. The family housing BMAR is currently $2.2 billion for the Navy and $1.3 billion for the Marine Corps. We are investing 1.8 percent of the Plant Replacement

Value (PRV) of our facilities, compared to a rate of two to four percent recommended

by a 1990 report of the National Research Council. Despite four rounds of base realignment and closure (BRAC), we continue to have excess capacity. While the number of ships and Sailors were reduced by 40 percent

and 30 percent respectively since 1988 as a result of BRAC, Navy shore infrastructure decreased by only 17 percent of PRV. I know this Committee understands how high quality shore facilities bring out the best in our people. Our mutual goal is to provide quality shore facilities to support

the current and future readiness of U. S. Naval forces. Let me describe the investment and efficiency solutions we are pursuing. Where appropriate, I will use metrics

to display where we were at the end of fiscal year 1998, where we expect to be at

the end of fiscal year 2000 based on this budget submission, and what our future

goals are.

THE INFRASTRUCTURE BUDGET IN PERSPECTIVE

Financing the Fiscal Year 2000 Construction Program

Before I explain our fiscal year 2000 budget request, I must first describe two new financing techniques that the DOD has instituted for the military construction accounts in fiscal year 2000. This change affects virtually all construction projects 4

in the Military Construction, Navy: all projects in the Military Construction, Naval

and Marine Corps Reserve; all Family Housing, Navy construction and improvements; 5 and all BRAC.

First, the fiscal year 2000 program requests authorization for the full program amount, which is shown throughout this statement. However, the fiscal year 2000

appropriation request is only for that portion expected to be actually spent in fiscal

year 2000, plus an additional factor for unforeseen actions. The remainder of the

construction portion of the project is included in a request for Advance Appropriations in fiscal year 2001. Second, the fiscal year 2000 DON budget also annualizes the cost of Supervision, Inspection and Overhead (SIOH) in military construction projects to align budgeted

costs with expenditure trends over five years. The budget requests full authorization

of SIOH, but appropriation for only that portion to support work to be done in fiscal

year 2000.

The following table displays the effect of both the Advance Appropriations and

annualization of SIOH on our fiscal year 2000 program.

[Dollars in millions]

Fiscal Year

2000 Auth Request

Less Fiscal

Year 2001 Advance Appn

Less 2001–

2005

Annualized

SIOH

Less Other

Changes

Equals Fiscal

Year 2000

Appn Request

MCON ................................. $922.7 $496.6 $43.0 6 $63.3 $319.8

MCNR ................................. 15.6 10.0 0.7 ...................... 4.9

FHCON ................................ 246.9 170.4 11.9 ...................... 64.6
6

8 Includes full authorization of SIOH and multi-phase construction of a berthing wharf at San

Diego, CA and CINCPAC headquarters building at Camp H.M. Smith, Hawaii.

[Dollars in millions]

Fiscal Year

2000 Auth Request

Less Fiscal

Year 2001 Advance Appn

Less 2001–

2005

Annualized

SIOH

Less Other

Changes

Equals Fiscal

Year 2000

Appn Request

BRAC .................................. 452.6 254.7 ...................... 7¥13.5 211.4

Total ...................... 1,637.8 931.7 55.6 49.8 600.7

6 Includes $76.0 million for phase-funded projects, for which advance appropriations are not sought, less $12.7 million

completion of a project previously authorized. 7 This adjustment primarily reflects the transfer of $18.6 million for Homeowner’s Assistance Program less $5 million in

anticipated land sales revenue.

The use of Advance Appropriations and annualization of SIOH allows financing

of critical DON readiness programs in fiscal year 2000. For example, Advance Appropriations was a one-time action that allowed the DOD to realign $3.1 billion to

readiness and personnel needs in fiscal year 2000, while still initiating all planned

construction projects envisioned under normal funding conventions. However, this

is not the preferred method of financing the program, and DOD only intends to utilize this method for the fiscal year 2000 program. If the fiscal year 2000 Military

Construction Appropriations Act provides the fiscal year 2000 appropriations requested in the President’s Budget including the advance appropriations of funds for

the fiscal year 2000 projects, it would provide all the funds (except the outyear

SIOH tail) needed to complete the fiscal year 2000 projects. The Biennial Budget

request for fiscal year 2001 fully funds all fiscal year 2001 projects (except the outyear SIOH tail).

The military construction accounts also benefit from the use of Advance Appropriations. Four Navy and eight Marine Corps projects totaling $200 million (fiscal

year 2000 appropriation of $50 million) were added to the fiscal year 2000 program

as a result of funds made available by Advance Appropriations. These projects included a pier replacement, quality of life facilities including new bachelor enlisted

quarters, maintenance facilities, and projects needed to improve readiness and

training.

I recognize that this new financing technique may be controversial. We will have

to take some additional steps to make it work—we will have to place a ‘‘limitation

of funds’’ clause on many construction projects to insure that obligations and outlays

stay within the fiscal year 2000 appropriated amounts. It will also require much

closer fiscal and acquisition management attention. Since the first year appropriation is more than sufficient to cover expected outlays, I expect no adverse impact

on program execution. Full authorization and approval of the fiscal year 2000 and

the fiscal year 2001 Advance Appropriations are the critical ingredients to the success of this approach. I ask that we work together on the merits of this approach.

Compared with Overall DON Fiscal Year 1999 Budget

The Department of the Navy installation budget includes many appropriations:

Military Construction, Navy (MCON); Military Construction, Naval and Marine

Corps Reserve (MCNR); Family Housing, Navy (FHN); Base Realignment and Closure (BRAC); and Environmental Restoration, Navy. Base operations support and

real property maintenance functions are included in the Operations and Maintenance accounts, Navy and Marine Corps, active and reserve. In aggregate, our fiscal

year 2000 installation program totals about $8.1 billion, or about 9.7 percent of the

DON fiscal year 2000 budget of $83.5 billion.

Compared with fiscal year 1999

Our fiscal year 2000 installation program (MCON, MCNR, FHN, BRAC) of $2.6

billion is eight percent more than the fiscal year 1999 enacted level of $2.4 billion,

and 13 percent more than our fiscal year 1999 budget request of $2.3 billion.

I am pleased to report that our fiscal year 2000 Military Construction, Navy Authorization request of $922.7 8 million is considerably larger than our fiscal year

1999 budget request of $468 million, or the enacted level of $610 million. It is financed with a fiscal year 2000 appropriation request of $319.8 million and a fiscal

year 2001 Advance Appropriations request of $496.6 million. Our fiscal year 2000

program, including Planning and Design and Unspecified Minor Construction, con-
7

9 Includes $12.7 million Phase II of Norfolk pier upgrade authorized in fiscal year 1999.

sists of 42 9 Navy projects totaling $688 million (fiscal year 2000 appropriation of

$267.5 million) and 23 Marine Corps projects totaling $162 million (fiscal year 2000

appropriation of $52.3 million). The fiscal year 2000 Military Construction, Navy

and Marine Corps Reserve program of $15 million (fiscal year 2000 appropriation

of $4.9 million) is similar to the fiscal year 1999 request, but below the fiscal year

1999 enacted level of $32 million. There are two Marine Corps reserve projects and

one Navy reserve project.

Our fiscal year 2000 Family Housing program is summarized in the following

table. Beginning in fiscal year 2000, all Public/Private Venture construction and improvement projects are included in the DOD Family Housing Improvement Fund.

Thus, our overall fiscal year 2000 Family Housing program of $1,204 million

($1,142.0 million ∂ $61.7 million) is just slightly below the fiscal year 1999 enacted

level of $1,224 million. Our Family Housing Operations and Maintenance request

declines primarily due to inventory reductions of about 4,000 Navy and 1,500 Marine Corps homes and reduced utility costs due to energy conservation measures.

The increase in leasing is due to new leased units coming on-line at four locations

in Italy.

[In Millions of Dollars]

Housing Program

Fiscal Year

1999 Enacted

Program

Fiscal Year

2000 Authorization Request

Fiscal Year

2000 DoD FHIF

Fiscal Year

2000 Appropriation Request

Construction .................................................. 301.6 246.9 61.7 64.6

Replacement Construction ............................ [53.0] [75.9] [42.2] [15.2]

Improvements ............................................... [233.0] [153.3] [19.5] [31.7]

Planning & Design ....................................... [15.6] [17.7] ..................... [17.7]

Operations & Maintenance ........................... 788.3 749.1 ..................... 749.1

Leasing ......................................................... 134.6 146.0 ..................... 146.0

Total Family Housing, Navy & Marine Corps ................................... 1,224.5 1,142.0 61.7 959.7

Our fiscal year 2000 BRAC program of $453 million (fiscal year 2000 appropriation of $198 million) is $122 million below the fiscal year 1999 enacted level of $575

million. This reduction is due to the virtual completion of BRAC construction and

realignment requirements. Our fiscal year 2000 BRAC program is now nearly all

environmental cleanup. The fiscal year 2000 BRAC environmental program of $382

million (fiscal year 2000 appropriation of $148.7 million) is 44 percent above the fiscal year 1999 enacted level of $265 million.

Our fiscal year 2000 Real Property Maintenance (RPM) request of $1.5 billion is

essentially the same as the fiscal year 1999 enacted level. RPM funds in the Operations and Maintenance accounts fund repairs, preventative and recurring maintenance, minor construction and centrally managed demolition. To give special emphasis and provide more management flexibility, $643 million of DON RPM funds are

included in the Quality of Life Enhancements, Defense account.

FAMILY HOUSING

Basic Allowance for Housing

We rely first on the private sector to provide housing for our Sailors, Marines and

their families. Our bases have housing referral offices to help newly arriving families find suitable homes in the community. In fiscal year 1998, about 74 percent of

Navy families and 66 percent of Marine Corps families worldwide lived in a home

they owned or rented in the community.

Service members receive a monthly housing allowance when government quarters

are not provided. Effective 1 January 1998, Basic Allowance for Housing (BAH) replaced both Basic Allowance for Quarters (BAQ) and Variable Housing Allowance

(VHA). BAH rates are linked to the actual housing costs where a member is assigned. Members assigned to high-cost areas will have a higher BAH and will not

be required to absorb a disproportionately higher share of their housing costs ‘‘out

of pocket.’’ Once fully implemented in the next four years, members at the same pay
8

10Suitability is based on the following DoD criteria: location (within one hour commute); cost

(rent meets DoD criteria); size (minimum square footage and number of bedrooms); condition

(unit is well maintained and structurally sound). All owner occupied housing is deemed suitable.

grade and dependent status will pay the same monthly out-of-pocket amount regardless of location. While BAH will equalize out of pocket expense across different locations, the national average out-of-pocket expense remains at 19.8 percent, still considerably higher than the DOD goal of 15 percent. The fiscal year 2000 budget retains the current

19.8 percent out of pocket rate. Nonetheless, we believe that the new BAH will be

particularly helpful to Navy and Marine Corps families, as many of our bases are

located in urban and coastal areas where living costs are higher.

Fix What We Own

Even with full implementation of BAH, there will remain many locations where there are not enough suitable10 homes in the community for our members. In such locations, we have used family housing funds to build or acquire additional homes.

At the end of fiscal year 1998, the Navy had an inventory of 62,700 homes worldwide and the Marine Corps had 25,600 homes. We also lease homes both here in

the U. S. and abroad. At the end of fiscal year 1998, we had about 5,500 leased

homes.

Our core family housing philosophy remains to first fix what we own. The Navy’s Neighborhoods of Excellence, and the Marine Corps Family Housing Campaign

Plan, embody the Department’s efforts to revitalize major home components for an

entire neighborhood, rather than piecemeal improvements on individual homes. We

update electrical and plumbing systems, replace windows and doors, add insulation,

modernize kitchens and baths, install new landscaping, and install better street

lighting. Using traditional family housing funds, our fiscal year 2000 improvement

program renovates 1,315 Navy homes at 9 locations at a cost of $130 million (fiscal

year 2000 appropriation of $27.2 million), and 407 Marine Corps homes at 6 locations at a cost of $24 million (fiscal year 2000 appropriation of $4.5 million).

Our fiscal year 2000 family housing construction program has three replacement

construction projects totaling 329 homes, all in Hawaii. Two projects are at Naval

Base Pearl Harbor: 96 homes at Hale Moku for $19.2 million (fiscal year 2000 appropriation of $3.8 million); and 133 homes at Pearl City for $30.2 million (fiscal

year 2000 appropriation of $6.0 million). The remaining project is to replace 100

homes at Marine Corps Base Kaneohe for $26.6 million (fiscal year 2000 appropriation of $5.3 million).

Public/Private Ventures

A number of years ago, we realized that the pace of new and replacement construction and improvements would never let us solve our seemingly intractable

backlog of repairs and shortage of homes. We worked closely with the Congress to

establish ground breaking new authorities in fiscal year 1995 and fiscal year 1996

to use public/private ventures (PPV) as a housing tool. Under a five-year test program which expires on 1 February 2001, we can provide cash, direct loans and loan

guarantees, and differential lease payments (DLP). We can also convey land or lease

existing land, housing and facilities to a developer in exchange for renovation or

construction of homes for our military members and their families. As the Secretary

of Defense announced, our objective was to use these tools to solve a 30-year housing problem in 10 years.

FAMILY HOUSING SHORTFALLS

[As of the end of Fiscal Year 1998]

Navy Marine Corps

Repair Backlog ........................................................................ $2,200,000,000 $1,300,000,000

Deficit (homes) ....................................................................... 13,600 10,400

Completed PPVs

The Navy successfully completed two PPV projects in late 1996 and early 1997.

These projects were started under the 1995 authorities and completed under the

1996 authorities. In the south Texas area, the Navy invested $9.5 million, and the
9

developer, Landmark Development Company, provided the remainder of the $32.5

million total project cost. Landmark constructed and manages 300 homes in a development called Bridge Pointe in Portland, TX to support personnel assigned to Naval

Air Station Corpus Christi and Naval Station Ingleside. Landmark also constructed

and manages 100 homes at a development called Hawks Landing in Kingsville, TX

to support personnel assigned to Naval Air Station Kingsville. Both projects are located off base and are fully leased, with about 75 percent occupied by military members.

At Everett, WA, the Navy invested $5.9 million in a limited partnership with

Dujardin Development Company to construct and manage 185 homes on private

land. The total project cost was $18 million. Dujardin completed and manages a development called Country Manor at Smokey Point for personnel assigned to Naval

Station Everett, WA. All units are leased to enlisted families.

PPVs—the next step

We have traveled a long road since those early successes. We wrestled with a

number of key concerns, including the future role of traditional military construction, construction standards, and occupant out-of-pocket expenses. We had extensive

discussions with fleet commanders, base commanders, and those we aimed to

serve—our Sailors, Marines and their families. We listened to what they had to say.

Last year, I established a new DON policy on PPV to resolve these and other issues:

Consider PPV first.—Where communities cannot meet our housing needs, we will

rely first on PPVs, including replacement construction and whole-house revitalization.

Regional scope.—We will evaluate our housing needs on a regional basis.

Quality standards.—We will establish PPV housing quality standards comparable

to what the private sector provides for civilians in similar income scales.

Out-of-pocket expenses.—Our goal is no out-of-pocket expenses for members.

Rent scale.—Rent scales are based on unit size and quality.

Conveying land or units.—We will not convey land unless it is excess to our longterm needs.

Allowing non-military occupants.—Service members will have preference. To ensure full occupancy, PPVs can accommodate civilian leases of limited duration.

We established two new PPV groups at the Naval Facilities Engineering Command—one for management and another for acquisition. These groups will manage

PPVs in close coordination with the fleet and base commanders. Our acquisition

strategy has matured to applying two business models for PPV projects. A Limited

Partnership will be used for terms up to 15 years for housing on private land where

our equity contribution is limited to cash. A Limited Liability Company (LLC) will

be used for a minimum 50-year term for housing on government or private land

where our equity contribution includes privatizing existing government owned housing. Both include escrow accounts, performance bonds, insurance, and personal and

corporate guarantees to ensure that our interests are protected during the construction phase and succeeding years. Both models minimize government liability while

still giving us flexibility to address changing requirements over the long-term as our

needs, and local market conditions change. The longer term of the LLC led us to

expand the use of cash reserves, participation in property management decisions,

incentive clauses, and termination options for non-performance.

PPVs Now in Process

We have undertaken an ambitious, but I believe attainable goal over the next

three years of over 33,000 PPV units at 16 locations for the Navy and over 8,000

PPV homes at 9 locations for the Marine Corps. These figures include both existing

units and construction of new housing. Each of these projects has the full support

of the fleet and local commanders. These projects will provide our Sailors and Marines with better housing sooner much sooner. Communities will also benefit from

the additional housing construction and increased tax base.

Many PPV efforts have already met critical milestones. The Marine Corps is in

the final stages of negotiations with a developer to exchange 419 existing homes and

land located off-base for up to 160 new on base homes at Marine Corps Base Albany,

GA. We expect to provide Congressional notification of the selection of a developer

very soon.

The Marine Corps issued a solicitation in November 1998 to privatize and revitalize 512 on base homes, and construct 200 new homes on base at Marine Corps

Base Camp Pendleton. The first part of this project would be funded with $20 million in previously authorized and appropriated funds.

The Navy negotiated modifications to the existing agreements with Dujardin Development and Landmark Development to provide DLP on behalf of service mem-
10

bers. Payments would be paid directly to the developer to buy-down the service

member’s out-of-pocket expenses (rent plus utilities) to the BAH rate. We expect to

provide congressional notification of the contract award and intent to transfer funds

to implement the DLP selection this summer.

In January 1999, the Navy issued solicitations to competitively enter into two new

limited partnerships for 300 townhouses near Naval Station Everett, WA, and 150

apartments and townhouses near Naval Air Station Kingsville, TX. The Navy envisions a mix of 2-, 3-, and 4-bedroom homes on privately owned land for active duty

enlisted personnel. Funding for the Navy share (including DLP) would come from

$29 million in previously authorized and appropriated funds. We expect to notify the

Congress of the selections later this year.

In the last five months, we have provided Congressional notification to issue solicitations for PPV projects in South Texas; San Diego, CA; Lemoore, CA; Brunswick, ME; and New Orleans, LA. Each PPV project would privatize all or substantial portions of government owned housing, renovate or demolish inadequate homes,

and construct new units on or off-base. We would fund our share of the investment

using the equity of those housing assets and $114 million in previously authorized

and appropriated family housing funds. These projects are currently on hold by the

House Appropriations MILCON Subcommittee. We continue our discussions with

the Subcommittee to resolve their concerns.

We plan to provide Congressional notification to issue solicitations for seven more

Navy and seven more Marine Corps locations during the course of this year. Our

share of the investment cost for these projects would come from $257 million in previously authorized and appropriated funds, plus additional funds in the FHIF. Our

fiscal year 2000 program includes nearly $61.6 million in the FHIF for PPV projects

at five locations. These funds will also be combined with additional prior year and

future year funds for additional PPV projects at some locations.

DEPARTMENT OF THE NAVY FISCAL YEAR 2000 PPV PROJECTS IN FAMILY HOUSING

IMPROVEMENT FUND

Location Funds in Millions # Homes

NAS Lemoore, CA ................................................................................ $20.1 406

MCAS Cherry Pt, NC ............................................................................ 22.0 728

NTC Great lakes, IL ............................................................................. 14.4 885

NICP Philadelphia, PA ......................................................................... 0.2 6

Parris Island ....................................................................................... 4.9 201

Total ....................................................................................... 61.6 2,196

MILITARY CONSTRUCTION

Our military construction program continues our approach of budgeting for only

those projects that meet the highest priority readiness and quality of life needs of

the Fleet and Fleet Marine Force, and their Reserve Components. The Navy convenes a Shore Facilities Programming Board and the Marine Corps convenes a

MILCON Program Evaluation Group each year to consider, evaluate, and prioritize

military construction projects. Projects are selected based on a number of different

criteria, including fleet priorities and the most critical readiness, quality of life, and

compliance needs.

Military Construction policy, like Family Housing, focuses on first fixing what we

own. To this end, 62 percent of the active and reserve military construction program

for the Navy and 45 percent for the Marine Corps is dedicated to replacement and

modernization projects.

This budget expands our efforts begun last year to modernize our piers and

wharves. Our construction program includes $168 million for five pier/wharf

projects. Examples include:

—Berthing Wharf at Naval Submarine Base Pearl Harbor, HI. This $29.5 million

project (fiscal year 2000 appropriation of $7.5 million) replaces two wharves

built in the 1940s that are now deteriorated beyond repair and that do not have

the structural capacity to support heavier mobile cranes now used to service

new submarines.
11

—Berthing Pier at Naval Station Norfolk,VA. This is the second phase of a $45.5

million project to replace Pier 2, which is over 50 years old. Pier 2 now has limited deck space, inadequate power supply, and lacks the structural strength to

safely support current ship classes. Full authorization and a $32.0 million appropriation were provided in fiscal year 1999. This budget requests the remaining $12.7 million to complete the replacement of Pier 2, with a $0.8 million

SIOH tail through fiscal year 2004.

Our construction program also funds 14 operational facilities totaling $35 million.

Examples include:

—Control Tower and Air Traffic Control Facility at Marine Corps Base, HI. This

$5.8 million project (fiscal year 2000 appropriation of $1.5 million) replaces an

existing control tower built that is deteriorated and lacks sufficient height to

meet safety and FAA regulations. The project also replaces trailers installed in

the early 80’s that are too small to install new equipment scheduled for installation in 2001.

—Operational Support Facilities, Naval Support Activity, Souda Bay, Crete. This

$6.4 million project (fiscal year 2000 appropriation of $1.6 million) provides several new buildings and an aircraft-parking apron to replace temporary trailers.

There are 8 projects totaling $40 million to support military training functions.

Examples include:

—Strike Fighter Weapons Training Facility, Lemoore, CA. This $4.0 million

project (fiscal year 2000 appropriation of $1.0 million) upgrades and expands an

existing facility to support the introduction of the F/A–18E/F aircraft to NAS

Lemoore.

—Staff Non-Commissioned Officer Academy, Marine Corps Base Camp Pendleton,

CA. This $6.5 million project (fiscal year 2000 appropriation of $1.6 million) provides an academic instruction building, armory and warehouse complex to replace temporary facilities that are located far from where the students do much

of their training.

There are 17 maintenance and storage projects totaling $120 million. Examples

include:

—Aircraft Acoustical Enclosure at Naval Air Station Oceana, VA. This $11.5 million project (fiscal year 2000 appropriation of $2.9 million) provides a means to

control noise generated during in-frame high power jet engine testing on F–14

and F/A–18 aircraft engines.

—Tactical Vehicle Maintenance Facility, Marine Corps Base Twentynine Palms,

CA. This $14.0 million project (fiscal year 2000 appropriation of $3.4 million)

provides a maintenance facility with an overhead crane, sunshades, and parking for tactical vehicles used during Combined Arms Exercises.

There are six environmental compliance and safety of life projects totaling $52

million. Examples include:

—Sewage Treatment Plant, Naval Surface Warfare Center Division, Indian Head,

MD. This $10.1 million project (fiscal year 2000 appropriation of $2.6 million)

would demolish 17 failing septic systems and connect them to an upgraded

treatment plant. The current plant is in violation of the Clean Water Act and

Maryland Department of Environment standards.

—Hazardous Materials Storage Facility at Naval Air Station Joint Reserve Base

Willow Grove, PA. This $1.9 million project (fiscal year 2000 appropriation of

$0.3 million) in the Military Construction Naval and Marine Corps Reserve Appropriation provides a facility to store hazardous and flammable material in

compliance with environmental and safety standards. Existing facilities have

been cited for non-compliance.

The single most expensive project in our budget is an $86.0 million project (fiscal

year 2000 appropriation of $15.9 million) to construct a new U. S. CINCPAC headquarters building at Camp H. M. Smith, HI. This project, to be constructed in three

phases, would consolidate personnel that currently occupy portions of 25 different

buildings, nearly all of which are deemed substandard or inadequate.
12

11These Marine Corps 1 ∂ 1 BQ projects were initiated prior to the blanket waiver to the

2 ∂ 0 standard.

NAVY BQ GOALS

Eliminate the 6,900 BQ spaces with gang heads by fiscal year 2008;

Eliminate the $648 million BQ repair backlog by fiscal year 2004;

Achieve the 1 ∂ 1 standard by fiscal year 2013.

MARINE CORPS BQ GOALS

Eliminate 10,400 BQ spaces with gang heads by fiscal year 2005;

Eliminate the $114 million BQ repair backlog by fiscal year 2004;

Assign more than two Marines per room by fiscal year 2036.

Quality of Life

There are a number of important quality of life projects included in our fiscal year

2000 budget. The single largest effort is for the construction and modernization of

Bachelor Enlisted Quarters (BEQs).

The DOD adopted a 1 ∂ 1 construction standard in 1995 for permanent party

personnel. This configuration consists of two individual living and sleeping rooms

with closets, and a shared bath and service area. The Marine Corps has been granted a permanent waiver to use an alternate 2 ∂ configuration for junior enlisted,

i.e., two persons per room. This allows the Marine Corps to foster team building and

build unit cohesion. These standards do not apply to recruits and A-school students.

Overseas locations also have unique considerations.

The Navy has 12 BQ projects totaling $205 million (fiscal year 2000 appropriation

of $51.4 million) in the fiscal year 2000 program.

—Four projects are being built to the 1 ∂ 1 standard for permanent party E1–

E4 personnel. They provide a total of 582 two-room modules.

—Three projects are being built to the 2 ∂ standard for E1–E4 personnel. They

provide a total of 405 single-room modules. One of these projects is at a Marine

Corps base where the 2 ∂ standard applies; another is in Southwest Asia; the

third is at Pearl Harbor as an interim step to the 1 ∂ 1 standard due to the

large shortage of adequate spaces.

—Four projects are being built to the 2 ∂ 2 configuration for A-school students

and transients. They provide a total of 484 two-room modules.

—One open bay project, which provides space for 480 recruits at Naval Recruit

Training Center Great Lakes, IL.

The Marine Corps has three projects totaling $50 million (fiscal year 2000 appropriation of $12.5 million) in the fiscal year 2000 program. All three Marine Corps

projects are being built to the 2 ∂ standard. They provide a total of 592 single-room

modules for junior enlisted personnel.

Both the Navy and Marine Corps are on track to achieve their long-range BQ

goals. Navy BQ 1 ∂ 1 and Marine Corps 2 ∂ transition plans are nearing completion. Since moving to the new BQ construction standards, the Navy has completed

thirteen 1 ∂ 1 BQ projects providing 1,800 rooms and three 2 ∂ BQ projects providing 600 rooms. The Marine Corps has completed three 1 ∂ 1 BQ projects11 with

961 rooms and four 2 ∂ BQ projects providing 804 rooms.

There are other quality of life projects in the fiscal year 2000 program: the Navy

has two multi-purpose fitness facilities, and the Marine Corps has a child development center, a family services center, and two fitness facilities.

BASE REALIGNMENT AND CLOSURE

Realignment and Closure Status

We are implementing four rounds of base realignment and closure (BRAC), 1988

under Public Law 100–526 and 1991, 1993, and 1995 under Public Law 101–510.

As a result of these decisions, we are implementing 178 actions consisting of 46

major closures, 89 minor closures, and 43 realignments. These closures and realignments include major Navy and Marine Corps installations in Philadelphia, PA;

Charleston, SC; Orlando and Jacksonville, FL; Seattle, WA; San Francisco, Long

Beach, San Diego, and Orange County, CA; Honolulu, HI; as well as other bases

in Rhode Island, Alaska, and Guam.
13

While this has been a complex challenge for the Department as well as for the

communities that hosted our ships, aircraft, Sailors, Marines and their families for

so many years, we have made substantial progress.

As of the end of January 1999, we had completed the operational closure or realignment of 93 percent (165 of 178) of all BRAC actions. Operational closure means

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

caretaker cadre) have been disestablished or relocated to a ‘‘receiving’’ site. We will

complete eight more actions in 1999, four in 2000, and one in 2001. We will meet

the statutory requirement to complete all BRAC closure and realignment actions by

July 2001. As of the end of fiscal year–1998, we had obligated 98 percent of the $8.5

billion appropriated for DON BRAC actions.

BRAC Costs and Savings

We have closed or realigned bases to make the Navy’s shore infrastructure more

proportional to its force structure and to provide resources to recapitalize our weapons systems and platforms. As of the end of fiscal year 1998, we had spent $8.5 billion on all four BRAC rounds to construct new or adapt existing facilities, move personnel, equipment, ships and aircraft to their new homeports, and clean up contamination. We will have saved $8.0 billion from no longer having to operate, maintain,

and staff these bases. The result is a net cost of $471 million to date. However, at

the end of this fiscal year, our net savings will exceed our net cost by $1.4 billion.

And by the end of fiscal year 2001, when all four rounds will be completed, we

project that the DON will have spent $9.9 billion and saved $15.7 billion, for a net

savings of $5.8 billion. Beginning in fiscal year 2002, we will save an additional $2.6

billion each year. These net savings estimates have been validated by several independent sources.

Environmental Cleanup

As we near the completion of BRAC-related construction, we are fully focused on

finishing environmental cleanup and completing property disposal. We have already

spent more than $1.0 billion through fiscal year 1998 on environmental work at our

BRAC bases for environmental baseline studies to identify potential contaminated

sites and assess the nature and extent of contamination to doing the cleanup, removing underground storage tanks, and closing hazardous material storage facilities.

Each base has established BRAC cleanup teams composed of remedial managers

from the Navy, States, and the Environmental Protection Agency to review,

prioritize, and expedite the necessary cleanups consistent with reuse plans. We recognize the dynamics of reuse and stand prepared to phase our cleanup plans as

needed to support changing community needs.

One measure of our progress in cleanup of contaminated property is the number

of acres that have become suitable for transfer under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the Community

Environmental Response Facilitation Act (CERFA). Properties in categories 1–4 are

environmentally suitable for transfer. Cleanup was either completed or unnecessary

in these areas. Property in category 5 indicates remedial investigations or cleanup

is underway. Properties in category 6 require cleanup, but actions have not been

started. Category 7 property has not yet been completely evaluated. The table shows

the progress we have made moving property towards categories 1–4. Most of the environmental studies are nearing completion. Fully 70 percent of our fiscal year 2000

BRAC environmental effort is targeted towards actual cleanup.

ACRES (ALL BRAC)

September

1996

September

1997

September

1999

CERFA Cat 1–4 .............................................................................. 107,833 143,100 147,119

CERFA Cat 5 .................................................................................. 11,260 1,596 3,193

CERFA Cat 6 .................................................................................. 7,572 6,395 5,831

CERFA Cat 7 .................................................................................. 39,194 14,768 9,716

Total .................................................................................. 165,859 165,859 165,859
14

There are 1,000 contaminated sites at 53 BRAC installations. A contaminated site

crosses the ‘‘cleanup finish line’’ when it achieves Remedy-in-Place/Response Complete (RIP/RC) and the regulator subsequently concurs. As of the end of fiscal year

1998, we had achieved RIP/RC status at 44 percent of all BRAC sites. By the end

of fiscal year 2001, when BRAC ends, we expect to have completed cleanup at 90

percent of all BRAC sites. Cleanup at the remaining sites will extend through fiscal

year 2010.

We are finding and continually searching for more ways to reduce cleanup costs.

We are using promising cleanup technologies and adopting natural attenuation for

low relative risk parcels at a number of our BRAC sites. We continue to work with

regulators and communities to tie cleanup standards to realistic reuse needs. We

use a BRAC Cost-to-Complete (CTC) index as a measure of our efforts to reduce

cleanup costs. At the beginning of fiscal year 1996, our BRAC CTC estimate was

$2.8 billion. At the end of fiscal year 1998, it was $1.5 billion. The CTC reduction

of $1.3 billion is the result of execution of $868 million in appropriated funds and

$441 million in cost avoidance, such as changes in risk based approaches to cleanup,

new information on the nature and extent of contamination, and use of new technologies for study or cleanup.

Section 334 Early Transfer Opportunities

Section 334 of the Fiscal Year 1997 Defense Authorization Act established a

framework for the DOD to initiate an early transfer of contaminated property to the

community. This authority allows DOD to defer the CERCLA requirement that all

remediation actions have been taken before the date of property transfer.

Section 334 requires that we first meet a number of conditions. We must obtain

concurrence from the governor of the State where the property is located. If the

property is listed on the National Priorities List, the Administrator of the U. S. Environmental Protection Agency must also concur with the early transfer. Furthermore, we must determine that the property is suitable for transfer for the use intended by the transferee. We may place restrictions in the deed limiting the use of

the property if determined necessary to protection of human health and the environment. Also, we must submit a budget that adequately addresses cleanup of the property. This authority does not relieve us from full compliance with the provisions of

CERCLA.

We are pursuing several early transfer opportunities. All of them would conceivably expedite the conveyance of the property and may also reduce cleanup costs.

Three early transfer opportunities are particularly promising.

—At the former Naval Training Center San Diego, CA, the San Diego Unified

Port Authority has requested early transfer of a 51-acre site, which contains a

former landfill. The parcel is adjacent to San Diego’s Lindbergh Field Airport

and will be redeveloped as a vehicle parking area. The cleanup remedy would

be integrated into construction of the parking area.

—At the former Fleet Industrial and Supply Center Oakland, CA, the Port of

Oakland has requested early transfer of the entire main site comprising 528

acres. The primary remaining cleanup action involves a four-acre site where a

dry cleaner shop was located. The Port of Oakland is moving rapidly to transform this former Navy base to expand the Port’s container terminal and has already demolished numerous structures to make way for their new development.

—At the former Naval Air Station Memphis, TN, the Millington Municipal Airport Authority has requested early transfer of 537 acres for airfield operations

at the municipal airport. The site contains residual trichloroethylene groundwater contamination from solvents used in past Navy aircraft operations.

Property Reuse

Under the mandate of the National Environmental Policy Act (NEPA) of 1969, we

consider the potential environmental impacts of disposal and reuse of base closure

property before we convey property. We evaluate issues involving historic preservation, air quality, noise, traffic, natural habitat, and endangered species. The NEPA

process concludes with the issuance of a Record of Decision (ROD). In fiscal year

1998, we completed seven RODs. Eight more are planned for this fiscal year and

10 for next year.

As the Local Redevelopment Authorities develop and refine their reuse plans, we

want to support immediate reuse opportunities through Interim Leases and Leases

in Furtherance of Conveyance. We must first prepare a Finding of Suitability to

Lease (FOSL) document. At the end of fiscal year 1998, we had over 1,000 FOSLs

in place covering nearly 18,000 acres. This year, we plan to issue more than 40 more

FOSLs covering 19,000 acres.
15

At the end of fiscal year–1998, we had about 115 leases in place between the

Navy and LRAs. Leased property is being used for a variety of purposes: port usage,

movie production, steel fabrication, general manufacturing and repair, education,

housing, childcare, shipbreaking, and police facilities. These leases have created several thousand jobs to help communities recover from the loss of the Navy and Marine Corps presence. The leases provide protection and property maintenance

clauses and generate significant revenue for the LRA.

Property Disposal

While leases are desirable, they are only an interim step to the ultimate BRAC

goal of property disposal. The DON must dispose of 434 parcels of land on 91 BRAC

bases. Each BRAC base has a disposal strategy tailored for that base. It incorporates LRA reuse plans with environmental cleanup timetables, NEPA documentation, conveyance plans and schedules and transition requirements into a comprehensive business strategy for conveying the Navy property to another entity.

Like the FOSL, a Finding of Suitability to Transfer (FOST) is needed before we

actually convey property. Here again, we are making good progress. As of the end

of fiscal year 1998, we had completed 64 FOSTs covering nearly 29,000 acres. In

fiscal year 1999, we plan to add more than 200 FOSTs covering 23,000 acres.

Through the end of fiscal year 1998, we had conveyed through economic development conveyances, negotiated sales, public sales, or Public Benefit Transfer over

1,850 acres, and earned $10.2 million in revenue that is being reapplied toward

BRAC cleanup. Our budget assumes we will receive about $5 million in land sale

revenue during fiscal year 2000; these funds will be applied towards environmental

cleanup of other BRAC property.

In addition to expediting the communities’ economic recovery, we want to dispose

of BRAC property as soon as practicable so that we can avoid caretaker costs and

focus on our core mission. The Navy recognized early on that the sooner a base

closed and property was disposed, the sooner savings would be achieved. We have

established cooperative agreements at many bases where the Navy has provided

funding and the LRA has accepted responsibility for providing services such as fire,

police, water, sewer, electricity, gas, and ground care as part of the property transition process.

After a base closes, however, disposal of the base closure property presents the

most complex challenge. In the disposal process, the Navy is guided by the President’s Five-Part Plan for Revitalizing Base Closure Communities, which emphasizes

local economic redevelopment of the closing installation and the creation of new

jobs. The Navy is bound by a legal framework of property disposal and environmental statutes that govern each phase of the disposal process.

The LRA’s are central to the property disposal process. Their timely submission

of a comprehensive, feasible reuse plan that will meet the standards of the National

Environmental Policy Act of 1969 (NEPA) and the broad range of Federal statutes

that govern treatment of protected resources is fundamental to the Navy’s ability

to proceed with the disposal of the property. The LRA must present a request to

acquire the property that is consistent with one of the four statutory methods available to the Navy to dispose of BRAC property. Often, the LRA’s do not meet these

statutory requirements and property disposal is significantly delayed. In certain instances, the LRA is not adequately equipped or financially capable of assuming the

responsibilities of owning the property and conveyance of base closure property to

the LRA lags far behind Navy schedules for disposal of the property. The quickest

and most efficient way to dispose of BRAC property may be by direct public sale.

INFRASTRUCTURE EFFICIENCY EFFORTS

Need for Two More Rounds of BRAC

I have so far discussed our investment plans to improve our infrastructure. However, as I indicated previously, we still have significantly more infrastructure remaining after four BRAC rounds than needed to support the conceivable force structure of the future. The Quadrennial Defense Review, Defense Reform Initiative, and

the National Defense Panel all concluded that more rounds of BRAC are required

to further shrink the military infrastructure. An April 1998 DOD report to Congress, submitted in accordance with Section 2824 of the fiscal year 1998 National

Defense Authorization Act, analyzed capacity by types of bases for each military department and Defense Logistics Agency. The report concluded that the DOD has

about 23 percent excess base capacity. The report also validated BRAC savings estimates, and noted that actual one-time implementation costs are close to or less than

initial estimates.
16

I again ask your support for DOD’s request for two more BRAC rounds, beginning in fiscal year–2001.

Re-inventing Shore Infrastructure

As we ask for two more rounds of BRAC, we have not been sitting idle. Under the leadership of the Secretary of Defense, the Secretary of the Navy, the Chief of

Naval Operations and the Commandant of the Marine Corps, we have a multitude

of initiatives well underway to make our infrastructure more effective and less costly.We have charted an ambitious course. The Navy has programmed $8 billion in savings over the fiscal year 1998 to fiscal year 2005 period; the Marine Corps has

programmed $370 million over the same period. We also realize that these efforts

require us to invest money, sometimes, significant sums of money up-front to do the

necessary analyses. We are carefully evaluating proposals, and where the potential

payback appears convincing, we are stepping up to the plate and putting money in

the budget to pursue the most promising initiatives. Given the wide variety of initiatives, the Deputy Chief of Naval Operations (Logistics) has developed a strategic

business plan that melds these myriad opportunities into a cohesive vision while

still providing execution flexibility to Fleet and Base commanders. Here are but a few examples:

—Competitive Sourcing.—We are reviewing all ‘‘commercial activities,’’ i.e., those functions that are now performed by military or DON civilians but that are also

performed by the private sector. Using the Office of Management and Budget

Circular A–76 process, we are competing to find who can best perform such

functions as food services, housing management, grounds maintenance, facility

maintenance, data processing, and aircraft refueling—a ‘‘most efficient organization’’ of in-house personnel, or by contract to a private sector provider. This

single initiative holds promise to generate over $5 billion in savings by fiscal

year–2005. We are still on the front end of this effort. We have to date announced competitions for about 21,000 Navy military and civilian billets. The

Marine Corps plans to announce their first competitions later this year. A total

of about 80,000 Navy and 5,000 Marine Corps billets are planned. Early results

are promising. The Navy has completed competition of 896 billets so far, which

have generated $9.4 million in annual savings.

—Building Demolition.—The goal of the building demolition program is to eliminate aging, unneeded and often unsightly facilities and their associated operating and maintenance costs. The Navy plans to demolish over 9.9 million

square feet and the Marine Corps 2.2 million square feet by fiscal year 2002.

Both the Navy and Marine Corps have centrally managed demolition programs

with funds included in Real Property Maintenance Operations and Maintenance

accounts. Through the end of fiscal year 1998, we had invested $63 million to

demolish 5.9 million square feet and removed nearly $600 million in PRV from

our rolls. We are now investing about $40 million per year. Our fiscal year 1999

program consists of 59 projects to demolish 534 structures.

—Privatization of Utilities.—Defense Reform Initiative Directive 49 directed the

Services to privatize all their natural gas, water, wastewater and electrical systems except where uneconomical or where the systems are needed for unique

security reasons. This is expected to reduce costs while providing quality utility

services. The Navy has 751 systems and the Marine Corps has 135 systems

worldwide to be examined for privatization. We have budgeted $11.2 million in

fiscal year 1999 and $33.7 million in fiscal year 2000 to perform the necessary

studies to meet the first DOD milestone: a determination by 30 September 2000

of which utility systems to try to privatize. Subsequent milestones are to issue

all Requests for Proposals by 30 September 2001, and to award all contracts by

30 September 2003.

—Claimant Consolidation/Regionalization of Base Operating Support (BOS).—Effective 1 October 1998, the Navy consolidated the number of major commands

with BOS responsibilities from 18 to 8. Regional BOS Commands have been established to manage the BOS functions. This consolidation will allow smaller

commands to focus on their primary mission, and provide new opportunities to

optimize these functions under a single commander in a Navy fleet concentration area. The Regional BOS Commanders are now pursuing ways to develop

more effective business practices.

—Smart Base.—Smart Base is an attempt to bring off-the-shelf modern technology and business practices to Navy applications. A variety of demonstrations

are planned or underway that promise to increase efficiency and reduce costs.

One example is Distributed Learning Centers (DLC), which provide classroom

skill training without the need to travel to a distant schoolhouse. DLC is now
17

deployed at 90 sites. Another example is Small Procurement Electronic Data

Interchange (SPEDI), which provides paperless ordering of standard supplies

and material on-line.

CONCLUSION

In conclusion, I believe the DON infrastructure program is now stronger than it

has been in recent memory. Some of the additional topline relief made available to

the DON has been applied to our programs. I believe we have truly turned the corner on our housing PPV effort. We are investing more military construction funds

to renew and upgrade critical waterfront, maintenance, operational, and training facilities, while staying on track with our plans to improve the living conditions of our

single Sailors and Marines. We are proceeding with numerous promising initiatives

to make our infrastructure more responsive and less costly.

There is admittedly some concern and potential risk in delayed execution by financing our fiscal year 2000 construction program using Advance Appropriations.

However, with the help of the Congress, I believe that we can safely manage this

new effort with no real impact on construction time lines.

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

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

in the future.

Senator BURNS. Thank you, Mr. Secretary.

We welcome our good friend, Senator Murray, from Washington,

the ranking member on this committee. If you have an opening

statement, we would like to hear from you now.

PREPARED STATEMENT OF SENATOR MURRAY

Senator MURRAY. Well, thank you, Mr. Chairman. I apologize for

being late. I am trying to juggle several committee hearings this

morning. I will just submit my statement for the record so that we

can get to the questions for the panel. But just let me express my

concern about the incremental funding plans, as you have as well,

and I hope that we can work through that process and come to

some good conclusions.

So, thank you very much.

[The statement follows:]

PREPARED STATEMENT OF SENATOR PATTY MURRAY

Thank you, Mr. Chairman, for scheduling this hearing to discuss the fiscal year

2000 construction program proposed by our navy and defense agencies.

I share the concerns that you have raised regarding the incremental funding plan

for military construction proposed by the defense department. I have not detected

a great deal of enthusiasm for this scheme from any source, including those who

devised it.

Given the lukewarm endorsement of this plan by the services, I’m sure the chilly

reception it has received on Capitol Hill comes as no surprise to any of our witnesses.

It is clear to me that there are a number of risks associated with this plan.

The services have indicated that they can execute construction projects under this

incremental funding formula, and I have great faith in their ability, but they have

also acknowledged that incremental funding could drive up costs, will definitely

complicate oversight, and could result in schedule delays.

This is not an auspicious start to preparing our services to meet the challenges

of the New Millennium.

The fact is, the infrastructure and quality of life programs that the Military Construction Appropriations Subcommittee oversees are crucial to the morale and readiness of our armed forces.

This is not an area in which we can afford to cut corners.

I have heard over and over again about the importance of quality of life issues

to the men and women who serve in our military, and to their families. Deteriorating infrastructure at U.S. bases in this country and around the world is hampering our military’s readiness at a time when the operating tempo is soaring.
18

Increased deployments are putting an added strain on families at a time when

military family resources—housing, schools, clinics, support services—are struggling

just to keep up with demand.

I note, for example, that ms. McGinn, in her prepared statement, says that the

defense department is currently meeting only 58 percent of the total child care

needs of the military members, and that the goal is to meet 65 percent by the year

2003. That leaves a huge gap in childcare services, which, as any working parent

knows, is a necessity, not a luxury.

While I appreciate the fact that the defense department is working to find a variety of solutions to meet child care demands, the fact remains that all the creative

thinking in the world won’t help families who need quality child care now.

I am convinced that the military will never solve its recruitment and retention

problems unless it pays significantly more attention—and commits a significantly

larger proportion of its resources—to family needs. I am in no way attempting to

imply that quality of life issues are more important than war fighting capabilities,

but I do contend that both are essential elements of readiness, and both deserve our

support. know that you take very seriously the responsibilities of this subcommittee,

and I commend you for the fair and even-handed leadership that you have consistently demonstrated in your handling of the many demands placed before this panel.

Given the budget constraints that we are facing, this is likely to be a more challenging year than usual. I wholeheartedly hope, in terms of proposals to finance

military construction, that it is also an aberrant year, and that incremental funding

proposals will not become a habit.

Thank you, Mr. Chairman. I welcome our witnesses, and I look forward to hearing

their testimony.

Senator BURNS. We are joined now with a little Alaska sunshine,

Senator Stevens, the full chairman of the Appropriations Committee.

STATEMENT OF SENATOR STEVENS

Senator STEVENS. Thank you, Mr. Chairman.

I, too, am worried about the problem of this deferred construction

concept in the MILCON accounts, and I think we better find a middle ground fairly soon. We are trying to make some study to see

whether this concept will drive construction costs up because of the

risk factor involved in continued appropriations for some, as opposed to others.

In tight budgets, people like to know, when they get a contract,

think that the money is in the bank, literally. We have always believed that it got us a lower price when people knew they really

had the money tied down. The contractors have not been heard yet

on this. I think, Mr. Chairman, we ought to think about getting

some contractors to come in and tell us, if it is possible, what impact this new process would have on these contracts.

I remember once when Senator Stennis had a similar suggestion

about starting a major naval vessel with a down payment and how

he reacted. That was short-lived, and he was capable of making decisions and sticking to them.

I think our problem now is that we do have a ceiling here for the

year 2000. If I am right, we are going to get the wall between defense and non-defense spending back again in the congressional

budget resolution when it is not in the administration’s budget.

That needs to be explored also, to see how confusing that is going

to become as we try to avoid another train wreck, as we call it,

having an omnibus bill at the end of this session.

But, I do want to tell you I am grateful to you for your concept

of leasing before final turnover of facilities. I am particularly concerned still with the Adak situation. Your people have been very
19

willing to consider the concept of leasing prior to final turnover. I

think there are some of those areas that ought to be accelerated,

and they should consider additional facilities that could be leased,

because currently the limitations are very great. In addition to that, there are some areas that are sort of out of

bounds for the people who are trying to work there because of classification under the environmental concerns. Because environmental concerns have been expressed in some areas, I would like

to have them reviewed. I think we are being too strict about that.

If Navy personnel were able to operate there for the period since

World War II on those properties without harm to the person, without extensive risks to the employees, I do not know why they

should suddenly become out of bounds as far as successors in operation are concerned. They have expressed great consternation to

me about that.

Have you been out there lately, Mr. Secretary?

Mr. PIRIE. I have not been there in about 3 years, Mr. Chairman.

Senator STEVENS. I hate to tell you, I have not been out there in about that time, too. Why don’t we take a trip out there some

time this year and take a look? Because I keep getting reports that

the future of that civilian takeover is going to be severely impacted

if they do not get access to the properties they need to commence

business operations, particularly going into fuel supply for the

trans-Pacific airlines and air cargo carriers, and into some concept

of pre-port fabrication of materials brought through there by air

cargo operations. If that does not get started soon, it will not be

a possibility, with the longer- and longer-range aircraft being available to all the carriers.

Thank you very much, Mr. Chairman.

Mr. PIRIE. I would be glad to work with you, Mr. Chairman, on

those issues.

Senator STEVENS. I appreciate that. I am just dropping by. We

have about five subcommittees meeting at the same time this

morning. I think I have some questions I will submit for the record

for you all. Thank you very much.

INCREMENTAL FUNDING

Senator BURNS. Thank you, Mr. Chairman. We appreciate your

comments. And I will tell you that we started a review on some of

this, Mr. Chairman, with the Secretary, and that continues. So, we

appreciate that.

Secretary Pirie, I am still concerned about the Department’s plan

to phase-fund military construction in 2000. I recognize that there

is tremendous fiscal year pressures to realign money. We know

where those pressures are coming from, and I am afraid that if the

practice continues, it may have long-term implications on what we

can do with this committee and the challenges we have had.

Do you want to comment on that? Because the realignment of

money this past year—this past 2 years, really—has been substantial.

Mr. PIRIE. Well, Mr. Chairman, I guess I share Senator Stevens’

concern about the amount of risk that we are imposing on the people that we are dealing with and the effect that that is going to

have on what they are going to have to charge in order for them
20

to operate responsibly and for them to get access to financing. Admiral Smith looked into this and talked to some people about this.

And I think he can expand on that.

Senator BURNS. Admiral Smith?

Admiral SMITH. Senator, as the head of the contracting agency

for the Navy that executes the military construction program, when

this concept was first broached, sir, I called in all of my attorneys

and contract specialists, and we first went over the legalities of actually executing a program this way. And after we had determined

that it could be done in accordance with the Federal Acquisition

Regulations and with existing law, I then said, well, what is our

risk here, what is it going to cost us? And, to be honest with you,

we could not tell.

So, I made a couple of phone calls. And I called the president of

the Association of General Contractors, as well as the CEO of a

major construction company in America. And I asked them specifically, if I put a clause in a contract that says, ‘‘subject to the availability of funds,’’ will it cost me any money; and, if so, how much?

In both cases, my friends said it will definitely cost you more

money. However, it will vary with the contract. And it will vary

with the project. And we cannot tell you it will be $10, a half a percent or 20 percent, because it will vary with the project. But it will

be in there. And, oh, by the way, it may well restrict the number

of people who are interested in doing government work, as opposed

to the way it is now.

Senator BURNS. Admiral, were you successful in any way of determining our old conventional way of financing those projects, how

much more that cost is going to be?

Admiral SMITH. No, sir. And I tried to press them on that, because they tend to be very, very detailed in their cost accounting,

on what it costs them to do work. And they of course do work for

the private sector, as well as the public sector. And they said, no,

it is just a matter of introducing risk into a business deal, and we

will put an extra percentage on the side. But it will vary with the

job, so we cannot give you a singular answer.

Senator BURNS. Did that make you think that maybe this approach may have to be looked into further, though?

Admiral SMITH. Yes, sir. Again, I am always concerned about

getting the best value in any procurement for the taxpayers. And

if there would be extra administrative costs or uncertainty costs in

here, from my perspective, personally, it certainly would be something that we would want to look at.

BARRACKS

Senator BURNS. Secretary Pirie, I understand that the Navy will

not be able to implement the 1-plus-1 standard until 2013. That is

14 years out there. And, by the way, looking out into the future,

the only time we talk about that is sort of with the budget. We do

not look at the immediate needs. I can remember one time we held

a hearing on Y2K in 1991. We did not get one drop of ink, and now

everybody is in this crash program of Y2K.

I am wondering, is the Navy allocating sufficient resources to

solve this problem? And do you have a handle on that, when we
21

spread that out that far, the total cost? I have a feeling it is going

to cost us more.

Mr. PIRIE. I am not sure about whether it is going to cost us

more, Mr. Chairman. We are putting about $120 million a year in

MILCON for Navy Bachelor Quarters (BQ’s) and $90 million for

real property maintenance. Not making the 1-plus-1 by 2013 is not

the whole question by any means. Because we have a succession

of other kinds of standards which are going to improve quality of

life for people other than the 1-plus-1’s—for example, the 2-plus-0’s

that we are putting in for the A schools and for transients or the

barracks we are building for recruits.

So, even though it takes us a long while to converge on getting

1-plus-1 for everybody, we are steadily improving the overall quality of our barracks housing for single sailors. And I think that goes

for the marines, as well.

Senator BURNS. Yes, I want to hear from General Higginbotham.

General HIGGINBOTHAM. Sir, we have a little bit different challenge. And what we are looking to do, at least with the 2000

money, is be able to get our marines out of gang head and open

squad bays by the year 2005. But it is also going to take until 2037

just to get our marines in the two men per room. Now, that is not

2-by-0, that is just two men per room.

Senator BURNS. Do not plan on me being there to cut the ribbon.

[Laughter.]

General HIGGINBOTHAM. Right. So, that is really reaching out

there.

What we have recently done, though, the Commandant and I

have put together a 10-year plan that will improve those numbers.

But to be able to do that is going to require some enhancement.

And so what we would really like to be able to do is have two men

per room by the year 2020. And so we have a plan that will get

us there, but it is going to take a little help to do that. And so that

is what we are striving to do.

So, we have a very aggressive plan in terms of the money that

we are putting into MILCON and quality of life is very aggressive

at this point.

Senator BURNS. Tell me, is it such a big, important item in retention? Is that a major item in retention?

General HIGGINBOTHAM. Absolutely.

Senator BURNS. From your observations.

General HIGGINBOTHAM. Oh, absolutely it is. In fact, during this

past month, I had the opportunity—I visited every one of our installations in the Marine Corps to look at all of our fiscal year 2000

MILCON projects. And in particular, I went out to Twentynine

Palms, and I looked at one facility they had out there for students.

And in one barracks, we have six students per room, inadequate

lighting, no adequate desks. And so it is that kind of environment

that we really have to do something about.

And so these are our young marines that, even though it is a

Permanent Change of Station (PCS), they are there for a year to

undergo schooling, that is really inadequate. So, that is really what

we are trying to do, is put money into readiness, do something

about Bachelor Enlisted Quarters (BEQ’s) and quality of life. And

so that is a principal piece of our focus.
22

RETENTION AND RECRUITING

And, Mr. Chairman, if I could just make one other quick statement here, because in your opening statement you talked about retention and recruiting. And so, your Marine Corps is doing very

well as it relates to recruiting and retention. We have made those

goals 44 months straight.

Now, with that said, this is tough business. And so we truly have

our best marines out there recruiting. But it takes leadership and

hard work to do it. But we are doing very well at this point.

Senator BURNS. Any comment, Admiral Totushek?

Admiral TOTUSCHEK. No, sir.

Senator BURNS. Secretary Pirie, did you want to respond?

Mr. PIRIE. Well, I was just going to say, as to the retention value

of improving the BQ’s, I mean the Marsh panel was unequivocal

about how important it is. And in my talking to young sailors and

marines, when they see the kind of new 2-plus-0’s and 1-plus-1’s,

they are absolutely delighted. So, I think it is important.

Senator BURNS. Well, I do, too. When we started down this road,

and when Senator Murray and I assumed this subcommittee, we

made that decision that we were going to do those things. However,

I am still in an old buggy whip attitude. There were 63 in my room

in F–212, 3rd Marine Division [Laughter.]

Senator MURRAY. Are you recommending that, Mr. Chairman?

Senator BURNS. No, I am not. [Laughter.]

It caused some problems every now and again. [Laughter.]

BARRACKS FUNDING

Senator Murray.

Senator MURRAY. Thank you, Mr. Chairman.

Let me just quickly follow up on that last question. A 40-year

program, is that aggressive? I do not understand. You are describing a 40-year program to meet the housing needs. That does not

feel to me like a very aggressive program.

General HIGGINBOTHAM. Well, the problem is it is all about

money. And so what we have got to be able to do in the Marine

Corps, in terms of our total obligational authority, is that we have

got to balance that money with readiness—in this case, readiness,

modernization and our military construction family programs. And

so part of our challenge today is that we have aging equipment. As

an example, our amphibious assault vehicle is now 27 years old.

We are going to have to spend $309 million here in the next couple

of years for an improvement program, that we call a Reliability,

Availability, Maintainability and rebuild to standard (RAM/RS)

program, to be able to extend the life of that vehicle out to 36

years, until the Advanced Amphibious Assault Vehicle comes on

line.

And so that is part of our significant problem today. And to be

able to fund our spares today; our repairables has increased 104

percent in cost just during the last several years. And so we have

gone from $82 for an average equipment repair order up to $190-

some at this point in time.

So, it is readiness that has taken more of our money. And so

modernization certainly is the central theme to all of this. We have
23

got to do something about that. But, clearly, the Commandant is

committed to making sure that our marines have equipment that

works, that it is ready, because that is the true indicator of quality

of life, is to bring them home alive. And so we have got to be able

to split that money out into those different pots.

Senator MURRAY. Right, I understand. It is a difficult challenge,

but it still has a lot to do with retention and morale. And we need

to really, I think, aggressively go after it.

INCREMENTAL FUNDING

Mr. Secretary, let me just ask you if you were consulted on the

idea of incrementally funding the military construction program

and, if so, did you recommend funding the plan?

Mr. PIRIE. I was not consulted prior to that decision being made.

After it was made, we were consulted on how much of a safety factor might be appropriate to put in. But we were not given the opportunity to argue for the reversal of the decision.

Senator MURRAY. Okay. Admiral Smith, let me just follow up.

You were talking about talking with the general contractors, and

they said that it was going to cost more money. Did they define exactly why for you, so we can understand that?

Admiral SMITH. Their concerns, of course, are, in any business

deal, the uncertainty associated with it. And since of course we always pay them after they have done the work, they will generally

have to go to a bank or some other lending institution to obtain financing. And of course the bankers tend to look askance at anything in their contract against which their borrowing the money

that might not get them paid on time or might not get them the

funds for the work that has been performed. So, again, from their

perspective, it is more uncertainty in the deal than had historically

been there.

Senator MURRAY. So, there is not anything concrete except for

perhaps financial loan interest?

Admiral SMITH. Yes, ma’am.

Senator MURRAY. Okay. Mr. Secretary, if the fiscal year 2000

military construction budget is restricted to $5.4 billion, without incremental funding, it will obviously result in many projects going

unfunded for at least a year. In your opinion, what impact is that

going to have on retention and readiness and morale in the Navy

and Marine Corps?

Mr. PIRIE. Well, it is pretty hard to quantify it exactly, Senator

Murray. But it is not going to help it. It will not be good. And if

we are not given the appropriations and authorization for what we

have asked for in terms of appropriations, it is going to essentially

defer the rest of those things 9 months to a year.

Senator MURRAY. As you know, one of my primary concerns has

been quality-of-life issues. And my concern is that these are going

to be left behind, with very limited resources, if we prioritize pier

modernization and environmental compliance or maintenance and

repair. And I know that you can point to your plan to fund bachelor

enlisted quarters, but those are very expensive projects. Assuming

that we find this advanced appropriations notion untenable and

find we have to fully fund projects at a much lower number than
24

any of us want, how are you going to prioritize some of these quality-of-life issues?

Mr. PIRIE. I think, at the moment, we have provided a list in the

order that they were originally developed at our planning board.

And we will probably simply defer the rest of the projects that do

not come under that funding cap until either very late in the fiscal

year or the beginning of next fiscal year.

General HIGGINBOTHAM. Ms. Murray, may I make a comment

about that?

Senator MURRAY. Yes, General.

General HIGGINBOTHAM. We have 23 projects for the fiscal year

2000. And if we do not get the incremental funding, now we are

going from $161.5 million down to $40.4 million, that means, out

of 23 projects, perhaps we can fund maybe four, maybe five.

Senator MURRAY. How are you going to prioritize those?

General HIGGINBOTHAM. We have a prioritized list at this point

that we can provide for the record if you like.

[The information follows:]

Planning and Design Authorized Cumulative

Total

PLANNING AND DESIGN ............................. 11,873 11,873

P–536 ........... MCAS New River, NC ...................... AIRCRAFT TAXIWAY ADDITION .................... 495 12,368

P–076 ........... MCB Camp Pendleton, CA .............. INTEGRATED COMMUNICATIONS HUB ........ 3,623 15,991

P–481 ........... MCAS Yuma, AZ .............................. LAND ACQUISITION .................................... 13,731 29,722

P–495 ........... MCAGCC Twentynine Palms, CA ..... BACHELOR ENLISTED QUARTERS .............. 18,195 47,917

P–063 ........... MCB Camp Pendleton, CA .............. ACADEMIC INSTRUCTION BUILDING ........... 6,155 54,072

P–568 ........... MCB Camp Pendleton, CA .............. MAINTENANCE/OPS FACILITY ..................... 7,986 62,058

P–122 ........... MCB Hawaii .................................... CONTROL TOWER ....................................... 5,486 67,544

P–935 ........... MCB Camp Lejeune, NC ................. ROAD AND UTILITY CONSTRUCTION .......... 8,339 75,883

P–022 ........... MCB Camp Pendleton, CA .............. TACTICAL VEHICLE MAINT FAC .................. 8,573 84,456

P–413 ........... MCAS Beaufort, SC ......................... CORROSION CONTROL FACILITY ................ 8,275 92,731

P–067 ........... MCB Camp Pendleton, CA .............. ARMORY ..................................................... 2,494 95,225

P–920 ........... MCLB Barstow, CA .......................... TEST TRACK/TEST POND FACILITY ............. 4,445 99,670

P–619 ........... MCAGCC Twentynine Palms, CA ..... TACTICAL VEHICLE MAINT FAC .................. 13,282 112,952

P–919 ........... MCLB Albany, GA ............................ ENGINEERING EQUIPMENT SHOP ............... 5,960 118,912

P–478 ........... MCB Quantico, VA ........................... BACHELOR ENLISTED QUARTERS .............. 19,802 138,714

P–645 ........... MCAS New River, NC ...................... FAMILY SERVICES CENTER ........................ 1,271 139,985

P–437 ........... MCAS Yuma, AZ .............................. CHILD DEVELOPMENT CENTER ADDITION .. 2,494 142,479

P–119 ........... MCB Camp Lejeune, NC ................. PHYSICAL FITNESS CENTER ....................... 4,026 146,505

P–069 ........... MCB Camp Pendleton, CA .............. SNCO ACADEMY, BEQ ................................ 9,266 155,771

P–285 ........... MCRD San Diego, CA ...................... PHYSICAL FITNESS CENTER ....................... 3,044 158,815

P–384 ........... MCAS Beaufort, SC ......................... ARMY ......................................................... 1,700 160,515

P–535 ........... MCAGCC Twentynine Palms, CA ..... CAST TRAINER ADDITION ........................... 1,588 162,103

P–500 ........... MCAS New River, NC ...................... PROPERTY CONTROL FACILITY .................. 3,437 165,540

Mr. PIRIE. The budget submit lists these projects in order. So,

that is the one we will work off for the moment, Senator Murray.

General HIGGINBOTHAM. But the point is that with that lesser

amount of funding, that will have a serious impact on our ability

to execute this 10-year plan that I am talking about now. But I

also want to alleviate one of your concerns in terms of how we are

committing our money. In the President’s budget in 1996, we had

identified $97.2 million for the fiscal year 2000, and we have committed $161.5 million. So, you can see that is an appreciable increase.

And so General Krulak is very committed to funding quality of

life and these construction programs. But we also feel like we need

a little help to kind of improve our current status.
25

PUGET SOUND PROJECTS

Senator MURRAY. Let me ask you one specific Washington State issue, which is a dredging project in the fiscal year 2000 budget at

Puget Sound and a D–5 missile support facility at the Puget Sound

Shipyard. This is the first phase of a major project to modernize

both the Trident fleet and the Submarine Base at Bangor. The

Navy is also reportedly considering homeporting additional Trident

submarines at Submarine Base Bangor. Can you tell me the scope

and status of the proposals and what impact they are going to have

on Kitsap County in my home State?

Mr. PIRIE. We can provide I think the detailed information for

the record, Senator Murray. But it is true that we are doing considerable dredging and building a pier at Puget Sound Shipyard in

support of carrier homeporting, and the Bangor construction

project, as you know. As to the impact on the county, I will have

to take that for the record.

[The information follows:]

The President’s Fiscal Year 2000 budget includes a Puget Sound dredging project (MCON P–338, $14.85 million) and a D–5 missile support facility (MCON P–321,

$6 million). MCON P–338 is sited at the Puget Sound Naval Shipyard in Bremerton

to support CVN berth depth requirements and is not in any way connected with

TRIDENT fleet requirements. The MCON P–321 project is sited at Bangor, not at

the Puget Sound Naval Shipyard, and provides utility and site improvements to prepare for a limited D5 capability at Bangor. Regarding homeporting additional TRIDENT submarines at Bangor, the Navy is still studying final homeporting alternatives. However, the Navy has determined

that the final number of TRIDENT submarines homeported in Bangor will not exceed the current number of 8.

Senator MURRAY. Okay. I would appreciate getting that back. And I have some other questions that I would like to submit for

the record, Mr. Chairman.

MILCON FUNDING LEVELS

Senator BURNS. Thank you, Senator Murray. Going back to what you said, General. You know, as near as 4 years ago, I think this MILCON expenditure was between $10 billion and $11 billion. Now we are down around $6 billion. That is

what I alluded to a while ago in my statement, that the shifting

of funds in the Department of Defense concerns me. Not only the

mission of military construction, but then we are shifting those

monies away. I am not real sure that our costs—we may be putting

more projects on line, but then are we, at this funding level, going

to be able to fulfill those obligations in 3, 4 and 5 years?

I see these costs starting to build up. Now, do you understand

where I am coming from? I am probably not making myself too

clear, but I am saying that it looks like we are going to run into

a balloon-type of situation here in trying to maintain our funding

levels.

Mr. PIRIE. Clearly, if we push a great deal of the 2000–2001 appropriations into 2001, there is a substantial bow wave, yes, sir,

Mr. Chairman.

Senator BURNS. Is that the way you see this?

General HIGGINBOTHAM. Yes, sir.

Senator BURNS. I just do not want to get us in a position to

where we have to come back and it would be more costly just to
26

complete the projects as we pushed them out. I would like to go

back to put another billion dollars in here and take care of some

obligations that we can pay for right now, and complete some of

these projects, and still have a master plan of where we want to

go.

Do you have anything against that? I may have to wrestle my

chairman a little bit.

Mr. PIRIE. Well, we can use all the help we can get, Mr. Chairman. [Laughter.]

Senator BURNS. I thought maybe that may be the answer.

Mr. PIRIE. I do not need to conceal my feeling about that.

The projects that we have ongoing now are, by and large, fully

funded. We have one or two incrementally funded projects and so

forth. And those in fact were protected in this budget. That is, the

full increments of the completion costs were protected.

Senator BURNS. But we have accelerated that, though, with this.

Mr. PIRIE. But there are others that have been pushed out, sir.

BASE REALIGNMENT AND CLOSURE [BRAC]

Senator BURNS. Yes. Now, tell me about—we have now completed, what, the fourth round of BRAC—savings there. There are

some savings, I assume, from what you have told us. I am wondering, whenever we start crowding that out, what would be our

future obligations if we have another round of BRAC.

Mr. PIRIE. Well, we will clearly have to put in the initial seed

money up front to finance all of the expenses of BRAC, which include the moving of people, the buyouts and early retirements, and

those kinds of programs, the building of new facilities at receiving

installations that get activities from BRAC installations and so

forth. And Admiral Smith has an eloquent line on how much you

have to put up front to make the eventual savings and his concerns

about how much we would have to put up for some additional

rounds.

Admiral SMITH. Sir, in my previous position in the Navy, I was

the Chief of Naval Operations’ Civil Engineer. And so I was involved in the programming and the early project management of

the first four rounds of BRAC. And in those first four rounds, the

Navy expended something like a little over $10 billion to realize

the annualized savings of about $2.5 billion a year. And we found

that we stuck to our original projections pretty well in terms of the

costs and the benefits.

So, our estimate was about $4 up front for every dollar per year

you would save over the long haul. And of course, those $2.5 billion

a year in savings are in perpetuity. I mean we are no longer paying

base operations costs to run the Naval Station in Charleston, that

has been closed.

As we go into the next round, since we of course picked a lot of

low-hanging fruit in the first 178 realignments and closures, our

estimate is it may cost us more, perhaps 4 and a half dollars, for

every dollar per year of savings. So, we are watching that very

closely as we go forward into hopefully another two rounds of

BRAC in the future.
27

Mr. PIRIE. That means you recoup your initial expenses in 4 and a half years. And, after that, everything that you get is free and

clear.

Senator BURNS. And we are to complete those by what, 2001?

Mr. PIRIE. 2001 for the last round of BRAC, yes, sir. Admiral SMITH. Yes, sir. And as Secretary Pirie correctly puts in his statement, the big savings are accrued when you get to the realign and close point. After that, the cleanup and dispose, which is

where we are on many properties right now, most of your savings

have already been realized when you come to that point.

Senator BURNS. Secretary Pirie, we had a hearing and we have discussed many times the cost of cleanup. And I assume that we

are moving forward on that and we are staying within projected

costs?

Mr. PIRIE. Yes, Mr. Chairman, we are. In fact, we have realized,

over the course of the past few years, some significant savings over

projected costs because of various kinds of efficiencies—negotiations with regulators to clean up to standards of use that the community is going to make rather than to national park standards,

and other kinds of cost avoidances. So, we are on track to complete

the projected cleanups.

Admiral Smith.

Admiral SMITH. Yes, sir. No, I cannot really add anything to

that. As a matter of fact, we have found that in working with the

communities and the State and Federal regulators, we have actually been able to save money over original estimates on the cleanups.

Senator BURNS. Well, the reason I ask you about that is because,

basically, we have incrementally funded BRAC accounts. We have

done it in that respect. And we still have some obligations to pick

up there between 2000 and 2001. I am still concerned about this

incremental thing. That bothers me a lot. I just feel like we are

going to get out there another 5 or 10 years, and all at once we

are going to be hit right between the eyes with a balloon-type

thing. And I would like to prevent that or some problems down the

line.

DEMOLITION PROGRAM

Last year, we discussed the Navy’s demolition program. It would

appear that the program has been quite successful, from your reports. Do you have any idea how much we have saved on the demolition of some of those old buildings? Have you put a pencil to that?

I know that is sort of a hypothetical question. It is probably into

an area where you cannot. But how successful has it been, Admiral?

Admiral SMITH. Sir, I love the demolition programs. [Laughter.]

Senator BURNS. You just like to tear up things. [Laughter.]

Admiral SMITH. Yes, sir. I guess my mother would have told you

that I was a destructive little boy.

Mr. PIRIE. Seabees with bulldozers, Mr. Chairman. [Laughter.]

Admiral SMITH. As you are probably aware, we have demolished

over 6 million square feet of old buildings. And we have found a

lot of things. We have found, almost serendipitously, that it has

saved us a lot of money. For the most part, they were World War
28

II or pre-World War II buildings. I would tell you, as an engineer,

those temporary wood frame barracks buildings we built during the

Second World War, that were only supposed to last 20 years, are

still as sound as the dollar. I mean they are going wonderful. And

I have no idea when they are going to come down.

Senator BURNS. Can you give us an idea of basically what are we

talking about? What buildings? Give me an idea of which ones.

Admiral SMITH. If you will remember the barracks that we built

during the Second World War, most of which have been—they were

two-story, wood frame structures, long, skinny, with central heads

in them. Those convert to office spaces very well. And virtually all

of them have been converted to office spaces now. Those are typical

of the genre.

We have also torn down production facilities, warehouse-type facilities. It has really helped us in our consolidation efforts in the

Navy. The unexpected benefit is not only do you get rid of an eyesore and a building that perhaps contains asbestos and other hazardous substances, but also now you do not have to run a steam

line to it to heat it in the wintertime. And you do not have to replace that old building, so that the roof is now worth more than

the building is.

So, it has been an enormous success for us. It has helped us a

very great deal. We are still scheduled to tear down about another

3 million to 4 million square feet over the next 2 years. But if you

go to some of our Naval stations, for example, the Naval Air Station at Breezy Point, it has really never looked better. We had forgotten how pretty our bases were until we tore down a lot of these

old, unsightly buildings.

Senator BURNS. How much is out there yet to do?

Admiral SMITH. Our last Navy-wide survey said that we needed

something like 10 million square feet demolished. I would tell you,

sir, as an old public works officer, that people did not think they

could get any money to do it, and they never really had the money

to do it, so I do not think they really went as far in looking for

demolition projects and candidates as they are now.

If I could also go back to kind of your first opening statement.

I have resisted the impulse to go and ask people how much money

they have saved, because there are unscrupulous people out there

in our budgeting process who would take those savings. And we are

trying to encourage our base commanders, honestly, to use that

money for other good things, because we worry they do not quite

have enough. [Laughter.]

So, maybe that is more candor than I should be showing here,

Secretary Pirie. [Laughter.]

Mr. PIRIE. That is very subtlely stated. [Laughter.]

Admiral SMITH. Yes.

Senator BURNS. Very subtle. Would you like to respond to that,

Mr. Secretary, in some way or other? That is a nice shade of red,

by the way. [Laughter.]

Mr. PIRIE. I am not the budgeteer, sir. But I would point out that

we also want to get these buildings down before they land on the

Historical Register. [Laughter.]

Admiral SMITH. Absolutely.

Mr. PIRIE. Because that gives us some problems, as well.
29

And, to be honest, it is not all World War II-vintage buildings. Some of the things we built in the sixties are looking pretty ugly

now, too, and need to be done away with. General.

MARINE CORPS DEMOLITION PROGRAM

General HIGGINBOTHAM. Yes, sir, I would like to comment on it,

as well. Since 1994, we have demolished 3.9 million square feet in

our facilities. Last year, in 1998, 1 million square feet. This year,

another 1.1 million square feet. And, by the year 2000, we will

have demolished what we need to demolish.

But we sort of look at it in terms of cost to savings. It is about a 5-to-1 ratio. And so, starting your sixth year, then you will realize cost savings associated with it.

Senator BURNS. I guess just to make the point, how many Quonset huts have you got left at Camp Pendleton? General HIGGINBOTHAM. A whole bunch.

Senator BURNS. Have you? General HIGGINBOTHAM. That is part of that $1 million this year. But when I talk about demolition, the buildings that we want to

destroy, you know, that we no longer need.

Senator BURNS. Well, I still think we have got some at MCRD San Diego, do we not? Admiral SMITH. Sure.

General HIGGINBOTHAM. Yes, sir, there are some.

Admiral SMITH. I believe there are some at Quantico, even, still.

General HIGGINBOTHAM. Right.

Senator BURNS. Well, Quantico, I do not worry too much about them. I just worry about Camp Pendleton and Marine Corps Recruit Depot [MCRD]. But I noticed when I was out there some time

ago that most of them had been boarded up, though. They just

have not been removed.

General HIGGINBOTHAM. Right.

Senator BURNS. And those will finally be removed? General HIGGINBOTHAM. Yes, sir. In fact, if you go out to the In- fantry Training School now, where historically you will see a lot of

those old Quonset huts, we have new BEQ’s being built as we

speak. And so a lot of those buildings are in fact being replaced.

QUALITY OF LIFE

Senator BURNS. Any other comments? That is about the end of my questions. And I know we will probably have some more before

we finally make it through this process. We would like just to keep

the telephone lines open. But I think Senator Murray has expressed some concern, and I think it is a well-founded concern, on

the incremental. I am not real sure I get a read from my own judgment. I cannot project out there, 5 and 6 and 10 years from now,

the problems that we may run into, especially how that will affect

if we have another round or BRAC.

I will tell you that I am going to go to the Armed Services Committee, and I am going to work very closely with Chairman Stevens, because the shift of funds and what we have to do and what

we are expected to do in the quality of life, such as day care centers, we have pointed more to families than we ever have before,
30

in medical facilities and medical care, those concern me greatly.

And the shift away, to use that money somewhere else, even

though it is in the Department of Defense, concerns me. Because I feel that we initiated a mission to improve that quality of life some 5 or 6 years ago, and with the help of Senator Murray.

And I do not want to abandon that because we are shifting money

away from our mission in military construction to other areas and

what some would view as of doubtful expenditure. So, I am going

to try to get you a little more money, to be right honest with you.

I know we kind of beat up on you every now and again, but I think

retention right now is utmost, and the morale of the troops. I know

that is very, very important when you have to put together a fighting force. And that is what we have to maintain. So, I thank you for coming this morning.

Do you have any other more questions?

Senator MURRAY. No, thank you, Mr. Chairman.

ADDITIONAL COMMITTEE QUESTIONS

Senator BURNS. Thank you. As we work on this, we will be work- ing very closely with you. I thank you for coming this morning.

Mr. PIRIE. Thanks very much, Mr. Chairman. [The following questions were not asked at the hearing, but were submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED BY SENATOR BURNS

NAVY FUNDING

Question. Secretary Pirie, last year you informed me that the Navy spends ap- proximately 1.7 to 1.8 percent of plant replacement value per year on facility maintenance. Has that number changed with the fiscal year 2000 Budget. Answer. The fiscal year 2000 budget request includes funds in Real Property Maintenance and Quality of Life Enhancements, Defense appropriations. Combining

these accounts, the percentage remains essentially the same as the fiscal year 1999

enacted level.

NAVY PUBLIC/PRIVATE VENTURES (PPV)

Question. Secretary Pirie, with respect to family housing privatization, I am con- cerned about Sailors and their families paying more to live in one of these projects

than housing provided through traditional military construction. What assurances

can you give me that they will not have out of pocket expenses? Answer. The Department of the Navy’s goal for housing privatization projects is to ensure that rent plus costs associated with average utility consumption does not

exceed the member’s Basic Allowance for Housing (BAH). Privatization projects are

being developed in accordance with this goal. Furthermore, safeguards will be incorporated to ensure that future rents to be paid by members will be linked with BAH

growth. If a family consumes excessive utilities, they may incur out-of-pocket expenses.

Question. What is the average lease period with the developers for these types of

Navy privatization deals?

Answer. Most projects involving the privatization of existing Government housing

are anticipated to be 50-year deals. There may be some projects of shorter duration.

The Navy is also using 15-year terms for Limited Partnership deals for housing on

private land where our equity contribution is limited to cash. We remain flexible

to consider other arrangements that would be mutually beneficial to all parties.

Question. How will installations with family housing privatization ventures be

treated in future rounds of BRAC?

Answer. Installations with family housing privatization ventures will be treated

no differently than any other installations (i.e., they will neither be penalized nor

treated favorably). The Navy is developing its PPV plans in order to maintain the

ability to terminate such agreements in the event it becomes necessary.
31

NAVY CONSTRUCTION EXECUTION

Question. Secretary Pirie, the Navy has greatly improved their construction

project execution the past several years. How will advance appropriations and

phased funding impact your execution?

Answer. The challenges that face the Navy in executing this budget are centered

on project and funds management. Successful execution of the program will depend

on our ability to accurately project outlay streams for each project, and to optimize

the allocation of funds for each project based on the projected outlay stream and

on the date of award.

Our projected outlay streams have to accommodate material procurement (including any long-lead time items), job phasing, work scheduling, etc. to accurately reflect

optimum contractor performance as if funds were to be obligated for the full value

of the contract.

Projected outlay streams then have to be time-phased against projected dates of

award and the date of the availability of the advance appropriations, in order to determine the appropriate level of funding to be obligated against the contract.

In addition, actual work-in-place and contract expenditures must be monitored to

ensure that sufficient funds are available throughout the year to preclude any work

stoppages or contract terminations. Award dates for subsequent projects will have

to be managed to maintain availability of sufficient funds for such purposes.

NAVY CONSTRUCTION EXECUTION

Question. With some of the BRAC money split between fiscal year 2000 and fiscal

year 2001, how will that affect implementation of the 1995 BRAC decisions?

Answer. There will be no effect on the implementation of the 1995 BRAC decision.

The fiscal year 2000 appropriation request of $211.4 million is only for that portion

expected to be actually spent in fiscal year 2000, plus an additional factor for unforeseen actions. The Navy has already completed 93 percent (165 of 178) of all closures and realignments, and will complete an additional eight by the end of fiscal

year 1999, four in fiscal year 2000, and one in fiscal year 2001.

Question. Explain the Navy’s rationale for phasing the supervision, inspection,

and overhead (SIOH) costs over a five-year period when the projects are phased in

two years?

Answer. SIOH annualization allowed the Department to realize a one-time savings over the four-year implementation period by reducing the amounts of SIOH

that are obligated but not yet expended.

SIOH annualization was developed as a permanent change in the manner in

which the Department will budget for such costs. Phasing the funding over five

years aligns the SIOH funding with historic MILCON outlays. SIOH is obligated

against a MILCON project based on the obligated amount of the contract or work

order. SIOH is expended (or outlayed) from a project at the same rate as the construction contract or work order is outlayed.

On the other hand, the use of advance appropriations to phase project costs over

two years is a one-time effort to satisfy critical readiness shortfalls within the Department of Defense in fiscal year 2000.

QUESTIONS SUBMITTED BY SENATOR HUTCHISON

CLEANUP AT DALLAS NAVAL AIR STATION

Question. It appears the successful redevelopment of the Dallas Naval Air Station

(DNAS) is being threatened. Timing is particularly critical since the City of Dallas

successfully completed a long-term lease agreement for a tenant corporation. This

project has the potential to make DNAS one of the BRAC ‘‘success stories’’ by

reusing the base and providing 1,500 jobs. Unfortunately, it could also become one

of the BRAC ‘‘horror stories’’ if this opportunity is lost. In addition, some consideration should be given to the fact that most of the DNAS property has been leased

from the City of Dallas for $1 per year for over 50 years.

When will the Navy complete the environmental investigation and clean up work

plan?

Answer. The environmental investigation is complete and a clean-up schedule has

been established which calls for cleanup to be completed in fiscal year 2001. The

City of Dallas has been provided the opportunity to begin reuse of the leased property; in addition, the Navy is willing to work with the City on any specific case that

may hinder redevelopment.
32

The Navy continues to support the reuse efforts of the cities of Dallas and Grand Prairie and is committed to a successful transition from military to civilian use of

the former Air Station.

TIMING OF CLEANUP

Question. The Navy is now scheduled to turn over the property on May 10, 1999. Is there any reason to think the Navy will not meet this commitment? Answer. The Navy is fully committed to terminating the lease for property at NAS Dallas by the date in question. Notification was given to the City of Dallas in a letter dated March 10, 1999 that the leased property would be returned to them by

means of lease cancellation on May 10, 1999. The Texas Air National Guard (TANG)

continues to occupy facilities at Dallas while construction of their new facilities is

nearing completion at the Naval Air Station Joint Reserve Base Ft. Worth, Texas.

The leased property cannot be terminated until TANG fully relocates which is

scheduled for April 30, 1999. However, the Navy has notified the City of Dallas that

a license can be issued to begin reuse for any facility not currently occupied by

TANG.

CLEAR ZONE AT NAVAL AIR STATION DALLAS

Question. What is the Navy’s plan for the ‘‘clear zone?’’ Since the commercial value of the whole property includes the clear zone (just as the Navy needed it for

DNAS), will the Navy include the property in the land transfer to the City of Dallas? Is there any reason (or possibility) the Navy would instead offer the clear zone

for open public sale?

Answer. Because the Naval Air Station Dallas, Texas, was approved for closure

under the Defense Base Closure and Realignment Act of 1990, Public Law, 101–510,

as amended, the Navy must comply with prescribed federal real property and base

closure disposal procedures under the Federal Property Management Regulations

and applicable base closure statutes. BRAC law prohibits the Navy from including

Navy owned ‘‘clear zone’’ property as part of the property being returned to the City

of Dallas by means of lease termination. The cities can acquire the property by public benefit conveyance, negotiated sale, or if none of the previous methods are applicable, then through an economic development conveyance which allows a reduction

of the sale price by incorporating discounts for certain development costs and job

creation.

The City of Grand Prairie has formally contacted the Navy and the Department of the Interior concerning a public benefit conveyance of the runway protection

(clear) zone located north of Jefferson Boulevard for park and recreation purposes

in order to protect the property from incompatible development. The City of Dallas

is working with Grand Prairie for preservation of the lighting system and that will

be addressed in the public benefit conveyance application. The Department of the

Interior may recommend this conveyance at no cost. The City of Dallas has also notified the Navy that it is willing to pursue convey- ance of other Navy-owned property of interest to the City via a negotiated sale. This

method of acquisition requires a payment of fair market value to the Government.

We are in the initial stages of this negotiated sale process and will be working with

the City and the General Services Administration to facilitate the transfer.

PERCHLORATE CONTAMINATION EXPENSE

Question. There is evidence of perchlorate contamination in surface and ground water around the Naval Weapons Industrial Reserve Plant McGregor, Texas. Although there is no current federally recognized safe limit of perchlorate, a draft Environment Protection Agency report recommended 32 parts per billion (ppb) as the

limit for safe drinking water. It is my understanding that onsite and offsite testing

found concentrations of the rocket-fuel oxidant as high as 22,000 ppb in onsite surface water and 5,500 ppb in boundary surface water. Sites toward Lake Belton

measured 670 and 190 ppb. Fortunately, there is not yet any known contamination

of the public drinking water.

How extensive is the perchlorate contamination on and around the NWIRP?

Answer. The perchlorate investigation began in August 1998. The ongoing investigation is very extensive and will identify the vertical and lateral extent of the perchlorate plume. Sufficient data should be available in the fall of 1999 to fully determine the extent of the perchlorate contamination.

Question. What is the Navy’s plan to monitor and clean up the contamination?

Answer. To insure public protection, the Navy has sampled surface water at various locations on and off the facility property. No confirmatory sample analysis at

the site where the earlier concentration of perchlorate was found to be 22,000 ppb
33

was performed because the seep was dry, i.e., no flow. The Navy sampled and found

no detectable concentration of perchlorate in all of the raw water intakes, located

downstream on Lake Belton and Lake Waco, for the City of Waco’s and the City

of Temple’s potable water systems. Perchlorate has been detected in water samples taken from the streams leaving the facility and flowing into Lake Belton and Lake Waco. In response, the Navy conducts monthly monitoring of the streams at strategic locations between the facility

and the raw water intakes. In addition and contingent upon the property owner’s

permission, the Navy will also install wells within a 1-mile radius of the facility,

as well as, along the watershed of each stream/creek flowing into Lake Waco and

Lake Belton (Harris Creek, South Bosque River, and Station Creek). The Navy

plans to conduct periodic sampling and monitoring of these wells to determine the

concentration of perchlorate in the ground water. The technology for clean up of perchlorate is in its infancy. Two pilot projects for perchlorate clean up are actively being pursued for demonstration at McGregor

under the Department of Defense Strategic Environmental Research and Development Program. In addition, an Interagency Perchlorate Steering Committee, comprised of EPA, DOD and industry representatives is conducting toxicity evaluations

and cleanup technologies to establish realistic risk levels and exposure limits. Recently, the Navy discovered a perchlorate source in the soil within Area M on NWIRP McGregor. Samples are being taken to determine the vertical and lateral

extent of contamination. During June, 1999, the Navy will begin cleanup of the site

by removing the contamination source.

NAVY PLANS FOR MCGREGOR NWIRF

Question. Is there any impact on the Navy’s program to decommission the site and cede it to the city of McGregor for industrial development? Answer. Prior to any property transfer, the extent and magnitude of all per- chlorate and other contamination must be determined and a cleanup plan put in

place. Perchlorate is one of many possible chemical contaminants being investigated.

The existing perchlorate contamination and ongoing clean up is not expected to impact the property transfer. However, there are many other sites which may contain

contamination sources that need to be investigated prior to property transfer. The

Navy expects that all investigations will be completed during the year 2001.

NAVY COOPERATION WITH BRAZOS RIVER AUTHORITY

Question. How is the Navy cooperating with the Brazos River Authority, area health districts, water suppliers, and cities who have a valid interest in all aspects

of this contamination?

Answer. Yes. The Navy met with the Brazos River Authority, the Mayors of mu- nicipalities in Central Texas, EPA and Congressman Chet Edwards on March 9,

1999. The Navy also met with the Brazos River Authority, the City of Waco and

the City of Temple on March 18–19, 1999 and March 25, 1999. All meetings have

been productive with the Navy providing full disclosure of all data they possess on

perchlorate contamination. The Navy plans to continue its good working relationship with the Brazos River Authority and all stakeholders and provide all information concerning perchlorate contamination.

QUESTIONS SUBMITTED BY SENATOR STEVENS

ADAK PROPERTY DISPOSAL AND REUSE

Question. Secretary Pirie, what is the status of the ordnance investigation of the

former Naval Air Station, Adak?

Answer. Navy has completed ordnance characterization of the main developed

core (‘‘downtown’’) area, approximately 2,500 acres, and no further investigation or

clearance of this area is required. The Navy has also completed the clearance of the

only confirmed minefield site near Clam Lagoon. Other proposed minefield sites

identified by World War II Island defensive plans have been investigated. No evidence of mines or other ordnance related items were discovered.

The Navy has formulated a work plan for investigating other areas identified in

World War II documentation as potential impact ranges, combat ranges, ammunition handling/storage areas, and gun emplacements. That work will be undertaken

during 1999. The United States Environmental Protection Agency Region X, and the

Alaska Department of Environmental Conservation have expressed concerns that

the Navy work plan will not yield sufficient information to enable property transfer

decisions. The issues involved are part of an emerging national policy discussion
34

about the appropriate investigation and clearance of property with potential ordnance contamination. Discussions are underway with those agencies to attempt to

resolve those concerns in a manner that would enable property transfer.

Question. Will the Navy meet the necessary regulatory requirements in order to

transfer the property to the Aleut Corporation or Local Reuse Authority by the end

of the year?

Answer. No. All environmental cleanup actions required by applicable regulations

will be completed by the end of this year except ordnance issues outside the ‘‘downtown’’ area. There will not be a Record of Decision (ROD) for those issues until 2001

at the earliest.

A ROD for Operable Unit A, which primarily addresses chemical and petroleum

issues, but also includes ordnance within the ‘‘downtown’’ area, has been drafted

and is pending signature by the Navy and concurrence by the United States Environmental Protection Agency Region X, and the Alaska Department of Environmental Conservation. This ROD will identify the remedial actions required pursuant

to the Comprehensive Environmental Response, Compensation and Liability Act

(CERCLA), as well as, a separate agreement between the Navy and the State of

Alaska concerning petroleum cleanup issues. The remedial actions required by this

ROD will all be completed, or, in the case of petroleum recovery systems, installed

and operating properly by the end of this year.

Operable Unit B consists of environmental cleanup of ordnance issues outside the

‘‘downtown’’ developed area. The Navy and the regulators have agreed on a proposed

time line to complete a ROD for Operable Unit B, which shows completion in early

2001. However, the Navy and the regulators have not yet agreed that the Navy proposed approach to ordnance characterization is sufficient. Discussions are ongoing

to attempt to resolve those differences.

Question. What will be the cost of extending the island support services contract

for an additional year while the ordnance situation is resolved?

Answer. The cost of the current island services contract is approximately $15.7

million per year, and it is scheduled to terminate March 31, 2000. A one-year extension at the same scope would cost approximately the same.

However, it will not be necessary for the Navy to operate the island support services at the current scope to support further ordnance characterization and/or clearance activities if required beyond the 1999 field season. In the event that additional

field work is required, such work would be supported from vessels or from self-contained base camps to the maximum extent possible due to the remoteness of the

areas involved. Accordingly, the Navy is prepared to discontinue operation of island

services at the current scope by the end of March 2000, and either turn such operations over to the Adak Reuse Corporation or reduce operations to the minimum required for Navy purposes.

The Navy advised The Aleut Corporation (TAC) and the Adak Reuse Corporation

(ARC) of these plans in November 1998. The Navy has had a number of transition

planning meetings with TAC and ARC representatives, and has notified ARC that

they should plan to assume operation of island support services by March 2000 in

order to continue availability of such services to support reuse.

Operation of island support services by the Navy at the current scope beyond the

planned transition in March 2000 is not needed to support Navy requirements.

QUESTIONS SUBMITTED BY SENATOR MURRAY

WASHINGTON STATE QUESTIONS

Question. The fiscal year 2000 budget includes a dredging project at Puget Sound

and a D5 missile support facility at the Puget Sound shipyard. I understand that

this is the first phase of a major project to modernize both the Trident fleet and

the submarine base at Bangor. The Navy also reportedly is considering home

porting additional Trident submarines at Submarine Base Bangor. Can you tell me

the scope and status of the proposals, and what impact they will have on Kitsap

County?

Answer. The President’s fiscal year 2000 budget includes a Puget Sound dredging

project (MCON P–338, $14.85 million) and a D–5 missile support facility (MCON

P–321, $6 million). MCON P–338 is sited at the Puget Sound Naval Shipyard in

Bremerton to support CVN berth depth requirements and is not in any way connected with TRIDENT fleet requirements. The MCON P–321 project is sited at Bangor, not at the Puget Sound Naval Shipyard, and provides utility and site improvements to prepare for a limited D5 capability at Bangor.
35

Regarding homeporting additional TRIDENT submarines at Bangor, the Navy is

still studying final homeporting alternatives. However, the Navy has determined

that the final number of TRIDENT submarines homeported in Bangor will not exceed the current number of 8.

Question. Will the current work force at the Puget Sound shipyard be sufficient

to carry out this work, or is it likely that the work force will have to be expanded?

Do you have any estimate of the number of jobs this project could create?

Answer. The dredging project at Puget Sound Naval Shipyard (NSY) is for CVNs.

The modernization at SUBASE Bangor associated with the D–5 missile system is

primarily at the Strategic Weapons Facility Pacific and involves upgrades/changes

to the handling and storage facilities, as well as, some work at the Explosive Handling Wharf (EHW). Although there are some major modifications, they will be relatively transparent to the rest of the base and will result in no personnel changes.

There will be approximately $15 million in contracts awarded during fiscal year

2000–2005 for military construction and equipment installation associated with the

D–5 project. Initial Operational Capability (IOC) for D–5 in Bangor will be May

2002.

The current Navy plan will move two Atlantic Fleet SSBNs to SUBBASE Bangor

in fiscal year 2003. This shift to Bangor will coincide with the removal from strategic service of two SSBNs currently at Bangor. Although the final disposition of the

SSBNs removed from strategic service has yet to be determined, they will likely continue to be in a shipyard. The net result is that there will be no appreciable change

in the number of industrial personnel assigned to SUBBASE Bangor.

Based on current projections, the Puget Sound NSY current work force level will

be sufficient to support the depot level maintenance requirements of Bangor

homeported SSBNs. This includes a SSBN fiscal year 2000 Overhaul/D5 backfit and

a SSBN fiscal year 2001 Overhaul/D5 backfit.

Question. What is the total military construction cost estimate and timetable for

modernizing the Submarine Base at Bangor?

Answer. Projects currently on the MCON FYDP for SUBASE Bangor are: fiscal

year 2004 P–199 BEQ $20.7M and fiscal year 2005 P–188 Lower Base Fitness Facility $0.9M.

Question. If additional submarines were homeported in Washington State, how

many additional military personnel would be based at Bangor? What impact would

that have on other military construction needs in the area, such as barracks, family

housing, schools and the like?

Answer. The Navy is still studying final homeporting alternatives in Washington

State. However, the Navy has determined that the final number of TRIDENT submarines homeported in Bangor will not exceed the current number of 8. Any operational, personnel support, housing, and school facility impacts on Kitsap County

due to homeporting changes would be analyzed as part of the National Environmental Policy Act (NEPA) process (if required) and required facilities would be identified, developed, and programmed through appropriate military construction

projects.

Question. Has a decision been made yet on where the Jimmy Carter nuclear submarine will be homeported? Is Bangor under consideration? When will a decision

be made? With the dredging project in this year’s budget, what other improvements

would the Bangor Submarine Base need to accommodate the Jimmy Carter?

Answer. A final decision on where to homeport U.S.S. Jimmy Carter (SSN 23) has

not been made. With a limited number of submarine assets available to meet a variety of mission requirements, there are many factors that must be weighed prior to

reaching a final homeport decision. Bangor is one of the Navy bases under consideration to be the homeport for Jimmy Carter. I expect a decision to be made during

fiscal year 2000. The entire infrastructure must be evaluated to ensure that the

homeport can adequately support the ship.

ADVANCED APPROPRIATIONS IN MILCON AND ITS AFFECT ON BMAR

Question. Mr. Pirie, in your testimony you talk about the Navy and Marine’s backlog of maintenance and repair. I know you’ve talked to this Subcommittee about

your backlog concerns in the past, and your testimony indicates a genuine concern

for the rate at which this is growing. How do you think the proposed budgetary gimmick of advanced appropriating will impact your backlog problem?

Answer. There will be no impact on the Real Property Maintenance backlog if the

Congress supports the Administration position on Advance Appropriation of Military

Construction, or otherwise fully funds construction projects. The backlog will increase if any replacement/modernization construction projects must be deferred.
36

BACKLOG OF MAINTENANCE AND REPAIR

Question. As you know, I’m very concerned about the quality of life of our troops.

I note that your backlog in family housing for the Navy is $2.2 billion and $1.3 billion for the Marines. Maintenance and repair takes on a much more human meaning when we’re talking about the actual residences of our servicemen and women

and their families. What would it take financially to actually begin chipping away

at this major shortfall?

Answer. Beginning in fiscal year 1994, the Navy began to make a significant investment in the revitalization of the unsuitable military family housing inventory.

The Navy plans to eliminate the remaining backlog of existing unsuitable homes by

the end of fiscal year 2005 through replacement construction, improvement and repair projects and, where feasible, privatization initiatives in CONUS.

The Marine Corps is chipping away significantly at the revitalization backlog and

has implemented a plan that will eliminate this backlog by fiscal year 2012. This

investment, coupled with the moderate implementation of the Military Housing Privatization Initiatives, will allow the Marine Corps to reduce the backlog by 66 percent to $439 million at the end of fiscal year 2005.

QUALITY OF LIFE-DEFENSE ACCOUNT

Question. Mr. Pirie, I note in your fiscal year 2000 budget, $643 million of the

Navy’s Real Property Maintenance funds are included in the Quality of Life Enhancements, Defense account. Can you tell the Subcommittee why you’ve made this

change and what you expect the benefits will be?

Answer. The Department of Defense followed recent Congressional practice and

budgeted funds in Quality of Life Enhancements, Defense instead of the Operations

and Maintenance appropriations. The action gives these funds special emphasis and

encourages more management flexibility by providing them a two-year life.

FAMILY HOUSING

Question. Mr. Pirie, Everett, Washington was one of two public/private venture

projects that the Navy undertook in the last few years. The Navy invested $5.9 million in a limited partnership with Dujardin Development Company to manage 185

homes off base at an area called Country Manor. Could you tell me how you rate

the success of this venture?

Answer. The Navy’s limited partnership in Everett, Washington successfully

achieved the goals established for that project: 1) construction of quality units; 2)

establishment of below market rents; and 3) minimize Navy’s capital investment.

The units are fully occupied by Navy enlisted families, and there is a waiting list

for these units. While the rental rates for the units are less than the prevailing market rates, junior enlisted families, especially those who have a need for the threeand four-bedroom units, are absorbing a significant portion of the total monthly

shelter cost (rent and utilities). To reduce the out-of-pocket cost burden for these

families, the Navy notified Congress of our intent to modify the existing limited

partnership agreement to include provisions for differential lease payments. The

Navy anticipates submitting a notification for funds transfer and agreement modification in the spring of 1999.

Question. What lessons has the Navy learned from its experience both here and

at Naval Air Station Corpus Christi?

Answer. The Navy gained valuable experience in structuring a public-private

partnership during the execution of the projects in Everett, Washington, and the

Corpus Christi area, Texas, including:

—The importance of site location, desirability, environmental conditions, availability of utilities and local zoning cannot be overstated. The Navy’s current

projects require developers to identify proposed sites at the Request for Qualification stage, thereby providing more time to complete environmental reviews

and achieve any local approvals that may be required.

—Local governmental jurisdictions have a role to play in most privatization

projects. The Navy will work with local governments, early in the process, to

address and resolve issues that could affect development.

—Financial risk and return analysis must be accurate and current throughout the

process as final agreements are negotiated. The Navy’s objective is quality,

well—maintained and affordable units. The developer’s objective is profit. If the

deal is properly structured, both objectives can be met.

—An active residual management/stewardship function is essential to the overall

continuing success of a Navy public/private ventures (PPV) project. Detailed
37

processes and procedures for every aspect of our residual management responsibility have been established, and are continuously being updated and refined.

Question. I understand we’re to expect a Congressional notification regarding a

new limited partnership agreement for Everett. Can you estimate when we’ll be

hearing from you on this?

Answer. The Navy submitted a pre-solicitation notification for a follow-on Everett,

Washington project on 1 October 1998. Proposals have been received and are currently under evaluation. The Navy anticipates submitting a funds transfer and

project award notification in early fiscal year 2000.

Question. In your testimony, you mention that the House MILCON Subcommittee

is concerned with your intent to solicit PPV projects in Texas, San Diego, Lemoore,

Maine and New Orleans. Can you comment on the nature of the House concerns?

Answer. The House MILCON Subcommittee has expressed concerns about the

scope and pace of the Navy’s housing privatization plan. They are also concerned

about how the Government’s interests will be protected over the course of the privatization agreement.

We are continuing to work with the Subcommittee to address their concerns.

Question. Do you have any concerns that we are giving up too much control, or

that there may be security concerns with having a private entity responsible for our

military housing?

Answer. The Navy proposes to leverage our units and land assets through a public-private entity (e.g., a Limited Liability Company (LLC)) that includes the Navy.

The Navy will be a partner in the deal, and as such will be able to affect the key

decisions made by the entity over the long-term. Navy and Marine Corps families

occupy these units now, and will continue to do so for the foreseeable future. Given

these long-term requirements, and our fiduciary responsibility to protect the Government’s assets, it is our intention to remain actively involved and therefore retain

a measure of control. We will include provisions in our privatization agreements

that afford protection to the Government’s interests.

We do not envision any security concerns associated with the privatization of military housing. Most of the Navy’s family housing units being evaluated for privatization are either located in the surrounding communities or at the perimeter of the

Base. Given the possibility that exists if unforeseen manpower reductions at an installation cause the housing supply to exceed the military requirements, the Marines are structuring the agreements with the developer so only military members

would be assigned to interior parcels and all civilians to off-base or perimeter parcels.

(39)

DEFENSE AGENCIES

U.S. SPECIAL OPERATIONS COMMAND

STATEMENT OF REAR ADM. RALPH E. SUGGS, USN, DEPUTY

COMMANER IN CHIEF

TRICARE MANAGEMENT ACTIVITY

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

DEFENSE LOGISTICS AGENCY

STATEMENT OF FREDERICK N. BAILLIE, EXECUTIVE DIRECTOR OF

RESOURCES, PLANNING, AND PERFORMANCE, DEFENSE LOGISTICS SUPPORT COMMAND

PERSONNEL SUPPORT, FAMILIES AND EDUCATION

STATEMENT OF GAIL H. MCGINN, ACTING DEPUTY ASSISTANT SECRETARY OF DEFENSE

Senator BURNS. Now, we will hear from our second panel this

morning, representing the Defense agencies. We will hear from

Rear Admiral Ralph Suggs, Deputy Commander in Chief, U.S. Special Operations Command; Admiral Carrato, Chief Operating Officer of TRICARE Management Activity, and we certainly appreciate

you coming this morning, the Executive Director of the Defense Logistics Agency, Frederick Baillie; and Ms. Gail McGinn, Acting

Deputy Assistant Secretary of Defense for Personnel Support, Families and Education. And we appreciate what a mission you have,

by the way.

We will let the room settle down here just a little bit. Thank you.

We appreciate you being with us today. I hope this testimony this

morning will provide this subcommittee with an overview of your

respective agency’s proposals for the 2000 budget. All your statements, if you have prepared statements, will be made a part of the

record in their entirety, and if you want to capsulate, that is fine.

We will do a dialogue up here.

Senator Murray.

Senator MURRAY. Thank you, Mr. Chairman. I welcome all the

witnesses. I look forward to your testimony.

Admiral SUGGS. Good morning Senator Burns and Senator Murray. I am pleased to be here today to discuss the fiscal year 2000

military construction budget request for the United States Special

Operations Command. I am Rear Admiral Ralph Suggs, the Deputy

Command in Chief of the Special Operations Command. I just recently joined the Command, after commanding Carrier Group 6,

known as the John C. Stennis Battle Group, returning from the

Gulf last fall.
40

I am accompanied this morning by Lt. Colonel Steve McCain,

from our congressional liaison staff, as well as Mr. Steve Dwight,

who is our command engineer.

I will submit my formal statement for the record and present a

brief summary this morning, if I could.

Our military construction program has a direct, positive and enduring impact on our joint special operations capability, as you all

know. The Command’s Guard, Reserve and active duty soldiers,

sailors and airmen possess highly specialized skills required to successfully execute the full range of joint special operations. The current military construction program is planned to provide essential—and I underline ‘‘essential’’—facilities that preserve and improve force capability, increase the readiness of complex weapon

systems—which really means our people—and support demanding

training needs.

SPECIAL OPERATIONS COMMAND (SOCOM)

Our military construction budget request for fiscal year 2000 is

$58.6 million—$50.6 million for major construction, $2.3 million for

unspecified minor construction, and $5.7 million for planning and

design for future projects. We feel this is fairly modest, relatively.

Approval of this program is essential to the continued development

of joint special operations forces, which support America’s national

security needs.

This committee’s support in prior years has greatly improved our

operations capability. We look forward to working with you all to

acquire the facilities needed by our people at USSOCOM, so that

they can perform the mission that you expect.

PREPARED STATEMENT

Thank you for the opportunity to meet with you all this morning,

and I look forward to entertaining your questions.

[Statement follows:]

PREPARED STATEMENT OF REAR ADMIRAL RALPH E. SUGGS

INTRODUCTION

Mr. Chairman and members of the committee, I am pleased to present the United

States Special Operations Command (USSOCOM) fiscal year 2000 Military Construction (MILCON) submittal. Our MILCON program has a direct, positive impact

on our training and operational capabilities. The highly specialized skills and equipment required to successfully execute the full spectrum of special operations missions also demand a modern array of operations, training, maintenance and storage

facilities.

PURPOSE

The long term goal of the USSOCOM facilities program, of which MILCON is one

part, is to have all units and individuals working and living in adequate facilities

in order to maximize training and operations capabilities. Facilities requirements

are generated by the need to modernize and replace inadequate facilities and the

need to support new weapons systems, force structure, and missions. The current

program is planned to provide facilities that will improve force capability, increase

readiness of complex weapons systems, and support diverse training needs. In particular, the program provides facilities to support the Special Operations mission to

provide riverine training for our allies when the Naval Small Craft Instruction and

Technical Training School (NAVSCIATTS) is transferred from Panama to Mississippi. It also replaces substandard facilities for the 75th Ranger Regiment and

4th Psychological Operations Group. These facilities will accommodate an improved
41

and expanded special operations forces (SOF) capability. All of the individual construction requests are part of a component master construction plan. Component

MILCON projects are integrated at the USSOCOM level to ensure that the most

needed projects are constructed at the right place, on time, and with the highest

return on investment.

Your support in prior years has aided immeasurably in improving our operations

capability. We look forward to working with your committee to acquire facilities

needed by USSOCOM to perform it missions and ensure we have a fully trained

and capable force in the future.

MILCON PROGRAM

The six military construction projects in this program include two projects for the

Army Special Operations Command, three for the Naval Special Warfare command

and one for the Joint Special Operations Command. Our MILCON budget for fiscal

year 2000 requests fiscal year 2000 appropriations of $20.2 million for six major construction projects, plus $2.3 million for unspecified minor construction, and $5.7 million for planning and design. We are also requesting fiscal year 200 advanced appropriations in the amount of $30.4 million to provide for the completion of these fiscal

year 2000 projects. The majority of our program supports replacement and renovation of current mission facilities. One project supports relocation of the Naval Small

Craft Instruction and Technical Training School (NAVSCIATTS) from Panama to

Mississippi. This budget request recognizes the need to balance construction requirements against acquisition programs and the high state of readiness required

of all special operations forces.

Following is a brief description of each of the six projects listed by state:

NSWC Command and Control Facility Addition NAB Coronado, CA—

$6,000,000.—Construct a command and control administrative facility addition (including renovation of existing administration facility) for the Naval Special Warfare

Command (NSWC). The existing facilities are not large enough to accommodate

NSWC Command and Control Headquarters personnel. The number of NSWC personnel has doubled since original construction. Currently, temporary buildings

(trailers) are being used to alleviate space deficiencies. The construction will provide

adequate and safe facilities to support NSWC Command and Control Headquarters.

Renovate the existing facility to include administrative support areas, physical conditioning areas, seventy-five person amphitheater/auditorium and conference spaces.

Regimental Command and Control Facility Fort Benning, GA—$10,200,000.—Provides a regimental headquarters, reconnaissance and signal detachment facility,

company operations, and training detachment building for the 75th Ranger Regiment. This headquarters currently occupies a dilapidated and antiquated Korean

War era barracks building. The building is completely inadequate as a command

and control facility. The facility’s layout is inefficient and impeded smooth and synchronized operations. Work place quality of life of the soldiers is substandard. The

regiment needs new facilities to replace an old barracks building it is currently

using as a regimental headquarters. The Army has slated the old barracks for demolition. This project is required to provide permanent facilities for the consolidated

command and control and supporting sophisticated intelligence, communications,

and command and control systems which link the 75th Ranger Regiment to Army,

joint, unified and national level systems and agencies.

Small Craft Training Complex Mississippi Army Ammunition Plant, Stennis

Space Center, Mississippi—$9,600,000.—Construct a Naval Small Craft Instruction

and Technical Training School (NAVSCIATTS) complex for naval Special Warfare

Center. The existing facilities are located in Panama and will be turned over to the

Panamanian Government. The need to provide courses such as riverine operations

planning, patrol craft weapons maintenance, outboard motor maintenance and overhaul still remains to be provided by the Naval Special Warfare community. Instruction to allied forces is a continuing need. The complex will provide adequate and

safe instruction and training facilities to support NAVSCIATTS. Training facilities

will include, instructional and mock training areas, classrooms, support areas, storage areas, conference spaces, instructors and administrative office rooms, student

berthing and student support areas.

Battalion Operations Complex Fort Bragg, NC—$18,600,000.—Constructs two battalion headquarters and two company administration and supply buildings for the

4th Psychological Operations Group and 96th Civil Affairs Battalion. New facilities

are needed to replace old, deteriorated, undersized, WWII wooden buildings uneconomical to maintain or restore. Current substandard 4th POG facilities are undersized by 45 percent and are located in old, deteriorated World War II temporary
42

wooden buildings. These buildings lack adequate electrical, heating, ventilating, air

conditioning, and plumbing systems.

Deployable Equipment Facility Fort Bragg, NC—$1,500,000.—Constructs an 8,000

square-foot deployable equipment facility to be used by the Joint Special Operations

Command (JSOC). JSOC personnel individual equipment (uniforms, boots, helmets,

ruck sacks, protective vests, etc.) is stored, secured and packed for immediate deployment when the need arises. Currently, the equipment is stored in various work

areas, hallways, stairwells and ad-hoc locker rooms that could be used more effectively. The new building will provide the required secure storage, which is essential

to meeting mandated time lines for rapid deployments.

Mission Support Facility FCTC-Atlantic, DAM Neck, VA—$4,700,000.—Construct

a single story building and a three story building to support Naval Special Warfare

Ordnance operations. The existing facilities are temporary buildings that do not provide adequate space or ventilation for the safe use of materials and equipment needed to perform the mission. Material is store in milvans which do not provide adequate ventilation. Specialized equipment is left exposed to the corrosive salt water

environment due to lack of storage facilities. A facility is required to provide a safe

working environment for ordnance operations personnel involved in research, testing, and development of specialized ordnance procedures. Spaces for administrative

support and planning are necessary for additional personnel being assigned to work

in the ordnance mission support arena. Storage areas are needed for administrative

materials, testing equipment and personnel gear.

SUMMARY

Our proposed fiscal year 2000 MILCON budget for facility investments will significantly improve the operational and training capability of Special Operations

Command. Approval of this program is essential to ensure the continued development of our nation’s Special Operations Forces.

STATEMENT OF GAIL H. MC GINN

Senator BURNS. Secretary McGinn.

Ms. MCGINN. Thank you, Mr. Chairman. Mr. Chairman and

members of the committee, it is indeed a privilege to appear before

you today and report on the current status of a key component of

our quality-of-life program, the Department of Defense education

activity’s construction program for fiscal year 2000.

I have submitted my full statement for the record, and I do have

some brief comments.

I would like to thank the committee for your unwavering support

and commitment to service members’ quality of life. When ground

is broken on our military installations, our community knows that

we believe in the importance of sustaining and improving their

quality of life. Our schools, along with our facilities, such as child

care, fitness centers, family centers, and education centers, are critical components of our strategy to develop livable communities.

Last year, with your support, we made great improvements in

quality of life through military construction, including 12 fitness

centers, nine child care centers, three education centers, and six

school projects. This year we are committed to continue to build

upon this momentum by requesting over $1.5 billion for quality-oflife construction projects. This is critical, since providing a good

quality of life remains essential to sustaining U.S. forces.

Having modern, safe and attractive facilities underscores our

joint commitment. As a result of the fiscal year 2000 construction

program, the Department plans to construct or modernize 11 additional fitness centers for our military communities, two child development centers, one family service center, and six more schools—

three in the United States and three overseas.
43

Our school system is in good hands, and continues to make enor- mous strides to provide a quality educational opportunity for our

military children, by improving the teaching and learning process

and raising the standard of learning to ensure excellence, and creating greater accountability so that we reach our expected outcomes. In support of this, beginning in fiscal year 2000, we will be

phasing in a full-day kindergarten program in all our schools and

reducing pupil-to-teacher ratios in grades 1 to 3 to 18-to-1. The high educational standards we have set for our students and our teachers must be matched by our equal commitment to our

school infrastructure. Clean, well maintained facilities send a clear

message to our students and their parents that we are committed

to providing a world-class education.

DEPARTMENT OF DEFENSE EDUCATION ACTIVITY (DODEA) FACILITY

REQUIREMENT

Last year we briefed the committee that we had developed a long-term strategy to address our facility requirements by focusing

on the most urgent needs, with special emphasis on Guam and

Camp Lejeune. I am pleased to report that we are on track with

all of the 1999 projects. Our plan for this year will provide improvements to our school infrastructure, totally $84.3 million, almost double the amount of last year, and demonstrate our continuing commitment to modernize our schools.

This year our plan calls for continuing improvements at Guam,

at Anderson Air Force Base and Camp Lejeune, launching the

overseas component of our modernization strategy at Rota, Spain,

and at RAF Feltwell, in the United Kingdom, and addressing deficiencies, to include physical education facilities both at our school

at Marine Corps Air Station Beaufort, South Carolina, and at RAF

Lakenheath, in the United Kingdom.

Our first project is on Guam. The Anderson Elementary School

project will provide a permanent pre-kindergarten through eighth

grade facility, and allow students to move out of current relocated

leased facilities that have housed many of the school functions

since 1997. Over the past 2 years, we have made great strides in

our facilities on Guam. Not only have the schools been a great morale booster for our families, but they have had the added value of

stabilizing the accompanied tour rate on the island.

The Tarawa II Elementary School is in the second phase of a

long-term plan to replace all the substandard school facilities at

Camp Lejeune, North Carolina. These schools were hit hard by a

hurricane in 1996. This project will replace a facility with serious

structural problems that do not meet North Central Association or

Department standards.

The project at Naval Air Station Rota, in Spain, will provide an

addition to replace most of the current elementary school complex,

which is in need of significant renovations and upgrade work. Furthermore, since the current elementary school campus design is located in six separate buildings, this new project will enhance the

quality of education by allowing us to consolidate many of the

school activities for our students and faculty.

The final three projects—Feltwell Elementary School, Laurel Bay

Elementary and RAF Lakenheath Middle School—will allow us to
44

move our students out of current substandard temporary facilities

into modern ones that can properly support the rigors of a quality

educational program. These projects will enhance our students’

learning environment by providing them with new physical education facilities, appropriate-sized, multipurpose classrooms, and

modern science and computer media labs.

In conclusion, I want to thank the committee again for your support for our school system’s military construction requirements,

and, moreover, for all programs that support our troops and their

families and the livability of our military communities. Quality-oflife programs, as you know, are not just nice to have, but, rather,

provide the foundation of our corporate culture of taking care of

people so they can focus on our mission.

PREPARED STATEMENT

I look forward to working with you and the rest of the Congress

on these challenges now and in the future. So, again, thank you

very much, and I will be glad to answer any questions you have.

[Statement follows:]

PREPARED STATEMENT OF GAIL H. MCGINN

Mr. Chairman and members of the Committee, it is indeed a privilege to appear

before you today. I am pleased to report to Congress on the current status of a critical component of the Department’s quality of life program, the Department of Defense Education Activity’s (DODEA) construction program for fiscal year 2000. Let

me begin by stating that the Department’s school system is in good hands, focused

on providing our children with a world class education designed to prepare them

to compete in the global economy in the 21st Century. DODEA continues to make

enormous strides to provide a better quality educational opportunity for our military

children by improving the teaching and learning process—raising the standard of

learning to ensure excellence and creating greater accountability to measure

progress toward expected outcomes.

PUTTING PEOPLE FIRST

Providing a good quality of life for America’s military and their families remains

essential to sustaining U.S. military strength. Reflecting that reality, the Secretary

is emphasizing our quality of life programs in this year’s budget by putting people

first. We never lose focus on our people—soldiers, sailors, airmen and Marines. They

are the bedrock of our National Security strategy. We remain the world’s preeminent military force because our people are highly skilled and motivated. The

quality of our force is directly related to our strong and sustained commitment to

their quality of life.

THE MILITARY COMMUNITY

Our military communities provide a healthy and secure environment in which to

live, raise a family and educate children. Schools are the fabric of the military community and help to reinforce the livability and vitality of our overseas installations

and many communities in the United States. At many installations, schools act as

old fashioned town squares—where families come to meet and exchange the latest

news and where the futures of their children are forged and everlasting friendships

are cemented. Military personnel cannot choose where they live. They face long separations from their families, imminent danger, short-notice deployments and frequent relocations. Building a sense of community is important since military life imposes this particular set of burdens on families.

Our schools along with other programs such as housing, child care, fitness centers

and family centers are critical components of our strategy to develop livable communities. Last year with your support, we made great improvements in quality of life

through military construction projects including 12 fitness centers, 9 child care centers, three education centers and six school projects. All projects authorized in the

fiscal year 1999 program are on track and are either in the final stages of design

or contract award. Before fully addressing the specific requirements for each
45

DODEA project submitted with this year’s budget, let me briefly summarize some

of the other priorities, programs and associated construction projects that we have

submitted this year to enhance military community quality of life.

FISCAL YEAR 2000 COMMUNITY QUALITY OF LIFE CONSTRUCTION

Military construction is a high impact morale booster at the community and individual level. There is no more demonstrable way to show support for quality of life,

than when the brick and mortar starts going up at a base. The perceived quality

of programs and commitment of leadership is often judged by the condition of the

installation infrastructure. Having modern, safe and attractive facilities underscores

our joint commitment to the standard of living of our Service members and their

families.

Our fiscal year 2000 quality of life construction program of over $1.5 billion reflects that commitment. As part of this MILCON request for military community

quality of life, we will construct or modernize 11 community physical fitness centers,

two child development centers and one family service center (attached at the end

of this statement).

FITNESS CENTERS

A major goal within the Department is the modernization and upgrading of fitness facilities. Fitness centers not only rank as the top morale, welfare and recreation program, they are also the program used by the most people. A recent survey

of fitness facilities found that 24 percent of 576 facilities were in excellent condition;

however, 22 percent were in poor condition requiring renovation or replacement. Recently, the Department launched Operation Be Fit, a special initiative to improve

fitness programs and increase individual participation in fitness activities. The

Services supported improvement in fitness facilities with facility renovations, equipment upgrades, increases in operating hours, and development of Service-specific operating standards. This year our plans call for over $63.7 million for 11 fitness construction projects for our military communities (see following chart).

[In Thousands of Dollars]

Service Location Project Amount

Army .................. Ft. Campbell, KY ............................... Physical Fitness Training Center ...... 6,000

Walter Reed Army Med. Center, DC .. Physical Fitness Training Center ...... 6,800

Ft Lewis, WA ...................................... Physical Fitness Training Center ...... 6,200

Navy ................... Norfolk Naval Station, VA ................. Waterfront Athletic Complex ............. 10,890

San Diego Marine Corps. Recruit

Depot, CA.

Physical Fitness Center Addition ...... 3,200

Camp Lejeune Marine Corps. Base,

NC.

Physical Fitness Center ..................... 4,230

Air Force ............ Travis AFB, CA .................................. Add to Physical Fitness Center ......... 7,500

Schriver AFB—Falcon AFS, CO ......... Physical Fitness Center ..................... 3,900

Mac Dill AFB, FL ............................... Physical Fitness Center ..................... 5,500

Whiteman AFB, MO ........................... Physical Fitness Center ..................... 1,900

Osan AB, Korea ................................. Adal Physical Fitness Center ............ 7,600

Total ......... ............................................................ ............................................................ 63,720

CHILD CARE PROGRAMS

The Department appreciates your continuing support of our child care program.

The availability of accessible, affordable, high quality child care is critical to the

maintenance of our workforce. We are currently meeting about 58 per cent of the

total child care needs of our members. Our goal is to meet 65 per cent by 2003. For

fiscal year 1999, we have nine projects in progress. Of these two provide expanded

capability to meet the local need and seven replace temporary or substandard structures that are no longer cost effective to maintain or adequate for delivering child

care. In fiscal year 2000, we have two projects scheduled, one at Yuma Marine

Corps Air Station, Arizona for $2.6 million and a second at RAF Lakenheath in the

United Kingdom for $5.8 million. Both are new facilities to expand capacity and replace existing inadequate or substandard structures.
46

Our efforts to increase capacity through contracting initiatives have provided

mixed results. The Navy competed their entire child care program for the San Diego

area under the A–76 competitive sourcing authority and won the competition. The

Army competed child care programs at three locations and only received a competing civilian bid in one case which the Army won. The Navy tested expanding capacity by buying down the cost for space in civilian child care centers so members

would pay the same as they would at a military center. They found that there was

little to no availability of space for children under age two and those spaces that

were contracted were only used if the civilian center was convenient to the military

installation. Through the Defense Logistics Agency we’re also testing third party

management of government built child care centers.

We have the RAND Corporation studying the potential for outsourcing military

child care. The study is looking at whether outsourcing is a feasible approach to expand our capacity and whether outsourcing of any type can reduce the cost per

space to DOD. We expect the study to be completed in about a year. We plan to

continue the use of contracting options, but we’re also going to target efforts to expand the in-home family child care component of our program. We believe we can

expand our in-home care capacity by expanding our use of subsidies to in-home providers and establishing licensing agreements with state and local licensing agencies

to allow those military spouses living off-base to provide in-home family child care.

We appreciate your support of our child care construction programs and we know

that we must look for as many low cost options as possible. We support a balance

of program delivery models including outsourcing at each installation. No one option

will provide the entire solution to the need for military child care.

FAMILY SUPPORT

Family support programs are a lifeline for families in an unstable environment

during deployments, frequent moves, and long work hours. The stresses of the military life require an ongoing commitment to families’ quality of life. The 284 DOD

family centers deliver an extensive array of human and social services to promote

healthy personal and family life. The centers also help members and their families

adapt to the unique challenges of military life. Various programs provide assistance

in relocation, spouse employment, parenting, financial management, deployment

and family separation, crisis or unexpected contingency, and other areas. This year

we are requesting $1.34 million for a project at New River Marine Corps Air Station

in South Carolina. Family support is an integral part of the Department’s strategy

to maintain a ready force and a major determiner of retention.

DEPARTMENT OF DEFENSE EDUCATION ACTIVITY (DODEA)

Now, I’d like turn to our school system, the Department of Defense Education Activity (DODEA). The education of the children of our Service men and women is key

to recruitment and retention. The Department operates the 21st largest school system in the nation, 231 schools worldwide—161 schools serve more than 80,000 children in 14 foreign countries, and 70 schools serve more than 35,000 students in the

United States. To be sure that students are properly prepared and ready for the

21st century, our schools must provide a world class educational standard and be

safe and modern places to in which to learn. These schools of the future need to

be safe, clean, appropriately sized and equipped with computer capability, new

media and state-of-the-art science labs.

EDUCATIONAL STANDARDS

At the core of our community strategic plan is the need to have rigorous educational standards in the classroom to challenge our students to be productive members of society. Strong schools with clear and high standards of achievement and

discipline are essential to our children and our society. These standards of excellence are important to help instill the excitement, knowledge and basic values, such

as hard work, that will set our children on the right track. The Department is committed to leading the way by providing an educational program that compares favorably with the best U.S. public school systems and one that prepares students to

compete in a global economy. We have fully adopted the National Education Goals,

we are implementing a plan to link all schools to the Internet; and in the year 2000,

we are launching several new initiatives:

Presidential Initiatives.—Our budget for fiscal year 2000 supports continued work

toward improving the quality of education to include funding to reduce the pupilteacher ratio in grades one through three, and to begin implementation of full-day

kindergarten in overseas schools. It also provides for a pilot summer school pro-
47

gram. These initiatives respond to program priorities identified by our senior commanders in the field and support the President’s educational priorities.

Technology.—Technology continues to receive a major emphasis in order to ensure

that all schools are connected to the Internet and that students are computer literate and well prepared for the information age. We are systematically increasing

hardware and software procurement. All schools will have Internet access by the

year 2000 and have an average student-to-computer ratio of 4:1.

Military Community and Parental Involvement.—We are committed to including

the military command, organizations, and groups throughout the military community in the education process of budget, curriculum, and school policies development.

FISCAL YEAR 2000 DODEA CONSTRUCTION PROJECTS

We have set high educational standards for our students and our teachers but we

cannot expect our children to learn and our teachers to foster learning on a crumbling foundation. In order to keep faith with our children, we must ensure that our

schools are prepared for the next century. Clean, well-maintained, up-to-date facilities send a clear message to our students: ‘‘You are important to us! We take your

education seriously.’’ To this end, we began an aggressive plan in 1999 to revitalize

our school infrastructure by focusing on the most urgent requirements. First was

the construction of permanent school facilities to serve students on Guam and second was a long overdue, replacement of aged stateside schools to include Camp

Lejeune and other serious facility requirements in the coming budgets. I am pleased

to report that we are on track with all of these projects. Our program for fiscal year

2000, calls for continued improvements for Guam and at our stateside schools at

Camp Lejeune, North Carolina. Our next priorities launch the overseas component

of our strategy with projects at NAS Rota in Spain and at RAF Feltwell in the

United Kingdom. Our final two projects in this year’s request are Laurel Bay Elementary School at Marine Corps Air Station Beaufort, South Carolina and at RAF

Lakenheath, United Kingdom.

Specifics on each project in the fiscal year 2000 DODEA request are as follows:

Construct Andersen Elementary School, Andersen AFB, Guam

DODEA established schools on Guam beginning with the 97–98 school year. At

that time classes were held in temporary facilities in a variety of base-owned buildings on Andersen AFB. In 1998, classes were moved to relocatable buildings leased

until the permanent facility came on line. This project will provide a 177,000 square

foot complete elementary school complex to house students in grades PK–8.

Replace Tarawa Terrace II Elementary School, Camp Lejeune, North Carolina

DODEA has initiated a long-term project to replace substandard school facilities

on Camp Lejeune which will include replacement of several of the schools there.

This project will replace a facility in need of major infrastructure upgrades which

cannot support the current educational programs. It includes 86,000 square feet to

support 690 students in grades PK–8.

Renovations and Additions, NAS Rota, Spain

This project provides a 102,000 square foot addition to replace most of the current

elementary school complex at Rota. The elementary school campus is comprised of

a number of buildings constructed at various times throughout the past thirty years,

all of which are now in need of significant renovations and upgrade work to remain

in use. This project will provide facilities which meet the current educational requirements of the students, which cannot be met at the present school.

Construct Addition, Feltwell Elementary School, RAF Feltwell, United Kingdom

This project will replace temporary facilities constructed in the early 90s in response to an increased enrollment at the Lakenheath and Feltwell schools due to

a realignment of military forces in Europe. This project will construct an 11,000

square foot multipurpose addition with 8 general purpose classrooms, a computer

lab, media center, and multipurpose room.

Construct Addition, Laurel Bay Elementary School, Marine Corps Air Station Beaufort South Carolina

This project provides a 23,000 square foot facility which will provide a new gymnasium, music and general purpose classrooms, science and computer labs, and an

expansion of the current media center. The current facility does not provide adequate general purpose classroom space, the media center is too small, and there is

no gymnasium. Completion of this project will allow the elementary school to vacate

substandard temporary facilities now in use.
48

Construct Gymnasium, Lakenheath Middle School, RAF Lakenheath, United Kingdom

This project will provide a new 15,000 square foot physical education facility for

the middle school students at Lakenheath. Physical education activities for the middle school are currently held in a converted World War II hangar. This building is

now in need of major renovations, and does not provide proper facilities to support

the physical education program.

In conclusion, I want to thank the committee again for your support for the military construction requirements of our schools and, moreover, for all programs that

support our troops and their families’and the livability of our military communities.

Quality of Life programs are not just ‘‘nice to have’’, but rather they provide the

foundation of our corporate culture of taking care of people so they can focus on the

mission. Quality of life is key to preserving individual and family well-being and solidifying military and societal core values in our forces, while concomitantly contributing to a trained and ready force. Your support is essential to maintaining and upgrading these programs, services and facilities. I would like to thank this committee

for your steadfast support of these important programs over the years. I look forward to working with you and the rest of the Congress on these challenges now and

in the future. Thank you.

FISCAL YEAR 2000 MILITARY CONSTRUCTION PROGRAM SELECT QUALITY OF LIFE PROJECTS

[In Thousands of Dollars]

Service Location Project Cost

DODEA ............... Anderson AFB, Guam Anderson ....... Elementary School ........................... 44,170

Camp Lejeune Marine Corps. Base,

NC.

Tarawa Terrace II Elementary

School.

10,570

NAS Rota, Spain .............................. Elementary School ........................... 17,020

RAF Feltwell, UK .............................. Elementary School ........................... 4,570

Marine Corps. Air Station Beaufort,

SC.

Laurel Bay Elementary School Addition.2,874

RAF Lakenheath, UK ........................ Lakenheath Middle School .............. 3,770

ARMY ................. Ft. Campbell, KY ............................. Physical Fitness Training Center .... 6,000

Walter Reed Army Med. Center, DC Physical Fitness Training Center .... 6,800

Ft. Lewis, WA ................................... Physcial Fitness Training Center .... 6,200

NAVY ................. Norfolk Naval Station, VA ................ Waterfront Athletic Complex ............ 10,890

Yuma Marine Corps. Air Station, AZ Child Development Center Addn ..... 2,620

San Diego Marine Corps. Recruit

Depot, CA.

Physical Fitness Center ADDN ......... 3,200

Camp Lejeune Marine Corps. Base,

NC.

Physical Fitness Center ................... 4 ,230

New River Marine Corps. Air Station, NC.Family Service Center ...................... 1,340

AIR FORCE ........ Travis AFB, CA ................................. Add to Physical Fitness Center ....... 7,500

Schriever AFB—Falcon AFS, CO ..... Physical Fitness Center ................... 3,900

Mac Dill AFB, FL .............................. Physical Fitness Center ................... 5,500

Whiteman AFB, MO .......................... Physical Fitness Center ................... 1,900

Osan AB, Korea ............................... Adal Physical Fitness Center .......... 7,600

RAF Lakenheath, UK ........................ Child Development Center ............... 5,800

FISCAL YEAR 2000 MEDICAL MILCON PROGRAM

Senator BURNS. Admiral Carrato, good morning.

Admiral CARRATO. Mr. Chairman, Senator Murray, thank you for

the opportunity to present the Department of Defense’s fiscal year

2000 medical military construction program budget request. This

committee has been very supportive of our medical construction

program in the past, and I look forward to working with you.
49

I would like to present this morning a brief overview of our fiscal year 2000 medical military construction program and provide a

longer written statement for the record. Our mission is to protect our forces before, during and oper- ational deployment, as well as provide health care services to other

eligible beneficiaries of the Department of Defense. Our fiscal year

2000 program requests fiscal year 2000 appropriations of $60.38

million for 23 major construction projects, as well as $3.587 million

for unspecified minor construction. We are also seeking $9.5 million

for planning and design efforts to complete designs on fiscal year

2001 projects and to commence design on projects identified for fiscal year 2002. The total request for this appropriation is $73.467 million. We

are also requesting fiscal year 2001 advanced appropriations in the

amount of $101.37 million, excluding Fort Wainright funding, to be

enacted in the fiscal year 2000 Military Construction Appropriations Act, in order that we may have the funding needed to complete projects begun in fiscal year 2000. The hospital replacement project at Fort Wainright, Alaska, will be funded over 5 years, beginning in fiscal year 2000, and being

completed in fiscal year 2004. The fiscal year 2000 phase one

project request for appropriations is for $18 million. Our fiscal year 2000 budget request includes a total of 23 projects: two projects for hospital addition, alteration, life safety

upgrades, and support infrastructure; one project for medical training mission support, nine medical readiness-related projects, nine

clinical replacement, addition, alteration-type projects, and two

medical logistics warehouses. All of these projects will either improve the departmental mission of readiness or the efficiency and

productivity of our providers, and thus, ultimately, quality of life

for our beneficiaries.

We are constantly working to right-size and reengineer DOD

medical facilities to support the changing practices of health care

delivery. No portion of the overseas medical projects—one at RAF

Lakenheath, United Kingdom, and the other at Ramstein, Germany—are eligible for Northern Atlantic Treaty Organization

(NATO) funding or host nation funding. The hospital project at

Yongsan, Korea, is, however, eligible for host nation funding.

PREPARED STATEMENT

This concludes my overview statement of the fiscal year 2000

medical military construction budget request. The program stands

as a testament to our commitment to maintain our medical readiness and provide quality health care services to the men and

women of the armed forces. Thank you for the opportunity to

present our budget, and I welcome your questions on any aspect of

the budget. Thank you.

[The statement follows:]

PREPARED STATEMENT OF RADM THOMAS F. CARRATO

Thank you Mr. Chairman and Members of the Subcommittee. I am RADM Thomas F. Carrato, Chief Operating Officer of the TRICARE Management Activity, Office

of the Assistant Secretary of Defense for Health Affairs.

On behalf of Dr. Sue Bailey, the Assistant Secretary of Defense for Health Affairs

and Dr. James Sears, the Executive Director, TRICARE Management Activity, I
50

thank you for the opportunity to present the Department of Defense’s fiscal year

2000 Medical Military Construction Program budget request.

I’d like to present a brief overview of our fiscal year 2000 Medical Military Construction Program this morning. The Appropriations Committee has been very supportive of our Medical Construction Program in the past and I look forward to working with you.

Our mission is to protect our forces before, during and after operational deployment as well as provide preventive health care services to other eligible beneficiaries of the Department of Defense. Our fiscal year 2000 program requests fiscal

year 2000 appropriations of $60,380,000 for 23 major construction projects. We are

also seeking $3,587,000 for unspecified minor construction and $9,500,000 for planning and design efforts to complete designs on fiscal year 2001 projects and to commence design on projects identified for fiscal year 2002. The total request for this

appropriation is $73,467,000. We are also requesting fiscal year 2001 advanced appropriations in the amount of $101,370,000 (excluding Fort Wainwright funding) to

be enacted in the fiscal year 2000 Military Construction Appropriations Act in order

that we may have the funding needed to complete projects begun in fiscal year 2000.

The attached table lists the total fiscal year 2000 program funding requirement,

the fiscal year 2000 funding request and fiscal year 2001 advanced appropriations

request for each project (with the exception of Fort Wainwright):

STATE LIST OF PRESIDENT’S FISCAL YEAR 2000 MILITARY CONSTRUCTION PROJECTS’ FUNDING

REQUIREMENTS

[In Millions of Dollars]

Location/Project Authorized

Request

Regular

Appropriation Request

Advanced

Appropriation Request

Ft. Wainwright, AK: Hospital Replacement (Ph 1) .................................... 133.000 18.000 ................

Davis-Monthan AFB, AZ: Ambulatory Health Care Center Add ................ 10.000 2.400 7.600

Los Angeles AFB, CA: Medical/Dental Clinic Repl .................................... 13.600 2.400 11.200

Travis AFB, CA: WRM Warehouse/Engg Sup Fac ...................................... 7.500 2.000 5.500

Jacksonville NAS, FL: Branch Med/Den Clinic Add/Alt ............................. 3.780 0.780 3.000

Patrick AFB, FL: Medical Logistics Facility Repl ...................................... 1.750 0.200 1.550

Pensacola NAS, FL: Aircrew Water Survival Training Facility ................... 4.300 1.300 3.000

Moody AFB, GA: WRM Warehouse/BEE Facility ......................................... 1.250 0.200 1.050

Ramstein AB, GE: Dental Clinic Add/Alt ................................................... 7.100 2.550 4.550

Yongsan, KO: Hospital Add/Alt .................................................................. 38.570 9.570 29.000

Yongsan, KO: Medical Supply/Equip Stor Whse ........................................ 2.550 2.300 0.250

Ft. Riley, KS: Consolidated Troop Medical Clinic ...................................... 6.000 1.060 4.940

Andrews AFB, MD: Med Log Fac Add/Alt .................................................. 3.000 2.000 1.000

Patuxent River NAS, MD: Aircrew Water Survival Training Facility .......... 4.150 1.200 2 .950

Cherry Point MCAS, NC: Aircrew Water Survival Training Facility ........... 3.500 1.000 2 .500

Wright-Patterson AFB, OH: Occupational Health Clinic/BEE Repl ............ 3.900 2.800 1.100

Sabana Seca NSGA, PR: Med/Den Clinic Repl ......................................... 4.000 1.120 2.880

Ft. Sam Houston, TX Veterinary Instructional Facility .............................. 5.800 0.600 5.200

RAF Lakenheath, UK: Dental Clinic Add/Alt .............................................. 7.100 1.000 6.100

Cheatham Annex, VA FHSO Container Holding Yard ................................ 1.650 0.500 1.150

Norfolk NAS, VA Aircrew Water Survival Training Facility ........................ 4.050 1.150 2.900

Ft. Lewis, WA N. Ft Lewis, Dental Clinic Repl .......................................... 5.500 4.950 0.550

Whidbey Island NAS, WA Aircrew Water Survival Training Facility .......... 4.700 1.300 3 .400

Total Major Construction ............................................................. 276.750 60.380 101.370

Planning & Design .................................................................................... 9.500 9.500 ................

Unspecified Minor Construction ................................................................ 3.587 3.587 ................

Grand Total Fiscal Year 2000 MILCON ........................................ 289.837 73.467 ................
51

The hospital replacement project at Fort Wainwright, Alaska will be funded over five years, fiscal year 2000 through fiscal year 2004. The fiscal year 2000 Phase I

project request for appropriations is for $18,000,000. The hospital addition/alteration project at Yongsan, Korea requires a total of $38,570,000 in military construction appropriations—$9,570,000 this year and the

remainder next year. This project will have a companion $40,000,000 O&M funding

spread over several years and Host Nation funding of $7,800,000. This project replaces one wing and provides heavy renovation of the remainder of this facility. The

central portion of this facility is a 1940’s Japanese constructed building. A series

of four separate buildings constructed between 1959 and 1990 have been attached

to it for the provision of healthcare. This project brings the hospital into compliance

with the Life Safety and Fire codes and standards. This budget request includes the following nine medical readiness related projects:

—A War Readiness Material Warehouse/Engineering Support Facility at Travis Air Force Base, California;

—A War Readiness Material Warehouse/Bioenvironmental Engineering Facility at Moody Air Force Base, Georgia; —A Medical Supply/Equipment Storage Warehouse at Yongsan, Korea;

—A Fleet Hospital Support Office Container Holding Yard and Wash Platform at Cheatham Annex, Virginia; and —Five AirCrew Water Survival Training Facilities at Pensacola Naval Air Sta- tion, Florida; Patuxent River Naval Air Station, Maryland; Cherry Point Marine

Corps Air Station, North Carolina; Norfolk Naval Air Station, Virginia; and

Whidbey Island Naval Air Station, Washington. Our budget request also includes nine clinics that are either replacements or addi- tions/alterations. They are: —An Ambulatory Health Care Center Addition/Alteration at Davis-Monthan Air

Force Base, Arizona;

—A Medical/Dental Clinic Replacement at Los Angeles Air Force Base, California;

—A Branch Medical/Dental Clinic Additional/Alteration at Jacksonville Naval Air

Station, Florida;

—A Dental Clinic Addition/Alteration at Ramstein Air Base, Germany;

—A Consolidated Troop Medical Clinic at Fort Riley, Kansas;

—An Occupational Health Clinic/Bioenvironmental Engineering Replacement Facility at Wright-Patterson Air Force Base, Ohio;

—A Medical/Dental Clinic Replacement at Naval Security Group Activity Sabana

Seca, Puerto Rico;

—A Dental Clinic Addition/Alteration at Royal Air Force Lakenheath, United

Kingdom; and

—A Dental Clinic Replacement at North Fort Lewis, Washington.

The Veterinary Instructional Facility at Fort Sam Houston, Texas will enhance

the Medical Training Mission. In 1980, Congress disestablished the Air Force Veterinary Services and directed the Army to procure, train and provide veterninary

missions for the entire Department of Defense. Reorganizations within the Army

and the BRAC 88 closure of Letterman Army Medical Center have centrally located

this training at Ft. Sam Houston, Texas.

We are also requesting funding for two medical logistics warehouse projects. The

first is a Medical Logistics Facility Replacement project at Patrick Air Force Base,

Florida, and the second is a Medical Logistics Facility Addition/Alteration project at

Andrews Air Force Base, Maryland.

CONCLUSION

This concludes my overview statement of the fiscal year 2000 medical military

construction budget request. The program stands as a testament to our commitment

to maintain our medical readiness and provide quality health care services to the

men and women of our Armed Forces. I thank you for the opportunity to present

our budget and I welcome your questions on any aspect of the budget before you

now.

Senator BURNS. Thank you, Admiral.

Mr. Baillie, welcome back.

STATEMENT OF FREDERICK N. BAILLIE

Mr. BAILLIE. Good morning. Thank you for remembering, Mr.

Chairman. When I first moved down here in 1995, testifying before

this committee was one of the first challenges I got to do, and I
52

have looked forward to it ever since. So, again, it is good to be here,

Mr. Chairman, Senator Murray.

Since you have already agreed to include the prepared statement, I will just have some brief oral remarks.

DLA FISCAL YEAR 2000 MILCON PROGRAM

The Defense Logistics Agency’s (DLAs) fiscal year 2000 military

construction request for authorization is $115.3 million for seven

projects. DLA continues its emphasis on sustaining and enhancing

the Department’s fuel storage and distribution infrastructure. Five

of those seven projects are fuel related and support the Joint Chiefs

of Staff and the services’ operational requirements. All of our fuel

projects are hydrant fuel systems, which support strategic mobility

at critical military installations. Our fuel projects at Eielson, Anderson, Elmendorf, Moron, and Fairchild Air Bases will improve

America’s strategic en route refueling capability.

In our other business areas, we are continuing our program to

construct hazardous waste storage facilities that conform with the

requirements of the Resource Conservation and Recovery Act.

And, finally, at one of DLA’s remaining distribution depots, we

will replace a World War I fire station and consolidate in a single,

modern facility police, physical security and safety functions that

protect over 2,400 military and civilian personnel, their families,

and over $5 billion in government material.

In summary, our military construction program reflects the DLA

vision to be America’s premier logistics combat support agency by

providing vital facilities that enhance the services’ warfighting capability.

PREPARED STATEMENT

Mr. Chairman, this concludes my oral statement. Thank you

again for asking me to be here. And if you have any questions, I

will be glad to respond.

[The statement follows:]

PREPARED STATEMENT OF FREDERICK N. BAILLIE

I am Frederick N. Baillie, Executive Director of Resources, Planning, and Performance, Defense Logistics Support Command, at the Defense Logistics Agency

(DLA). I am pleased to have the opportunity to provide information about DLA’s fiscal year 2000 Military Construction request.

MILITARY CONSTRUCTION REQUEST

The Defense Logistics Agency has requested $115.3 million in authorization, $24.1

million in fiscal year 2000 appropriations, and $91.2 million in fiscal year 2001 advanced appropriations to support our fiscal year 2000 Military Construction program. This program consists of seven projects that will enhance strategic en route

fueling capability, increase mission responsiveness, reduce environmental hazards,

and improve facility readiness at our activities in support of the Agency’s missions.

This request includes:

—$101.4 million for replacing deteriorated, obsolete hydrant fuel systems, or providing new systems, at five critical Air Force bases.

—$8.9 million for constructing conforming storage facilities at various locations

for the disposal of DOD-generated hazardous waste.

—$5.0 million for the replacement of an existing fire station to consolidate public

safety functions at DLA’s Defense Distribution Depot in New Cumberland,

Pennsylvania.
53

ADVANCE APPROPRIATION

In order to free up resources required to address high priority DOD modernization

and readiness requirements, the entire fiscal year 2000 DOD MilCon program, including DLA’s, is funded through a combination of regular fiscal year 2000 appropriations and fiscal year 2001 advance appropriations, both of which we are requesting to be enacted in the Fiscal Year 2000 MilCon Appropriations Act. However, this

is not the preferred method of financing the program, and the Department only intends to utilize this method for the fiscal year 2000 program.

We are requesting full authorization for all the fiscal year 2000 projects but only

a portion of this amount for appropriations we expect to spend in fiscal year 2000.

On average, the appropriation amount is approximately 20 percent of full authorization amount of the projects. This provides sufficient budget authority to cover the

first year outlays and obligations required to ensure that program execution is unaffected by the change from full, upfront that we have used in the past to full funding

through advance appropriations that we are proposing for the fiscal year 2000 program.

NEW FUEL MISSION RESPONSIBILITIES

In fiscal year 1996, DLA assumed new responsibilities for programming fuel-related MILCON projects for bulk and intermediate fuel storage and hydrant fuel systems at the Services’ installations. The Office of the Secretary of Defense approved

this responsibility transfer from the Services in fiscal year 1992 in its Plan for the

Integrated Management of Bulk Petroleum. In carrying out this responsibility, we

are requesting approval of 5 fuel-related projects at $101.4 million, which is 88 percent of our total program request. All of these projects (at the Eielson Air Force

Base, AK; Elmendorf Air Force Base, AK; Andersen Air Force Base, GU; Moron Air

Base, SP; and, Fairchild Air Force Base (AFB), WA) are priorities of the Joint Chiefs

of Staff to provide critical fuels infrastructure to support strategic en route mobility.

HYDRANT FUEL SYSTEMS

Our proposed investment to replace old and deteriorated hydrant fuel systems, or

provide new systems at critical bases, is $101.4 million. As mentioned previously,

these projects all support strategic en route mobility requirements.

We propose to construct a hydrant fuel systems at Eielson AFB, AK. The $26.0

million project will provide a system of 20 modern, pressurized fuel hydrant outlets.

Wide-bodied aircraft are currently fueled by refueler trucks or a small Type III hydrant system of five outlets built by the Air Force in 1995. The existing hydrant

system, which will remain in operation, can accommodate neither the number of aircraft refueled for peacetime operations nor those expected during a contingency. Refueler trucks, which accomplish at 75 percent of aircraft refuelings at the base, are

highly susceptible to mechanical failure in subzero temperatures and severe arctic

conditions. In addition, this slow, manpower-intensive operation reduces the base’s

ability to meet its demanding refueling requirements and aircraft turnaround times.

The base will close the runway during fiscal year 2000 construction season to accommodate this project and two Air Force runway projects.

We propose to replace a hydrant fuel system at Elmendorf AFB, AK. The $23.5

million project will provide a system of 15 modern, pressurized fuel hydrant outlets.

This project provides the second of two hydrant fuel systems needed to meet a total

requirement of 30 hydrant outlets. The first system was approved in the fiscal year

1999 DLA MILCON program and is currently under construction. The existing hydrant system, built in the 1950s, is technologically obsolete and incapable of supporting current wide-bodied aircraft refueling requirements. Repair parts, which are

no longer available, must be individually fabricated or salvaged from other inoperable systems. Moreover, the deteriorated system is at the point of failure; it has already leaked several times over the past several years, and will continue to pose

a future environmental hazard.

At Andersen AFB, Guam, we will replace an existing hydrant fuel system for

wide-bodied aircraft supporting strategic en route mobility requirements in the Pacific with a modern, pressurized fuel hydrant system of 20 outlets for $24.3 million.

This project provides one of four hydrant systems needed to meet a total requirement of 67 hydrant outlets. Currently, the base operates a 45-year-old hydrant system that is failing and cannot support peacetime missions or en route mobility requirements in contingency or wartime operations. Due to the potential for environmental contamination and inability to provide replacement components, one of three

existing pumphouses has already been taken out of service. Six other outlets (of a

total of 20) are also out of service. As with other obsolete hydrant systems else-
54

where, repair parts are no longer commercially available and must be salvaged from

other similar systems or individually fabricated. In addition, the underground piping system lacks cathodic (corrosion) protection. The new hydrant system will include features to protect it from the corrosive marine environment and will employ

a leak detection system. The existing hydrant system will be demolished.

At Moron Air Base, Spain, we propose to continue with the second of two projects

for the replacement of the hydrant fuel systems at a cost of $15.2 million. The first

system was approved in the fiscal year 1997 DLA MILCON program and is currently under construction. The existing 1950’s hydrant system also suffers from the

obsolescence and lack of repair parts as highlighted previously. This project is not

yet eligible for funding by the NATO Security Investment Program. However, NATO

has approved a precautionary prefinancing statement to facilitate future U.S.

recoupment of the cost of this project when eligibility is established. This second replacement project provides a new hydrant fuel system, storage tanks and support

facilities constructed to current standards.

At Fairchild AFB, WA, we propose to construct a new $12.4 million hydrant fuel

system to improve the base’s capability to quickly refuel wide-bodied aircraft used

to support strategic en route mobility requirements. Currently, refueler trucks or a

hydrant system that uses 40-year-old underground fuel storage tanks and equipment are used to refuel these aircraft. Aircraft must be towed into parking positions

to be refueled using the existing outlets. Low pumping rates and long turnaround

times to refill the required six-to-seven truckloads of fuel per aircraft make use of

refueler trucks unsatisfactory. The proposed project extends the system and constructs an additional 10-outlet hydrant fuel system to decrease refueling times and

reduce dependence on refueler trucks. Existing underground fuel storage tanks will

be demolished.

DISTRIBUTION AND SUPPLY CENTER INVESTMENTS

Distribution Depots

At our Defense Distribution Depot in New Cumberland, PA, we propose a $5.0

million Public Safety Center to replace a World War I wooden fire station and consolidate police, physical security, and health-and-safety personnel. These activities

are now scattered in six locations at two separate installations, 18 kilometers apart.

The existing fire station was built in 1919 and is too small for existing fire fighting

equipment, nor does it contain satisfactory specialized space for current around-theclock operations common with these facilities. The proposed facility will increase responsiveness to an operation providing essential 24-hour protection to over 2400 active duty and civilian personnel.

Conforming Storage

Since 1980, DOD has tasked DLA with disposing of hazardous waste generated

by DOD components. Before disposal, DLA must store this hazardous waste in conformance with federal and state environmental regulations implementing the Resource Conservation and Recovery Act (RCRA). In fiscal year 2000, we are requesting $8.9 million to build conforming storage facilities at several of our Defense Reutilization and Marketing Offices to comply with these environmental requirements.

We will proceed with those projects that receive RCRA permits from state regulators—a process that is lengthy and somewhat unpredictable. Consequently, as in

prior years, we are requesting single-line-item funding for this program so that we

may award projects as we received these permits. We will continue to notify the appropriate committees before construction of each project.

SUMMARY

DLA’s fiscal year 2000 Military Construction request reflects our efforts to support military readiness, protect the environment, and provide safe and adequate

working conditions for our military and civilian work force. Five of the seven

projects provide vital fuel facilities to support the Services’ warfighting requirements. The remaining two are needed to meet the Agency’s non-fuel mission requirements to sustain operations into the 21st Century. With the full authorization

and advance appropriations requested, we can fully execute our program. Thank

you, Mr. Chairman, for this opportunity to present our fiscal year 2000 Military

Construction program.

Senator BURNS. Thank you, Mr. Baillie. We appreciate your testimony and we appreciate your hard work on this.
55

Admiral Suggs, I have one specific question, the movement of the

Small Craft Instruction and Technical Training School from Panama to Mississippi.

Admiral SUGGS. Yes, sir.

Senator BURNS. Have you the numbers on that and the requirement that you are going to need to make that move?

Admiral SUGGS. Well, Mr. Chairman, as you saw in our proposal,

we are looking for about $9.6 million this year as directed by the

Program Budget Decision (PBD) 715 to move the school and that

training from Panama, which closed down at the end of last year,

up to Stennis. We feel that will be adequate for the next year or

so.

As you know, that is very much a success story, as we support

our Central and South American allies and friends in the Southern

Command Theater. It is a real winner for us and for that Command. We are looking downstream, sir, in at 2001, to complementing the school with a range, to allow the training to be exercised in that part of the country, which is really perfect for riverine

training. We currently have to go up to Kentucky to use some of

the rivers and ranges there.

But if we can get this approved for 2001, it is going to be in the

neighborhood of about $3.3 million, sir, to provide a 360-degree

range to support the training up there, the live fire, the safety, the

security, all the things that we need to do to complement training

and the schoolhouse syllabus that will be done down at the center

itself. You will be seeing that a little later on, sir.

INCREMENTAL FUNDING

Senator BURNS. Give me an idea, do you think that the method

of advanced appropriations and the incremental funding, do you

think that will slow down the execution of these projects?

Admiral SUGGS. Well, sir, we had the opportunity—and we appreciate that—to sit in on your earlier discussions this morning

with our friends from the Navy. And we heard your comment, and

we certainly are aware of a lot of the record comments that Dr.

Hamre and Mr. Lynn have provided. We share everybody’s concern

for this approach.

In a perfect world, if we got a plus-up, we would very much like

to go into fiscal years 2000 and 2001 with the $50 million that we

requested, which we feel is really modest and very carefully

planned for these programs. However, we agree that we need to get

on with the recapitalization with these six projects, which have tremendous implications both in readiness and especially the work

place environment—the quality of life if you will.

We at the Special Operations Command, we are very familiar

with risk management—on all our operational missions, we approach them very critically from a risk management perspective.

We know that because of this incremental approach, if approved,

it provides some risk which may result in some additional cost and

other problems. But we have a very small command, and we have

some very talented, dedicated people running these projects. And

we have enjoyed a very successful track record in executing the

small amount of funds that we have gotten. And we think that we
56

can execute this program like we have all the others in the past,

and minimize that risk.

Certainly, we understand that it is there. But when you look at

what we are getting from the Special Operations Command, as you

all know, we are only about $3 billion in total when compared to

the rest of the budget. When you take out the military pay, we are

less than 1 percent of the total DoD budget. So, this is a very modest, proposal. And I can only promise you, from the Command in

Chief and everyone associated, that we will put the same critical

approach to this risk management for construction as we do in our

operational management. But certainly there is some risk here,

and we appreciate that.

Senator BURNS. Senator Murray.

Senator MURRAY. Thank you, Mr. Chairman.

Admiral Carrato, on your list of medical military construction

projects, you list both the authorization request and the advanced

appropriation request. And I see that Fort Lewis Dental Center,

the total request is $5.5 million and the appropriation is just a little over a $500,000. And the total request for the Whidbey Island

Training Facility is $4.7 million while the appropriation request is

$3.5 million. Can you tell me how you arrived at the appropriated

level and what your criteria were for determining which projects

were appropriated at a higher percentage compared to the authorization request?

Admiral CARRATO. Yes, ma’am. The process was one where it

was very inclusive. We included the services, since they are execution agents. And we looked at what would be an appropriate level,

where we could actually execute the program in 2000. And we believe we do have budget levels that would be executable. And we

did involve the services in determining those amounts that would

be necessary.

Senator MURRAY. So, the appropriation level is what you believe

can be done?

Admiral CARRATO. Yes, ma’am.

FISCAL YEAR 2000 ADVANCED APPROPRIATION

Senator MURRAY. Okay. Mr. Baillie, in your testimony, you mention that this advanced appropriation proposal in the fiscal year

2000 budget is not the preferred method of financing your programs. Can you talk a little bit about what your concerns are with

that?

Mr. BAILLIE. I think my concerns would echo the speakers who

have gone before me. As the Admiral said, this is a calculated risk.

From a business perspective, the Department is certainly attempting to make best use of the funds that you appropriate to us. There

are down sides and risks to that, and I think we did discuss some

of them this morning, as far as impact on contractors and if money

does not get subsequently appropriated.

Specifically, as far as the DLA program, it is a relatively small

program. We also have been very successful in executing it. We believe that if we are given the advanced appropriations requested,

the 2000 program could go ahead as planned.

Senator MURRAY. Okay, thank you.
57

Ms. McGinn, the Senate report accompanying the fiscal year

1999 military construction appropriation bill called for a study on

the condition and the adequacy of school facilities, both those that

are federally owned and those that are part of the local district

that support military installations. That report was due February

15th. Can you tell me what the status of that report is?

Ms. MCGINN. Senator Murray, that report is currently in the

planning and preparation stages. We find that it will be quite a

large undertaking, and we have begun to scope it out.

I do regret that we have not sent you an interim report on that.

I apologize for that. But efforts are underway, and I have asked for

more priority on it, to get it done in a time frame——

Senator MURRAY. Can you give us a time line at all when you

expect to have that to us?

Ms. MCGINN. I think the nature of the report is such that we

probably have to do a contracted effort. And so I would say 9

months to a year probably.

Senator MURRAY. More, before we see it?

Ms. MCGINN. Yes.

BANGOR ELEMENTARY SCHOOL

Senator MURRAY. Okay. The Senate report also directed DOD to

allocate not less than $1 million for the design of an elementary

school to serve the Bangor Submarine community. Can you tell me

the status of that project and when you anticipate requesting construction funds for that?

Ms. MCGINN. I may have to take that one for the record, ma’am.

Senator MURRAY. Okay. I would appreciate getting a response

back on that. It is one that we have been working closely with the

community on, and I really would like to know.

[The information follows:]

We understand the need to support the Central Kitsap school district in providing

quality education facilities for students of military members stationed at Bangor

Submarine Base. Last year, the Department of Defense Education Activity met with

representatives of the Central Kitsap district to discuss the impact on the district

from military dependents, including special needs students enrolled in their schools

as a result of Bangor’s designation as a compassionate assignement post, and we

continue to wor with them on this issue.

The Central kitsap School District has indicated a need for $982,000 to complete

design and related cost and environmental analyses to prepare for construction of

the new school. Discussions within the Department indicate that military construction funds are not the appropriate source for funding a school facility owned by a

local education agency. Regrettably, even if DoD can identify the appropriate source

of funds, funding for this expenditure has not been programmed. Spending $1 million for the Bangor Submarine community would significantly impact our ability to

execute the program at other locations.

Senator MURRAY. Let me ask you a general question on child

care needs. I noticed that you said that you are trying to meet 65

percent of the total child care needs 5 years from now.

Ms. MCGINN. Correct.

Senator MURRAY. And from your position, is that an adequate request?

Ms. MCGINN. Well, if you visit the field, you will hear that we

do not have enough child care.

Senator MURRAY. I hear it all the time.
58

Ms. MCGINN. And we do need to expand the availability and ac- cessibility of child care. We have been working on that since 1989,

when the Military Child Care Act was put into effect. And we have

been making progress. It has not been as rapid as we would like. We have recently identified some ways to speed up the access to child care by improving the way we manage our family child care

program, by putting more family child care in place. And that

would be where a military spouse would take care of up to six children in their quarters. We can do that by subsidizing that. We

have also discovered that we can create memorandum of agreement

with civilian communities, so that we can license people in off-base

housing, as well. So, we think that that particular approach will increase the

availability of care, probably faster than anything else.

Senator MURRAY. So, that would be on top of 65 percent that

your goal is, that you would look at military, on-site families, to

subsidize—how would you do that?

Ms. MCGINN. No. That would be to help us get to the 65 percent.

Senator MURRAY. That is part of the 65 percent?

Ms. MCGINN. Right.

Senator MURRAY. So, there is still a 35-percent unmet need 5

years from now?

DOD CHILD CARE REQUIREMENTS

Ms. MCGINN. Well, our overall goal was to go to 80 percent of

the need. Because we believe that there are people who, because

of shift work or other kinds of preferences, or familial care, even

though we identified them in our formula, would not actually come

forward for military child care. So, we set our overall goal at 80

percent, and then set our immediate goal, for budgetary purposes

and programming purposes, at 65 percent.

Senator MURRAY. What tools would you need to make that happen faster?

Ms. MCGINN. I think that the primary tool is really to enhance,

as I said, the family child care component of this. That is the part

of the program which appears to be growing the most. It is the

quickest way to get care out there, and particularly if we can start

to use the off-base resources, both of licensing our people who live

off base and then perhaps licensing people who are off base to provide care for us, as well. And that is what we are really going to

be pursuing to the greatest extent possible.

Senator MURRAY. Okay. Ms. McGinn, while I have you I have to

ask you a non-related issue. It is on the military funeral honors for

veterans. We are supposed to have a study back by March 31st.

Can you tell me if we will have that in hand?

Ms. MCGINN. We will be close.

Senator MURRAY. How close?

Ms. MCGINN. Our goal is to get it there by March 31st.

Senator MURRAY. You will not tell me 9 months later?

Ms. MCGINN. No, ma’am. We have worked through the concept

within the Department of Defense. We have been out, and we have

discussed it with 20 separate veteran service organizations in a

one-on-one, consultative manner, to get their input. We are putting

the final pieces of that together right now for coordination pur-
59

poses. And we would like to come over and brief your staff later

in the month.

Senator MURRAY. I would very much appreciate that. We are

waiting for that report back. And as you know, veterans are dying

very quickly. And the most time that goes by, the fewer of them

have military honors. And I think we really need to move aggressively on that.

Mr. Chairman, thank you for your time. I do have to go to another committee hearing, but I really appreciate your work on this,

and I look forward to working with you.

Senator BURNS. Thank you very much, Senator Murray.

MEDICAL FACILITY IN SOUTH KOREA

Admiral Carrato, I am very interested in the new medical facility

in South Korea. Could you describe that project? It is a fairly robust project, I understand. Is that correct?

Admiral CARRATO. Yes, sir. The project is to replace a 1940’s era

hospital built under Japanese construction. And it is a fairly major

renovation of that facility. It is a critical project for us, given its

location, and fairly comprehensive, replacement, addition, life safety upgrade.

Senator BURNS. Now, did we raze part of that and then are starting from the ground up, or is it strictly all renovation of the existing structure?

Admiral CARRATO. It is a combination. We will be doing some

renovation within the existing walls. And then there will actually

be some additions that we will be constructing, as well.

Senator BURNS. We have, as you know, passed a bill a couple of

weeks ago dealing with pay and retirement and also health care.

Could you give me your overview; is TRICARE working?

Admiral CARRATO. Yes.

Senator BURNS. Now, I get a few complaints every now and

again. I get a letter or two. I would just like it if you could give

me an overview of that. And I know maybe that does not fall under

your area of expertise.

Admiral CARRATO. Actually, sir, it does. Let me give you the

short version of, is TRICARE working. As you know, TRICARE is

a major overhaul of the military health system. And any time you

have such a large undertaking, which TRICARE is, there are going

to be some growing pains.

We began TRICARE on the West Coast—California, Oregon and

the State of Washington—and where it has had a chance to mature, we see the beneficiaries are very satisfied with the program.

In our more current start-ups, on the East Coast, we have had

some difficulties. And most of the difficulties fall really into three

major categories. One is claims processing. And we did have some

hearings last week, where that was a major focus of both the

House and Senate Armed Services Committees. And we believe

that we are taking steps to simplify that claims processing process,

working with our contractors, who are actually performing that

function for us. We think we are on the right track to addressing

that issue.
60

TRICARE RESPONSE TIME

And I am happy to report that our audited claims processing performance numbers as of February of this year, all of our claims

processing contractors are meeting or exceeding our standards.

The other area is telephone, beneficiaries calling up and being

put on hold, not getting accurate information. And, again, I think

that is a symptom of a complex program, a symptom of a program

where we have to hire literally hundreds of staff to attend to those

telephones. And they also have to be trained on a fairly complex

program.

Senator BURNS. Not on this automated dial system—in other

words, dial one if you want a flu shot and dial two if you need an

appendix taken out?

Admiral CARRATO. We actually do have that, sir. Our telephone

standards are that there must be an automated response unit that

acknowledges a phone call within two rings. That is easy to do. You

can purchase one of those off the shelf. Our standard to get to a

human being, though, is 90 percent of telephone calls have to be

connected to a human within 2 minutes. And we have had some

difficulty meeting that standard. Again, I am happy to report we

now are meeting that standard, on average.

We will have some issues in our newer regions. And it is isolated

with some Monday morning. Again, it is a behavior change for our

customers, our providers, et cetera.

Senator BURNS. I just hate those things. I just absolutely hate

them.

Admiral CARRATO. Sometimes they are necessary.

Senator BURNS. I know.

Admiral CARRATO. The other issue that we hear mentioned—and

this actually is an issue that I know was raised in the State of

Montana—is as we bring managed health care to areas of the country where managed health care has not been introduced before, in

some rural areas, we will have issues associated with developing

adequate networks to support our TRICARE Prime program. And

that is another area that we continue to work on, is to look at how

we can enhance the delivery system in some of those rural areas.

But I guess that is a very long-winded answer. The short answer

is TRICARE is working. If you look at the more mature regions,

I think it is working quite well. Customer satisfaction is quite high.

We still have some growing pains in some of our newer regions.

And we are working aggressively to fix it. We are certainly aware

of the impact that it could have on readiness, retention and quality

of life.

Senator BURNS. But it is not without its warts?

Admiral CARRATO. It is not without its warts, no, sir. But we are

working to remove the warts, and working aggressively.

Senator BURNS. The reason I asked you about that is specifically

about Montana. We deal with great distances up there, as you well

know. We have got a lot of light between light bulbs, or a lot of

dirt between light bulbs. So, we have to do that.
61

DOD SCHOOL ELIGIBILITY

Ms. McGinn, I am interested in education. Those families that

are located off base, in the first place, they can either send their

children to school on base or can they send them to the public

schools of that particular area?

Ms. MCGINN. If they are located off base, they generally go to the

public schools surrounding the base. If they are on base on those

installations where we have Department of Defense schools, then

the children are eligible to attend the schools on base. If they are

off base, they are not.

Senator BURNS. In other words, if they live off base, then they

are prohibited from sending their children to school on base; is that

correct?

Ms. MCGINN. Yes, I believe that is correct.

Senator BURNS. Okay. I did not know how that was set up. Because I am very familiar with impact aid. We have Malstrom Air

Force Base in Great Falls, and of course, that impact aid is part

of that.

Mr. Baillie, I see that there are five projects in the fiscal year

2000 budget request to replace existing hydrant fuel systems. Give

me an update on that. How is it coming? I know we have had a

few problems in the past, but that infrastructure is very, very important.

DOD FUEL SYSTEM REPLACEMENT

Mr. BAILLIE. Absolutely, Senator. And you are correct, five of our

seven projects are fuel system replacements. What we are talking

about are systems that, for the most part, are at least 40 years old,

that are not only operationally incapable of meeting the needs of

wide-bodied jet refueling, but, quite frankly, in many cases, posing

several environmental hazards. There is no leak protection. There

is no use of state-of-the-art materials. A lot of the projects in this

year’s program are in places like Alaska, with severe environmental conditions. A lot of the plumbing, if you will, for these systems is exposed to those elements.

In addition, at the other temperature spectrum, Guam is a little

bit warmer, but it is very much subject to corrosion from saltwater.

So, what we are attempting to do is, working with the Joint Chiefs

of Staff, to prioritize those systems, both from operational and environmental areas, that need to be replaced. We have come from

about 44 systems in 1992, when DLA was first assigned the fuels

mission in this area, down to, I believe, about 18 projects left. And

at this point, the DLA Program Objective Memorandum (POM) for

the outyears will address all those remaining projects.

Senator BURNS. You are satisfied with the progress we are making?

Mr. BAILLIE. Yes, sir, very much so. And we appreciate the support of this committee in that.

Senator BURNS. Tell me a little bit about—there has been some

concern raised among my colleagues, the emphasis on privatization

and the impact that it has on logistics. I happen to be one of those

people that think logistics is—used to be just a little office, way

down at the end of the building, but logistics now is very impor-
62

tant. I think that was highlighted in 1991, how important they can

be, not only with the ability to carry out a mission in support of

ours—it is like General Higginbotham said, it is not only deploying

people, but bringing them back home again. Logistics plays a tremendous role in that.

When we start privatization, and some areas have been, in your opinion, has that impacted our ability to carry out our mission in

the area of logistics?

DLA PRIVATIZATION

Mr. BAILLIE. I agree, Senator. When I first started work with what was then the Defense Supply Agency, in a warehouse in

Pennsylvania, logistics was ‘‘get the boxes out the door.’’ It has now

evolved into supply chain management. It is very much more complicated.

The DLA concept of privatization goes back to risk management, if you will. We like to believe that we are still a military organization using business tools rather than a business-type organization.

We do some things that Sears Roebuck, notwithstanding, does not

do.

The concept with which we have attempted to approach privatization says we need to find the best value source using sound business case approaches. Our three distribution depots—Columbus,

Ohio; Warner-Robbins, Georgia; and Barstow, California—that are

in the process of going up for privatization review, were chosen as

representative samples so that we could learn from them. We are

getting some very good feedback from the San Antonio, Texas base,

which is currently being operated by a contractor as part of the

base closure process. Costs are well within the contract, and the

performance statistics rival government-operated depots. That is not to say that you are not correct, sir. There are con- cerns here. We are venturing into uncharted waters, if you will. We

have never, in DOD, or at least DLA, let an entire depot go. We

have taken small sub-functions of that. But when we looked at it

from a business proposition, talked to academia and the private

sector, they felt that to get that best value, we really needed to not

carve up a process into sub-functions, but to take the entire operation itself.

So, we are taking—whether it is with the distribution depots, the property disposal offices or even some of our fuels operations—we

are taking a very measured, phased approach. We want to learn up

front. And then, from both our successes and failures, move out

where it makes sense, keeping in mind that the DLA purpose for

being is to support that warfighter. And we need to do what we

need to do as far as being a good business, but whatever we do,

we cannot afford to risk the warfighter’s support.

Senator BURNS. The ability to warehouse fits your ability for distribution? Do we still have needs in warehousing?

DISTRIBUTION SPACE

Mr. BAILLIE. At this point, Senator, we have, quite frankly, an

excess of distribution space. There is about right now 375 million

attainable cubic feet. Attainable cubic feet is less aisle space and

offices and sprinkler clearances and things like that. We have
63

about 260 million, right now, occupied cubic feet. We would very

much like to see support for at least one, and hopefully two, more

rounds of BRAC. Because that really is the only way that we can

get at those kinds of excesses.

The excess that I talked about is spread over 19 different depots.

In order for us to truly eliminate the excess to match our attainable with our occupied, we are probably going to need to get out

of at least one, if not more, of those depots.

Senator BURNS. Okay. I think that is about all the questions that

I have. I think there will be other questions from other members

of this subcommittee. I want to thank the witnesses this morning

for their being candid with us. We want to work with you as we

implement this, understanding the mission that we have in front

of us.

ADDITIONAL COMMITTEE QUESTIONS

If there are other questions by other committee members, we

would ask you to respond to those Senators and to the committee.

[The following questions were not asked at the hearing, but were

submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED TO ADMIRAL SUGGS

QUESTIONS SUBMITTED BY SENATOR BURNS

INCREMENTAL FUNDING

Question. Will this method of advance appropriations and incremental funding

slow down the execution of these projects?

Answer. We will be able to execute the United States Special Operations Command (USSOCOM) military construction program, but clearly this adds risk in the

execution of our MILCON program. This method of advance appropriations and incremental funding will require a higher level of management oversight to ensure

there is no slow down in the execution of these projects.

To execute our construction program under incremental funding we will need from

the Congress: full authorization for each project, advance appropriations for fiscal

year 2001 and the necessary reprogramming flexibility. We need full authorization

to allow for award of the full project scope in one contract. The advance appropriation for fiscal year 2001 will ensure the money is available on the first day of the

new fiscal year and allow construction to proceed into the second year without interruption. We need the reprogramming flexibility, based on the ‘‘authorized’’ amount,

to transfer the limited funds provided in fiscal year 2000 between projects as work

progresses. This flexibility is required because some projects may proceed faster due

to construction schedule variations or the need to start early to meet mission priorities.

Question. What will be the impact to your MILCON program if the Congress does

not provide advance appropriations?

Answer. Advance appropriations are the key to providing a continuous funding

stream for each construction contract across the fiscal year divide. If advance appropriations are not available, we anticipate more fourth quarter awards in order to

assure that we have funds on hand to bridge the gap between fiscal years. We also

anticipate higher contractor costs due to funding uncertainties.

QUESTIONS SUBMITTED BY SENATOR MURRAY

STENNIS SMALL CRAFT TRAINING COMPLEX

Question. Admiral Suggs, in your fiscal year 00 budget you have identified 6

projects for funding. It appears that the appropriated amount requested, as opposed

to the total authorization request, has been spread evenly between all of the projects

except for the Stennis Small Craft Training Complex. Can you tell the subcommittee
64

why this project is fully funded while the others have to await advance appropriations?

Answer. Instructions that instituted incremental funding predated the decision to relocate the Naval Small Craft Instruction and Technical Training School

(NAVSCIATTS) to Stennis. Subsequently, the Department directed USSOCOM to

establish the school and provided the necessary MILCON funds. Since the

NAVSCIATTS decision was directive in nature, we did not incrementally fund the

construction project to insure an expeditious completion of the required facilities.

Question. Will any of the other 5 projects significantly suffer without advanced appropriations?

Answer. Advance appropriations are the key to providing a continuous funding stream for each construction contract across the fiscal year divide. If advance appropriations are not available, we anticipate more fourth quarter awards in order to

assure that we have funds on hand to bridge the gap. We also anticipate higher contractor costs due to funding uncertainties.

QUESTIONS SUBMITTED TO ADMIRAL CARRATO

QUESTIONS SUBMITTED BY SENATOR BURNS

INCREMENTAL FUNDING

Question. Admiral Carrato, we often incrementally fund big medical projects because of the size and cost. However, with split year funding for all projects contained in the budget—regardless of their size, what challenges are you anticipating

as you execute these projects?

Answer. There are numerous challenges in executing split year funded versus

fully funded projects due to uncertainty about the amount and timeliness of the second year funding. We believe we can successfully execute the fiscal year 2000 Medical Military Construction Program, as submitted in the President’s Budget, if the

advanced appropriations authority for fiscal year 2001 is enacted in the fiscal year

2000 Military Construction Appropriation Act as requested. This advanced appropriations authority will assure us and the contractor community that we will have

the funding needed to complete the projects begun in fiscal year 2000. Our construction agents tell us that there is some risk involved with increased cost of construction due to delays in awarding contracts in the latter part of the year. We cannot

totally avoid this risk but we will work diligently to minimize it. Failure to receive

the requested fiscal year 2001 advanced appropriations authority in fiscal year 2000

will cause us to defer much needed projects by as much as one year until we receive

the remainder of funds in fiscal year 2001 Appropriation Bills.

Question. Admiral Carrato, you have a fairly robust medical military construction

program in fiscal year 2000. What is the backlog of your medical/dental con

struction/renovati on requirements ?

Answer. This program reflects our minimum medical facilities construction requirements within the constraints of the overall Departmental requirements for fiscal year 2000. This is based on the fact that we currently have a backlog of over

$2 billion in military construction alone for construction/renovation of our medical/

dental facilities.

QUESTIONS SUBMITTED BY SENATOR STEVENS

BASSETT ARMY HOSPITAL

Question. Admiral Carrato, I understand that the first phase of funding for the

Bassett Army Hospital is in the fiscal year 2000 budget. What is the department’s

funding strategy for this project and when is it to be completed?

Answer. The Bassett Army Community Hospital is slated to start construction in

fiscal year 2000 based on the following funding strategy:

[Dollars in millions]

Phase Amount

Fiscal year 2000 ............................................................................................ 1 $18

Fiscal year 2001 ............................................................................................ 2 56

Fiscal year 2002 ............................................................................................ 3 34

Fiscal year 2003 ............................................................................................ 4 20
65

[Dollars in millions]

Phase Amount

Fiscal year 2004 ............................................................................................ 5 5

We have requested a full authorization of $133 million for this project in fiscal

year 2000. The construction of the project is expected to be complete in the summer

of 2004.

Question. Is there funding in the budget or in the Future Years Defense Plan

(FYDP) to demolish the existing Bassett Hospital located at Fort Wainwright, Alaska?

Answer. Yes. The funding for the demolition of existing Basset Army Community

Hospital at Fort Wainwright, Alaska, is included in the last two phases (Phases 4&

5) of the project in fiscal year 2003 and fiscal year 2004.

QUESTIONS SUBMITTED TO MR. BAILLIE

QUESTIONS SUBMITTED BY SENATOR BURNS

DLA HYDRANT FUEL SYSTEMS

Question. Mr. Baillie, I see that there are five projects in the fiscal year 2000

budget to replace existing Hydrant Fuel Systems. Please describe the long-term plan

to replace the aging DOD fuel infrastructure?

Answer. Starting with the fiscal year 1996 MILCON program, DLA assumed additional funding responsibilities from the Services for base-level and intermediate petroleum storage and hydrant systems. The majority of the fuel facilities DLA inherited were deteriorated, 40- to 50-year-old systems. From fiscal year 1996 through

fiscal year 1999, DLA has aggressively replaced this decaying infrastructure by investing $278 million in new and revitalized fuel systems. However, the current estimated backlog of needed fuel projects remains at over $1 billion.

In the current DOD Future Year Development Plan (FYDP; fiscal year 2000–

2005), DLA plans to invest an additional $630 million for strategic en route mobility

projects to enhance the Nation’s warfighting capabilities, for environmental compliance and protection, and for other operational projects to replace aging fuel systems.

This proposed plan will fund the remaining 21 strategic en route fuel projects by

fiscal year 2005 and all currently identified projects to correct non-compliant environmental conditions at our fuel activities

Nevertheless, the remaining backlog of fuel infrastructure requirements will continue to be a significant challenge that must be addressed in future FYDPs. With

this in mind, DLA and the Military Services are aggressively pursuing alternate

sources to military construction funding. These alternatives include seeking host-nation funding, privatizing fuel functions, or developing maintenance and repair

projects instead of MILCON. These initiatives are expected to result in a modest

reduction in fuel MILCON requirements.

INCREMENTAL FUNDING

Question. Mr. Baillie, will incremental funding of these projects slow down their

ultimate execution and increase their cost?

Answer. As we mentioned in our verbal testimony, we know that incremental

funding, if approved, provides some risks. We expect the projects will be slowed to

a limited extent. But with the relatively small program we have and talented, dedicated people running these projects, we think we can continue to successfully execute these projects. Our past performance shows we have a solid record of project

execution in previous years.

QUESTIONS SUBMITTED BY SENATOR STEVENS

DLA PROJECTS IN ALASKA

Question. Mr. Baillie, I understand that there are two Alaska projects in your fiscal year 2000 budget submission. Can you explain why these two projects are so important to our national military strategy?

Answer. The Commanders In Chief’s (CINCs) have identified numerous strategic

airlift en route support fuel infrastructure shortfalls as a result of a Joint
66

Warfighting Capabilities Assessment (JWCA) review. This review revealed that with

reduced overseas presence, enhancements were required to the remaining enroute

refueling infrastructure to support the National Military Strategy. The two projects

in Alaska are key locations for a CONUS to Far East deployment of forces based

on weather, route vulnerability, airfield support, and other factors.

INCREMENTAL FUNDING

Question. Mr. Baillie, will incremental funding of these projects slow down their

ultimate execution and increase the cost?

Answer. As we mentioned in our verbal testimony, we know that incremental

funding, if approved, provides some risks. We expect the projects will be slowed to

a limited extent. But with the relatively small program we have and talented, dedicated people running these projects, we think we can continue to successfully execute these projects. Our past performance shows we have a solid record of project

execution in previous years.

QUESTIONS SUBMITTED BY SENATOR MURRAY

FUNDING FORMULA

Question. Can you explain the formula you used to arrive at the fiscal year 2000

appropriated amount you are requesting for the five hydrant fuel system projects

in your budget? It appears to me that you are looking for a down payment ranging

from as little as 11 percent to as much as 35 percent. Why the spread?

Answer. We did not apply a set percentage for determining the fiscal year 2000

funding request for each project. Rather, we applied the amount allocated to us by

the Department based on project priorities and site-specific factors that will influence expected outlays in fiscal year 2000. These factors include the start and duration of diverse construction seasons, expected material ordering and transportation

lag times, and constraints due to adjacent construction projects at some of these

sites. The fiscal year 2000 program request was ultimately based on engineering

judgement and the variable effects of these factors on the projects and funds available.

QUESTIONS SUBMITTED TO MS. MCGINN

QUESTIONS SUBMITTED BY SENATOR BURNS

DOD DEPENDENT SCHOOLS

Question. Ms. McGinn, I am pleased that DOD has begun an initiative to improve

the condition of the DODDS schools. Many are inadequate and need serious attention. Please describe your backlog of construction and renovation projects?

Answer. The following is a list of projects critical to DODEA (DODDS/DDESS)

that are not funded in the fiscal year 2000 budget, but that are included in the Future Years Defense Plan. The total is approximately $174.7 million as shown below.

In Thousands

Construct Hohenfels HS, Wuerzburg, GE ..................................................... $13,100

Replace Russell ES, Camp Lejeune, NC ........................................................ 7,100

Classroom Addition, Lakenheath ES, UK ..................................................... 533

Classroom Addition, Mannheim ES, Heidelberg, GE ................................... 700

Classroom Addition, Ramstein ES, GE .......................................................... 700

Classroom Addition, Ernest J. King ES/MS, Japan ..................................... 769

Classroom Addition, Wetzel ES, Kaiserslautern, GE ................................... 1,163

Classroom Addition, Schweinfurt ES, Wuerzburg, GE ................................ 1,207

Classroom Addition, Shirley Lanham ES, Japan ......................................... 1,076

Classroom Addition, Lincoln ES, Ft Campbell, KY ...................................... 768

Classroom Addition, Tarawa II ES, Camp Lejeune, NC .............................. 513

Classroom Addition, Antilles ES, Ft Buchanan, PR ..................................... 769

Classroom Addition, Freddie Stowers ES, Ft Benning, GA ......................... 513

Classroom Addition, Barkley ES, Ft Campbell, KY ..................................... 1,003

Classroom Addition, Jackson ES, Ft Campbell, KY ..................................... 1,003

Construct Lakenheath MS, UK ...................................................................... 16,298

Construct Addition, Ramstein HS, GE .......................................................... 1,900

Additions & Renovations, Sigonella E/MS, Italy .......................................... 7,200

Construction Addition, Mark Twain ES, Heidelberg, GE ............................ 2,200
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In Thousands

Additions & Renovations, Rota HS, Spain .................................................... 15,500

Construct Seoul MS, Korea ............................................................................. 17,480

Replace Berkley Manor ES, Camp Lejeune, NC ........................................... 7,550

Additions & Renovations, Delalio ES, Camp Lejeune, NC .......................... 3,900

Additions & Renovations, Stone Street ES, Camp Lejeune, NC ................. 5,100

Replace Tarawa I ES, Camp Lejeune, NC ..................................................... 6,466

Replace Russell ES, Quantico, VA ................................................................. 6,600

Addition to Wassom ES, Ft Campbell, KY .................................................... 4,350

FY02 Construction for PTR/Kindergarten initiative-various locations ....... 20,300

FY03 Construction for PTR/Kindergarten initiative-various locations ....... 20,200

FY01 Unspecified Minor Construction ........................................................... 2,691

FY03 Unspecified Minor Construction ........................................................... 4,800

FY04 Unspecified Minor Construction ........................................................... 1,236

Total ....................................................................................................... 174,708

FITNESS CENTERS

Question. How do fitness centers equate to and impact quality of life for service

personnel and their families? Why is it important these facilities be located on the

bases and installations?

Answer. It seems there is greater attention placed on quality of life facilities, such

as fitness centers in the fiscal year 2000 budget. Maintaining a physically fit military force is important to readiness. In addition, having an active military community, including both Service members and their families, forms a major part of

health promotion activities. Further, it helps keep health costs down and productivity up. Service members and their families tell us in survey after survey that fitness centers are their number one Morale, Welfare and Recreation (MOOR) and leisure activity.

The Marsh Commission Quality of Life report identified significant fitness facility

deficiencies. The Task Force concluded that fitness centers aided recruiting, retention, readiness and productivity and were important to overall quality of life—particularly among single junior enlisted personnel. This report also indicated that fitness is the most important MWR program having a positive effect on retention. As

in the civilian community, successful recreational activities must be located where

people live, work, and play. Our installations are the hub where Service members

and their families build a sense of community. Fitness centers must be on installations because it makes their use by members more convenient, thereby encouraging

regular and frequent exercise and the adoption of healthy, positive lifestyles. Maintaining physical fitness is part of the daily work requirement for our military force.

Members are required to partake in some form of fitness training or activity on an

ongoing basis to maintain high fitness levels and combat readiness. Easy accessibility to fitness centers is critical because many junior enlisted lack the private

transportation required to travel significant distances to exercise. The best time for

many Service members to exercise is during noon meal time or directly after work;

the quality and duration of one’s workout is directly affected by the distance.

FITNESS CENTER BACKLOG

Question. What is the backlog for building and renovating fitness centers within

the military services?

Answer. In 1997, the Department launched a major initiative that focused on improving physical fitness. This initiative, called ‘‘Operation Be Fit,’’ includes 5 major

actions aimed at improving fitness activities. One of those actions is to address the

serious facility deficiencies cited in the Marsh Commission report. As part of this

facility improvement action, OSD conducted a survey of the Department’s fitness facilities. This installation level survey identified 122 fitness facilities that were in

poor condition. The survey instrument specifically instructed the installation to have

the local engineer determine if the fitness facility was in excellent, good or poor condition, according to engineering criteria. These 122 poor facilities represented almost

a quarter of all fitness facilities that our people used to stay fit and for recreation.

The number of poor facilities has been reduced and will be reduced further if the

eleven facilities requested in the fiscal year 2000 MILCON are approved.

The following is a list of projects critical to the Services’ fitness centers, that are

not funded in the fiscal year 2000 budget, but are included in the Future Years Defense Plan. The total is approximately $363 million as shown below.

In Millions

Bamberg, GE .......................................................................................................... $6.00
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In Millions

Ft. Knox, KY .......................................................................................................... 6.20

Ft. Bragg, NC (Ctr 1) ............................................................................................. 6.20

Camp Stanley, KR ................................................................................................. 6.00

Ft. McNair, Wash D.C ........................................................................................... 7.80

Weisbaden, GE ....................................................................................................... 6.00

Ft. Hood, TX ........................................................................................................... 6.20

Ft. Bragg, NC (Ctr 2) ............................................................................................. 6.20

Kaiserslautern, GE ................................................................................................ 6.00

Camp Kyle, KR ...................................................................................................... 6.00

Ft. Benning, GA ..................................................................................................... 10.00

Atlanta, GA ............................................................................................................ 2.92

WPS Charleston, SC .............................................................................................. 4.83

Diego Garcia ........................................................................................................... 5.55

Dahlgren, VA .......................................................................................................... 5.87

Roosevelt Roads, PR .............................................................................................. 7.29

ASW San Diego, CA ............................................................................................... 3.46

Monterey, CA ......................................................................................................... 3.87

Navy Replacement Projects ................................................................................... 1.96

HAS Norfolk, VA .................................................................................................... 9.44

Newport, VA ........................................................................................................... 8.76

Athens, GA ............................................................................................................. 2.67

Corry Station, FL (Ctr 1) ...................................................................................... 1.66

Fallon, NV .............................................................................................................. 4.80

Port Hueneme, CA ................................................................................................. 5.63

Lemore, CA ............................................................................................................. 5.44

Dam Neck, VA ........................................................................................................ 1.85

Gulfport, MS ........................................................................................................... 3.03

Corry Station (Ctr 2) ............................................................................................. 1.11

E1 Centro, CA ........................................................................................................ 4.79

Bangor, ME ............................................................................................................ 0.92

Davis Monthan AFB, AZ ....................................................................................... 7.60

McGuire AFB, NJ .................................................................................................. 10.50

Dover AFB, DE ...................................................................................................... 5.00

McChord AFB, WA ................................................................................................ 5.40

Lackland AFB, TX ................................................................................................. 3.00

Little Rock, AR ....................................................................................................... 7.50

Anderson AFB, GU ................................................................................................ 8.20

Tinker AFB, OK ..................................................................................................... 4.10

Scott AFB, IL ......................................................................................................... 7.75

Dyess AFB, TX ....................................................................................................... 6.45

RAF Mildenhall ...................................................................................................... 5.00

Shaw AFB, SC ........................................................................................................ 1.50

Hanscom AFB, MA ................................................................................................ 4.00

Minot AFB, ND ...................................................................................................... 4.25

Beale AFB, CA ....................................................................................................... 6.65

Seymour-Johnson AFB, NC .................................................................................. 5.50

Ramstein AFB, GE ................................................................................................ 6.00

Hickam AFB, HI .................................................................................................... 10.00

Charleston AFB, SC .............................................................................................. 1.90

Elmendorf AFB, AK ............................................................................................... 1.70

Randolph AFB, TX ................................................................................................. 10.20

Nellis AFB, NV ...................................................................................................... 2.00

Moody AFB, GA ..................................................................................................... 3.20

Eielson AFB, AK .................................................................................................... 9.90

Andrews AFB, MD ................................................................................................. 9.00

Spangdahlem, AFB, GE ........................................................................................ 1.70

Bolling AFB, Wash D.C ......................................................................................... 9.00

Quantico, VA .......................................................................................................... 7.90

Lejeune, NC (Ctr 2) ............................................................................................... 3.95

Pendleton, CA (Ctr 1) ............................................................................................ 4.72

Cherry Point, NC ................................................................................................... 3.31

Miramar, CA .......................................................................................................... 4.15

Pendleton, CA (Ctr 2) ............................................................................................ 11.69

Yuma, AZ ................................................................................................................ 0.83

Lejuene, NC (Ctr 3) ............................................................................................... 2.58
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In Millions

Kaneohe, HI ........................................................................................................... 8.38

Total ............................................................................................................. 362.96

SUBCOMMITTEE RECESS

Senator BURNS. The next hearing of the subcommittee will take

place on March the 23, when we will hear from the Army and the

Air Force. We certainly appreciate your cooperation this morning

and your good work. We appreciate all that you do.

[Whereupon, at 11:30 a.m., Thursday, March 16, the subcommittee was recessed, to reconvene at 11 a.m., Tuesday, March 23.]

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MILITARY CONSTRUCTION APPROPRIATIONS

FOR FISCAL YEAR 2000

TUESDAY, MARCH 23, 1999

U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC.

The subcommittee met at 11 a.m., in room SD–116, Dirksen Senate Office Building, Hon. Conrad Burns (chairman) presiding. Present: Senators Burns, Craig, and Murray.

DEPARTMENT OF DEFENSE

DEPARTMENT OF THE ARMY

STATEMENT OF MAHLON APGAR, IV, ASSISTANT SECRETARY OF THE

ARMY (INSTALLATIONS AND ENVIRONMENT)

ACCOMPANIED BY:

MAJOR GENERAL MILTON HUNTER, DIRECTOR OF MILITARY PROGRAMS, U.S. ARMY CORPS OF ENGINEERS

MAJOR GENERAL ROBERT L. VAN ANTWERP, JR., ASSISTANT

CHIEF OF STAFF FOR INSTALLATION MANAGEMENT

BRIGADIER GENERAL JAMES R. HELMLY, DEPUTY CHIEF, ARMY

RESERVE, OFFICE CHIEF, ARMY RESERVE

BRIGADIER GENERAL MICHAEL J. SQUIER, DEPUTY DIRECTOR,

ARMY NATIONAL GUARD

OPENING STATEMENT

Senator BURNS. We will call the committee to order.

This morning we will hear testimony of the Military Construc- tion, Family Housing, the Base Realignment and Closure (BRAC)

and Reserve component programs from both the Army and the Air

Force. I welcome all of you here this morning. We will first hear

from the United States Army.

I am pleased to have before us the Assistant Secretary of the

Army for Installations and Environment. Is that Mahone?

Mr. APGAR. Mahlon.

Senator BURNS. Mahlon——

Mr. APGAR. I am called Sandy, sir, please.

Senator BURNS [continuing]. Apgar.

Mr. APGAR. Correct.

Senator BURNS. I will tell you that we have quite a lot of concern, as you well know, on military construction and the way that

we are funding our 2000 military construction budget. Incremental

funding over the last two-year period will slow execution of these

critical projects, in my estimate.
72

Ultimately, it will cost the American taxpayer more money, as

we expect contractors to assume more of the risk associated with

building facilities for the Department. I am not all that big of a fan

of it, but yet we are not written in stone, and we will listen to what

you have in mind. Senior Defense officials tell me that this is a

one-time-only financing technique, advanced appropriations for all

projects; however, the same fiscal challenges that the Department

faced in putting together the fiscal year 2000 budget will still be

there in years to come.

I think the danger will be that we begin not fully funding military construction up front but spread the costs over two, three, and

even five years, and I have some concern with that. How do we

deal with BRAC if there is future base closings, and that may be

a distinct possibility. So I am not a big fan of incremental funding,

and believe this is the wrong way for the Department to proceed.

PREPARED STATEMENTS

I will forego the rest of my statement, and I will enter my statement and Senator Murray’s statement into the record.

[The statements follow:]

PREPARED STATEMENT OF SENATOR BURNS

The Subcommittee will come to order. This morning we will hear testimony on

the Military Construction, Family Housing, BRAC and Reserve Component programs for both the Army and the Air Force.

We will first hear from the Department of the Army.

We are pleased to have before us this morning, the Assistant Secretary of the

Army for Installations and Environment, Mahlon Apgar.

I remain concerned with the way the Department of Defense has funded the fiscal

year 2000 Military Construction budget.

Incremental funding over a two-year period will slow execution of these critical

projects. Ultimately, it will cost the American taxpayers more money as we expect

contractors to assume more of the risk associated with building facilities for the department.

Senior defense officials tell me that this is a one-time only financing technique—

advance appropriations of all projects. However, the same fiscal challenges that the

department faced in putting together the fiscal year 2000 budget will still be there

in years to come.

The danger will be that we begin not to fully fund Military Construction up front

but spread the costs over two, three or even five years.

I could foresee a time when we have many projects on the books but not enough

money to begin construction on any of them.

I oppose incremental funding and believe it is the wrong way for the department

to proceed.

It will strike a major blow to revitalizing our aging infrastructure and improving

quality of life for service members and their families.

I can assure you that we will approach this situation with great care and consideration we decide how to proceed with this budget.

I want to commend you and the Army for your continued commitment toward improving the quality of life for single soldiers. However, I am concerned with the absence of funding in the budget for family housing for the Army, not only in the fiscal

year 2000 budget but also in the out year. We will discuss this later when we get

to questions.

We look forward to working with you to ensure that the Army’s most critical requirements are met in this budget.

Secretary Apgar, I would ask you to keep your statement brief because we will

also hear from the Air Force later this morning.

Please be advised that your statement will be included in its entirety for the

record.

Sir, before we proceed, would you introduce the representatives that are with you

today from the Army?
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I would like to turn to the ranking member, Senator Murray, for any comments

that she might like to make at this time.

Secretary Apgar, please proceed.

PREPARED STATEMENT OF SENATOR MURRAY

Mr. Chairman, thank you for scheduling this hearing to discuss the Fiscal Year

2000 Military Construction programs of the Army and Air Force. I welcome our witnesses, and I look forward to hearing their testimony.

This is a crucial year for the programs that our subcommittee oversees. The Congress has heard a steady drumbeat of testimony from military and civilian defense

leaders over the past several months regarding threats to the readiness of our

armed forces.

Pay and retirement benefits are said to be inadequate. Recruitment and retention

are down, maintenance and repair costs are up, and morale among the troops is

strained.

The Defense Department responded to these pressures by seeking a substantial

increase in the defense budget for fiscal year 2000, part of which is to be financed

by stretching out the funding for fiscal year 2000 military construction projects over

two years.

While I am sure it is well-intentioned, I also believe that this is a very risky strategy. We have heard from previous witnesses before this subcommittee that incremental funding could have a detrimental effect on the pace of Military Construction.

Contractors are expected to view this system with skepticism, construction costs are

likely to increase, and at least some projects are going to end up behind schedule.

Given these potential drawbacks, I have serious reservations about incremental

funding and the impact it could have on absolutely essential Military Construction

projects and quality of life programs.

I have heard time and again from witnesses before this subcommittee about the

importance of quality of life projects to the men and women who serve in our armed

forces. I have visited the military bases in my state of Washington and elsewhere

in this country. I have seen first-hand examples of crumbling infrastructure and inadequate facilities. I have seen first-hand the need for barracks, family housing,

child care facilities, schools, clinics and other family support services.

These items are crucial components of military readiness, and we cannot afford

to shortchange them or delay them.

I fear that whether we go with some kind of incremental funding program or

whether we fully fund a reduced number of projects, the result will be the same—

vital military construction projects will go begging, and the men and women who

serve in our military will see a further decline in the quality of life that we provide

for them and their families.

Clearly, we have our work cut out for us. We must work within existing budget

constraints.

We must accept the fact that Military Construction is but one element of a complex and comprehensive defense program.

We must set priorities. We must allocate our resources carefully. But, for the good

of our military and the benefit of our national security, we cannot afford to lose our

focus on essential quality of life improvements.

I commend our witnesses today, and indeed all of the services, for the recognition

that they have given to the importance of quality of life initiatives, and for their

efforts to improve quality of life programs in the face of severe budget pressures

from readiness and personnel accounts.

I appreciate the emphasis that the chairman of this subcommittee has placed on

quality of life improvements.

I commend our witnesses today, and indeed all of the services, for the recognition

that they have given to the importance of quality of life initiatives, and for their

efforts to improve quality of life programs in the face of severe budget pressures

from readiness and personnel accounts.

I appreciate the emphasis that the chairman of this subcommittee has placed on

quality of life improvements.

Through his efforts, he has made a direct and significant contribution to the lives

of many of the men and women who are serving in the U.S. military today.

I thank him for his support, and I look forward to working with him and with

the services to find the best possible solution to meeting the myriad of Military Construction and other needs of the armed forces.

Thank you Mr. Chairman.
74

Senator BURNS. This morning we have General Antwerp, Gen- eral Hunter, and General Squier, and General Helmly. We welcome

you this morning, and we would welcome your statements at this

time.

Mr. Secretary, thank you for coming this morning.

STATEMENT OF MAHLON APGAR

Mr. APGAR. Thank you, Mr. Chairman. It is an honor to appear before you and the committee to discuss the Army’s budget request

for fiscal year 2000 and our military construction program. This is

my first appearance before the committee, and I pledge to work

closely with you in addressing the many challenges in our Military

Construction (MILCON) programs. I hope you will call me at any

time with your concerns or questions you may have about our policies and programs. My written statement provides in-depth details of our military construction budget request. In it we balance Army objectives for

modernization, readiness, and quality of life, and support our highest priorities, barracks and family housing, strategic mobility, reserve component construction, real property maintenance, and base

closures and realignments, and with your permission, Mr. Chairman, I will submit the full statement for the record and make some

brief comments to highlight our progress.

Senator BURNS. All of your statements will be made part of the

record.

Mr. APGAR. Thank you, sir. First, barracks modernization is a

major success. With your support, 53 percent of our single-soldier

housing is funded to meet or approximate the new one-plus-one

standard, and while we still have some way to go, especially overseas, we are on schedule to complete Army-wide barracks modernization by 2008.

Our budget also emphasizes strategic mobility; that is, the platform for Army readiness. These force projection projects will provide the necessary infrastructure, specifically rail and airfield improvements, to facilitate movement of our troops and their equipment to essential air and sea ports. The budget also supports reserve component construction.

For the Army National Guard we have budgeted for a readiness

center, three maintenance support facilities, and one training facility. For the Army Reserve, we have three new Army Reserve centers, a regional maintenance training facility, and other critical

projects.

Real property maintenance is our primary account for maintaining the Army’s infrastructure. Because these resources protect the

facilities that your committee approves, your support of the funding

levels we have requested in our operations and maintenance budget will reinforce our MILCON programs. We hope you will endorse

this funding.

In our current base closure and realignment program, three out

of four rounds of base closures will be completed by the end of this

fiscal year, and we will complete the final round of closures and realignments by the end of fiscal year 2001. We continue to believe

that the BRAC process is the best way to dispose of unneeded infrastructure and to reshape our installations.
75

We will achieve nearly a billion dollars a year in annual savings

once our current program is fully implemented, but we must do

more to reduce the costs of maintaining excess infrastructure and

to redeploy these resources for our critical readiness requirements.

Finally, I would like to clarify our intent and plans concerning

the Army’s housing privatization program. This is a major Administration priority, and it is one of the main reasons I was asked to

take this office, but it has become the subject of some controversy

in recent weeks. I have come to realize that we have not discussed

our concepts and plans with you and others in Congress as much

as we should have.

So I want to underscore my commitment to forging a closer dialogue with you in the coming months on this critical program.

As you know, the Army has an acute family housing problem. A

huge backlog of substandard houses must be renovated, a substantial housing deficit, especially for junior enlisted soldiers, must be

eliminated, and a large ongoing maintenance requirement must be

satisfied.

It is imperative to attract and maintain a trained and ready

Army and sustain the selfless service of our soldiers. They demand

that we solve this complex problem by providing their families with

better places in which to live. I consider this basic institutional responsibility as my most important professional and personal challenge in this office and, accordingly, have pressed forward in the

past eight months with great urgency to design and test an Army

privatization program that I believe will substantially help the

Army, our soldiers, and their families.

I am pleased to report that the home building and development

industry has shown a great interest in the program, and the Army

leadership has expressed its support.

Shortly after taking office last June I visited Forts Carson and

Lewis with senior Army military and civilian executives to see the

problems firsthand through the eyes of soldiers and their families,

and to gauge the priorities and concerns of the local commands,

and since then have done the same at ten other installations in the

U.S., and Korea, including Forts Hood, Meade, Shafter, and

Schofield Barracks.

Frankly, I was appalled at some of the conditions I saw, but I

was also impressed with the dedication of the troops, the understanding of their families, and the resolve of the local command

teams to help them.

In response, we mustered a task force of Army and private sector

experts to help us forge a strategy designed both to attract private

capital to fund improvements, and to enlist private enterprise to revitalize our residential neighborhoods.

In my judgment, sufficient private capital will be available to

achieve our objectives if we maximize the Army’s advantage of

scale in using the privatization tools Congress has given us, but

privatization means more than capital. Capital alone is not enough.

We have to engage the four E’s.

I call them the entrepreneurship, the energy, the efficiency, and

the expertise of the world’s most effective home building and real

estate industry to help us house the world’s best Army in the quality communities they deserve. That is why we renamed our housing
76

privatization program from Capital Ventures Initiative (CVI),

which focuses on financing, to Residential Communities Initiative

(RCI), which emphasizes our overriding goal, to enhance the quality of life for soldiers and their families by creating and sustaining

attractive, affordable residential communities on Army posts.

RCI uses the tools provided by Congress to achieve this goal, by

leveraging the experience and creativity of the development industry, as well as their capital. We believe that most Army family

housing needs in the U.S. can be met through RCI, but at this time

we would like to test our concept at five installations. We will continue to use traditional MILCON to fund all of those projects in the

U.S. where privatization is not feasible, and all housing projects

overseas, where the privatization authorities do not apply.

As part of our pilot program we are pursuing three changes in

policy and practices. First, our management focus is shifting from

housing production to community development.

Each project will include the features and amenities that most

Americans enjoy in their neighborhoods, such as extensive landscaping, community centers, recreation facilities, and ongoing

maintenance of public space as well as housing renovation and construction.

The second change is transforming our business relationships

from contracting to partnering. In traditional military construction

projects the Army is the developer. We provide the funds, take the

risks, and bid the contracts, but when the houses are built, the contractor is finished, and the Army maintains and manages the completed project usually through separate contractors.

In RCI, the Army will become a partner with private developers.

Each developer will arrange the project financing for private investors, take the business risks, hire and manage the contractors, and

provide ongoing services with specific performance measures that

align the developer’s goals with the Army’s.

The third major shift, from procuring the contractor, through a

request for proposal, to selecting a partner through a request for

qualifications, is a consequence of the first two changes, and is

itself an important reform of the procurement process.

In the typical request for proposal (RFP) the Army details the requirements for executing a project and selects the contractor based

on his bid proposal. The contractor cannot suggest improvements

to these specifications until the contract award is made, but by

then he has no incentive to do so and would only delay the project.

In our proposed request for quote (RFQ), the Army will define

the qualifications for selecting the developing partner, experienced

track record, financial resources, management capabilities, and so

on, and then the Army and selected developer together will jointly

prepare the best plan for project execution, and then submit that

plan for congressional review.

The RFQ process will enable the Army to benefit from the industry’s creativity and experience, encourage the developer to innovate

wherever possible throughout the project, and eliminate delays in

execution. We designed the RFQ specifically to broaden competition

by making it easier and cheaper for developers to enter the program. Those who responded to the RFP in Fort Carson, for exam-
77

ple, have told us that they spent anywhere from $300,000 to over

$1 million.

The RFQ tests we have done suggest that people can enter—experienced, qualified developers and managers can enter for sums in

the range of $10,000 to $25,000. That factor alone, together with

the simplicity, will greatly broaden competition.

The RFQ process is basically an inexpensive way for the Army

to acquire information and especially insights from experienced developers, and then to determine the boundaries of a long-term business relationship.

The dialogue between the developer, the Army, and other stakeholders will result in a plan for each installation that shows how

much will be invested, how many houses and other facilities will

be built and renovated, and how maintenance and other operations

will be managed to meet our critical housing needs and create family communities for which we can all be proud.

In closing these opening comments, Mr. Chairman, may I reaffirm my commitment to work closely with you and your staff to

make the Residential Communities Initiative succeed.

PREPARED STATEMENT

Thank you. We will be pleased to respond to your questions.

Senator BURNS. Thank you, Mr. Secretary.

[The statement follows:]

PREPARED STATEMENT OF HON. MAHOL APGAR, IV

Mr. Chairman and members of the subcommittee, it is a pleasure to appear before

you to discuss the Active Army and Reserve Components’ military construction request for fiscal year 2000. This request includes initiatives of considerable importance to America’s Army, as well as this committee, and we appreciate the opportunity to report on them to you.

Our statement is in four parts:

PART I—MILITARY CONSTRUCTION, ARMY FAMILY HOUSING, ARMY HOMEOWNERS

ASSISTANCE FUND, DEFENSE

I am pleased to present the Active Army’s portion of the Military Construction

budget request for fiscal year 2000. This budget provides construction and family

housing resources essential to support your Army’s role in our National Military

Strategy.

The program presented herein requests fiscal year 2000 appropriations of

$656,003,000 for Military Construction, Army (MCA) and $1,112,083,000 for Army

Family Housing (AFH); also requested is an advance appropriation of $659,536,000

for MCA and $43,991,000 for AFH. The companion request for authorization in fiscal year 2000 includes $1,117,505,000 for MCA and $1,158,980 for AFH. The fiscal

year 2000 request for authorization of appropriations is $656,003,000 for MCA and

$1,112,083,000 for AFH. There is no request this year for the Homeowners Assistance Fund, Defense.

America’s Army is the most capable Army in the world today. The soldiers of the

active component, the National Guard, and the Army Reserve, are joined by the civilian employees and family members to form the ‘‘Total Army.’’ The Army stands

ready today, as our predecessors have for over 223 years, to fight and win our Nation’s wars. We are currently conducting operations throughout the world to shape

the international environment and to promote peace and prosperity. On any given

day in fiscal year 1998, over 28,000 of our soldiers were deployed away from their

home stations to more than 70 countries around the world, conducting operations

in support of the National Military Strategy.

We must be ready to respond wherever our interests are threatened around the

world. To do this, we must maintain sufficient forces, sufficient strategic air and

sealift to project power rapidly, sufficient prepositioned assets to cut down deploy-
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ment times for initial response forces, and sufficient installations from which to

project our forces. The requirements of military service demand unique sacrifices from military members, their families and the civilians who work with them. One of the imperatives to maintaining a trained and ready Army is taking care of our soldiers and

families. People are the defining characteristic of a quality force and are the nucleus

of our Army. High caliber quality of life programs are essential to ensuring that the

Army continues to attract and retain the soldiers necessary to maintain the Total

Army. We must continue to focus on issues important to these men and women who

so bravely serve the nation. Programs that provide our soldiers and their families

better places to work and live are key to our focus. The commitment to taking care

of soldiers benefits our Nation by fostering strong families and safer communities. Now, I would like to discuss the Army’s facilities strategy for fiscal year 2000 and beyond.

FACILITIES STRATEGY

A world-class Army deserves world-class facilities. The Army’s vision is to provide comprehensive, adaptable power projection platforms with the quality facilities, infrastructure and services that are integral to the readiness of the force and the quality of life of our soldiers and their families. The Army’s facilities strategy is threefold. First, we must focus our investment on the most important facilities because our resources are limited. To do this we

must identify required facilities, infrastructure and support services, and then focus

our resources on those to assure the desired level of readiness. Second, we must divest all unneeded real estate. Third, we must reduce the total cost required to support our facilities and related services, including maintenance of our real estate inventory.

As part of our effort to better focus our investment, we have developed a decision

support tool, the Installation Status Report (ISR) to help formulate and monitor our

facilities strategy. We use it to assess the status of our facilities’ condition. This

identifies critical areas to consider in resource allocation. Also, it assists in condition

assessment of our facilities essential to the installation’s mission and quality of life.

We are reducing our requirement by rigorously eliminating excess facilities. Our

current facilities reduction program and base realignment and closure process will

result in disposal of over 200 million square feet in the United States by 2003. We

continue to demolish one square foot for every square foot constructed and began

reducing our leasing costs in fiscal year 1998 by $13,900,000. By 2003, with our

overseas reductions included, the Army will have disposed of over 400 million

square feet from its fiscal year 1990 peak of 1,157,700,000 square feet.

We are looking for innovative ways to reduce the cost of our facilities, including

privatization or outsourcing of certain functions. One example is installation utilities systems. Our goal is to privatize all utility systems, where it is economically

feasible, by 2003, including those supporting reserve components and overseas, except those needed for unique security reasons. Privatization is also being considered

to provide better housing for soldiers and their families while reducing the Army’s

inventory. Partnering with civilian communities around an installation to provide

some facilities is also a viable alternative to Army owned facilities.

Over the period 2000–2005, the Army plans to achieve over $3 billion in estimated

savings from our Major Commands with United States installations to provide additional resources for force modernization and other high priorities. These reductions

are based on estimated savings derived from performing A–76 cost competition studies of commercial activities comprising about 73,000 positions during fiscal years

1997–2002. The Army’s primary challenge is to accomplish these cost-effective measures as soon as possible.

Next, I will discuss the highlights of the budget.

ADVANCE APPROPRIATIONS

In order to free up resources required to address serious requirements in readiness funding, the fiscal year 2000 construction program has been incrementally

funded by authorizing each project and requesting advance appropriations to fund

it.

We are requesting full authorization for all new fiscal year 2000 projects, but only

the appropriations that can be spent in the first year. In most cases, this amounts

to approximately 15 percent of the project. For the Army, the percentage is based

on historical, first-year outlay rates and includes an additional percentage for risk

and flexibility. We are also requesting fiscal year 2001 advance appropriations for

the balance of the funding requirement.
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MILITARY CONSTRUCTION, ARMY (MCA)

We are focusing on four major categories of projects: mission facilities; quality of life; support programs such as infrastructure and environment; and chemical demilitarization. I will explain each area in turn.

MISSION FACILITIES

In fiscal year 2000, there are thirteen mission facility projects, including the Army’s Strategic Mobility Program (ASMP), and the Simulator Facility Program.

We are requesting full authorization of $171,650,000, with appropriations and authorization of appropriations of $42,510,000. Advance appropriations for the balance

of the projects are requested for fiscal year 2001.

Army Strategic Mobility Program

Our budget request continues the program to upgrade our strategic mobility infra- structure enabling the Army to maintain the best possible power projection platforms. We are requesting full authorization of $161,050,000 with appropriations and

authorization of appropriations of $40,910,000. Advance appropriations for the balance of the projects are requested for fiscal year 2001. The fiscal year 2000 projects

will complete 68 percent (based on authorization) of the Strategic Mobility program

that is scheduled for completion in fiscal year 2003. Our fiscal year 2000 request includes the second phase of the railhead loading fa- cility at Fort Hood that was fully authorized last year. We are requesting an appropriation and authorization of appropriations of $14,800,000 to complete the project. In addition to the above project we are planning to construct two other projects at Fort Hood: a fixed wing aircraft parking apron and a deployment ready reactive

field. At Fort Bliss, we are constructing an air deployment facility complex, an aircraft loading apron, and an ammunition hot load facility. We are continuing to upgrade the facilities at Fort Bragg by constructing a heavy drop rigging facility. Additional projects include a rail and containerization facility at Fort Sill, an ammunition holding area at Fort Benning and an ammunition surveillance facility at Sunny

Point Military Ocean Terminal. We are continuing to improve our depot capability with a rail yard infrastructure improvement project and ammunition road infrastructure project at McAlester Army

Depot, an ammunition surveillance facility at Bluegrass Army Depot, and an ammunition containerization complex at Letterkenny Army Depot. Simulator Facility Program.—One project is included in this year’s budget for the Wolverine/Grizzly Simulator Facility. This project will enhance engineer soldier

training at Fort Leonard Wood by using a group of fully interactive, networked simulators and work stations to replicate actual vehicles, weapons systems, and command and control elements. This is the only simulator facility required for engineer

training. Our budget requests full authorization of $10,600,000 with appropriations

and authorization of appropriations of $1,600,000. Advance appropriations for the

balance of the project are requested for fiscal year 2001.

QUALITY OF LIFE PROJECTS

The quality of life of our soldiers, their families and civilians has a significant im- pact on readiness. Therefore, our budget reflects substantial funding levels for quality of life programs to support our goal to get soldiers out of gang latrine type barracks and to provide new or upgraded barracks for our requirement of 137,000 single soldiers. Additionally, we are requesting other quality of life facilities that will

improve not only the life style of our soldiers but also the readiness of the Army.

We are requesting an authorization of $454,550,000, with appropriations and authorization of appropriations of $85,423,000 for quality of life projects this year. Advance appropriations for the balance of the projects are requested for fiscal year

2001.

This substantial effort, as well as increased out-year funding, accelerates our barracks program by building new or renovating all barracks worldwide by 2008, rather

than 2012 as previously planned.

Whole Barracks Renewal Initiative.—Modernization of barracks continues to be

the Army’s number one facilities priority for military construction. It provides our

single soldiers with a quality living environment that is comparable to living off the

installation, or that enjoyed by our married soldiers. Our new or renovated barracks

include increased personal privacy and larger rooms, closets, upgraded day rooms,

all new furnishings, adequate parking, and landscaping, in addition to administrative offices, which are separated from the barracks.

In fiscal year 2000, we are planning seventeen projects. This includes five projects

in Europe and one project in Korea. Our budget also expands and funds the Fort
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Campbell barracks complex that was authorized in fiscal year 1999 and the Fort

Stewart barracks complex that was authorized in fiscal year 1998. We are requesting an additional $7,000,000 authorization to complete the Fort Stewart project, due

to an increased price estimate of the total cost to build the barracks complex. We

are requesting full authorization of $434,300,000, with appropriations and authorization of appropriations of $81,273,000. Advance appropriations for the balance of

the projects are requested for fiscal year 2001.

After completion of the fiscal year 2000 program, 60 percent of our soldiers requiring housing will be housed at the new standard. Our plan is to invest an additional

$5.2 billion (including host nation support) to fix barracks worldwide to meet our

goal of providing improved living conditions to our single soldiers by fiscal year

2008. Between fiscal year 1994 and fiscal year 1999, we have already invested $3.0

billion in improving barracks and thus the quality of life of our single soldiers.

Physical Fitness Training Centers

Physical fitness facilities have a positive impact on morale, physical welfare, soldier fitness and recreation. The overall condition of our existing fitness training facilities prompted us to include three projects in fiscal year 2000: one each at Fort

Lewis, Fort Campbell and at Walter Reed Army Medical Center. The request for full

authorization is $19,000,000, with appropriations and authorization of appropriations of $3,770,000 for these projects. In addition, advance appropriations for the

balance of the projects are requested for fiscal year 2001. This is the first phase of

an effort to improve the condition of our physical fitness training centers.

Chapel

Our fiscal year 2000 budget includes a small chapel at Fort McNair, to serve the

spiritual needs of the residents, employees, staff and students. This project also

must be designed with the unique requirements of one of the Army’s most important

historic posts. Full authorization of $1,250,000 is requested with appropriations and

authorization of appropriations for $380,000. Advance appropriations for the balance

of the project are requested for fiscal year 2001.

SUPPORT PROGRAMS

This category of construction projects provides vital support to installations and

helps improve their readiness capabilities. In our budget, we have requested twentyfive projects with full authorization request of $193,000,000, and appropriations and

authorization of appropriations request of $169,465,000. Advance appropriations for

the balance of the projects are requested for fiscal year 2001.

Our budget includes eight projects that will improve soldier training. Three

projects were authorized by Congress in fiscal year 1999: Phase 2 of the Military

Operations in Urban Terrain (MOUT) training complex at Fort Bragg, Phase 2 of

the soldier development center at Fort Hood, and Phase 2 of the Fort Knox multipurpose digital training range. In addition, we have included a MOUT range and

Sabre heliport improvements at Fort Campbell, a multi-purpose training range at

Fort Stewart, an ammunition supply point facility for Yakima Training Center and

a rotational unit facility maintenance area at Fort Irwin.

We are also revitalizing our infrastructure by budgeting eleven projects that affect

the efficient and safe operations of our installations. These projects include a tank

trail upgrade for erosion mitigation at Fort Lewis, Yakima Training Center, a heat

plant upgrade at Fort Wainwright, a water treatment plant at Fort Leavenworth,

a water system upgrade and an electrical system upgrade in Korea. We also included a military police station and a fire station at Fort Belvoir, a fire station at

McAlester Army Ammunition Plant, and an emergency service center at both Fort

Myer and Fort Jackson. In addition, we are completing the power plant for Roi

Namur on Kwajalein Atoll that was fully authorized in fiscal year 1999.

Construction of the United States Army Disciplinary Barracks, begun in fiscal

year 1998, will be completed with this final phase, with an appropriations and authorization of appropriations request of $18,800,000. Phase 2 of the United States

Military Academy Cadet Physical Development Center, begun in fiscal year 1999,

is also included. We are requesting appropriations and authorization of appropriations of $28,500,000 for this phase. The entire project was authorized in fiscal year

1999.

The budget also includes projects at Westover Air Force Base and Fort Meade for

the construction of military entrance processing centers that will permit us to vacate

costly leased facilities and move onto a military installation. The United States

Army Space Command Headquarters will be constructed at Peterson Air Force

Base, with the approval of this budget, which also permits us to vacate leased facili-
81

ties and to co-locate with other similar commands, thus providing an additional economic advantage. Also included is a request for a classified project.

AMMUNITION DEMILITARIZATION

The Ammunition Demilitarization (Chemical Demilitarization) Program is designed to destroy the U.S. inventory of lethal chemical agents, munitions, and related (non-stockpiled) materiel. It also provides for emergency response capabilities,

while avoiding future risks and costs associated with the continued storage of chemical warfare materiel.

The Office of the Secretary of Defense devolved the Chemical Demilitarization

program to the Department of the Army in fiscal year 1999. Although Congress authorized and appropriated funding for the fiscal year 1999 Chemical Demilitarization construction program to the Department of Defense, the overall responsibility

for the program remained with the Army and we have included it in this year’s

Army budget.

An appropriations and authorization of appropriations request for $267,100,000 is

included in the Army’s fiscal year 2000 budget to continue the Chemical Demilitarization projects previously authorized. Full authorization of $206,000,000 is requested for two new projects at Blue Grass Army Depot. The first Blue Grass

project is a support project which improves road access and security control. It also

provides utility linkage to the construction site, vehicle parking, and a facility for

contamination control. The second Blue Grass project is the Ammunition Demilitarization Facility, which provides the structures required to safely handle, process,

and dispose of lethal chemical agents and munitions. Table 1 summarizes our request:

TABLE I

[Fiscal Year 2000]

Installation Type Amount

Aberdeen Proving Ground, MD ........... Ammun Demil Facility ............................................... $66,600,000

Anniston Army Depot, AL ................... Ammun Demil Facility ............................................... 7,000,000

Blue Grass Army Depot, KY ............... Ammun Demil Facility ............................................... 1 11,800,000

Blue Grass Army Depot, KY ............... Ammun Demil Support Facility ................................. 11,000,000

Newport Army Depot, IN .................... Ammun Demil Facility ............................................... 61,200,000

Pine Bluff Army Depot, AR ................ Ammun Demil Facility ............................................... 61,800,000

Pueblo Army Depot, CO ..................... Ammun Demil Facility ............................................... 11,800,000

Umatilla Army Depot, OR .................. Ammun Demil Facility ............................................... 35,900,000

1 Authorization request of $195,800,000.

PLANNING AND DESIGN

The fiscal year 2000 MCA budget includes $60,705,000 for planning and design.

This request is based on the size of the two succeeding fiscal years’ military construction programs. The requested amount will be used to complete design on fiscal

years 2000 and 2001 and initiate design of fiscal year 2002 projects. The size of the

fiscal year 2000 request is, therefore, a function of the construction programs for

three fiscal years: 2000, 2001 and 2002.

Host Nation Support (HNS) Planning and Design (P&D).—The Army, as Executive Agent, provides HNS P&D for oversight of Host Nation funded design and construction projects. The United States Army Corps of Engineers oversees the design

and construction to ensure the facilities meet our requirements and standards. Lack

of oversight may result in an increase in design errors and construction deficiencies

that will require United States dollars to rectify. Maintaining the funding level for

this mission results in a payback where one dollar of United States funding gains

$60 worth of Host Nation Construction. The fiscal year 2000 budget request for

$21,300,000 will provide oversight for approximately $1 billion of construction in

Japan, $50 million in Korea and $50 million in Europe. The budget includes

$2,800,000, which is dedicated to the oversight of facilities associated with the Government of Japan (GOJ) funded initiative to consolidate and relocate United States

Forces on Okinawa.

Let me show you the analysis of our fiscal year 2000 MCA request.
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BUDGET REQUEST ANALYSIS

Summary

The fiscal year 2000 MCA budget includes a request for appropriations of

$656,003,000 and companion authorization of appropriations request of

$656,003,000 and advance appropriations of $659,536,000.

Authorization Request.—The request for authorization is $1,117,505,000. The authorization request is adjusted for those projects previously authorized in fiscal

years 1998 and 1999. These projects include the third phase of the U.S. Disciplinary

Barracks, the second phase of the Railhead Facility and the Force XXI Soldier Support Center at Fort Hood, phase two of the West Point Cadet Physical Development

Center, the Multi-purpose Digital Training Range at Fort Knox, the Power Plant at

Roi Namur, and the remainder of the Whole Barracks Renewal Complex at Fort

Campbell and Fort Stewart. Additionally, it is modified to provide full authorization

of $195,800,000 for the Bluegrass Army Depot Ammunition Demilitarization project.

Only $11,800,000 in appropriations is required for the first phase of this project.

The fiscal year 2000 request for authorization and appropriations for fiscal year

2000, by investment focus, is shown in Table 2:

TABLE 2.—INVESTMENT FOCUS

[Appropriations Fiscal Year 2000]

Category Authorization Appopriations Percent Appropriations

Quality of Life/Barracks .................................................... $454,550,000 $85,423,000 13.0

Mission/Strategic Mobility ................................................. 171,650,000 42,510,000 6.5

Support .............................................................................. 193,000,000 169,465,000 25.8

Planning & Design/Minor Construction ............................. 91,505,000 91,505,000 14.0

Subtotal Army MILCON ......................................... 910,705,000 388,903,000 59.3

Chemical Demilitarization ................................................. 206,800,000 267,100,000 40.7

TOTAL PROGRAM .................................................. 1,117,505,000 656,003,000 100.0

Table 3 shows the fiscal year 2000 distribution of the appropriations request

among the Army’s major commands:

TABLE 3.—COMMAND SUMMARY

[Military Construction Army Fiscal Year 2000]

Command Appropriations

($000) Percent of Total

INSIDE THE UNITED STATES

Forces Command ............................................................................................ 103,463 15.8

Training & Doctrine Command ...................................................................... 45,200 6.9

Army Materiel Command ................................................................................ 272,490 41.5

Military District of Washington ...................................................................... 6,110 0.9

Military Traffic Management Command ........................................................ 550 0.1

United States Military Academy ..................................................................... 28,500 4.3

Space & Missile Defense Command .............................................................. 3,700 0.6

United States Army, Pacific ........................................................................... 18,700 2.9

Classified Project ........................................................................................... 36,400 5.5

SUB-TOTALS ...................................................................................... 15,113 78.5

OUTSIDE THE UNITED STATES

Space & Missile Defense Command .............................................................. 35,400 5.4

Eighth, United States Army ........................................................................... 6,670 1.0

United States Army, Europe ........................................................................... 7,315 1.1
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TABLE 3.—COMMAND SUMMARY—Continued

[Military Construction Army Fiscal Year 2000]

Command Appropriations

($000) Percent of Total

SUB-TOTAL ........................................................................................ 49,385 7.5

TOTAL MAJOR CONSTRUCTION .......................................................... 564,498 86.1

WORLDWIDE

Planning and Design ..................................................................................... 82,005 12.5

Minor Construction ......................................................................................... 9,500 1.4

SUB-TOTAL ........................................................................................ 91,505 13.9

TOTAL APPROPRIATIONS REQUESTED ............................................... 656,003 100.0

Advance appropriations.—With full authorization, a single contract can be awarded. Advance appropriations allow the Army to construct all phases of a project as

a continuous project and minimizes any impact to the contractor due to incremental

funding. With advance appropriations, the scope of the contract is not limited, but

the work to be performed by the contractor is limited by the amount available for

obligation in a given year. fiscal year 2001 advance appropriations of $659,536,000

are requested for the balance of the fiscal year 2000 construction projects.

Now, I will explain our Army Family Housing request.

ARMY FAMILY HOUSING

No single quality of life measure is more important than adequate housing for soldiers and families. The family housing program provides a major incentive necessary for attracting and retaining dedicated individuals to serve in the Army. Yet,

adequate housing continues to be the number one soldier concern when we ask them

about their quality of life. Out-of-pocket expenses for soldiers living off post in the

United States are approximately 20 percent of the total cost of their housing. Maintaining or finding adequate, quality housing for our soldiers and families is one of

the Army’s continuing challenges

DOD has set a goal to eliminate inadequate family housing by 2010. Currently,

76 percent of Army’s housing needs to be upgraded. Not taking action would leave

our program underfunded by about $400 million per year, or $6 billion by 2010.

Therefore, we intend to privatize Army Family Housing (AFH) in the United States,

provide adequate revitalization resources to overseas locations and divest or demolish unneeded houses.

In the United States, the Army plans to use the 1996 Military Housing Privatization Initiative (MHPI) authorities in a program we are calling the Residential Communities Initiative (RCI) to privatize AFH. MHPI allows the Services to leverage

housing dollars to obtain private sector interest, expertise and capital to improve

military housing. We plan to privatize 85,000 units at 43 installations in the United

States by fiscal year 2005. Fort Carson, solicited under the Request for Proposals

(RFP) process, is the first to be privatized, with an award expected in July 1999.

Future projects will be solicited under the Request for Qualifications (RFQ) process,

wherein the government selects a private housing and community developer based

on the firm’s qualifications and experience; jointly develops a Community Development and Management Plan with that developer; and negotiates a development

agreement with the developer to implement that plan. The RFQ process is faster,

less costly to the developer, and provides more flexibility to develop projects that

meet the needs of all parties concerned. The emphasis is on partnering with the private entity to develop residential communities. The first RCI project to be executed

under the RFQ process will be Fort Hood, and is scheduled for award in February

2000. Forts Lewis, Stewart, Meade, and other installations will follow. Minimal

maintenance and repair (M&R) funds will be used to sustain housing in a safe and

habitable condition in the United States until privatized. Thirty-eight million dollars

has been transferred from the Army Family Housing program in fiscal year 2000

to the Military Pay Account to cover the cost of the first RCI projects. An additional

$9 million of fiscal year 2000 AFH has been transferred to the OSD Family Housing

Improvement Fund (FHIF) for OMB ‘‘scoring.’’ The majority, but not all, of AFH
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construction requirements in the Continental United States (CONUS) will be accomplished through the privatization program. Only in unique instances where privatization is not feasible is it expected that traditional MILCON will be necessary for

AFH in CONUS.

Because the Services do not own the houses or the land in foreign areas, they are

unable to ‘‘leverage’’ Military Construction funds or attract new capital as they do

in the United States. Moreover, the MHPI authorities do not apply in foreign areas,

so we will increase the funds for the revitalization of our family housing in foreign

areas to meet the DOD goal by fiscal year 2010.

Our fiscal year 2000 request for appropriations and authorization of appropriations is $1,112,083,000, while the authorization request is $1,158,980,000. Additionally, we are requesting $43,991,000 for advance appropriations. Our request includes a modest new construction program to alleviate housing shortages in Korea;

a revitalization program for our aging foreign housing inventory, which is 92 percent inadequate; and planning and design programs for future construction projects.

Like the Military Construction, Army program, we are requesting full authorization

for all new fiscal year 2000 projects, but only the appropriations that can be spent

in the first year. In most cases, this amounts to approximately 15 percent of the

project. For the Army, this percentage is based on historical, first-year outlay rates

and includes an additional percentage for risk and flexibility. We are also requesting

fiscal year 2001 advance appropriations for the balance of the funding requirement.

Funding for the annual costs of operating, maintaining and leasing family housing

for fiscal year 2000 is $1,098,080,000. Table 4 summarizes each of the categories

of the Army Family Housing program.

TABLE 4.—ARMY FAMILY HOUSING

[Fiscal Year 2000]

Facility Category

Authorization Appropriations

Dollars Percent Dollars Percent

New Construction .......................................... 24,000,000 2 4,400,000 <1

percent Post Acquisition Const .................... 32,600,000 3 5,303,000 1

Planning and Design .................................... 4,300,000 <1 4,300,000 <1

Operations ..................................................... 185,620,000 16 185,620,000 17

Utilities ......................................................... 220,952,000 19 220,952,000 20

Maintenance ................................................. 469,211,000 40 469,211,000 42

Leasing ......................................................... 222,294,000 19 222,294,000 <1

Debt .............................................................. 3,000 <1 3,000 <1

TOTAL ............................................... 1,158,980,000 ................ 1,112,083,000 ................

Advance appropriations—With full authorization, a single contract can be awarded. Advance appropriations allow the Army to construct all phases of a project as

a continuous project and minimize any impact to the contractor due to incremental

funding. With advance appropriations, the contract is not limited, but the scope of

the work to be performed by the contractor is limited by the amount available for

obligation in a given year. fiscal year 2001 advance appropriations of $43,991,000

are requested for the balance of the fiscal year 2000 construction projects.

FAMILY HOUSING CONSTRUCTION

The fiscal year 2000 request continues the Whole Neighborhood Revitalization

(WNR) initiative to revitalize the housing units, while concurrently improving

neighborhood amenities. This successful approach addresses the entire living environment of the military, and we appreciate the support that has been provided by

the Congress in past years. The projects recommended for this program, all in foreign areas, are based on life-cycle economic analyses and will provide units that

meet adequacy standards. Foreign area funding requests, where RCI does not apply,

are being increased in order to bring all inadequate units up to current adequacy

standards by fiscal year 2010. We are requesting full authorization of $60,900,000,

with appropriations and authorization of appropriations of $14,003,000. Advance appropriations for the balance of the projects is requested for fiscal year 2001.
85

New Construction

The fiscal year 2000 new construction program provides a project to construct 60 units at Camp Humphreys, Korea, where there is a continuing requirement for new

housing, including the supporting infrastructure. The new construction project is requested to provide family housing in Korea where adequate off-post family housing

is not available and no on-post family housing exists. These units are for command

sponsored personnel currently living in substandard, off-post quarters and for those

personnel who are unaccompanied due solely to a lack of adequate family housing.

Post Acquisition Construction

The Post Acquisition Construction program is an integral part of our housing revi- talization program, and is limited to foreign areas. In fiscal year 2000, we are requesting funds for improvements to 424 units at three locations in Europe. Also included within the scope of these projects are efforts to improve supporting infrastructure and energy conservation, and to eliminate environmental hazards.

OPERATIONS AND MAINTENANCE

The operations, utilities, maintenance and leasing programs comprise the majority of the fiscal year 2000 request. The requested amount of $1,098,080,000 for fiscal

year 2000 is almost 95 percent of the family housing authorization request and

nearly 99 percent of the authorization of appropriations request. This budget provides for the Army’s annual expenditures for operations, municipal-type services,

furnishings, maintenance and repair, and utilities. Because of the privatization program in the United States, maintenance and repair funds for units scheduled to be

privatized will be reduced to a level that sustains the houses in a habitable condition, but defers major repair projects until the RCI program is implemented at our

installations.

The family housing utilities’ request reflects our success in reducing our energy consumption and supports the Army’s energy conservation goal of a one and onehalf percent reduction in overall facility energy requirements. This request is the

minimum necessary to operate and maintain our family housing throughout the

world.

LEASING

The leasing program provides another way of adequately housing our military families. We are requesting $222,294,000 in fiscal year 2000 to fund existing Section

2835 project requirements, temporary domestic leases in the United States, and over

10,000 units overseas.

REAL PROPERTY MAINTENANCE

In addition to MCA and AFH, the third area in the facilities arena is the Real

Property Maintenance (RPM) program. RPM is the primary account in installation

base support funding responsible to maintain the infrastructure to achieve a successful readiness posture for the Army’s fighting force. Installations are the power

projection platforms of America’s Army and must be properly maintained to be

ready to support current Army missions and any future deployments. RPM consists of two major functional areas: Maintenance and Repair of Real Property and Minor Construction. The Maintenance and Repair of Real Property account pays to repair and maintain buildings, structures, roads and grounds, and

utilities systems. The Minor Construction account pays for projects under $500,000

for the erection, installation or assembly of a new facility, and for the addition, expansion or alteration of an existing facility. It also funds projects under $1 million

which are intended solely to correct a life, health or safety deficiency. This year we

have requested funds for our RPM program in the Operation and Maintenance,

Army (OMA) account, as well as a portion of the funds being requested in the Quality of Life Enhancement, Defense (QOLE,D) account. When the OMA RPM funding

of $828 million is combined with the QOLE,D funding of $626 million, the resulting

total funding will be $1,454,000 in fiscal year 2000.

Within the RPM program, there are two areas to highlight: our Barracks Upgrade

Program (BUP) and the Long Range Utilities Strategy. At the completion of the fiscal year 1998 program, 48 percent of our requirement for permanent party barracks

will meet or approximate the new DOD 1∂1 barracks standard. Our Whole Barracks Renewal Program, using Military Construction funding, will revitalize or replace 27 percent of the barracks. The remaining 25 percent of the barracks can be

modified to an approximate 1∂1 standard using RPM resources. In fiscal year 1999,

Congress provided Army an additional $137 million in Quality of Life Enhancements, Defense (QOLE,D) funding for repair of facilities key to improving the qual-
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ity of life of our soldiers in CONUS. We allocated these funds to bring more of our

VOLAR-era barracks inventory to the 1∂1 standard within the Barracks Upgrade

Program. Starting in fiscal year 1999, and through the completion of the program,

the Army committed approximately $150 million per year to continue the efforts to

upgrade our single soldier’s quality of life. The Barracks Upgrade Program, when

combined with the Military Construction, Army Whole Barracks Renewal program,

is reducing significantly the amount of time required to improve the living conditions of our single soldiers to the current DOD standard. We expect that all barracks for permanent party soldiers will have been revitalized or replaced by the year

2008.

The second area to highlight within the RPM program is our Long Range Utilities

Strategy to provide reliable and efficient utility services at our installations. As discussed earlier, privatization or outsourcing of utilities is the first part of our strategy. We are maximizing our efforts to partner with the local communities’ utility

departments and private utility companies to provide utility services that are more

efficient and reliable. The second part of the strategy is the utilities modernization

program to help upgrade those utility systems that are not viable candidates to be

privatized, such as central heating plants and distribution systems. We have programmed $60,000,000 per year for utility modernization projects in fiscal years 1998

through 2002. Utility systems at unique or remote installations are particularly reliant on these modernization projects. While we are able to make progress in upgrading barracks and improving utility services, the basic maintenance and repair of

Army facilities is funded at only 78 percent of the requirement, including those

funds in the Quality of Life, Defense, appropriation. At the current funding levels,

Army commanders will only be able to fix what breaks. The Installation Status Report (ISR) shows Army facilities are rated C–3 (not fully mission capable) due to

years of under-funding. At the end of the last rating period, 24 percent of the

Army’s facilities were ‘‘red’’—unsatisfactory, 47 percent were ‘‘amber’’—marginal,

and only 29 percent were ‘‘green’’—good.

HOMEOWNERS ASSISTANCE FUND, DEFENSE

The Army is the executive agent for the Homeowners Assistance Program. This

program provides assistance to homeowners by reducing their losses incident to the

disposal of their homes when the military installations at or near where they are

serving or employed are ordered to be closed or the scope of operations reduced. For

fiscal year 2000, there is no request for authorization of appropriations and appropriations. Requirements for the program will be funded from prior year carryover,

revenue from sale of homes, and anticipated authority to transfer monies from the

Base Realignment and Closure Account. Assistance will be provided to personnel at

approximately 25 installations that are impacted with either a base closure or a realignment of personnel, resulting in adverse economic effects on local communities.

SUMMARY

Mr. Chairman, our fiscal year 2000 budget marks a change from our normal budget. It is a balanced program that permits us to execute our construction programs;

provides for the military construction required to improve our readiness posture;

and provides for family housing leasing, operation and maintenance of the nonprivatized inventory, and privatization of approximately 14,100 owned units through

fiscal year 2000. This request is part of the total Army budget request that is strategically balanced to support both the readiness of the force and the quality of life

of our personnel. Our long-term strategy can only be accomplished through balanced

funding, divestiture of excess capacity and improvements in management. We will

continue to streamline, consolidate and establish community partnerships that generate resources for infrastructure improvements and continuance of services.

The fiscal year 2000 request is for appropriations is $1,768,086,000 and authorization of $2,276,485,000 for Military Construction, Army and Army Family Housing.

Further, the program allows us to rely on the RCI program for the U.S. and redistribute scarce resources to Europe and Korea to meet the departmental guidance to

eliminate inadequate family housing Army-wide by fiscal year 2010. Thank you for

your continued support for Army facilities funding.

PART II—MILITARY CONSTRUCTION, ARMY NATIONAL GUARD

Next, I will present the Army National Guard’s Military Construction Program for

fiscal year 2000.

The program presented requests fiscal year 2000 appropriation of $16,045,000 for

military construction, Army National Guard. The companion request for authoriza-
87

tion is $57,402,000. Also requested is an advance appropriation of $41,357,000 in

fiscal year 2001.

The Army National Guard is America’s community based, dual use reserve force.

They are missioned across the spectrum of contingencies, and structured and

resourced to accomplish State and Federal missions when called. Army National

Guardsmen are trained citizen-soldiers committed to preserving the timeless traditions and values of service to our Nation and communities, and, by statute, an integral part of the first line defense of the United States. The National Guard is balanced and ready. It is manned with over 361,000 quality soldiers in over 2,700 communities nationwide.

Greater reliance has been placed on this community based component of America’s Army. We are fully engaged in joint operational support, host nation support,

military-to-military contact with emerging democracies, and preventive deterrence

to hedge against aggression. The Army National Guard’s equally vital role is providing assistance and support to our 54 States and Territories during domestic and

community support missions. We have been an active participant in every major

American conflict around the world. Last year we provided close to 400,000 emergency response State missions and provided over one million Federal man-days in

support of global missions.

FACILITIES STRATEGY

The goal of the Army National Guard is to provide state-of-the-art, community

based facilities that facilitate communications, operations, training and equipment

maintenance in which to station, sustain and prepare the force for deployment. Our

objective is to have the maximum number of units that are manned, trained,

equipped, resourced and missioned for Federal as well as State and/or domestic requirements.

In order for the Army National Guard to ensure that it will continue to be able

to provide the forces needed to meet the needs of the community, the Army and the

nation, it is a necessity that we have quality facilities. To do this, we intend to design, implement, operate and maintain our facilities using private sector business

practices, 21st century technologies, and commercial off-the-shelf facilities software.

Some examples that demonstrate this comprehensive program are:

Education

An extensive real property management and real estate training program for our

facilities’ managers continues to progress. Energy training at the manager and executive level has been a beneficial addition to the program.

Master Planning

A new State-wide development planning initiative was adopted by an additional

twelve States in fiscal year 1999, bringing the total to thirty. Master Planning establishes the foundation for the management and development of installations; provides the framework for analyzing and justifying maintenance and repair resource

allocations; helps justify all peacetime and mobilization construction and development activities; forms an important management tool to ensure the efficient assignment, utilization, and disposal of real property assets; and provides a decision-making tool to identify requirements and alternatives for resolving real property deficiencies and excesses. This system will provide the user with a spatial decision support system which uses geographic information and computer automated design

technology. An additional twelve States are planned to be on-line each year until

2001 when all fifty-four States and Territories will have completed their Development Plans.

Energy Management

State-of-the-art energy efficient facilities are being constructed. We are also upgrading existing facilities to current energy efficient standards by funding energy

projects from current operating funds, using Energy Savings Performance contracts,

developing military construction Energy Conservation Investment Program projects,

and implementing energy improvement projects funded by utility companies. We

manage an active energy audit program performing audits in seven to eight States

per year. The State energy managers are empowered to execute an aggressive energy management program.

Data Analysis

In fiscal year 1999, we continued to refine the computerized systems that allowed

cost analysis of budget projections. The Army National Guard installations program

focuses on the future, investing to provide efficiencies and not just to repair past
88

mistakes. An example is the Infrastructure Requirements Plan that has allowed the

Army National Guard to better prioritize its future construction requirements.

Building Management System

We are currently in the implementation phase of the Smart Building Demonstration Project. This undertaking links several independent Direct Digital Controls for

the operation of heating, ventilating, and air conditioning systems within a facility.

Demand Lighting Technologies

The Demand Lighting Technologies (DeLiTe) system consists of intrusion detection sensors, working in conjunction with exterior lighting, CCTV and existing

alarm systems. The system was developed to enhance security, reduce security

guards and decrease energy costs. At this time, we have facilities in Ohio and Maryland that are operational.

Military Construction, Army National Guard (MCNG)

Within our military construction request, we focus on five investment areas: training site modernization, maintenance support shops, readiness centers, minor construction, and planning and design. These projects are mission focused and are centered on the quality of life of our soldiers.

MISSION FACILITIES

In fiscal year 2000, there are five mission facility projects. The amount of

$11,145,000 will be used to begin their construction. Essential mission facilities include several initiatives such as maintenance support shops, a readiness center and

a training site complex.

Training Site Modernization

Fiscal Year 2000 continues the slow process of adapting existing State operated

training sites to training strategies for the 21st century. We have included the Marseilles Training Complex, at Marseilles, Illinois, to our training site modernization

program. Current training is being conducted in field tents that provide limited temporary supply, administrative, housing and hygiene facilities. This training complex

will greatly enhance readiness, as well as quality of life for the soldier.

Maintenance Support Shops

In fiscal year 2000, we have included three replacement projects. We will replace

a Maneuver Area Training Equipment Site at Yakima, Washington; a Maneuver

Area Training Equipment Site/Combined Support Maintenance Shop at Anchorage,

Alaska; and one Organizational Maintenance Shop at Charlotte, North Carolina.

These facilities are over two decades old and cannot support the mission of maintaining the larger and more sophisticated vehicles and equipment. The construction

of these facilities will greatly enhance the readiness posture of equipment in the

State, increase crew proficiency, and will provide a safe working environment for

our soldiers.

Readiness Centers

A critical focal point for quality of life is the soldiers’ Readiness Center, of which

there are about 3,200 nationwide. This is where America may have its first and only

exposure to the military. The Readiness Center of yesterday, today, and tomorrow

is a place where the public can meet for community events and find refuge in times

of need. Therefore, in fiscal year 2000, we have included in our budget request a

readiness center at Charlotte, North Carolina. This project will permit the community to demolish a facility built in 1956, and allow for an expansion to the local airport. The community, in return, has plans to provide the site for construction of this

readiness center.

BUDGET REQUEST ANALYSIS

This MCNG budget request includes a request for appropriation of $16,045,000,

an authorization of appropriation of $16,045,000, and authorization of $57,402,000

in fiscal year 2000.

Table 5 shows the Fiscal Year 2000 request, by investment focus.
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TABLE 5.—INVESTMENT FOCUS APPROPRIATIONS

Category Authorizations Appropriations Percent Appropriations

Maintenance Support Shops ............................................. $34,463,000 $7,316,000 45.6

Readiness Center .............................................................. 7,087,000 1,504,000 9.4

Training Site Facilities ...................................................... 10,952,000 2,325,000 14.5

Minor Construction ............................................................ 771,000 771,000 4.8

Planning and Design ......................................................... 4,129,000 4,129,000 25.7

TOTAL ................................................................... 57,402,000 16,045,000 100

Table 6 shows the fiscal year 2000 distribution of the appropriations request

among the fifty-four States and Territories:

TABLE 6.—FUNDED PROGRAM

[Fiscal Year 2000]

Location Project Title Appropriations

Request

Percent of

Total

Charlotte, NC .................................................... Readiness Center ............................................. $1,504,000 9.4

Marswilles, IL ................................................... Tng Site, Battalion Complex ............................ 2,325,000 14.5

Anchorage, AK .................................................. Combined Support Maintenance Shop/Manvr

Area Tng Equip Site.

2,940,000 18.3

Yakima, WA ...................................................... Maneuver Area Trng Equip Site ...................... 3,464,000 21.6

Charlotte, NC .................................................... Operational Maintenance Shop ....................... 912,000 5.7

Various ............................................................. Planning and Design ....................................... 4,129,000 25.7

Various ............................................................. Minor Construction .......................................... 771,000 4.8

Total Appropriations Requested ......... .......................................................................... 16,045,000 100.0

REAL PROPERTY MAINTENANCE

The States will continue to prudently manage their existing facilities, despite the

challenges of age and shrinking real property support funding. They are committed

to executing the programs you authorize as expeditiously and as efficiently as possible. Facilities built during the last decade have played major roles in meeting force

structure changes, accomplishing quality training, maintaining readiness, and improving soldier quality of life.

The operation and maintenance of our physical plant is an issue of concern. The

replacement value of all National Guard facilities is almost $19 billion. Their average age is over thirty-four years. States take care of these facilities, using the limited resources in Real Property Maintenance accounts, as authorized and appropriated by Congress.

They do so, however, in a way appropriate to their unique Federal/State status.

The National Guard Bureau does not own, operate or maintain these facilities. The

States and Territories perform these functions. The National Guard Bureau transfers to the States money that Congress authorizes and appropriates for this purpose.

This money supports critical training, aviation and logistical facilities. For almost

half of these facilities, the States and Territories must contribute at least 25 percent

of operations and repair costs.

The States and Territories then pay the utility bills, hire those reimbursed employees necessary to operate and maintain these facilities, buy the supplies necessary for operations and maintenance, and contract for renovation and construction

projects. They also lease facilities when required. The Construction and Facilities

Management Offices are making a herculean effort to operate and maintain all National Guard facilities.

SUMMARY

The fiscal year 2000 request is for appropriation of $16,045,000 and an authorization of $57,402,000 for military construction.

The National Guard is a critical part of America’s Army. Today’s challenges are

not insurmountable and the National Guard will continue to provide the best facilities with the resources made available. As we look forward to another successful
90

year in Army National Guard Military Construction, we must thank you for your

continual support of our program.

PART III—MILITARY CONSTRUCTION, ARMY RESERVE

It is now my privilege to present the Army Reserve’s military construction budget

request for fiscal year 2000. This budget provides essential military construction resources to address the Army Reserve’s highest priority projects, and it will allow the

Army Reserve to continue to successfully operate in a resource constrained environment. Like all of America’s Army Reserve programs, the military construction will

focus Resources to Readiness.

The program presented requests fiscal year 2000 appropriations of $23,120,000

and advance appropriations of $54,506,000. The companion request for authorizations in fiscal year 2000 is $81,215,000.

The Army Reserve, which is on duty in 76 countries around the world, is an integral part of, and an essential and relevant partner in, America’s Army. This fact

is clearly evidenced by the Army Reserve units and personnel who comprise 65 percent of the Reserve Component forces and 71 percent of the Army Reserve Component Forces serving in Operation Joint Forge. In addition to relying on Reserve

forces to deploy and support major worldwide contingencies and warfighting, the

Army is increasingly dependent on its Army Reserve for support of a wide variety

of daily, ongoing missions at home and abroad during peacetime. This includes an

expanding role in commanding and controlling Army installations and providing regional base operations support. Those missions include the provision of trained and

ready combat support /combat service support units to rapidly mobilize and deploy;

providing trained and ready individual soldiers to augment the Army; and projecting the Army anytime, anyplace to achieve victory. Army Reserve units and soldiers will continue to respond to national security needs and domestic missions into

the 21st century. To ensure readiness, we must have the minimum essential facilities resources in which to train, support, and sustain our forces.

FACILITIES STRATEGY

The organization, roles and missions of the Army Reserve dictate the need for a

widely dispersed inventory of facilities. It provides a military linkage in 1,315 communities throughout America, its territories, and over-seas locations. Those facilities

have an average age of about 37 years. The six Army Reserve operated installations

have an average age of facilities of about 48 years. The Army Reserve military construction strategy relies on its demonstrated capability to convert the precious resources authorized and appropriated by Congress into quality facilities that support

the readiness of soldiers and units. Since 1981, the Army Reserve has executed

more than 300 military construction projects that represent a $1.3 billion investment by the Nation.

To effectively carry out its stewardship responsibilities toward the facilities inventory, the Army Reserve has adopted priorities and strategies that guide the application of resources focused on readiness. The essence of our program is straightforward: provide essential facilities to improve readiness and quality of life, preserve

and enhance the Army’s image across America, and conserve and protect the facilities resources for which we are responsible. Our priorities are: provide critical mission needs of Force Support Package units; address the worst cases of facilities deterioration and overcrowding; pursue modernization of the total facilities inventory;

and carefully manage Reserve operated installations. Our strategy for managing the

Army Reserve infrastructure in a resource constrained environment rests on six fundamentals: eliminate leases when economical; dispose of excess facilities; consolidate

units into the best available facilities; use Base Realignment and Closure (BRAC)

enclaves where practical; use the new Modular Design System (MDS) to achieve

long term cost savings in construction and design costs; and, finally, to pursue

economies and efficiencies in installation management, base operations support, and

facilities engineering.

Significant benefits have been realized from BRAC. The Army Reserve acquired

facilities from all Services, as well as the Active Army, which offset military construction requirements. The facilities acquired through BRAC provided a military

construction cost avoidance of $123.3 million. Other facilities acquired through the

BRAC process permitted the Army Reserve to relocate units from leased property

to quality, Government-owned centers. That effort allowed the Army Reserve to reduce its lease costs by $6.07 million.
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PROGRAM HIGHLIGHTS

Readiness

Army Reserve construction program requirements are quite different from those

of the Active Army. Army Reserve forces are community based, not installation

based, requiring that forces and facilities be dispersed in hundreds of cities and

towns across the Nation. This dispersion of forces and facilities reduces the opportunities for regional consolidation and wholesale reductions in facilities inventory. Facilities must be located in the communities where soldiers live and where their units

are based. They must be sufficient to meet the readiness training requirements of

the units stationed in them. Reserve facilities serve as locally based extensions of

the Army’s power projection platforms by providing essential and cost effective

places to conduct training, maintenance, storage of contingency equipment and supplies, and preparation for mobilization and deployment that simply cannot be accomplished elsewhere. The Reserve operated installations support mission essential

training for thousands of soldiers each year.

Quality of Life

Quality, well maintained facilities provide Army Reserve units with the means to

conduct necessary individual and collective training; to perform operator and unit

maintenance on vehicles and equipment; and to secure, store, and care for organizational supplies and equipment. These facilities also provide other important benefits. Fully functional and well maintained training centers have a positive impact

on recruiting and retention, unit morale and the readiness of the full time support

personnel who work in the facilities on a daily basis. In addition to supporting the

quality of life of units and support staffs, Reserve facilities project an important and

lasting image of America’s Army in the local community.

Modernization

The plant replacement value (PRV) of Army Reserve facilities and installations

is approximately $10.6 billion. The budget request for fiscal year 2000 addresses the

Army Reserve’s highest priorities for modernizing and revitalizing the inventory and

for providing new facilities in response to new and changing missions.

Installations and Base Support

The Army Reserve continues to undergo significant change as America’s Army

continues to shape itself for the 21st century. One of these changes is the growing

mission to command and control former Active Army installations. These installations serve as high quality, regional training sites for forces of both the Reserve and

Active Components of the Army, as well as the other Services; provide sites for specialized training; and offer a variety of supporting facilities. To fulfill this important

mission, we must be able to fund projects that support critical training, mobilization

and quality of life requirements at the installations. Our military construction program for both fiscal years 1999 and 2000 includes one project at Fort Dix, New Jersey, one of the Army’s fifteen power projection platforms. That project directly supports training and readiness of the force and environmental stewardship. The Army

Reserve is also assuming greater responsibilities nationwide in managing base support operations and facilities engineering activities, using the command, control, and

management capabilities of its Regional Support Commands. This mission reinforces

the Army Reserve’s relevance and value to the total Army as a provider of combat

service support and other essential infrastructure support in both peacetime and

wartime.

BUDGET REQUEST ANALYSIS

The fiscal year 2000 Military Construction, Army Reserve (MCAR) budget includes a request for appropriations and authorization of appropriations of

$23,120,000 and advance appropriations of $54,506,000. This budget request for fiscal year 2000 provides essential funds for our highest priority requirements, while

it is in line with our commitment to operate successfully in an environment of constrained resources. It also reflects the realities of maintaining near term force readiness and still meeting critical requirements for military construction that directly

supports that readiness. The MCAR appropriation includes three categories of funding: Major Construction, Minor Construction, and Planning and Design.

Major Construction.—Our fiscal year 2000 requests funding for the construction

of three new Army Reserve centers in Georgia, Guam and Puerto Rico to accomplish

essential facility replacements; a Regional Maintenance Training facility at Fort

Hood, Texas; a Tactical Vehicle Wash Facility at Fort Dix, New Jersey, that supports training and environ-mental requirements; revitalization of existing facilities
92

in New York; and land acquisition to support a future joint services project in Florida.

Unspecified Minor Construction.—These funds provide for construction of projects not otherwise authorized by law, and which have a funded cost of less than

$1,500,000. Unspecified minor construction may include construction, alteration or

conversion of permanent or temporary facilities. The program provides an important

means to accomplish small projects that are not now identified, but which may arise

during the fiscal year, and that must be accomplished to satisfy critical, unforeseen

mission requirements. The fiscal year 2000 budget includes $1,416,000 for Unspecified Minor Construction.

Planning and Design.—These funds provide for a continuous, multi-year process of designing construction projects for execution in the budget years and beyond.

Planning and design activities include the preparation of engineering designs, drawings, specifications, and solicitation documents necessary to execute major and unspecified minor construction projects. Planning and design funds are also required

to support the Army Reserve’s share of the costs of the continued development of

the Modular Design System as an effective and cost and time saving facility design

tool. Our budget request for planning and design is $8.5 million for fiscal year 2000. Real Property Maintenance (RPM).—Another important issue that is directly linked to the Army Reserve’s overall ability to be good stewards of its facilities and

installations, is that of funding for real property maintenance (RPM). Although provided separately by the Operation and Maintenance Army Reserve (OMAR) appropriation, these funds complement military construction (MILCON) funds to round

out the Army Reserve’s total resources to manage its facilities inventory. Long term

resource constraints in both military construction and real property maintenance

have a combined effect of increasing the rates of aging and deterioration of our valuable facilities and infrastructure. We are applying available resources to only the

most critical maintenance and repair needs. We solicit your support of real property

maintenance as an essential adjunct of construction.

SUMMARY

In summary, as the national military strategy has changed to meet the challenges

of the next century, the Army Reserve will grow in its importance and relevance

in the execution of that strategy. The men and women of the Army Reserve have

consistently demonstrated that they can respond to the missions and challenges assigned to them. Our Reserve facilities and installations are valuable resources that

support force readiness and power projection, while serving as highly visible links

between America’s Army and America itself.

The fiscal year 2000 request is for appropriations of $23,120,000 and authorization of $81,215,000 for Military Construction, Army Reserve. We are grateful to the

Congress and the Nation for the support you have given and continue to give to the

Army Reserve and our most valuable resource, our soldiers.

PART IV—BASE REALIGNMENT AND CLOSURE (BRAC)

Our facilities strategy strives to meet the needs of today’s soldiers, while also focusing on the changes required to support the Army of the 21st century. This budget

represents the Army’s final two year budget required to implement the first four

rounds of BRAC. In fiscal year 1999, the Army is saving $839 million and will save

$953 million annually upon completing these first four rounds of BRAC. Although

these savings are substantial, we need to achieve even more, and bring our infrastructure assets in line with projected needs. We must reduce the total cost required

to support our facilities and manage and maintain our real property inventory.

BRAC has significant investment costs, but the results bring to the Army modern

and efficient facilities at the remaining installations. The resulting savings are critical to modernization, sustainment, infrastructure and quality of life improvements.

Therefore, we support the Secretary of Defense’s request for two additional rounds

of BRAC in 2001 and 2005.

The BRAC process has proven to be the only viable method to identify and dispose

of excess facilities. The Army is in the process of closing 112 installations and realigning an additional 27 as a result of the first four rounds of BRAC. We are now

in the final three years of the 13-year process to implement these first four rounds.

By implementing BRAC, the Army is complying with the law while saving money

that would otherwise support unneeded overhead. These closed assets are now

available for productive reuse by local communities and the private sector.

BRAC savings do not come immediately because of the up front costs for implementation and the time it takes to close and dispose of property. The resulting savings are not as substantial as originally anticipated because potential land, facilities
93

and equipment revenues are being made available to support local economic opportunities that create jobs and expand the tax base. Environmental costs are significant and are being funded up front to facilitate economic revitalization. The remaining challenges that lie ahead are implementing the final round, BRAC 95, ahead

of schedule, disposing of property at closed bases, cleaning up contaminated property and assisting communities with reuse.

In fiscal year 2000, we remain focused almost exclusively on BRAC 1995, the last

of the four rounds, along with the conveyance of properties to local communities for

conversion to non-military reuse. The fiscal year 2000 budget is important because

it contains the resources needed to fully fund the final six major construction actions. These projects are scheduled for award early in fiscal year 2000, and are required to complete the BRAC 95 actions. This budget also supports unit movements

that will allow us to complete the closure and realignments as scheduled. Additionally, the Army remains committed to environmental cleanup of BRAC properties.

This budget includes the resources required to support projected reuse in the near

term and to continue with current projects to protect human health and the environment. The Army will employ full funding through advance appropriations for contracts begun during fiscal year 2000. This will provide the mechanism to stretch the

fiscal year 2000 funds and execute the fiscal year 2001 program early in the fiscal

year. Therefore, we request that Congress approve appropriations and authorization

of appropriations of of $155,400,000 in fiscal year 2000 and approve advance appropriations of $196,091,000 for fiscal year 2001.

The Army is accelerating all BRAC actions to obtain savings and return assets

to the private sector as quickly as available resources will allow. In fiscal year 1998,

we closed Fort Ritchie, Maryland and Fort Indiantown Gap, Pennsylvania. We completed the disestablishment and realignment of the Aviation and Troop Command

from St. Louis, Missouri, to four other locations in December 1997. In fiscal year

1999, we are on schedule to complete the movement of the military police and chemical schools to Fort Leonard Wood, Missouri, and close Fort McClellan, Alabama.

The Army also plans to close East Fort Baker, California, and move the Concepts

Analysis Agency from leased space in Bethesda, Maryland, to a new facility at Fort

Belvoir, Virginia. These actions will nearly complete all planned closure actions, except for the three that are scheduled for fiscal years 2000 and 2001.

The President’s Five Part Community Reinvestment Program, announced on 2

July 1993, speeds economic recovery of communities where military bases are closing by investing in people, investing in industry and investing in communities. The

Army is making its bases available more quickly for economic redevelopment because of the additional authorities we now have. During fiscal year 1998, the Army

conveyed properties at Detroit Arsenal and the Materials Technology Lab in Watertown, Massachusetts, and leased property at Letterkenny Army Depot. These actions helped local communities create new private sector jobs that lessened the impact of the base closure actions.

BASE REALIGNMENT AND CLOSURE—OVERSEAS

Although the extensive overseas closures do not receive the same level of public

attention as those in the United States, they represent the fundamental shift from

a forward deployed force to one relying upon overseas presence and power projection. Without the need for a Commission, we are closing about seven of ten overseas

sites in Europe. Reductions in infrastructure roughly parallel troop reductions of 70

percent. In Korea, the number of installations is dropping from 104 to 83, or 20 percent.

On 18 September 1990, the Secretary of Defense announced the first round of

overseas bases to be returned. Since that time, there have been a total of 22 announcements. On 14 January 1993, DOD announced it will withdraw all United

States military forces from the Republic of Panama and transfer all facilities by 31

December, 1999. Of the 13 sites in Panama announced for closure, twelve have been

returned. Table 7 shows the total number of overseas sites announced for closure

or partial closure is 667:

TABLE 7.—Total overseas sites announced for closure or partial closure

Location Installations

Germany ................................................................................................................. 575

Korea ....................................................................................................................... 30

France ..................................................................................................................... 21

Panama ................................................................................................................... 13

Netherlands ............................................................................................................ 6

Turkey ..................................................................................................................... 6
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Location Installations

United Kingdom ..................................................................................................... 5

Greece ..................................................................................................................... 4

Italy ......................................................................................................................... 4

Belgium ................................................................................................................... 3

Total ................................................................................................................. 667

Additional announcements will occur until the base structure matches the force

identified to meet United States commitments. At this time, we do not see the need

for many more overseas closures. Most of the 188 million square feet (MSF) of overseas reductions are in Europe,

where we are returning over 600 sites. This is equivalent to closing 12 of our biggest

installations in the United States—Forts Hood, Bragg, Benning, Stewart, Leonard

Wood, Lewis, Bliss, Carson, Gordon, Meade, Campbell and Redstone Arsenal. Unquestionably, these reductions are substantial and have produced savings to sustain

readiness.

The process for closing overseas bases is much different than in the United States. First, unified commanders nominate overseas sites for return or partial return to

host nations. Next, the Joint Staff, various DOD components, National Security

Council and State Department review these nominations. After the Secretary of Defense approves them, DOD notifies Congress, host governments and the public. The

Army ends operations by vacating the entire installation and returning it to the

host nation. If we only reduce operations, we retain a portion of the facilities.

BASE REALIGNMENT AND CLOSURE PROGRAM STATUS

The Army has completed all realignment and closure actions from the BRAC 88 and BRAC 91 rounds. The work of property disposal and environmental remediation

at eighteen installations will continue for several years. The Army continues to work

with local communities to make properties available for economic redevelopment. Introduction of economic development conveyances and interim leasing have resulted

in accelerating property reuse and jobs creation at installations that were previously

unavailable, pending completion of environmental restoration efforts.

The Army continues to accelerate the implementation of the BRAC 93 and BRAC

95 rounds. BRAC 93 is complete, with the exception of the realignment of Fort Monmouth, which is scheduled for fiscal year 1999. The Army is in the fourth year of

the implementation of BRAC 95, after which twenty-six of the twenty-nine closures

and four of eighteen realignment actions will be complete. Interim leases and economic development conveyances are making properties at these installations available to the local communities earlier in the process. The Army completed interim

leases with local communities at Letterkenny Army Depot and Detroit Arsenal to

make industrial facilities available for reuse in 1998. The former Fitzsimons Army

Medical Center is now being converted to a University Medical Center. Negotiations

and required environmental restoration continue at other installations, and additional conveyances are likely in the near future.

For the period 1989 through 1998, the Army has spent $3,991,976,000 to implement the first four rounds of BRAC. The Army has realized a total of $3,337,200,000

in savings during the implementation period through the end of fiscal year 1998,

and will realize an additional $838,900,000 in annual recurring savings in fiscal

year 1999. Upon implementation of all actions from the first four BRAC rounds, the

Army will achieve annual savings of $953,000,000 beginning in fiscal year 2002.

The Army has completed environmental actions at 1,032 of a total of 1,944 BRAC

environmental cleanup sites through fiscal year 1998. Environmental restoration efforts were complete at 68 BRAC installations through fiscal year 1998, out of a total

of 122 installations. The Army remains focused on supporting environmental cleanup actions required to support property reuse and will continue to fund environmental cleanup actions that are required in support of property transfer and reuse.

SUMMARY

Closing and realigning bases saves money which otherwise goes to unneeded overhead, and frees up valuable assets for productive reuse. These savings permit us

to invest properly in the forces and bases we keep to ensure their continued effectiveness. Continuation of accelerated implementation requires the execution of the

fiscal year 2000 program as planned and budgeted. We request your support by providing the necessary BRAC funding for fiscal year 2000.

We remain committed to promoting economic redevelopment at our BRAC installations. We are supporting early reuse of properties through economic development

conveyances as well as the early transfer and interim leasing options made possible
95

by Congress last year. Real property assets are being conveyed to local communities,

permitting them to quickly enter into business arrangements with the private sector. Local communities, with the Army’s support and encouragement, are working

to develop business opportunities that result in jobs and tax revenues. The successful conversion of former Army installations to productive use in the private sector

is something all of us can be proud of.

Mr. Chairman, this concludes my statement. Thank you.

Senator BURNS. We have been joined by Senator Craig, of Idaho,

a member of this committee, who has some pressing needs. Did you

want to offer a statement or ask some questions?

STATEMENT OF LARRY CRAIG

Senator CRAIG. Thank you very much, Mr. Chairman. Let me ask

unanimous consent that my whole statement be a part of the

record.

I would only say that this year’s military construction plan calls

for authorization and a partial, approximately 25 percent appropriation for certain areas. In my opinion, this approach is penny

wise and pound foolish. To stretch out an entire year’s worth of

projects will likely cost more in the long run and delay construction

of essential projects and installations. I think we are calling this

full approach phase funding.

Certainly, at Mountain Home Air Force in Idaho, it does not

make good sense for us, and I do not think it makes good sense

for anybody else.

I have talked with some of the contractors in Idaho, and I will

tell you that those who have done the quality work we have seen

on the base are less likely to bid these kinds of contracts, if we deal

with that kind of thing. It is just an unrealistic way of getting

around some of our budget problems. Let us face it, Mr. Chairman,

fund the appropriate ones fully, do it the right way instead of this

less than creative way I have seen proposed.

PREPARED STATEMENT

With that I will ask that my statement be made a part of the

record.

Senator BURNS. Thank you, Senator Craig.

[The statement follows:]

PREPARED STATEMENT OF SENATOR LARRY CRAIG

Military Construction is Important.—Military construction helps our troops to better perform their missions, and it supports our service members with the facilities

that contribute to their quality of life and that of their families. Unfortunately, I

continue to be concerned about funding for crucial construction projects. For fiscal

year 1998, the Administration requested funding levels below both the fiscal year

1996 and fiscal year 1997 levels. And this year’s budget request, in my mind, is even

more of a set back.

Problem of this Year’s Proposed Phase Funding.—This year’s military construction

plan calls for full authorization and a partial (approximately 25 percent) appropriation. This approach is penny wise and pound foolish. To Stretch out an entire year’s

worth of projects will likely cost more in the long-run, and will delay construction

of essential projects at our installations. Let me also point out that I’ve heard from

contractors in Idaho, and they have made it clear they don’t want to bid for projects

funded at 25 percent of the cost. Who can blame them?

Impact on Mountain Home Air Force Base, Idaho.—The impact of phase funding,

if carried out, is very real. There are important projects in the budget request that

I believe deserve full authorization and appropriation this year. For example:
96

—The $14.6 million Enhanced Training Range project will provide the improvements needed by aircrews to fly against realistic targets under battlefield conditions. Completing the range is a multi-year project already. Allowing this

project to slip another year will adversely impact the readiness of the pilots.

—I also plan to request money for a couple of other projects, not currently listed

in this year’s budget request, that I believe belong there. One project is an Aircraft Parking Apron to replace an inadequate ramp at Mountain Home. The

current situation is unacceptable. The ramp is constructed with only four inches

of asphalt. Aircraft can, and do sink into the asphalt, particularly during the

hot summer months. This ramp needs to be constructed with 14 inches of reinforced concrete.

—Airmen’s Dining Hall: Another example is the airmen’s dining hall. This facility,

opened in 1978, is plagued with serious roof leaks that disrupt compliance with

sanitation requirements. The mechanical and electrical systems are outdated,

and it is increasingly difficult to find parts for continued maintenance. The hall

doesn’t meet Air Force or ACC standards.

—These difficulties are two good examples of how both mission readiness and

quality-of-life are impacted by military construction. I will look for your assistance in the coming months to help address these concerns.

—As a fiscal conservative, I take seriously the responsibility of working within the

framework of a balanced budget as we make decisions about program funding.

However, it is also important to keep in mind that there are sometimes potential savings from improving infrastructure at military facilities.

Mr. Chairman, once again, thank you for your work and efforts, and I look forward to continually working with you and the Committee, so that our men and

women in uniform receive the support and facilities they deserve.

Senator BURNS. I think there are a lot of us who have been on

this committee for quite a while still concerned about the quality

of life and we are very, very concerned about retention.

I come out of the enlisted ranks, and I see we are not building

NCOs like we used to build, and maintaining and keeping those

NCOs and skilled positions, especially with an Army that is quite

different than the one that I knew back in the fifties. So everything

has changed. I was making $62 a month and sleeping in barracks

with 60 others, and I did not see anything wrong with that.

Of course, if you cowboyed for a while and got used to sleeping

on the ground, well, the barracks looked pretty good to me. I probably had more money then than I have now, but nonetheless, we

know the times have changed. I realize that we have budgetary

problems. We have had to shift some money. That concerns me

also, because we have lost some of the money out of MILCON that

has been put over to readiness, and also to fund operations around

the world to make sure that we fulfill those commitments, and I

can understand that.

But now we are down to the point where I do not know whether

this committee has any more money to give to that kind of a situation, if we are going to attend to everything in the infrastructure.

Now, we have moved better than 50 percent of our military capabilities in the Reserves and Guard, and when we started to do that,

we found that infrastructure on Reserve and Guard was lacking

around the nation. A lot of states were lacking in their infrastructure to house, to educate, and to train soldiers, sailors, marines,

and airmen. So we have shifted—I have tried to shift a little more

money to those areas if we are going to maintain readiness, and

in the Reserves and the Guard I do not believe that—I think those

young men and women have to be trained and have to be—their

edge has to be just as—or should be equal to those who are on regular duty.
97

I am concerned about recruiting, to attract young people to the military. I sort of fall into the category where we may have to look

at—we may have to look at some folks—at the draft again in order

to fill the ranks and to do some things. We need to talk about this money and new programs to furnish housing. I am a great supporter of the one plus one standard, and

now I am saying as far as the Army is concerned there still is great

value to barracks life, especially in fighting units. There is a cohesiveness, there is teamwork, and then whenever

you move up and you have your own room, well, in order to make

buck sergeant, well, there was some incentive to advance in grade

so that your living conditions probably could be a little bit better.

I think we have to have some incentives and the right of passage,

and, of course, that is the reason I was a marine. There were lower

qualifications back in the fifties to be in the marine corps, and we

survived it.

Mr. Secretary, why is the Army relying on housing privatization exclusively to satisfy its housing requirements in the United States

rather than a combination of privatization and military construction? It seems like we are totally going towards privatization.

FAMILY HOUSING PRIVATIZATION

Mr. APGAR. Mr. Chairman, that is my responsibility, and frankly, we have not communicated as well our true intent. The objective

was never to replace military construction, but rather, frankly, to

use the privatization authorities to their fullest extent, and that is

because of a financial reality which struck me very hard coming

into the government from the private sector last summer, looking

at a $6 billion backlog, on a streamlined basis, knowing that it

would take $600 million a year for ten years in new funds that

simply are not available, and would divert funds from more critical

readiness priorities.

I looked at those privatization authorities, and frankly, the ge- nius of those in the legislation that Congress passed in 1996 is that

it allows leveraging of public dollars with substantial private dollars. In fact, in the five pilot projects that we have analyzed, the

lowest amount of leverage is eight to one. The highest is over forty

to one.

By any measure that is a very significant and very attractive po- tential capability in a situation where we cannot depend on a flow

of fresh funds to make a real dent, much less solve our total revitalization needs. So we are driven by, first, the huge backlog that

we have; second, the very tight budgetary constraints under which

we are operating, as you well know better than me, and third, the

potential for a balanced program, which does use these new authorities to the fullest extent we can.

PILOT PROGRAMS

Now, at this point, we have only committed, as a matter of policy, to a pilot program, which includes five installations, one of

which is already in the procurement process, I am sure you know,

Fort Carson, through the traditional RFP method; four of which,

Forts Hood, Lewis, Stewart, and Meade, we are proposing for pilot

testing. The reason we are proposing that group is very important.
98

They represent a diversity of situations. Fort Hood, an enormous

post in a somewhat remote setting, with a limited local private

housing market; Forts Lewis and Meade, by contrast, are in urban

markets with significant private sector outside. Fort Stewart is a

more specialized post in a medium-sized city area.

Between those four, we hope to not only test the full range of authorities, not just one method, but all seven of the tools, plus the

conditions of adapting housing to a private market standard in

those areas, a very important innovation in the legislation, in my

view, and at the same time represent 95 percent-plus of all of the

conditions in Continental United States (CONUS) installations.

By using this pilot as a test bed, both for design and execution,

and not just for the financing tools, but for all of the methods of

working with the private sector, we then will be in a better position, as will you, to judge how far privatization can go.

I take full responsibility for promoting the fact from last summer

when I came on that we should, in my personal view, move as aggressively as possible because of these constraints.

I recognized, however, as I said in my opening statement that

that view is not shared either by many in Congress or even by

some within the Defense Department, and because of that, I certainly want to temper that to limit our focus to the pilot programs

over the next 18 to 24 months, and then be able to come back with

facts, results, comments from our development partners, and as appropriate then, look ahead to a much more balanced program.

Senator BURNS. Just explain to me added costs. It has to cost

more to finally complete all of the projects that we have, it is going

to cost us more money, it sounds like to me. When you spread that

out over five years, the contractors take a risk, there are financing

costs, there are all these things that we will have, and then the situation, what if we have another round of BRAC? What is our obligation on the end of that?

Mr. APGAR. If I may, sir, I think you may now be referring to

the incremental funding——

Senator BURNS. Yes. Yes.

Mr. APGAR [continuing]. And I was commenting on privatization,

so let us shift to the incremental funding situation.

Senator BURNS. Basically, that is where we are going, the privatization, we are going to use the incremental funding to move into

that privatization, am I not correct on that?

Mr. APGAR. No, sir, we are really separating now two different

strategies. Incremental funding is, as I believe you said earlier, a

one-time strategy driven by the Department of Defense (DOD) policy to manage the fact that we have tight budget constraints and

have to be able to move as quickly as possible on critical priority

projects.

Housing privatization, we see as a completely separate strategy

specifically for housing and specifically with those 1996 tools. It is

not incremental funding. It is long-term recapitalization of the

housing——

Senator BURNS. I see.
99

INCREMENTAL FUNDING

Mr. APGAR. So to respond to your question on incremental funding, we are providing through this one-time incremental funding

strategy critical projects in a situation which is not ideal, but is

manageable.

We expect that all the projects can be executed within the fiscal

year, but we are requesting that the reprogramming baseline be

raised to the highest amount of the project, and that you approve

advanced appropriations, because as you and Senator Craig both

commented on, the private sector does need the assurance in order

to price well, and if the assurance is there through advanced appropriations, then our ability to negotiate and manage good deals is

still there.

Perhaps, General Hunter, you might wish to comment as the

execution agent.

General HUNTER. Sir, good morning.

Senator BURNS. Good morning.

General HUNTER. I am the Director of Military Programs at the

Headquarters of the Corps of Engineers. As we have looked at the

strategy for executing an incrementally funded program, we have

looked at several things that I think are necessary, too. Secretary

Apgar mentioned full authorization.

I think we would also need advanced appropriation and reprogramming authority. That is one set of tools that can help us

manage that program in building some assurances for the contracting community. The other point I would like to make is, if we

do not have those tools then we are looking at a strategy of moving

a number of projects probably to the final quarter, to sort of bridge

the gap between fiscal years.

Senator BURNS. In the privatization, General Hunter, satisfy my

curiosity on another round of BRAC. What are our obligations to

the holders of that housing?

General HUNTER. For housing?

Senator BURNS. Yes. If that base is closed up, what is our obligation?

General HUNTER. Sir, I defer that to the Secretary.

FAMILY HOUSING PRIVATIZATION

Mr. APGAR. First, in the way each privatization project is structured, the legislation does enable us to provide guarantees against

closures, but the need for that and the degree to which guarantees

will be needed is situational, and it has to be approached case by

case.

For example, in a market like Fort Meade, Maryland, just up the

road here, in my professional view, not an official one at this moment, if you will forgive me, there should not be a need for extensive guarantees, if any, because the market itself is so vibrant. The

location of the installation is so central in a growing market area

that the developer should be able to build and manage housing

projects that can be absorbed in the local market should that installation ever be closed, and that is a critical factor. It is precisely

why one cannot take a one-size-fits-all approach in this, but we

have to look at it case by case, location by location.
100

The other factor is the enabling power to build to local market standards. The more that we use those authorities built into the

privatization legislation, the less the developer needs to move from

the military construction housing specification (MILSPEC), which

might not be saleable or reliable in the local market, to a much

more marketable commodity. Those two factors working together,

frankly, will limit, but we have the degree to which the government

is liable or exposed. We do have to recognize that in remote markets, for example, there will have to be some form of quid pro quo

to a developer for a situation that he has no control over and does

not represent a real business risk. It is a government action.

Senator BURNS. Talking about the standards of local builders, look at my house. I live in the meanest pile of junk you ever saw

in your life. I have done more work on it since I got it brand new

that I should have bought some old junk and fixed it up. The stewards of the taxpayers’ dollars. I think you answered most of this. What leverage will we have to ensure the standards are met, number one, and if disputes arise, how do we settle?

Mr. APGAR. First, in the development agreement, that is, the long-term agreement with the development partner selected in

each location, performance standards will be established both for

construction and for operations. Even more important than those

purely contractual provisions, we intend to build in incentives for

performance, a technique which has long been used in the private

sector and in the development industry to ensure that it is not a

question of adversarial relationships. We have a contract, we are

there to enforce it, but rather, aligning the goals of the development partner with ours for performance.

Those techniques are well established. We are not inventing

them. We are adapting them to this situation. Our best guarantee,

Mr. Chairman, is really the selection of the development partner

and why we put so much attention into reforming the procurement

process.

As you well know, if you are in a business relationship with a

partner for the long term, you have a very different type of problem-solving dispute resolution process than you do if you are in a

purely contractual adversarial process. The Corps of Engineers, as

executing agents, and all of us involved believe strongly that by

moving to a partnership mode of operation and establishing good

performance criteria, and incentives to deliver them, that we

should get a much better long-term result.

BARRACKS MODERNIZATION

Senator BURNS. Over in your barracks modernization, will the

shift of this housing standard that you are talking about, privatization, improve the quality of life for soldiers? Will the privatization

affect what we do with our bachelor personnel?

Mr. APGAR. No, sir. At present, the privatization program only

applies to family housing.

Senator BURNS. I know, but the way we allocate our dollars, how

are we coming out on one-plus-one, are we—will that help us

maybe accelerate our one-plus-one renovation plans?

Mr. APGAR. Yes, it should, because—well, family housing has its

own budget structure, but we are placing a high priority on com-
101

pleting the one-plus-one barracks modernization program. As I

mentioned earlier, we are more than half-way through to our goal.

We are pursuing it with maximum, both budget support and leadership support. General Van Antwerp, would you like to comment

on that?

General VAN ANTWERP. Our plan right now is to buy out the barracks by 2008, and then we are going to start a program in 2001

for the trainee barracks. They are separate, but the one-plus-one

barracks are for permanent party.

The timing of that has to do with allowing the swing space, because you have to move those soldiers into other space. So the program is on about as fast a track as—in fact, we pulled it in from

2012 into 2008. It is about $600 million a year, and I think the program is well on track. I do not think that it will take any funds

from Army family housing to continue at this pace.

Senator BURNS. In other words, you can maintain a schedule.

General VAN ANTWERP. Yes, sir.

Senator BURNS. I still think we ought to set out and visit about

that, and we will try to put together some kind of an appointment

where we can sit down and walk me through that when we have

a little more time and can probably have a better exchange on just

exactly what we are looking at then.

MILCON FUNDING—CHEMICAL DEMILITARIZATION

Last year, Congress realigned the MILCON funding for the

chemical demilitarization program from the Army to the Defensewide account. In this 2000 budget submission, the military construction funding is back in the Army’s budget. If the program encounters problems or has cost overruns, does that put the Army at

risk?

Mr. APGAR. Although, Congress authorized and appropriated the

funding, the overall responsibility for the program remained with

the Army and we have included it in this years army budget. Does

anyone else have a further explanation?

General VAN ANTWERP. I think the responsibility for construction

remained in the Army. I guess there would be some risk passed to

the Army if things went wrong with the program. I think that as

the program has been executed in the past, though, it is small risk.

The Corps of Engineers has done an excellent job with the execution of this program.

Senator BURNS. Do you have $61 million in the budget for this

demilitarization construction this year, is that a correct figure?

General VAN ANTWERP. I am showing the appropriation had $267

million, is what my number reflected.

Senator BURNS. Okay.

General VAN ANTWERP. I can get back with you on that.

Senator BURNS. All right. We talked about, on your contract,

housing, and a lot of that has been privatized, and off-base contractors are contracted to do that. Why are we not doing that ourselves? General, I will ask you.

General VAN ANTWERP. Why are we contracting out a lot of our

O&M work?

Senator BURNS. Yes.
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COMPETITIVE SOURCING

General VAN ANTWERP. The privatization program and the competitive sourcing program, this really falls into competitive

sourcing, where we would be the contract holders, but we would get

someone to do, in that case, operation and maintenance work that

is done readily on the outside.

It is done a lot by commercial activities. There are ample people

to bid on it. We would say in many cases it is a back office function

for the Army, it is not a Corps function. So we have a program to

compete these things.

If the government can do it more economically in-house, then it

stays in the government, and we put together what we call a most

efficient government organization. If a private sector contractor can

do it more efficiently, and a lot of times if it is a bigger contract,

if it is like for a whole base, where they are able to reduce

overheads and things, a lot of times the private sector can do it

more economically than we can.

Senator BURNS. Why can we not be teaching young men and

young women who come into the Army and have very few skills,

and when they leave they will have a skill?

General VAN ANTWERP. This program is essentially for things

that are not done with military labor. The military labor of the part

that we are competing is very, very small. In fact, what we would

like to do is get the uniformed members back into the force and out

of these commercial-type activities.

We are talking, our program is 73,000 positions to study for competitive sourcing. Only about 6,000 of those spaces are uniformed

members, and the idea would be to take those uniformed members,

put them back in the force, and use the rest of it by the civilian.

Senator BURNS. You might teach one of them to be a carpenter,

so he can do something when he comes out. I am sorry, I left off

Van Antwerp.

General VAN ANTWERP. Antwerp puts me at the head of the alphabet. I am usually last in line. [Laughter.]

Senator BURNS. I will tell you that we have a very, very solid

neighborhood of Hollanders, in Bozeman, Montana, and I will tell

you a neat story.

One of them is an old friend of mine, his name is Van Heisen,

and he is in the sweet potato business, grows sweet potatoes. They

are very frugal, as you well know. They are great people. He is 80

years old, and he has cancer, and he does not have very long to

live, so I went to visit him, and we have known each other for a

long time.

At the end of the visit he said, he told his wife to go get the

checkbook, and said, ‘‘Write this boy a check, because he is running

for reelection,’’ and I said, ‘‘John, that is not the purpose of this

visit.’’ He said, ‘‘I know it, but,’’ he said, ‘‘in 30 days I am not going

to be here and she is pretty close with her money, you might not

get nothing.’’ [Laughter.]

They are terrific people.

There will be some more questions. I am sure Senator Murray

will have some questions, Mr. Secretary. This privatization, we are

going to continue to visit with you.
103

I would like to set up a private appointment before we finally

make our decision on this, because we have not gotten our full allocations, as you know, as of yet, so we do not know exactly what

our allocations are going to be, but I do want to sit down, because

I guess we are going into an area of which I have the least knowledge, and when you have the least knowledge, you have more fears,

and I want to go over this with you kind of around the table, and

if takes an hour or so, why I think I will either come to your place

or you can come to my place, it does not make any difference.

My concern right now is readiness, and our soldiers, especially

in the enlisted level, where we are having tremendous problems of

retention and retention of skilled people, and we cannot continue

to lose those people if we are going to have a solid planning force.

I have a lot of respect for young men and women who choose to

wear the uniform of the United States of America, and I think we

have an obligation to them, and we also have an obligation to the

taxpayers.

I think we are taking some risks here maybe that we would not

have to take or should not take. So I would want to visit along

those lines, if you would probably allow me, and I would be happy

to work with you in any way we can to make sure that we are both

heading in the same direction, and we can have an understanding

regarding this point.

ADDITIONAL COMMITTEE QUESTIONS

I appreciate you coming this morning and answering these questions for the record, and I look forward to our second meeting.

General VAN ANTWERP. Thank you.

Mr. APGAR. Thank you very much.

[The following questions were not asked at the hearing, but were

submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED TO SECRETARY APGAR

QUESTIONS SUBMITTED BY SENATOR BURNS

FUNDING LEVEL

Question. Secretary Apgar, I am concerned about the Department’s plan to phase

fund military construction (MILCON) in fiscal year 2000. I recognize that there

were tremendous fiscal pressures to realign money. However, if this practice continues into the future, what would be the long-term implications to your MILCON

program?

Answer. Incremental or phase funding of military construction is a one-time initiative to fund critical readiness requirements. There is no intent to continue the

practice in the future. Continuation of the practice would reduce the Army’s ability

to program future construction due to the commitment of future year funds to pay

the balance on prior years’ incrementally funded work.

Also, while incremental funding is appropriate for large-scale construction

projects, such as hospitals and chemical demilitarization facilities, it is not conducive to small projects. Small projects which are incrementally funded generally require delayed award or notice to proceed and may be subject to higher bids. For the

Army National Guard, projects would have to be subdivided into segments because

State statutes prohibit the award of contracts without all Federal dollars being

present. This would require the use of separate contracts on each increment and

would potentially cost more money.

Question. If we decide to pursue this strategy of advance appropriations, will this

slow down execution of the projects and potentially increase their costs?
104

Answer. No. Advance appropriations, along with full authorization and greater reprogramming flexibility, will allow the fiscal year 2000 program to be executed

(awarded) within the initial fiscal year of funding with little impact on project costs.

Question. What does the Army spend each year on Plant Replacement Value per

year on facility maintenance? At this rate, what is the replacement cycle for Army

infrastructure for each component?

Answer. In fiscal year 2000, the Army proposes to spend $1,748 million for facility

maintenance ($828 million, Active; $78 million, Guard; $116 million, Reserve; plus

$726 million with Quality of Life Enhancements, Defense (QOLE,D)). These totals

include funding for sustainment maintenance and about 20 percent for recapitalization initiatives or $361 million. The grand total is approximately 77 percent of the

required funding needed to maintain our facilities in their current condition. The

replacement cycle based on MILCON funding for Army infrastructure in fiscal year

2000 is approximately 160 years.

RESIDENTIAL COMMUNITIES INITIATIVE (RCI)

Question. Did you look at other methods to close the housing gap and privatize

housing? What were they? Why did you select the RCI process?

Answer. Yes, the Army has considered a wide range of alternatives to address the

severe, persistent funding shortfall and resulting revitalization (construction and

major maintenance and repair) backlog, recently re-verified to be $6B. This shortfall

is the backlog of work needed on existing units to bring them up to current standards. This $6B backlog does not include any costs to alleviate the family housing

deficit, estimated at more than 10,000 units. During the mid-1990s, studies by several agencies [e.g., Marsh Quality of Life Task Force, Army Science Board, Congressional Budget Office (CBO), the General Accounting Office (GAO), and others] all

came to the same conclusion that family housing could not be revitalized using traditional MILCON but that the Department would need to privatize to leverage

scarce appropriated funds and assets (housing and land) to solve the military housing problem.

In fiscal year 1994, the Army developed a strategy consisting of 1) the protection

of Army Family Housing (AFH) appropriated fund budgets to stop further deterioration until a long-term solution could be developed; 2) the demolition of unneeded,

uneconomically-repairable housing; and 3) the transition of housing management to

a business type operation or privatization. The Army’s success in implementing this

strategy has been mixed. Due to budgetary constraints, we were not able to significantly reduce further deterioration of the inventory because of the large backlog of

work. However, the Army has succeeded in continuing to demolish unneeded AFH

units and has demolished over 4,500 such units since fiscal year 1993. As a step

toward fulfilling the long-term portion of its housing strategy, the Army implemented the Business Occupancy Program (BOP) in 1996 to house more soldiers on

installations by funding housing offices according to the number of AFH occupied

by military families, not total inventory. Further, the Army proposed for consideration within the Executive Branch legislation for an Army Housing Corporation (in

1994) to operate AFH as a business and supported the Department’s Military Housing Corporation initiative in 1996. Ultimately, however, these initiatives were not

pursued for implementation. In short, the Army considered many other approaches

before settling on an RCI-style privatization as the solution to the AFH problems

in the U.S. We should stress, however, that RCI is itself a pilot program designed

to experiment with the authorities available to the Army under the Military Housing Privatization Initiative legislation.

The focus of the Army’s efforts will be on utilizing these authorities to increase

or leverage the rate of return on government resources dedicated to support the

Army’s housing needs. We do not, however, believe that privatization will prove appropriate or feasible at all installations. Consequently, even if after consultation

with Congress, the Army proceeds with privatization beyond the RCI pilot we would

expect to rely on traditional military construction methods to address some portion

of our soldiers’ and their families’ housing needs.

Question. With respect to family housing privatization, I am concerned about soldiers and their families paying more to live in one of these projects than housing

provided through traditional military construction. What assurances can you give

me that they will not have out of pocket expenses?

Answer. The Army Leadership has continued to stress that any privatization

project for family housing on an installation will be ‘‘invisible’’ to the soldiers and

family members in that out-of-pocket costs for all soldiers living in on-post housing

(whether privatized or government owned) will be the same. Under the current policy, there are no out-of-pocket costs associated with on-post housing. Consequently,
105

soldiers will pay no more than their Basic Allowance for Housing (BAH) for the rent

and utilities of the RCI housing that is privatized on an Army installation.

Question. What is the average lease period with the developers for these types of

Army privatization deals?

Answer. Fort Carson is the Army’s first project and is currently in the evaluation

phase. Fort Carson was solicited as a Request for Proposal and the contract term

is a 50-year contract with an additional 25-year option. Under the Request for

Qualifications procurement process, the term of the lease will be determined during

the development of the Community Development and Management Plan.

Question. How will installations with family housing privatization ventures be

treated in future rounds of BRAC?

Answer. All installations will be treated the same. That is, under the recently proposed Base Realignment and Closure legislation, all installations would be treated

equally and evaluated against identical criteria, regardless of whether housing on

the installation is government owned or privatized. The new legislation, like its

predecessor which authorized BRAC rounds in 1991, 1993, and 1995, would require

that each of the Military Departments evaluate installations on the basis of a force

structure plan and a set of approved selection criteria, that would be published and

reviewed by Congress. In addition, every recommendation under the new BRAC

round, along with supporting data, would be certified and reviewed by the independent Base Realignment and Closure Commission, the General Accounting Office,

and the Congress.

Question. I have heard that the Army continued letting contracts for consultants

even after the Congress asked the program be put on hold until you received their

clearance. Have you let any contracts? What are they for and for how much money?

How was it determined who would be invited to bid on the contracts? Who received

the contracts and why?

Answer. Yes. The contracting process was already in process when the Army’s privatization initiative was put on hold. To have canceled the solicitation and re-competed would have caused substantial delays in executing the pilot privatization

projects.

The solicitation was announced publicly in the Commerce Business Daily. The

Government awarded a single Performance Based Compensation, Firm-Fixed PriceLabor Hour, Indefinite Delivery/Indefinite Quantity type contract from this solicitation. The contract was awarded to LaSalle Partners, Inc. (now Jones Lang LaSalle)

and was awarded competitively after full and open competition. The contract is for

services to provide professional administrative and management support services.

The guaranteed minimum award per year during the base year and one option period is $100,000. Maximum award over the total two-year period is approximately

$7.5 million. The Government expects to make minimal contractual payments during the time the program is on hold.

BARRACKS MODERNIZATION

Question. Secretary Apgar, explain to me the Army’s policy regarding barracks

modernization.

Answer. The Army builds or renovates barracks to the one-plus-one standard for

permanent party single soldiers in grades E–1 through E–6. The current requirement is for 137,000 soldiers. Included in the program is the removal of company and

higher administrative facilities and dining facilities from the barracks buildings. To

achieve the fiscal year 2008 buyout, we use a combination of MCA, O&M, host nation support, and residual value funding. Decisions on construction versus renovation are based on detailed building assessments and economic analyses.

Question. I understand that the Army will implement the 1∂1 standard in fiscal

year 2008. How were the decisions made on prioritizing which bases came first?

Would you provide the subcommittee the Army’s barracks master plan for the

record?

Answer. Prioritization is based on requirements, age and type of existing facilities

and the installation’s ability to execute projects. Further, emphasis is placed on

minimizing the impact of construction and renovation on providing accommodations

for single soldiers while still achieving the buyout goal. Location specific program

data are in the chart that follows. Program level planning detail for fiscal year

2006–2008, the last years of the program, is not yet available.
106

[Fiscal years 1996–2005]

State Location Prjection Amount

1996

AZ .......................... Ft Huachuca ................. WholeBarracks Complex Renewal ....................... $16,000

CO ......................... Ft Carson ..................... WholeBarracks Renewal Complex (Ph I) ............ 20,000

DC ......................... Ft McNair ..................... WholeBarracks Complex Renewal ....................... 5,500

GA .......................... Ft Benning ................... WholeBarracks Complex Renewal ....................... 33,000

HI ........................... Schofield Bks ............... WholeBarracks Complex Renewal (Ph I) ............ 30,000

KS .......................... Ft Riley ......................... WholeBarracks Renewal (Ph I) ........................... 7,000

KY .......................... Ft Campbell ................. WholeBarracks Complex Renewal (Ph I) ............ 10,000

MD ......................... Ft Dietrick .................... Unaccompanied Enl Pers Hsg ............................ 17,500

NC ......................... Ft Bragg ....................... WholeBarracks Complex Renewal ....................... 18,500

OK .......................... Ft Sill ........................... 48-Person Barracks Complex ............................. 8,000

SC .......................... Ft Jackson .................... WholeBarracks Complex Renewal ....................... 32,000

TX .......................... Ft Hood ......................... WholeBarracks Complex Renewal ....................... 17,500

TX .......................... Ft Bliss ......................... WholeBarracks Complex Renewal ....................... 48,000

TX .......................... Ft Hood ......................... WholeBarracks Complex Renewal (Ph I) ............ 15,000

TX .......................... Ft Bliss ......................... Dining Facility ..................................................... 4,900

VA .......................... Ft Eustis ....................... WholeBarracks Complex Renewal ....................... 11,000

KR .......................... Cp Hovey ...................... WholeBarracks Complex Renewal ....................... 7,300

KR .......................... Cp Stanley .................... WholeBarracks Complex Renewal ....................... 6,800

KR .......................... Cp Pelham ................... WholeBarracks Complex Renewal ....................... 5,600

KR .......................... Cp Hovey ...................... WholeBarracks Complex Renewal ....................... 6,200

KR .......................... Korea ............................ Dining Facility ..................................................... 4,150

1997

CO ......................... Ft Carson ..................... WholeBarracks Complex Renewal(Ph II) ............. 13,000

GA .......................... Ft Benning ................... WholeBarracks Complex Renewal ....................... 44,000

HI ........................... Schofield Bks ............... WholeBarracks Complex Renewal ....................... 10,600

KS .......................... Ft Riley ......................... WholeBarracks Complex Renewal ....................... 26,000

KY .......................... Ft Campbell ................. WholeBarracks Complex Renewal(Ph II) ............. 35,000

KY .......................... Ft Knox ......................... WholeBarracks Complex Renewal-Ph I ............... 10,000

MO ......................... Ft Leonard Wood .......... Ft. McClellan relocation ...................................... 58,000

TX .......................... Ft Hood ......................... WholeBarracks Complex Renewal (Ph II) ........... 35,000

WA ......................... Ft Lewis ........................ WholeBarracks Complex Renewal ....................... 49,000

GY .......................... Taylor Bks .................... Barracks Restoration .......................................... 9,300

GY .......................... Spinelli, Bks ................. Barracks .............................................................. 8,100

KR .......................... Cp Red Cloud ............... WholeBarracks Complex Renewal ....................... 14,000

KR .......................... Cp Casey ...................... WholeBarracks Complex Renewal ....................... 16,000

1998

AZ .......................... Ft Huachuca ................. WholeBarracks Complex Renewal ....................... 20,000

GA .......................... Ft Stewart (HAAF) ........ WholeBarracks Complex Renewal, Ph I .............. 13,400

GA .......................... Ft Gordon ..................... WholeBarracks Complex Renewal ....................... 22,000

HI ........................... Schofield Bks ............... WholeBarracks Complex Renewal ....................... 44,000

KS .......................... Ft Riley ......................... WholeBarracks Complex Renewal ....................... 18,500

KY .......................... Ft Campbell ................. WholeBarracks Complex Renewal ....................... 37,000

KY .......................... Ft Knox ......................... WholeBarracks Complex Renewal—Ph II ........... 22,000

NC ......................... Ft Bragg ....................... WholeBarracks Complex Renewal ....................... 9,800

OK .......................... Ft Sill ........................... WholeBarracks Complex Renewal ....................... 8,000

TX .......................... Ft Sam Houston ........... WholeBarracks Complex Renewal ....................... 16,000

VA .......................... Ft Myer ......................... WholeBarracks Renewal ...................................... 8,200

WA ......................... Ft Lewis ........................ WholeBarracks Complex Renewal ....................... 31,000

GY .......................... Tompkins Bks ............... Barracks Renovation ........................................... 7,600

GY .......................... Taylor Bks .................... Barracks Renovation ........................................... 5,400

GY .......................... Katterbach .................... Barracks Renovation ........................................... 19,000

GY .......................... Kaiserslautern .............. Whole Barracks Renewal .................................... 5,200

KR .......................... Cp Red Cloud ............... WholeBarracks Renewal ...................................... 22,000

KR .......................... Cp Stanley .................... WholeBarracks Renewal ...................................... 6,400
107

[Fiscal years 1996–2005]

State Location Prjection Amount

KR .......................... Cp Castle ..................... WholeBarracks Renewal ...................................... 7,700

KR .......................... Cp Humphreys .............. WholeBarracks Renewal ...................................... 29,000

KR .......................... Cp Casey ...................... Dining Facility ..................................................... 5,100

1999

DAK ........................ Ft Wainwright ............... WholeBarracks Renewal ...................................... 16,000

GA .......................... Ft Benning ................... WholeBarracks Complex Renewal ....................... 28,600

HI ........................... Schofield Bks ............... WholeBarracks Complex Renewal ....................... 47,500

KY .......................... Ft Campbell ................. Whole Barracks Complex Renewal ..................... 41,000

NC ......................... Ft Bragg ....................... Whole Barracks Complex Renewal ..................... 47,000

NC ......................... Ft Bragg ....................... Whole Barracks Complex Renewal ..................... 10,600

OK .......................... Ft Sill ........................... Whole Barracks Complex Renewal ..................... 20,500

TX .......................... Ft Sam Houston ........... Whole Barracks Complex Renewal ..................... 21,800

VA .......................... Ft Myer ......................... Barracks Renovation ........................................... 6,200

VA .......................... Ft Eustis ....................... Whole Barracks Complex Renewal ..................... 36,531

.

GY .......................... Schweinfurt Modernize Barracks Building ............................................... 18,000

KR .......................... Cp Stanley .................... Whole Barracks Renewal .................................... 5,800

KR .......................... Cp Casey ...................... Whole Barracks Complex Renewal ..................... 13,400

KR .......................... Cp Castle ..................... Whole Barracks Renewal .................................... 18,226

KR .......................... Cp Humphreys .............. Whole Barracks Renewal .................................... 8,500

KR .......................... Cp Casey ...................... Whole Barracks Renewal .................................... 29,000

KR .......................... Cp Hovey ...................... Whole Barracks Renewal .................................... 20,000

2000

AK .......................... Fort Richardson ............ Whole Barracks Complex Renewal ..................... 14,600

GA .......................... Fort Benning ................ Whole Barracks Renewal Complex ..................... 47,000

GA .......................... Fort Stewart ................. Whole Barracks Complex Renewal w/Dining ...... 3,500

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 95,000

KS .......................... Fort Leavenworth .......... Whole Barracks Complex Renewal ..................... 26,000

KY .......................... Fort Campbell .............. Whole Barracks Complex Renewal, Ph II ........... 4,800

MD ......................... Fort Meade ................... Whole Barracks Complex Renewal ..................... 18,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 74,000

PA .......................... Carlisle Barracks ......... Whole Barracks Complex Renewal ..................... 5,000

TX .......................... Fort Hood ...................... Whole Barracks Complex Renewal ..................... 29,000

VA .......................... Fort Eustis .................... Whole Barracks Complex Renewal ..................... 39,000

GY .......................... Ansbach ....................... Whole Barracks Complex Renewal ..................... 21,000

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 5,700

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 9,300

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 8,200

GY .......................... Mannheim .................... Whole Barracks Complex Renewal ..................... 4,500

KR .......................... Camp Casey ................. Whole Barracks Complex Renewal ..................... 31,000

2001

AK .......................... Fort Richardson ............ Whole Barracks Complex Renewal ..................... 12,400

CA .......................... Fort Irwin ...................... Whole Barracks Complex Renewal ..................... 25,900

GA .......................... Fort Benning ................ Whole Barracks Renewal Complex ..................... 39,900

GA .......................... Fort Stewart ................. Whole Barracks Renewal Complex w/Dining ...... 39,000

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 80,800

HI ........................... Schofield Barracks ....... Whole Barracks Complex Modernization ............. 35,900

KS .......................... Fort Riley ...................... Whole Barracks Complex Renewal ..................... 25,900

KY .......................... Fort Campbell .............. Whole Barracks Complex Renewal ..................... 27,200

KY .......................... Fort Campbell .............. Whole Barracks Complex Renewal, Ph III .......... 45,900

MD ......................... Fort Detrick .................. Whole Barracks Complex Renewal ..................... 14,200

MD ......................... Fort Meade ................... Whole Barracks Complex Renewal ..................... 15,300

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 57,392

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 22,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 59,800
108

[Fiscal years 1996–2005]

State Location Prjection Amount

NJ .......................... Fort Monmouth ............. USMA Prep School Barracks ............................... 11,800

PA .......................... Carlisle Barracks ......... Whole Barracks Complex Renewal ..................... 4,250

VA .......................... Fort Eustis .................... Whole Barracks Complex Renewal ..................... 33,200

GY .......................... Ansbach ....................... Whole Barracks Complex Renewal ..................... 17,850

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 7,900

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 6,970

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 4,840

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 4,100

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 9,300

GY .......................... Darmstadt .................... Whole Barracks Complex Renewal ..................... 6,800

GY .......................... Darmstadt .................... Whole Barracks Complex Renewal ..................... 7,000

GY .......................... Mannheim .................... Whole Barracks Complex Renewal ..................... 3,825

GY .......................... Mannheim .................... Whole Barracks Complex Renewal ..................... 5,400

KR .......................... Camp Casey ................. Whole Barracks Complex Renewal ..................... 26,350

KR .......................... Camp Humphreys ......... Whole Barracks Complex Renewal ..................... 14,400

KR .......................... Camp Page .................. Whole Barracks Complex Renewal ..................... 20,900

KW ......................... Kwajalein ...................... Unaccompanied Personnel Housing ................... 19,900

2002

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 49,000

KS .......................... Fort Riley ...................... Whole Barracks Complex Renewal ..................... 40,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 39,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 40,000

VA .......................... Fort Myer ...................... Whole Barracks Complex Renewal ..................... 4,500

WA ......................... Fort Lewis ..................... Whole Barracks Complex Renewal ..................... 49,000

WA ......................... Fort Lewis ..................... Whole Barracks Complex Renewal ..................... 49,000

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 9,500

GY .......................... Darmstadt .................... Whole Barracks Complex Renewal ..................... 6,800

GY .......................... Darmstadt .................... Whole Barracks Complex Renewal ..................... 6,900

GY .......................... Hanau ........................... Whole Barracks Complex Renewal ..................... 7,300

GY .......................... Heidelberg .................... Whole Barracks Complex Renewal ..................... 7,200

KR .......................... Camp Carroll ................ Whole Barracks Complex Renewal ..................... 9,000

KR .......................... K–16 Airfield ................ Whole Barracks Complex Renewal ..................... 25,000

2003

AK .......................... Fort Richardson ............ Whole Barracks Complex Renewal ..................... 18,500

CO ......................... Fort Carson .................. Whole Barracks Complex Renewal ..................... 47,000

GA .......................... Fort Stewart (HAAF) ..... Whole Barracks Complex Renewal ..................... 20,000

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 49,000

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 29,000

KS .......................... Fort Riley ...................... Whole Barracks Complex Renewal ..................... 35,000

KY .......................... Fort Campbell .............. Whole Barracks Complex Renewal ..................... 24,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 41,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 32,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 12,000

TX .......................... Fort Hood ...................... Whole Barracks Complex Renewal ..................... 41,000

GY .......................... Baumholder .................. Vehicle Maintenance Facility .............................. 11,600

GY .......................... Darmstadt .................... Whole Barracks Complex Renewal ..................... 7,200

GY .......................... Hanau ........................... Whole Barracks Complex Renewal ..................... 7,400

GY .......................... Hanau ........................... Whole Barracks Complex Renewal ..................... 7,500

GY .......................... Heidelberg .................... Whole Barracks Complex Renewal ..................... 6,800

GY .......................... Mannheim .................... Whole Barracks Complex Renewal ..................... 4,250

GY .......................... Mannheim .................... Whole Barracks Complex Renewal ..................... 5,300

GY .......................... Mannheim .................... Whole Barracks Complex Renewal ..................... 7,280

KR .......................... Camp Bonifas .............. Whole Barracks Complex Renewal ..................... 9,000

KR .......................... Camp Coiner ................ Whole Barracks Complex Renewal ..................... 20,000
109

[Fiscal years 1996–2005]

State Location Prjection Amount

2004

AK .......................... Fort Wainwright ............ Whole Barracks Complex Renewal ..................... 13,000

GA .......................... Fort Benning ................ Whole Barracks Complex Renewal ..................... 14,000

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 49,500

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 34,000

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 16,600

KS .......................... Fort Riley ...................... Whole Barracks Complex renewal ...................... 34,500

KY .......................... Fort Campbell .............. Whole Barracks Complex Renewal ..................... 10,600

MD ......................... Fort Meade ................... Whole Barracks Complex Renewal ..................... 18,500

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 57,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal, USASOC ...... 12,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 16,000

VA .......................... Fort Story ...................... Whole Barracks Complex Renewal ..................... 15,000

WA ......................... Fort Lewis ..................... Whole Barracks Complex Renewal ..................... 49,000

GY .......................... Bamberg ....................... Whole Barracks Complex Renewal ..................... 6,000

GY .......................... Heidelberg .................... Whole Barracks Complex Renewal ..................... 4,600

GY .......................... Heidelberg .................... Whole Barracks Complex Renewal ..................... 7,100

GY .......................... Kaiserslautern .............. Whole Barracks Complex Renewal ..................... 8,900

GY .......................... Mannheim .................... Whole Barracks Complex Renewal ..................... 4,200

GY .......................... Mannheim .................... Whole Barracks Complex Renewal ..................... 1,300

GY .......................... Wuerzburg .................... Whole Barracks Complex Renewal ..................... 3,350

KR .......................... Camp Carroll ................ Whole Barracks Complex Renewal ..................... 9,000

KR .......................... Camp Walker ................ Whole Barracks Complex Renewal ..................... 20,000

2005

AK .......................... Fort Richardson ............ Whole Barracks Complex Renewal ..................... 18,000

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 34,000

HI ........................... Schofield Barracks ....... Whole Barracks Complex Renewal ..................... 46,600

KS .......................... Fort Riley ...................... Whole Barracks Complex Renewal ..................... 40,000

KY .......................... Fort Campbell .............. Whole Barracks Complex Renewal ..................... 35,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 12,000

NC ......................... Fort Bragg .................... Whole Barracks Complex Renewal ..................... 54,000

VA .......................... Fort Myer ...................... Whole Barracks Complex Renewal ..................... 6,000

VA .......................... Fort Myer ...................... Whole Barracks Complex Renewal ..................... 6,200

WA ......................... Fort Lewis ..................... Whole Barracks Complex Renewal ..................... 49,000

GY .......................... Various, Germany ......... Whole Barracks Complex Renewal ..................... 21,500

GY .......................... Various, Germany ......... Whole Barracks Complex Renewal ..................... 30,700

KR .......................... Camp Stanley ............... Whole Barracks Complex Renewal ..................... 10,000

KR .......................... Various Korea ............... Whole Barracks Complex Renewal ..................... 9,500

KR .......................... Yongsan ....................... Whole Barracks Complex Renewal ..................... 20,000

Question. Will the shift to this housing standard improve quality of life for sol- diers? Will it impact retention?

Answer. Without a doubt, the one-plus-one standard improves the quality of life for single soldiers. Investment in the one-plus-one standard is expected to promote

the retention of highly trained and experienced first-term soldiers. One-plus-one is

not only a room configuration but a whole community that covers all living and

working aspects of a soldier’s life while in garrison. Commanders in the field who

have troops living in the new barracks and working in the new support facilities

are the strongest supporters of the program. The new barracks complexes have improved troop morale, while at the same time enhancing efficiency of garrison functional operations and readiness.

CHEMICAL DEMILITARIZATION

Question. Mr. Secretary, last year the Congress realigned the MILCON funding

for the Chemical Demilitarization Program from the Army to the Defense-wide account. I see that in the fiscal year 2000 budget submission, that the military construction funding is back in the Army’s budget. If the program encounters problems

or cost overruns, does that put the Army at risk?
110

Answer. All known Chemical Demilitarization Program requirements were fully

funded at the time of the transfer to the Army; as such, the Army’s topline was commensurately increased to adequately resource the Program through completion. The

Army is totally committed to manage this program within the approved life-cycle

cost estimate (LCCE). However, if unexpected circumstances result in cost exceeding

the LCCE, other Army programs are potentially at risk.

Question. There is approximately $261 million in the budget for Chem-Demil construction. Can you execute that much funding in one year? Does that entail double

or triple shifts of construction workers? Would you provide for the record how the

Corps will execute those contracts for $60 million and above?

Answer. Yes, we expect all the MILCON funds requested for fiscal year 2000 to

be required during that fiscal year. Based on current execution plans, all of the programmed construction funds will be placed during fiscal year 2000 with the exception of a limited amount of funds. These funds will be retained for contingencies for

unknown construction changes and associated supervision, inspection, and overhead,

for engineering during construction, and for the development of as-built drawings.

The facilities at Anniston and Umatilla will be completed during fiscal year 2000.

The construction of the facilities at Pine Bluff, Aberdeen, and Newport will be continuing and is expected to proceed at near or at full capacity during the fiscal year.

Umatilla is the only facility where the contractor is working double shifts instead

of single shifts. This is expected to continue until construction completion in the

third quarter of fiscal year 2000.

Each of the seven demilitarization facilities is being constructed using a single,

incrementally funded construction contract. The fiscal year 2000 budget requests

funding increments in excess of $60 million for Pine Bluff, Aberdeen, and Newport.

For Pine Bluff, construction in fiscal year 2000 will include completion of the site

work, the Personnel Support Complex, the Medical Maintenance Building, the Entry

Control Facility, and the Process and Utility Building, while construction will continue on the Munitions Demilitarization Building. For Aberdeen and Newport, construction at each site in fiscal year 2000 will include finishing the design, doing site

work, and starting construction of the Chemical Disposal Building, the Process Auxiliary Building, the Utility Building, the Standby Generator Building, the Laboratory, the Personnel Support Building, the Entry Control Facility, the Gas Mask

Storage Facility, and the Site Storage Facility.

MILITARY CONSTRUCTION EXECUTION

Question. Secretary Apgar, all components of the Army have greatly improved

their construction project execution the past several years. How will advance appropriations and phased funding impact your execution? If we permanently adopt such

a phased funding mechanism for military construction, what would be the long-term

impact on the Army?

Answer. If the budget is approved as requested, the fiscal year 2000 program is

fully executable (awardable) within the initial fiscal year of funding.

The broad use of incremental funding of military construction, however, is a onetime initiative to fund critical readiness requirements. There is no intent to continue

the practice in the future. Continuation of the practice would reduce the Army’s

ability to program future construction due to the commitment of future-year funds

to pay the balance on prior years’ incrementally funded work.

Also, while incremental funding may be appropriate for certain large-scale construction projects, such as hospitals and chemical demilitarization facilities, it is not

necessarily conducive to small, short-duration projects. Experience with incrementally funding smaller dollar value contracts is limited. In the long term, the availability of only limited funds in the initial fiscal year awards and solicitations may

be subject to higher bids because of restrictions on ordering materials and on the

perception by smaller contractors of added risk due to incremental funding. For the

Army National Guard incremental funding will impact on the first year execution

of some projects. Some States are prohibited by state statute from awarding contracts without full funding being immediately available. These States would delay

execution to the second year of appropriation. For the same reason, other States,

while not prohibited from contracting, would probably delay execution to fourth

quarter to ensure continuous funding.

BRAC EXECUTION

Question. With some of the BRAC money split between fiscal year 2000 and fiscal

year 2001, how will that affect implementation of the 95 BRAC decisions? How

much money was realigned from fiscal year 2000 to fiscal year 2001?
111

Answer. The fiscal year 2000 President’s budget includes adequate funds to fully implement all remaining closure and realignment actions. The Army has requested

advance appropriations of $196 million in fiscal year 2001 for the Army BRAC program.

QUESTIONS SUBMITTED BY SENATOR STEVENS

REPLACEMENT OF BASSETT ARMY HOSPITAL

Question. Secretary Apgar, the Army intends to build a new hospital at Fort Wainwright in my state, beginning in fiscal year 2000. What is the Army’s funding

strategy for this project and will it be completed? Answer: The Defense Medical Military Construction Program submitted the new Fort Wainwright hospital in the fiscal year 2000 President’s Budget for

$133,000,000. The project was requested to be appropriated over 5 years with the

phases being fiscal year 2000—$18,000,000; fiscal year 2001—$56,000,000; fiscal

year 2002—$34,000,000; fiscal year 2003—$20,000,000; fiscal year 2004—

$5,000,000. This project is estimated for construction completion by the summer of

fiscal 2004.

Question. Is there funding in the budget to demolish the existing Bassett Hospital located at Fort Wainwright? Answer. Yes. The funding for demolition of existing Bassett Army Community Hospital at Fort Wainwright, Alaska, is included in the last two phases (Phases 4

and 5) of this project in fiscal year 2003 and fiscal year 2004.

ARMY GUARD AND RESERVE MILCON FUNDING

Question. Secretary Apgar, over the past several years, the committee has worked with the Army to ensure that they provided a minimum level of funding for the

Army Guard. We agreed upon $50 million each year. This year the Army has only

provided the Army Guard $16 million under this phased-funded scheme. Can you

explain to me why the Army did not honor its commitment to the Committee? Answer. Just like the other DOD components, the Army Guard MCNG program was incrementally funded. The Army Guard authorization remains in excess of $50

million, but to meet funding guidelines, only $16 million of the appropriation was

requested in fiscal year 2000, with the balance requested as an advance appropriation.

Question. What kind of message does the Army send to its Reserve Components when it provides them less than $40 million in total for all of their infrastructure

requirements?

Answer. Readiness requirements have been addressed and improved in fiscal year 2000. The Army National Guard budget request contains the full authorization in

recognition of Congressional interest. However it seeks only $16 million in appropriation, because that was all that was available under the circumstances. Funds

garnered by MILCON incremental funding were used as part of this readiness plusup. The Army Reserve received some of this readiness enhancement and supports

that. The Army Reserve also understands that it has not been singled out as a bill

payer, and they received cuts consistent with the other components. The key is

OSD’s assurance that the balance of the incremental funding will be provided in fiscal year 2001. Funds to maintain the Army Reserve’s current infrastructure has not

been decremented in fiscal year 2000.

QUESTIONS SUBMITTED BY SENATOR MURRAY

ARMY NATIONAL GUARD AND RESERVE

Question. Mr. Apgar, when I compare the funding levels from last year to this

year for both the Guard and Reserve, I’m very concerned. For the Army Reserve,

funds are decreasing from $102 million to a requested $23 million. Likewise, the

National Guard funds are decreasing from $145 million to $16 million. How on

earth are you going to be able to sustain the Guard and Reserve with these minimal

levels of funding?

Answer. The decrease in funding is a one time special event. For the Army Reserve, an authorization request of $81,215,000 and an appropriation request of

$23,120,000 was all that was affordable under the circumstances. The Army Reserve

believes that there will be no significant impact to Reserve Component facilities.

The Army National Guard fiscal year 2000 MILCON submission was in keeping

with the DOD plan for incremental funding. An authorization request of
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$57,402,000 and an appropriation request of $16,045,000 was all that was affordable

under the circumstances.

Question. Will the Yakima MATES project be capable of construction with only

$3.5 million out of $16 million being appropriated this year, according to your request?

Answer. Not under the current appropriation request. State statutes prohibit partial funding and the Washington Army National Guard will not be able to award

the contract if full funding is not available. However, if informal reprogramming is

based on the full authorization or if Congress approved formal reprogramming for

the Yakima MATES, then this project could be awarded in fiscal year 2000.

Question. General Helmly and General Squier, can you tell me what input the Reserve and Guard had in the decision to seek incremental funding for MILCON

projects? Are you comfortable with this plan?

Answer. The U.S. Army Reserve did not provide any input into the decision to

seek incremental funding for fiscal year 2000 MILCON projects. We feel comfortable

with our plan to execute the fiscal year 2000 MILCON projects if Congress approves

the budget as submitted and provides full authorization, advance appropriations,

and an increase in reprogramming threshold. The Army National Guard also had

no input into the decision to submit MILCON projects for incremental funding. The

Army National Guard supports this concept as submitted on a one-time basis and

will find ways to make it work as directed.

Question. Mr. Apgar, in recent years, Congress has had to do the heavy lifting

on providing adequate MILCON funding for the Guard and Reserve. Given the importance of the Guard and Reserve to our national security, I would expect to see

an effort to increase MILCON funding again this year. How would you recommend

that any additional projects be funded this year—additional incremental funding,

full funding, or what?

Answer. The Army recommends that any additional projects for fiscal year 2000

that are added to the Guard or the Reserves be fully funded. This would provide

the infrastructure upgrades that are desperately needed in the Reserve Components.

BUDGET QUESTIONS

Question. In your overview of funding, it becomes clear that Chemical Demilitarization ends up on top for the requested appropriations amount compared to mission projects and quality of life projects. Can you explain to the Committee how you

prioritized when recommending your appropriations levels compared to your authorized levels for fiscal year 2000?

Answer. Some projects, such as Chemical Demilitarization; are already being executed under incremental funding. The appropriation request in fiscal year 2000 for

these projects represents a higher level of funding required to meet contractual obligations. Also, smaller projects with short construction duration were funded at approximately 30 percent to ensure projects are not held up for lack of sufficient funds

due to rapid construction execution. All other active Army projects are funded at

approximately 15 percent of the contract amount, based on historic first year execution. The Army Reserve funded projects between 6 and 36 percent while the National Guard funded all projects at 21 percent.

Question. The Fort Lewis physical fitness center is one of the quality of life

projects you list, and is slated to receive $1.85 million this year. Can you comment

on the status of this project in light of the advanced appropriations? Similarly, can

you comment on the support project at Fort Lewis, the Tank Trail Erosion project?

Answer. The Fort Lewis physical fitness center’s estimated construction contract

award is in January 2000. The requested advanced appropriations and reprogramming authority will ensure the project is executed without disruption or delay due

to funding constraints.

The Tank Trail Erosion project is the fifth phase of a ten phase project. The fifth

phase is fully funded, as were the previous four phases, and will not require advanced appropriations for completion of this phase.
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DEPARTMENT OF THE AIR FORCE

STATEMENT OF RUBY B. DEMESME, ASSISTANT SECRETARY OF THE

AIR FORCE, MANPOWER, RESERVE AFFAIRS, INSTALLATIONS

AND ENVIRONMENT

ACCOMPANIED BY:

MAJ. GEN. EUGENE A. LUPIA, HEADQUARTERS, USAF, THE CIVIL

ENGINEER, DEPUTY CHIEF OF STAFF, INSTALLATIONS AND LOGISTICS

BRIG. GEN. CRAIG R. MCKINLEY, DIRECTOR, AIR NATIONAL

GUARD

COL. RICHARD R. KOEPP, DIRECTOR, INSTALLATIONS AND LOGISTICS, OFFICE OF AIR FORCE RESERVE

THOMAS W L. MCCALL, JR., DEPUTY ASSISTANT SECRETARY (ENVIRONMENT, SAFETY, AND OCCUPATIONAL HEALTH)

INTRODUCTION OF WITNESSES

Senator BURNS. We will next hear from the United States Air

Force, Ruby B. Demesme, Assistant Secretary of the Air Force,

Manpower, Reserve Affairs, Installations and Environment. Thank

you for the visit the other day. We also have General Lupia, The Civil Engineer, Deputy Chief of Staff, Installations and Logistics; Brigadier General Craig R.

McKinley, Deputy Director, Air National Guard; and Colonel Richard R. Koepp, Director, Installations and Logistics, Office of Air

Force Reserve. We welcome you this morning.

Secretary Demesme.

Ms. DEMESME. Good morning, Senator. I will take just a few min- utes to highlight our Military Construction (MILCON) program. The Air Force is striving to maintain facilities and infrastructure to preclude weakening unit readiness, impairing our mission accomplishments, or degrading our peoples’ quality of life; therefore,

our corporate strategy is to accomplish these goals by ensuring that

the MILCON program places emphasis on supporting our new mission beddowns, our current mission activities, ensuring continued

access to critical ranges and air space, reinvesting in the few remaining bases overseas, funding our critical environmental compliance projects, and maintaining and operating our maintenance programs to protect the quality of life of our personnel and their families.

We recognize the integral role the air reserve components play

in our total force mission, and our program assures that their construction needs are addressed along with those of the active force.

Mr. Chairman, for the next few minutes I will in very precise

terms review our total force MILCON program, to include military

family housing and base realignment and closure.

The Air Force total MILCON budget request for fiscal year 2000

is $1.85 billion. Our current mission program includes runway and

ramp repair projects, additions and alterations to existing facilities,
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and two composite support complexes. It is important that our people operate in an environment designed to help them accomplish

their mission; so, therefore, our new mission program supports our

weapons system beddowns, such as the F–22 fighter, the C–17 air

lifter, the B–2 bomber, the KC–135 tanker, the joint primary aircraft training system, or JPATS (Joint Primary Aircraft Training

System), and the construction of the enhanced training range in

Idaho.

Achieving and maintaining military readiness is extremely difficult, but it is our utmost priority. While modern technology enables our forces to perform their missions more effectively, technology cannot substitute for high-quality people. So to retain our

people we must meet their needs, and, therefore, our program

plans enlisted dormitories, fitness centers, and community support

facilities at various locations.

We must also invest in force protection, safety and quality of life

facilities, and our overseas bases. We now have 11 main operating

bases overseas. Regrettably, the reduced MILCON investment,

along with inadequate host nation support and funding, means

that we are not fully meeting our MILCON program overseas

needs.

Family housing is one of our most important programs, and we

are extremely appreciative of this committee’s strong support. Our

MILCON program reflects efforts to continue to revitalize or replace worn-out housing units that are no longer economical to

maintain.

Our Base Relignment and Closure (BRAC) request supports the

1995 decision to realign Kelly Air Force Base, Texas, as well as

supports our design costs for the fiscal year 2001 program. I also

note the Air Force strongly supports Secretary Cohens request for

two additional BRAC rounds.

Despite the challenges we have a number of good news stories.

For example, using the new legislation, this past year we awarded

the Department of Defense’s first privatized housing project at

Lackland Air Force Base, Texas. We also are the proud recipients

of almost one-third of the Department of Defense’s 42 environmental awards.

In conclusion, Mr. Chairman, this committee’s continued support

is vital for us to accomplish our program goals. Our MILCON submission reflects the corporate priorities that support weapons systems modernization, and also provides a fair and equal, safe and

secure, environment for our people to work and play.

PREPARED STATEMENT

I am ready to discuss any issues that you have, or answer any

questions that you might have for us at this time.

[The statement follows:]

PREPARED STATEMENT OF RUBY B. DEMESME

INTRODUCTION

Mr. Chairman and members of the committee, good day. I appreciate the opportunity to appear before you today to discuss the Department of the Air Force fiscal

year 2000 Military Construction (MILCON) program. While this is my first appear-
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ance before the committee, I am nonetheless appreciative of your continuing support

for our uniformed members and their families.

Mr. Chairman, we are cognizant that the Air Force could not maintain the quality of any of its facilities, and the advantages they provide, without the strong support

we have always received from this committee, for which we are most appreciative.

Overview

As we adjust to ever changing world conditions and revise our mission, plan, and structure to meet our responsibilities, both at home and those associated with peacekeeping and other deployments abroad, it is imperative that we establish and maintain standards to provide an adequate quality of life for our people. Since people

have been and remain the most important weapon system in our inventory, we must

listen to what they tell us they need if we want to keep them in uniform. Well,

we’ve asked, and we’ve listened, and we are now trying to respond to their stated

desires for safe, accessible, and affordable housing, health care facilities, child development centers, and work environments. Meeting all of these demands is no easy

task, yet we’ve made every effort to balance these needs with those of modernization. The fiscal year 2000 MILCON budget request reflects the results of our strategy. As we merge operations into an Expeditionary Aerospace Force (EAF), it is more important than ever that the interface and mutuality between the active and reserve components be seamless. This means ensuring the Air National Guard (ANG)

and Air Force Reserve (AFR) receive adequate MILCON funding along with the Active forces. This budget also addresses their needs.

The Total Force concept enables the Air Force to aggressively manage the most

formidable obstacles to troop retention and readiness—heavy taskings and tough fiscal constraints. Despite these challenges, we must balance MILCON needs across

the total force, to include our very capable Ready Reserve and Guard units, as we

transition the Air Force into the 21st Century.

Support operations for our EAF concept must become better and less expensive:

better, because quality infrastructure contributes to quality of life, which improves

morale, retention, and the readiness of the force: and less expensive in order to free

up funds for the high priority weapon systems modernization we need to maintain

battlefield dominance.

We are continually examining internal operations and support activities to determine where we can leverage our resources. We are taking actions to right-size, to

consolidate like functions, to demolish excess facilities, and to enhance joint use of

facilities between service components and government agencies (such as the National Aeronautics and Space Administration), and to embrace better business practices. These initiatives focus on improving the efficiency and performance of the Air

Force facility support structure.

The reality is that, in order to fund higher priority programs, the Air Force is

underinvesting in installation programs. Each year we balance installation support

operations against other Air Force priorities, which results in a funding stream

based on an acceptable level of risk. This means that our installation programs continue to be underfunded.

The maintenance and repair of facilities and infrastructure at Air Force installations are essential to our core competencies in support of national strategies and the

Quadrennial Defense Review. We are striving to maintain facilities and infrastructure where Air Force people work and live to preclude weakening unit readiness,

impairing mission accomplishment, or degrading quality of life. Consequently, the

Air Force corporate strategy for the installation support program includes:

—Maintaining our operations and maintenance programs to preserve the quality

of life of our personnel and their families.

—Ensuring that our MILCON program places emphasis on supporting new mission beddowns and current mission necessities, to include redirecting limited

capital investment to our most pressing requirements.

—Ensuring continued access to critical ranges and airspace.

—Reinvesting in the few remaining overseas bases, which, even after host-nation

burdensharing, have numerous facility needs critical to Air Force core competencies.

—Incorporating environment, health and safety cost considerations into core business practices to lower cost and to improve performance while continuing to

fund critical environmental projects to meet compliance requirements.

The Air Force continues to look at our installation facility requirements with a

view towards leaner operations. We are continuing to embrace better business practices by considering private sector business ventures for everything we do. This allows us to leverage our limited resources by incorporating new innovative ideas.
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These new ideas will continue to shape the templates for installations in the 21st

Century. Mr. Chairman, I now would like to proceed to discuss the major programs in our fiscal year 2000 MILCON budget request. I will review the total force MILCON program, to include discussion of the Military Family Housing (MFH) program. Finally,

I will address the Air Force perspective on the Department of Defense request for

funding of the Base Realignment and Closure (BRAC) accounts.

Air Force Military Construction Budget

The Air Force MILCON program consists of five principal areas: New Mission; Current Mission; Planning & Design and Unspecified Minor Construction; Environmental; and BRAC. New Mission construction supports the beddown of new weapons systems and force structure realignments. Current Mission construction revitalizes existing facilities and infrastructure, and builds new facilities to correct existing

deficiencies. Planning & Design and Unspecified Minor Construction includes funds

to design our construction projects and to fund a small program to handle urgent,

unforeseen construction requirements. The environmental program consists of those

regulatory compliance projects, which must be accomplished by law, or to avoid increased health or safety risks to people on or off our installations. The BRAC program supports the beddown of realigned missions. The Air Force proposes financing its fiscal year 2000 MILCON program through a combination of regular appropriations and advance appropriations. We are requesting $315 million in fiscal year 2000 appropriations and $686 million in appropriations for fiscal year 2001 to enable completion of the fiscal year 2000 program.

This one-time financing methodology enables the Air Force to fulfill its commitment

to providing quality facilities, while maximizing the use of fiscal year 2000 resources

for other readiness and modernization needs. The Air Force has added the $686 million needed to complete the fiscal year 2000 projects to its fiscal year 2001 program.

The use of advance appropriations for fiscal year 2000 projects has no impact on

the Air Force’s planned MILCON for fiscal year 2001 through 2005. This is not the

preferred method of budgeting for construction projects, but we expect to execute the

fiscal year 2000 program without delays or added costs provided Congress approves

full authorization and advance appropriations for the projects requested. For fiscal year 2000, we are requesting a program of $1.85 billion for MILCON. This request includes $1.75 billion for active duty MILCON ($597 million for traditional MILCON and $1.150 billion for MFH); $73 million for ANG; $29 million for

AFR; and $4.7 million for BRAC MILCON.

The Total Air Force Military Construction Program

Similar to last year, the Air Force’s fiscal year 2000 MILCON and MFH programs were developed using a facility investment strategy with the following objectives:

Maintain what we own; Accommodate new missions; Maintain quality of life investments; Optimize use of public and private resources; Continue demolition programs;

Reinvest overseas and Continue environmental leadership.

Program Overview

Given the success of the corporate Air Force process, we continue to consider the

Air Force total obligation authority as one pot of money. These funds are distributed

based on the most urgent, corporate needs of the total force. The strategy for allocating these funds is inextricably tied to major commands (to include the AFR and

ANG), Chief of Staff, and Secretary of the Air Force priorities.

To determine priorities, each major command submits a prioritized, unconstrained

list of its construction requirements. The MILCON integrated process team, then

uses a weighted matrix to establish a cross-cutting investment program. This results in an integrated priority list based on the most urgent needs of the total Air

Force. The list integrates new mission, current mission, and environmental projects

for active, ANG, and AFR components. This priority list is presented to the corporate leadership structure, to include the Chief of Staff and the Secretary of the

Air Force, for final review and approval.

Current Mission

‘‘Maintain what we own’’ is the investment strategy underlying our current

MILCON program. This concept results in identifying the minimum requirements

to sustain readiness and quality of life while attempting to reduce the requirements

via privatization and demolition. This strategy ensures that we exercise the stewardship entrusted to us for maintaining eighty-seven major installations.

Our fiscal year 2000 current mission MILCON program consists of 54 projects totaling $467 million. These projects include a variety of facilities at a number of installations to include: runway and ramp repair projects at Eglin Auxiliary Field 9,
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Florida; Davis-Monthan Air Force Base, Arizona; Pope Air Force Base, North Carolina; and Elmendorf and Eielson Air Force Bases, Alaska; addition and alteration

to the Air Force Reserve Headquarters facility at Robins Air Force Base, Georgia;

and constructing two composite support complexes for the Air National Guard at

Kulis, Alaska and Savannah, Georgia. These projects are critical to maintaining aircraft readiness and to enhance the work environment of the consolidated functions,

thereby improving overall efficiency and reducing costs associated with stress and

the frustration of system failure.

We will continue our emphasis on the effective use of available resources to determine what we need, to care for what we own, to renovate or replace worn out facilities, and to look for opportunities to consolidate functions in retained facilities.

Accommodate New Mission

It is important that our people are able to operate in an environment designed

to accomplish their missions. The Air Force modernization programs is designed to

enhance the unique capabilities embodied in our specialized core competencies.

These competencies provide the rapid, precise, global response that enables our combatant commanders to respond quickly to regional conflicts in support of the national strategy.

We need MILCON to support weapon system beddowns, such as the F–22 fighter,

C–17 airlifter, B–2 bomber, KC–135 tanker, Joint Primary Aircraft Training System

(JPATS), and to improve aircrew proficiency training by constructing, for example,

the Enhanced Training Range in Idaho (Juniper Butte Range). Our entire MILCON

program needed to support new mission requirements consisting of 23 projects totals

$154 million.

F–22 Raptor

The F–22, our #1 modernization priority, is the Air Force’s next generation air

superiority fighter being developed to counter threats posed by advance surface-toair missile systems and next generation fighters. The proposed location for the F–

22 follow-on operational test and evaluation and the weapons school beddown is

Nellis Air Force Base, Nevada. The fiscal year 2000 MILCON includes three F–22

projects at Nellis Air Force Base totaling $19 million.

C–17 Globemaster III

The C–17 Globemaster III aircraft is designed to replace our aging fleet of C–141

Starlifters, which currently are operating beyond their intended design life. The C–

17 provides rapid global mobility by combining the C–141 airlift capabilities, the C–

5 capability to carry oversize cargo, and the C–130 capability to land directly on

short, forward-located airstrips.

McChord Air Force Base, Washington, was designated as the second operational

base for the C–17. We had already identified Charleston Air Force Base, South

Carolina, as the first operational base, and Altus Air Force Base, Oklahoma, as the

C–17 training base. Since then, we have identified Jackson International Airport,

Mississippi, as the proposed Air National Guard C–17 operating location. To support

this program, the fiscal year 2000 MILCON request includes Active and AFR facilities at McChord Air Force Base, Washington, and a corrosion control facility at

Charleston Air Force Base, South Carolina.

B–2 SPIRIT

The B–2 is a multi-role bomber capable of delivering both conventional and nuclear munitions. The bomber represents a major leap forward in technology and is

an important milestone in the U.S. bomber modernization program. Our fiscal year

2000 MILCON program includes one $23 million project at Whiteman Air Force

Base, Missouri.

KC–135 STRATOTANKER

The KC–135 principal mission is refueling. This asset greatly enhances the Air

Force’s capability to accomplish its mission of Global Engagement. We have four

projects in the fiscal year 2000 MILCON to support the KC–135 totaling $19 million. The projects are: flight simulator facilities at Robins Air Force Base, Georgia

and RAF Mildenhall, United Kingdom; repair parking ramp at Eielson Air Force

Base, Alaska; and a squadron operations and aircraft maintenance unit at McConnell Air Force Base, Kansas.
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JOINT PRIMARY AIRCRAFT TRAINING SYSTEM (JPATS)

JPATS is a joint Air Force and Navy primary trainer. The JPATS T–6A Texan

II aircraft replaces existing fleets of Air Force T–37s and Navy T–34s. The aircraft

will be used to train entry-level pilots, navigators, and naval flight officers. The fiscal year 2000 MILCON includes one JPATS project at Laughlin Air Force Base,

Texas for $3 million.

ENHANCED TRAINING RANGE IN IDAHO (JUNIPER BUTTE)

The Air Force is building a training range on Bureau of Land Management and

Idaho state lands in Southwest Idaho, and modifying airspace for local training use

by Mountain Home Air Force Base, Idaho, crews. The range will simulate real-world

scenarios and will allow aircrews to plan and practice complex missions. This project

will balance realistic local training with careful consideration of environmental, cultural, and economic concerns. In addition to providing realistic training, the range’s

close proximity to Mountain Home Air Force Base increases efficiency by allowing

crews to convert time currently spent in transit to a distant range into actual training time. The new range will include a 12,000-acre drop zone site; a 640-acre and

four 5-acre no-drop zone sites; simulated target areas; and 10 one acre and twenty

quarter acre emitter sites. This multi-year range program request includes $15 million in fiscal year 2000 for phase II, and $2 million for a defense access road project.

Quality of Life

Achieving and maintaining military readiness is our number one priority. While

modern technology enables our forces to perform their missions more effectively, it

cannot substitute for high quality people. People, our most treasured resource, are

the critical components of readiness. It is imperative that we maintain a highly motivated and trained fighting force to effectively respond to the demands placed on

them. We have 95,000 military members forward stationed or deployed and we urgently need to fund quality improvements that address our troops’ top concerns: retirement pay; fair and competitive compensation; safe, affordable, and adequate

housing; quality health care; balanced tempo; robust community and family programs; and expanded educational opportunities. These are the initiatives that commanders, first sergeants, and airmen say are important to them.

The quality of life of our people must be commensurate with the sacrifices we ask

them to make. Addressing these concerns has enabled us to better manage recruiting and retention challenges. Offering an attractive living environment to those aspiring to serve this great country results in improved quality of life for our personnel, and that, Mr. Chairman, translates into enhanced readiness.

The MILCON program improves quality of life by renovating or constructing dormitories and community support facilities. Our three-step dormitory investment

strategy, as outlined in the Air Force dormitory master plan, is as follows: (1) the

buy-out of all permanent party central latrine dormitories, now complete given the

generous congressional support in fiscal year 1999; (2) the elimination of shortages;

and (3) the replacement of our worst remaining dorms.

We balance dormitory investment against additional requests for community support facilities. This year ’s MILCON program funds eight enlisted dormitory projects

at eight stateside installations, and one project overseas, for a total of $90.5 million.

In addition to the dormitories, the MILCON program funds a child development

center at RAF Lakenheath, United Kingdom; a dining facility at Keesler Air Force

Base, Mississippi; visitors quarters at McGuire Air Force Base, New Jersey; and

new or modified fitness centers at Travis Air Force Base, California; Schriever (formerly Falcon) Air Force Base, Colorado; MacDill Air Force Base, Florida; Whiteman

Air Force Base, Missouri; and Osan Air Base, Korea, for a total of $51 million.

Optimize Use of Public and Private Resources

As the Air Force operationalizes its EAF concept, we must free up precious funds

for modernization. To do this, we continue to adopt modern business practices, e.g.,

eliminating redundancy; using competition to improve quality and to reduce costs;

and reducing support structures to free up resources for other higher priority needs.

Nonetheless, we must keep in mind that the purpose of our competitive sourcing

and privatizing initiatives is the preservation of the ‘‘tooth’’ and streamlining the

‘‘tail.’’

MILITARY FAMILY HOUSING

We awarded our first housing privatization project last summer at Lackland Air

Force Base, Texas. While the contracting process took longer than we would have
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liked, it was necessary to develop the new documents, policies, and procedures that

will allow us to eliminate many hurdles on future projects. The Air Force continues to solicit advice from national real estate and financial

institutions on how to improve our performance in privatization. We firmly believe

that through privatization we can provide new homes to our airmen in less time

than using the standard MILCON process.

UTILITIES

Meanwhile, we are embracing a defense reform initiative that places us primarily in the energy management business, which will reduce our role in the infrastructure

business. Our goal is to privatize utility systems where it makes economic sense and

does not negatively impact national security. To date we have identified 463 utility systems for potential privatization, and analysis for 55 of these systems is currently underway. We have also programmed

204 systems for analysis in fiscal year 1999, and the remaining 204 systems in fiscal

year 2000. As a result, the Air Force will be able to meet the goals established by

the Department of Defense to privatize all utility systems by 2003.

LABORATORY INFRASTRUCTURE

We are also exploring innovative partnership arrangements with industry to achieve real reductions in Research, Development, Technology & Evaluation

(RDT&E) infrastructure costs through mutually beneficial use of Air Force-owned

land and facilities. By working with local communities and government entities at

the Air Force research sites, we are confident we can develop more efficient operations. One example is the joint proposal being negotiated between our Rome research site and the state of New York. Through a combined funding source consisting of MILCON, state and local government funds, and a bond issue, the Rome

research site will be able to divest themselves of 14 old and expensive-to-maintain

buildings in order to acquire one new building with greatly reduced operations and

maintenance costs. Additional savings in manpower will come through reduced requirements for security, facility management, and maintenance. The innovative

lease arrangement will substantially reduce the costs to the government while guaranteeing payback to the bond holders. Another example of an innovative approach to infrastructure requirements is the

proposal for Brooks Air Force Base, the home of our Armstrong research site. The

Brooks ‘‘city base’’ concept is being explored with the city of San Antonio and the

State of Texas. This concept would allow us to retain a research campus while turning the rest of the base infrastructure over to the local government and to private

contractors. It also would allow the local community to have access to the facilities

currently at Brooks, and would provide a valuable place for future industrial and

commercial development while retaining areas for parks and recreation. As with the

Rome research site in New York, the city base at Brooks would greatly reduce infrastructure costs to the government since it would no longer be responsible for the

upkeep of the support facilities and would need to maintain only the facilities actually used for research. These types of partnerships with the local communities have

great potential and may become models for future Air Force infrastructure plans.

Demolition

While we strive to increase our maintenance dollar for infrastructure or new facilities; we must continue to demolish worn out or obsolete facilities in order to reduce recurring operations and maintenance costs. Over the past three fiscal years,

we have demolished over nine million square feet of obsolete facilities.

Overseas Military Construction

We must also invest in force protection, safety, and quality of life at our overseas bases. We now have eleven overseas main operating bases, of which six are to the

East: two in England, two in Germany, one in Italy, and one in Turkey; and five

bases in the Pacific: three in Japan and two in Korea. After years of base closures

and force reductions, we have achieved stability in the overseas arena. However, the

reduced MILCON investment coupled with inadequate host-nation funding does not

meet our overseas requirements. Consequently, while we are actively pursuing

NATO funding, increased host-nation funding, and payment-in-kind, our quality of

life improvement needs remain greater than available burden-sharing funding can

satisfy. Our fiscal year 2000 MILCON program for our European and Pacific installations

totals $77 million. The program consists of a consolidated corrosion control and

maintenance complex, a KC–135 flight simulator facility, and an operations facility

at RAF Mildenhall; and a consolidated support complex at RAF Lakenheath, United
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Kingdom. Also in the program are a $2 million global positioning system control station on Ascension Island, and a $2 million project for apron security lighting at

Lajes Air Base, Portugal. As mentioned earlier, there is one overseas dormitory

project; an addition/alteration to the physical fitness center, at Osan Air Base,

Korea; and a child development center at RAF Lakenheath, United Kingdom. We

ask for your support of these important operational and quality of life projects that

represent critical requirements for our airmen and their families located overseas.

We are sending a precautionary prefinancing statement to the NATO infrastructure committees for all NATO-eligible European projects. These statements will permit recoupment from the NATO infrastructure program if eligibility is subsequently

established.

Environmental Military Construction

As our record shows, we are dedicated to enhancing our already open relationships with both the regulatory community and the neighborhoods around our installations. We strive to ensure that our operations meet all environmental regulations

and laws, and we seek out partnerships with local regulatory and commercial sector

counterparts to share ideas and to create an atmosphere of trust.

Our continuing campaign to foster an environmental ethic within the Air Force,

both here in the US and abroad, has enabled us to enhance operational readiness,

be a good neighbor, and leverage our resources to ensure that we remain a leader

in environmental compliance, cleanup, and pollution prevention.

As a result of these cooperative efforts over the past two years, the Air Force environmental program has received top honors in almost one-third of the 42 awards

recognized by the Department of Defense. We were recognized for overall environmental quality, pollution prevention, and recycling. Additionally, our measure of

merit targeting no-enforcement actions is paying dividends. We have reduced our

open enforcement actions from 263 in fiscal year 1992 to just seven in the first quarter of fiscal year 1999.

Our major environmental stewardship projects are the renewal of the Barry M.

Goldwater Range in Arizona and the Nellis Range in Nevada. We anticipate submitting renewal legislation to Congress in late summer. Our environmental compliance

MILCON request for fiscal year 2000 totals $27 million for eight, class-1 ‘‘must pay’’

compliance projects. Our program primarily focuses on projects for fire training facilities, which are closed due to fuel contaminated land and potential ground water

contamination. These fire training facilities are located at Hickam Air Force Base,

Hawaii; an ANG fire training facility at Savannah International Airport, Georgia;

and an AFR fire training facility at Homestead Air Reserve Station, Florida. We

also have two wastewater treatment facility projects at RAF Feltwell and RAF

Molesworth, United Kingdom; a hazardous material storage facility at RAF

Mildenhall, United Kingdom; a sanitary sewer line project at Schriever Air Force

Base, Colorado; and a project to close the landfill at Andersen Air Force Base,

Guam.

All of these projects satisfy class-1 requirements. (Class-1 compliance requirements refer to conditions or facilities currently out of compliance with environmental laws or regulations, including those subject to a compliance agreement.)

Unspecified Minor Construction

We have requested $15 million in fiscal year 2000 for unspecified minor construction, which will provide the total Air Force with a primary means of responding to

small, unforeseen facility requirements that cannot wait for normal MILCON. From

fiscal year 1994 through fiscal year 1998, a total of $6 million was reprogrammed

into the account to fund urgent requirements. The fiscal year 1994 through fiscal

year 1999 accounts are fully obligated, or committed, to valid projects.

Planning and Design

Our request for fiscal year 2000 planning and design is $35 million. These funds

are required to complete design of the fiscal year 2001 construction program and

to start design of our fiscal year 2002 projects.

Construction Supervision, Inspection and Overhead

The Air Force active and Reserve forces will annualize its appropriations for construction supervision, inspection and overhead over five budget years based on fiscal

year 1993–97 outlay rates. This defers total obligation authority in the initial budget year , and budgets for supervision, inspection, and overhead funds as needed, as

opposed to maintaining unobligated balances.
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Military Family Housing

As in years past, we consider family housing to be one of our most important pro- grams. We are convinced that no other facility program so greatly influences the

performance and commitment of our people as much as having quality homes for

our families. Maintaining our responsibility to the family housing program is even

more important in this era of major force reductions and increased frequency and

length of deployments. Because these factors are so stressful for military families,

it is imperative that we continue to emphasize quality of life issues to mitigate the

stress. Consequently, we have developed, consistent with the corporate priorities of

the Air Force, a housing program to best serve our families. Due in large part to strong congressional support, our MFH investment program has been sustained during recent force structure changes. As of this fiscal year, the

average age of our housing inventory is 35 years and 61,000 of our 110,000 units

require revitalization.

Our MFH investment has three prongs: the replacement/ improvement program, the operation and maintenance program, and the leverage we can obtain through

a balanced privatization program. The $328 million fiscal year 2000 MFH replacement/improvement program will replace 1180 worn-out units at 15 separate locations, and will improve 1334 units at 15 locations. The housing operations & maintenance program totals $822 million. It supports ‘‘must pay’’ requirements such as

refuse collection, snow removal, utilities, leases, and critical housing maintenance

tasks. These are essential repairs that must be done to keep the houses in good condition. Finally, we will use privatization at selected locations to leverage our funds.

Privatization is a tool which allows us to accelerate the buyout of repairs to adequate homes and we ask for your continued strong support for our requested investment levels to ensure we have sufficient capital to accelerate the repair of our inadequate housing.

Housing Improvements

The Air Force ‘‘whole house/whole neighborhood’’ improvement concept has proven extremely successful. Under this concept, we upgrade older homes to contemporary

standards by updating worn-out bathrooms and kitchens, replacing obsolete utility

and structural systems, providing additional living space as permitted by law, and,

at the same time, accomplishing required maintenance and repair. The result is a

cost effective investment that extends the life of these houses 25 years. In addition,

the ‘‘whole neighborhood’’ program provides recreation areas, landscaping, playgrounds and utility support systems to give us attractive and functional living environments.

Our fiscal year 2000 improvement request is $124 million. This amount revitalizes 1334 homes at 15 bases. This includes $74 million for 903 homes stateside, $49 million for 431 homes overseas, and $1.2 million for two neighborhood improvement

projects.

HOUSING CONSTRUCTION

We are requesting $186 million for fiscal year 2000 projects, with $173 million at 14 stateside bases to replace 1105 existing houses, and $13 million at one overseas

base (Lajes) to replace 75 existing houses that are no longer economical to maintain.

OPERATIONS, UTILITIES AND MAINTENANCE

Our fiscal year 2000 request for family housing operations, utilities, and mainte- nance is $703 million. These funds are necessary to operate and maintain the

110,000 homes in the Air Force inventory. Approximately 41 percent of this request

represents the Air Force’s obligation as the landlord for items such as utilities,

refuse collection, and other key services. The remaining 59 percent of the funds is

for maintenance for the homes and infrastructure.

PLANNING AND DESIGN AND LEASING

We have requested $136 million for planning and design, and for leasing. This includes $17 million for planning and design of new construction and improvement

programs, and $119 million for leasing approximately 4,100 domestic and 3,900 foreign homes. The leasing program supports critical missions in non-traditional locations, such as foreign sites where family housing is not available, and for recruiters

not located near military installations in the US.

Our fiscal year 2000 MFH budget request reflects our policy to ensure that our

families have access to safe, affordable and adequate homes; and mirrors our strategy to modernize on-base housing by improving our worst first. We are committed

to improving retention by providing our Air Force families with homes and commu-
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nities that are comparable in design and amenities to private sector housing. Our

‘‘whole house-whole neighborhood’’ concept for developing a housing community plan

for each installation continues to put our people first by fostering a sense of community and supporting neighborhood identity. We seek to achieve a pride of ownership

mentality within our family housing community.

Base Closure Accounts

The Air Force BRAC fiscal year 2000 MILCON request is $4.7 million for 3 con- struction projects supporting the BRAC 1995 decision to realign Kelly Air Force

Base, Texas, and for final design costs of fiscal year 2001 BRAC construction. The

projects are a communication facility addition, and a maintenance facility, at Kelly

Air Force Base, Texas, and a civil engineering shop addition, at Lackland Air Force

Base, Texas.

The Air Force requirements included in the Department of Defense fiscal year 2000 budget request for the BRAC accounts are designed to support the President’s

Five-Part program by continuing to transfer property at closure installations as

quickly and efficiently as possible to communities for economic reinvestment at the

earliest opportunity. As part of the defense budget, the Air Force request reflects

a thorough review of all remaining requirements and careful budgeting to fulfill

validated requirements to the greatest extent possible within the budget constraints.

The Air Force continues to be committed to timely environmental restoration that is protective of human health at our closure bases. In addition to converting bases

to civilian use, we continue the realignment beddown process at remaining installations to ensure that base closure neither disrupts our operational requirements nor

adversely affects quality of life. We appreciate the support of this committee in helping us meet these objectives. Our successes in base conversion are numerous. The Environmental Protection

Agency recently highlighted the Air Force fast-track cleanup program at the former

Bergstrom Air Force Base, Texas, designed to meet the Austin-Bergstrom International Airport opening date. We intend to apply our many lessons learned to future base conversions should the Congress approve additional rounds of closures. One final comment on BRAC. Reductions in Air Force manpower and force structure have outpaced those in infrastructure, which results in commanders spending

scarce resources on unneeded infrastructure. Consequently, the Secretary of Defense

has requested, and the Air Force supports, two additional rounds of base closures.

Further BRAC actions are necessary to ensure we have the proper force structure

and topline for modernization necessary to properly execute our mission and to

maintain day-to-day activities. We need BRACs now, because the Air Force has

more bases than it needs and any delay in this process delays the realization of critical cost savings. As previously stated by Acting Secretary of the Air Force F. Whitten Peters, ‘‘simply put, base realignment and closure is tomorrow’s readiness decision that we must begin planning today.’’

Conclusion

In conclusion, Mr. Chairman, I thank the committee for its strong support of the Air Force MILCON program, which contributes immeasurably to the Air Force’s

readiness, retention, recruiting, training and quality of life programs. Our fiscal year 2000 Air Force MILCON submission reflects the corporate prior- ities supporting the total Air Force vision to continue our position as the world’s

best and most respected air and space force, while working to maintain our aging

physical plants. Our installations are crucial factors in Air Force readiness. We rely

on our bases to serve as our launch platforms to effectively project U. S. air and

space power, as well as places where our people live and work. This budget submission reflects our commitment to maintain the quality of Air Force installations. Thank you Mr. Chairman and members of the committee.

ENVIRONMENTAL CLEANUP

Senator BURNS. Thank you very much. I will just pull one out of the blue. Thank you for that statement. Environmental cleanup, as a result of BRAC, in other words,

closing some of our facilities, tell me about that, and the amount

of money that you are spending. I do not know if anybody has those

figures. That was kind of a question that just popped into my head,

the progress that we are making on environmental cleanup as a result of BRAC.
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Ms. DEMESME. Yes, sir. As you know, environmental cleanup has

cost a little bit more than we envisioned when we went into the

BRAC rounds, but as we have gotten into it, we are doing it better.

We partnered with a lot of the environmental agencies to try to do

it even more succinctly in the future.

Right now, we have a $291 million program for fiscal years 2000

and 2001. I have with me my environmental deputy assistant secretary, who could give you some more figures on that, Mr. McCall.

Senator BURNS. Just give me a little bit of a progress report, Mr.

Secretary.

Mr. MCCALL. We spent approximately $1.9 billion to clean up,

and we are more than halfway through that. We will have most of

our sites completed by 2001. It will be well over 90 percent of our

sites completed, but we will have a few sites on some installations

that still have not been done.

Part of these have been discovered as we have gone along, and

there will be some minor adjustments, but they are not going to

impact our ability to transfer property or to be timely.

The one base that stands out different from all the rest is

McClellan, which will take us longer, probably to about 2016. We

are timing our cleanups to support property utilization so that we

will not impact the ability to reutilize. That is the state of our program.

Senator BURNS. Tell me about a base that was as large as

McClellan. Can one sector be cleaned up, or one part of that base,

and that be moved into private hands.

Mr. MCCALL. Yes, it can.

Senator BURNS. Is that the way we are doing that?

Mr. MCCALL. Yes, it is.

Senator BURNS. Thank you very much. We were concerned about

that, because BRAC, I think all the time we were going through

the process of the BRAC, we really did not know what figure was

going to pop up when you talked about environmental cleanup before we could move those properties. Last year we had a little hearing, in fact, with regard to that, and finding some problems, and

you are right, there are a lot of things that are discovered, and it

becomes a surprise.

General LUPIA. Senator, I want to make a comment, if I could,

on environmental cleanup, not related to BRAC, though. I wrote

you a letter this morning to let you know that Malmstrom Air

Force Base is about to be recognized for the best environmental

cleanup program in the Air Force at an awards ceremony on the

26th of April, which we have invited you to.

OVERSEAS MILITARY CONSTRUCTION

Senator BURNS. Well, thank you very much. Now, you mentioned

being behind in some of your overseas installations. Would you

mind telling me where you consider you have shortages, what those

shortages are, and why?

Ms. DEMESME. We have shortages in Korea. I think some of our

worst places are in Korea. We are not getting the level of support

in terms of burden sharing with Korea as we are with, let us say,

Japan. We have dorms situations there that we need replaced. We
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have fitness centers that we need. We have housing that we need

in that particular location.

We also have housing needs in Europe, and we have some, of

course, in Japan. General Lupia, you might want to give the Senator a better idea of what we are planning in those areas.

General LUPIA. Sir, when I was assigned as the programmer in

Europe in the mid-eighties we had 26 big operating bases throughout Europe. In the early nineties, as we decided to downsize and

lower the number of our forces in Europe, we made a conscious decision in the Air Force to stop asking the Congress for money for

construction until we could decide where we would be.

Now, the result of that is, we are in six bases in Europe today,

and only six, two in the United Kingdom, two in Germany, one in

Italy, and one in Turkey. Because of the pause, I might say, of

three to four years, the bases overseas got even further behind

than they were to start with. We have two bases left in Korea,

down from a very much larger amount, just at Osan and Kusan

today, and three bases in Japan.

We asked the Congress and Senate for very little help in Japan,

because we do get a lot of burden-sharing money from the Japanese. In recent years the Koreans have continued to give us more

and more. At Osan Air Base, we are asking you for help with the

dormitory, because it is where the highest number of our people

live off base and are exposed—in the force protection area are exposed to the dangers of terrorism, et cetera.

NATO has picked up a very large share of the construction in

Aviano, I know you saw that while you were there. We have a

great deal of non-appropriated funds we invested in there for the

commissary and the base exchange (BX), a new complex, and a new

DOD school, but it still left us a requirement to build and pay for

dormitories, for example, and for many of our other U.S.-owned facilities.

Senator BURNS. If I remember, there was just limited dormitory

space.

General LUPIA. Yes, sir. In our program, and the Congress has

been good to us, we have been able to build dormitories, one-plusone dormitories, over the last couple of years to buy out our deficit

there as well.

Senator BURNS. General, did we ever get an agreement with the

Italian government on some sort of permanence at Aviano?

General LUPIA. Yes, sir. The length of it, I do not recall off the

top of my head, but we do have—we got that entire area they call

the Zappala area, from the Italian Air Force. That is where we are

building the commissary and the BX, and have a military construction line item for roads, et cetera. But the answer to your question

is yes. The length of the agreement or the terms of the agreement

I am not familiar with.

Senator BURNS. South Korea is going through some very difficult

financial times as a country, and we are part of almost the total

collapse of the economic community of the Pacific rim. Are they rebounding now to where they are more amenable for burden sharing

there?
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Ms. DEMESME. They are more stable than they were last year at this time, but we still are unable to increase the amount that we

can expect them to assist us with.

MILITARY HOUSING

Senator BURNS. We just talked to the Army about their privat- ization and their leveraging the money. We still have members of

Congress, that is what they are asking us on these programs. Are

you approaching your housing problems the same way that the

Army is?

Ms. DEMESME. No, sir, we are not. We have a three-pronged ap- proach to housing. We are looking at traditional MILCON, privatization and operation and maintenance (O&M). We still have a lot

that we need to do with O&M money as well. We are taking a very

measured approach to housing. We have agreed that it is important

to look at not just the needs for the day, but how we are going to

sustain those needs in the future.

We are looking at out-of-pocket expenses to our members to make sure that we are keeping it within their housing allowance,

because they are already spending between 15 and 20 percent out

of pocket, and we do not want to increase that. So our contracts

will ensure that their housing allowances will take care of utilities

in the privatization market.

We are also looking at whether we should lease the land or if we should convey it, whether it is on base or off base, and to that end,

we are in the process of developing a family housing master plan. We are going to continue to move slowly on this, because we want to make sure we do it right. We want the housing to be there.

This gives us the opportunity to provide housing today when people

need it rather than postpone it until tomorrow, but at the same

time we want to be able to make sure that the housing we developed for our people will meet their needs and will not cost them

a lot of extra money, and will continue to meet the quality that we

think our people deserve.

ONE-PLUS-ONE

Senator BURNS. Tell me about one-plus-one.

Ms. DEMESME. One-plus-one is very important, sir. We highly en- dorse it. I listened to your earlier talk about being in the Army. I

was not in the Army, and the Marine Corps is only looking for a

few good men, but I did go to college, and I can recall in my college

dormitory, I had a room with four people with a central latrine. I could not have anybody in my room. If I wanted to study I had

to go someplace else. If I wanted to take a bath, I was not always

able to do so. We all had the same daytime duty, to go to school,

so we did not have the shift work. So when I think about our young

people, I realize——

Senator BURNS. Well, we did, but we did not write about it.

Ms. DEMESME. We did, but we accepted what we had to at that

time.

Senator BURNS. That is right.

Ms. DEMESME. But the difference was, I had a place to go home

to. I could go home to my family during holidays and summers,

that was just the place that I was going to school. With our young
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men and women, this is their home, this is where they work, this

is where they sleep. They need their privacy. They need their ability to get up tomorrow and go out on that tarmac and turn the

wrenches on the planes.

They need to be able to forecast weather, and all those things

that require concentration, where they need to have the ability to

think and to just be by themselves once in a while if that is what

they need, but it does not take away from their integrity, because

the living units are still in the buildings together, and they will

still be training together, they will still be doing teamwork in lots

of areas.

I think privacy is the number one issue for our young men and

women. It is not that they are going to college, and they are going

to go out later on and have fun, this is a real life-and-death situation, and I think it is important that they have a safe place to

sleep.

Senator BURNS. You have a master plan on——

Ms. DEMESME. We have a master plan. First, we focused on getting rid of our gang latrine. We have done that a little ahead of

schedule. Next, we are implementing new assignment standards

that govern how we use our existing dormitories. Over the next

three years, fiscal years 2000 to 2002, we intend to provide private

sleeping rooms to our current dormitory occupants, wherever possible. We will continue buying out our room deficit through fiscal

year 2009 according to the master plan.

That will be our own base capability and sometimes we are going

to be leasing or having people move off base, and by 2009 we hope

to have completed our master dormitory project. We are on track,

we are doing well, and it means a lot to our men and women.

Senator BURNS. I know we have talked and, of course, I am very

much concerned about, as I said, with the Army, we are going to

stop building NCO dormitories. We visited with, I think they were

all probably majors and below in the Middle East, and Senator

Inouye, Senator Stevens, and I were out there.

What struck me, there were two young women, one was a staff

sergeant and one was a tech sergeant, and they are leaving the Air

Force, and that concerns me a lot. They were very bright young

women, and they were technicians on the AWACS, skilled positions.

We just absolutely have to retain those people, if we possibly can.

They are the best we have. That was kind of a—the living conditions there—and this was their tenth or eleventh trip over there

since 1991. So that concerns me a lot.

I do not have any other questions other than I think your approach is correct, and I want to thank you for the visit. It was a

very good visit. I enjoyed that a lot. We are going to visit some

more on this privatization thing, and I do not know which direction

you-all are going in the Air Force, and we do not have all of our

allocations yet, and as soon as we get our allocations, we will come

down and be in very close consultation with you, and work with

you as we work through some of those problems in the appropriations.

Ms. DEMESME. Well, we appreciate your support. We look forward to working with you. If we can assist in any way, if you are
127

visiting different locations, or need timely information, please let

us know.

Senator BURNS. Well, I have a couple of trips to make, and look

forward to those. I like a working relationship, and that is the most

important thing.

Ms. DEMESME. This is General Lupia’s last appearance.

Senator BURNS. Really?

General LUPIA. Yes, sir.

Ms. DEMESME. He is thinking about retiring. I am not sure if we

can allow that to happen.

Senator BURNS. We are not going to let you out. We need to retain generals, too, you know. [Laughter.]

MALMSTROM AIR FORCE BASE

General LUPIA. Sir, I have been at this for 32 years, and I think

it is time to give somebody else a chance. I told you I was not going

to retire until we got the Malmstrom Air Force Base Red Horse

Unit stood up.

Senator BURNS. I have to tell you, that has been a pretty nice

success story out there. We are using some reserve and——

General LUPIA. Guardsmen.

Senator BURNS [continuing]. And guardsmen, along with

regulars.

General LUPIA. Yes, sir. We reached full operating capability last

October 1st, as we said we would. We had 200 members of the

squadron deployed for the first real genuine deployment down to

Guatemala, to help with the recovery of Hurricane Mitch, and I am

happy to tell you that our active guardsmen, 200 of them, guys and

gals, have now come back. Today another group of guardsmen from

Montana have returned to Guatemala to continue helping restore

critical systems and utilities.

They asked me today while I was here, if I would get a chance

to see you, and I said it is for sure I will get a chance to see you,

if I could present you with one of their 819th squadron coins. It

says on the back, ‘‘A horse with wings, unity, teamwork, and commitment.’’ So on behalf of the members of the 819th, I would like

to present this.

Senator BURNS. Thank you very much. Tell them thank you. I

am pretty proud of them out there, because that was kind of an

experiment——

General LUPIA. Yes, sir.

Senator BURNS [continuing]. To see if we could integrate those

two sections, and it has been—I hope it has been fairly successful

anyway.

General LUPIA. A big success.

Senator BURNS. I do not know all the ins and outs about it——

General LUPIA. A big success, sir.

Senator BURNS [continuing]. But it has the appearance of a lot

of success, and we want to continue to do those things. I am sure

that Senator Murray will have some questions, and if you could respond to her and the committee, we would deeply appreciate it. She

is down at the White House, and they are talking Kosovo, and I

certainly understand that.
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ADDITIONAL COMMITTEE QUESTIONS

We appreciate your patience, and coming before the committee, and we look forward to working with you. [The following questions were not asked at the hearing, but were submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED TO MS. DEMESME

QUESTIONS SUBMITTED BY SENATOR BURNS

FUNDING LEVELS

Question. There has been a steady decline in Military Construction funding within DOD. This year the Department migrated $3.1 billion from the MILCON bill to replenish personnel and readiness accounts within the Department. DOD did not cut

any military construction projects as a result of this reduction. Rather they requested only a small down payment on each project, and spread the funding over

two years. This decline will result in gradual erosion in the ability of the Air Force to ade- quately maintain and replace their base infrastructure, as well as protect quality

of life initiatives.

The fiscal year 2000 Air Force budget funds real property maintenance at the Preservation Maintenance Level which represents the resources necessary to accomplish periodic maintenance required to sustain real property facilities and infrastructure. This is one percent of the current physical plant. This represents almost

80–100 year replacement cycle. Madame Secretary, I am concerned about the Department’s Plan to Phase Fund Military Construction in fiscal year 2000. I recognize that their were tremendous

fiscal pressures to realign money. However, if this practice continues into the future,

what would be the long-term implications to your Milcon program? Answer. Since advance appropriations is proposed as a one-time action, we are not

sure what the long-term implications would be. The Department and our design/construction agents will have to create new mechanisms to accurately track project

costs over multiple appropriation years. Right now a project has a single year of appropriation to track project increases, reprogramming thresholds and scope adjustments. All of these elements become more difficult to track and potentially more

costly if this practice continues. Any long-term approach would perpetuate the additional workload needed to develop award and funding strategies that ensure adequate funding is available on each project so construction can proceed as necessary

to meet need dates.

Question. If we decide to pursue this strategy of advance appropriations, will this slow down execution of the projects and potentially increase their costs? Answer. Although advance appropriations does not support optimal program exe- cution, it does not preclude 100 percent execution in the year of appropriation. We

will continue to work award and funding strategies with our design/construction

agents to ensure sufficient funds are available on each project so construction can

proceed as necessary to meet need dates.

The potential for cost increases can be minimized if Congress provides full project

authorization in the year of appropriation, changes the reprogramming base from

the appropriated to the authorized amount to enable the transfer of funds between

projects in a timely manner, and advance appropriates the balance of construction

funds so they are available at the start of the next fiscal year.

Question. What does the Air Force spend each year on plant replacement value

on facility maintenance? At this rate, what is the replacement cycle for infrastructure for each component?

Answer. In fiscal year 2000, the Air Force is spending one percent of the plant

replacement value in the Operation and Maintenance appropriation for facility

maintenance. At this rate, there is no recapitalization of facilities.

FAMILY HOUSING PRIVATIZATION

Question. Because of the tremendous backlog of new and replacement family housing construction, the Department of Defense sought new authorities to use public/

private ventures as a housing tool. Under a five-year test program which expires

February 2001, the Air Force can provide cash, direct loans and loan guarantees,

and differential lease payments. They can also convey land or lease existing land,
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housing and facilities to a developer in exchange for renovation or construction or

homes.

The Air Force is cautiously proceeding with family housing privatization. They

have awarded a contract at Lackland AFB, Texas, and are scheduled to make an

award for Robins AFB, Georgia later this year. There are seven additional projects

underway this year. They are working to streamline the acquisition process to

spread the process.

Madame Secretary, would you describe the Air Force approach to family housing

privatization and the projects currently underway?

Answer. The Air Force is using a measured approach to military family housing

privatization during the five year test period that ends in February, 2001. We will

test the range of authorities that are contained the 1996 legislation. The Air Force

is accomplishing housing privatization through real estate deals using a request for

proposal.

The Lackland AFB project for 420 units was awarded August 1998. The Robins

AFB project is currently in the solicitation evaluation stage with contract award

projected for August 1999. The Elmendorf AFB project solicitation was issued to the

public on 25 March 1999. Nine other initiatives are at various stages of concept development in our approach towards housing privatization during this five year test

period.

Question. I noticed the Air Force is continuing to budget for traditional MILCON

for family housing. Why have you chosen a combination of privatization and military construction for family housing?

Answer. The Air Force sees privatization as a tool, in addition to MILCON and

O&M, to provide quality housing to our service members. The Air Force is taking

a measured approach during the test period of these privatization authorities. Privatization will be considered where economically viable and in the best interest of

our military families.

Question. I remain concerned that Air Force personnel and their families may pay

more to live in one of these projects than housing provided through regular

MILCON. What assurances can you give me that they will not have out of pocket

expenses?

Answer. The Chief of Staff of the Air Force and the Secretary of the Air Force

have directed that housing privatization initiatives should not cause service members to pay out of pocket expenses. Therefore, any housing privatization project that

results in out of pocket expenses for military members will not be implemented.

FORT BELKNAP TRAINING RANGE

Question. The Montana Air Guard is working a proposal through the Air Force

to create a weapons training range on the Fort Belknap Indian Reservation. The

Montana Air Guard briefed some of Ms. Demesme’s staff on their concept in late

February. In order to move this proposal forward, the Montana Guard must have

the approval of the Fort Belknap Tribal Counsel.

This range will provide the Montana F–16s a bombing range in the state, rather

than having to travel long distances to practice bombing and air-to-ground gunnery.

This will facilitate the Air Guard’s shift in mission from an air defense role to a

general-purpose mission. Receiving Air Force approval for this range is critical for

this concept to move forward.

Madame Secretary, I understand that the Montana Air Guard is pursuing a concept of a weapons training range in Montana. Does the Air Force anticipate any

problems with this Initiative?

Answer. The Air Force supports the effort to establish a range in Montana. Currently we do not anticipate any problems with this initiative

Question. How Will this Range Facilitate Training for the Montana Air Guard?

Answer: Efforts to establish an air to ground range in Montana are in the very

early conceptual stages. If this range were to be developed, its close proximity to

the Montana Air National Guard (MTANG) home base would provide greater training opportunities. Compared to flying to the closest range currently available, our

preliminary analysis shows we could save approximately one hour and twenty minutes of flying time per training flight. This transit time could be put to better use

accomplishing other required training. Additionally, the cost savings per year could

total $2,600,000.

Question. What is the status and associated time line of this proposal?

Answer. Since this range concept is in early conceptual stages, no timelines have

been established. If a formal proposal should develop from this concept, timelines

would be established consistent with standard Air Force directives.
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QUESTIONS SUBMITTED BY SENATOR STEVENS

MILCON PROJECTS FOR EIELSON AFB IN FISCAL YEAR 2000

Question. Madame Secretary, I understand that Eielson AFB has four major MILCON projects in the fiscal year 2000 budget. It is my understanding that the

two runway projects and the defense fuel project were linked in order for construction to occur at the same time. What impact will incremental funding have on the

execution of these projects? Answer. The Air Force must consider the limited construction season due to the

arctic climate and the need to limit runway closure when determining the funding

required for this project so construction can proceed as necessary. We will work contract and funding strategies with our design and construction agents to ensure the

potential impact of advance appropriation on these projects is minimized.

Question. When and for how long do you anticipate the runway will be closed at Eielson AFB as a result of these projects? Answer. We anticipate the runway will be closed for approximately 135 days, be- ginning in May of calendar year 2000.

QUESTIONS SUBMITTED BY SENATOR MURRAY

TOTAL BUDGET

Question. After looking over the numbers for the active Air Force and subtracting all the ‘‘must-haves,’’ it appears you only have $143 million for new construction this

year, and will need $471 million in fiscal year 2001 to meet your total program request. Is $143 million going to be adequate, particularly if Congress decides this advanced appropriation formula isn’t acceptable? How will you prioritize your projects? Answer. If Congress decides advanced appropriation is not acceptable, $143,000,000 will not be adequate for our major construction requirements in fiscal

year 2000. The Air Force requires $699,000,000 to execute the fiscal year 2000

MILCON program without advanced appropriation. The Air Force’s major commands submitted $2,200,000,000 in requirements for fiscal year 2000 including new

mission beddown, operational facilities, control towers and fire stations, dormitories,

infrastructure projects, and quality-of-life facilities (physical fitness centers, dining

facilities, child development centers, etc.).

A reduction of this magnitude would require a complete reassessment of the Air Force’s most urgent needs.

Question. In your active current mission projects, there are three required to be done by Congress in fiscal year 2000; (1) the Beale flightline fire station for $9 million; (2) the McConnell KC–135 squad ops for $10 million; and (3) Rome lab for $13

million. Will these requirements of $32 million then reduce the $143 million available for new projects to $111 million? Answer. A reduction of this magnitude would require a complete reassessment of the Air Force’s most urgent needs.

Question. I notice that your active quality of life projects total $140 million this year. Again, given the funding constraints, how will these projects be prioritized

compared to your current mission requests? Answer. They will be prioritized very high. However, a reduction of this mag- nitude would require a complete reassessment of the Air Force’s most urgent needs.

C–17 GLOBEMASTER III—MC CHORD AFB

Question. McChord Air Force Base in Washington State has been identified as the

second operational base for the C–17. In your fiscal year 2000 budget, there are both

Active and Reserve facilities funded at McChord to address this need ($8 million for

squad operations active, and $3 million for squad ops reserve). My concern is what

will happen to these projects as a result of the incremental funding proposal. How

much do you anticipate will get done this year compared to next year. What happens if Congress does not approve advance appropriations? Where are these projects

on your priority list?

Answer. As a result of the Department’s request for advance appropriation, we

will continue to work award and funding strategies with our design/construction

agents to ensure sufficient funds are available on each project so construction can

proceed as necessary to meet need dates. Although advance appropriation does not

support optimal program execution, it does not preclude the MILCON projects from

being awarded in fiscal year 2000. The potential for cost increases and job stoppage

can be minimized if Congress provides full project authorization in the year of appropriation, changes the reprogramming base from the appropriated to the author-
131

ized amount to enable the transfer of funds between projects in a timely manner,

and advance appropriates the balance of construction funds so they are available at

the start of the next fiscal year. These changes would help keep the McChord

projects on schedule, as if advance appropriation did not exist. If Congress decides advance appropriation is not acceptable, the $213,000,000 of appropriation requested will not be adequate for our construction requirements in

fiscal year 2000. The Air Force requires $699,000,000 to execute the fiscal year 2000

MILCON program without advance appropriations. The Air Force does not have a prioritized listing of projects based on a $213,000,000 funding level. If advance appropriation is not approved, a reduction in

funding of this magnitude would require a complete reassessment of the Air Force’s

most urgent needs.

Question. Will the proposed changes in the force structure of the Air Force have any impact on Air Force operations and future military construction requirements

in Washington State? Answer. No. Bases identified in the force structure announcement have enough infrastructure to support additional personnel and materiel.

QUALITY OF LIFE

Question. Ms. DeMesme, in your testimony you have strong words of support for

the importance of quality of life initiatives. As you may know, I too am a strong

advocate of improving the quality of life for our troops. When I talk to men and

women on our air force installations, I find it is the little things, like fitness centers,

day care, and quality of housing, that matter the most to them and invariably affect

their decision to stay in the service. Now given the advanced appropriation situation

facing us this year, and given the very real possibility that this funding proposal

will not survive the appropriations process, how would you prioritize the Air Force’s

quality of life initiatives?

Answer. The Air Force’s quality of life initiatives will remain a very high priority.

However, a reduction of this magnitude would require a complete reassessment of

the Air Force’s most urgent needs in the MILCON arena.

QUESTIONS SUBMITTED TO GENERAL LUPIA

QUESTIONS SUBMITTED BY SENATOR MURRAY

HOUSING

Question. General Lupia, we understand that it is more cost-effective for the Air

Force when enlisted men and women live on base as opposed to off base. Is the Air

Force taking any steps toward either reducing this extra expense for living off base

or toward promoting on-base housing? What impact do you think the uncertainty

surrounding the incremental funding proposal will have on your effort to reduce

housing costs?

Answer. Actually, it is more cost effective for the Air Force when enlisted men

and women live off-base. This fact has been documented in General Accounting Office and Congressional Budget Office reports. For this reason, OSD has a policy that

communities near military installations are relied on as the primary source of housing for DOD personnel.

The Fiscal Year 1998 Defense Authorization Act initiated housing allowance reform and established a goal that housing out-of-pocket expenses should be 15 percent. Currently, service members living off-base pay on average 20 percent out-ofpocket for housing expenses; some pay more, some less depending on location. There

are two initiatives to address this problem. First, OSD in January 1998 began implementing a six- year program to equalize out-of-pocket expense percentages for all

locations to 20 percent. Second, the Air Force is working an initiative that would

accelerate the transition period of the OSD program and decrease the out-of-pocket

expenses to the Congressional target of 15 percent.

Access to safe, affordable housing for our people is a key quality of life priority.

As long as our members continue to experience the present level of out-of-pocket expenses, we can expect there to be a high demand for on-base housing, especially

from our junior enlisted airmen. Currently, 47 percent of our E1–E7 Air Force families live in base housing.

Although advanced appropriations does not support optimal program execution, it

does not preclude 100 percent execution in the year of appropriation. We will continue to work award and funding strategies to ensure sufficient funds are available

on each project so construction can proceed as necessary to meet need dates. The
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potential for cost increases can be minimized if Congress provides full project authorization in the year of appropriation, changes the reprogramming base from the

appropriated to the authorized amount to enable the transfer of funds between

projects in a timely manner, and advance appropriates the balance of construction

funds so they are available at the start of the next fiscal year.

UTILITY PRIVATIZATION

Question. In an effort to meet the requirement by DOD to privatize all utility systems by 2003, you have programmed 204 systems for analysis in fiscal year 1999

and the remaining 204 systems for fiscal year 2000. Is it going to be possible to

meet this fiscal year 2000 requirement? What is the status of the 204 systems currently being evaluated this fiscal year?

Answer. Yes, the Air Force will meet its fiscal year 2000 requirement. Of the 204

systems currently being evaluated during fiscal year 1999, 85 systems are under

analysis. The remaining 119 statements of work are being developed and will be

awarded long before the end of fiscal year 1999.

UNSPECIFIED MINOR CONSTRUCTION

Question. I notice your unspecified minor construction amount for the Air National Guard has decreased by $2.25 million. What is the reason for this deduction?

Answer. The original Air National Guard request for unspecified minor construction was reduced by $2,550,000 during the budget cycle due to under execution of

the fiscal year 1998 program. The program included a joint project for a medical facility at McGuire. The Guard portion of this Active/Guard/Reserve initiative was

$1,500,000. Bids exceeded the threshold and negotiations were unsuccessful in

achieving an awardable project so it was cancelled late in the year. Two additional

projects were substituted, but their combined cost did not fully execute the P–341

program leaving an unobligated balance. The joint medical project at McGuire is

still a valid requirement for the Guard and Reserve and is included in our FYDP.

SUBCOMMITTEE RECESS

Ms. DEMESME. Thank you very much.

Senator BURNS. This hearing is recessed.

[Whereupon, at 12:05 p.m., Tuesday, March 23, the subcommittee was recessed, to reconvene subject to the call of the Chair.]
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DEPARTMENT OF DEFENSE/MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL

YEAR 2000

WEDNESDAY, JULY 14, 1999

U.S. SENATE, SUBCOMMITTEES OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC.

The subcommittees met at 10:03 a.m., in room SD–192, Dirksen

Senate Office Building, Hon. Ted Stevens (chairman of the Defense

Subcommittee) presiding.

Present: Senators Stevens, Domenici, Burns, and Inouye.

Also present: Senator Roberts.

DEPARTMENT OF DEFENSE

FORWARD OPERATING LOCATIONS (FOL) FOR COUNTERDRUG

OPERATIONS

STATEMENTS OF:

GEN. CHARLES E. WILHELM, COMMANDER IN CHIEF, U.S. SOUTHERN COMMAND, U.S. MARINE CORPS

HON. WALTER B. SLOCOMBE, UNDER SECRETARY OF DEFENSE

(POLICY)

OPENING STATEMENT OF HON. TED STEVENS

Senator STEVENS. Good morning, Mr. Slocombe and General.

This morning we want to hear from you about the establishment

of military operating locations in Latin America. I do want to

thank Senator Burns for joining us, and Senator Roberts.

NEW MILITARY FACILITIES

This proposal to open up four new military facilities in Aruba,

Curacao, and Costa Rica impacts the work of both subcommittees,

the Defense Subcommittee and Military Construction Subcommittee, and has implications on future year funding.

Last month, Senator Inouye and I notified Secretary Cohen that

the Defense Subcommittee was not in a position to approve the request for $45 million to commence the establishment of these new

bases in operating locations at the time the Department was seeking the authority to close additional bases in the United States,

and our forces face expanded overseas contingency deployments.

We believe the committee needed to review the proposal in greater detail to understand the fiscal and operational implications. Senator Inouye and I noted in our letter to Secretary Cohen this sub-
134

committee has consistently increased fundings available for the defense counterdrug missions over the levels sought by the President

in the budget request. For the fiscal year 2000, the bill passed by the Senate, we added $54 million directly for the DOD counterdrug operations. General

Wilhelm, in your testimony you rightly note the Coast Guard is the

lead U.S. agency for drug interdiction. In light of that role, however, the subcommittee increased defense funding for the Coast

Guard counterdrug operations, adding $200 million to the Coast

Guard allocation for the fiscal year 2000. In the Kosovo emergency supplemental passed in May, the sub- committee added a further $200 million for 1999 for the Coast

Guard to enhance counterdrug roles. These considerations led us to

seek a better understanding of why new military facilities were

needed overseas at a time when operational stress is resulting in

some of the lowest personnel retention figures since the establishment of the all-volunteer force.

There is no question that the military has an important contribu- tion to make in our national effort to stop the flow of drugs into

the United States. The appropriate role for the military in that effort must take into account other missions faced by the Armed

Services, especially the unprecedented pace of long-term overseas

deployment.

INFRASTRUCTURE COSTS

I will defer to Senator Burns, and I am sure Senator Inouye also, on the implications of the infrastructure costs associated with the

new locations.

For the fiscal year 2000 the Armed Services and Appropriations Committees of the Senate judged that the permanent infrastructure costs should be funded through the military construction budget rather than through the defense appropriations bills as sought

in the budget. This hearing affords both subcommittees the benefit

of your views on the matter as we proceed to act on reprogramming

requests that are still pending and the funding sought for fiscal

year 2000. Both of your prepared statements will be inserted into the record in full. I want to turn to my colleague, Senator Inouye, and then

if Senator Burns does not mind, Senator Roberts is in the chair at

10:30, and I want to see if he has any comments before he leaves.

STATEMENT OF HON. DANIEL K. INOUYE

Senator INOUYE. Thank you very much. Mr. Secretary and General Wilhelm, we appreciate your presence here this morning.

No one questions the importance of the counterdrug mission, and

I do not believe that that is an issue here this morning. What is

at issue is how the Department of Defense interprets its authority

to conduct overseas operations in advance of receiving congressional approval.

Also, the subcommittee needs to understand what the impact of

establishing four new temporary overseas facilities will have on

family separations, readiness, retention, et cetera, and there are

questions regarding how long we will be operating from these new

bases.
135

DOD keeps insisting that we need to reduce infrastructure to

consolidate bases here in the United States, but with this plan we

see the possibility of establishing new overseas locations that will

be manned by U.S. military personnel.

These are some of the questions that many of us have, and why

our chairman has called this hearing, and so we look forward to

your testimony to explain this approach.

I thank you very much, Mr. Chairman.

Senator STEVENS. Thank you, Senator. Senator Burns, do you object to turning to Senator Roberts?

Senator BURNS. No.

Senator STEVENS. Senator Roberts.

STATEMENT OF HON. PAT ROBERTS

Senator ROBERTS. Thank you, Mr. Chairman. Thank you for your

indulgence. I thank my colleague from Montana for his patience. I

plan to maintain my status as an honorary member—that is not

ornery member, that is honorary member—of the Appropriations

Committee. I am on good behavior, sir, and will make my remarks

as short as I possibly can.

EMERGING THREATS

I am chairman of a new subcommittee on the Armed Services

Committee called Emerging Threats and Capabilities. We have an

obligation to take a look at the emerging threats that we think are

of vital interest to our national security. We have had six hearings.

Most of those hearings dealt with weapons of mass destruction,

cyber threats—that is, information warfare—terrorism, and down

on the list, and I do not mean that in terms of priority, but also

down on the list is the problem of drugs.

I was invited by General Wilhelm to come to the Southern Command. I went down and talked to General Wilhelm at length, and

I must say that I had my eyes opened. My horizon was broadened,

because I think in terms of the Southern Command and what is

entailed in 32 nations down there, 360 million people, and the

stakes involved, that it is terribly, terribly important.

When I became the chairman of the Emerging Threats and Capabilities Subcommittee, I tried to make a concerted effort in the

hearings that we held to the future and the security environment,

rather than that of the past. One of the conclusions we reached is

that Latin America will either be a source of great strength for the

United States or it will be a principal weakness, and we want to

make sure that it is a strength.

Now, what am I talking about? What are the stakes? In my prepared remarks I go into the energy situation, the Panama Canal,

our trade interest compared to other theaters, to the regional

threats in regards to a very fragile area in regards to democracy

and the terrorism problem, also the drug problems, the corruption

problem, narcotrafficking, but I just made a list this morning.

We do not want to reverse the success that we have had in the

eighties in this region, Mr. Chairman. Thirty-one out of thirty-two

nations now have democracy in this very crucial part of the world.

It is a tremendous success story. I do not know of too many people
136

who have really written the history of what we went through in the

eighties and where we are today. Three hundred sixty million people, average age about 17, 18 years old, a lot of very crucial needs. With 31 out of 32 nations now

having democracy, obviously the only one remaining is Cuba. There could be a threat to our Nation’s oil supply. Venezuela does supply approximately 18 percent of our oil supply. With a situation in Colombia and unrest there and rebels dedicated to interests that are not in our vital interest, that could be a real problem,

and so consequently I do not think we want to see gas lines and

oil price inflation. That is a situation that could occur.

This is a situation where we must maintain a presence because

of our world’s leading trading partners, Mr. Chairman. I was over

in Brussels talking with the European Union, trying to get some

progress in regards to the World Trade Organization talks. I must

tell you that I do not think the potential or the prospects for trade

in that part of the world are very good.

FOOD SAFETY

We have a food safety situation over in Europe, where sound science is being tossed out the window. Eighty-five percent of the

subsidies paid on agriculture today come from the European Union.

Where must we look? We must look south.

Again, 360 million people who need a good, nutritious diet. We can export those bulk commodities. The Appropriations Committee

will be considering on down the road an emergency bill in regards

to agriculture probably totalling $5, $6, $7, $8 billion. If we had

fast track now in place, and we were in a competitive situation

with our competitors overseas, the Southern Command, the southern area is where we should go. It has a lot of ramifications for the Kansas wheat farmer out

there now, saying I get $2 a bushel for my wheat. That is the kind

of individual relationship that we have with our constituents in regards to their economic livelihood. We are going to have a hearing on down the road in the Emerg- ing Threats Subcommittee on the weapons of mass destruction.

John Deutch is in charge of a commission. There has been some

press about it. We are going to have him in there for a hearing. I asked General Schumacher what would be the easiest way to introduce a weapon of mass destruction and nuclear device into

this country. Guess what, in a shipment of cocaine. That would be

the easiest way to get it into this country, and so in terms of our

vital national interest in that kind of a threat, why, this region is

all-important.

I know the General will mention that we are into a culture of the

Americas and not an American culture any more. I know the General will mention the problems with immigration, the fact that by

2010 the Hispanic Americans will represent the largest minority

population of the United States.

FORWARD OPERATING LOCATIONS

I think with some kind of presence, Mr. Chairman, whether it’s

the forward operating locations—I will go out on a limb. I think the

situation with Howard Air Force Base was a mistake. I think we
137

ought to have some kind of a lease-back arrangement. I know that

is probably not possible, and I am not sure what kind of format it

will take with the forward-operating locations, but I will tell you,

sir, that I think that on a cost basis we could do it about half the

cost in regards to the cost of Howard.

So how that works out, obviously, sir, that is your responsibility,

that of the Department of Defense. I just wanted to go on record

in saying that as chairman of the Emerging Threats Subcommittee,

strategically, geopolitically, with a whole range of issues, this part

of the world is extremely important.

We have had a success story, but the history of foreign policy and

involvement in that part of the world is that when we have success

we tend to draw back, and then we get into real problems.

With that, Mr. Chairman, I want to thank you for the opportunity to come before the committee. I am an admirer of General

Wilhelm. He has certainly opened up my eyes. I would encourage

every member of the committee to go down there to the Southern

Command and let him walk you through some of the obligations

and the missions.

This is just not about drugs. Drugs are very important, but I

think from the standpoint of our strategic interests it is exceedingly important.

I want to thank the General for the job that he does, and I thank

you, Mr. Chairman, for the opportunity to make a statement.

Senator STEVENS. Thank you.

General, Senator Roberts demonstrates there is no such thing as

an ex-marine. [Laughter.]

Senator Burns.

STATEMENT OF HON. CONRAD BURNS

Senator BURNS. I would concur with that. There are only farmers

and whatever. Thank you, Mr. Chairman, and thank you for holding these hearings.

NORTH AMERICAN FREE TRADE AGREEMENT

I also want to footnote on what Senator Roberts has just revealed

to us as far as not only from a drug interdiction and security in

the area, from the trade point of view also. There is a great success

story down there, and the European Union has made overtures already to include South America in their plans of an extended, what

we call our North American Free Trade Agreement. We have been

trying to expand, so there is much more at stake here than just

military security and drug interdiction.

There is a possibility and a future of an extended relationship in

the Americas that I think will be very beneficial to everybody that

lives here both in North America and in South America.

My questioning will go along the lines of what we have in existence there as far as facilities are concerned. Also the requests that

have been made here through military construction, because any

time we have any expansion we are dealing with a finite amount

of money that is being stretched almost to the breaking point. Mr.

Chairman, as you know, you have wrestled in your full committee

with all of these appropriations, and you know how we have to set
138

our priorities on where we can get the best, where they should be

used.

We did not really know about this until we had already marked up our bill this year. The administration made no revelation to us

the amount of money that they were going to request to construct

facilities for the fiscal year 2000 budget, and we just found out

about it. Now we are trying to scramble to get our house in order

where we may at least facilitate or help facilitate our presence

there and the mission that we have ahead of us.

The committee did not receive detailed justification for these projects until June of this year. So we want to better understand

the requirement of these bases as well as the justification to spend

$122 million in these overseas areas, especially when we have existing bases, and some would judge might be able to support these

missions.

So I look forward to the testimony this morning, and again I want to thank the chairman for these hearings.

Senator STEVENS. Senator Domenici, do you want to make a

statement?

Senator DOMENICI. No, thank you, Mr. Chairman.

REPROGRAMMING

Senator STEVENS. Mr. Slocombe and General, I just want to relate two things to you. First, this reprogramming was from operating funds to military construction, and we did not approve it partially for that reason, and second, when we went to Kuwait and

visited with General Pate after the President increased the deployment to Kuwait, I inquired where the money came from, and how

we started this base that was there. That was not an air base. It

was Army, as I recall, and General Pate told me he was building

a base for 50 years.

When we looked at King Sultan Airfield, which until Aviano was

the largest Air Force base for our military, it was never really a

subject of an authorization. I was told that when we appropriated

funds for the account which had been mentioned in the statement

that would be a field there to replace after the Khobar Towers, as

I recall, in Iran, and the problem of Iran. It was viewed as an implicit approval of the new bases that were to be established.

Now, I just do not want to see a situation where we implicitly

are approving bases, and I hope that the Congress will agree with

us on that. As I said in my statement, the issue before us is not

your judgment about whether they should be there.

The issue really is, what is the deterrent today to the reenlistment of our people? Only 29 percent of our pilots who are up for

retention reenlisted this last year, and I believe that is the result

of extensive overseas deployments and unaccompanied tours.

I hope you will tell us, will these be unaccompanied tours, and

how long will these tours be, and are we setting up three more

bases that will take people away from their families for 4, 5, 6

months of a year and lead to further problems as far as retention

is concerned?

Mr. Slocombe, who wishes to go first?

Mr. SLOCOMBE. Mr. Chairman, with your permission, I suggest

that General Wilhelm go first to outline the details of the proposal
139

and its relation to both our counterdrug effort and our broader interest, and then I will have a short summary of my statement

afterwards.

Senator STEVENS. General.

STATEMENT OF GEN. CHARLES E. WILHELM

General WILHELM. Mr. Chairman, distinguished members of the committees, I welcome this opportunity to appear before you this

morning to discuss and testify about what I consider to be the single most important issues that confronts United States Southern

Command today. Mr. Chairman, I took notes during the very powerful and direct opening statements which you made and the members of the committee made, and I have made some notes to myself prior to coming in here this morning as to some points that I might raise in

my opening statement. I certainly do not want to waste the time of the committee, and I think that you have defined very clearly the path you would like

for this testimony to take, so I am going to pick my way through

my notes and try to really just hit those points that are of concern

to the committee.

POST PANAMA THEATER ARCHITECTURE

As we withdraw our forces from Panama, as we must under the

provisions of the 1977 treaties, reestablishing the United States

Southern Command theater architecture in a way that will enable

us to perform our missions in the 21st century has become for me

the single most important task that I will perform during my tenure in command, and I have made that statement to Secretary

Cohen, and he has agreed with the direction that I have decided

to go. I will tell you it has been a difficult task. It has been made more difficult by the very short time that has been available to make

these arrangements. To be very honest, Mr. Chairman and members of the committee, when I assumed command at Southern Command in September

1997, I did so with about a 99 percent expectation that we would

succeed in our negotiations with Panama for the creation of a multinational counterdrug center there and as a part of that I really

contemplated a residual presence of about 2,500 to 3,500 U.S. personnel to do many of the things that we need to do in the region

to preserve the financial and other equities that members of the

committee have already mentioned.

As I mentioned, we have done pretty well. In my formal statement I have given you a brief recap of where we are in our repositioning and relocation efforts. With the help of this committee,

with the help of some of your staffers—Mr. Cortese, Ms. Ashworth

are here today. They have been very helpful with the things that

we have done on Puerto Rico, which has really in a great many

ways assumed the role that Panama did in the past.

This morning, as I see it, we have got one major task that remains to be performed, and that is to identify a network of forward

operating locations that will enable us to perform the missions that

we previously performed from Howard Air Force Base in Panama,
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and I would hasten to add that as important as it is, the

counterdrug mission is only a portion of this.

Senator Roberts in his statements made some comments about

the growth of democracy in this region, the fact that 31 out of 32

countries are now ruled and governed by people who are in office

based on the wishes of the populace, and these countries have free

market economies, and I think all members of the committee are

aware of the directions that our financial dealings with this part

of the world have taken since 1990.

Our exports to Latin America have more than doubled, as I have

mentioned in other statements. Today we do more business with

Chile, a country of 14.5 million people, than we do with India, with

952 million. We do more business with either Mexico or Brazil than

we do with China, with 1.3 billion, and the list goes on.

FORWARD OPERATING LOCATION

I believe that the forward operating location concept that we

have developed provides an efficient and a very cost-effective way

to perform the missions that we previously performed from Howard

Air Force Base. Just to very quickly review the bidding on the cost,

the numbers cited by the chairman are precisely correct.

In fiscal years 2000 and 2001, we have a requirement for a total

of $122.5 million, not to build bases, but simply to improve existing

facilities in Ecuador, in Curacao, and Aruba, and to bring them to

a state where they meet safety and operating standards that are

acceptable to the United States Air Force and the U.S. Customs

Service.

I really need to make that distinction. We are not intending to

build bases, simply to improve the operating conditions at these existing host nation facilities which we have negotiated access to and

that will permit us to carry out important counterdrug and other

engagement missions.

I have taken a little bit longer-term view of this, and I think it

is important that we put these outlays into a meaningful context.

The cost of annual operations at Howard Air Force Base was $75.8

million. After we complete these upgrades that I have mentioned,

we estimate that the annual operating cost for the forward operating locations will range somewhere between about $14 to $18

million, and so if we look at this over a 10-year operating horizon,

operations from the forward operating locations will actually cost

only 40 percent of what we would pay if we continued to conduct

these operations from Howard.

I really think that to fully understand the importance of the

FOL’s and to make the important distinction that these are really

a network of facilities, geography is very instructive. Mr. Chairman, if you do not mind, I would like to refer to a chart.

Senator STEVENS. Yes, sir.
141

General WILHELM. Sir, to walk you through the chart, the pink

circle in the middle depicts the operating range of an E–3 AWACS

aircraft operating out of Howard Air Force Base.

Senator STEVENS. General, is it possible to turn that around so

people out there can see the same thing and we can see it, too?

General WILHELM. Yes, sir, we probably can.

Senator STEVENS. We had the charts. They do not have the

charts. If you could just move it around so people out there can see

it, too.

AWACS

General WILHELM. Again, the circle in the center in pink depicts

the operational reach that an AWACS, an E–3 AWACS aircraft

would have operating from Howard Air Force Base. These two operating circles here in blue and overlapping in pink depict the same

coverage that we would get from the same aircraft operating from

the forward operating location at Manta, Ecuador, here to the

northeast.

This operating radius depicts the coverage we would get from the

AWACS operating from Curacao or Aruba.

I should make the point that this reflects 2 hours transit time

out to the mission area, 8 hours on station, and 2 hours back. That

is the standard profile for an AWACS mission, and the range of the

arc depicts the range of the radar on the aircraft itself.

Now, there are some important points to be made here. It has

been suggested that perhaps we could realize significant savings if

we did not operate the full family of detection monitoring and

tracking assets, to include the AWACS from Manta, Ecuador. I
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need to draw something on the map, because this is the most important order that we contend with when we look at the

counterdrug mission and more and more regional stability, and I

will sketch it right on, sir. This is the border here, between Colombia and Peru. This is the

air bridge that we worked so hard and devoted so many resources

to interdict starting in the earlier part of this decade, and in my

statement I think you saw, if you will pardon the phrase, the body

count that we have achieved on narcotrafficking aircraft, over 123

aircraft since 1995 shot down, forced down, seized or confiscated as

a result of our air bridge interdiction operations. What is important is the operating arc coming out of Aruba and Curacao does not reach the border between Peru and Ecuador. We

could stand to lose what we worked so hard to gain. On the positive side, looking at Aruba and Curacao, it does pro- vide us very favorable coverage over the Eastern and Central Caribbean. Ecuador is extremely important for two reasons: one, again,

very, very short reach to the Peru-Colombia border, and it provides

us excellent coverage of this portion of the Eastern Pacific, which

at this point in time has largely been an open back door, feeding

narcotics up toward Mexico through the Sea of Cortez into Mexico’s

specific ports and then over our Southwest border.

And as you know from other testimony by General McCaffrey and others, 59 percent of the drugs get here over those routes, so

this needs to be considered as a network of facilities which will provide us the operational reach or coverage that we need to fully address the challenge. Now, I have added in this final arc which reflects the positioning of a Central American forward operating location. For the purposes

of this chart we have placed the center part, the star over northern

Costa Rica, roughly where the Liberia Air Base is. As to whether

or not we can negotiate an FOL agreement with Costa Rica at this

point is perhaps problematic, but if not Costa Rica, I am very confident that we could negotiate an access agreement with another

country in Central America. As you can see, this arc then provides us complete coverage of all of Central America and the balance of the Eastern Pacific transit routes headed up toward the coast of Mexico.

I felt it very important to try to put this entire issue into a geo- graphic context, because I think only when we regard the FOL’s as

a network do they really make strategic and operational sense.

Thank you, sir. I appreciate your patience with the chartology.

PREPARED STATEMENT

Mr. Chairman, members of the committee, I had a number of

things I was going to say about the nature of the drug threat,

about what it has done and is doing to the societies in our region,

and what it has done to our own society, but as Senator Inouye

stated, you are very much aware of that, so I think it would not

be a good use of the committee’s time for me to cover ground that

has already been pretty well trod upon, and so I would like to terminate my opening statement at this point, sir, and I look forward

to your questions and the questions of the members of the committee.
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Senator STEVENS. Thank you, General.

[The statement follows:]

PREPARED STATEMENT OF GEN. CHARLES E. WILHELM

INTRODUCTION

Mr. Chairman, distinguished members of the committees, I welcome this opportunity to discuss with you the plans and concepts that will enable us to sustain a

strong Department of Defense contribution to the crucial struggle against illicit

drugs. As we complete the withdrawal of United States military forces from Panama, the Forward Operating Locations (FOLS) we are establishing in the Caribbean

and Latin America become a critical means of access to the region, providing the

U.S. an efficient and cost-effective alternative to Howard Air Force Base for the execution of critical counterdrug missions. Moreover, in addition to enabling Southern

Command to meet its responsibilities under Presidential Decision Directive 14

(PDD–14) and Goals 4 and 5 of the U.S. National Drug Control Strategy, the FOLs

will emerge as a vital component of our cooperative regional engagement strategy.

Over the last two decades, regional stability has been a key element in fostering

economic growth and democratization throughout the Caribbean and Latin America.

However, drug trafficking and its relationship with organized crime are seriously

threatening the hemisphere’s potential to achieve long-term stability, peace, and

economic prosperity.

The complete withdrawal of United States forces from Panama is challenging our

ability to sustain necessary levels of effort in countering this threat. Up until now,

DOD and other interagency organizations provided the majority of support in the

fight against the illegal drug trade from U.S. military facilities in Panama. To offset

the loss of basing rights in Panama, we are aggressively executing a plan to realign

and rebalance the theater architecture to sustain counterdrug efforts in support of

PDD–14 and The National Drug Control Strategy. An interlocking network of FOLs

is an essential element of this new architecture.

In this statement I will present my assessment of this region’s importance to the

United States, followed by an overview of the transnational threats that jeopardize

our regional interests. I will conclude with a discussion of the FOL concept, the

FOLs themselves and the absolutely pivotal role they will play in our regional engagement and counterdrug strategies.

THE IMPORTANCE OF THE REGION

Growing economic interdependence and the wave of democratic reform that has

swept over this region, as well as shifting cultural and demographic trends have significantly elevated the importance of the Caribbean and Latin America to the

United States.

Latin America is our fastest growing export market. Today, 44 cents of every dollar that the 411 million inhabitants of the region spend on imports are for goods

and services from the United States. Statistics can be instructive. It is meaningful

to note that our annual trade with Chile, a nation of 14.5 million people, exceeds

our trade with India with a population of 952 million. With almost 1.3 billion inhabitants, China is the most populous nation on the earth, yet we do more business

with our 98 million next-door-neighbors in Mexico. By 2010, trade with Latin America is expected to exceed trade with Europe and Japan combined, and if the Free

Trade Area of the Americas (FTAA) initiative is in place by 2005, we can expect

to see additional growth in hemispheric economic interdependence.

The influence of Latin America is also reshaping America’s cultural and demographic landscapes. What was once an ‘‘American Culture’’ is rapidly becoming a

‘‘Culture of the Americas.’’ Today, the United States is the fifth largest Spanish

speaking country in the world. By 2010 Hispanics will become our largest minority

population and by the mid-point of the 21st century demographers project that 100

million U.S. citizens will be of Hispanic descent.

Along with these trends, the dramatic expansion of democracy and resolution of

intra-regional disputes and rivalries provides visible evidence of a hemisphere that

has taken important first steps toward the achievement of long term peace and stability, at least at the state-to-state level. In the last twenty years, the paradigm of

coups, military dictatorships, communist-inspired insurgencies, border disputes, and

economic crises has gradually given way to elected governments and militaries that

are subordinate to civilian leadership and support democratic processes. These are

nations that are resolving disputes without resorting to the use of force. As an example, last October, we witnessed a watershed event—the resolution of Peru and
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Ecuador’s longstanding border dispute with the historic signing of a peace agreement between the two countries.

Viewed through the prism of the national security strategy of engagement and en- largement there is no better success story for U.S. Foreign policy. On the other

hand, history has demonstrated that success is many times harder to sustain than

failure is to fix, and these positive trends must be nurtured, encouraged and reinforced.

THE THREAT

Despite positive cultural, economic, and political developments, there is a pervasive sense of unease in the region regarding security issues. Our enemies are not

well known, our challenges are unclear, dangers are not always obvious and responses are frequently difficult to formulate. It has been suggested that uncertainty

is the norm and apprehension the mood. Some of the region’s democracies remain

fragile; facing economic adversity, rapid population growth, and proliferating

transnational threats. Out of area powers have shown increased interest in our

next-door neighbors. Under these circumstances it is reasonable to anticipate setbacks, particularly when fledgling democracies are confronted with chronic corruption, narco-financed insurgencies, and deeply rooted organized crime. United States

presence within the hemisphere demonstrates our commitment to the region, prevents the creation of a security void, and provides engagement opportunities to

counter emerging threats to regional security and prosperity.

Today, I believe the primary threat to the region can be summed-up in a single

word—corruption. Corruption in all its forms eats at and stunts the growth of young

democracies. In Latin America, at the heart of most forms of corruption are the corrosive effects of the drug trade. Drugs and the people who grow, produce and sell

them, are aggressively challenging the ability of many governments to provide longterm stability and economic prosperity. Illegal drugs are killing and sickening the

people, sapping productivity, draining economies, threatening the environment, and

undermining democratic institutions. We are not immune to these problems—far

from it. In the United States in 1996 alone, drugs and drug related illness and violence claimed the lives of 14,843 Americans. In an historic context that equates to

88 percent of our losses in the Korean Conflict! Each year, illegal drugs send a half

million Americans to emergency rooms, turn our urban neighborhoods into battle

grounds, and for many of our youth turn the American dream into an American

nightmare. No nation, not even one as powerful as ours can afford such devastating

social, health and criminal consequences. Because this tragedy has been with us for

years, and because it kills and disables our citizens one at a time, I sometimes fear

that we’ve developed a tolerance for it. If we experienced these kinds of losses in

a day, a week or even a month, they would simply not be tolerated. By my definition, illegal drugs are a ‘‘weapon of mass destruction,’’ and should be treated as

such.

The countries of the Caribbean and Latin America have grown to accept and understand the drug threat as a shared challenge and they are now more ready than

ever to join us in the fight. However, they need our help and encouragement for the

long struggle ahead. SOUTHCOM and DOD play a supporting role in this fight

through both theater engagement and counterdrug operations. Presidential Decision

Directive 14 and goals 4 and 5 of the National Drug Control Strategy provide the

foundations for Southern Command’s counter-drug campaign.

FORWARD OPERATING LOCATIONS

An adequate operational presence in our theater of operations is absolutely essential for the full and successful implementation of our counterdrug and regional engagement missions. While executing our counterdrug campaign plan, forces strategically placed in the theater give us flexibility and allow us to be proactive rather

than reactive in confronting narcotraffickers. Our goal is to force them into a defensive posture. The past two years have witnessed significant reductions in coca cultivation in Peru and Bolivia. During the past year alone cultivation has been reduced by 26 percent in Peru and 17 percent in Bolivia, while production of coca base

has been reduced by about 25 percent in both countries. These successes are attributable to a combination of effective host country eradication and alternative development programs and aggressive U.S. and host country efforts to interdict the air

bridge that previously linked cultivation sites in Peru and Bolivia with processing

and production laboratories in Colombia.

The Air Bridge Denial Program has employed forward-deployed U.S. aircraft to

provide intelligence, surveillance, reconnaissance, airborne early warning, and

tracking support to host nation forces. Last year, with U.S. support, host nation
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interceptors shot down, forced down, seized or destroyed 26 narcotrafficking aircraft,

bringing the total to 123 narcotrafficking aircraft taken out of action since 1995.

As a result, we have observed a shift in trafficking patterns. The cost of cocaine

base in Peru and Bolivia plummeted to unprofitable levels as pilot fees skyrocketed.

As a consequence, more illegal drug shipments were diverted to the rivers. To compensate for setbacks in Peru and Bolivia, Narcotraffickers increased their cultivation of coca by 28 percent in Colombia and further streamlined their operations by

consolidating cultivation and production. We are now supporting efforts by Colombia

and its neighbors to effectively counter these revised trafficking patterns.

Continued forward presence by our forces is mandatory if we are to sustain the

progress that has been made. The combination of U.S. detection, monitoring and

tracking aircraft and host country interceptors has proven to be an effective team;

one that strikes an appropriate balance between U.S. and host nation capabilities

and roles in pursuit of end games. Continued forward presence under the FOL concept will enable us to continue this support, and provides an efficient and cost-effective alternative to the permanent bases that we previously occupied.

ALTERNATIVES TO PANAMA

Historically, DOD support for source zone countries has been provided from military facilities in Panama—over 2,000 counterdrug flights per year originated from

Howard Air Force Base. From Panama, we also supported transit zone interdiction

operations, pier-side boarding and searches, and training for U.S. and host country

counterdrug units.

The Panama Canal Treaties of 1977 mandate a complete withdrawal of U.S. Military Forces not later than December 31, 1999. The departure of forces does not,

however, alter Southern Command’s mission responsibilities or requirements. When

negotiations with Panama for a Post-1999 presence were terminated, Southern

Command conducted a strategic analysis and determined that a series of Forward

Operating Locations (FOLs) would be necessary to provide the capabilities required

to achieve our counterdrug mission objectives.

FOLs have become an integral part of SOUTHCOM’s theater architecture for the

next century. While they will allow us to remain fully engaged in the multilateral

effort to combat narcotrafficking, they are not bases to be constructed at U.S. expense nor are they intended to replace Howard Air Force Base. Rather, FOLs are

intended to replace the counterdrug operational capability that was provided by

Howard Air Force Base without incurring the expense of base construction and at

reduced annual operating cost. In simple terms, FOLs are agreements between the

United States Government and Host Nations whereby the United States will be

granted access to existing facilities that are owned and operated by the host nation.

These sites will provide a 24-hour, seven-day per week, operational capability. U.S.

Aircraft will rotate in and out of FOLs as mission needs dictate. Each site must be

night and all weather capable with an air traffic control facility, an 8,000-foot runway with the capability to support small, medium and heavy aircraft. Each FOL

must also have refueling and crash/fire rescue capabilities and minimum ramp,

hangar, office, maintenance, and storage space.

Numbers of support personnel will vary depending on numbers and types of aircraft deployed and the availability of host nation support. We envision a requirement for 8–12 permanently assigned personnel at each FOL. Depending on mission

requirements, FOLs will be required to support as many as 200 temporarily deployed personnel.

Three FOLs are needed to maintain the optempo and area coverage that we previously enjoyed from Howard AFB; one in South America for source zone operations,

and one each in the Caribbean and Central America to support transit zone and

northern source zone operations. Three FOLs also provide the flexibility that is necessary to contend with weather patterns and changes in trafficking routes. Initial

access agreements have been negotiated and operations are currently underway

from FOLs in the Caribbean and South America. Site surveys at each location have

identified improvements that are needed to support full-scale operations and to upgrade host nation facilities to U.S. safety and operational standards.

In close consultation with host nations, we have devised a three-phase program

for FOL development. Phase one, which commenced on 1 May, coinciding with the

termination of flight operations from Howard Air Force Base, consists of what we

have termed ‘‘expeditionary operations.’’ This entails use of facilities in ‘‘as is’’ condition. Phase one operations are in progress at Curacao, Aruba and Manta, Ecuador,

albeit at reduced operational tempo. The second phase will begin in fiscal year 2000

with the initiation of MILCON projects that will increase the operating capacities

of the FOLs and bring them up to U.S. standards. During the third phase in fiscal
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year 2001, MILCON projects will be completed and we will attain full operational

capacity and capabilities. At the end of phase three we will achieve operational

reach or area coverage that will equal or exceed that which we had from Howard

at roughly 25 percent of annual recurring operating costs.

MANTA, ECUADOR

The FOL at Manta is critical for adequate support of operations in the crucial

source zone. Operations are now underway from Eloy Alfaro International Airport

in Manta. This site allows forward-deployed intelligence, surveillance, and airborne

early warning aircraft to monitor key narcotics trafficking routes deep in the source

zone and over the Eastern Pacific—a pipeline that feeds Mexico, and ultimately the

U.S.

The USAF, as DOD executive agent for this FOL, recently sent a Site Activation

Task Force to survey Manta facilities. The team concluded that the runway was

suitable for most counterdrug aircraft but would require upgrades to accommodate

AWACS, a critical asset for execution of our source zone strategy. The task force

also recommended construction of various maintenance and other support facilities.

Ecuador has been an eager and gracious host. The local Air Force commander has

worked tirelessly to correct deficiencies at the airfield and to provide the safest possible operating environment.

The footprint at Manta is expected to consist of five to eight aircraft and six to

eight permanently assigned staff personnel. As previously discussed, when full capabilities are attained, the numbers of DOD and interagency personnel temporarily assigned to Manta will fluctuate based on missions and numbers and types of aircraft

deployed.

ARUBA AND CURACAO

The airfields on the islands of Curacao and Aruba are approximately 45 miles

apart; therefore, they must be improved and managed separately. These two airfields are well situated and together they provide adequate capacity to support operations in the Caribbean Transit and Northern Source Zones. Operations by DOD

and U.S. Customs Service aircraft have commenced from Hato International Airport

in Curacao and Reina Beatrix International Airport in Aruba under diplomatic

notes negotiated and exchanged with the Kingdom of the Netherlands. The Site Activation Task Force identified requirements for improvements to ramps and

taxiways at Curacao and Aruba. For longer-term operations, their report recommends construction of maintenance and operations facilities at both sites.

The footprint in Curacao is expected to consist of seven to nine aircraft, 12 to 15

permanently assigned staff personnel and as many as 200–230 temporarily deployed

operations and maintenance personnel. In Aruba, the footprint is expected to consist

of four U.S. Customs aircraft, with approximately 15 permanently assigned staff

and 20–25 deployed operations and maintenance personnel. As in the case of Manta,

the numbers at Aruba and Curacao will be small initially and will grow incrementally as we improve existing facilities to accommodate more deployed aircraft and

personnel.

THE COST OF DOING BUSINESS

My Air Force Component Commander, Lieutenant General Lansford Trapp, has

visited all three sites and has reviewed the findings of the Site Activation Task

Force. To achieve Southern Command’s strategic goals and to meet requisite safety

and operational standards, he assesses the MILCON requirement to be $122.47 million for Manta, Curacao and Aruba. For purposes of comparison, our most recent

annual operating costs at Howard Air Force Base were $75.8 million. Once deficiencies are corrected at the three FOLs, we estimate that annual operating costs

will be in the neighborhood of $14 million to $18 million. Based on 10 years of operations, FOL costs would be approximately 40 percent of those we would have incurred over the same period at Howard with permanently assigned forces.

CONCLUSION

The departure of United States military forces from Panama has created unique

and difficult challenges for U.S. Southern Command. In the space of less than one

year we have been required to recraft a theater architecture that was almost a century old. The end of this task is in sight. Our Theater Special Operations Command

has successfully displaced its headquarters from Panama and is now conducting

full-scale operations from its new home in Puerto Rico. U.S. Army South will haul

down its colors at Fort Clayton in Panama on the 30th of this month and raise them
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over a new command post at Fort Buchanan in Puerto Rico. We have already successfully merged Panama-based Joint interagency Task Force (JIATF) South with

its counterpart organization JIATF East in Key West. This consolidated organization is now planning and overseeing execution of counterdrug operations in both the

transit and source zones. With support from the government of Honduras we have

increased our presence at the Soto Cano Air Base absorbing urgently needed helicopter assets previously based in Panama. These actions, coupled with the earlier

relocation of our Headquarters from Panama to Miami, have resulted in a leaner

United States Southern Command, but a Southern Command that is nonetheless

properly postured to conduct its regional engagement and counterdrug missions in

the 21st century. The Forward Operating Locations are the final pieces of the future

theater architecture. In this statement I have emphasized how crucial this final element is, and I am not alone in this assessment. On June 30th I attended an interagency meeting at the White House. Included among those present were National

Security Advisor Berger, Office of National Drug Control Policy Director McCaffrey,

Assistant Secretary of State for Western Hemisphere Affairs Romero, Special Envoy

for Latin America McKay, Commandant of the Coast Guard and United States

Interdiction Coordinator Admiral Loy, representatives from the Departments of

Transportation and Justice and others. We discussed the FOLs and the requirements for them. There was unanimous support and universal acknowledgment that

the FOLs are essential for the continued prosecution of an effective supply-side

counterdrug campaign. I concluded my presentation to this interagency gathering

with the simple and direct statement that without the FOLs, United States Southern Command would be unable to effectively confront the threat postulated in Presidential Decision Directive 14, and we would be incapable of carrying out missions

in support of goals 4 and 5 of the National Drug Control Strategy. We at Southern

Command are grateful for the support and encouragement we have received from

the Congress as we have gone about the difficult business of resetting our theater

architecture. Timely implementation of the FOL concept is the final step in this

process. For a modest investment the FOLS will enable us to safely and efficiently

carry out vital missions without the costs and other encumbrances associated with

overseas bases.

STATEMENT OF HON. WALTER B. SLOCOMBE

Senator STEVENS. Mr. Slocombe.

Mr. SLOCOMBE. Thank you, Mr. Chairman. It is as always an

honor to appear before this committee and to address your concerns

and the programs of the Department of Defense, particularly in

this case with regard to Latin America and the counterdrug effort.

FORWARD OPERATING LOCATIONS

General Wilhelm has explained the operational necessity for the

three planned forward operating locations. I would just like to add

a couple of points. Everybody recognizes the importance of the

counterdrug mission, and certainly the Department of Defense. We

recognize and appreciate the consistent support from this committee and from the Congress as a whole.

The surveillance and detection in the areas that would be covered by these aircraft operating out of these locations is a key part

of our overall counterdrug effort, but I want to make the point that

it is a relatively small part, a very small part of the overall Government effort, which just at the Federal level alone is something like

$17 billion, and quite a small part even of the Defense Department

effort, which is just under $1 billion annually, about a quarter of

that for source zone operations.

Second, I think General Wilhelm’s presentation has explained

the geography, which makes it so clear that it is essential to have

operating locations within the region, and that it is not practical

to conduct these operations from bases either in the United States

or Puerto Rico or Guantanamo, just because of distance.
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There is another consideration, and this goes in a sense to what

Senator Burns and Senator Roberts said. We have a broader interest in a presence and influence in Latin America. In particular, a

consistent and vigorous U.S. effort to deal with the transit and

source zone problem are essential to our credibility in getting the

countries in the region to take actions in their own interests and

ours, particularly with respect to their own counterdrug efforts, an

area where there is still a lot to do but where a fair amount of

progress has been made.

Third, I want to underscore the point that we recognize that this

committee has always given especially rigorous scrutiny to military

construction and other capital expenditures by the U.S. military on

facilities overseas. This is as it should be, not only because we are

trying to reduce the burden of unneeded infrastructure both overseas and in the United States, but because of the concerns that

you, Mr. Chairman, in particular have raised about our long-term

ability to sustain the level of operations that we now maintain.

As General Wilhelm’s statement I think makes clear, these are

not the construction of new bases. To build new bases in this region

to replace Howard would simply dwarf by many times the amounts

of Milcon money we are talking about here. These are necessary

measures on what I think is a pretty austere basis to bring these

facilities up to the standards that we need to be able to operate

from them.

It is an efficient approach. It makes use of existing foreign airports and foreign facilities. Indeed, one of the main purposes of the

FOL concept is to do this important mission with the smallest footprint possible. Over the long run, the forward operating locations

will actually cost less than Howard would have cost had we continued to operate there and maintain that facility, had we been able

to reach agreement with the Panamanian Government.

And third, we are in this area, as I hope is the case everywhere,

trying to accomplish the mission in a way that is most efficient not

only from the point of view of dollars spent on military construction

and operation, but burden on our people. General Wilhelm can give

the details, but these will be relatively short tours for the air crew

involved. The permanent presence will be extremely limited, something like a dozen people at each facility.

As a part of recognizing the many pressures on the budget, but

more important the pressures on our people and on key assets, we

scrub very carefully every request to undertake a mission like this,

and particularly because this is primarily surveillance aircraft,

which are in heavy demand in other theaters. That is particularly

the case here.

REDUCTION IN DEPLOYMENTS

We believe we have struck an appropriate balance in allocating

both the available inventory of surveillance aircraft and the pace

at which they operate. As part of this effort, we are reviewing a

number of our current overseas activities. Secretary Cohen yesterday was in Bosnia and indicated the very real prospect that we will

be able to make substantial reductions in our deployments and our

allies’ deployments there in Bosnia, and we are reviewing both the
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size and, indeed, the need to continue our operations in a number

of other areas.

PREPARED STATEMENT

In summary, this is, as the committee—and we fully understand

you know this—this is a very important mission. It can, under current circumstances, be conducted only from bases, facilities in the

region, and we believe that we have put forward a proposal which

is an efficient and, indeed, an austere one to get this critical job

done at a minimal cost to the taxpayer and, equally important, at

a minimal impact on the burden on our military service personnel

who will have to carry out the mission.

I look forward to answering the committee’s questions.

[The statement follows:]

PREPARED STATEMENT OF WALTER SLOCOMBE

Mr. Chairman, as always it is an honor to appear before this committee to discuss

the Department of Defense’s role in United States counterdrug activities, how these

activities support our national security interests, and specifically the importance of

Forward Operating Locations in an environment shaped by our changed relationship with Panama. I particularly welcome the opportunity to address these issues

with General Wilhelm who, as CINC SOUTHCOM has personal responsibility for

the counterdrug operations at issue. I want to thank both subcommittees for their

support of the counterdrug program in general. Congressional support enables us

to counter some of the drug threat, which costs our nation over 14,000 lives and

billions of dollars each year.

The Threat

We as a nation face a comprehensive threat from drugs and must, as a nation,

carry out a comprehensive response. Treatment and suppression of demand are critical elements, and are up to domestic law enforcement and other agencies. But dealing with the source of drugs must also be a key element of our effort.

Nearly all the cocaine and most of the heroin consumed in the United States is

produced from crops in Colombia, Bolivia, Peru and Mexico—the ‘‘source zone.’’ Drug

traffickers transport the cocaine to the United States in a multi-step process by air,

and over sea and land through a ‘‘transit zone’’ consisting of the Caribbean, Central

America and the waters of the eastern Pacific. Areas through which illegal drugs

flow into the United States and its immediate environs are termed the ‘‘arrival

zone,’’ where DOD as well as federal, state and local law enforcement agencies cooperate to apprehend drug traffickers. While global seizures of cocaine average 270

metric tons per year, the current annual production capability of 550–650 metric

tons continues to be sufficient to meet current user demands in the United States,

Europe and South America. The bottom line is that while our progress has been significant, the threat remains very, very potent.

DOD’s Role in Counterdrug Activities

The U.S. Government’s role in counterdrug initiatives has evolved from disparate

activities conducted by a various agencies to a unified mission characterized by joint

military and civilian collaboration—a mission that was established by Congress and

which has received consistent Congressional support. Congress passed the AntiDrug Abuse Act of 1986, which gave the Executive Branch more authority to fight

the tide of illegal drug shipments. Also in 1986, the President issued National Security Directive 221, which declared drug trafficking to be a threat to U.S. national

security. Two years later, the Congress enacted another anti-drug abuse act in order

to establish a coherent and comprehensive national policy to unify the efforts of the

more than thirty Federal agencies and numerous state and local agencies engaged

in counterdrug activities. The National Defense Authorization Act for Fiscal Year

1989 proved a watershed for Congressional interest in counterdrug activities conducted by the U.S. military, assigning primary responsibility for the detection and

monitoring of aerial and maritime transportation of illegal drugs into the United

States to the Department of Defense.
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The National Drug Control Strategy

The 1999 edition of the National Drug Control Strategy embodies the 1989 Act’s mandate that the Department take the interagency lead in drug detection and interdiction. The Strategy states that our domestic challenge is to reduce illegal drug use

while ensuring individual liberty and the rule of law. Our international challenge

is to develop effective, cooperative programs that respect national sovereignty and

reduce the cultivation, production, trafficking, distribution and use of illegal drugs

while supporting democratic governance and human rights. The Strategy highlights the critical need to ‘‘[s]hield America’s air, land and sea frontiers from the drug threat,’’ by interdicting the international flow of drugs in

the transit and arrival zones. Yet, even in 1989, when the Department was first assigned the lead in aerial and maritime detection and monitoring, we knew that defending Americans from the influx of drugs in the arrival and transit zones represented only part of the solution. Going beyond the transit zone and into the source

zones to break foreign and domestic sources of supply was and remains a key element of our integrated strategy. DOD pursues this element by working with source

zone nations in both civilian and military capacities to provide intelligence, training

and other building-blocks of national self-sufficiency regarding counterdrug activities. Under General Wilhelm’s leadership, and in concert with the U.S. embassy

country teams, the Southern Command has aggressively pursued these contacts

with cooperative source zone nations.

Consistent with Congressional direction, we have devoted significant resources to

this endeavor, and we believe we have achieved significant successes. It is the Department’s commitment to this Congressionally-directed mission that brings General

Wilhelm and me before the subcommittees today. Our success to date has depended

on effective aerial surveillance and interdiction of key drug transit routes. We need

to reach beyond the transit routes and deep into the source zones to continue this

fight. Quite simply, from both a military and policy perspective, we cannot continue

to execute this mission that Congress has given us without the Forward Operating

Locations. We must be able to project our own assets, our own detection and monitoring resources well into the transit and source zones. Without this ability to meet

the threat where it originates, the Department will not be able to fully execute the

mandate it has been given by Congress. Moreover, we will not be able to sustain

the effort to convince the governments of producing nations to cooperate in regional,

integrated efforts.

Successes

There have been some notable successes. Howard Air Force Base in Panama provided a key staging area for counterdrug missions into both the transit and source

zones. Among other achievements, this capability helped U.S. assets support Peruvian interdiction efforts that disrupted the movement of cocaine base from Peru to

Colombia by air. Peru’s airborne interdiction of several dozen drug-trafficking aircraft over a three-year period resulted in the significant disruption of the traditional

north-south airbridge between Peru and Colombia. As a result, Peruvian coca cultivation exceeded traffickers’ transport capabilities and drove down coca prices. Depressed coca prices from 1996 to 1998 dramatically reduced coca base production in

Peru from more than 450 metric tons to 240 metric tons annually. In addition, coca

cultivation declined substantially in Bolivia in 1998 as the result of ground interdiction efforts in the Chapare region and controls on processing chemicals.

The net impact of these gains was offset by the increased coca cultivation in Colombia during the same period. Significantly, it is the Colombian production in particular that can be addressed by U.S. assets deploying from Forward Operating Locations. We are working with the Colombians and others in the region to address

movement of cocaine hydrochloride—the ‘‘finished product’’—by air from local laboratories to transshipment points on the north and west coasts of Colombia. It is

from these locations that cocaine is smuggled into Mexico and the United States.

The infrastructure supporting the smuggling of cocaine by air has been the key to

efficient operation of the cocaine industry. We cannot begin to attack this infrastructure—figuratively and literally—without the operational flexibility provided by the

FOLs. In particular, the FOL at Manta, Ecuador allows us to reach this infrastructure deep in the Colombia source zone, Peru, as well as the increasingly popular

eastern Pacific transit zone, although this facility requires improvements to realize

its full potential.

The International Dimension

Regrettably, the option of continued operation from Howard Air Force Base in

Panama is not available. The United States and Panama discussed at length the

possibility of a continued U.S. military presence beyond the effective date of the
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Panama Canal Treaty but agreement was not possible. As a result, counterdrug operations from Howard Air Force Base ceased as of May 1, 1999.

The importance of the counterdrug operation and the need for a forward-based

U.S. presence to sustain it led SOUTHCOM to develop the current Forward Operating Location concept. The FOL concept, explained in detail in General Wilhelm’s

statement, uses existing airport facilities owned and operated by host nations that

are made available under bilateral agreements. Indeed, the concept has already

proven its value as U.S. aircraft have continued their detection and monitoring missions on an interim basis from the newly established Forward Operating Locations

in the Netherlands Antilles/Aruba and from Ecuador. SOUTHCOM was able to put

its FOL contingency plan into effect after closure of the Howard AFB runway on

May 1.

The Department of Defense will spend $247 million in fiscal year 1999 on

counterdrug activities in source zone countries this fiscal year, focusing on cocaine

production and movement in Peru and Colombia. The Department will work with

other U.S. agencies to dismantle the cocaine cartels and the cocaine ‘‘business,’’ and

with the Peruvian and Colombian governments to break traffickers’ air transit

routes. The concentration of traffickers in this area, and their dependence on air

routes, makes the source zone a special focus of our near-term efforts. The value

of military presence options afforded by FOLs for this mission, specifically the additional location at Manta, Ecuador, cannot be overestimated. However, continued detection and monitoring efforts in the source and transit zones using the FOLs depend on Congressional support. Funds are needed both for operations and for construction of minimum essential upgrades to facilities. The inability to reprogram fiscal year 1999 operating funds, or a shortfall in fiscal year 2000 construction funds,

will force us to continue operating the Aruba and Curacao FOLs on an interim

basis, deploying our personnel as expeditionary units: quality of life and efficiency

will suffer drastically.

On April 16, 1999, the Air Force was designated ‘‘Executive Agent’’ for the FOLs.

In this capacity, the Air Force will implement necessary upgrades and maintain the

three planned FOLs. The Air Force determined that a total $122.5 million in

MILCON funding is required to augment existing host-nation FOL facilities during

the fiscal year 2000–2001 period. This funding will support upgrades to facilities in

Curacao, Aruba, and Manta so that the Department can continue to execute its

statutorily mandated counterdrug mission.

Conclusion

The Department is firmly committed to meeting the goals of the National Drug

Control Strategy as well as its congressionally-mandated leadership role in detection

and monitoring. The key to continued effective execution of this mission is the ability to operate in the source zones. We cannot extend our reach in this manner without the Forward Operating Location strategy. I join General Wilhelm in urging your

support and we look forward to working with you.

FORWARD OPERATING LOCATIONS COST

Senator STEVENS. Thank you very much.

Mr. Slocombe and General, our attention was called to an Inside

the Pentagon report on May 27. I am sure you must have seen it,

and the real problem as pointed out in this, in many ways, and I

am quoting, the Manta location alone was found earlier this year

by a site survey to need such substantial modifications that it may

eat up at least twice the $50 million in funds budgeted to start up

the three initial FOL’s.

Each of the Caribbean islands was judged by the military site

surveyors to require $50 million in long-term improvements. Concrete is deteriorating—I am just going down this—the debris is

dangerous, lighting is substandard, the base has an emergency

power supply but it is broken, and cable is deteriorating. As a result, the United States will have to build a power base, I guess.

Something is missing here. The base water is not potable. It provides only 50 percent of the current demand. Air traffic control

tower is antiquated.
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The Manta airfield, security at the airfield is plentiful. Wildlife abounds. Bird activity is horrendous. Off-base medical care substandard, should be avoided. It will take 6 months to improve the

airfield, and office space for military personnel, and it goes on, is

very critical. But the main point that was raised to me, though, is we would be replacing Howard, which was an accompanied tour base, with

three forward locations where our people once again will be deployed without their families, and it just seems to me we ought to

have some review of that.

Now, General, you mentioned the savings over a 10-year period. I question whether there should be an agreement signed for 10

years without approval of Congress in any event, but beyond that,

those savings are the savings from not having families with our

people. That is the difference.

As a matter of fact, I think if you put forward, operating on the FOL’s, and if you put the cost of full family deployment, it would

cost more for three bases than it did for Howard, so are we not redeploying this at the cost of the burden on our personnel by going

to forward locations to operate without their families year after

year after year? Is that not what this is all about?

General WILHELM. Senator, I do not think so. I think that this

is a manageable proposition. As Mr. Slocombe mentioned in his testimony and in his opening statement, our personnel structure

would be quite different. His numbers were correct. We project

about 8 to 12 personnel permanently assigned to each one of these

locations to handle the day-to-day management and contracting

tasks that would be necessary to sustain operations at the FOL’s.

DEPLOYMENTS

The deployments of the aircraft themselves, based on past patterns, these would not be lengthy deployments. Probably 2 weeks

up to 1 month at most. I think the shorter term deployments are

things that most of our men and women in uniform have become

pretty accustomed to. It is the long 4, 6-month deployments, the remote tours of 1 year, where families do not accompany their sponsors, that we really fracture the harmony and the cohesiveness of

families.

I personally have lived with these short deployments. Many of

them are simply categorized as necessary training to maintain either a unit or individual readiness. Senator, very honestly I believe

that is a manageable challenge.

You are quite correct, the principal savings associated with a forward operating location as opposed to a base is the lack of a necessity to develop what we call a vertical infrastructure, schools, child

development centers, commissaries, and PX’s. But again, sir, given

the short periods of deployments, I think these are very manageable challenges, and I think the services can cope with that.

Sir, I did also read with considerable interest the article that you

referred to in Inside the Pentagon. That article was published before the results of the site activation task forces were made available to me. Quite frankly, I challenge off most of that article. I visited Manta last week. The conditions that are cited in that report

are quite frankly significant exaggerations.
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The local base commander, the Ecuadorean base commander has

already corrected many of these shortfalls. In terms of foreign debris that was on the runways, the vegetation that had grown up

around the runways has been cut back. Many of the deficiencies on

lighting and other issues cited in the report have already been corrected, not by us but by the Ecuadoreans. A squadron operations building has already been freed up by the Ecuadoreans for us. It has been repainted. I toured the space in its

entirety. I visited the Oro Verde Hotel, toured the entire facility

right down to the main air conditioning unit with the manager of

the hotel.

In short, sir, I think that report was misleading, and I would note that a staff delegation went to Manta. I believe Senator Grahams’ senior staffer was present, I think Ms. Hatheway, one of

Senator DeWine’s staffers were present. I believe the total delegation was about six to eight strong. They came back to Miami and gave me a completely different de- briefing of what they found. The Customs Service representative

there indicated that the facility was in a far better state of repair

than he had been led to believe, and they essentially took the same

exceptions that I did with the article that appeared in the Inside

the Pentagon. I do not regard that as a credible piece of journalism.

Mr. SLOCOMBE. Mr. Chairman, could I add one point?

Senator STEVENS. My time is up. It is Senator Inouye’s time.

Senator INOUYE. Thank you very much.

FORWARD OPERATING LOCATIONS

Mr. Secretary, you have tried to describe to us the difference between the forward operating location and a base on the basis of

cost. How long do we plan to operate out of these temporary locations?

Mr. SLOCOMBE. There is no reason that we could not continue to

operate on this basis for an indefinite period of time. I am afraid

we are going to have the drug problem for a long time. I think realistically we are going to have to operate from somewhere in that

region for a considerable period.

Senator INOUYE. Then it would be appropriate for us to assume

that it would be a long-term presence there, not 10 years, but more

than that.

Mr. SLOCOMBE. Even 10 years is a relatively short time, given

the scale and the persistence of this problem. I am afraid we are

going to have to be concerned about the import of illegal drugs into

the United States from Latin America for a long time.

One of the reasons why this is an attractive approach is that it

means that at least the lower foreign cost of operating from the foreign bases in the long-term justifies the initial cost to bring the facilities up to standard.

Senator INOUYE. Whatever it is, if we are going to be there for

several decades you will have to appropriate additional funds to

maintain our presence there.

Mr. SLOCOMBE. There is no question we will have to appropriate

funds both to conduct the operations and to maintain the facilities.

Senator INOUYE. In our negotiations with the host nations, have

we set down specific time periods and, if so, what are they?
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Mr. SLOCOMBE. The current arrangements run about 1 year, and will be renewed, and we look forward to having an agreement for

a long-term presence and long-term use of the facilities. The precise duration has not been agreed yet. I have to say, we found both in the case of the Ecuadorean and the Dutch Government, who have responsibility for Curacao and

Aruba, that they understand the importance of the mission and

have been supportive of the idea of our using the facilities. Could I just make one point, going back to the issue—my under- standing is that the crews for the aircraft that did the surveillance

out of Howard often were not personal change of station (PCS).

Their families were often not with them in all cases. Those are the

people who will be going on a temporary basis to these airfields to

operate. The people who are there on a permanent basis, the dozen

or so may well take their families with them. That is an issue to

be worked out.

Senator INOUYE. What is the so-called temporary assignment time period? How long can they expect to be there? General WILHELM. Sir, that is a decision that is normally made by the services. As a practical matter, looking as Mr. Slocombe

mentioned, it was truly the temporary duty (TDY) air crews that

did most of the work out of Howard.

The normal deployments, based on my observations, were about

2 weeks to 6 weeks, but I would like to run the line on that, sir,

and provide you a precise answer through the quadrennial defense

review (QFR), sir. I will give you a good profile on exactly what our

deployment time lines were for TDY people to Howard. I think I

am probably fairly safe in saying that I think you would see it parallel at the forward operating locations. So, sir, if I might, I will

get back to you on that.

Senator INOUYE. I thank you.

Mr. Secretary, in your statement you note the quality of life and

the efficiency of our forces will ‘‘suffer drastically if Congress fails

to approve your reprogramming request.’’ Does this mean that if

Congress denies this request DOD will still proceed with the establishment of the FOL’s anyway?

Mr. SLOCOMBE. No. We will not do what we do not have the authority and money to do, but we will have to find some other way

to execute the mission.

Senator INOUYE. Under what authority would you be operating

these FOL’s?

FOL CONCEPT

Mr. SLOCOMBE. We believe, and this actually goes back to a point

about the reprogramming. The reprogramming is not for money for

Milcon. It is for funds out of an operating, in effect a holding account for the counterdrug money to use for the operations at the

FOL’s.

We believe we have authority, and it has been the consistent

practice that we can operate on the basis of using a facility and pay

the operating costs out of operating funds. That is what we are

doing now.

We believe that we can make a case and that we are confident

that we will be able to carry forward on the FOL concept. Just how
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we would manage if we were not able to do that, we would have

to work with the committee and work with the Congress and work

with the services and the command to figure out some other way

to do it.

I think it would be more expensive in the long run, and it would almost certainly have a bigger impact on the people. I am informed that the specific authority for the FOL’s and for the operation is section 1004 of the National Defense Authorization

Act for Fiscal Year 1991, but in general it is our authority to conduct these counterdrug operations. I emphasize the point that the reprogramming has to do with op- erating money, and not with Milcon money.

Senator INOUYE. General Wilhelm, in your statement you stated that out of Howard there were 2,000 missions, and out of these

new bases, how many do you anticipate, the same level of activity? General WILHELM. Sir, assuming that we would get roughly the same commitment of resources, we would hope to achieve about the

same level of activity. That was 2,000 missions out of Howard each

year, and on a normal day we have 21 aircraft of various types,

models, and series committed to the counterdrug mission. Yes, sir, I would hope we could maintain a steady state for resource commitment and could roughly duplicate that tempo of operations from the forward operating locations.

Senator INOUYE. The question that the chairman asked on the

cost difference related to a family accompanying and not, I hope

you can provide that to us, what would be the difference if families

were there.

General WILHELM. In terms of the cost factor, sir, if we had to

recreate and build an entire base, I suspect the cost would be very

large indeed.

Senator INOUYE. Can you provide that to us?

Mr. SLOCOMBE. We can try to provide an estimate, at least. Without doing a comprehensive survey it would be hard to tell what it

would cost to build a full-up permanent base in one of these countries.

You and the chairman are right, the cost probably somewhere is

paid because the schools, the housing, the support of the family, it

will be paid somewhere, presumably, but it will be in the United

States, but the operating cost will be substantially lower.

General WILHELM. Senator, there is no question about it, the

recreation of a Howard Air Force Base like facility in Latin America would be an enormously expensive proposition, there is no question about it.

Mr. SLOCOMBE. And also, running Howard for 10 years would be

an expensive proposition.

Senator INOUYE. Thank you.

Senator STEVENS. Senator Burns.

RETENTION

Senator BURNS. Senator Stevens and I had an opportunity to go

on a trip to the Middle East. He mentioned retention, and as I visit

our different military personnel and facilities around the world, I

am increasingly concerned about our ability to build noncommissioned officers (NCO’s) and to obtain skilled people.
156

We met with a group and Senator Inouye was there in Saudi

Arabia where Air Force personnel, tech sergeants, staff sergeants,

men and women who had been, say, in the Air Force for some 8

to 14 years were on their eleventh trip to the Middle East since

1991, and were leaving the Armed Services.

They were highly skilled people. They were AWACS, they were

radar technicians on AWACS, and that continues to I think bother

and concern our chairman whenever we start talking about the

nuts and bolts of really operating an efficient military organization,

and that is my concern.

ARUBA AND CURACAO OPERATIONS

General, you have recommended Aruba and Curacao. They are

only 10 miles apart. What is the difference in their operations, and

can that operation be combined?

General WILHELM. Sir, the operation cannot be combined, and

the problem is the capacity of the two airfields. As you point out,

the two islands are approximate to each other, but if you look at

the ramp space to park aircraft, if you look at the capacity to make

launches and recoveries, they are relatively small facilities.

You need both to get the full coverage that we require, and the

breakout that we have done thus far in an operational context

would primarily place customs assets at Aruba, principally their P–

3’s, where our Air Force assets would operate out of Curacao, but

neither base on its own is sufficiently large to handle the numbers

of aircraft that we need to conduct the mission, so that is the reason for the two.

CONSIDERATION OF ALTERNATE LOCATIONS

Senator BURNS. In the overall picture of this, did we consider

Honduras, Puerto Rico, or Guantanamo? Were any of these facilities considered in the overall scheme of things?

General WILHELM. Senator, they certainly were. We took a close

look at Honduras, but as you know we have had a continuous presence there since 1983, so we are pretty familiar with what that

base will support, and what it will not support.

We really ran into a series of really three constraining factors

there. First, there was some reluctance on the part of the Government of Honduras to open Soto Cano up for large-scale counterdrug

operations.

Second, Senator, I really needed to find a home for the Army helicopters coming out of Panama, and we already had rotary wing

aviation assets on the ground at Soto Cano, so it made good sense

to marry those aircraft up with the ones that were already there.

That way we did not have to duplicate maintenance supply and

other structures at some other place.

Third, and probably most important, is geography. There are

some high elevations in and around the airfield at Soto Cano that

make it impossible for many of our aircraft to take off with a full

fuel load, so they end up with constrained time on station and a

lot of our counterdrug aircraft are not configured for aerial refueling, so that was really a hard constraint against wholesale use of

Honduras.
157

As far as Puerto Rico is concerned and Guantanamo Bay, those facilities are being used. The Coast Guard, as I think you are

aware, Senator, uses the Borinquen facility very heavily in Puerto

Rico to conduct many of its counterdrug and other operations in

what we refer to as the transit zone.

As we have come out of Panama I have identified airfields in

Puerto Rico as the basing locations for our theater airlift assets, so

we have put our C–130’s in there to support our other regional engagement missions. Sir, as you know, our facilities at Guantanamo are somewhat limited, and it is a tough runway to get in and out of with the air

space restrictions. Again, the Coast Guard and the Navy use that

probably just about up to the limits of its capacity, and it does support many of our operations in the transit zone, so sir, we really

did look at just about every option we had in the region.

FOL’S

Senator BURNS. Mr. Slocombe, would you give the committee an update on negotiation with these countries for a permanent presence there, and I say that because we are going to make some capital expenditures, and I would like to know the status of the negotiations of the recommended FOL’s.

Mr. SLOCOMBE. The short answer is, we are discussing with both

the Netherlands, who as I say have responsibility for the Netherlands Antilles in this area, although they have to talk to the local

Governments as well, and with Ecuador, for long-term arrangements which would provide the status of continued eligibility, I

guess, continued agreement to our use of the facilities, and in particular continued, the equivalent of a status of forces agreement.

It is not formally a status of forces agreement, but it provides

protection for our people against jurisdiction by the local courts for

official acts, the kind of issue which is important if you are going

to have people operating, even on a temporary basis, out of a location, and in practice we will not make investments, we will not do

the construction until we have a long-term commitment. I do not

necessarily mean a commitment forever, but a long-term commitment.

There is a meeting with the Netherlands tomorrow, the 15th,

and a meeting with the Ecuadoreans within a couple of weeks, and

the indications are that we will be able to work out our arrangements. The progress is going forward, and in any event we are confident on the point we will not spend the money.

Senator BURNS. Mr. Chairman, with your indulgence, I have one

more question along those lines.

I understand a major issue remains as to whether or not U.S.

forces have the authority to operate and bear arms at forward operational locations to protect our deployed assets. Give me an idea,

or would you comment on that issue for the committee, and the

status of those discussions with those host governments?

Mr. SLOCOMBE. My understanding is the host governments are

agreeable to U.S. personnel having firearms for security purposes.

They do now, and this should not be an issue as far as we understand.

Senator BURNS. Thank you, Mr. Chairman.
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Senator STEVENS. I thank you. Gentlemen, I am informed that our special operations forces deployed to 152 countries, foreign countries, foreign territories included, with 123 counterdrug missions in 22 countries last year. We have got people in Haiti and in Kuwait and Saudi Arabia. We have got people in Iceland. We have got people in Bosnia. We have

got people in South Korea. Two of those are accompanied, all the

rest are not.

Now, when you look at this, we travel a lot, probably too much, and we ask too many questions. I remember two pilots that visited

me in Britain, I think it is 18 months or 2 years ago, roughly. They

had been with their families 3 months out of the last 3 years, each

year. They had been deployed to Kuwait, and then redeployed to

Bosnia, they had been deployed elsewhere, and they were getting

out.

Now, that is what I see is what is happening here now. We are going from an accompanied tour to an unaccompanied tour status

in the war on drugs, which we support, but it does not seem to me

to have been thought through very well about personnel. What about security, General? This is probably one of the most violent places in the world today because of the drug activities. We

are going to have 15 to 20 people in, what, three different, four different locations. Are you going to have an extra marine detachment

there to protect them? Who is going to protect them?

FORCE PROTECTION

General WILHELM. Sir, the issue of force protection I will tell you

right up front is job one for the United States Southern Command.

That is the first thing we look at before we deploy any force for any

period of time to any location.

The security of the force, as you would expect, normally comes

from one of two sources. Either the host nation provides security

forces, or we provide augmenting security forces.

Senator, that is really one of the foremost tasks that I levy

against my intelligence organization, and that is to stay dead on

top of the security situation at every location where we have troops

deployed in Latin America and the Caribbean.

I have told them, I do not want information day to day, I want

it from minute to minute about the security conditions there. For

example, we received a report that one of the young men, one of

our first deployers to Ecuador, had been accosted outside of his

hotel room in Manta. He had been confronted by two knife-wielding

assailants. They took his billfold with $20 and a hand-held radio.

We are working on that right now with the Ecuadorean authorities.

We are very conscious of the fact that we need a buddy system

when people on liberty, or are at and around town. We are working

with the Ecuadoreans to get better security around our billeting locations. This was a criminal act, sir. I only bring that up

anecdotally to let you know how much importance I place on that.

Sir, we will never blink our eyes where force security is concerned.

Senator STEVENS. Do you think these four bases are secure without an occupational security force?

General WILHELM. Sir, I believe these are secure locations. Yes,

sir, I do.
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AWACS/RETRACTABLE OVER THE HORIZON RADAR

Senator STEVENS. Apparently AWACS are part of the key to this.

What happened to that over-the-horizon radar we took from

Manchikta and put in Puerto Rico for this purpose? Are you using

it?

General WILHELM. Yes, sir. Not the Puerto Rican radar quite yet.

Senator, as I think you know, the initial operational capability for

the relocatable over-the-horizon radar in Vieques, Puerto Rico, is in

fiscal year 2000.

The two radars that we have right now that give us the deep

look and broad area coverage are the ROTHR’s in Virginia and

Texas. When we stand up the third radar in Puerto Rico it will improve our coverage particularly of the deep source zone. The issue

here, sir, is that the radars do different jobs.

Senator STEVENS. I understand that, but are they going to take

some of the pressure off the AWACS? You need three AWACS now,

rather than one.

General WILHELM. Sir, we actually use two AWACS. That is the

asset level that is assigned to us by the Joint Chief of Staff (JCS).

We have not had two.

Senator STEVENS. You had three circles?

General WILHELM. No, sir. Those were the operating radius out

of the three FOL’s. We would not necessarily have an AWACS at

each one of those. In fact, we would probably have no more than

two at any given time, because that is the asset ceiling that has

been assigned by JCS. Those circles simply depicted the operational coverage that we could achieve from each of the three

FOL’s.

Again, it is our duty to make clear that the ROTHR’s provide us

with the initial tipper. They let us know that an aircraft has taken

off. The locating data is not precise. Ten to 20 miles is about as

close as we get.

We do not get altitude. That is when the AWACS, when the P–

3 domes come in. They add more precision to the locating data on

the contact, its direction of flight, its altitude, and that is how we

start to build a case toward a track of interest. But all of the radars have to work together to make this happen.

Senator, I am sorry if the chart created confusion. We actually

rate only two AWACS assigned Southern Command for this mission, and since the crisis in Kosovo we have only had one.

Senator STEVENS. I went down and rode the P–3 out of Key West

into this area, and was briefed on what they were doing to support

the counterdrug activities. Why is it we cannot use some portion

of these forces out of Key West, from our own soil?

General WILHELM. Sir, we do fly some missions out of Key West.

Senator STEVENS. I know, I flew in them, but why don’t you use

that location rather than these?

General WILHELM. Sir, the operational reach from Key West

would not get into either the southern source zone nor—our southern transit zone, excuse me, nor would it even touch the source

zone. It is simply too far away. We would end up covering only

really the northern and central regions of the Caribbean. We could
160

not cover Central America from there, and we would get no coverage of the Pacific movement vectors.

Senator STEVENS. Mr. Slocombe, would you give the committee

the estimate of the total numbers of military personnel deployed

overseas in fiscal years 1998, 1999, and projected for 2000, please?

Mr. SLOCOMBE. I have the numbers, if you will bear with me for

a second.

Senator STEVENS. You can give those for the record, if you like.

Mr. SLOCOMBE. Let me give them for the record.

[The information follows:]

EXCERPT FROM JOINT STAFF INFORMATION PAPER

Subject: Under Secretary of Defense for Policy Testimony Regarding Overseas and

Long Term Contingency Deployments

Purpose.—To respond to a Deputy Assistant Secretary of Defense for Drug Enforcement Policy and Support request for information.

Total number of military personnel deployed overseas.—This number is best presented by the average number of active duty U.S. military personnel deployed, not

stationed, on any given week overseas in support of contingency operations. This

number does not include those deployed in a temporary duty status or those deployed for exercises.

[Deleted.]

Fiscal year 2000—Estimate not available.

Senator STEVENS. I sort of am going back where Senator Burns

was. It does seem to us that the two, Aruba and Curacao, are so

close together in terms of the availability of the other two sites,

that the necessity of having four sites in this area is stretching our

capability more than we should stretch it. I would urge you to take

a look again as to whether we should spend defense funds for the

infrastructure and base operations on a site that is for the Customs

Service.

I have been trying to get people to do that in California and in

Arizona and New Mexico for years, but we will not do it, but here

we are spending money outside of our country for the same operations to protect South American countries. I think we need to develop a real definite United States policy of what we are going to

do with military assets in terms of the war on drugs, but we are

not currently using them to protect our own borders.

When we were down on the Arizona border 2 weeks ago, there

were almost as many people coming into Arizona daily as there are

going into Albania from Kosovo, straining a whole operation down

there as far as immigration, customs, and border patrol.

In this area that you are operating in, the military takes the full

brunt of the whole operation, but you will not take any in the

United States. I really see the development of some very inconsistent policies in terms of the use of military force to support the

war on drugs, and I hope to have that reviewed by another committee.

Senator, do you have any further questions?

Senator INOUYE. No, thank you.

Senator STEVENS. Senator Burns.

Senator BURNS. I guess I am concerned about our expenditure

further out than just, here we are, we have got a request now for

a reprogram of funds, and how we are going to move some of those

dollars around, and we have yet to figure out how we are going to
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do that, General. We are supportive of the drug intervention program down there, let there be no doubt about that. There will always be drug flow into this country for the simple reason this country has got the money to buy them, and that is it.

You are never going to stop drugs coming into this country until

we run out of money, and that is just a fact, and of course you have

a terrific mission ahead of you. But you know, I think the stabilization, the security of the area also has far-reaching yields in the best interests of this country. I

am just wondering, have you given any thought what we are going

to need, say, past this initial investment in capital expenditures,

what it is going to take in the next 5 years? I guess I am an old county commissioner. We really did not get the efficiency of our county down until we did a 5-year budget, and

what we did this year affected what we could do 5 years down the

road. I would kind of like to get ahead of the hounds a little bit.

Have we had any kind of a projection or demand on our funds in

that respect?

FIVE-YEAR PROJECTION

General WILHELM. Senator Burns, that is a wide-ranging ques- tion, of course, and I will take it on in that context, if I might.

Senator BURNS. You might just give a thumbnail, because I know

you cannot be too precise. I understand that.

General WILHELM. I think probably one of the most often-used

statements when we talk about the drug struggle is that there is

no silver bullet, and that is quite correct. I think that we can have

a very powerful impact on this problem, but we are going to have

to do it in a variety of ways, and I will just work from south to

north, and I will do this very quickly.

I encounter a lot of frustration, and sometimes the feeling that

this is mission impossible. I do not agree. There are three countries, really, that produce drugs. They are Peru, Colombia, and Bolivia, and we are winning the war in two of those countries today.

Cultivation was down 26 percent in Peru last year, 17 percent in

Bolivia, and their production of base was down 25 percent in both

countries.

The problem was the 28 percent increase in Colombia, but we are

doing some pretty vigorous things right now with Colombia to help

them more effectively counter the drug threat in their country. It

is going to take some time, but I am one of those that is cautiously

optimistic—not many of us, but I am cautiously optimistic about

Colombia, its national resilience, and its ability to overcome its

problems.

So two out of three is the way I look at it in the source zone,

and I think we have got some pretty good programs to do that.

We knocked off 147 metric tons of dope in route to the United

States last year. That is not too bad. I would like to get 200 metric

tons this year.

In his national drug control strategy, General Barry McCaffrey

has created some hard goals for us to achieve, 10 percent reduction

by 2002, and about a 20-percent reduction by 2007. We are going

to work hard to make that happen and, of course, that is nipping

the stuff before it gets to the frontiers of the United States.
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Again, Senator, things like the forward operating locations are absolutely indispensable if we want to do this. I am an infantryman. I always want——

Senator BURNS. Primarily you are a rifleman first and then ev- erything else comes later. General WILHELM. Absolutely, sir, and you always want to defeat the enemy as far forward from your main battle position as you

possibly can. I would like to win as much of this war as we can

in the source zone, pick up the bleeders in the transit zone, and

then, as Senator Stevens and Senator Inouye suggested, we probably need to buttress the defenses right along our own borders,

right in the wire, so to speak. But I view my job as fighting the deep fight, going down and bloodying their nose in the source zone, try to give them two black

eyes in the transit zone, and make them weak before they get to

the arrival zone.

If we do all these things, eradication, interdiction, alternative de- velopment, the things that State and the rest of the interagency do,

sir, we can win this thing.

Senator BURNS. Mr. Chairman, I know most that my Ranking Member, Senator Murray of Washington, would probably have

some questions this morning. She is involved in other issues, and

if she has questions of either of you, I would appreciate if you

would respond both to the committee and to Senator Murray out

of respect, and I appreciate you having this hearing this morning.

Senator STEVENS. Yes. She is on the floor. May I ask, Senator,

have you received the supplemental for the $122.5 million for

Milcon?

Senator BURNS. We have not.

Senator STEVENS. We have seen an outline of it. When are we

going to receive it?

General WILHELM. Senator, I know that—I think the document

is called a 1391. I am looking at Steve Cortese. He knows these

kinds of things. I know that those documents were cut for the

$122.5 million, sir. I do not know where they are, but I am sure

between Mr. Slocombe and I we can find them.

Senator STEVENS. We have not seen the projection. As Senator

Burns mentioned, we normally do get a 5-year projection. We got

the $45 million reprogramming, and then we understood there is

another sum coming for the year 2000, $122.5 million, and we do

not know, and that was for augmenting facilities at the existing

sites, and we were told that there would be further funds for the

increases in operational maintenance and personnel cost, and we

have not seen those. I think it would be helpful if we could see

those.

Are you operating planes out of these four bases now?

FOL FUNDING CONCERNS

General WILHELM. Sir, we are, out of all of them, out of Curacao,

out of Aruba, and out of Manta, that is correct.

Senator STEVENS. You have made some changes, I assume, out

of your operating accounts for that.

General WILHELM. Yes. Well, this was money that was previously in the accounts to conduct counterdrug operations, and as
163

I mentioned in response to a previous question, we have done the

things that we could do on the ground at Manta to correct the deficiencies that were there, and we have gotten a thumbs up from the

Customs Service and from Navy, who have operated the P–3’s, that

it is an acceptable base from an operational and safety standpoint.

Sir, if I could clarify one point, the Milcon requirements are for

$42.8 million in 2000 with the balance in 2001, so it is not all in

fiscal year 2000.

And if I might return to one point for just a second, because I

am confused right now about the reprogramming action. That reprogramming action was for fiscal year 1999. That was $45 million,

and all of that was in the O&M accounts, and Senator, only $6.1

million of that was related to the forward operating locations. The

majority of those reprogramming funds were to support other consolidations, and movements that were associated with the closure

of our bases in Panama.

I do not quite know what happened here.

Senator STEVENS. We did not approve it. The main reason was,

it seemed to me, and I consulted with Senator Inouye, it looked like

we were going to implicitly approve the creation of four new bases

overseas without any congressional hearings at all, and after our

experience in Haiti and in King Sultan and Kuwait, it was just not

the thing to do in our opinion. We think the public should have

knowledge if we are going to start a new series of bases overseas,

they are going to be ongoing for a period of time, and Mr. Slocombe

was correct when he says that 10 years it is going to be a short

time on this.

Now, if this is a new policy to replace Howard and replace it with

four bases instead of one, the public ought to know. That is one of

the costs of the Panama Canal agreement, but it is also one of the

costs of the war on drugs, and this time it is coming all out of defense. It is the first time I have seen it come all out of defense,

General.

In the past, with the Coast Guard, we transferred some money

to the Coast Guard, and the counterdrug funds were transferred to

the Coast Guard, and the P–3 I flew on was reimbursed by the

Coast Guard, or by the drug operations to the Coast Guard. This,

you are not seeking any reimbursement from the other funds. This

is using defense funds now for counterdrug activity straight up,

and I think there should be a record on that, and we should understand what you are doing.

I am not dissatisfied with your explanation. I am not too happy

about it, but I think you have answered our questions, and we will

consult with the committee to see what we will do about the reprogramming, but it just did not seem to us that we ought to approve a reprogramming of operation and maintenance (O&M) funds

for the counterdrug activities in a fashion that you could implicitly

assume that we had approved the concept of replacing Howard

with four different bases.

General WILHELM. Senator, I can completely appreciate your concerns. The reason I wanted to mention it, sir, was I read your letter

of, I believe June 28, and the issues that are addressed in there

I had a hard time correlating with the real purpose for the $45 million reprogramming action.
164

Senator STEVENS. We did not get the breakdown of how you were going to spend the $45 million until after I sent the letter. Then

we were told the specifics.

The reprogramming request was not specific. It was just for use in four locations overseas of O&M money for the drug operations,

and we just wanted to have a record on it, and now that we have

it, as I said, I am not too happy about what I see, because I see

further stress on the forces from unaccompanied tours for a period

of time ahead of us that is going to lead to worse statistics as far

as reenlistment is concerned.

I do not know the answer to it. I am sure you do not know, ei- ther, but I am getting to the point where every time I talk to these

young pilots—it is particularly pilots that we have a real shortage

of now. Do you have any knowledge of what the shortage of the

AWACS pilots is now?

General WILHELM. Sir, I do not know.

Senator STEVENS. We will have to track that down.

Senator BURNS. Well, Mr. Chairman, I just want to make a point. We sat there, all three of us sat there and listened to those

young folks, among NCO’s. I mean, these are the skilled people

that I think are the nuts and bolts of making this thing operate,

and that was very enlightening, that day we spent, and we threw

everybody out of there and just had a very frank conversation with

those folks, so that is a concern.

I thank the chairman.

ADDITIONAL COMMITTEE QUESTIONS

Senator STEVENS. We did that in Kuwait, at King Sultan. Thank you very much, gentlemen. We appreciate it.

[The following questions were not asked at the hearing, but were submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED BY SENATOR CONRAD BURNS

DOD FORWARD OPERATING LOCATIONS FOR COUNTER DRUG OPERATIONS

Question. Why did the Department not request military construction funding for these forward operating locations as is the normal practice for constructing military

facilities overseas?

Answer. The request was based on what was believed to be the established precedent concerning MILCON and the DOD’s Counterdrug Central Transfer Account

(CTA). The precedence was the Department’s fiscal year 1995 CTA request, which

included $10,000,000 in MILCON funding for the construction of a Relocatable

Over-the-Horizon Radar (ROTHR) in Puerto Rico. The Congress appropriated this

MILCON amount as a part of the CTA in Public Law 103–335.

Question. It appears that there are additional funding requirements for these

bases over the next several years. Will the military construction budget for fiscal

year 2001 include these additional projects?

Answer. Yes, the military construction funding for the remaining requirements at

the FOLs will be forwarded as a part of the fiscal year 2001 MILCON budget.

Question. What will be the legal basis for U.S. deployed or stationed personnel

in both the Netherland Antilles and Ecuador?

Answer. All personnel will be at the Forward Operating Locations pursuant to bilateral access agreements with the respective countries. They will be deployed to fulfill our 10 U.S.C. 124 detection and monitoring mission.

FOL NEGOTIATION STATUS

Question. What is the status of negotiations with these countries on securing a

more permanent agreement to base our forces?
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Answer. The status of FOL negotiations are fluid. Ambassador Brown is doing a

superb job in securing these agreements and is in the best position to provide you

a current status of the negotiations. I am confident that these agreements will be

secured in the near future.

CONCEPT OF OPERATIONS

Question. Could you begin by describing how you envision the concept of operations for each of the three bases in Aruba, Curacao, and Ecuador?

Answer. These sites will replace the capabilities lost with our departure from Panama but without the overhead costs of building a base. This is achieved through forward operating location (FOL) agreements.

FOL agreements with host nations enable us to use their existing facilities, upgraded to U.S. standards, for the conduct of counterdrug operations throughout the

source zone and to do so at considerably less expense than our operations from Howard Air Force Base.

The Caribbean sites of Curacao and Aruba are to focus on the transit zone and

the northern portion of the source zone. Light and medium aircraft (C–550, C–130,

F–16 and P–3) will fly from these sites in support of our detection and monitoring

mission. Curacao will also be capable of hosting heavy aircraft (E–3 AWACS and

KC–135).

Manta, Ecuador, will be capable of hosting all three weight classes of aircraft and

is the most critical of the three sites. Manta provides the flexibility to conduct intelligence-cued operations throughout the deep source zone with little or no warning

to narco-traffickers. The necessity to maximize the use of limited assets, like the

AWACS, makes Manta the right place. No other FOL provides the flexibility to direct this strategic asset against the shifting patterns of the narco-traffickers in Colombia, Peru, and Bolivia.

FACILITIES

Question. What is the current state of facilities and infrastructure at each of these

locations?

Answer. Facilities and infrastructure at the Forward Operating Locations (FOLs)

is generally good but will require approximately $122.5 million in upgrades to meet

U.S. operational and safety standards. To reduce costs, we will use host-nation facilities to the maximum extent consistent with U.S. operational, safety, and quality

of life considerations. The Aruba Airport Authority currently provides adequate office space inside the airport terminal and sufficient ramp space adjacent to the main

commercial ramp. Renovation on the Aruba airport terminal, scheduled to begin on

1 November 1999, will require construction of temporary office facilities. In Curacao,

the host-nation government and the Dutch military allocated sufficient aircraft

ramp space and assigned temporary office facilities. In Manta, host-nation military

facilities are supporting limited operations. Local civilian establishments are providing billeting and messing support at all three locations.

Question. Describe the type of facilities that Southern Command and the Air

Force agree are needed for each of the locations?

Answer. To meet U.S. operational and safety standards, all three Forward Operating Locations (FOLs) require additional aircraft ramp space, adequate aircraft

maintenance facilities, and permanently assigned office spaces. To reduce costs, we

will use expeditionary facilities at each location where possible. Manta Air Base

(AB) requires more upgrades to meet U.S. operational and safety standards than

Curacao and Aruba international airfields. Manta requires moderate upgrades to

crash/fire/rescue capability, bulk fuel storage capacity, and billeting/messing facilities. We estimate the total construction cost for all three FOLs to be $122.5 million.

MILITARY CONSTRUCTION ESTIMATES

Question. Finally, what are our military construction estimates for each of the

bases in Aruba, Curacao and Ecuador?

Answer. For the sake of clarity, Forward Operating Locations (FOL) are not

bases. FOLs are host nation facilities where the U.S. is granted use and access for

the purpose of conducting counterdrug operations. Military construction is limited

to those areas necessary to support U.S. counterdrug operations.

For fiscal year 2000 we must receive $42.8 million of which $10.8 million will be

used for consolidated planning and design of all three FOLs, with the remainder

being used for airfield pavement/site improvements at Manta, Ecuador. Manta will

require the bulk of the expenditure to enhance the parking ramp, runway and

taxiways. The upgrades will allow us to accommodate four large aircraft (E–3,
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AWACS and KC–135) and four medium (E–2, P–3, C–550, C–130, and ARL) aircraft.

In the following fiscal year the remaining $79.7 million is needed to complete upgrades in all three sites ensuring adequate, safe and mission essential facilities from

which to operate.

CONSTRUCTION OF TEMPORARY FACILITIES

Question. It appears that we plan to construct permanent facilities at each of

these forward operating locations. Why not use more temporary facilities?

Answer. We are using host nation facilities to the maximum extent possible at

each of the locations. We will only build essential facilities that we cannot obtain

from the host nation. In the initial stages of developing the forward operating locations, temporary facilities were used, and where temporary facilities can support the

operation, we will retain those temporary facilities.

Temporary facilities, however, like the Air Force’s ‘‘Harvest Bare’’ camps, are currently being used for interim facilities which will continue until more permanent facilities can be completed. These types of facilities (tents and prefabricated structures) are effective, but have a limited useful life. After 18–24 months they require

replacement or significant maintenance.

Permanent support facilities will be constructed using materials and methods

which will result in the least cost, both in terms of initial construction and routine

operations and maintenance. ‘‘Expeditionary’’ type facilities (pre-engineered buildings, K-spans, etc.) will be considered where practical.

OPERATIONAL REQUIREMENTS

Question. What are the operational requirements for Aruba and Curacao installations?

Answer. The operational requirements for Forward Operating Locations in Aruba

and Curacao are:

—An operational capability of twenty-four hours per day, seven days per week.

—Night and all weather landing/takeoff capability with manned air traffic control

facilities.

—Runway length of at least 8,000 feet, with a load bearing capacity for AWACS

and C–141 aircraft.

—Refueling/Defueling capability.

—Crash, Fire and Rescue services.

—Ramp, Hangar, Office and Storage space.

—Communications capability to support aircraft maintenance requirements, and

connectivity with command and control organizations such as Joint Interagency

Task Force East (JIATF-E).

ALTERNATIVE FORWARD OPERATING LOCATIONS

Question. Did the department consider our facilities in Honduras, Puerto Rico and

in Guantanamo Bay to conduct these operations? Please explain why these are not

being used rather than new locations?

Answer. Yes, and all three locations continue to support counterdrug operations

just as they did prior to the closure of Howard Air Force Base.

Soto Cano Air Base, Honduras, is the home for a majority of Army aviation assets

in theater. These assets support counterdrug operations such as CENTRAL SKIES

as well as many non-counterdrug missions. Although the topography of the region

limits Soto Cano’s use as a Forward Operating Location, it can be used to support

surge operations in the Eastern Pacific and in Central America.

The geographic location of Guantanamo Bay, Cuba, and Naval Station Roosevelt

Roads, Puerto Rico, allow Department of Defense, Coast Guard, and Customs Service detection, monitoring and tracking assets to continue supporting counterdrug operations in the Caribbean transit zone. These locations, however, do not provide the

required operational reach into the South American source zone and large portions

of the Eastern Pacific.

CONSTRUCTION OF TEMPORARY FACILITIES

Question. How long is it anticipated that our forces will remain at these forward

operating locations?

Answer. We anticipate a network of interlocking Forward Operating Locations

(FOLs) will be necessary until we have achieved the targets and goals directed in

Presidential Decision Directive 14 and the National Drug Control Strategy. Ongoing
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negotiations are for an agreement that allows U.S. access to FOLs for 10 years with

an option for an additional 5 years.

HOST NATION SUPPORT

Question. General Wilhelm, what if any contributions are the host nations providing for the construction of these forward operating locations?

Answer. The host nations of Ecuador and the Netherlands are contributing significantly to our efforts to establish forward operating locations.

At all three locations, the host nations have provided temporary ramp space at

no charge. The same holds true of office space, maintenance facilities, and hangar

space provided on a temporary basis within their capability. In Curacao, the Royal

Netherlands Navy will provide, on a permanent basis, sufficient ramp space for two

P–3 and one E–2 aircraft along with co-use of their maintenance hangar. In Manta,

the Ecuadorian Air Force has provided several buildings for use on a permanent

basis. The Ecuadorian Air Force also conducted extensive excavation of brush and

existing obstructions around the runway environment so counterdrug operations

could commence in June. This action was performed to meet U.S. air safety standards—the Ecuadorian fighter wing at Manta did not require this safety enhancement.

These gratuitous actions, along with the host nations’ contributions to overcoming

day-to-day obstacles, have convinced me of their sincere desire to participate in our

collective counterdrug mission.

MILITARY CONSTRUCTION FUNDING

Question. The Department requested $42.8 million in fiscal year 2000 Southern

Command military construction funding for the forward operating locations. The

total program requirements are $122.37 million. What are the priority projects for

fiscal year 2000?

Answer. Fiscal year 2000 military construction program funding of $42.8 million

for Forward Operating Locations (FOLs) will provide $10.8 million for consolidated

FOL planning and design and the remainder will be used for parking ramp enhancements and runway/taxiway repair to accommodate four large aircraft (E–3,

AWACS and KC–135) and four medium (E–2, P–3, C–550, C–130 ARL) aircraft in

Manta, Ecuador. These funds will also provide the means to repair an existing ramp

for three medium aircraft.

SUPPORTING AIRCRAFT

Question. General, the Congress had earlier been briefed on the forward operating

locations that these facilities were to support transit aircraft on a mission required

basis. However, the documentation that the committee has received indicates that

the F–15s or F–16s will be the only aircraft permanently assigned to Curacao. Is

this a change to the initial intent of the program and what is the justification for

the permanent assignment of these aircraft?

Answer. There has been no change in our original concept of operations at the

Curacao, Aruba or Manta Forward Operating Locations (FOLs). Air National Guard

units, from throughout the United States, rotate every six weeks and crews rotate

at 15-day intervals. As a new unit arrives, the previous unit departs. This rotation

achieves near-continuous presence with temporarily deployed personnel and equipment.

QUESTIONS SUBMITTED BY SENATOR PATTY MURRAY

FORWARD OPERATING LOCATIONS (FOLS)

Question. Mr. Chairman, I would like to preface my question by commending General Wilhelm for his leadership and dedication to the Defense Department’s counter

narcotics mission. As the head of the U.S. Southern Command, he has mounted a

determined and aggressive campaign to stem the flow of illegal drugs from the Caribbean and Central America and to promote stability and democracy in the region.

His is an enormous task, and a vitally important one. We are all well aware that

it is crucial that he succeeds.

On that note, I cannot help but think that a coordinated battle plan is a necessary

ingredient of success, but what this Committee is being presented appears to be

more of a scattershot, almost piecemeal approach. One day, we receive a relatively

vague reprogramming request for $45 million for Forward Operating Locations. Another day, we are asked to shift $42.8 million into military construction for the
168

FOL’s. Later, we are told that a total of $122 million will be needed for construction

at these locations in fiscal years 2000 and 2001. At the same time, Southern Command is significantly increasing its presence in Puerto Rico, and Congress is being

urged to acquire the headquarters site that SOUTHCOM currently leases in Miami.

I understand that all of these actions were precipitated by the closing of Howard

Air Force Base in Panama, but I am concerned that in the haste to relocate the missions that had been based at Howard, we may be so focused on short term fixes

that we lose sight of our long term goals.

I understand that SOUTHCOM is currently operating some missions out of the

proposed Forward Operating Locations, so my first question, for both General Wilhelm and Mr. Slocomb, is this: what would the impact on the counter narcotics mission be if SOUTHCOM were to complete a long-range master plan, as the Senate

Subcommittee on Military Construction has directed, before investing $122 million

in overseas military construction projects? How quickly could you complete such a

plan and submit it to Congress.

Answer. The Department of Defense long-range plan for Forward Operating Locations has been developed and was briefed to the Senate Subcommittee for Military

Construction in August. Because of the many variables that have an impact on

these plans, they are always being updated and adapted in order to have the greatest impact on our mission. The Department of Defense and U.S. Southern Command

stand ready to provide updates or answer your questions at any time.

DEPLOYMENTS TO FORWARD OPERATING LOCATIONS (FOLS)

Question. General Wilhelm, you have indicated that the majority of deployments

to the FOLs would be short term—a period of weeks as opposed to months. In responding to the Committee on the specific lengths of tours, would you also indicate

for the record how frequently a service member would be rotated into this duty. In

other words, how many times a year could a service member expect to be assigned

to this duty, and what would be the total amount of time during the year that he

or she would have to spend away from their families?

Answer. Each Service establishes deployment timelines consistent with their overarching personnel tempo (PERSTEMPO) criteria. All our Forward Operating Location (FOL) deployments will be short duration temporary duty (TDY) assignments.

FOLs provide Services the flexibility to tailor their PERSTEMPO criteria to support

our mission requirements. The frequency with which individual Service members

would be assigned to these missions is a Service determination.

QUALITY OF LIFE

Question. In your opinion, how will these assignments affect the quality of life and

operating tempo concerns that are having such a severe impact on Air Force retention levels? What steps are you taking to mitigate the impact of any quality of life

concerns caused by this duty on the service members and their families?

Answer. Forward Operating Location (FOL) deployments have a positive impact

on morale and retention. Counterdrug operations are actual missions against actual

targets. Aircrews respond favorably to these challenges and gain a sense of accomplishment from performing these missions. Guard personnel support many of the

Air Force deployments, easing the operating tempo on the active force. For example,

Guard F–15s/F–16s fly Coronet Nighthawk deployments, typically deploying from

various home units to Curacao every six weeks and rotating crews at 15-day intervals.

Service personnel tempo (PERSTEMPO) is further reduced by contracting as

much base operating support as possible. We selected, from available sites, those

airfields that best meet U.S. operational requirements, safety standards, and adequate personnel support facilities. We will upgrade these facilities to U.S. standards

during the next two fiscal years. The quality of life needs of military personnel and

their families will be provided by the Services.

HOME BASES OF DEPLOYED PERSONNEL

Question. General Wilhelm, would you provide for the record the home bases from

which the personnel would be deployed to the Forward Operating Location missions.

Answer. The designation of units and personnel to support counterdrug requirements at the Forward Operating Locations is Service responsibility. I defer to the

Services to answer this question.
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SECURITY ARRANGEMENTS

Question. General Wilhelm, you indicated that, in your opinion, the proposed

FOLs are secure locations. Would you elaborate for the record on the specific security arrangements that will be made for U.S. personnel assigned either permanently

or temporarily to these sites, who will provide the security on and off base, and

what the security arrangements will cost the U.S.

Answer. The assessed terrorism threat levels at Forward Operating Locations

(FOLs) are NEGLIGIBLE for Curacao and Aruba and LOW for Ecuador. The assessed threat levels for crime is MEDIUM for Curacao and Aruba and HIGH for

Ecuador. Threat level assessments are updated on a daily basis. Host nations provide security at the FOLs, to counter the assessed terrorism and criminal threat levels.

As our executive agent for FOLs, U.S. Air Forces South (USSOUTHAF) is responsible for the security of permanent and temporary duty (TDY) Department of Defense (DOD) and U.S. Customs Service personnel located at the FOLs. Where necessary, USSOUTHAF augments host nation security forces.

In addition, all U.S. personnel deploying to the U.S. Southern Command area of

responsibility are required to receive pre-deployment anti-terrorism (AT) awareness

training. FOL Detachment Commanders are also required to conduct security inbriefs for personnel arriving at FOLs.

Security costs are negligible because of host nation support and existing security

provisions at FOL facilities. Physical security requirements will be integrated into

plans for U.S. FOL infrastructure improvements.

HOUSING

Question. I note that the $122 million military construction cost estimate includes

funding for visiting enlisted and officers quarters at Manta. What, if any, type of

housing is being provided for visiting military personnel at the sites in Aruba and

Curacao? What is the cost estimate? What type of housing (on base, off base; leased;

single or multi family etc.) will be provided for the permanent U.S. personnel stationed at these sites? What is the cost estimate?

Answer. Visiting military and interagency personnel to Aruba and Curacao are

billeted in U.S. Air Force contracted hotels, most of which are within 15 minutes

of their assigned airfields. The fiscal year 2000 budget for housing temporary duty

personnel is $2,700,000. Furthermore, a small number of permanent personnel will

be assigned housing within the local community. Their housing costs are projected

to be within the current housing allowance.

REGIONAL ASSISTANCE

Question. General Wilhelm, you note in your prepared remarks that the nations

of the Caribbean and Latin America recognize that fighting the illegal drug trade

in the region is a shared responsibility. Certainly, Southern Command’s counter

narcotics operations benefit not only the United States but also our neighbors in the

Caribbean. Other than allowing the U.S. military to use existing facilities on Aruba,

Curacao, and Ecuador, what types of assistance are we receiving from these nations

to fight illegal drugs?

Answer. Together with the Latin American, Caribbean, and European nations, we

are pursuing a regional approach to combat illicit drug production, transportation,

and the associated problems inherent with the narcotics trade.

In addition to the Forward Operating Location agreements, the Dutch, British,

and French contribute surface and air assets to regional counterdrug operations in

the Caribbean. This multinational support provides greater operational flexibility

and complements U.S. and Participating Nation military and law enforcement assets on a continuing basis with maritime air detection and monitoring, at sea refueling, and maritime patrol aircraft.

The nations of the Caribbean and Latin America support the regional counterdrug

effort by conducting both military and law enforcement counterdrug operations

within their borders. They own and operate numerous ground based radars to conduct detection and tracking and they provide the military and law enforcement personnel who are interdicting drugs, eradicating illicit crops, and arresting drug traffickers inside their respective countries. In 1998, nations of the source and transit

zone were responsible for 85 percent of worldwide cocaine seizures and the destruction of 3.1 million marijuana plants and over 38,500 hectares of coca. Additionally,

18 nations in the hemisphere have entered into bilateral maritime agreements with

the U.S. to help each nation plan and conduct multinational air and maritime

counterdrug operations regardless of territorial seas or airspace.
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QUESTIONS SUBMITTED BY SENATOR RICHARD J. DURBIN

COLOMBIAN REVOLUTIONARY ARMED FORCES (FARC)

Question. Are Colombian drug-related guerrillas of the Colombian revolutionary Armed Forces (FARC) still operating in the jungle province of Darien in Panama

and are you concerned that this group may threaten the operation of the Panama

Canal?

Answer. The FARC is reported to frequently cross the Colombian-Panamanian border into the Darien province. Although the Panamanian Public Forces (PPF) are

neither manned, trained, nor equipped to combat them, I do not believe the FARC,

or any other paramilitary group, presents a threat to the safe and efficient operation

of the Canal at this time.

PANAMA UNEXPLODED ORDNANCE

Question. Under Article IV of the Panama Canal Treaty the United States prom- ised to clean up unexploded ordnance in former U.S. military installations. However, I have heard press reports that we are instead planning to close certain areas

rather than clearing the ordnance. Why can’t the ordnance be cleared? Answer. There are former range areas, characterized by steep cliffs and triple can- opy jungles, which are virtually impassable. Ordnance detection and clearing in

these areas is not possible without subjecting personnel to extreme risk or resulting

in significant environmental damage. We used the same techniques and technology to clear our ranges in Panama that we used to clear transferring rangelands in the United States. More aggressive

clearing methods such as clear cutting and excavation have been rejected for the

devastating effect they would have on the forests and the plant and animal species

harbored in these canal watershed areas. The areas that cannot be cleared represent two percent of the total acreage returned to the Government of Panama

under the Panama Canal Treaty. The framers of the treaty realized the range areas could not be completely cleared of all unexploded ordnance, which is why all parties agreed to include the ‘‘practicability’’ clause in the document. We have complied with our treaty obligations consistent with terrain accessibility, technology limitations, and environmental concerns.

DOD FORWARD OPERATING LOCATIONS FOR COUNTERDRUG OPERATIONS

Question. I understand that the United States funds the Regional Counterdrug Training Academy. I would like to know more about this academy. Where is it located/Does it do the same type of training as the Army School of the Americas, at

Fort Benning, Georgia? Is it training military or law enforcement officials? Does the

Academy include human rights training? Does the Academy provide Counter-insurgency training? (Note: The remainder of this question will be addressed by

SOUTHCOM) The Washington Post reported in May 1998 that U.S. special operations forces were training Colombian military units under the Joint Combined Exchange training program. It seems very difficult to conduct counter-insurgency operations when guerrillas and drug traffickers are located in and around civilian populations. Are the special forces providing counter-insurgency training? How is human

rights training integrated? Does this training conform with the Leahy Amendment,

which prohibits training to units that engage in human rights violations? Answer. The Regional Counterdrug Training Academy (RCTA) is located at Naval Air Station, Meridian, Mississippi. The RCTA was established in 1992 and its mission is to provide no cost, ‘‘street level’’ case-making, counterdrug skills to domestic

law enforcement officials. The RCTA is congressionally directed and is funded

through the Department of Defense. The Mississippi National Guard is responsible

for management of the academy and the courses are taught by guest subject matter

experts, with a ‘‘cops training cops’’ environment. The RCTA does not do the same

type of training as the Army School of the Americas, at Fort Benning, Georgia. The

academy’s mission is to train domestic local law enforcement officials in counterdrug

operations, versus the School of the America’s mission to train foreign military

forces in military operations. The RCTA curriculum includes some of the following

general areas: Undercover Investigations, K–9 Training, Drug Labs, Operational

Skills and Raid Planning. The academy has more than 35 courses, all oriented toward domestic local law enforcement counterdrug operations. The curriculum for the

academy is oriented toward domestic law enforcement officials and specifically does

not cover training in human rights or counter-insurgency operations.

One last point, the academy’s original charter was limited to law enforcement officials in the states of Alabama, Louisiana, and Mississippi, but in 1996 was modified
171

to include Georgia. The RCTA is now authorized to train domestic law enforcement

officials outside the four-state region, as well as National Guard personnel involved

in counterdrug support operations.

Question. Is a forward operating location agreement still a possibility in Panama?

If not, what additional location is Central America is DOD seeking?

Answer. At this time, there are no plans to re-engage the Government of Panama

on the topic of U.S. military access. DOD will comply fully with the provisions of

the 1977 Panama Canal Treaty and will withdraw all military forces and turnover

facilities in Panama by December 31, 1999. DOD and the State Department are coordinating efforts to identify a location for a FOL in Central America however no

site has yet to be identified.

CONCLUSION OF HEARINGS

Senator STEVENS. If there is nothing further, this will conclude

the hearings for both the Defense Subcommittee and the Military

Construction Subcommittee.

[Whereupon, at 11:25 a.m., Wednesday, July 14, the hearings

were concluded, and the subcommittees were recessed, to reconvene

subject to the call of the Chair.]
(i)

LIST OF WITNESSES, COMMUNICATIONS, AND

PREPARED STATEMENTS

Page

Apgar, Mahlon, IV, Assistant Secretary of the Army (Installations and Environment), Department of the Army, Department of Defense .......................... 71, 74

Prepared statement .......................................................................................... 77

Questions submitted to .................................................................................... 103

Baillie, Frederick N., Executive Director of Resources, Planning, and Performance, Defense Logistics Support Command, Defense Logistics Agency, Defense Agencies, Department of Defense ............................................................. 39

Prepared statement .......................................................................................... 52

Questions submitted to .................................................................................... 65

Burns, Hon. Conrad, U.S. Senator from Montana:

Opening statement ........................................................................................... 1

Prepared statement .......................................................................................... 72

Questions submitted by ................................................. 30, 65, 66, 103, 128, 164

Statement of ...................................................................................................... 137

Carrato, Rear Adm. Thomas F., PHS, Chief Operating Officer, Tricare Management Activity, Defense Agencies, Department of Defense .......................... 39

Questions submitted to .................................................................................... 64

Craig, Hon. Larry, U.S. Senator from Idaho:

Prepared statement .......................................................................................... 95

Statement of ...................................................................................................... 95

Demesme, Ruby B., Assistant Secretary of the Air Force, Manpower, Reserve

Affairs, Installations and Environment, Department of the Air Force ........... 113

Prepared statement .......................................................................................... 114

Questions submitted to .................................................................................... 128

Durbin, Hon. Richard J., U.S. Senator from Illinois, questions submitted

by ........................................................................................................................... 170

Helmly, Brigadier General James R., Deputy Chief, Army Reserve, Office

Chief, Army Reserve, Department of the Army, Department of Defense ....... 71

Higginbotham, Maj. Gen. Geoffrey B., USMC, Deputy Chief of Staff for Installations and Logistics, Headquarters Marine Corps, Department of the Navy,

Department of Defense ........................................................................................ 1

Hunter, Major General Milton, Director of Military Programs, U.S. Army

Corps of Engineers, Department of the Army, Department of Defense .......... 71

Hutchison, Hon. Kay Bailey, U.S. Senator from Texas, questions submitted

by ........................................................................................................................... 31

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

Koepp, Col. Richard R., Director, Installations and Logistics, Office of Air

Force Reserve, Department of the Air Force, Department of Defense ............ 113

Lupia, Maj. Gen. Eugene A., Headquarters, USAF, the Civil Engineer, Deputy

Chief of Staff, Installations and Logistics, Department of the Air Force,

Department of Defense ........................................................................................ 113

Questions submitted to .................................................................................... 131

McCalls, Thomas W.L., Deputy Assistant Secretary (Environment Safety and

Occupational Health), Department of the Air Force, Department of Defense ...................................................................................................................... 113
Page

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McGinn, Gail H., Acting Deputy Assistant Secretary of Defense, Defense

Logistics Agency, Defense Agencies, Department of Defense .......................... 39, 42

Prepared statement .......................................................................................... 44

Questions submitted to .................................................................................... 66

McKinley, Brig. Gen. Craig R., Director, Air National Guard, Department

of the Air Force, Department of Defense ........................................................... 113

Murray, Hon. Patty, U.S. Senator from Washington:

Prepared statements........................................................................................ 17, 73

Questions submitted by ................................. 34, 63, 66, 73, 111, 130, 131, 167

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

Prepared statement .......................................................................................... 4

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

Slocombe, Hon. Walter B., Under Secretary of Defense (Policy), Department

of Defense ......................................................................................................... 133, 147

Prepared statement .......................................................................................... 149

Smith, Rear Adm. Louis M., Commander, Naval Facilities Engineering Command, Department of the Navy, Department of Defense ................................. 1

Squier, Brigadier General Michael J., Deputy Director, Army National Guard,

Department of the Army, Department of Defense ............................................ 71

Stevens, Hon. Ted, U.S. Senator from Alaska:

Opening statement ........................................................................................... 133

Questions submitted by .......................................................... 33, 64, 65, 111, 130

Statement of ...................................................................................................... 18

Suggs, Rear Adm. Ralph E., USN, Deputy Commander in Chief, U.S. Special

Operations Command, Defense Agencies, Department of Defense .................. 39

Prepared statement .......................................................................................... 40

Questions submitted to .................................................................................... 63

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

Navy, Department of Defense ............................................................................. 1

Van Antwerp, Major General Robert L., Jr., Assistant Chief of Staff for

Installation Management, Department of the Army, Department of Defense ...................................................................................................................... 71

Wilhelm, Gen. Charles E., Commander in Chief, U.S. Southern Command,

U.S. Marine Corps, Department of Defense ...................................................... 133

Prepared statement .......................................................................................... 143

Statement of ...................................................................................................... 139
(iii)

SUBJECT INDEX

DEPARTMENT OF DEFENSE

DEFENSE AGENCIES

U.S. SPECIAL OPERATIONS COMMAND

TRICARE MANAGEMENT ACTIVITY

DEFENSE LOGISTICS AGENCY

PERSONNEL SUPPORT, FAMILIES AND EDUCATION

Page

Additional committee questions ............................................................................. 63

Bangor Elementary School ...................................................................................... 57

Department of Defense education activity (DoDEA) facility requirement .......... 43

Distribution space .................................................................................................... 62

DLA:

Fiscal year 2000 Milcon program .................................................................... 52

Privatization ..................................................................................................... 62

DOD:

Child care requirements .................................................................................. 58

Fuel system replacement ................................................................................. 61

School eligibility ............................................................................................... 61 Fiscal year 2000: Advanced appropriation ................................................................................... 56

Medical Milcon program .................................................................................. 48 Incremental funding ................................................................................................ 55

Medical facility in South Korea .............................................................................. 59

Personnel support, families and education ............................................................ 39

Special Operations Command (SOCOM) ............................................................... 40

Tricare response time .............................................................................................. 60

DEPARTMENT OF THE AIR FORCE

Additional committee questions ............................................................................. 128

Environmental cleanup ........................................................................................... 122

Overseas military construction ............................................................................... 123

Military housing ...................................................................................................... 125

One-plus-one ............................................................................................................ 125

Malmstrom Air Force Base ..................................................................................... 127

DEPARTMENT OF THE ARMY

Additional committee questions ............................................................................. 103

Family housing privatization ................................................................................. 97, 99

Pilot programs .......................................................................................................... 97

Incremental funding ................................................................................................ 99

Barracks modernization .......................................................................................... 100

Milcon funding—chemical demilitarization ........................................................... 101

Competitive sourcing ............................................................................................... 102

DEPARTMENT OF THE NAVY

Additional committee questions ............................................................................. 30

Barracks ................................................................................................................... 20
Page

iv

Barracks—Continued

Funding ............................................................................................................. 22

Base realignment and closure [BRAC] .................................................................. 12, 26

Demolition program ................................................................................................. 27

Incremental funding................................................................................................ 19, 23

Infrastructure:

Budget in Perspective, the ............................................................................... 5

Efficiency Efforts .............................................................................................. 15

Marine Corps demolition program ......................................................................... 29

Milcon funding levels ............................................................................................... 25

Navy budget overview ............................................................................................. 3

Puget sound projects ................................................................................................ 25

Quality of life ........................................................................................................... 29

Retention and recruiting ......................................................................................... 22

DEPARTMENT OF DEFENSE

FORWARD OPERATING LOCATIONS (FOL) FOR COUNTERDRUG OPERATIONS

Additional committee questions ............................................................................. 164

Aruba and Curacao operations ............................................................................... 156

AWACS ..................................................................................................................... 141

Retractable over the horizon radar ................................................................. 159

Deployments ............................................................................................................. 152

Reduction in ...................................................................................................... 148

Emerging threats ..................................................................................................... 135

Five-year projection ................................................................................................. 161

Food safety ............................................................................................................... 136

Force protection ....................................................................................................... 158

Forward operating locations (FOLs) ....................................... 136, 140, 147, 153, 157

Concept .............................................................................................................. 154

Cost .................................................................................................................... 151

Deployments, reduction in ............................................................................... 148

Funding concerns .............................................................................................. 162

Infrastructure costs ................................................................................................. 134

Locations, consideration of alternate ..................................................................... 156

Military construction funding ................................................................................. 133

Military facilities, new ............................................................................................ 133

North American Free Trade Agreement ................................................................ 137

Post Panama theater architecture ......................................................................... 139

Reprogramming ....................................................................................................... 138

Retention .................................................................................................................. 155

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