Segment 3 Of 3 Previous Hearing Segment(2)
SPEAKERS CONTENTS INSERTS Tables
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H.R. 1778
House of Representatives,
Committee on National Security,
Washington, D.C., Tuesday, June 17, 1997.
The committee met, pursuant to call, at 10:10 a.m. in room 2118, Rayburn House Office Building, Hon. Floyd Spence (chairman of the committee) presiding.
OPENING STATEMENT OF HON. FLOYD D. SPENCE, A REPRESENTATIVE FROM SOUTH CAROLINA, CHAIRMAN, COMMITTEE ON NATIONAL SECURITY
The CHAIRMAN. The meeting will please be in order.
This morning, the committee meets again on the issue of defense reform to receive testimony on H.R. 1778, the Defense Reform Act of 1997. This legislation was introduced 2 weeks ago and was reported out of the committee last week.
The imperative to reform how the Department of Defense conducts its business has never been greater. Defense spending has suffered a real decline for 13 consecutive years. At the same time, the Department of Defense is facing billions of dollars in readiness, quality of life, and modernization shortfalls. In this context, reforming the Department's bureaucracy and the manner in which it conducts its business goes beyond just making the Department more efficient; it may represent the only viable option for retaining an adequate level of combat capability into the future.
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Much of H.R. 1778 depends on past committee initiatives to reform the Department of Defense, and it contains a number of organizational, business practice, and policy reforms intended to compel the Department of Defense to operate more efficiently.
According to the Congressional Budget Office, just the provisions of H.R. 1778 dealing with downsizing the bureaucracy will save $15.5 billion over the next 5 years and $5 billion per year thereafter. This does not include any savings resulting from the various business practice and acquisition reforms contained in the bill. It is real reform with the promise of real savings.
As I noted during the full committee markup last week, this legislation proposes action on several fronts. First, it addresses work force reductions. Over the past several years, the committee has focused attention on the disproportionate size of the work force assigned to the Office of the Secretary of Defense, headquarters staff, and acquisition organizations.
Second, the bill also recognizes that there are many commercial functions which are currently performed by the Department which are neither inherently governmental nor directly related to the warfighting mission.
Accordingly, H.R. 1778 imposes business practice reforms by mandating a number of commercial activities of the Department such as finance and accounting, information services, and property disposal be competitively procured. It does not mandate privatization, just competition. And in recognition of the fact that the private sector is not always more cost effective than the public sector, the bill ensures that the existing work force will be able to compete.
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H.R. 1778 also addresses modest but long overdue environmental reform. Notwithstanding the fact that the Department of Defense budget contains approximately $12 billion each year to pay for cleanup costs of the Departments of Defense and Energy, actual cleanup is proceeding far too slowly and inefficiently.
H.R. 1778 amends Superfund and other environmental laws to provide more rationality and efficiency in the Department of Defense environmental cleanup effort while still ensuring protection of human health and the environment.
However, in order to simplify the political landscape, let me state that it is my intention to separate the environmental provisions from the more traditional defense reform provisions of H.R. 1778 and that I would ask the Rules Committee to consider the environmental provisions as a separate amendment.
Because these environmental provisions fall within the primary jurisdiction of the Commerce and Transportation Committees, whether or not they are made in order is a matter that will have to be made and decided at the leadership level in the Rules Committee.
I also believe that separating out the environmental provisions will keep the obvious controversy that surrounds them from spilling over into the defense organizational and business practice reforms. I recognize that the Department of Defense is beginning to appreciate the imperative to reform how it operates, and I commend Secretary Cohen for apparently looking seriously at defense reform. However, the results of Secretary Cohen's review will not be known until late in the year, and I do not believe that the Congress can or should wait that long.
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As I indicated during the markup last week, nothing in this bill should hamper Secretary Cohen's efforts. Rather, H.R. 1778 should provide impetus for any reforms under consideration by the Secretary.
Today's witnesses will appear before us in three panels. The first panel will consist of Noel Longuemare, Acting Under secretary of Defense for Acquisition and Technology; and Sherri Goodman, Deputy Undersecretary of Defense for Environmental Security.
The second panel, which will focus on infrastructure and business practice reform, consists of Mr. Butch Hinton, Assistant Comptroller General, the General Accounting Office; Dr. Dov Zakheim, CEO, SPC International Corp., former Deputy Under Secretary of Defense for Planning and Resources; and Mr. John Sturdivant, president of the American Federation of Government Employees, AFL–CIO.
And the third panel will focus on environmental issues and consists of Gail Norton, attorney general, the State of Colorado; Mr. John Spisak, president and CEO, Terranext Corp., Lakewood, CO; Mr. Larry Hourcle, associate professor of environmental law and director of environmental law programs, George Washington University National Law Center.
Before we begin, let me recognize my distinguished colleague, Mr. Dellums. But I neglected to mention, of course, we have Mr. Hamre, who will lead off the first panel, and we welcome him this morning, too.
Mr. Dellums, do you have any comments to make?
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STATEMENT OF HON. RONALD V. DELLUMS, A REPRESENTATIVE FROM CALIFORNIA, RANKING MEMBER, COMMITTEE ON NATIONAL SECURITY
Mr. DELLUMS. Thank you very much, Mr. Chairman and members of the committee.
I listened very carefully to your opening remarks, and I would like to join you in welcoming our distinguished witnesses to the hearing today. I look forward to their contribution to the debate on the bill, H.R. 1778, the Defense Reform Act of 1997.
Mr. Chairman, I do not wish to take a great deal of time at the outset, especially since we have precious little time to address the broadly divergent matters contained in this bill. With the distinguished witnesses we have here today, we have an opportunity to gain insight from them regarding their views on the long-term implications of what has been developed thus far.
As you recall, Mr. Chairman, my commitment was to work with you to create a product that we could put before the committee and the public, as well as other committees of jurisdiction, for their assessment and hopefully for their help in developing a consensus package that we could bring to the floor of Congress as an amendment on the bill, H.R. 1119, the defense authorization bill. I made that commitment despite some concerns with elements of the proposed package and in light of my responsibility to carry such a dialog forward on behalf of this side of the aisle.
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Since the introduction of H.R. 1778, my staff and I, along with a number of my colleagues on both sides of the aisle, have received serious objections from many quarters on process and content.
In addition, the White House, the Department of Defense, the Department of Energy, the Environmental Protection Agency, and many State attorneys general, environmental and labor groups have raised objections, both in much of the substance of this package and the process by which it was developed.
One major process concern remains the relative lack of public stakeholder participation in the development of the legislation. Moreover, members here on the committee, as you know, have complained about how little time they had to study specific elements of the bill before they were asked to commit themselves to its provisions. This hearing, which I recommended, along with others, and you agreed to, is a first step in addressing this concern.
One of the major areas of concern revolves around the environmental title, and you indicated your desire to separate that out as a separate item to come to the floor.
In that regard, I am pleased to note that we have the State attorney general of Colorado, the Hon. Gail Norton, here today to address the impact of these specific provisions on State and local governments, and I look forward to her contribution.
An extension, Mr. Chairman, of my concern about the process is the ability of members to use the knowledge acquired in this hearing to evaluate the provisions and prepare well-thought-out amendments to the underlying bill. According to the existing schedule, as we speak, Mr. Chairman, all amendments must be submitted to the Rules Committee no later than noon today. Having amendments due before this hearing is over is certainly not regular order and seriously disadvantages the members of this committee.
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During the committee mark, I mentioned that in my capacity as a representative from California, I certainly was unable to support the bill as drafted. The en bloc amendments accepted at the mark were insufficient to change that position. But I look forward to this hearing and learning what further steps might be taken to improve this legislation. And in that spirit and in that regard, Mr. Chairman, and with those remarks, I look forward to the testimony of the witnesses and I yield back the balance of my time.
The CHAIRMAN. I thank the gentleman.
Again, I apologize for not recognizing Dr. John Hamre, my good friend, the Undersecretary of Defense, and to lead off——
Mr. DELLUMS. Mr. Chairman, we just learned a minute ago that for this committee now, the Rules Committee has backed that up to 4 p.m. So there is some addition of time.
The CHAIRMAN. I see. Good. Thank you.
Dr. Hamre, you can proceed as you like. We can have your remarks submitted for the record, and you can proceed however you like.
STATEMENT OF JOHN HAMRE, UNDER SECRETARY OF DEFENSE, COMPTROLLER
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Secretary HAMRE. Thank you very much, Mr. Chairman. We are very pleased to be invited to be here today.
There is also some controversy associated with any hearing, of course, and listening to the opening statements today, my sense is, there is probably a little more controversy with this one than maybe some other hearings. I think it is probably valuable then for us to begin to say what we all agree on, and I think that there is a lot of agreement in this room today, agreement among all of you and, frankly, agreement with us.
Secretary Cohen and I appreciate your very generous words about Secretary Cohen, Mr. Chairman. Secretary Cohen has said we will become more efficient and we will be downsizing and tackling some tough issues in the Department, and I think there is strong agreement that we need to do that. I know of no one on either side of the aisle or on either side of these tables that disagrees that we need to be looking very hard at ourselves. That was one of the issues that came out of the Quadrennial Defense Review.
And the Secretary decided early on that there wasn't going to be enough time, while he was tackling the big issues—you know, how large should our nuclear forces be? How much of our forces should we station overseas? What should we have as a rotation policy?—very large, substantial questions, and in the context of that, there wasn't enough time to be tackling issues that are important but secondary in nature, such as the support structure that we have. And so he deferred that, and he said we will tackle that after we get done with the big review.
He came forward, reported that to you, and we are now in the process of looking now at these followup issues. I am here today because I was asked by him to head that effort up inside the Department. And there are two paths that we are under in doing that.
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The first is, the Secretary created a task force on defense reform. That panel is meeting. They are talking widely to people both inside the Department and out, and I know they have been talking with your staff and with members here.
And then we have, paralleling that, some business process changes that we have launched very much with the help and support of Noel Longuemare, who is sitting with me today, looking at crosscutting issues that are business process issues, and we strongly agree that we need to do that, and we take the legislation that you have written in that spirit.
There is an awful lot in this legislation that we agree with.
I would say that one thing I have learned is that we can't get this done by ourselves in the Department, and you, frankly, can't get it done without our being partners. So the bottom line is, we all need to come together on an agenda, when it is all said and done, and I take this hearing to be a part of that.
There is going to be controversy in this hearing, but I know that there is unanimity in what we are all trying to do, and we support what you are doing. We thank you for what you are doing, and I would ask that some of the comments that I make later on, which may sound critical, are really not criticism of what you are trying to accomplish, the goal we all understand and agree with.
Let me first begin by saying, what are the things that we do agree with? And there are lots of things in that legislation that we do agree with. Sections 201 through 206 call for expanded competition in support services, and we think that is a good idea. I think that we will have some implementation issues with you that we would want to explore, but we think that that is a step in the right direction.
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Section 223, you call for conveying public utilities, the authority for the Secretary to convey to public utilities, or other entities, utility functions on post, camp, and station. We think that is a good idea.
You call, in section 403, for repeal of contractor guarantees, and we think that is a good idea. We think that contractor guarantees are appropriate but they ought to grow out of an acquisition strategy rather than being mandated through legislation.
Section 404, you call for an expanded use of micro purchases and the use of the impact card, and we strongly agree with that. We think that is a move in the right direction as well.
Section 405, you call for simplified procedures for commercial item procurement. That, too, we think is a great idea. We thank you for that.
Section 101 and 102 we will probably have some disagreement with you on, but it is calling for reductions in headquarters and in OSD. And, frankly, we think we need to do that as well. We will probably differ on the size and the magnitude and the pace, but we don't disagree that there can be downsizing and should be some downsizing.
So as I said, there is an awful lot in this legislation that we really do agree with you on.
Now, there are some other parts of the bill that, frankly, we think that there are some problems with, and, first of all, I would like—I put these in three categories.
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First, I would say there are some items of the legislation in here that there are internal contradictions in the bill as it is currently written.
Sections 201 through 206, as I mentioned, deal with expanding competition for various services, yet sections 212 and 213 make competition more difficult the way it is written now, and, you know, we are a little confused in reading it. If you want expanded competition, then I think we need to tackle the way 212 and 213 are written, because they will actually make it harder.
Section 223, you call for privatizing utilities, and, as I said, we think that is a good idea. Yet in section 402, you basically tell us to create a Government utility for telecommunications that is inside the Government rather than in the private sector.
We really think there is an internal contradiction here. We don't have any disagreement with you that we ought to expand the use of fiberoptics, but we frankly think that ought to be in the private sector, just as is your call for putting utilities in the private sector.
Section 211 basically eliminates A–76 requirements and creates a new performance work statement requirement which would function like the A–76 process. And so while you would eliminate it there, yet you toughen A–76, the underlying statutory basis for A–76, in section 212. So there are some inconsistencies here that need to be worked out.
And then, sections 501 through 509, you create a new commission, and yet in section 408 you repeal all commissions.
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So I think that we need to get kind of an understanding on these, where there are internal contradictions in the bill as it is currently written.
I know how legislation is written. I am not being critical. I worked on the Hill for 11 years and I know that there is a lot of give and take, and it is sometimes hard, especially when you are under a fast pace, as I know you have been, to be able to work those things out. But these are some things that need to be ironed out.
A second area where we have some concern, and that is, there are certain provisions as they are currently written which are basically unexecutable in their current form. Let me give you some examples. Section 102, you call for cutting the acquisition work force by 15 percent in 1 year. That just can't get done. When you have to follow the ground rules for due process for civil servants, even with the expedited benefits that you provide or the enhancements that you provide, we can't accomplish anything like that. Even if it were a good idea, and I am going to defer to Mr. Longuemare to be able to talk to you about whether that is a good idea, the magnitude and the pace, but it just physically can't get done.
Section 201, you call for DFAS, and in section 203, DISA, for them to open up to competition for their services, and, as I said, we think that is a good idea. You specify in the law that that be done within 16 months. Yet, section 211—or, excuse me—212 tightens up the A–76 process which right now takes 24 months. I mean, we can't just physically do it under the timetable that you have in the legislation the way it is currently written.
Section 211 actually would step us backward if we are trying to do competition, because section 211, as it is currently written, requires that we do competitive evaluation on an installation and function basis.
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So, for example, if I wanted to propose to compete all accounting services for the Air Force, I couldn't do it under section 211 because I have to break it into every individual base. So, I mean, we need to work those sorts of things out. There are these contradictions.
Section 221, you call for reducing, so that the overhead function for inventory control points not exceed 8 percent of the value of what they are managing. And I understand that as a management tool. I know that that is something that companies will do.
We are very different, because a lot of the value of the inventory is there for wartime, and you have got to keep it for wartime, and you simply can't get rid of the inventory by having a fire sale like Land's End would. You know, if those plaid-checked sports coats didn't sell, you know, mark them down and get rid of them.
The problem is, we can't do that if it is spare parts for engines. So you are going to have this inventory that is a large value, and if we can only have 8 percent of the administration of that, yet you still need people that are managing each individual item to make sure they are available at the flight line.
I mean, we have 2 million items that are under management control, and an arbitrary goal of a percent here just really can't be executed. We do think that it is perfectly fair for you to put other performance goals on us in this area, but probably not this one.
Finally, we think that there are a couple of provisions that we really would ask you to rethink. And, for example, we think that your section 407 that deals with investigations and audits, we would ask you to think about this one again, if you wouldn't mind.
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I am joined here today by Don Mancuso, who is the deputy inspector general for the Department of Defense, in case there are technical questions that I can't answer.
Our concern here is that 2 years ago you put in law direction for us to set up a better mechanism for coordinating investigations, criminal investigations. We think we have done that. We actually think it is working fairly well, and we think this legislation actually would be a step backward, introducing more controversy than—that we don't currently have because we have worked things out.
We also think that the legislation, as currently drafted, really is in some tension, if not conflict, with the underlying act that created the inspectors general, and we need you to look at that. I think that—I would ask you to take a look at that piece, if you would.
Finally, section 105, this deals with TRANSCOM, and there is a lot of—I know there has been an awful lot of conversation with you all over the last 4 or 5 days about TRANSCOM.
Let me just say, I have looked at a lot of business management thing that are going on. Pound for pound, there is not a unified command anyplace that has done more in reengineering than has TRANSCOM. They really have bent over backward to try to get at a lot of the structural inefficiencies that they inherited when TRANSCOM was created. And I think we are a little disappointed in this, and I think we would like to sit down with you all and try to work some of this out, because we really think—I know this for a fact—General Cross is absolutely committed to do exactly what you are asking for in spirit, but the way it is currently drafted will really complicate his ability to do his job.
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For example, you target the reductions to people that are involved in contracting, finance, supply management, things of this nature. Those are exactly the people you are going to need. If there is a contingency and you have to quickly get to Bosnia or you have to quickly get to Somalia, you need people who can go out and quickly place orders, contracts for lift.
And to simply say we ought to get rid of all those people, I know what you are trying to do, and I agree with what your underlying goal was, which was to protect the combat delivery capability in TRANSCOM and to try to get it out of the support structure, but it turns out this part of the support structure is needed to do the combat delivery piece. So we need you to look at that, please.
Now, there are two other areas, and I would like to defer to my colleagues. I know our time is short, but I would like to defer to my colleague, to Noel Longuemare, to talk about the acquisition work force. I know there is this very catchy phrase, ''an army of shoppers,'' but we need to talk with you about it, and I would like to defer to Noel, and, after that, defer to Sherri Goodman to talk about the environmental pieces.
Thank you, sir.
The CHAIRMAN. Noel.
STATEMENT OF R. NOEL LONGUEMARE, ACTING UNDER SECRETARY OF DEFENSE FOR ACQUISITION AND TECHNOLOGY
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Mr. LONGUEMARE. Thank you, Mr. Chairman.
Quite frankly, we are quite concerned about the proposed work force reductions that exist in H.R. 1778. What perhaps is not well known completely is the fact that we have actually been reducing by a very substantial amount. In fact, we have come down over 40 percent in our acquisition work force since 1989. We will be down some 50 percent by the year 2000, according to our present plan. So we believe that we have responded quite well to the overall reduction. In fact, if you look at the rates of change, we have come down faster in our acquisition work force than the military has come down in their force structure.
At the same time, we have been making some massive changes and improvements in our acquisition process. We have streamlined our initiatives. We have gotten rid of MILSPEC's, replaced them with performance specifications. We have focused on costs. All these have made measurable and very significant improvements in efficiency. They have also actually added to the workload of the acquisition work force, because many of these things are new. We have a lot of new things that have to be addressed, and the work load has actually gone up instead of down for the acquisition people.
As you well know, during the same period, we have now been focusing on the need to modernize. From the period of 1989 down, we were actually able to live off the reserve that was there because of the cold war, the inventory that we had. That, as you know, is now over. We now must focus on modernization. So we are now in the process of building up our acquisition and new products for our warfighter.
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The acquisition system, quite frankly, is starting to strain under all of this. We have come down by a large number. We are making massive changes in the way people do business, and there is a certain rate beyond which the system just has a hard time assimilating these changes and bringing them into focus.
I would point out that there are two primary functions of our acquisitions system. First and foremost, it is to provide the best possible products, equipment, to our warfighters. That is of paramount importance to us. In addition, we also have to safeguard the taxpayers' investment. And those are two very key and distinct functions.
I am quite concerned that if we proceed to further reduce the acquisition work force in a precipitous way, we will now be unable to fulfill those two primary missions. We are going to have some things break, and I think that would be a serious problem to all of us.
H.R. 1778 mandates a 15-percent reduction in 1998; that is 40,000 jobs involved. There is another 17-percent reduction the following year; that is another 40,000 jobs, for a total of a 32-percent reduction in 2 years. Mr. Chairman, that is too fast a rate for us to be able to handle in a short period of time, and we are very concerned about the potential impact on this. These cuts would be very difficult to accomplish in the short period of time, but the consequences would be even more severe, in my judgment.
Mr. Chairman, as John Hamre mentioned, the Secretary of Defense is totally committed to modernizing our forces and finding every possible way to improve efficiency. So we have every motivation to want to reduce the work force as appropriate. But what we must do is to accomplish this in a controlled way, in a manner that we can, at the same time as we are reducing the work force, continue to do our very important job, and that, in my judgment, is the key issue involved here.
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I would like to recommend that we continue to work together and jointly approach this in a way that we can reduce our work force in a measured and appropriate manner that will improve the efficiency but also avoid the dislocations that might come about from too fast a push.
The CHAIRMAN. Thank you.
Ms. Sherri Goodman.
STATEMENT OF SHERRI GOODMAN, DEPUTY UNDER SECRETARY OF DEFENSE FOR ENVIRONMENAL SECURITY
Ms. GOODMAN. Thank you, Mr. Chairman and members of the committee. Thank you for giving me the opportunity to appear before you today.
In defense, we are strong advocates of responsible environmental reform, and we have worked closely with this committee over a number of years to achieve important environmental reforms. Indeed, we have worked with other committees, but particularly this committee.
For example, in fiscal year 1996, we worked closely with the House and Senate defense committees to pass important environmental legislation affecting our closing bases that speeds cleanup and allows the Department to enter into long-term lease agreements, facilitating base reuse.
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Last year, with bipartisan support in the House and in the Senate and with strong backing from the administration and the Department of Defense, Congress authorized the devolvement of the defense environmental restoration accounts to the military departments for improved management, and also provided authority to allow the transfer of contaminated Federal property before completion of the cleanup remedy, which, as you know, can sometimes take some time to achieve.
The Department of Defense, working closely with Congress, has also obtained from Congress a clarification of the meaning of uncontaminated property to speed land transfer, and you have provided authority to withhold listing on the National Priority List of DOD sites that are already in a successful cleanup program under other laws.
The point of these examples is to show the significant progress made on environmental reform with this committee working together with the Department of Defense. We have been working hard since I came to the Department to make our environmental programs, our cleanup and compliance programs, better, faster, and cheaper.
And indeed, Mr. Chairman, while you noted in your opening statement that cleanup proceeds sometimes slowly and inefficiently, I would note to you that we now invest over 70 percent of our cleanup dollars in actual cleanup. We are beyond the study phase, and we are moving fairly expeditiously today. In fact, we like to think of our motto for our defense environmental programs as being lean, mean, and green.
Now, it is important to recognize that the reason important environmental reforms such as the ones that this committee included in the defense authorization bill last year were able to be included was because we had a bipartisan approach which involved all interested stakeholders, recognizing that in the environmental area there are always many outside of the Government who are interested and active participants in environmental reforms, including affected agencies and other committees. As you recognized, there are other committees that claim jurisdiction of our Nation's key environmental laws.
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Now, on H.R. 1778, we have not had the time to have that process to involve all the stakeholders and other committees yet, and while there is much common ground, in our views of environmental reform, we must non-concur on most of the provisions in title III.
We hope the Superfund reform provisions in title III, particularly sections 301 to 312, signal the start of a fully formed process which will incorporate the views of community stakeholders and other relevant congressional committees while recognizing the importance of the administration's principles of Superfund reform in this overall action, and we indeed support Superfund reform through a fully inclusive process.
Title III also contains a provision that would address the Clean Air Act standards for military sources. And, as many of you know, EPA has proposed to make changes to the national ambient air quality standards for ozone and particulate matter. We indeed have concerns with how these proposed standards would affect Department of Defense military operations.
Section 314 would not provide the majority of protections that the Department of Defense needs in this regard or has obtained in the past from EPA. But we have been working very closely with all the Federal agencies, particularly with EPA, on these proposed rules, and I am pleased to be able to note today, Mr. Chairman, that the administrator of EPA has just written to the Secretary of Defense, in a letter I would like to introduce here today, providing assurances to the Department of Defense on the major issues we do have on the Clean Air Act proposals for ozone and particulate matter.
[The letter can be found in the appendix on page 385.]
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Ms. GOODMAN. As you know, Mr. Chairman, the storage and transportation of military munitions is of great interest to the Department of Defense. Section 315 seems intended to create a congressional stamp of approval to the munitions rule promulgated by the Environmental Protection Agency earlier this year. That rule was developed by EPA in consultation with the Department of Defense, and DOD believes that it is a good rule and that it is a rule fully supported by both the facts and existing law.
Not all parties to the rulemaking share this view, and the rule is in litigation right now. As such, I cannot discuss this in detail today. However, the Department of Defense would be happy to work with you and with your staff and other agencies on this particular provision.
Mr. Chairman, I want to thank you for the opportunity to speak with the National Security Committee today. We want to pursue meaningful reform with this committee and to continue the historical progress that we have made. I value our close working relationship. I believe it must continue.
I commend the House National Security Committee for entering this debate, and I believe it should be made a more integral part of the overall Superfund reform process. And I have received a commitment from the EPA and the Council on Environmental Quality that they will more fully incorporate the committee staff, the House National Security Committee staff, into the deliberations here on Superfund reform, and I believe that will be an important part of being able to achieve meaningful reform.
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Mr. Chairman, I thank you for the opportunity to appear before you today.
The CHAIRMAN. Thank you very much.
Secretary HAMRE. Mr. Chairman, may I make one comment?
The CHAIRMAN. Yes.
Secretary HAMRE. I forgot to mention this as one of the things I need to ask you to look at. I skipped over it.
Your section 408 tells us to take basically a zero-based look at all commissions and boards. I think that is a good idea. We probably do need to do that. But there is one part of it that we don't think is a good idea. Basically, you say in there that the Secretary cannot create another commission without getting legislative approval to do that.
Just a week ago, the Secretary, in the whirlwind of controversy that surrounded General Ralston's nomination, decided we needed to take a fresh look at our policies and mores as it relates to sexual conduct in the military, and he asked Senator Kassebaum to head up a commission to do that.
If we were subject to this legislation, we would either have to wait a year to get it enacted and things like that. The Secretary really needs the ability to create commissions to help him on important issues that come up like that, without waiting for legislation to do it. So I would ask you to take a look at that one, too.
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Thank you, sir.
The CHAIRMAN. Any questions of the panel?
Mr. Skelton, you don't have any questions?
Mr. DELLUMS. I am reserving at this time, and I would allow other members to ask, and then I will come back, Mr. Chairman.
Mr. SKELTON. First, thank you, all three, for your testimony.
I am, as a result of your earlier comments, Mr. Hamre concerned in general with the fact that some of the sections seem to contradict the others. We appreciate, I appreciate—I know others do—your pointing them out to us. Hopefully, we can correct those before it hits the floor—hopefully.
But should some of these be enacted, I am sure the people in the Pentagon and elsewhere would see the conflict, and they would say, ''Can't those people in Congress either read or write?'' And that causes me concern, because this committee will have its fingerprints all over this bill.
What we are trying to do, I think, is really, really good, and I think you would agree with that. So thank you for your comments. I do have concerns about those apparent conflicts, and I hope the staff will take your suggestions seriously.
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I do have a point in question, Mr. Hamre. General Cross of the Transportation Command has contacted me, and I suppose because it is close to Missouri, across the river from us. In section 105—and you have touched on this briefly in your testimony of this bill, statutory mandates, personnel mandates—excuse me—personnel reductions have been mandated.
And I ask you, in a more detailed fashion, could you discuss that, because it appears to me that this may create an unintended consequence. Though I think this, along with other areas, we should downsize, downsize correctly, I do note that this particular command has been singled out, and I would appreciate a full discussion on this by you, if you don't mind, sir.
Thank you.
Secretary HAMRE. Mr. Skelton, thank you.
I have had a limited conversation with General Cross, and I have met with some of his very able staff over the last couple of days.
I, too, share a bit of concern that this would be the only unified command where we put a personnel cap in law. I mean, I don't think we have done that before, and I am not sure that is a good idea.
I understand what the committee is trying to do. The committee is trying to press the command and the Department to rationalize the underlying structure that makes up all the complexity of the transportation community.
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Ironically, General Cross, that was his personal mission when he went out to TRANSCOM, was to do exactly that same thing. I think you ultimately need to leave it to the commanders, if they are capable and competent and committed to the same goal you are, to try to find the best way to accomplish that.
And General Cross has done some remarkable things. Between the 1993 base and 1997, there are going to be 13,000 people coming out of the transportation community through efficiencies. He is, for the first time, bringing together all of the computer systems into an integrated transportation network. It is a very complicated enterprise, and it is the enterprise that we rarely think about, but it is the one that puts combat power in a theater.
I think you really need to sit down with him and get a full appreciation of what he has done and the vision he has—if you disagree with the vision, fine. Then I think that is fair game to be working out. I honestly don't think you would. I really think you would really embrace what he is trying to do. I think he really has a good handle on it. I really would ask you to think about that.
I would have to defer to him as to all of the details of what he has been doing, but I know from the externalities, just looking at his budget, he saved over $700 million over the last 3 years through downsizing and reform. So this is a commander and a command that has done an enormous amount in downsizing, and I think that that ought to be the starting point, to recognize what he has done.
Mr. SKELTON. Thank you so much.
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The CHAIRMAN. Mr. Stump.
Mr. STUMP. Thank you, Mr. Chairman.
Doctor, thank you, and the rest, for appearing today and for your testimony. I have one quick question I would like to ask Ms. Goodman, if I may.
You said that 70 percent of your dollars, I believe, were committed from that which you have been allocated for cleanup? Or is that 70-percent cleanup minus legal work? Or both?
Ms. GOODMAN. In our cleanup program, Congressman, we devote over 70 percent of the funds that you provide for the Defense Environmental Restoration Account to actual cleanup, remedial—design and remedial action, the dirt-moving activities or containing contamination, as opposed to the analyses and studies that occur before you can actually do the cleanup. And that is a sign that the cleanup program at Defense is in a more mature phase now.
We are actually out there either removing contaminants or containing the sources of the contamination to protect public health and the environment.
Mr. STUMP. I guess what I am really getting at is, how much of that money has been used for legal work? Is there any way of telling me that?
Ms. GOODMAN. Yes. It is a very, very small amount, and the reason is, Congressman, that we own our military bases. So that the issue of who has to pay for the cleanup, which is a source of dispute in private sector cleanups, which indeed have been subject to much litigation, is for the most part not an issue at the Department of Defense, because we know who caused the contamination, so we don't have to litigate it. We just put that whole issue aside. We go to determining what is the contamination and then how to address it.
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Mr. STUMP. That is what I needed. Thank you.
Thank you, Mr. Chairman.
The CHAIRMAN. Thank you.
Mr. Sisisky.
Mr. SISISKY. Thank you, Mr. Chairman.
Welcome this morning.
I am very concerned, you have raised the issue of some that you didn't like. We have already made a 40 percent decrease—am I correct, Mr. Secretary?—in the acquisition work force.
Mr. LONGUEMARE. Yes, sir, that is correct.
Mr. SISISKY. So as directed by this piece of legislation, we will have to make a 42-percent decrease on what we have now by 2001; is that correct?
Mr. LONGUEMARE. This would be an additional reduction over and above what we are currently having. In fact, you might want to take a look at a couple of charts that I believe you have in your package in front of you there.
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Do you have the first chart that shows——
Mr. SISISKY. I can't get to all of it. I have got too many.
Here it is right here. OK.
Mr. LONGUEMARE. The first chart plots the overall acquisition work force over time, and, as you can see from 1989, which is the peak, the current plan that we are actually on reduces it by approximately 50 percent by the year 2000.
The following chart, which is called DOD Plan Versus Proposed Bill, actually plots the DOD plan, and then it shows the additional reductions that are mandated by H.R. 1778.
I would draw your attention to the fact that at the same time we are planning to increase our investment accounts, which is what I referred to earlier in terms of the total workload. So——
Mr. SISISKY. So it is true that we had 300,000 acquisition work force? Or is that just in a category like depot workers? These are people that physically put out orders?
Mr. LONGUEMARE. No, sir. The definition of ''acquisition work force'' has led to a great deal of confusion, because it is a very complicated set of activities and involves a large number of different functions.
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Part of the confusion is that H.R. 1778 changes the baseline in terms of the definition of those people that are covered. The number that we need to refer to is, for a starting point in 1997, there are 269,000 personnel in the acquisition work force as defined by the proposed bill. And what this does is exclude all of the civilian personnel who are in our depots. If you add the depot personnel and others, then this number gets higher.
Secretary HAMRE. Sir, it is a little bit like saying there are 27,000 Members of Congress, because you are counting all the staff and the support structure and everything else. I mean, I think it comes across very good to say you have got 300,000 shoppers, but there are very, very few shoppers. I mean, it would be like saying there are 27,000 Members of Congress.
Mr. SISISKY. But it still boils down to 40—if you go by the bill, it is 40,000 less people in 1998?
Mr. LONGUEMARE. Yes, sir.
Mr. SISISKY. All right. I can't go too far on that.
Expansion of simplified acquisition procedures, you have the right to use simplified procedures now up to $100,000; am I correct?
Secretary HAMRE. Sir, as I understand it, I may have—I think it is $25,000 now, raising it to $100,000. We think that would be a good idea. I mean, we have proposed that for a couple of years.
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Mr. SISISKY. The bill recommends $5 million.
Secretary HAMRE. I would have to——
Mr. SISISKY. I mean, that is a large petty cash fund.
Secretary HAMRE. Simplified procedures tell me that it is under the discipline of professional acquisition officials with warrants and that sort of thing.
Mr. SISISKY. You don't think $5 million is too much?
Secretary HAMRE. I guess I am going to have to defer to Mr. Longuemare to say whether that is too large a jump. I mean, I know that the number of contracts that would fall between 100,000 and 5,000,000 is actually fairly small. But I would have to defer to him as to whether that is too large a jump for simplified procedures.
Mr. LONGUEMARE. Let's see. Which section is this, John?
Secretary HAMRE. That would be——
Mr. SISISKY. I wish I had the section. I don't have it.
Secretary HAMRE. I have it here. It is section 405.
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Mr. LONGUEMARE. No, sir. We are in favor of the——
Mr. SISISKY. That is good. That is all I need to ask. I made a note.
The other thing has to do with the utility con—I assume you are talking about electric power in that?
Secretary HAMRE. Sir, the section as it is written now is not only electrical utilities but it is also water, sewage, the whole works. It is permissive for all forms of utilities, as the legislation is now drafted.
Mr. SISISKY. The only reason I asked the question, Mr. Chairman, is we are jumping ahead of the whole Congress. We haven't decided yet whether we do this or not.
You know, my concern—I would love for you to save money, but my concern is, who is going to end up paying that bill? It is going to be the consumer, the homeowner consumer, that will end up paying that.
I was told that the generation of power—and this was a good while ago—in Virginia, they would have to close one entire plant, Virginia Electric Power Company would have to close one entire plant, if the Department of Defense bought electricity some other place. That is a lot, and that means there is a lot of interest that people have to pay. And I notice in the bill it is financially sound to do so. That is financially sound to the Department of Defense, not to the ultimate consumer around the——
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Secretary HAMRE. Sir, the way the legislation is drafted now is, it is permissive authority for the Secretary to convey it. It doesn't dictate a formula or a mechanism.
Mr. SISISKY. I understand that.
Secretary HAMRE. Of course, we would have to work that out that it would be good for everything; good for us, DOD, and good for the community as well.
Mr. SISISKY. I see my time is up.
The CHAIRMAN. Mr. Bateman.
Mr. BATEMAN. Thank you, Mr. Chairman.
In section 205, we deal with ophthalmic services and, in effect, say privatize it, but there is an injunction that if that is the most economical way to do it. I take it nobody has made the judgment, and it will be subject to a study and analysis as to whether or not privatizing would jeopardize readiness or save money, and it won't be done unless it is demonstrated that it will save money.
Secretary HAMRE. Sir, the way the statute or the way that you have drafted the legislation now, it only tells us that we should compete it. It doesn't say we have to privatize it.
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Mr. BATEMAN. OK.
Secretary HAMRE. So I think we would follow that guideline.
Mr. BATEMAN. The next thing I would make reference to, Dr. Hamre, your observations about the A–76 process and the requirement in the bill for obtaining data, it doesn't seem to me that that is a disconnect or a contradiction between the provisions of the bill, which seem to me to be designed to accelerate or to increase the amount of privatization that can take place.
But there are those of us in the Congress—I am one, and I think that I am in the majority on this—that, while they are perfectly willing to have things considered for privatizing, they want it to be an orderly process where you demonstrate there are savings, because our historic experience is that there are instances where privatization does not, in fact, save money; it costs money.
So it is of interest to the committee that we have an accumulation of data in order that we can conduct a legitimate oversight responsibility to see if privatization, outsourcing, is, in fact, working. And that is not contrary to the provisions which, as I read it, say, in effect, if you have already done A–76 process on functions X, Y, and Z, you can go forward and privatize those functions at bases where they haven't been privatized yet, without having to do all that you normally would have to do if you hadn't already done those kinds of analyses at other bases on the same operations or functions.
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So I don't see that there is, in fact, a disconnect.
Secretary HAMRE. Sir, with permission, I would like to have the people who are experts on our side meet with your staff to go over it. My reading of it and the way that our—the people that have been working A–76 issues for us who have read it say we think this would be a step backwards. I don't think you intend it that way. I don't think we would like to see it happen that way.
We think the A–76 process, it is burdensome but it is fair, and many times when you go through it, you find out the Government wins because the Government has a chance to develop a better and more efficient process. We think that is good.
Mr. BATEMAN. I raise the question because, in one major command in the Army, the injunction came down from on high, go forth and privatize everything that you can privatize or analyze every function as a candidate for privatization—fine as far as it goes. But someone at the staff meeting says, well, can we take a look at things which have been privatized to make sure we are saving money? And the answer was, no, you can't look at that.
Secretary HAMRE. I don't personally agree with that.
Mr. BATEMAN. Those kind of things don't make any sense, and that is what the A–76 process is all about. And we are not trying to broaden it, but certainly it should not be abandoned. I don't think Congress would ever consent to its abandonment and just say, as the rules and missions reviews seem to imply, go forth and privatize at all cost, or any cost.
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The next observation—and it is more of an observation than anything else—is, in looking at the environmental provisions, I look at it in the context of serving on another committee which has jurisdiction of a part of what is generally described under the rubric of Superfund. And I don't know of anyone, any of the witnesses who have been before that committee and any of the statements that I can recall from the administration, that don't indicate that there are ways in which the Superfund law is very impractical, inefficient, overly costly, overly burdensome in terms of whatever benefit you are getting from it, and that it calls for significant reform.
Now, other than on a jurisdictional basis, which shouldn't be the concern of the Department of Defense, I don't know why the kind of things that we are talking about in terms of how we address Superfund sites and environmental cleanup costs and administration, selecting in a discrete way what needs to be done and doing it first, permitting areas of defense facilities where there has been some contamination to be isolated while disposing of the rest, I don't see why those common sense provisions wouldn't be applauded by the Department of Defense at least in its operations, pending such time as that wonderful day arrives when we will have done a comprehensive reform of the Superfund.
Ms. GOODMAN. Well, and indeed, Congressman, we have worked very closely with this committee and obtained last year three very important targeted Superfund reforms as part of the defense authorization bill. So we are—I am interested in seeing that law reformed. I believe there are some important reforms that need to be made, particularly in the way remedies are selected.
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Some of the reforms, I will say—some of the provisions in this bill, frankly, do not help us at the Department of Defense. They are either unnecessary or they are—they are not in the—they will complicate what we are trying to do in terms of reforming Superfund.
We would like to work with you, particularly in the area of remedy reform, and, as I said, last year we had an effort where we worked very closely with the committee and we involved other interested stakeholders.
I know you have on your next panel the attorney general from the State of Colorado. States have very strong views on their role in the application of environmental laws, and we recognize and respect that the States, as well as the Federal Government, have certain roles here.
So we would like to work with this committee, as we did last year when we obtained three very important reforms to Superfund on this bill, to address appropriately issues.
I will also say, though, that we want to be careful not to treat Federal facilities different from private sites. I think the time has long passed where we need to be able to treat Federal facilities on the same footing as private sites and give them the same opportunity to benefit from reforms that are made, responsible reforms that are made, in the law.
Mr. BATEMAN. Well, Madam Secretary, if you would, because I don't have a written statement of your testimony or a full statement, I would appreciate it if you would send me some further information on these three wonderful reforms that we adopted last year.
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[The information referred to can be found in the appendix on page 414.]
Ms. GOODMAN. Oh, of course, Congressman.
Mr. BATEMAN. And I would like to have something specific as to whether or not there is a Department of Defense practical, common-sense objection to some of the specific reforms that are outlined in H.R. 1778 that has recently been reported from the committee.
Secretary HAMRE. May I just take 30 seconds to follow up, Mr. Bateman? And I take very seriously what you said, that it ought to be a fair and level playing field for competition. I then need to ask you please to have your staff look at section 206, which puts a floor of 33 percent that must be privatized for all defense agencies. I think that is a little inconsistent. I think we need to be—it ought to be a fair and level playing field, and we ought to do head-to-head. But would you please have your staff look at 206? That would be great.
Thank you.
The CHAIRMAN. Mr. Dellums.
Mr. DELLUMS. Thank you very much.
Mr. Chairman, I would like my colleagues to indulge me for a minute. I want to assume my responsibility as ranking member to set a record on this legislation, because this is specificity and, you know, we are going to have to live with this one way or the other. So I would like to take some time to ask some very specific questions, start with generally and go very specific. And I would like to address my questions to you, Ms. Goodman. And because I think this is important to make the legislative record here clear, I have reduced my questions to writing and I would like to go forward.
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Ms. Goodman, much heat has been generated about—what exactly the title III environmental provisions would indeed do. Some claim that it would not relieve the Departments of Defense and Energy of any of the fundamental public health and safety protections of current environmental law, while others claim just the opposite. Obviously, we can't walk both sides of that street.
The thrust of my questions is going to be, how do you interpret them in your department? Please provide the committee with your view as to what relief these provisions would provide to the Department of Defense, whether that relief is meaningful in operational or financial terms, and in what ways these changes would cause the Department of Defense and, by implication, DOE facilities to be treated differently from other polluted sites.
Ms. GOODMAN. OK.
Mr. DELLUMS. In other words, this is an attempt by this committee to provide some relief. What do you perceive as the relief in operational terms and whether or not that relief will take place in the context of an effort that protects the public health and preserves the integrity of the environment.
Ms. GOODMAN. OK. You would like me to address that with respect to each of the provisions as—right now? I can do that if you would like.
Mr. DELLUMS. Yes. You can start with a general comment, and then I am going to ask you, by sections, different questions.
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Ms. GOODMAN. OK. Congressman, most of the provisions—most of the Superfund provisions which are in here, sections 301 to 312 are specific to Federal facilities. And it is an—important principle of our Superfund reform principles that we not treat Federal facilities different than private sector sites. And the reason that is important is because I don't want Federal facilities any longer to be disadvantaged with respect to private sector sites in the way they are treated under the Superfund law. And that has been the case to some extent in the past, but I think there is a recognition now that we have mature cleanup programs in the Department of Defense and the Department of Energy, and we should be on the same footing.
Now, there are important reforms that can be accomplished in Superfund that the administration and the Department of Defense have been working to obtain over the last several years. There are important reforms that can be made in remedy selection. There are important reforms that the administration has, frankly, already made administratively.
The Environmental Protection Agency has issued a series of administrative reforms which help to streamline the process while protecting human health and the environment. And I think that that is the key balance that we are trying to obtain here, which is to ensure that we are protecting human health and the environment and at the same time streamline what has been a somewhat lengthy process for assessing contamination and actually getting to the cleanup.
I think some of the provisions, Superfund provisions that have been introduced in H.R. 1778, can be the starting point for a dialogue, but it has been a fundamental principle of reform in the Superfund area that we have included stakeholders, States, citizens, environmental organizations, as well as other committees of jurisdiction and other agencies; and I think that that process, while it may be just process, the process itself is fundamental here to the substance.
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And so I think that—having that process which, as I said, we had last year when we did undertake some targeted reforms on the defense authorization bill, but we had a process that occurred before their inclusion, I think is quite fundamental.
Mr. DELLUMS. I will come back to that.
Existing Superfund Program considers the protection of public health and the environment as the basic factor in choosing the methods for cleanup at Superfund sites. When you look at this bill, it seems to me that it elevates the factor of cost. How do you interpret that section? Do you interpret it as meaning that cost now becomes the dominant factor in that selection? Does it now overshadow the first two that I enunciated that are the basis of present Superfund law?
Ms. GOODMAN. OK.
Mr. DELLUMS. Again, how do you read this legislation? How do you see it?
Ms. GOODMAN. Well, I do think that there is a provision of this legislation that does indeed elevate the role of cost. I think there is an appropriate way to do that, but not—it should not be elevated above the role of human health and the environment. We are trying, as part of our overall reform of Superfund, to ensure that cost is appropriately included as a factor, but we would need—as I said, this could be a starting point for discussion, but I do not think that this is the end point.
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We have worked very closely with other committees and with other stakeholders to get to the appropriate formulation, and I think we need to continue to do that here. As I said, I don't think we are there in the way it is stated in title III at present.
Mr. DELLUMS. Let me be even more precise on this.
As you read the language of the bill as it is presently written, do you interpret that to mean that cost is a dominant factor? Does it now supersede the issue of protection of public health and the environment? Because you have to work with this, and it is important as to how you interpret the provision of the acts.
Ms. GOODMAN. All right.
Well, what I—we would need to study those provisions in more detail, and I will tell you that what is important, though, is that human health and the environment over the long term is a basic requirement, and cost is a balancing factor in remedy selection.
Mr. DELLUMS. OK. The existing law places a high emphasis on providing permanent cleanup of contaminated sites wherever possible. As a practical matter, the remedies chosen cover a wide variety of options from containment to treatment. However, this bill, as I view this bill, as it is written, places a strong emphasis on containment and a rather ill-defined term; ''what other methods of protection,'' provides permanent remedies.
From your—again, from your interpretation of this bill, what are ''other methods of protection'' and is there a large, long-term cost to manage these sites if we do not treat the waste where possible?
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Ms. GOODMAN. Well, Congressman, this is not—that is a very complicated subject. We have had——
Mr. DELLUMS. But this bill attempts to address it. I have no other choice.
Ms. GOODMAN. Right. I don't know that that is the right formulation. We have been moving towards being able to recognize that containment, rather than permanence in every circumstance, is something that is the best that we can do and is appropriate given the levels of risk in certain circumstances but not in others. And so we need to be able to make those choices and we need to do it in a way that gives the highest regard for protecting human health and the environment.
So I think that that particular formulation would require further work.
Mr. DELLUMS. OK. All right.
One such discussed issue in the ongoing Superfund authorization debate concerns land use restrictions as part of cleanup strategies. This bill has a section on institutional controls that does not offer any specificity regarding who makes sure that the institutional controls are in place as long as needed to protect people from the hazardous substances or identify who will manage or pay for these institutional controls.
From your vantage point, again, are these misstatements of the spirit or the intent of the provision?
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Ms. GOODMAN. Frankly, on that one, Congressman, I would need to understand more what the drafters intend by that, because I do think that institutional controls are becoming a more important part of our overall remediation strategies, where we recognize that we, in certain cases, are going to contain rather than—and so we will need institutional controls—and there has been a lot of work done in the last few years—to understand better how institutional controls might work.
But, again, because what—institutional controls depend very heavily in many cases on local property law; they are such things as deed restrictions, et cetera. It is important that we understand fully from those that would be in the position of implementing them—because the Federal Government is not going to be the guarantor of institutional controls in all instances—that we understand better how they would work and who is in a position to implement them.
Mr. DELLUMS. Let me turn your attention to section 301.
Under current law, what is the typical remedy for landfill at a military base? And is natural attenuation, also known as intrinsic remediation, considered containment or treatment?
Ms. GOODMAN. It depends on the circumstances, Congressman. But natural attenuation can, indeed, be—if done appropriately, depending on the contents of the landfill, natural attenuation over time can constitute treatment of that landfill. I mean, in fact, we are very much supportive of methods like natural attenuation and others that are low-cost techniques, because essentially you are just letting the contents of the landfill attenuate or go away over time, if that is appropriate, given the risks that are presented by the contents of that landfill.
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So we have been working with EPA and with our States to adopt the lower-cost treatment and/or containment techniques like natural attenuation, bioremediation, bugs in soil, for example.
Mr. DELLUMS. And section 302, under current law EPA policy and, as I understand it, Department of Defense policy, who determines; ''reasonably anticipated future land use for purpose of remedy selection'' who determines that, under current law? Who determines ''reasonably anticipated future land use for the purposes of remedy selection?'' Who makes that determination?
Ms. GOODMAN. Well, at our active bases, we determine it—the Department of Defense makes an assessment, and it is reviewed with our citizen stakeholders through the restoration advisory boards of which EPA and the State are members. At our closing bases, the local redevelopment authority which is determining how to reuse the property at the closing base develops its—a reuse plan which is then reviewed by the environmental officials from Defense, from EPA and the State to assess what is the reasonably anticipated future land use that is possible, given that reuse plan and the environmental conditions existing at the site.
Mr. DELLUMS. You anticipated one of my follow-on questions. So I will go past that.
In the long run, how can—this is a judgment that I would just like to get your view on. How can public health or the environment be protected when cleanup is designed to meet standards other than residential unrestricted use? Because, as you know, this bill attempts to make some differences in that regard; and I would like to get your opinion.
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Ms. GOODMAN. OK. Well, today we try—working very closely with EPA and with State and environmental officials, we look at future uses, so that if a site—which has an industrial use today, if the community plans to continue using it in an industrial manner for the foreseeable future, we would design, with EPA's approval and the State, a remedy that addresses cleanup to an industrial standard.
We indeed do not, as a nation, clean up all properties to residential land use today. And we have accepted that where that can be determined as a reasonably anticipated future land use in consultation with environmental regulators, and where the community supports that future use, that that can be appropriate.
And, in fact, we have been revising the—EPA has revised the way it addresses land use in Superfund over the last several years, in part through administrative reforms. So I think section 302 is really unnecessary because we have accomplished—while future land use is indeed very important, and 3 years ago when I was testifying before this committee, 3 and 4 years ago, I said the most important thing we need to do in our cleanup program is recognize the importance of the role of future land use in selecting our cleanup remedies.
But indeed we have made a lot of progress in the last 3 years on just that issue. So that—and I think that the way that 302 is drafted would actually make more rigid the direction about how we determine future land use, whereas we have flexibility today and we have support from communities, citizens, and environmental regulators.
Mr. DELLUMS. I appreciate that, and the thrust of my question was to get at just your last answer which was, do you think this section is necessary? And I appreciate your remarks in that regard.
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Section 304, when a non-Federal responsible party does not agree with a State-required cleanup remedy, does the State have to pay for the extra cost?
Ms. GOODMAN. Could you restate your question?
Mr. DELLUMS. Sure. When a non-Federal responsible party does not agree with a State-required cleanup remedy, does the State have to pay for the extra cost?
Ms. GOODMAN. A non-OK. What is confusing me a little bit is the non-Federal responsible party.
Mr. DELLUMS. Nongovernmental agencies.
Ms. GOODMAN. Nongovernmental agencies?
Mr. DELLUMS. Nongovernmental entity, yes.
Ms. GOODMAN. OK. When a nongovernmental entity does not—
Mr. DELLUMS. Federal Governmental agency.
Ms. GOODMAN. In other words, like when a State does not agree with the cleanup remedy?
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Mr. DELLUMS. Give me that answer.
Ms. GOODMAN. OK. Is the question, when a State doesn't agree with the remedy, can they force the Federal Government to pay the extra cost? If that is——
Mr. DELLUMS. Actually, I was asking the question the other way around.
Ms. GOODMAN. OK.
Mr. DELLUMS. Does the State have to pay the extra cost if the—if there is a non-Federal—nongovernmental agency, a nongovernmental entity does not agree with a State-required cleanup remedy, does the State have to pay the extra cost? If you don't—you can supply that.
Ms. GOODMAN. I think I will take that question for the record.
[The information referred to can be found in the appendix beginning on page 413.]
Mr. SPRATT. There is one—if I could just, the gentleman would yield one second—further addition to that, if this is a rule of general application in that State, not some site-specific or specially formulated rule but is a rule of general application—as I understand it, particularly applies in the West where conditions are much more arid than in the East, and some States have much stricter groundwater rules than Federal rules would be or than many States would have.
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The question is: Does a private party have to apply—abide by that State rule?
Ms. GOODMAN. Oh, does——
Mr. SPRATT. Because this particular bill would exempt the Federal Government from complying with the rule unless the State paid for its application.
Mr. DELLUMS. See, this is important to us because, as he pointed out, that is how section 304 is written, as we understand it. So the responses to those questions are very important to us.
With respect to section 311, let me just ask you the generic question. As you read section 311, is this provision needed?
Ms. GOODMAN. Section 311——
Mr. DELLUMS. I am sorry; 311, the one that deals with safe drinking water, et cetera.
Ms. GOODMAN. Section 311 is standards for remedial actions conducted at Defense facilities not on the national priority list. This—this is a Federal facility-specific provision, and again—so I think that on that ground—on that ground alone, we have an issue with it.
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This one would be—you know, there may be some basis for future discussion on this issue, but we are required to meet—now, here is a way in which Federal facilities today are treated differently from private sites. This is, I think, the opposite of your last question.
DOD today is required to meet ARAR's at non-NPL sites, which private parties are not. So in that sense, we are—we have—we are subject in some sense to the relevant and appropriate requirements. I believe, Congressman, that is what you—Congressman Spratt, what you were referring to in the last section.
Mr. SPRATT. I think you dropped an acronym on us that we didn't follow.
Ms. GOODMAN. ARAR's, appropriate and relevant—it is a term—it is an environmental term of art that even I cannot even remember what it stands for—what it stands for, but relevant and appropriate requirements, which means that State laws can be brought in to—made applicable to a federally designed cleanup.
Mr. DELLUMS. The reason why I asked you the question with respect to 311 is that people that have reacted to section 311 pointed out that as 311 is written, you would not be required, for example, to clean groundwater under a military facility to the same level that you would clean groundwater on a nonmilitary facility. And the obvious question is: Why would groundwater under a military facility——
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Ms. GOODMAN. I agree that—
Mr. DELLUMS [continuing]. Need to be cleaned to less than the same standard as on nonmilitary facilities? And we think 311 is mischievous in that regard, or at least there are a number of people who are out there who have raised this question.
I am simply trying to get your assessment of how you read 311.
Ms. GOODMAN. If that is what it would do, I would agree with you. I would not—I would have real—I would have real difficulty with it.
I am not sure that is what that provision does, because I think that right now it is only the Federal facilities that are subject to the State applicable requirements at the non-NPL bases. We are talking the non-national priority list bases. So I think that this provision, as I said, we—I have some—I have some concerns with it, but what I am not sure is that we fully understand what it does.
Mr. DELLUMS. Finally, on section 315, and I appreciate the indulgence of my colleagues on this, this section, as you know, exempts unexpended military munitions in storage from requirements under the hazardous waste law. Could this provision be interpreted to include, as you read it, stockpiled chemical weapons?
Ms. GOODMAN. Yes.
Mr. DELLUMS. OK. Would it change the manner in which the Department currently stores the chemical stockpile?
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Ms. GOODMAN. No.
Mr. DELLUMS. Thank you very much.
And again I thank my colleagues. I felt that it was important to raise this series of questions to get the Department of Defense's view of it. There will be other witnesses later on today. We will get their perspective on it.
Thank you very much, Mr. Chairman.
The CHAIRMAN. Mr. Hefley is not here. Mr. Thornberry.
Mr. THORNBERRY. Thank you, Mr. Chairman.
Dr. Hamre, I want to back up a little bit and ask really for a more general perspective. One of the things this committee has been working on the last 2 years is trying to update and streamline the management in the Department of Energy's defense programs area. It is a mess, and it seems to me that there are a couple of parallels we can draw. One is that there are some very big problems.
Recently, the Institute for Defense Analysis came out with a report that discussed a number of management problems, and basically nobody disagrees that there are enormous problems that need to be solved.
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The second one—part of it, though, is that it seems very, very difficult for the organization to reform itself, and that is really the—I guess, where I am coming from, the primary concern I have.
You talked about chairing this Defense Reform Task Force. I don't know exactly what your timetable is going to be, but how in the world are you ever going to overcome the bureaucratic self-interest and even a natural reluctance to change that exists with this big an organization and this difficult an organization to reform?
Even today, some of your colleagues have used things like don't push us too fast; we can do this, but only in a very controlled and moderate way. The chances of making the reforms that have got to be made without congressional intervention, without a congressional push, seem to me to be—to be nonexistent.
And I say all of that in light of, again, the numbers that we have: 60 percent of the Defense budget goes for infrastructure and support services; 45 percent of active duty military personnel are assigned to infrastructure functions. If we are going to have a chance to have a viable military in the future, how are we going to get there? And is there—do you agree with me that there is no way the Department can really reform itself by itself?
Secretary HAMRE. Mr. Thornberry, I worked as a staffer on the Senate Armed Services Committee, the counterpart, the other body, for 10 years, and I—and I understand very much what you are saying. It is very hard for organizations to change themselves. And so when I came to the Department, I probably was of the view that it—that it would be very hard for the organization to do that.
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I am amazed at the amount of things that we do tackle, probably smaller and less dramatic in nature than normally comes to the scope on the Hill, but there are lots of remarkable things that are under way.
I am familiar, in my area, and I know that Mr. Longuemare is familiar in his area, in finance, for example, a year ago we didn't have—every bit of our contract payment operation out of Columbus, OH, where we disburse about $42 million an hour—every bit of that was on paper. Today, we get—about 40 percent of all of our progress payment invoices come in electronically. We now have about 25 percent of all commercial invoices that come in electronically, and that has meant fewer people on the job having to key in data.
So there are lots of things. I can give you lots of micro examples.
I think Secretary Cohen shares your sense, having come from the Hill very recently, that it would be hard for us to kind of turn ourselves inside out and say, do we need to do business the way we are doing it? I honestly think we do ask ourselves those questions, but they frequently get bogged down in a lot of engineering details when you go back to the very people who would lose their jobs and ask them to think about it again.
So I think, for that reason, the Secretary asked to have this commission set up to be outsiders who are inside the family looking to help ask some of these tough questions.
The task force has met with him for preliminary guidance from him. They plan—we plan to go back to meet with the Secretary in 2 weeks with some preliminary thoughts. There is a specific timetable. They have broken down their efforts so that over the next 5 months there will be specific things along the way that they will be bringing back to the Secretary.
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Part of my job is to make sure that this gets integrated, so that it is very easy for outsiders to come in and say, you ought to stop doing it this way without understanding everything we are really doing. It is very easy for me to say, for example, why do we have an outfit that is responsible for providing surplus equipment to local law enforcement agencies? And then I find out that it is in statute. I have to have it; and then an outside commission wouldn't necessarily know that.
So it is striking a balance, sir, between people on the inside that have to know how to run it and what the legal and the environment is around it, and yet being forced from the outside to make changes.
I think the Secretary wants to do what you are calling for and is trying to find that balance, sir; I think that is really what he is trying to do. We really will be coming back to you with changes.
Mr. THORNBERRY. Well, I don't disagree with that as far as what he wants to do. My concern is whether he is able to do it, whether you are able to do it as a result of your task force.
For example, one of the things that I have found is that what may be remarkable inside the Pentagon, and have a great deal of difficulty getting done, does not quite seem so remarkable outside, and that that seems rather common sense from the outside seems impossible from inside the Pentagon.
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I think we have different standards on what an accomplishment really is.
Let me ask one final question.
Secretary HAMRE. Yes, sir.
Mr. THORNBERRY. These numbers, work force acquisition numbers that we have, does that include consultants, outside contractors? We heard last week that the number of consultants in the Department of Defense has gone up 278 percent in recent years. Are they included in this 40-percent decline?
Secretary HAMRE. No, sir. Those are just Government employees. And, sir, let me just say, I know that you—I saw your—the part of the committee report criticizing us for using outside contract services. This is—and this is kind of an inherent dilemma when, on the one hand, we are downsizing people inside the Government but the work still has to get done. So we are going to be using more consultants and contract support.
What we ought to be doing is finding a way to reengineer what we are doing, so it is frankly easier and cheaper to do it. And we can do that in some areas, but in some areas, frankly, you still need to have the professional expertise and we have to buy that. So I am not surprised to see an increase in our use of consultants.
Mr. THORNBERRY. But that would skew these numbers somewhat that we have been provided? This is not the total picture, I would say.
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Secretary HAMRE. No. There certainly are more people who are in the private sector that are doing contract support to help us in the acquisition process, but we have been doing that for years as well.
Mr. THORNBERRY. OK. Thank you.
The CHAIRMAN. Thank you very much.
Mr. Snyder.
Mr. SNYDER. Thank you, Mr. Chairman. And thank you for holding the hearings.
Dr. Hamre, if you could just tell me with a specific question, you gave several examples of what you consider to be inconsistencies or conflicts. But I just picked out one of them here, the section 223 and the section 402 that has to do with the privatization of utilities. I don't practice law, but as I read those sections through quickly, I am not sure I see all that much conflict. And if you could—I mean, the section 402 talks about—''a privately dedicated'' was the language—a privately dedicated telecommunications network.
I mean, basically aren't we talking about if you have got two military facilities in a town, the Congress is just saying we want you to go out and contract with one of the local telecommunications providers and set up a fiberoptics system? I don't see where that is saying in there that the Department of Defense or the Army or somebody is going to be taking over and setting up another utility company.
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Tell me where you see a conflict there.
Secretary HAMRE. Well, we certainly would not like to be forced into a position of having to set up our own operation. We want to buy that. And I think DISA, during the last 3 years, has done a remarkable job of going out and buying services from the private sector.
Mr. SNYDER. But wait a second. I don't see that. When it says in here, if you can do through contracts, a privately dedicated—doesn't privately dedicated imply staying with a private utility?
Secretary HAMRE. Not necessarily. I mean——
Mr. SNYDER. What does privately dedicated then mean?
Secretary HAMRE. Privately dedicated means they are the only people that are using that network.
Mr. SNYDER. Privately dedicated.
Secretary HAMRE. So if you can help us work out the words, if you don't intend it to be owned by the Government, we would rather not own it. We would pick up the receiver.
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Mr. SNYDER. I am still confused.
Secretary HAMRE. And everything behind the receiver be in the private sector. I would rather not have to own it myself.
Mr. SNYDER. Help me again. Privately dedicated, are you understanding privately to mean—privately meaning only between—I guess I have lost it.
Secretary HAMRE. Among those bases.
Mr. SNYDER. I am sorry?
Secretary HAMRE. Among those bases owned by the Government. I would rather have it be a public utility that we are buying services from, rather than it being owned by the Federal Government.
Mr. SNYDER. Is your conclusion of this after you have talked with the folks that drafted this? I mean, I read the language privately dedicated and thought they meant—thought it meant privately as in nongovernmentally owned. Am I off base there?
Secretary HAMRE. Sir, we haven't—I have not personally spoken with whoever was the staffer that worked the language of it. I would be glad to do that.
Mr. SNYDER. Yes.
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Secretary HAMRE. We are really kind of doing this on the fly.
Mr. SNYDER. I understand.
Secretary HAMRE. What I am saying is, I hope there is no—I didn't try to say—these are tensions I see inside the bill. This language needs to be clarified. If you intend it to be in the private sector, fine by us.
Mr. SNYDER. OK. Fine.
Secretary HAMRE. We would rather not be owning it. I am simply saying at the very time, this language needs to be tightened up, if that is what you intend it to be, because the rest of the bill is suggesting we shouldn't be in the utilities business.
Mr. SNYDER. Right. So you are interpreting that language there differently than I. But I don't pretend to practice law so I will defer to you.
Secretary HAMRE. I am a comptroller geek. I don't practice the law either. I don't think I break them.
Mr. SNYDER. I guess what I am getting at, Dr. Hamre, is we don't have a lot of time to do amendments, and there are some clearly conflicting areas in there that absolutely need to be cleared up. I would just pick that one up as an example.
In my first reading through I didn't see it as a glaring inconsistency. But I can understand if you and I are reading language differently, or your lawyers are reading it differently, then it is an inconsistency and it would need to be straightened out. If it is not clear to you what your mandate is, then that is a problem, yes.
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Ms. Goodman, again, let me just say one very specific thing. I was impressed with what you said about section 311 at the end, which was basically, you were having trouble answering Mr. Dellums questions because not only did you not understand what it means, but you are not sure that you know of anyone else who knows what it means, either.
Is that a fair characterization of what you said? And if so, I mean that is of great concern to—I would think that would be of great concern to a whole lot of people around the country.
Ms. GOODMAN. OK. Well, again on that issue, I think we really would have to look at it more closely, because it gets into an area that is very complicated, which is this question of applicable, relevant and appropriate requirements. That is what the acronym ARAR stands for. It is a term of art. It has a specific meaning in cleanup law and lore, and we have to deal with it carefully.
What I want to clarify for you, though, is that the Department of Defense must today meet all of the applicable—that is, the first ''A'' in the ARAR's—State cleanup requirements, both under law and under H.R. 1778. That doesn't change the applicable cleanup requirements.
And we must meet State groundwater protection requirements that are applicable to cleanups, just like private parties. So in that sense, you know, military bases have to protect the groundwater in the same way that private parties do today.
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Mr. SNYDER. I see my time is up.
Thank you, Mr. Chairman.
The CHAIRMAN. Thank you.
Mr. Allen.
Mr. ALLEN. Mr. Chairman, I know we have a lot to do today so I will try to be quick.
This new member is struggling with what the work force, the acquisition work force, is. And so for either one of you—I mean, I have two questions. One is: This legislation basically says there will be a certain reduction in the acquisition work force over a period of time.
The first question is a policy question. What is the right level and how do you get there? What is the underlying rationale? Are we trying simply to pick a number and use it as a target, or is there some rationale for looking at the size of the acquisition rate—work force in relation to what we are going through throughout the entire Department of Defense?
And second, can you give me some examples? I mean, I assume some of these people are buying, you know, supplies at different bases, but others are involved in the process of evaluating F–18's—FA–18's and F–22's. I want to make sure that those people, or that the Department as a whole, has the capacity to be able to deal with the manufacturers and understand the different components and how to evaluate different companies, how to make sure we have a fair competitive process as we go along.
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But if you could give me some insight as to some examples, about what types of jobs are included in the acquisition work force, that would be helpful.
And the other question, I guess, is a broader policy question. Do you—how do we set a target that makes some sense?
Mr. LONGUEMARE. Mr. Allen, the overall acquisition work force is a diverse group because it is—in addition to just the purchasing part of it, which is the smallest portion of the work force, there is a large contingent of other functions which are required in order to ensure that the equipment is correct and that it is proper, that it will meet its requirements; and also it involves the entire support and repair part.
Just to give you an example, the definition of the work force in the overall context includes the depots, the systems materiel, development and readiness parts, materiel management, base operations, communications support, test and evaluation acquisition management, contracts, the laboratory structure to make sure that the R&D is done, and a whole variety of smaller subsections.
So you can see it is far more than the so-called shopper's concept. In fact, if you think of the actual purchasing function, there are something on the order of less than 1,500 people involved in the actual writing of purchase orders and that type of thing. Those are the actual people who do the buying.
There are some 15,000 total—less than that—in the contracts area, which are associated with the larger procurements and that, by far, overshadows the mere purchasing function.
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The numbers that we have in our plan are the result of an accumulation of all the plans that are associated with the various functions, sort of the bottom-up look at the problem, than with a management goal ascribed to that.
When I indicated to you earlier that there is concern that the work force is starting to strain, we are starting to see that effect in these various different areas, that there is starting to be a problem if we too rapidly try to cut this work force down.
I would also point out that H.R. 1778 changes the definition and excludes all of the depots. So none of the depots are included in that definition. So that is a further complication to all of this.
But it is a very diverse and widespread set of responsibilities.
Mr. ALLEN. One last question. Is it fair to say that your—the number of personnel you need in the acquisition work force depends in part on what your purchasing procedures are and that, as you simplify your purchasing procedures, you can do with fewer personnel?
Is that—and then, growing out of that, are there some reports that would be useful to us on these topics that ought to be made a part of this record?
Mr. LONGUEMARE. The answer to your first question is both ''yes'' and ''no.'' It is true that the actual simplified purchasing aspects do reduce the total amount of paperwork, so the paperwork people are reduced considerably. On the other hand, we are moving to performance specifications. We are no longer specifying every detail of how equipment should be designed and manufactured, so this requires a lot more individual judgment; it requires a lot more work on the part of some aspects of this.
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We are finding that some sectors of the acquisition work force actually have more work now than they did before because of this problem. So it is not a simple answer.
I will try to take for the record to determine if there are some reports or information of that nature that would be helpful to you and we will get that for you.
Secretary HAMRE. May I take just 1 minute to expand on what Mr. Longuemare said?
Mr. ALLEN. Yes.
Secretary HAMRE. I think that the philosophy and the policy of the Government and, frankly, Secretary Cohen's philosophy, is that the business of government is management, not services. We ought to be buying the services from the private sector and managing the Government.
We are in the management business historically because it was cost effective for us to do that, and the test of being in the services business is, does it cost more or less for the Government to do it? If it costs less, the Government ought to do it; if it costs more, the private sector ought to do it.
On the management side, we ought to do management if it is value added. If it is not value added, then we ought to stop doing it. I think that is the taxonomy rather than an arbitrary percentage that ought to guide how we think about this problem.
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Mr. ALLEN. Thank you very much.
Thank you, Mr. Chairman.
The CHAIRMAN. Thank you.
Mr. Reyes.
Mr. REYES. Thank you, Mr. Chairman. I have got a couple of issues that I would like to get cleared up for me. It is for whoever feels most comfortable with it.
The first one is the issue of technology. How has technology been part of the process to make you a more effective entity in terms of being able to do the kinds of things that will save you money and the kinds of things that I think we are ultimately trying to address with the kind of language here that I have heard some problem—that you have got some problems with?
Secretary HAMRE. I can speak to my area. Each one of us has this experience. I would say technology is both a blessing and a curse. It is a curse because I find in my world I am tied to the technology of the 1970's and we are still operating with that technology, the old business systems; and I am bogged down, we are bogged down by being tied to old legacy technology we would like to break away from but we can't.
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Technology is also a blessing because there are new technologies coming on, such as Internet technology, which lets us get access to each other.
For example, we have a wonderful project that I am working with Mr. Longuemare on, which is to get imaged documents without ever turning them into paper. I can get contracts now electronically, using standard off-the-shelf Internet tools.
And so it is both a blessing and a curse, and it is a very complicated—you have asked a very complicated question, sir, and it is not easily susceptible. You have to be very smart on how you invest in technology in this area because you could really spend a lot of money and get nothing out of it.
Mr. REYES. And the reason I ask that question is because technology is fine, but if we, as an agency or entity or as a corporation—whatever you are dealing with—if we don't take the time to make the transition, it becomes that curse that you are talking about.
Are there efforts now under way to try to maximize the utilization of technology in order to be more effective and more, I guess, cost effective, ultimately?
Secretary HAMRE. Sir, I think there are lots of projects under way all over that are using technology smart. I think the hardest thing—the thing you have to do is, you have to trust people locally to find smart ways of doing business. And that is kind of counter to the way Government does things sometimes.
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We want one big global solution to problems sometimes, and then you get very large, complex, cumbersome, expensive systems which usually collapse because they don't work. I think the success rate is probably 1 out of 10 major new software systems that ever works when you design it as a great big new replacement. You really have to do smart modular replacements at the local level.
Mr. LONGUEMARE. Could I just briefly comment?
Mr. REYES. Yes.
Mr. LONGUEMARE. I believe information technology clearly is the dominant area that is giving us the greatest opportunity, and it has enormous payoff, especially in our logistics and related support areas. We are doing a great deal to infuse technology there, to have better visibility of our assets, reduce inventory, just-in-time concepts as opposed to these just-in-case concepts.
There is enormous potential there, and I would admit that we have just scratched the surface in applying that.
This is also an area where we can make great use of the private sector. We are more and more moving to using so-called COTS products and relying on the huge investment that is being made in the commercial world to take advantage of that. So some of our deal use areas are—we are looking for that.
Mr. REYES. The other aspect I would like for you to address is that—and this is because we often hear so much commentary out there in the general public that if we consolidate our ability to buy, you know, our procurement process, that the normal business-type rules would apply. That means that if you are going to buy 100 hammers, the hammer should be $2.98 instead of $4.98.
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And my question deals with, do these rules, in fact, apply, No. 1? No. 2, are we working towards that effort? I guess the procurement version of the Joint Strike Fighter.
Secretary HAMRE. I have one thing to say, and then I will turn to Mr. Longuemare.
The most interesting business evolution that is under way right now is to find ways to get the purchasing power of the Federal Government, where we can buy lots of quantity and then get discounts, but to democratize that so you can make that available at the lowest level. The way you do that is with this technology that you talked about—electronic catalogs and electronic shopping malls.
We are now able through centralized procurement instruments, we can negotiate for a supplier to provide us, on demand, auto parts at a discount, but we can make that tool available widely to every motor pool in the Army, for example. That is the most exciting thing that is going on, so that you can get the advantage of bulk purchases but you can democratize the purchasing process and make it available locally through technology. It is really exciting.
Mr. LONGUEMARE. Although the DOD buys millions of different items, it is interesting that, in general, we are not a large quantity buyer of any specific thing. That is in a relative sense now. In certain commodity areas, we do buy large quantities, but in general we have a relatively small quantity of very specialized things quite often.
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The greatest change that is occurring now is this breaking of the paradigm where it used to be thought that there was an automatic relationship between quantity and cost, that if you would reduce the quantity, that you automatically had to go up by a proportionate amount in cost. There is still a relationship there, but the new techniques that are being utilized, for example, the Joint Strike Fighter, they are applicable to other areas as well, have been able to separate the quantity from the cost part, so that there is much less of a relationship now. That has enormous potential for the DOD, because we are a small buyer in many areas.
And a lot of this has to do with the new concepts in design, the information technology that reduces the overhead that we used to have personnel doing, that we can now use information technology to reduce this overhead cost.
Mr. REYES. Thank you. And the last thing that I would like to comment on is that if this plan is too aggressive and the reductions are too dramatic, then can I assume—and I apologize, I had to leave for a few minutes, but can I assume that you have a plan that will get us to the same place at perhaps a different rate? Is that a fair assumption, that you have a plan in terms of where you want to be in response to this kind of effort by legislation?
Mr. LONGUEMARE. We do have a plan. In fact, we are following that and actually ahead of schedule in terms of our current projection.
The QDR also is requiring us to take another look at this, so we are in the process of seeing what the impact of this is, and I would expect, as a result of the QDR, we will have some revisions to this.
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But we have—we have, we believe, a very aggressive plan to address this issue and come down in an efficient way that doesn't require Draconian measures to be taken.
Mr. REYES. OK.
Thank you, Mr. Chairman.
The CHAIRMAN. Ms. Harman.
Ms. HARMAN. Thank you, Mr. Chairman. I apologize for being late to these hearings, but I was over at the Pentagon celebrating the promotion to three stars of the first woman in the Army to receive that rank, and I was very pleased to be there.
I would like to associate myself with the remarks of Mr. Thornberry. I think he addressed very sensitively a subject that I think is the essence of this debate, and that is whether or not legislation could serve as a useful prod to cause the Department to move along the path of reducing the tail so that we could have more resources for the tooth.
I happen to think legislation is useful, and I am pleased that we are considering this bill, albeit not the perfect bill, but I am pleased we are considering this bill now. And I am also pleased that we have some environmental reforms on the table. Even if they may not be the perfect reforms, I think that environmental reform is part of reform—infrastructure reform, and that is why, Mr. Chairman, I was the one person on this side who voted against deleting the environmental reforms from this package.
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At any rate, my question is this: I tend to think that this is a useful way to focus the issue. I also think that if focus does not occur in the short term, either through legislation or internal reform, you are going to have a very hard time getting Congress to consider closing more bases; because they may be part of the infrastructure problem, but so are excess infrastructure—so is excess infrastructure in the Pentagon itself.
So my question to any of you is: Do you agree with me that more and faster internal reform is a prerequisite to coming up here and asking for more legislation for base closures?
Secretary HAMRE. Well, I probably risk a lot of personal safety in answering the way I am going to. No, I don't think it is a prerequisite for it. I think we ought to do it. I think it is a parallel thing that we ought to do on our own.
I think that we ought to be reforming and getting every dollar out that is not value added inside the Department, whether there is another BRAC or not. We think we need another BRAC round, too. I actually think we need two more BRAC rounds, but I don't think that one is a precondition of the other. We ought to be doing it anyway.
As long as I am inviting myself to get in trouble, I would say, you know, with all the calls for competition, that is exactly what we have called for in the depot issue, with Kelly-McClellan. We have simply asked to be able to compete.
And so I would say this legislation really is—we support this legislation and we think that is exactly what we are trying to do with Kelly and McClellan. So I know I am in real trouble now.
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Ms. HARMAN. Any other comments?
Secretary HAMRE. They are smarter than I am.
Ms. HARMAN. No other comments.
Well, I do think that more shrinking of infrastructure is a prerequisite to more legislation on base closures. I am not one to say, over my dead body. I think that that is premature. But I do say that putting the Pentagon on a diet is something to do this year, and I do want to salute you for the reforms you have made.
The second question, I guess along those same lines, is: My assumption is that if we don't reduce infrastructure, not only will we not have enough money to fund a proper-size tooth, but also we risk in future years—should budget constraints and economic circumstances change for the worse, we risk a reduction in the defense top line that will take money out of the wrong places.
What are your thoughts on that comment?
Secretary HAMRE. I think we agree with you. I think that we have—where we have accommodated the constraints the last 5 years, 7 years, frankly, has been cutting back on our modernization. It has gone too long. I think we need to start turning that around. That is the centerpiece of the QDR in many ways is to shake dollars out of the system so that we could put it on to modernization. In the long run, we will be in a very serious problem.
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We are not capitalizing the force to the long run that we need, and so we do need to have these efficiencies. We do need to get as much of the fat out of the system as possible, and we do need to shake out as much of the infrastructure as we can afford.
Ms. HARMAN. Any other comments on that?
No? OK.
I did have a conversation with Secretary Cohen just before the QDR was released about the chances for adequate reform, internal at DOD, of infrastructure, absent pressure from outside; and he was a bit skeptical, as you are not surprised to hear. And that, I think, was part of his motivation in urging the National Performance Review to take on some of these tasks and in forming an industry advisory committee.
I would just like to salute him for doing those things and say, as one member of this committee, that I want to keep the pressure on in a constructive way; and I do think that this legislation, however we may revise it, but that the notion of a reform package is a good prod as well.
Thank you very much.
The CHAIRMAN. Thank you.
Mr. Bartlett, do you have a question?
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Mr. BARTLETT. Thank you very much.
I was here during your testimony, and I was here for part of the questioning. I am sorry that I had to leave. I was here when Mr. Dellums was engaging you in a dialogue about the environmental part of the bill, and it is that that I wanted to ask a question about.
I have a concern that our present policy in one aspect of this is difficult to square with fairness and, frankly, it is difficult to square with sanity. And I am talking about the cleanup of the bases that we have closed, are closing and are giving to the private sector. And I am personally involved in one of those, because it is in our district.
These bases are occupied by our young men and women in the military, where they serve. They are occupied by the civilian employees who work there. Many times, the families of both our military people and the civilians recreate there in recreational facilities. And it is good enough, all of these years, environmentally, for our military people to serve there and our civilian work force to work there. And now, when we are going to give it to the local community, somehow we are faced with the necessity of spending millions of dollars, sometimes many millions of dollars, in evaluating the environmental risk and then cleaning it up.
And my question is this: If it is quite good enough for our young men and women in the military, as they serve there, and good enough for our civilian employees, as they work there, why isn't it good enough to give away without spending the first dime on it?
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If the pollutants are in fact not escaping into the air and not migrating into aquifers, why do we have to spend any money cleaning up a facility that was quite good enough for our use so that we can give it away? Help me understand.
Ms. GOODMAN. Well, indeed, we clean up our facilities that we are keeping. In fact, we spend about 50 percent more each year on cleaning up our active bases. Our Defense Environmental Restoration account for active bases is about $1.2 to $1.3 billion a year, and we spend—we invest about $700 or $800 million at our closing bases.
So indeed we are cleaning up at our active bases because we believe that it is important to protect, first and foremost, the health and safety of the soldiers, sailors, airmen, and marines that serve our Nation. So their health is the prime—is indeed our very focus.
Now, as we close our bases, of course, we are also cleaning up so that we can put that property back into productive reuse. Sometimes at the closing bases, we are designing the cleanup remedies to fit with the local communities' reuse needs, which may be different than the way we used the property when it was used as a military base.
For example, at Fort Meade, where a portion of the base is closing, there is, in fact, there an old Army airfield, the Tipler Army airfield, which has—was at one time a bombing range. It has unexploded ordnance. When this was part of the military base, that old airfield with ordnance on it was just kind of left there.
Now, it is being—now, at considerable expense, we are trying to locate and remove that unexploded ordnance because the community has a proposed reuse that requires being able to provide some access to that, which, without some clearance, is totally unsafe.
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So there are some differences, but the primary purpose is to protect the health and safety of our troops and protect the health and safety of the citizens who live around our communities when the property closes. We need to provide that same—that same level of protection.
Mr. BARTLETT. I share your concern for making sure that our facilities meet the health requirements of our military personnel and the employees. But the example you gave of cleaning up the ordnance, you know every square foot of land in the country doesn't have to be fit for a nursery and the kids don't have to be able to eat the dirt.
And many times——
Ms. GOODMAN. I agree with you on that.
Mr. BARTLETT. And many times we are spending far more money in cleaning up this property than it is worth in the marketplace. That is just not a wise expenditure of money, and these are very precious defense dollars that we are using to do that.
You know, if you can make no other use of it, plant trees on it, put a fence around it and come back in 50 years and harvest the trees. We want more trees planted. That is a perfectly appropriate use. And clearly, the ordnance is not escaping into the air and is not migrating into the aquifer.
I have a real problem with spending our defense dollars making land usable for the private sector when there are other uses to which they could put that land that would cost us none of our defense dollars.
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Ms. GOODMAN. Well, that is why there are many acres of the former Fort Meade that are today a wildlife refuge and a park, some of which do contain unexploded ordnance which we do not plan to try to locate and remove.
Mr. BARTLETT. I would just hope that we would do more of that in the future. I have seen it in the one base that is closing in our district. We had to spend a lot of money evaluating what the environmental risks might be.
And my question is: If there were environmental risks that were acceptable to our military personnel and to the civilian employees, why do we have to spend any money evaluating if there are environmental risks there when we are going to give it away? If the local community doesn't want it, we will plant trees on it, come back in 50 years and harvest them. But these are very precious defense dollars that are used for this, and I just don't think it is a wise use of our dollars.
Thank you very much.
The CHAIRMAN. Thank you, Mr. Bartlett.
I think we can about get to the end of this. The panel—I wanted to just say something myself. We appreciate, of course, your contribution, all of you, this morning. Of course, we didn't expect you to come up here and say, I agree with everything you are trying to do, you know, give us more of it.
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That is not the nature of the beast that we deal with in reform. When we talk about reform—and we will find people for the listening audience out here, the jury, it is kind of like hearing one side, and you haven't heard the other side yet. We have other panels that will reflect on some of these things.
A lot of these efforts we are making in reform have been suggested by not only DOD itself, but outside organizations. GAO and other people who have studied these things. So there are reasons for these things that we are doing.
And it kind of reminds me, every time you try to reform anything, including this place, I have heard it put this way: First of all, you say, I didn't do it. And then you say, I won't do it anymore. And then you say, I will give it all back. And then you say, according to controlling legal authorities, I am not guilty anyway. And then you say, finally, in any event, I apologize.
So that is how you deal with reform around here. You get all those kinds of—you expect that kind of stuff.
You don't expect people who are being reformed to, without kicking and screaming and yelling and all the rest, give in to it. That is the nature of the beast we deal with, and we will find a little more light shed on this problem later on.
Mr. Dellums.
Mr. DELLUMS. Thank you, Mr. Chairman.
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First of all, you are in rare form this morning.
Second, I join you in thanking the witnesses for their contribution. Mr. Longuemare, we thank you for your admonishments with respect to pace and rate. It is something that we need to look at.
Mr. Hamre, we thank you very much for laying out in very clear terms those areas of the bill in which we have agreement; those areas that you think we need to rethink, to revisit; and, finally, those areas that appear to be sections that create contradictions one from another. That is useful testimony.
Ms. Goodman, I thank you very much for your contribution. I asked a lot of questions, some of them very technical. It was only my intent to try to draw you out as to your interpretation.
I drew from your testimony, first, that there are areas of this bill that you don't perceive as necessary; areas of the bill that are not necessarily helpful; and, finally, sections of the bill where the intent of the drafters are not necessarily clear. Therefore, the intent and the impact of the legislation is not necessarily clear.
For my purposes, I found that testimony extremely useful and very valuable; and I thank you and all of your colleagues for that as well.
I yield back the balance of my time.
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The CHAIRMAN. Again, thank you very much for your contribution.
We will get to the next panel, panel 2, if you can take your places. I think we will get new nameplates up there for everybody.
Does everybody seem to be settled in? We will proceed with the next panel. They have been introduced previously.
The CHAIRMAN. Let's start off with Mr. Hinton, the Assistant Comptroller General of the GAO.
Thank you, Mr. Hinton.
STATEMENT OF BUTCH HINTON, ASSISTANT COMPTROLLER GENERAL, GENERAL ACCOUNTING OFFICE
Mr. HINTON. Thank you, Mr. Chairman, Mr. Dellums, members of the committee.
With your permission, I would like to have my statement submitted for the record.
The CHAIRMAN. Without objection, proceed as you like.
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Mr. HINTON. Thank you, sir. I am pleased to be here today to provide my observations on the Defense Reform Act of 1997, known as H.R. 1778.
The General Accounting Office strongly supports the need to improve DOD's business practices and further reduce its support infrastructure. Our work has shown that there are significant opportunities to improve economy and efficiency by doing such things as streamlining operations, consolidating functions, and increasing public/private competition.
We believe that aggressively pursuing these opportunities could result in billions of dollars in savings. These savings, in turn, could be used to meet other priorities such as weapons systems modernization and readiness. In our view, one dollar spent on inefficiency is one less dollar available to meet other defense priorities.
We think the opportunities for improvement are significant, because DOD has not achieved support infrastructure reductions that are commensurate with the force structure reductions that have taken place. Support infrastructure costs currently represent about $146 billion, almost two-thirds of the DOD's budget, and are projected to remain relatively constant through the year 2001.
DOD must achieve significant savings in its support infrastructure to help meet its aim of increasing procurement funding from $44 billion to about $68 billion between now and fiscal year 2002.
We also believe that the Department has significant opportunities to improve its business practices. As discussed in our February 1997, high-risk report, there are six areas within DOD that we consider to be vulnerable to waste and inefficiency. They are the areas of financial management, information technology, weapons systems acquisition, contract management, infrastructure, and inventory management.
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The Department's inability to effectively address weaknesses in these areas has resulted in billions of dollars, in our view, being wasted and placing billions of dollars in future spending at similar risk. For example, our infrastructure report noted that DOD continues to operate and maintain excess support infrastructure and waste billions of dollars annually on inefficient and unneeded activities.
In order to effectively address the high-risk areas we believe that senior level defense managers need to develop a strategic plan that is based on the framework provided by the Government Performance and Results Act and other recent legislation such as Clinger-Cohen.
Now, let me turn to our specific observations on the bill at hand.
Overall, we agree with the aim of the titles relating to defense personnel reforms, defense business practice reforms and the additional miscellaneous defense reforms.
In my printed statement, Mr. Chairman, we have added some suggestions to enhance some of the effectiveness of some of the provisions. We have some reservations about some, and we ask for some clarity in some, so I think that would help engage in that debate that you just referred to.
In the title relating to defense personnel reforms, we believe there are opportunities to achieve savings by reducing personnel overhead in various DOD headquarters and support areas identified in the bill. Also, it is important that such reductions be well-planned so that the remaining organizational structures are efficient and effective. In that regard, the plans DOD are required to prepare are extremely important; and they are the ones that you have in your legislation.
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Concerning defense business practice reforms, we support increased examination of the potential for outsourcing business activities. A primary reason for the support is the savings that can accrue from outsourcing emphasis on a competitive process involving public and private sector organizations and its emphasis on identifying the most efficient organization.
Further, our work shows that there are inefficiencies in various defense activities addressed in the bill such as the U.S. Transportation Command; and we heard some discussion about that this morning.
In 1996, we issued a report on TRANSCOM raising a number of inefficiencies. Dr. Hamre spoke to the reengineering efforts that General Cross is going through. We have been working with him to try to improve on those, and we currently have a review looking at the progress that TRANSCOM is making to reengineer itself. So that is positive from where I would sit.
There are also significant opportunities to change business practices in defense agencies, as suggested by the title.
We also offer several suggestions to enhance the effectiveness of certain sections in this title. The suggestions relate to such things as the timing for completing certain actions and assuring competition between public and private sector activities.
We do have a question about the section that removes the defense automation and printing services surcharge billed to its military customers. The requirement to remove the surcharge would be inconsistent, we believe, with the working capital fund cost accounting principles. The committee may want to reconsider this section.
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Lastly, the title relating to miscellaneous additional defense reforms. For those sections where we have some comment, we have those in our statement; but we generally agree with the section's aims.
We do, however, question part of the provision creating a board to coordinate audits because it authorized the Under Secretary of Defense, that is the comptroller and the chief financial officer, to participate in jurisdictional decisions among the service auditors and to resolve judicial disputes. This role raises questions, in our judgment, regarding the independence of the service audit organizations; and I think you heard Dr. Hamre this morning raise the same concern.
I am also aware that Mrs. Hill, the inspector general at DOD, has sent a letter to the committee expressing some of the concerns along the same line. Therefore, in our view, the committee may want also to revisit that provision.
As regards title III on the environmental issues, we have not done sufficient work to place us in a position to comment on those right now; and I just wanted to make the members aware of that.
Mr. Chairman, that concludes my opening remarks. I and my colleagues here at the table, when they conclude, would be prepared for questions.
[The prepared statement of Mr. Hinton can be found in the appendix on page 251.]
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The CHAIRMAN. Dr. Zakheim.
STATEMENT OF DOV ZAKHEIM, CEO, SPC INTERNATIONAL CORP. (FORMER DEPUTY UNDER SECRETARY OF DEFENSE FOR PLANNING AND RESOURCES)
Mr. ZAKHEIM. Thank you very much, Mr. Chairman, members of the committee. I am honored to discuss with you some of the issues relating to defense reform and to H.R. 1778.
I should add at the outset that I am doing so in an individual capacity, neither as a member of Secretary of Defense Cohen's recently created Defense Reform Task Force, of which I am a member, or, for that matter, the company I work for, System Planning Corp.
Permit me, though, to say a few words about the task force that John Hamre referred to earlier. I believe its creation is a demonstration of the Secretary of Defense's determination to implement defense reform and to do so in the near term. A number of the members of that task force have been outspoken on the need for such reform for many years. Moreover, some of us on the task force are, like myself, former officials in Republican administrations, while others have long experience in Democratic party politics. It is truly a bipartisan effort.
Finally, virtually every member of the task force has experience as a Capitol Hill staffer of some kind. We all recognize the critical importance of the Congress to the realization of our common objective and, therefore, the importance of the legislation that we are discussing.
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Let me briefly discuss, as I see it, the basic problem, which is managing an end to resource shortfalls; and I know that I have testified before this committee in the past on this very subject.
The Department of Defense continues to be plagued by resource shortfalls that have a particularly harmful effect on the acquisition accounts. Despite ongoing reductions of force levels since the end of the cold war, the cost of manning, operating, maintaining, and modernizing currently planned forces into the future far exceeds the resources that are likely to be made available for defense expenditure.
It is ironic that the last major defense review but one, that is to say the bottom-up review, was tailored to fit comfortably within the budget ceilings that had already been framed by the Office of Management and Budget for the future years of Mr. Clinton's term. It identified all but $13 million of the 5-year savings that the Clinton administration announced 6 months earlier in April 1993, and promised to find the remainder within the plan for fiscal years 1995 to 1998. Forces and budgets, in other words, seem to be very much in balance.
But you all know that the BUR was effectively a dead letter by the time of its public release. Budget constraints forced the administration to lower its force level estimates from those outlined in the review within a few weeks of its appearance.
The recently completed quadrennial defense review has pared force levels even further, again with the implicit promise that forces and budgets will be in balance. As with the BUR, force and/or active military manpower levels have been reduced virtually across the board. Only the Marine Corps seems to have escaped relatively unscathed, though it, too, will be hurt by a planned decline of V–22 procurement levels.
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But there is no clear evidence that the QDR will be any more successful at eliminating budget shortfalls than its predecessor review. These shortfalls are due in no small part to problems that are endemic to the system and which, especially during its first term, the administration aggravated to a large extent. The QDR goes some way but does not entirely do away with these problems.
The administration initially took office in 1993 with a wildly optimistic sense of its ability to manage reductions in defense overhead, in the accelerating cost of weapons systems modernization, and in the historical exponential growth in the O&M operations and maintenance costs.
It then quickly demonstrated a proclivity to commit American forces to peacekeeping operations for which budget funds had not been anticipated.
Third, the administration expanded the level of defense budget funding for nondefense activities, in effect employing defense resources to support social welfare and other activities that might not otherwise have been funded.
Finally, the administration pegged its long-range budget hopes on the extension of current low inflation rates, allowing it to claim savings in billions of dollars. While the QDR itself does not remedy any of these concerns, its focus on infrastructure and business practices offers some hope for the future, as does the legislation we are discussing today.
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Let me talk a little bit about savings that you have identified and that can be further identified. As a first step, I think there is a need for honesty in budget assumptions. The BUR process and its aftermath was not at all assisted by the rosey assumptions regarding savings that could be realized from acquisition reform. Such assumptions served only to mask the gap between resource requirements that the BUR generated and the availability of future funds to meet those requirements. Overly optimistic inflationary estimates only compounded the problem of closing that gap. Those are both dangers we face even now.
Acquisition reform is a long-standing Government objective. It was the subject of hearings over 2 decades ago. I suppose it would have been longer, but I haven't been around Washington that long, so I don't remember them.
While the Clinton administration has made a major effort in this sphere, it is unlikely that reform is going to save the DOD more than approximately a billion or so annually.
It is noteworthy that the DOD recently issued a report on a major aspect of acquisition reform, that of simplifying military specification for contractors, MILSPEC reform; and it conflicted cost avoidance, unrealized anticipated expenditures with actual savings and, as you well know, there is a difference between savings and what you might not otherwise have spent. DOD still could not identify as much as $500 million in annual savings.
Such savings, of course, are praiseworthy; but they are not a panacea financially. Rosy inflation estimates, likewise, aren't the panacea.
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It is unlikely that during the next 6 years, when currently planned systems begin to be fielded and operated, that inflation rates will remain as low as they have been over the past 4 years. There have not been 4 consecutive years with similarly low rates since the 1950's. On the other hand, in 2 of the past 20 years, inflation exceeded double digits; and in 4 others it exceeded 8 percent.
Leaving out the double-digit years, the average annual inflationary increase for the last 18 years exceeded 4.5 percent. Under these circumstances, it would have been far more prudent for the Department to have retained the assumed inflation rates of at least 3 percent, with long-range budget projections extending into the 21st century. The price of an error, the price of Mr. Greenspan's nightmare coming true, is going to be the DOD budget and the top line.
Finally, budget projections should take a greater account of the real cost growth in weapons system development. It is inexcusable that the Department continues to underestimate new weapons costs in much the same manner as it did 35 years ago. Such self-deception simply undermines the Department's own objectives as well as its credibility.
A couple of suggestions then, in addition.
First of all, weapons are not platforms. The case for modernizing weapons, not platforms, extends back to the earlier McNamara days. I know this is not the exact subject of the legislation, but I also know this is something the committee has been concerned about for quite some time. It is no less valid today as a concern.
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If the revolution in military affairs has any validly at all it is to emphasize the importance of new weapons at the expense of platforms. Such an emphasis would have a far-reaching impact throughout the defense structure. Tactical aircraft development could be altered with an emphasis instead on upgrading current systems, and such a decision could obviously affect the many tactical aircraft programs we have today. These concerns obviously address other weapons systems as well.
Another area, protecting the operations and maintenance accounts. As noted above, the costs of peacekeeping invariably have been greater than initially estimated. Withdrawing from at least some of the peacekeeping business could yield a DOD savings in excess of $4 billion each year. A similar figure could be realized through a more vigorous effort to win now nondefense spending from the defense budget, which the legislation in many ways attempts to do.
It should be noted that a reduction of $4 billion would still permit many programs, notably those still associated with environmental cleanup, to remain funded within that budget.
Now getting at the defense infrastructure. We have all heard already and we all know that base operations remain a major source of effort—of savings for the DOD, and I believe the QDR and the Secretary is right to request another BRAC round. Actually, they are asking for two.
Congress must look beyond the politics of the past; being vigilant, but it still should give BRAC another chance. We all know why BRAC is under suspicion today, but it is still a key to savings in the future.
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Bases under consideration for closure in 1995 should again be brought into the Base Closure Commission's purview. Bases slated for closure should not be allowed to remain open for the Reserves or anybody else. If you are going to close them, close them.
Staff working at those bases should be retired. The buildings should be closed, turned over to the private sector. The DOD should no longer be responsible for police and fire protection and other ancillary costs that don't ever seem to go away, even if bases are shut down.
Now there is a significant time lag of about 10 years between changes in allocated force and manpower levels and changes in infrastructure, both physical plant and the work force. It is critical that planners take account of this lag and of the interrelationship among forces, resources, and infrastructure.
In particular, there is a need to take a closer look at housing, which consumes a significant proportion of the physical plant area.
Second, it must be recognized that infrastructure is the home of a significant percentage of defense civilians. Our infrastructure may no longer be that of World War II, but it still too closely resembles that of the 1960's, which is still quite some years ago.
I want to draw your attention to one specific aspect of this infrastructure. The DOD should be more ruthless about cutting defense labs. There is little these labs offer that the private sector can't match. While some capabilities are unique to the Department of Defense, these are far fewer than their proponents will admit, and many hark back to technologies that have long since been bypassed by the private sector. In an era when the Department has stressed contracting out to civilian defense firms and, more importantly, has acknowledged that technical leadership increasingly derives from commercial applications, the need for a large defense laboratory structure is simply indefensible.
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Ultimately, the Department of Defense should recognize that reductions can only be realized through personnel cuts, which is exactly what this legislation does. Personnel costs amount to about half the defense infrastructure budget.
Since civilian personnel costs more on average than do the military, the reason being that you have higher grade civilians doing the same jobs that lower grade military do, the stress should be on eliminating civilian jobs. After all, military personnel assigned to support the infrastructure can also fight wars. Civilians in this regard are one dimensional.
In conclusion, let me simply say that, as the Secretary of Defense has recognized, there is much work to be done in the realm of defense reform. There is a need to reorganize in order to manage the reductions that have yet to be made, those that I may have noted above or others that might be put forward.
This committee likewise is in the forefront of the effort to make reform work. Too many times in the past, efforts at reform were more matters of lip service, of reports issued and then gathering dust and forgotten. The time has long since past when the Nation can tolerate such a lack of seriousness, and I applaud those in the Congress and the members of this committee for throwing in their lot with those who would drag our defense system once and for all into the century that is now upon us.
Thank you.
The CHAIRMAN. Thank you, Dr. Zakheim.
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[The prepared statement of Mr. Zakheim can be found in the appendix on page 279.]
The CHAIRMAN. Mr. Sturdivant.
STATEMENT OF JOHN N. STURDIVANT, PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES AFL–CIO
Mr. STURDIVANT. Thank you, Mr. Chairman.
Mr. Dellums, members of the committee, I am John Sturdivant. I am the National President of the American Federation of Government Employees, which is not only the largest union representing Federal workers but we also are one which represents 300,000 blue- and white-collar workers in the Department of Defense.
Thank you both for inviting me to offer the views of the hard-working civilian employees who help to ensure the Nation's security. If I may, I would like to submit my written testimony for the record.
The CHAIRMAN. Without objection.
Mr. STURDIVANT. I will try to summarize my summary, which has already been summarized several times.
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The CHAIRMAN. That will be fine.
Mr. STURDIVANT. Section 206 requires that defense agencies privatize at least one-third of their commercial and industrial functions by September 30, 1999.
The fact that defense agencies are being considered for privatization is nothing new. What is new and is surprising to us is that the House National Security Committee is mandating that fully one-third of the agencies' work be privatized—without first requiring public/private competition.
Mr. Chairman, I want to assure you that AFGE is not knee-jerk antiprivatization. Federal employees should not perform noncore work if they cannot do it more effectively, more efficiently, and more reliably than contractors.
However, AFGE is also unreservedly procompetition when it comes to noncore work. Full and fair competition for such work spurs Federal employees and contractors to perform better and ensures that taxpayers and warfighters alike receive the best possible service.
I would like to point out that AFGE is the only union that works with the administration to rewrite A–76 and, in fact, some parts of A–76 make it easier to contract out. But, also, we got an addition to A–76 that makes it possible to contract in when the work is not being efficiently and effectively done on behalf of the taxpayer by the outside contractor.
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If allowed to be enacted into law, section 206 would create conditions which would allow defense agency managers, many of whom are already predisposed toward contracting out, to tilt the A–76 process against in-house bids. Defense managers would be encouraged to contract out in defiance of the A–76 process and, in so doing, avoid genuine public/private competition.
Finally, defense agency managers would be inspired to rewrite the rules for public/private competition in ways which would bias competition against in-house bids through the provisions contained elsewhere in the Defense Reform Act which, in effect, repeal significant provisions of A–76.
I don't think it is unreasonable that employees ought to be able to compete for their own jobs. After all, we are talking about civilians who have worked in the Defense Department and who really helped to win the cold war. They should not be tossed upon the human scrap heap if they can compete and if they can win those competitions on behalf of the taxpayers and the people who are fighting the wars.
Regardless of which of these options defense agency managers choose, the consequences for the taxpayers and the warfighters will be the same: paying more, getting less in terms of inferior services and products.
Mr. Chairman, I know that you and your colleagues are impatient to free up money to plow back into modernization, and I agree with that. You can't be a superpower on the cheap, and we think in AFGE that we need to be a superpower. The world is still a very dangerous place. But section 206 will make it even harder to achieve this important objective.
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As I said earlier, much of the work performed by defense agencies has been, is being or will be considered for privatizing. That is not at issue. Whether the privatizing which occurs at defense agencies will benefit both taxpayers and warfighters is what has yet to be determined. However, section 206 makes it much less likely that such privatizing will be cost-effective.
Therefore, I urge the committee to eliminate section 206 or at least amend the provision to require that any privatizing or contracting that occurs must be done in accordance with established procedures for public/private competitions. This ensures that work is privatized out only after deliberate analysis has been performed that proves the work cannot be performed more effectively, efficiently and reliably by Federal employees.
I also want to take this opportunity to outline my concern regarding the anticompetition provisions contained in sections 201, 202, and 203. They implicitly repeal A–76 for the Defense Finance and Accounting Service, the Defense Reutilization and Marketing Service and the Defense Information Systems Agency, respectively. Although there is a requirement that the affected components be given an opportunity to establish most efficient organizations, it is possible that there will not be enough time for managers and employees to put together genuine MEO's before the privatization mandate must be implemented.
Now, this is one of my pet peeves: I think that we in the Federal Government and certainly Federal workers—we should be working every day for the most efficient organization, regardless of whether our jobs are threatened to be privatized or not, because that gives the best value, once again, for the taxpayers. That is the reason why we in AFGE endorsed and really put our arms around this whole effort to reinvent Government that the administration has put forth. We have been trying, through our labor-management partnerships working with local management at the point where the work is being done, to make sure we have a most efficient organization.
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We should be working for that all the time, not just when there is a threat or when our jobs, our force, are perhaps threatened to be privatized. That is something that we are going to continue to work on because we think that is what the taxpayers want.
One of the gentlemen raised—I believe it was you, Mr. Chairman, that talked about reform. Believe it or not, in spite of a lot of the things that have happened in this town—and I have been in and around this business for almost 30 years—reform of Government is going to happen. It is going to happen because the taxpayers, the people who are paying the bills, are demanding that it happen.
That is why we in AFGE, we know that Government reform is coming. We know that the taxpayers want better, more efficient, more effective government and better customer service.
That is the reason why, in our organization, which, once again, is a different direction from a lot of unions, we made the decision that reform is like a freight train. Some union leaders have decided to get in front of it and do this. This union leader has not decided to do that. This union leader has decided to get on the train, to make our way to the engine and then to try to get some of our ideas as to how fast it should go, what direction it should take and where it should stop. But that is what is going to happen with Government reform.
We are in the process at AFGE of building a union that is tough enough not to be afraid of change but smart enough to seize it and shape it and use it in a way that not only benefits our members but benefits the people, the taxpayers, that we provide the services for.
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AFGE opposes repealing circulars requiring for public-private competitions for the work performed by those defense agencies that I mentioned earlier, especially when managers must labor under the blind one-third privatization mandate imposed by section 206. Who knows? They might go to more than one-third if allowed to compete; all of the work might go. But we have got to have some measure of who can do it better, who can do it more effectively, who can do it more efficiently. Section 206 does not give us that measuring tool in order to get there.
If there is no turning back from this course of action, then the committee should at least strongly indicate that it wishes to repeal A–76 in these specific instances only to expedite the competition process, not tilt it against in-house bids. This objective cannot be accomplished, first, by making that preference obvious in the legislation and then by requiring DOD to justify any deviations from the policies and procedures included in A–76.
Finally, I want to address our concerns relative to section 211. Under its provisions, it would require DOD to use standardized forms in lieu of the performance work statements and requests for proposal required by A–76 in the consideration for conversion to contractor performance of those commercial services and functions at military installations that have been converted to contractor performance at a rate of 50 percent or more.
It is important to note that this one-size-fits-all approach is already being attempted as part of the omnibus A–76 study currently examining functions performed at the Air Force Reserve bases. Thus far, standardization is not working as managers come to the realization that every installation is different; their requirements and missions are not always the same; their capabilities are different; the people are different; their skills are different; and their environments are different.
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Also, I would like to remind the committee that even if a function or service has been contracted out or privatized, in many installations there is no guarantee that similar savings will always be realized elsewhere in the Department or that such an alternative is necessarily desirable from the standpoint of national security or force readiness.
Therefore, I urge the committee not to eliminate important parts of the A–76 process which are designed to ensure that site-specific factors are given the consideration they deserve in the contracting out decisionmaking process.
If, however, the House National Security Committee is determined to take this course of action, I urge the panel to at least add an explicit requirement that DOD abide by policies and procedures in OMB Circular A–76 other than those dealing with performance work statements and requests for proposal.
Finally, I don't want to start a cat fight, but I must respectfully disagree with my colleague at the end of the table who termed Federal employees as one dimensional. Federal employees are not one dimensional.
These are civilian employees, my members from the Anderson Army depot, who went in Desert Storm to help put applique armour on the M1–A1 tanks. They were over there during the buildup. Federal workers at Letterkenny and other depots in Pennsylvania, even though they had gotten reduction-in-force notices, went on 12-hour shifts to help make sure that the materials moved and our country got the service that it desired.
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Throughout history of this country, Federal civilian workers have worked side by side with the uniformed military; and they have worked as a team. These are not one-dimensional people. They are at least four-dimensional.
My constructive criticism notwithstanding, Mr. Chairman, thank you for inviting AFGE to offer this testimony. I will be glad to try to answer any questions that I can. Those that I can't answer, I have my technical people with me; and we can get you the answers. Thank you.
The CHAIRMAN. Thank you, Mr. Sturdivant. Thank you for getting on the train.
I have experienced just what you are talking about, you get run over sometimes if you are standing in front of that train. But try to get on and do what you can there.
Just for your information, you have already convinced us on one point there. We are going to try to get the Rules Committee to allow us to amend the section 206 by the one-third and just make it compete like—having it competing like the rest of the groups.
Mr. STURDIVANT. Yes, sir.
[The prepared statement of Mr. Sturdivant can be found in the appendix on page 304.]
The CHAIRMAN. Mr. Dellums.
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Mr. DELLUMS. Thank you, Mr. Chairman. I just have one question.
Mr. Sturdivant, in your discussion of section 206 you mentioned cost-effectiveness. I would just like to ask you, what has been your experience with respect to outsourcing? When the Government makes a decision to outsource, is it your experience that they ever go back, say, 2 years later to assess the original decision to ascertain whether or not that decision was cost-effective then and whether or not to continue down that direction, continue to be an efficient and effective way to go?
Mr. STURDIVANT. Our experience has been—and that is one of our pet peeves—is once the Government outsources, of course, you lose a lot of the technical capabilities and knowledge of the employees; and, of course, in a lot of instances you lose a lot of the equipment. A lot of times, the Government gives the equipment to the contractor.
So, to my knowledge, there is not a process where—and we would like to see one where they go back and evaluate, because, in a lot of instances, it can be privatized at a bid that really is low in relation to the in-house bid. But I don't know that there is a procedure where they look at that in the outyears and take a look at how the costs of these contracts rise.
So that is something—I don't believe that that is the current example, the current system; and certainly it is something that we would like to see.
We see now about 50 percent. We are winning about 50 percent of those. There is some work that we simply can't do cheaper.
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If you take a lot of the base ops work, a lot of the work where they are painting BOQ's, where they are cutting the grass, where they are doing a lot of that work, we are really underbid because, in a lot of instances, the contractor—even with the Service Contract Act, the contractor is not paying the benefits, the health care and these types of things that Federal workers have.
There you have a policy question as to whether or not the Government, the Federal Government, wants to go from a question of having a work force, even though it is basically the working poor, where they have health care, of where they have other benefits and outsource it, where in a lot of instances the people that you have working don't have that.
But under reviewed A–76 procedures we are winning a good 50 percent of those; and, as I said before, we are trying to drive it right now, even before the organization is threatened with outsourcing, to make sure it is the most efficient organization.
Mr. BATEMAN [presiding]. Next I will call on Mr. Bartlett for any questions he may have.
Mr. BARTLETT. Thank you very much.
There are two considerations relative to downsizing in the procurement. One of them has to do with the mechanism of procurement and the other has to do with the kind of downsizing that the private sector has done, and I have a question relative to those two.
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It is my understanding that when foreign countries come to buy a fighter aircraft that they can purchase it at considerably less cost than it costs the Pentagon to buy it simply because they purchase it on the basis of performance when delivered rather than, as the Pentagon does, have a lot of observers there to make sure that appropriate manufacturing techniques are pursued. So we could presumably lower the cost of our procurements if we procured them the way Switzerland and so forth procures our fighter aircraft.
Second question relates to the kind of downsizing and middle management that has gone on in the private sector. My question relative to these two is: How far do you think we have progressed in the Pentagon relative to the midmanagement downsizing that we have seen in the private sector?
Second, what kind of consideration are we giving to changing our procurement procedures so that we can avoid the added manufacturing costs that are incident with having a large number of observers in the factory to make sure that appropriate manufacturing techniques are adhered to?
Mr. ZAKHEIM. You want me to go first?
Mr. HINTON. Yes.
Mr. ZAKHEIM. Boy, walking the plank first.
On procuring fighters, my experience with some of these foreign countries has been that they have actually complained that they are spending more than we are. They say we rip them off; we have all sorts of ways of padding the prices. It is not at all a uniform kind of experience.
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In general, to the extent that there are so-called savings for foreign countries for buying our systems, it is primarily because we have already paid the money for research and development. In fact, we have had surcharges to deal with just that. Then the foreign countries complain that, why are we charging them the R&D charges? And, of course, it is simply to cover costs of our own.
So I don't think that, if you actually look closely at it, the overseas buyers of American systems are getting some kind of special break. The reason they come here, frankly, no matter how much they hate each other, very often we find countries that are at loggerheads with each other both buy American. The reason they do is because our system does work. We do produce the best, and there is a reason for that. So I don't think that they are necessarily buying on the cheap.
Regarding downsizing in the Department versus the private sector, I think you will find, if you speak to people in the private sector, they will point out that they have gone much, much further in cutting middle management than the Department of Defense has done. For all the reasons that I think you have already heard today, it is very, very difficult to go to people who will constantly tell you they are efficient.
In 1980, in 1985, in 1990, take any organization you wish, take any organization in the Government that you wish, and they will always tell you in that year that they were efficient. Then, 5 years later, they will tell you how now they are more efficient than they were, which implies that then they weren't efficient. And you will see this throughout the record. I mean, this is just the classic way of doing things.
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In the private sector, it is obviously much easier. A CEO comes in and says, I am eliminating 20,000 jobs in 4 months; and, boom, it is done. That is that. People may complain. People may go to the news media. Stockholders may have one attitude or another.
Obviously, it doesn't work that way in Government. But, generally speaking, I think it is safe to say that the private industry, when it has gone after middle management—and that is not across private industry, it is by company frankly—has done so in a way that has been both more radical and quicker than for a whole host of reasons the Federal Government can do.
Mr. HINTON. I, too, would say I don't think there is any uniformity in how the foreign governments buy the systems out there. I think that the United States has a market, and it is high tech, and I think that largely drives why they come to the United States. They may pay more, but I think they get better quality. But that is an individual, country-by-country decision that goes into that.
On the downsizing, we at GAO—I don't have a precise answer as to where things are on middle management. I think our experience, looking at the private sector, what we have seen happening as companies, when they recognize that they do need to restructure, reengineer, have started asking themselves the question: What business do I really need to be in?
Once they answer that, then they start coming down the line to shimmy it down. OK, if I am in this business, what do I need in my middle management, my senior management? But the middle management has been squeezed as that process has worked.
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What we have seen in DOD and in the administration, NPR is moving in that direction to deal with some of the middle management. But that is evolving, I think.
I think also that acquisition reform and time, as we see some of the initiatives of Mr. Kaminski and Mr. Longuemare, as they evolve on that side you will see some of the middle management shrink possibly in that score. But the question is: What is the mission? What is the core mission? What do I need to support that core mission? That has got to be asked in DOD to get them to the position as to the resources they need to determine what that work force is, in particular middle management.
You know, there are two types of—and two parts of the bill, management headquarters and the acquisition work force. We don't have a specific comment on what those precise numbers should be. However, I think there is a definitional problem associated with both of them as to what constitutes management headquarters, and we heard discussion today about what constitutes the acquisition work force. There have been a lot of definitions out there. I think the legislation that we are discussing today takes a step to try to define that to give you a baseline that you can measure over time where you want to go.
Mr. Bateman, I know you had a hearing that we talked on, and that was precisely the point that we brought up on the acquisition side. There were about five or six definitions operative in that hearing. On both scores, GAO is now looking at the management headquarters, how the definitions are, what is there, who is there, how much, what is it costing us to operate those functions? Similarly, we are doing work for this committee on the acquisition work force.
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So I think the jury is still out a little bit on that, but I do think the legislation makes a step at let's define both of those entities and let's start on an approach to where we want to go and how to get there.
Mr. STURDIVANT. We did some different things in private industry. I mean, you have got to remember in private industry, in a lot of instances, people would wake up, the plant would be closed, gone to Mexico, gone somewhere else, no jobs, no pension, no health care.
Or a CEO—like you said, a CEO would come in and say, we are going to cut 10,000 jobs; and folks would get one or two weeks' notice, if they were lucky, in the private industry; and they were gone.
We began talking to the Bush administration when we knew we were going to have a smaller defense. Basically, we knew the cold war was coming to an end. There was going to be downsizing in the Department of Defense. We began having discussions with not only the administration but up here as to how do we do this in a humane way. How do we do this in some kind of a rational way so we don't affect national defense and security? We began talking about buy-outs, early-outs, early retirement, continuation of health insurance.
I can remember coming up here and testifying and saying, you know, if you can build a missile and shoot it 6,000 miles and have it land in the space of a parking lot, you ought to be able to put a person's name in a computer and match it somewhere else with skills and move them there. So we did some different things; and, as a result of that, the Defense Department, once we got agreement—we got agreement with the Bush administration late in its life, and we were able to have a more humane process to downsize the Defense Department.
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I think that is a right thing to do. I think that—from a policy standpoint, I think that we did the right thing, working together. I think that that is one of the successes that we had the administration and with Congress and with us.
The other piece, though, is that we are doing some experiments. We are trying to do some experiments around team processes. Managers are people, too; and I would—even though we don't represent them, I would not be open to just putting, you know, those folks out on the street, you know, sua sponte. So we have got to determine how do we shrink the middle management and how do we do it—continue to do it in a humane, compassionate way?
Of course, defense has not moved as quickly as we would like to see them do it, because of the fact that I continue to get a lot of frustration from workers who want to reinvent, who want to streamline and, basically, they are in an instance where they are just changing the titles of the managers but they are not squeezing down and they are not empowering the front line workers to do that work. So we have got to continue to do that.
In my discussions with the administration, I was telling them that, in your first term, all the easy stuff has been done in government reinvention. Everything that we do in the second term of the administration is going to be tough, difficult decisions as we continue to have or try to work toward a government that is more focused, as we continue to try to make some determinations as to what kind of a government we are going to have in the 21st century, what is it going to look like and how do we move those folks out who have given good service but who, in a 21st century government, will not be needed? And defense can do more on that. But we are trying to help them and work with them on that. But it can stand some additional emphasis.
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Mr. BARTLETT. Thank you very much for your thoughtful answers.
Mr. Chairman, I think that there is a need to address in perhaps a more specific way whether or not the policy of buying on the basis of performance might save a lot of procurement dollars, as compared to the current policy which buys largely on the basis of adherence to MILSPEC procedures for manufacturing. This is a policy decision that I think deserves some thoughtful pursuit.
Thank you.
Mr. BATEMAN. Thank you, Mr. Bartlett.
Mr. Snyder.
Mr. SNYDER. Thank you, Mr. Chairman.
Mr. Hinton, I had a couple of questions for you, if I might. I used to live in a boxcar, so I love train metaphors.
You made a comment about—in your written statement on section 201—it is on page 14 of your statement—that you think that rather than going ahead with the outsourcing competition for the finance and accounting services, that the capacity isn't there and that it needs to be a pilot. I mean, effectively what you are saying is the train needs to be slowed down in this area. Is that a fair characterization?
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If we go ahead—and this legislation is already about to be on the floor. If we leave this section intact and it becomes law, are we headed for problems or not?
Mr. HINTON. The counsel that I am offering through our statement here is that we do think that we need to take into account the experience of some of the private sector entities who have looked at this, have learned out—they went into it thinking they could outsource. When they found the capacity in the private sector to accept that and that capacity was not there, this could be the same thing. It faces parts of DFAS; and what we were suggesting is that, in terms of the legislation, we may want to go slow and pilot test this on one or several small DFAS centers to see what works and what doesn't work.
Mr. SNYDER. I understand. I thought that was pretty clear.
The second question, I guess I put this under—going back to trains. As the train goes by, there are a couple of cars I can't even read the writing on; they are going so fast. I am talking about title III now, the environmental section.
I don't know if you heard Ms. Goodman's comments earlier, but she said there was a section in there that she said she didn't know what it meant and couldn't find—I respect her opinion; I think she is a bright woman—she couldn't find anyone who knew what it meant either. You all have decided—I believe your phrase was you have not done sufficient work on title III. Well, as you know, that is—the most spirited discussion going on is with title III. Are you opting out because that is not your expertise or it is just you haven't had time to look at it or what?
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Mr. HINTON. We haven't had sufficient time to delve into it and discuss and try to make sure we have understood all the issues. We have done some work around compliance-type issues, but I wasn't in a position where I could come up and feel comfortable offering a comment on that.
Mr. SNYDER. Is that something that you are still working on given that it is——
Mr. HINTON. We are still looking at that, but I do not have it here for the committee today.
Mr. SNYDER. Will you be coming forward with a report that you will be sending to us all?
Mr. HINTON. I will be happy to provide something for the record.
[The information referred to can be found in the appendix beginning on page 416.]
Mr. SNYDER. Right, on title III.
Thank you, Mr. Chairman.
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Mr. BATEMAN. Mr. Reyes.
Mr. REYES. Thank you, Mr. Chairman. I have got just a brief comment.
Because I think part of what makes me uncomfortable when I listen to or have listened to some of the testimony is that we are playing really fast and loose in terms of BRAC 2 and BRAC 3 and the impact that it has on Federal workers that have been very loyal and have been there when this country has needed them.
I don't feel comfortable in the concept of doing the kinds of things that we are emulating corporate America, because part of what I have read in recent months is that perhaps in the spirit of downsizing some of these large corporations have now recognized that they downsized too much.
I think that in the concept of national security and the implications of what we do in the context of we probably won't get a second chance and recognizing that we have got so many unresolved issues internationally, I would hope that we would play a smarter game than try to get into a spirit of competition of how fast can we dismantle and downsize our whole defense industry.
I don't have any specific questions. I just wanted to express my reservations about some of the testimony that we hear before this committee. I think it is important to recognize that we are here today and enjoying the kinds of benefits that we enjoy because of Federal employees that have worked very hard. Federal employees, irrespective of the fact that they were going to be laid off or terminated, were there when this country needed them.
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I think we need to do right by those employees, and I think we need to do right in the concept of what we are about as a National Security Committee, to do the kinds of things that are prudent and not be so quick to downsize and so quick for calling for a BRAC 2 and 3.
Thank you, Mr. Chairman.
Mr. BATEMAN. Thank you, Mr. Reyes.
Mr. Rodriguez.
Mr. RODRIGUEZ. No questions.
Mr. BATEMAN. No questions.
The acting chair wants to thank you each for your testimony. I have read your prepared statements, listened with great interest to your oral presentation.
Obviously, we are trying to do some very significant things in this so-called defense reform package. I think most would give us credit for having a bundle of good intentions, but we also know that old phrase about where good intentions sometimes leads you to.
I am gratified to hear that the section 206 is going to be visited with specific reference to removing arbitrary percentages and substituting the A–76 process.
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There are aspects of what we are doing and saying in regard to A–76 and outsourcing and privatizing that I think the underlying intent is very good, but it is extremely important that we be careful with the details. And whatever may happen before the Rules Committee or on the floor, this bill is a work in progress through the time that we will be going to conference with the Senate; and, hopefully, we will improve it at each step of its legislative journey.
With that, we thank you very much.
Mr. HINTON. Thank you, Mr. Chairman.
Mr. ZAKHEIM. Thank you.
Mr. BATEMAN. We will invite the third panel to take a seat at the commmittee table, the panel consisting of Mr. John Spisak, president and CEO of Terranext Corp. of Lakewood, CO; Mr. Larry Hourcle, associate professor of environmental law and director of environmental law programs, George Washington University National Law Center; and the Honorable Gale Norton, attorney general for the State of Colorado.
We welcome you and look forward to your testimony.
The attorney general will join you at the committee table very shortly. We have now had two corrections of my mispronunciation of your name and for that I apologize. Attorney General Norton, we welcome you to the committee and ask you to proceed as soon as you are ready, and your written statement has been made a part of the record. You can proceed any way you see fit.
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STATEMENT OF GALE NORTON, ATTORNEY GENERAL, STATE OF COLORADO
Ms. NORTON. Thank you, Mr. Chairman. Members of the committee, I am Gale Norton, attorney general of the State of Colorado. Although the support efforts to streamline the Federal Facility Cleanup Program thereby maximizing the dollars of each dollar spent, I urge you to delete title III from the bill.
In addition to my own written testimony, I would like to offer for the record the written testimony of Dan Morales, the attorney general of Texas. He is Chair of the Defense, or he is a member of the Defense Environmental Task Force, a federally chartered advisory committee, which has established a future land work use working group.
[The statement of Mr. Dan Morales can be found in the appendix on page 388.]
In addition, I would like to submit for the record letters from Attorney General Chrissy Gregoire of Washington, who is the chair of the National Association of Attorneys General Environment Committee, a letter from an Attorney General Scott Harshbarger of Massachusetts, president of the National Association of Attorneys General, a letter from Attorney General Skip Humphrey of Minnesota, who is chair of the NAAG legislative subcommittee, and a letter from James Bickford, secretary of Kentucky's Natural Resources and Environmental Protection Cabinet.
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Mr. BATEMAN. Without objection, all the letters and statements you mentioned will be made a part of the record.
[The information referred to can be found in the appendix beginning on page 231.]
Ms. NORTON. Thank you, Mr. Chairman. Mr. Chairman, as part of my background, I have had the opportunity to be involved in hazardous waste issues for a number of years. Before becoming attorney general from Colorado, I served in the Reagan administration. And one of my responsibilities was to be part of an interagency task force dealing with Superfund amendments.
Eventually the issues we dealt with became a part of the 1986 Superfund amendments. In addition, I have represented private parties involved in Superfund sites. As attorney general of Colorado, I have a great deal of responsibility for dealing with hazardous waste issues. We are fairly unique in having both a major Department of Defense facility, the Rocky Mountain Arsenal, and a major Department of Energy facility, Rocky Flats. My perspective results from that.
It also is reflected by most attorneys general around the country. The letters that I have submitted reflect the same kinds of opinions that have been part of the National Association of Attorney General resolutions passed over the last several years. The National Governors Association also had a task force that dealt with cleanup of Federal facility Superfund sites, and again, they have reflected very similar views. Of course, my own comments today are my own views and should be seen as such.
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There are two principles that I believe are at the core of my considerations of the proposed legislation. The first of those is federalism. There is a very localized effect to hazardous waste sites. Those who are in the community are the ones who are most effected by those sites. State and local officials have to deal on a very firsthand basis with the problems created by those sites.
I believe strongly in the principle that as a Nation, we are best served by the strength of 50 different States that come together as part of our Federal system, and that the Federal Government should give deference to the States whenever possible.
The second major principle that I believe is very important is that the same roles should apply to the Federal Government as apply to private businesses. When this Congress came in through the 1994 elections, one of the principle plans was that application of Federal rules should be extended to congressional offices with the idea that the country would be better served with those who write the rules having to live under those rules.
A similar something can be said about the Federal Government and application of environmental laws to Federal agencies. To the extent that improvements need to take place in those laws, those should be evaluated across the board and not have special laws written for the Federal agencies. If there are problems, we should solve those for everyone.
The provisions included in title III are not only extremely wide-ranging, but they are also highly controversial and therefore should be subject to full public scrutiny and debate. For example, Section 301 affects not just Federal facilities, but all sites being cleaned up under CERCLA, thus this legislation will affect thousands of responsible parties, hundreds of thousands of citizens living near and impacted by contaminated facilities, and dozens of State and territorial governments, not to mention several Federal agencies.
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For this reason, H.R. 1778 must be subjected to full and adequate review by all affected parties. And while it is good to have the same rules applying to Federal facilities, I think that process should include both the private businesses and the Federal facilities as part of the consideration of this legislation.
Many of the matters addressed in title III, such as remedy selection and State authority are currently the subject of stakeholder meetings in the House and the Senate. That process should be allowed to continue rather than being short-circuited.
After my stance review, I see several potential substantive problems with the bill. First, several of the provisions simply ignore legitimate State interests in the CERCLA cleanup process. Second, some of the provisions contravene compromises reached by the States and Federal entities after extensive negotiations. Third, they are shortcut solutions to difficult issues still being debated through stakeholders meetings in the House and Senate. Fourth, some provisions in title III are unnecessary and attempt to fix what is not broken.
For example, section 302 of the bill would make future land use the pivotal consideration in the remedy selection process in Federal facilities. Certainly, one of the lessons learned during the first decade and a half of implementing CERCLA is the cost of requiring cleanup of property to a level safe for residential uses in some instances far exceed those necessary for commercial or industrial uses. Most agree that it does not make sense to require these additional costs if residential use is not reasonably anticipated.
This understanding has been incorporated into EPA guidance on land use, and is increasingly reflected in the remedies being selected. However, there exists a general consensus that legislation is desirable to provide for the methodical inclusion of land use considerations into remedy selection, and States generally concur.
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Therefore, there are, however, right ways and wrong ways to factor land use in decisionmaking. We must be certain that whatever reforms are ultimately enacted consider land use in the right way.
The right way is to ensure that entities and individuals who will be most affected by land use and cleanup decisions have meaningful input in the process of designating future land use scenarios. The wrong way from the State perspective is to allow the polluter to decide unilaterally what future land use will be on a piece of property and tailor its cleanup for that use. It appears that title III allows this scenario. Specifically, it allows the President to choose the future use of a property and then to select a cleanup remedy consistent with that land use.
Another very troublesome aspect of title III is the section dealing with the transfer of EPA authorities at Federal facilities to willing and qualified States. Much of this language in section 30 is taken from H.R. 4916, which States negotiated with Federal agencies, including the Department of Justice, Department of Energy, and Department of Defense in 1994. Changes to that language, however, that are found in H.R. 1778, would so fundamentally alter the compromise reached between the States and Federal Government as to render it virtually meaningless and therefore unacceptable to the States. Specifically, the 1994 Federal State promise acknowledged that qualified States were appropriately overseeing its cleanup.
States unlike EPA, are not hamstrung by the unitary executive theory. They maintain a truly arm's length relationship with the regulated agencies. States are recognized as being flexible, creative and effective at identifying and creating innovative solutions to difficult problems. States can be trusted to select cost-effective remedies at Federal facilities.
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Some have argued that allowing States to regulate Federal facilities cleanups would break the Federal budget, because divorcing decision making authority from funding responsibilities provides incentives for States to gold plate remedies. I disagree. State delegation at Federal facilities ensures oversight, not gold-plated remedies.
States have no incentive to drive up the cost of cleanup unnecessarily. Rather, States are motivated to achieve thorough remedies as quickly and efficiently as possible, to conserve their other scant resources and convert Federal facilities or portions therefore from dead zones into community assets.
Far from raiding the Federal Treasury, States have proven when implementing either Federal hazardous waste laws or their own cleanup programs, the remedies they select are far more cost-effective than those chosen by Federal Superfund managers, and begin and end far more swiftly.
States are flexible. At Rocky Flats, we negotiated an agreement which allowed the Department of Energy 10 years merely to investigate the contamination at the facility, not to clean it up as erroneously reported by GAO. Since signing the agreement, we have granted over 70 extensions for good cause. Only a few requests for extension were denied.
Much of the existing interagency agreement expressly allows consideration of appropriation shortfalls, and the new interagency agreement that is being negotiated will take budget constraints into consideration in setting schedules and milestones.
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States recognize there are limited Federal resources. What they want is a sustained commitment to make the progress needed. Although the record demonstrates that States can be trusted to regulate Federal facilities responsibly, we have agreed in the past to grant agencies additional protections that are not enjoyed by the private industry. Most importantly, H.R. 4916 required States to enforce their remedy decisions in Federal Court, thereby allowing the Federal agency to challenge these decisions, despite the CERCLA section 113(h) preenforcement review ban.
States also agreed to explicit legislation that said they cannot impose more stringent requirements against Federal agencies than against private parties, and language that required dispute resolution to proceed all the way to the Governor, rather than just to the top State environmental officials.
H.R. 1778 radically deviates from the compromise language by establishing a scheme whereby States would forfeit their independent RCRA authorities when they are delegated CERCLA authorities, and States would have to pay for remedial activities beyond those required by Federal law. Thus, the bill gives the States the authority to select remedies, but, in practice, prevents them from imposing State requirements more stringent than Federal laws would impose. Under current law, States can independently enforce their own hazardous waste management statutes at any facility being cleaned up under CERCLA.
The bill then would place the States in a worse position than they currently hold. In addition, the bill results in a situation in which private firms must comply with State laws, but the Federal Government need not do so. For this reason, the States oppose those delegation provisions contained in H.R. 1778.
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Section 303 is another one of several examples of legislation that is unnecessary and creates more problems than it solves. It attempts to create a criminal liability exception for Federal employees in instances where most are not appropriated to meet Federal requirements. This is a laudable goal, but completely unnecessary.
Despite the fact that the Federal Facilities Compliance Act, which clarifies the waiver of sovereign immunity for criminal liability has been in effect for 5 years, no governmental employee has ever been prosecuted for noncompliance with environmental laws that was a result of inadequate appropriations, nor do State or, we assume, Federal prosecutors intend to bring such actions. It would be fundamentally unfair to punish employees for acts over which they have no control.
The language proposed in H.R. 1778, however, would do more than just protect such innocent employees. It would also repeal statutes put in place over the past several years that enable the States to ensure adequate cleanups at Federal facilities. It would preempt State law and repeal the criminal liability provisions of the Federal Facility Compliance Act, which those provisions were carefully considered and supported by a wide consensus of interested parties, including States.
Because there is no evidence that criminal liability is a problem that requires a legislative fix, because the proposed language would preempt State law, and because the bill would create loopholes in the current system, States strenuously oppose this provision.
The Superfund program as a whole and the Federal facility cleanup program in particular is beset with many problems. I can understand the frustration of this committee with the slow progress of reform and can further understand the committee's desire to push the progress forward. However, I believe the best way to ensure workable, fair, and comprehensive legislative reforms is to pursue bipartisan solutions in a process which allows extensive stakeholder involvement. This has not happened in H.R. 1778. Therefore, I would recommend that title III be deleted from H.R. 1778 and the matters addressed there be considered separately. Thank you, Mr. Chairman.
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[The prepared statement of Ms. Norton can be found in the appendix on page 317.]
Mr. BATEMAN. Thank you, Attorney General Norton. Now Mr. Spisak.
STATEMENT OF JOHN SPISAK, PRESIDENT AND CEO, TERRANEXT CORP., LAKEWOOD, CO
Mr. SPISAK. Thank you, Mr. Chairman. Mr. Chairman and members of the committee, my name is John Spisak, the President and CEO of Terranext, a national remediation firm that is based in Lakewood, CO. I have 16 years of experience in dealing with Superfund and related issues, and about 5 years of experience advocating comprehensive reform of the program.
I feel comfortable in sharing with you my assessment of Superfund today and what the Congress ought to do about it and the merits of title III of H.R. 1778, which this committee is discussing today. First, make no mistake about it, Superfund remains a horribly broken, wasteful, and unproductive program.
Using EPA's own data illustrated by the chart over there, you have heard a lot and will continue to hear a lot about administrative reforms and how they are improving the program, speeding cleanups, bringing successes to the program. Once again, using EPA's own data, you will see that the program is stagnant and, in fact, in numerous areas it is declining.
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The situation is this: Administrative reforms aren't working. They are too little too late. We need comprehensive reform of the program. The primary cause of this situation is the Superfund statute itself. It dictates, among other things, the punitive retroactive strict joint and several liability scheme in a remedy regime that compels preferences for permanent and treatment remedies.
The Superfund statute essentially sets out rules of the game that have dictated the behavior which we have seen exhibited by both governmental and private sector players over the past 16 years and the results have been both predictable and a national disgrace. Unless the statute itself is reformed, do not expect the results of Superfund to change for your Federal facilities or anyone else.
As found by GAO and private sector analysts alike, EPA's so-called administrative reforms have produced little real change, what I referred to a moment ago. The reason for this is because they are inherently insignificant. They are minimal in scope, and the overriding mandates of the Superfund statute prevent more productive administrative action.
Second, the entity in the greatest need of Superfund reform is the Government itself. The Government's potential liability at nonFederal and Federal facilities is staggering and far exceeds that of any other public or private entity in the country. The lion's share of the Federal Government's liability falls within DOE and DOD, who I believe aggressively supports the kind of reform reflected in title III of H.R. 1778.
The Federal Government spends about $9 billion a year on hazardous waste cleanup and about two-thirds of that goes to DOE's Federal facilities side. Over the next 75 years, the total combined Federal agency cost could range from $234 to $389 billion. Clearly, there is a major responsibility here in making sure that the expensive efforts are carried out on a cost-effective basis for the taxpayers and that serious Superfund reform is absolutely needed if you are going to meet that responsibility.
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I am familiar with the estimates indicating that with remedy reform savings of nearly 35 percent, DOE and DOE alone could save over $900 million a year. Other comprehensive reforms designed to streamline the now unnecessarily burdensome administrative processes and produce overhead could save an additional $334 million a year at DOE and DOD facilities. Together these administrative process reforms would allow both agencies to reprogram nearly $1 billion a year to other high priority national security goals, while still accomplishing their mission to protect human health and the environment. These are big numbers and they reflect the enormity of the opportunity before this committee.
As for title III, I view it as a necessary and good, although certainly not perfect, piece of legislation. Work still has to be done in certain areas such as the role of reasonably anticipated future land use, the definition and remediation of hot spots, which in many cases require expensive treatment remedies, and certainly care must be taken in fashioning the State role at Federal facilities. Title III is headed in the right direction on these issues, but work and amendment remains necessary.
In my written testimony I outline my recommendations on improving these provisions. With respect to other sections of title III, the bill takes the correct approach which should produce significant, positive results. I refer specifically to title III's language on long-term operation and maintenance obligations, and the prenotification of Congress regarding the cost of DOE compliance requirements.
Overall, I encourage this committee to pursue title III and work closely with the Commerce Committee and Transportation and Infrastructure Committee of this House which have jurisdiction over Superfund issues. All Americans deserve your best collective efforts on this important matter. I appreciate this opportunity to share views and look forward to any questions you might have.
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[The prepared statement of Mr. Spisak can be found in the appendix on page 232.]
Mr. BATEMAN. Thank you, Mr. Spisak. And now Mr. Hourcle.
STATEMENT OF LARRY HOURCLE, ASSOCIATE PROFESSOR OF ENVIRONMENTAL LAW AND DIRECTOR OF ENVIRONMENTAL LAW PROGRAMS, GEORGE WASHINGTON UNIVERSITY NATIONAL LAW CENTER
Mr. HOURCLE. Thank you, Mr. Chairman. It is an honor to be invited to present testimony before the committee. I have a written statement. I ask it be entered into the record at this time. It also contains the necessary information for the committee with regard to the involvement of George Washington University and my involvement in Federal research.
Mr. BATEMAN. Without objection it will be made a part of the record.
Mr. HOURCLE. Thank you very much. I am very pleased to see the committee willing to undertake the issue of Federal facilities under the Comprehensive Environmental Response Compensation Liability Act. I think too often the subset of issues gets lost in the larger Superfund or CERCLA debate. I want to set the stage for the committee with maybe a little bit of a historical perspective of how we got here and why I think you sort of reached out to the reforms that you have in 1778.
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When I remember back to the eighties when I was a law student in the environmental law program at GW, I remember the purpose of CERCLA then was really to deal with some very significant, very tricky and difficult and health threatening sites, and that was the original purpose until 1986, when, in an effort to get more cleanup going, there was a major reform, and as part of that reform, section 120 of the act was included, created, and that sort of presumptively placed all Federal facilities into the CERCLA process. Not just those that were the really significant, tricky sites to cleanup, but sort of presumptively drives all Federal facilities into the CERCLA cleanup process. And what has happened is that, in my way of looking at it, under the Federal facilities CERCLA section, a little bit reinforced by the Defense Environmental Restoration Program, which as we all know was created by section 211 of those Superfund amendments and Reauthorization Act, CERCLA is now being used to remediate many Federal facility sites and many DOD sites that just don't have the equivalent threat of private sector sites.
GAO estimates, and I have got a little graphic in my testimony, there are about 450,000 sites of potential concern throughout the United States. Only 1,200 or so sites, about .2 percent, really are on the national priorities list and get the full attention of CERCLA. What is happening with the rest is most are being cleaned up under State law. And I think with that regard, what your bill tries to do is build a lot of commonsense approaches that the States have had to deal with as they adjust to their responsibilities of dealing with the non, and put those on the Federal facilities site that aren't NPL caliber.
The process starts off with every Federal facility site going through a process of a fence-to-fence listing, and the law requires that all these sites that are required to follow that process until EPA makes a decision as to whether those sites should go on the national priorities list or not. I think one of the most significant problems that I saw when I was in Defense and continue to see now is that, frankly, EPA doesn't make that decision.
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Under the law now, until you can say a site isn't on the NPL, it really doesn't default into the somewhat, what is developed as the more common-sensical State law processes for cleanup. And I think one of the dysfunctional aspects about CERCLA is that EPA really has no obligation anymore to make that call in a timely fashion. That creates a lot of frustration, because having worked Federal facilities cleanup, you sort of need to adjust those cleanup strategies to the possibility you might be on the NPL, and therefore follow all the guidance and requirements that NPL would require of those caliber sites.
And because you might be going under a State law regime, trying to think ahead about how you might be asked to cleanup that side in the State law. So in essence, what happens is you wind up following two masters for most of the cleanup process and that redundancy costs time and effort and money.
As I said before, I think what 1778 seems to single out is these modern concepts of how to address these non-NPL and less serious sites, but it does so in a way, unfortunately, that sort of wraps in all the sites that are addressed under CERCLA. I think there are a number of serious sites that do require very active, rigorous attention, but at the same time General Norton would probably agree there is a fundamental difference as to how a site needs to be addressed, whether it is Basin F over Rocky Mountain Arsenal or whether it is the sort of general industrialized risk of closing Lowry Air Force base about 5 minutes to the South.
I think we need to find the right solution to the right problem. We need to address the serious sites, but leave the less risky DOD sites from the attendant cost and scrutiny that CERCLA requires again from the paradigm of EPA for the very most serious sites.
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Now, obviously this hearing has come up quickly and one of the luxuries of academia is you get to think about things for a long time and share ideas with people. I didn't get to do that on this occasion, but as an academic I always have suggestions, so I offer them in a shorthand version and they are more completely elaborated in my testimony.
I think there is merit in sunsetting EPA's ability to move sites to the NPL, no matter the amount of delay. I note in my testimony that after years of cleanup on this past April Fool's Day, Fort George G. Meade was added as a proposed listing to the NPL.
I would require the CERCLA process for non-NPL caliber sites. I have a belief there are some flaws in the whole NPL listing process and the use of the HRS model, which is very, very coarse and predictive, and presumptive, excuse me, and I think there is a point in time when you take a look at a site and realize certain sites don't require treatment on the NPL and there is merit in thinking about moving them off and onto regimes like State regimes.
Don't apply the CERCLA process that is applied just for PRP litigation just to Federal facility cleanup. Rather, we move to a more performance-based structure where DOD and other Federal agencies are held strictly accountable for results in cleanup, not the process of cleanup. I am doing a little work right now on the question of DOD cleanup and you can use performance-based contracting.
The national contingency plan, it seems to me, sort of prevents you from going into a performance-based contracting strategy with regard to selection of remedy, a potential costly impediment. I wouldn't require EPA to anoint State programs.
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I would instead set up a paradigm for the criteria that State programs should have so that Federal facility sites could just go into them and use the existing DSMOA type process to sort of memorialize that agreement.
I think there would be a great benefit in handling many of these Federal facilities under State brownfields and volunteer programs which are the kinds of strategies H.R. 1778 suggests.
There are some problems with cost and schedule. From DOD's perspective, they are trying to run a national program with some strict budget review and approval processes, and that is about a 2-year lag time. But so far, my sense is, the States have worked very well with DOD to figure out what needs to be done and build that into an orderly budget process. I think there is a problem with just defaulting to DOD's suggested remedy.
In setting up the DSMOA—and I was involved in that—one of the concerns was just throwing it all in front of a Federal judge. EPA has come up with a remedy review board, and I suggest that that might be something of a solution in this area.
If there is a genuine dispute about remedy between a State and a Federal agency, you might model it after the process used to select the base closure committees. I think RAB's are very important because of their native participation in deciding on land use decisions. It is a little bit questionable right now what is the status and role of the Restoration Advisory Board. Excuse me for using an acronym. I think that deserves some clarification.
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Government Performance and Results Act: I think there is a lot of promise for that. I haven't seen any sense or talk about how Federal facilities cleanup is going to be addressed by agencies to include EPA in their plans under the Government Performance and Results Act, and, frankly, developing the measurable criteria that that calls for so Congress can really monitor progress and make sure everybody has got the same sense of progress.
With regard to use of brownfields type strategy, I think you have to do that also in conjunction with the program, and this could be key for DOD. As Mr. Dellums suggested, there are costs associated with just continuing to contain the property, and without a technology development program, the agencies can't make good management decisions about when it is time not to just continue the cost of containment but actually go in there and fix the problem.
Finally, try not to tie agency hands on issues like hot spots. When is the right time to address those kinds of situations? Give them some criteria so they can make good management decisions.
In closing, there are four issues that I see as real problematic issues for the future, particularly as we move from an NPL CERCLA paradigm for Federal facilities, off of that into other strategies. The Government has never been able to figure out what the role is of the National Environmental Policy Act in cleanup, particularly cleanup under a State-led site.
Do we have to do environmental impact statements on cleanup? We have just sort of avoided that issue.
The issue of third party sites, those sites where past Government practices, disposal practices—and the most troubling ones are World War II activities—are now coming back as liability against the Government.
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Natural resource damage claims, another part of CERCLA, pay for natural resource damages. I don't have an answer for this, but there are parts of me that say it is different when we are talking about damages on Federal agency sites, Federal Government-owned sites, than if we are talking about private sites, and there are some interesting conflicts when it is the agency itself that is running the site, is also the liable party and the trustee for natural resources. But this is coming up to be an issue at Massachusetts Military Reservation and I think needs some thought about it.
And the last is cleaning up ranges and how that squares the whole CERCLA process, tricky issues, not much technology yet. And from all I understand, neither natural resource damage claims nor munitions range cleanup costs are included in the current DOD projections for the total environmental restoration program.
Thank you very much for this opportunity. I will be pleased to answer question.
[The prepared statement of Mr. Hourcle can be found in the appendix on page 353.]
Mr. BATEMAN. Thank you very much.
Mr. Dellums.
Mr. DELLUMS. Thank you very much. I would like to begin with Attorney General Norton.
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As you recall, this morning I asked the question and pointed out that the existing Superfund program considers the protection of the public health and the environment as basic factors in choosing methods to clean up Superfund sites. As I read this bill, there is an effort to raise the level of cost as a factor. I would appreciate it if you would give us your view of any effort to elevate—to include costs as a factor in the decisionmaking.
Ms. NORTON. Thank you, Representative Dellums.
The issue of cost is one that has been frustrating, as a practical matter, during the cleanup process. When we first began back in 1991 with trying to negotiate a settlement at the Rocky Mountain Arsenal, I frequently asked, ''How much will it cost to do A as opposed to B?'' and could never get answers to know whether a better cleanup was 10 cents more than a lesser cleanup or $1 billion more. So you need some of that in order to make a reasonable decision. And I think that decisionmakers over time have learned that that is something that can be factored in, and we have moved the process forward so that is a type of information that is more available to decisionmakers.
On the other hand, I think it becomes counterproductive to have cost playing too much of a factor. It needs to be something that is one of the types of information that is available, and we should make efforts to have that information available, but that should not be the driving force.
Our entire process was established with the idea of protecting public health and the environment, and I think by trying to come in and make massive changes that pull us away from what has already evolved, that we can cause problems.
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Mr. DELLUMS. Existing law bases a high emphasis on providing permanent cleanup of contaminated sites, where possible. As a practical matter, the remedies chosen cover a wide range of options, from containment or treatment. However, this bill, as I read it, places a strong emphasis on containment and other methods of protection besides permanent cleanup remedies. Are such interim remedies appropriate, as you view it?
Ms. NORTON. One of the frustrations from the State perspective has been the length of time that is put on the table to develop the technologies for a cleanup process, and from our perspective, it is helpful to be able to push forward on having our cleanups accomplished.
I think we need to look at the level of difficulty of the technological issues that we are dealing with. There are some things where the technology is still being developed. But, for example, under the Federal Facilities Compliance Act, there are provisions that are technology enforcing, and those have been helpful in dealing with Department of Energy facilities especially.
I think it is helpful to have the kind of pressure that comes from those technology-enforcing provisions that allow the cleanups to push forward. If we simply say until we have perfected the technology we are going to just contain things, I think we will spend up a lot more in the long run.
I think we may not have the absolute answers at this point, but containment of some of these, especially of the radioactive materials, is, in and of itself, a very expensive option, and going ahead with what we know is sometimes more cost effective.
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Mr. DELLUMS. In typical base closure situations, do communities have sufficient authority to have land use determined remedies as opposed to having containment determine land use? In the long run, how can public health be protected when cleanup is designed to meet standards other than residential, unrestricted use?
Ms. NORTON. I think there is oftentimes a view that Federal facilities are often geographically distant from local communities. That is clearly not the case. The Rocky Mountain Arsenal, for example, has residential facilities directly across the street from the arsenal. It is very much a key factor for those communities how that land is going to be utilized.
I think what works the best is, when we have an agreement, Federal, State, and local, about what the future land use is going to be, where we have been able to negotiate those things—and it is not easy getting everybody to agree, but where you can actually force everyone to sit down and negotiate and come up with a future vision for that property, and everyone agrees with that, then it is very easy for the pieces to fall into place.
Mr. DELLUMS. How would the provisions of section 311 affect the Department of Defense's obligation to meet the standard in the Federal Safe Clean Water Act, Federal Safe Drinking Water Act, or the Clean Water Act water quality criteria at non-NPL defense facilities?
And finally, how would States react to the elimination of relevant and appropriate standards at the Department of Defense at non-NPL sites?
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Ms. NORTON. Unfortunately, my experience has dealt largely with the NPL sites, and because this may be an issue that would affect both Colorado sites and other sites, I would like to not comment on that particular provision.
Mr. DELLUMS. Fair enough.
Ms. NORTON. I would be happy to provide additional answers.
[The information referred to can be found in the appendix beginning on page 413.]
Mr. DELLUMS. Why should the groundwater under defense facilities not have to be cleaned up to meet the same standards as groundwater on other areas? And is it your view that this bill is leading to such a distinction and difference?
Ms. NORTON. Groundwater has been a very important issue at a number of our sites. At Rocky Mountain Arsenal, that was an especially important issue, but it is also a major issue at other private sites.
From the Colorado perspective, where water is scarce, groundwater is very important to us. It is a huge resource that is necessary for our future. There are technological limitations on what you can do to clean up groundwater, but from our perspective, the groundwater resource is something that is a separate property right that is not necessarily owned by the surface owner, it is owned by those who actually use it and develop uses for that in the future.
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And so even though a Federal site overlays the surface of the land, they are not necessarily the owners of that groundwater. And so from a Colorado perspective, it is a separate recourse, should be treated differently, and it should not make the difference who the owner or the responsible party is at the site that is on the surface.
Mr. DELLUMS. And the final part of the question is, do you read this bill as relaxing that authority?
Ms. NORTON. I have concerns about that. I have not had time to study the specific provisions of this in order to really answer that. But certainly as we get away from ARAR's and—which have been a factor in some of our groundwater issues, or in other ways relax standards, we do have concerns.
Mr. DELLUMS. Mr. Chairman, two quick other things.
First, Mr. Spisak, in the course of your remarks—and you alluded to your chart—you indicated there is need for a comprehensive reform of the Superfund program.
And, Mr. Hourcle, you mentioned that one of the luxuries of academia is, you have time to pause and reflect and get ideas and thoughts from your fellow colleagues.
One of the concerns about this process is not simply one of content, but it is also one of process. We have not—to comprehensively reform Superfund is a very complex undertaking. Now, I think that this committee could argue, at least in some circles, it has certain expertise in matters dealing with the Department of Defense.
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I am not as sure that we can argue persuasively that we have acquired nor developed the necessary expertise to grapple with a piece of legislation so complex and so far-reaching in this kind of a short-circuited, truncated process, that in many ways excludes the stakeholders who have a tremendous investment in the preservation of public health and the environment and how Superfund interacts with that.
So I would say to you, taking your own words, if we agreed for a moment on the need for comprehensive reform, I am suggesting that this is, A, not the venue; B, it is not the appropriate process; and you mentioned in the latter part of your remarks that this committee ought to engage in a process with the other committees. This particular process bypasses that. So we don't have the interplay that is very important with committees who develop their expertise.
And I would say to my distinguished witness here from academia, if you have not had time to pause and think and look at the fast track we are on, and as I listen to you, these are very complex, controversial issues even as you have laid them out.
Finally, Mr. Chairman, I would like to ask unanimous consent that a letter directed to both you in your capacity as chair and me in my capacity as ranking member dated June 16 of this year from the National Resources Defense Council, Sierra Club, Physicians for Social Responsibility, the Environmental Defense Fund, Military Production Network, Friends of the Earth, United Methodist, General Board of Church and Society, Pacific Study Center, United States Public Interest Research Group—that this document be entered into the record and appear at the appropriate point in these proceedings.
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Mr. BATEMAN. Without objection.
Mr. DELLUMS. Thank you, Mr. Chairman.
[The letter can be found in the appendix on page 403.]
Mr. SPISAK. Congressman Dellums, could I make just one comment about your comment?
Mr. DELLUMS. Yes, please. I would have liked to get your response from that.
Mr. SPISAK. I think the point is well taken about comprehensive reform, but, as you know, this Congress has been wrestling with comprehensive reform for close to 5 years. I know I have been working here with many folks on the Hill, trying to see reform through the process.
I think what you are seeing in this legislation is born of frustration not only in this committee, but other committees on the Hill, and the question I would ask is, how long is this going to take, because the sites continue to fester in the community, the money continues to be squandered and the sites are not getting done. And I think what is most important for the committee to do here is keep the heat on the process, and by including these propositions in 1778, you are doing exactly that and putting the heat on other committees to move toward comprehensive reform.
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Yes, there is a lot of work that has to be done and comprehensive reform has to be accomplished, but unless the various pressure points come from different places in government, it is going to continue to drag on past the 5 years it already has.
Mr. DELLUMS. Thank you, gentlemen.
The CHAIRMAN. Thank you.
Mr. Bateman.
Mr. BATEMAN. Thank you, Mr. Chairman.
And Mr. Spisak, I think you exactly put your finger on what is involved here. The committee has grown very frustrated with the failure of the Congress to come to grips with doing some of the commonsense things that need to be done to improve Superfund and our laws dealing with toxic sites. It is a frustration, and I hope our frustration being vented will help expedite the process.
Professor Hourcle, I would look to inquire of you concerning a term you used that has just come to my attention. This is the natural resource damage liability. Would you comment on what is involved there, what the stakes are and the implications of this type of liability?
Mr. HOURCLE. Created as part of CERCLA, one of the concepts is, if responsible parties are contaminating natural resources, whether they are fish or fowl or water, as part of the polluter pays principle, those who damage those resources should pay, first, to restore them; and then pay, second, for the value of those resources which cannot be restored, in a sort of full valuation concept.
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And CERCLA says there are three kinds of entities that can be sort of trustees responsible for restoring the resources or taking the value of the money for the irretrievable resources, and those are the Federal Government, the State, and tribes. Unfortunately, one the issues is, the statute is silent about how they divide up the actual allocation between what is the tribe's share and the State's and Government's share.
We are now seeing some actual valuation as to how much does a salmon cost, are there resources, and it is sort of pretty and should that be valued, and are people going to go there? There are some fairly theoretical concepts of valuation. People are starting to add up the costs of these as part of CERCLA remediation and say, by the way, here in addition is your bill for nature resource damage claims.
I don't know, I haven't seen any research with regard to DOD. My vague recollection is there was a GAO report about DOE and nature resource damage claims that said, oh, my gosh, the sky could be falling.
There are more, and they are handled more frequently on private sites, but General Norton can probably address that. I do know they are not factored into the DOD estimate of total cost, because it was the same DOD estimate as when I was at DOD; and they have more sites now, so I am betting the resource damage claims are not in the number. And they are at issue in a Massachusetts military reservation on Cape Cod, and the State and the Air Force are tussling over what is the right response.
There are natural resource damages that go off site and natural resource damages that go on site. The potential is fairly significant, and there was an article in the National Law Journal, I believe last May, that talked about the real potential, the unquantified potential of the Federal product. So beyond sort of telling you what they are and saying, there are a lot of people who think they could be significant, one of the frustrations is nobody is really going out there and trying to put their arms around what the cost is going to be and what the right approach for Federal agencies should be—should we be putting it back into natural resources, work at the installations?
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The Air Force has some interesting concepts about how, when you figure out you are going to fix a site, you add in that natural resource restoration, but it is really time as affects this committee and the natural resources out of Federal military installations come to grapple with, how do we approach this issue. I apologize for redundancy.
Mr. BATEMAN. OK.
The CHAIRMAN. Mr. Hefley just stepped out.
Mr. Snyder.
Mr. SNYDER. Thank you, Mr. Chairman. Just a couple of comments.
I appreciate all three of you testifying. I know you have had to wait a long time and, you know, the herd has gotten small, but you fed us well.
General, I appreciate your comments. We were talking the other night, during the committee markup—you must have written a letter, but your opposition to title III was known to the committee. I was impressed that you made a very strong statement against title III, but a strong statement in favor of a bipartisan, long-term solution. I salute you for that.
As you may have gathered, that is not what happened the other night, and unfortunately, we broke pretty much along party lines, which is probably a mistake, to solve these environmental challenges.
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The only other thing I would say is, there are a whole lot more people out there than the four or five of us yet, and I hope your eloquent statements get shared with another 430 people in the House.
Thank you, Mr. Chairman, for having this hearing today. It has been very helpful to me.
Mr. BATEMAN. Thank you.
Now, Mr. Hefley.
Mr. HAFLEY. Thank you, Mr. Chairman. I apologize if I was out of the room when you called on me, but I thought it was Mr. Snyder's turn anyhow. I hope you have noticed we stacked this panel very heavily with Colorado representatives. They are deporting themselves very well, I think.
The cost has been mentioned a lot here today, and the term ''common sense.'' I think Mr. Bateman used the term ''common sense,'' and I think we have—in the Superfund cleanup, we haven't used a lot of common sense. That is why we are struggling to try to reform the law. And I think you are correct, if we don't keep the pressure on from all angles, we are never going to get it reformed, so we will get cleanup done.
Now, on two fronts, at the Rocky Mountain Arsenal and Rocky Flats, there were agreements made about what the land would be used for. If you are talking about cleaning up in a pristine condition as if none of this activity had ever taken place, we are not going to get to an agreement. The list that Mr. Dellums read on the record, they are never going to agree, I think, with commonsense approaches to the cleanup.
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And let me look at Rocky Mountain Arsenal. At the arsenal, you have some land that is fine to use. I remember when they were trying to build the runways, or trying to decide about a new runway or build the runways on the arsenal, they said it is the most polluted spot of ground on the Earth.
Well, it is not. Most of it, you can take your Boy Scout troop out there at night and eat fish out of the lake. But there are some very polluted areas. Yes, you can, Gale. That is not something I am guessing at; I absolutely know you can. Also, it is happening, as a matter of fact.
There are also some areas like the pesticide area that can probably be cleaned up. Maybe you can clean up the ammunition area. And you probably never in a practical sense can clean up the poison gas area there, and that may need containment.
So let me ask you all to comment on two things. First of all, shouldn't cost be a factor when you are debating about these things, considering the fact that in the base closure process we have spent $28 billion so far—well, up to the year 2000, it will be $28 billion in cleanup, and after that we are estimating $5 billion a year as far out as we can see in base cleanup.
So shouldn't cost be a factor? And cost relates to land use, so shouldn't land use costs be some consideration, in some factor when we are considering the level of cleanup?
Mr. SPISAK. Congressman, you are absolutely right about cost, but cost always gets tagged or framed in the context of, if you are considering cost, you are not considering health and the environment.
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What you see is an enormous wastage of money in this program. You have got a process that drags on for 9, 10, 11 years, where lawyers spend tons of money, PRP's spend tons of money, fighting each other. All of that money could be used to clean up sites, redevelop sites for better land use.
The debate is always framed, we have to look at cost, we have to look at cost, but always in the context of the existing program. Change the existing program and you are going to have a large pool of money that is going to be available to do more cleanups, to speed cleanups, and to do things for the community regarding land use that you have never seen in the past.
There is no reason to tie cost to an automatic negative when it comes to discussing human health and the environment.
There are also a lot of new tools that have evolved over the last several years. One is site-specific risk assessment. There is a lot of good technology, a lot of very good science and academic effort has gone into site-specific methodologies, which can be very protective of human health in the environment and change the remedy and reduce the costs around those sites.
None of this can take place unless we have a comprehensively reformed program, and as Congressman Bateman raised, you can—there is a lot of discussion today that NRD costs could equal or exceed what we are spending on Superfund today. If that is the case, it has to be included in comprehensive reform, because if you decouple the two and you go through this difficult effort to reform the program and leave NRD off the table, you could end up at square one. If you reform the program and you get rid of all of this process that the attorneys are involved in, trying to realize who has to pay, the polluter doesn't pay.
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Our company cleaned up a site in Commerce, TX. We are being sued, we can't get out of it, we are spending a fortune with lawyers defending ourselves, and all we did was, we were hired to come in and clean the site. We didn't put one ounce of pollution there, we didn't disturb anything, all we did was clean the site, and for that we are being punished under CERCLA and will continue to be. That is where you will find a lot of money.
In my testimony, I talk about nearly $1 billion and the elimination of process. That is a lot of money that can be used for land use, for quicker cleanups and certainly to address human health and the environment; and why are we wasting this money year after year?
Ms. NORTON. Representative Hefley, very clearly, land use and cost are factors that do play a key role at the sites. But I think I see them in a somewhat different perspective.
The land use issue is an understandable issue, and if you want to reach community consensus—Federal, State, local consensus about how to handle a site. If you are talking about how many parts per billion of such and such a chemical is going to be an appropriate standard, nobody understands what you are talking about and very few people have a frame of reference for making an appropriate decision.
But if you talk about, will this be used industrially or commercially or for residential environment, people can understand that. So it is a very good focal point for defining an agreement that can then allow the process to continue in a way that makes sense. But if you cut out that part of consensus building, then everyone has to fight about the technical details. Everybody runs into court to try to protect their safety, because they don't know where the process is going to end up.
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I think if you try to do the land use decision without having the consensus step, then you make what could be a very constructive part of the process into one that just causes additional conflict. And so I think having consensus as a part of land use addition making is very important.
Costs clearly can be a factor when you are looking at things like at Rocky Flats, where we are talking about either doing a large, up-front investment right now to try to clean up the problem and get past the major hurdle, or to just continue trying to keep our plutonium safe and under control for many more years into the future until we finally grapple with, what do we do with it.
So I think there certainly are some decisions where cost does need to be a factor, but it needs to be done in the right way. A very important part of our decision-making also needs to be who is in charge, and you said that we had made progress at Rocky Mountain Arsenal and Rocky Flats after we finally agreed what the land use was; that is true. But it was also after we agreed on how the cleanup process was going to be managed.
At Rocky Flats we moved ahead, I think, of most other States in making progress at the Flats, because we had an agreement spelling out, the State was in charge of some operable units and the EPA was in charge of others, and we understood who was in charge of which decisions. And that was reached as an agreement and that has worked relatively well.
At Rocky Mountain Arsenal, we ended up going through district court, court of appeals and finally denial of cert at the U.S. Supreme Court that the State had the ability to impose its own waste law at the Rocky Mountain Arsenal. Once the State won that decision, we were able to move forward with an agreement on how the cleanup was going to be operated.
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And so I think the States having that kind of control is still consistent with the idea of moving forward in a cost-effective way.
Mr. HAFLEY. Gail, I am likely to run out of time. We put a lot more money in to try to meet that goal at Rocky Mountain Flats, and I think the consensus that has come to on both of those processes is that we want to see the cleanup actually happen. We don't want to see John in a lawsuit, because he is trying to make it happen, so any discussions you might have to try to solve John's problem in a comprehensive reform, John should not be held accountable. Neither should a bank that makes a loan on that property, later on be pulled into it and be held accountable, that didn't have anything to do with the pollution. All those things we can use.
Any suggestions you have, I would appreciate because we would like to incorporate——
Ms. NORTON. Thank you. I think John and I might be in agreement with any of the ultimate ways to streamline Superfund. I don't necessarily speak for all attorneys general on that.
Mr. HOURCLE. Do I have time for a couple of thoughts on cleanup? My central point was, cost is an issue and Superfund cleanups seem to cost more because of the process, and there are a lot of Federal sites that are being forced under the CERCLA process that don't need to be; and common-sense approaches like the State voluntary cleanup programs and common-sense programs that consider cost in sort of a realistic paradigm are good approaches. And if you move DOD sites into those, I, as a taxpayer, would be a lot happier.
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My concern with land use and cleanup is that we have to look at costs, but the long-term costs. We don't want to start a situation where we are going to wind up making a short-term cost decision that causes a long-term toxic tort suit later on.
Mr. HOURCLE. My last sort of point on that is Love Canal was one of the early examples of tying sort of remedies to future land use, you know. If they just deeded over this pot of drums and it could be used as a park, you know, why do anything further? People sort of forgot about that, went back in, said, well, I need some land for a school. Let me sort of take this stuff and move it around a little bit, and then we wind up with Love Canal.
So one of my fears when I used to talk about the base closure process is, yes, let's talk about reuse and cleanup, but let's do it so we make sure we don't start basically major toxic tort suits 10 years from now because somebody has forgotten something.
The CHAIRMAN. Mr. Rodriguez.
Mr. RODRIGUEZ. Nothing.
The CHAIRMAN. I apologize for having to run out for a moment. I might have missed a little bit of this. But, of course, the main reason we are involved in this exercise in the first place is we are trying to do a couple of things. We are trying to make the cleanup more effective, be able to turn these bases that are being closed back over to public use. And the rules and the regulations we have governing cleanup right now, I think all of you have to admit they kind of stand in the way of doing these things in an orderly way sometimes.
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And money has to be wasted that way. It can be used better, and not only get more money for cleanup and for helping modernization, things like that in the military, but also helping to get that property back in the public use, so they can realize that savings, and also the public can make better use of it.
But with the regulations the way they are right now, a good example that I have always used, and I never could understand it, you have got a 500-acre tract, an air base at Myrtle Beach Air Force Base. It is closed. Well, because you have one little part of that place that is contaminated in a certain way, that prevents the whole thing from being turned back over to public use. And no good is being accomplished by that, holding the whole thing hostage to that one thing until it is cleaned up, to the state that you can't clean it up to sometimes.
So these things aren't just something to be done just for the hang of it, or no thought given to it. These are suggestions that have been made by people who are concerned about these things, and we are trying to do our best to see if we can't resolve some of these things. We appreciate your help in testifying pro and con about it.
As I said earlier, we want to—in my statement earlier this morning—we are going to have to separate this out probably anyway before the Rules Committee because we have jurisdictional problems of the committees. But I think the effort is being made at least to get it out in a forum for good debate and see if we can't come up with some kind of meaningful reforms in it. So we appreciate again your help and staying so long past lunchtime, and, again, we appreciate it.
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No further business, we will adjourn the meeting.
Mr. Dellums.
Mr. DELLUMS. I would just like to thank our witnesses, and thank you. You made a commitment, and you kept it, Mr. Chairman. I appreciate these hearings. We all agree that this is not the most ideal process, but I appreciate your commitment to continue to keep it open. Thank you very much.
The CHAIRMAN. I thank the gentleman. Thank you again.
[Whereupon, at 2:20 p.m., the committee was adjourned.]
"The Official Committee record contains additional material here."
QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD
June 17, 1997
QUESTIONS SUBMITTED BY MR. SPENCE
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Mr. SPENCE. When Deputy Secretary White came before the committee in February on the topic of defense reform, he stated the Department intended to comply with the statutory requirements to report to Congress within ''weeks'' on streamlining the Office of the Secretary of Defense (OSD) and the military department management headquarters. Unfortunately, neither report has been provided to the Congress to date.
What is the status of the Congressionally mandated study on OSD that was due March 1, 1996?
Secretary HAMRE. The recently completed Quadrennial Defense Review (QDR) examined many aspects of the Department's organization and functions including the role of headquarters, secretariats, and defense agencies. This report was provided to Congress on May 19, 1997. The short timeline of the QDR, however, limited the scrutiny that could have been given to many important issues in the area of defense management and support structure. Therefore, to further the initial work undertaken by the QDR Secretary Cohen appointed a panel on reform, the Task Force on Defense Reform, to undertake a detailed review and produce specific recommendations for organizational reform, reductions in management overhead, and streamlined business practices in the Department. It is anticipated that the Task Force will submit a final report in early November 1997. Additionally, Hicks and Associates conducted a comprehensive study of the OSD management structure, which focused on many of the central questions of interest to the Congress. A copy of this report was provided to the Congress on July 15, 1997.
The sum of these efforts will provide the necessary analysis for the Department's on-going deliberations for improving the organization and management of the Department and addressing the issues of interest to the Congress.
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Mr. SPENCE. What is the status of the Congressionally mandated study on headquarters staffs that was due March 1, 1997?
Secretary HAMRE. The key issues addressed in the reviews of the Office of the Secretary of Defense directly impact on the Headquarters of the Military Departments and the Joint Staff. Therefore, the thrust of this study will be determined in large part by the decisions made regarding the roles, missions, size, and organizational structure of the Office of the Secretary of Defense. Secretary Cohen has formally directed the Task Force on Defense Reform to focus on the review of the organization of the Joint Chiefs of Staff and the Military Departments as a primary area of their study. Their recommendations together with the above mentioned reviews of the Office of the Secretary of Defense will provide the framework for the review of the headquarters staffs.
Mr. SPENCE. Infrastructure costs currently account for nearly 60% of total funding and 61% of the people employed by the Department of Defense (DOD) in FY 1997. According to the Quadrennial Defense Review, DOD needs to ''reduce the share of the defense budget devoted to infrastructure'' in order to support future force structure investments. However the QDR provides few details to how DOD plans to achieve the necessary reductions, choosing instead to establish a task force to report the details by November of this year.
How long will it take to implement the reforms envisioned in the upcoming task force report?
Is it prudent to delay infrastructure reforms given the current budget environment?
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What reforms can be undertaken without further legislation?
Secretary HAMRE. a: The Task Force on Defense Reform is scheduled to complete its recommendations concerning DoD reforms in November. Although it is not possible to judge now how long it will take to implement recommended reforms before the Department has had a chance to study them, it is our intention to aggressively implement all prudent reforms and to closely monitor how quickly and comprehensively these reforms are being implemented.
b: Infrastructure reforms are not being delayed. The Department is currently engaged in a large variety of infrastructure reforms in such areas as personnel, financial management, acquisition reform, and logistics. Many of these reforms are highlighted in the April 1997 DoD Annual Report to the President and the Congress.
In addition, I have initiated 17 Management Reform Memoranda which will produce reforms and streamlining in such areas as paper-free contracting, movement of household goods, and the management of leased property.
c: Many reforms can be undertaken without further legislation. For example, it seems clear that the Defense Reform Task Force is going to recommend further reductions and streamlining in headquarters staffs. Much of this type of streamlining can be accomplished without further legislation. In addition, one of my Management Reform Memoranda involves expanding the use of prime vendor contract instruments. Without further legislation, DoD can increase the use of contract instruments that permit customers at the local level to procure readily available items directly from commercial suppliers at discounted prices for rapid local delivery. These contracts not only provide improved service but also avoid the cost of building warehouses and maintaining inventories.
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Mr. SPENCE. The President's FY 1998 budget request marks the 13th straight year of real decline in defense spending forcing the Department to maintain readiness, a high quality of life and modernize it forces with fewer resources.
What initiatives are underway to ensure the goals of modernization, readiness, and quality of life are reached?
What specific programs will be affected by such initiatives?
Secretary HAMRE. Extensive initiatives and adjustments have been and are being made to ensure that America's defense capabilities remain fully sufficient to protect and advance U.S. interests worldwide. As defense budgets have declined, top priority has been given to keeping the readiness and quality of life of the remaining forces and personnel. These priorities have been supported by savings from reductions in force structure and personnel, made possible because of the collapse of the Soviet Union. Savings also have come from base closure and realignment, the streamlining and improvement of DoD management and infrastructure, and other initiatives.
Regarding modernization, for the past decade the Department has been able to reduce its purchases of new weapons without undermining the battlefield superiority of U.S. forces. The main reasons: the collapse of the Soviet Union and its global military threat plus the modernization achieved during the years of high defense spending during the 1980s. Moreover, in spite of the sharp decline in procurement funding, the average age of U.S. military equipment did not increase. This is primarily because as forces were drawn down, older equipment was weeded out. Now DoD's reprieve from equipment aging is over, and procurement spending must increase. At the same time, acquisition reform promises to bring us more for the money.
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These initiatives and developments affect virtually every DoD program.
Mr. SPENCE. An April 1997 GAO report states that infrastructure funding within DOD will remain at about 60% between FY 1997 and FY 2001. The report also states that over half of infrastructure funding goes to central logistics and installation support.
What impact will this level of infrastructure have on the ability of DOD to provide for upcoming modernization requirements?
Mr. HINTON. In April 1997, we reported that the proportion of planned infrastructure funding in DOD's Future Years Defense Program (FYDP) for fiscal years 1997–2001 was projected to remain at about 60 percent.(see footnote 1) Although DOD wanted to reduce and streamline its infrastructure to help pay for the billions of dollars that it would need for modern weapon systems, our analysis shows no significant net infrastructure savings to DOD during this period. As a result, DOD has a mismatch between its modernization programs and available funds. It has often had to reduce, delay, or stretch out these programs, substantially increasing the cost of each weapon system.
Our analysis of the FYDP for fiscal years 1998–2003 shows that for the fourth straight year since 1995, DOD has not met its procurement goals established in previous programs. Our review also found that the FYDP retains substantial risk that DOD's program will not be executed as planned. In its May 1997 Report of the Quadrennial Defense Review, DOD acknowledges that the FYDP for fiscal years 1998–2003 includes substantial risk. The Secretary of Defense has stated that absent any further changes, the defense program was most likely not going to free up sufficient funds to achieve DOD's modernization goals. To accomplish its goals, DOD proposes that it reduce personnel, make some modest changes in force structure, realize additional infrastructure savings through fundamental reforms and base realignments and closures, and continue to improve its business operations. The success of these initiatives will require discipline, execution, and aggressive follow-through on the part of DOD management. On some important initiatives such as base closures and military personnel reductions, DOD will need congressional approval.
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Mr. SPENCE. In your March testimony before the Readiness Subcommittee you stated that ''DOD's efforts to reduce costs and achieve savings is extremely important and we encourage DOD to move forward as quickly as possible.''
What recommendations would you make to reduce the level of infrastructure spending within DOD?
Mr. HINTON. Over the past 5 years, we have made hundreds of recommendations to DOD to reduce the level of infrastructure spending within the Department. While DOD has implemented many of the recommendations and achieved savings and other benefits, about 30 percent of our recommendations have not been implemented. These recommendations include ways to consolidate functions, eliminate duplication of effort, improve efficiency, and streamline DOD practices in the areas of acquisition, logistics, installation operations, and property management. Specifically, we believe that DOD could reap significant savings by: (1) reducing excess capacity in its testing and evaluation areas and reducing the 35-percent excess capacity in DOD's laboratories and centers; (2) reducing the 50-percent excess capacity within DOD's depot maintenance system; (3) reducing the costs of managing its $67 billion inventory, of which almost half is beyond war reserve and operating requirements, by aggressively adopting leading edge best practices; (4) reducing installation support costs by relying more on interservice-type arrangements and outsourcing more base support activities; (5) reducing its dependence on government-owned housing; (6) reforming acquisition processes; and finally by (7) reducing training costs by eliminating excess capacity within its training facilities.
Opportunities to reduce DOD infrastructure funding are also illustrated in our February 1997 high-risk series of reports that include Defense infrastructure as 1 of 24 high-risk areas that is vulnerable to waste and mismanagement within the federal government.(see footnote 2) DOD's inability to effectively address the underlying causes of the high-risk areas has resulted in billions of dollars being wasted and places billions of dollars in future spending at similar risk. These causes include cultural resistance to change and service parochialism, inadequate incentives for seeking change, lack of comprehensive and reliable data, lack of results-oriented goals and performance measures, and lack of management accountability for correcting problems and following through to conform performance results.
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Effectively attacking the underlying causes will require congressional support and a commitment by senior-level DOD managers to a plan that addresses actions for eliminating the problems in high-risk areas. We believe that the plan needs to be based on the framework provided by the Chief Financial Officers Act, the Government Performance and Results Act the Paperwork Reduction Act, and Clinger-Cohen Act. On May 1, 1997, in a hearing held by the Senate Committee on Governmental Affairs, we suggested that the Deputy Secretary of Defense should be tasked with responsibility for developing and implementing the plan and that plan should: establish results-oriented goals, performance measures, and time frames for completing corrective actions; identify organizations and individuals that are responsible for accomplishing specific goals; and provide for annual progress reports to the Congress on outcomes.
We believe that such a plan and annual progress reporting will provide a sound basis for the Congress to oversee DOD's progress toward eliminating problems in these high-risk areas.
Mr. SPENCE. How do your recommendations compare to those of the 1995 Commission on Roles and Mission, the 1996 Defense Science Board, the recent Quadrennial Defense Review, and the defense reform bill HR 1778?
Mr. HINTON. Overall, our recommendations are consistent with the aim of the proposals developed by the Commission on Roles and Mission (CORM), the Defense Science Board (DSB), the Quadrennial Defense Review (QDR), and the 1997 Defense Reform Bill H.R. 1778. However, based on the lessons from past initiatives and principally our work on depot maintenance and base support operations, we are concerned that savings of the magnitude projected by the CORM, the DSB, and DOD may not be achievable. In addition, there are various legislative requirements that will also restrict and otherwise affect DOD's ability to implement some proposed initiatives. For example, legislation prohibits the outsourcing of certain functions, such as civilian firefighters or security guards at military installations. Also, there are other provisions that affect the extent to which outsourcing can be accomplished in other areas. Notwithstanding these challenges, we think DOD's effort to reduce costs and achieve savings is extremely important and we encourage DOD to move forward as quickly as possible.
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The Commission on Roles and Missions
In May 1995, the CORM recommended that DOD outsource all current and newly established commercial-type support services.(see footnote 3) Depot-level maintenance was one of these activities. The report stated that its recommendations for greater use of private market competition would lower DOD's support costs and improve performance—noting that a 20-percent savings from outsourcing DOD's commercial-type workload would free over $3 billion per year for higher defense needs.
In July 1996, we questioned the assumption made by the CORM that privatizing all DOD depot maintenance activities would save 20 percent and not harm readiness or sustainability.(see footnote 4) The CORM's depot privatization savings and readiness assumptions are based on conditions that do not currently exist for many depot workloads. Privatizing essentially all depot maintenance under current conditions would not likely achieve expected savings and, according to the military services, would result in unacceptable readiness and sustainability risks. The CORM assumed a highly competitive and capable private market exists or would develop for most depot workloads. However, we found that most of the depot workloads contracted to the private sector are awarded noncompetitively—mostly to the original equipment manufacturer. Without highly competitive and capable private sector markets, the cost and readiness risks of privatizing depot maintenance workloads may prove unacceptable.
Additionally, a number of factors would likely limit private sector competition for many workloads currently in the public depots. The types of existing public workloads where private sector competition may be limited include: (1) workloads where data rights necessary for competition have not been acquired., (2) small workloads that do not justify large private sector capital investment costs, (3) workloads for older and/or highly specialized systems, (4) workloads were erratic requirements where DOD cannot guarantee a stable workload, and (5) workloads that would be costly to move from one source of repair to another. In addition, the military services periodically assess the readiness and sustainability risks of privatizing depot workloads. If the risk are determined to be too high, the workloads are retained in the public depots. Historically, the services have determined that the risks of privatizing most workloads are too high and have retained them in the public depots. These assessments have provided the primary justification for maintaining a large organic depot maintenance core capability.
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The Defense Science Board
In November 1996, the DSB recommended a dramatic restructuring of DOD's infrastructure by maximizing the use of the private sector for almost all support functions.(see footnote 5) The DSB provided a new vision where DOD would only provide warfighting, direct battlefield support, policy and decision-making, and oversight. All other activities would be done by the private sector—using best practices for achieving better, faster, lower-cost results. According to the report, if DOD implemented the specific recommendations of DSB, over $30 billion could be reduced annually from defense infrastructure accounts by the year 2002. Of these savings, $6 billion annually was from logistics infrastructure activities, which DSB defined as including inventory control points, distribution depots, maintenance depots, and installation supply and repair.
Although we have not yet completed our review of the DSB report, our analysis indicates that savings projections of $30 billion are not likely to be achieved. Based on DOD's analysis and our work, we believe that the estimated savings are likely to be significantly less than projected because of errors in estimates, overly optimistic savings assumptions, and legal and cultural impediments. Specifically:
DOD's analysis of the DSB report shows that achievable annual savings in logistics infrastructure activities are about $2 billion instead of DSB's estimated $6 billion. For example, according to DOD, the DSB underestimated contract administration and oversight costs and claimed one-time inventory savings as steady-state savings. Moreover, DOD thought that about another $3 billion projected savings would be difficult or unlikely given current legislative requirements and DOD's resistance to change.
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Separate from the concerns DOD's analysis raised, our analysis of the DSB report also raises questions about the likely magnitude of savings. For example, we found that DSB's savings assumptions from reliability improvements were overstated by at least $1 billion. Moreover, the Board's savings are based primarily on studies of public/private competitions of commercial and non-nuclear ship and submarine maintenance activities, which generally have highly competitive markets. However, this is not the case for some logistics activities such as non-ship depot maintenance. Therefore, we question whether the Board's estimated savings can be achieved in those logistics activities without adequate competition. Furthermore, legal and cultural impediments preclude DOD from outsourcing all of the logistics activities the DSB assumed would be outsource. For example, legislation prohibits the outsourcing of certain functions, such as civilian firefighters or security guards at military installations. Also, there are other legal provisions that affect the extent to which outsourcing can be accomplished in other logistics areas. Finally, DOD has an entrench culture that resists dramatic changes, such as DSB's recommended restructuring of DOD's infrastructure.
The Quadrennial Defense Review
To close the gap between force structure and infrastructure reductions and reduce the share of the defense budget devoted to infrastructure, the QDR proposed: Further reducing 109,000 civilian and military personnel associated with infrastructure activities beyond the initiatives in the fiscal year 1998 DOD budget; requesting the authority for two additional rounds of BRAC in 1999 and 2001; and improving the efficiency and performance of DOD support activities by adopting innovative management and business practices of the private sector to include reengineering, streamlining, reorganizing, downsizing, consolidating, computerizing, and commercializing infrastructure activities.(see footnote 6)
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In its assessment of the QDR report, the National Defense Panel concluded that the QDR did not go far enough in examining DOD's infrastructure activities and that more aggressive action was needed. Similarly, as part of our review of DOD compliance with the Government Performance and Results Act, we concluded that the QDR report did not adequately describe the steps DOD needs to take to reduce infrastructure funding. For example, the management problems DOD faces with managing its contract operations were not adequately discussed. Several other management problems also lack specificity in terms of the steps DOD will take to resolve them, time frames for resolution, needed resources, or external factors that could affect successful resolution. Recognizing the importance of further reducing DOD's infrastructure, the Secretary of Defense commissioned a Task Force on Defense Reform to examine the Office of the Secretary of Defense, Defense agencies and field activities, the military departments, and their infrastructures. This panel plans to review the history, missions, resources, operations, and requirements of these organizations in order to reengineer the way they operate. However, more time is needed for the Task Force to complete its analysis and identify specific infrastructure reductions. The final report of the Task Force is scheduled to be completed in November 1997.
The 1997 Defense Reform Bill H.R. 1778
Regarding H.R. 1778, we generally agree with the aim of the titles relating to defense personnel reforms, defense business practice reforms, and additional miscellaneous defense reforms. For example:
Defense Personnel Reforms.—There are opportunities to achieve savings by reducing personnel overhead in various DOD headquarters and support areas identified in the bill. Also, it is important that such reductions be well planned so that the remaining organizational structures are efficient and effective. In that regard, the plans DOD is required to prepare are extremely important.
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Defense Business Practice Reforms.—We support increased examination of the potential for outsourcing business activities. A primary reason for this support is the savings that can accrue from outsourcing's emphasis on a competitive process involving public and private sector organizations and its emphasis on identifying the most efficient organization. Further, our work shows that there are inefficiencies in various defense activities addressed in the bill such as the U.S. Transportation Command, and that there are significant opportunities to change business practices in defense agencies as suggested by this title.
Miscellaneous Additional Defense Reforms.—For those sections where we have some basis to comment, we generally agree with the sections' aims. We question part of the provision creating a board to coordinate audits because it would authorize the Under Secretary of Defense (Comptroller/Chief Financial Officer) to participate in jurisdictional decisions among the service auditors and to resolve jurisdictional disputes. This role raises questions regarding the independence of service audit organizations.
QUESTIONS SUBMITTED BY MR. DELLUMS
States Do Not Pay Cost Differences
Mr. DELLUMS. Does the State have to pay the extra cost if the—if there is a non-Federal—nongovernmental agency, a nongovernmental entity does not agree with a State-required cleanup remedy, does the State have to pay the extra cost?
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Ms. GOODMAN. In instances where a private party has proposed an adequate remedy (for example, an in situ landfill cap that is fully protective and would cost $2 million) and the state mandates a more expensive remedy (for example, excavation and transport to a permitted landfill at a cost of $3 million), we are not aware of any statute that requires states to pay the cost difference.
Mr. DELLUMS. How would the provisions of section 311 affect the Department of Defense's obligation to meet the standard in the Federal Safe Clean Water Act [sic], Federal Safe Drinking Water Act, or the Clean Water Act water quality criteria at non-NPL defense facilities?
Ms. NORTON. Section 311 of the Defense Reform Act would exempt non-NPL DOD sites from compliance with relevant and appropriate requirements (RARs). DOD would not have to comply with the Safe Drinking Water Act (SDWA) or the Clean Water Act (CWA) standards because, generally speaking, they are relevant and appropriate, not applicable standards.
CERCLA section 121(d) requires remedial actions selected by the President ''to require a level or standard of control which at least attains Maximum Contaminant Level Goals established under the Safe Drinking Water Act and water quality criteria established under section 304 or 303 of the Clean Water Act, where such goals or criteria are relevant and appropriate under the circumstances of the release or threatened release.''
Further, 10 USC 2701 requires DOD cleanup activities to be ''carried out subject to, and in a manner consistent with, section 120 . . . of [CERCLA].'' Section 120 provides that all criteria applicable to remedial actions at sites at which hazardous substances are located are also applicable to federal facilities. Therefore, under current law, cleanups at non-NPL Department of Defense (DOD) sites must meet the standards under the SDWA and CWA where these standards are relevant and appropriate under the circumstances of the release or threatened release, (unless they satisfy the limited grounds for waiver pursuant to section 121(d)(4) of CERCLA).(see footnote 7)
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EPA generally considers MCLs and non-zero maximum contaminant level goals (MCLGs) to be relevant and appropriate when determining acceptable exposure for ground water and surface water that is a current or potential source of drinking water. 40 CFR 300.430(e)(2)(i)(B). Federal Water Quality Criteria (FWQC) may be relevant and appropriate when the FWQC is intended to protect the uses designated for the water body at the site, or when the exposures for which the FWQC are protective are likely to occur.
EPA has defined applicable standards as those that would apply to an action if that action were not undertaken pursuant to CERCLA. Because MCLs legally apply at the tap, and only to purveyors of drinking water, they would not be applicable as ambient groundwater cleanup standards. Likewise, because FWQC are not enforceable, but are only intended to be used by states in developing their own stream standards, they too would not be applicable.
In summary, whereas DOD is currently required to meet MCLs, non-zero MCLGs and FWQC at non-NPL facilities, where criteria are relevant and appropriate, it would be exempt from these standards if section 311 were passed.
Mr. DELLUMS. How would States react to the elimination of relevant and appropriate standards at the Department of Defense at non-NPL sites?
Ms. NORTON. States are concerned that appropriate cleanup levels are achieved at DOD non-NPL sites, especially given the fact that these sites may later be transferred into private hands. At private sites, parties are subject to the full range of state laws, including authorized RCRA programs, state superfund laws, and voluntary cleanup laws. Compliance with these laws provides states with adequate assurance that appropriate cleanup levels are being met.
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At DOD sites, however, DOD generally refuses to acknowledge that it is subject to state laws. Instead, it asserts that it has its own cleanup authority deriving from the Defense Environmental Restoration Act and Executive Order 12580, which delegates the President's CERCLA cleanup authorities to DOD. Under the Executive Order, EPA has no oversight role at non-NPL sites, whereas at NPL sites EPA has the final say in determining the appropriate cleanup levels. Thus, at federal non-NPL sites, it is the polluter, DOD, not the regulator deciding ''how clean is clean''. This is not the case at private party sites.
If federal facilities would submit to appropriate state authorities in the same fashion as private parties, compliance with relevant and appropriate requirements would not be required, and section 311 would not be objectionable. Without regulatory oversight authority, however, the imposition of ''RARs'' provides some assurance that a certain level of acceptable cleanup will be met; for example, compliance with MCLs. Without clarification of the waiver of sovereign immunity in CERCLA, therefore, the elimination of these requirements would be opposed by states.
QUESTIONS SUBMITTED BY MR. BATEMAN
Superfund Reforms
Mr. BATEMAN. Well, Madam Secretary, if you would because I don't have a written statement of your testimony or a full statement, I would appreciate it if you would send me some further information on these three wonderful reforms that we adopted last year.
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Ms. GOODMAN. There are three Superfund reforms that the Committee helped us with last year.
The first reform, what we call the early transfer provision, authorizes the transfer by deed of federal lands that are contaminated with hazardous substances or petroleum products prior to the implementation of all remedial actions provided that appropriate safeguards are in place and the EPA (if applicable) and the governor agree. DoD used this authority at Grissom Air Force Base in Indiana to transfer land to the state for a state prison.
The second reform allows the EPA Administrator to defer listing a federal facility on the National Priorities List if work is under way at a site under an authority such as the Resource Conservation and Recovery Act (RCRA). This reform enables DoD to avoid redoing documents to comply with the format and terms in the Comprehensive Environmental Response, Compensation, and Liability Act rather than RCRA.
The third reform changed the definition of uncontaminated parcels to include locations where hazardous substances or petroleum products, such as household cleaners and fuel oil, have been stored but where no release has occurred. In the past, we automatically assumed a parcel of land was contaminated and needed ''study'' if a hazardous material had been stored for more than a year, even if there was no evidence of a release to the environment. This reform has accelerated determinations that property is indeed acceptable for transfer by deed.
QUESTIONS SUBMITTED BY MR. ALLEN
Acquisition Workforce Reports
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Mr. ALLEN. One last question. Is it fair to say that your—the number of personnel you need in the acquisition workforce depends in part on what your purchasing procedures are and that, as you simplify your purchasing procedures, you can do with fewer personnel?
Is that—and then, growing out of that, are there some reports that would be useful to us on these topics that ought to be made a part of this record?
Mr. LONGUEMARE. Record should reference the Report of the United States Congress on the National Defense Authorization Act for Fiscal Year 1996 (Section 906), Right-Sizing the Department of Defense Acquisition Workforce, dated January 28, 1997. Status report on the ''Review of the DoD Acquisition Workforce,'' dated September 8, 1997, is attached.
Review of the Department of Defense (DoD) Acquisition Workforce Status Report on the Revised Packard Definition, September 8, 1997
Jefferson Solutions has been working the last three months to develop a more accurate, useful and understandable definition of the DoD acquisition workforce. In order to facilitate accomplishment of this goal, Solutions first interviewed key DoD officials associated with DoD acquisition organizations, systems and personnel. The review also included analysis of the various approaches that have been used over the years to define the DoD acquisition workforce.
The main models, currently being used in discussions concerning the DoD acquisition workforce, are not considered to be accurate representations of the actual number or type of personnel performing DoD's acquisition functions. In one model, the DoD acquisition workforce is considered to be equal to the total number of personnel employed in DoD's acquisition organizations, as defined by DoDI 5000.58. This approach yields a workforce totaling 365,749 personnel based on March 31, 1997 data from the Defense Manpower Data Center (DMDC). This is down from a total of 393,788 personnel as of October 1, 1996. It is felt that this definition is much too broad since it includes many personnel that are not performing acquisition functions, such as police, firefighters, librarians, doctors, and child care personnel. It also omits personnel in other organizations who may be performing acquisition functions. In another model, those personnel designated to receive training under the Defense Acquisition Workforce Improvement Act (DAWIA) are considered to be equal to the DoD acquisition workforce. This approach would yield a workforce totaling about 105,000 personnel. While DAWIA personnel form the core of the DoD acquisition workforce, the DAWIA definition is by its very nature too limiting.
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Solutions, in conjunction with the Services, has examined another method for identifying the size and composition of DoD's acquisition workforce. This method is based on an updated version of a framework the Packard Commission developed in the mid-1980's. Using this approach, the DoD acquisition workforce consists of all personnel employed in acquisition occupations (e.g., Contracting, Auditing and Property Disposal) wherever they are located across DoD, plus those employed in acquisition support occupations (e.g., Mathematics, Budget Analysis, and Supply Management) if they are located in certain organizations. Solutions, working with the Services, has refined and updated the Packard approach. This revised Packard approach provides a much more accurate and realistic definition of the DoD acquisition workforce. The use of occupational series, as the basis for the algorithm, will enable DoD to more clearly identify those personnel who are actually performing acquisition functions.
The attached documents provide a detailed description of the revised Packard definition. They also list the occupations which are considered acquisition occupations and thus counted wherever they are located across DoD, and occupations which are considered acquisition support occupations and thus counted only in certain organizations. In addition, the attached documents provide a breakout of the DoD acquisition workforce, based on the revised Packard definition. The data used in the attached documents was provided by DMDC and is personnel data as of the end of March 1997.
The documentation clearly shows that the DoD acquisition workforce is quite diverse and includes engineers, scientists, auditors and quality assurance personnel as well as contracting and purchasing personnel. Using occupations to determine the size and composition of the DoD acquisition workforce is inherently better than counting all personnel in certain organizations identified as acquisition organizations. The DoD acquisition workforce, based on the revised Packard definition, consists of 177,604 personnel. Also, a fair share of additional direct administrative support personnel (11,545) should be added to the revised Packard number, resulting in a DoD acquisition workforce of 189,149 personnel as of March 31, 1997.
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It should be noted that 15,008 personnel considered acquisition or acquisition support at the Army Corps of Engineers are included in this workforce of 189,149 personnel. It should also be noted that while this definition of the workforce captures about 95% of DoD's engineers, the Services utilize contractor support in this area, to supplement their organic workforce, to different degrees.
Revised Packard Definition
GROUP I OCCUPATIONS
[Counted across DoD]
Contractor Industrial Relations; Program Management; Logistics Management; Auditing; Materials Engineering; Civil Engineering; Environmental Engineering; Mechanical Engineering; Electrical Engineering; Computer Engineering; Electronics Engineering; Aerospace Engineering; Chemical Engineering; Contracting; Industrial Property Management; Property Disposal; Purchasing; Procurement Clerical & Assistance; Property Disposal Clerical; Industrial Specialist; and Quality Assurance.
Revised Packard Definition
GROUP II OCCUPATIONS
[Counted in listed organizations only]
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Computer Specialist; Budget Analysis; General Engineering; Engineering Technician; Surveying Technician; Engineering Drafting; Nuclear Engineering; Naval Architecture; Ship Surveying; Agricultural Engineering; Ceramic Engineering; Welding Engineering; Industrial Eng. Tech.; Industrial Engineering; Gen. Bus & Industry; Gen. Physical Science; Chemistry; Hydrology; Hydrologic Tech; Metallurgy; Geology; Oceanography; Cartography; Operations Research; Mathematics; Statistician; Computer Science; Production Control; Biomedical Engineering; Supply Program Mgmt.; Geophysics; and Physics.
GROUP II ORGANIZATIONS
Army.—AMC; AAE; SDC SSDC; and Army COE.
Navy.—CNR; NAVAIR; NAVSUP; NAVSEA; NAVFAC; PEO/DRPM'S; SPAWAR; ASN (RDA); and USMC SYS CMD.
Other DoD.—DLA; USD(A&T); USSOCOM (SOAC only); BMDO; DCAA; DISA; and Tri-care Support Office.(see footnote 8)
Air Force.—AFMC; ASAF(A); and PEO.
DoD Acquisition Workforce
[Based on the Revised Packard Definition]
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BREAKOUT OF PACKARD APPROACH BY OCCUPATION
QUESTIONS SUBMITTED BY MR. SNYDER
Title III
Mr. SNYDER. Will you be coming forward with a report that you will be sending to us all?
Mr. HINTON. We are submitting additional information regarding Title III of The Defense Reform Act of 1997 (H.R. 1778) dealing with defense environmental reforms. We understand that this title is to be separated from other provisions of H.R. 1778 for consideration as part of other legislation. The bill contained some provisions that would amend the Superfund program under Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) as it applies to all federal facilities, not just defense facilities. Subtitle A (sections 301 through 304) addresses Superfund reforms generally while Subtitle B (sections 311 through 315) addresses environmental reforms applicable to the Departments of Defense and Energy. GAO has previously analyzed issues related to some aspects of sections 301, 302, and 304 and provided, through reports and testimony, our comments for use by agency decisionmakers and congressional overseers in the ongoing policy debates on these issues. With respect to other matters addressed in those sections and for sections 303 and 311 through 315 we have no prior or ongoing work to serve as a basis for comment. Our specific observations derived from our prior work follow:
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Section 301: Revision of methods of remediation.
Section 301 of the proposed act would establish new guidelines for remedy selection in the Superfund program. It would remove the existing statutory preference for permanent cleanup remedies that significantly reduce the volume, toxicity, or mobility of contaminants at Superfund sites. We testified before the Senate Committee on Environment and Public Works in May 1996(see footnote 9) that, since enactment of this preference, in the 1986 Amendments to CERCLA, the Environmental Protection Agency (EPA) has increasingly selected permanent remedies, such as incinerating contaminated soil, rather than containment remedies, such as capping the contaminated area and fencing it off from human contact. At the time we presented congressional testimony on this issue in 1996, about half of all cleanup plans included permanent treatments. We reported that the preference for permanent remedies increased shorter term cleanup costs because constructing treatment remedies is usually more expensive than installing containment measures. We said, however, that while the costs to install containment measures might be lower at first, they would require long-term monitoring and maintenance to ensure that they remain protective. In September 1995(see footnote 10), we estimated that the average cost of operating and maintaining a site with contained waste could total $5 million over 30 years. We also estimated that during this period, overall operation and maintenance costs to the federal government, states and responsible parties could be $5 billion, $8 billion, and $18 billion, respectively.
Section 301 of the bill would also direct the President to establish generic remedies for categories of facilities. We discussed the time it takes to select a remedy in our March 1997 report on the duration of Superfund cleanups.(see footnote 11) In that report we said that much of the time taken to complete cleanups (10.6 years for nonfederal sites whose cleanup was completed in 1996) is spend during the early planning phases of the cleanup process, when cleanup remedies are selected. We found that less time has been spent on actual construction work at sites than on the selection of remedies.
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Section 302: Requirement to consider reasonably anticipated future land use.
Section 302 of the bill provides that before selecting a cleanup remedy, the President identify reasonably anticipated future land uses at a facility. In March 1996 testimony before the Subcommittees on Military Procurement and Military Readiness of this Committee, we testified about the impact of incorporating assumptions about land use into cleanup decision-making.(see footnote 12) We noted that incorporating realistic land use assumptions into the selection process for a cleanup remedy under CERCLA could result in significant cost savings at DOE—from $200 million to $600 million annually. In our May 1996 testimony we said that determining a site's future use is key to estimating people's future exposure to contaminants at the site, which, in turn, helps to determine the level of cleanup required for a site. In an August 1994 report,(see footnote 13) we said that when EPA lacked specific data on a site's future use, it adopted assumptions that would be most protective of human health, namely, that the land would be used for residential rather than commerical or industrial purposes. Assuming future residential use can lead to estimates of health risks that warrant cleaning up a site immediately. In a July 1995 report,(see footnote 14) we reviewed EPA's data for 225 Superfund sites, and found, that at about half of the 190 sites where EPA had decided cleanup was necessary, the health risks were ranked as high not because of the land's current use but because EPA had assumed the land's use would change in the future.
In April and November 1994, we reported cases where DOD was required to study cleanup options for land uses that were not considered likely.(see footnote 15) At one contaminated location, while industrial activity continued, DOD was required to develop a risk assessment which assumed future residential use. At another location, DOD officials questioned the need to clean all sites to standards that may exceed naturally occurring conditions.
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Section 304: State role at Federal facilities.
Section 304 of the bill provides that qualified states may be granted approval by EPA to exercise oversight over cleanups at federal facilities. While GAO has not reviewed the desirability of greater state control over federal facility cleanups, we have recently reported on ways in which interested states can successfully assume greater responsibilities at Superfund sites.(see footnote 16) The report identifies (1) what lessons have been learned from the experiences of five states that already have led National Priorities List (NPL) cleanups and (2) how EPA can help ensure that interested states are successful in their efforts to adopt increased Superfund responsibilities. We found that two critical factors affect a state's ability to successfully lead cleanups at NPL sites: (1) the ability of EPA and the state to develop a constructive and efficient relationship characterized by a clear division of responsibility and by a level of oversight by EPA that is commensurate with the state's cleanup capabilities and (2) the availability of technical and financial support to help a state perform its additional responsibilities.
This section would also prohibit a state from exercising any of its authorities under Section 3006 of the Solid Waste Disposal Act (as added by the Resource Conservation and Recovery Act of 1976 (RCRA)) at the same time and at the same site as the state is exercising delegated CERCLA authorities. In our March 1996 testimony, we stated that the need to coordinate cleanup requirements of the two acts has created the potential for delays and increased costs at DOE's sites. For example, officials at DOE's Savannah River Site were preparing additional documents to meet CERCLA's requirements, at a cost of about $33,000, for a facility that had previously been cleaned up and closed under RCRA. Such problems could continue at federal facilities that are subject to both acts unless coordination is improved.
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(Footnote 1 return)
Defense Budget: Observations on Infrastructure Activities (GAO/NSIAD–97–127BR, Apr. 4, 1997).
(Footnote 2 return)
In 1990, we began reviewing and reporting on high-risk areas throughout the federal government, and in February 1997, we issued a series of reports providing the status of such areas. Of the 24 areas we identified as high risk, 6 are within DOD.
(Footnote 3 return)
Directions for Defense, Commission on Roles and Missions (May 24, 1995).
(Footnote 4 return)
Defense Depot Maintenance: Commission on Roles and Mission's Privatization Assumptions Are Questionable (GAO/NSIAD–96–161, July 15, 1996).
(Footnote 5 return)
Report on the Defense Board 1996 Summer Study on Achieving an Innovative Support Structure for 21st Century Military Superiority: Higher Performance at Lower Cost, Defense Science Board (Nov. 1996).
(Footnote 6 return)
The Report of the Quadrennial Defense Review, Department of Defense (May 1997).
(Footnote 7 return)
Under the national contingency plan (NCP), federal ambient water quality criteria (FWQC) are not considered relevant and appropriate if maximum contaminant levels (MCLs) exist for the same chemical.
(Footnote 8 return)
TSO Group II numbers not included in this draft, pending identification of applicable UIC's.
(Footnote 9 return)
Superfund: Implications of Key Reauthorization Issues (GAO/T–RCED–96–145, May 1, 1996).
(Footnote 10 return)
Details on our findings are contained in Superfund; Operations and Maintenance Activities Will Require Billions of Dollars (GAO/RCED–95–259, Sept. 29 1995).
(Footnote 11 return)
Superfund: Times to Complete the Assessment and Cleanup of Hazardous Waste Sites (GAO/RCED–97–20, Mar. 31, 1997).
(Footnote 12 return)
Environmental Protection: Issues Facing the Energy and Defense Environmental Management Programs (GAO/T–RCED/NSIAD–96–127, Mar. 21, 1996).
(Footnote 13 return)
See also Superfund: Improved Reviews and Guidance Could Reduce Inconsistencies in Risk Assessments (GAO/RCED–94–220, Aug. 10, 1994).
(Footnote 14 return)
Superfund: Information on Current Health Risks (GAO/RCED–95–205, July 19, 1995).
(Footnote 15 return)
Environmental Cleanup: To Many High Priority Sites Impede DOD's Program (GAO/NSIAD–94–133, April 21, 1994) and Environmental Cleanup: Case Studies of Six High Priority DOD Installations (GAO/NSIAD–95–8, Nov. 18, 1994).
(Footnote 16 return)
Superfund: Stronger EPA-State Relationship Can Improve Cleanups and Reduce Costs (GAO/RCED–97–77, Apr. 24, 1997).