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[H.N.S.C. No. 106–42]



FOR FISCAL YEAR 2001—H.R. 4205






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(H.R. 4205)

MARCH 9, 2000




JOEL HEFLEY, Colorado, Chairman
JOHN M. McHUGH, New York
HOWARD ''BUCK'' McKEON, California
BOB STUMP, Arizona
JIM SAXTON, New Jersey

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GENE TAYLOR, Mississippi
VIC SNYDER, Arkansas
ROBERT BRADY, Pennsylvania

Philip W. Grone, Professional Staff Member
George Withers, Professional Staff Member
Noah Simon, Research Assistant
Rebecca Anfinson, Staff Assistant






    Thursday, March 9, 2000, Fiscal Year 2001 National Defense Authorization Act—The Department of the Navy and the Department of the Air Force
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    Thursday, March 9, 2000




    Hefley, Hon. Joel, a Representative from Colorado, Chairman, Military Installations and Facilities Subcommittee

    Taylor, Hon. Gene, a Representative from Mississippi, Ranking Member, Military Installations and Facilities Subcommittee


    DeMesme, Hon. Ruby B., Assistant Secretary of the Air Force for Manpower, Reserve Affairs, Installations and Environment, accompanied by the Civil Engineer of the Air Force, Maj. Gen. Ernest O. Robbins, III; Brig. Gen. Craig R. McKinley, Deputy Director of the Air National Guard; and Brig. Gen. Robert Duignan, Deputy to the Chief, Office of the Air Force Reserve.
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    Pirie, Hon. Robert B., Jr., Assistant Secretary of the Navy for Installations and Environment; accompanied by Rear Adm. Louis M. Smith, Commander, Naval Facilities Engineering Command; Maj. Gen. Harold Mashburn, Assistant Deputy Chief of Staff for Installations; and Rear Adm. John G. Cotton, Deputy Director of Naval Reserve


[The Prepared Statements can be viewed in the hard copy.]

DeMesme, Hon. Ruby B.

Hefley, Hon. Joel

Pirie, Hon. Robert B., Jr.

Robbins, Maj. Gen. Earnest O., III

[The Documents submitted for the Record can be viewed in the hard copy.]
Joint Chiefs Cool to Renewed Base Closings; Cohen Pushes Plan

[The Questions and Answers can be viewed in the hard copy.]
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Mr. Hefley
Mr. McKeon
Mr. Snyder
Mr. Taylor
Mr. Underwood


House of Representatives,
Committee on Armed Services,
Military Installations and Facilities Subcommittee,
Washington, DC, Thursday, March 9, 2000.

    The subcommittee met, pursuant to notice, at 1:15 p.m., in room 2212 Rayburn House Office Building, Hon. Joel Hefley, (chairman of the subcommittee) presiding.


    Mr. HEFLEY. The committee will come to order. I apologize gentlemen for being late and keeping such an esteemed group late. So what you get is like in Monopoly, a get-out-of-jail-free card, you get one free answer that you don't have to give, if you don't want to.
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    This afternoon the Subcommittee on Military Installations and Facilities continues its hearing on the President's request for funding for the military construction (MILCON) and military family housing programs with the Department of Defense (DOD) and for the coming fiscal year (FY). The focus of our hearing today will be on the budget request supporting the programs of the active and reserve components of the Department of the Air Force and the Department of the Navy, including the Marine Corps.

    One month ago, the Department of Defense released its budget request for fiscal year 2001. Our main concern is about the underfunding of critical infrastructure investment accounts. Military construction and military family housing continue to receive too little attention in the overall competition for resources. While the President's defense budget request is a step in the right direction, it is only a step. Even as the Administration belatedly recognizes the need for increased defense spending, erosion in the overall MILCON top line continues.

    The military construction accounts for the active and reserve components of the Navy and the Air Force are no exception to the general rule. The Administration's budget request proposes funding levels for Navy and Marine Corps military construction 16 percent below current spending levels; for the Naval Reserve, the reduction is 43 percent. Air Force military construction has been reduced in the request by 31 percent from current spending levels, while the Air National Guard and Air Force Reserve have taken reductions from current spending levels of 80 percent and 76 percent, respectively.

    While I am pleased that the Navy has at least maintained an even funding profile for the support of military family housing and has increased it's commitment to family housing construction by 6 percent, the Air Force has reduced its commitment to renovation and new construction by 36 percent.
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    These core infrastructure accounts cannot continue to be used to pay bills elsewhere without accelerating the long-term degradation of quality of life, training, and readiness.

    [The prepared statement of Mr. Hefley can be found in the Appendix.]

    Mr. HEFLEY. Mr. Taylor, do you have any opening remarks.


    Mr. TAYLOR. Mr. Chairman, in light of the debate on the House floor on the minimum wage and the likelihood of the number of votes, I'm going to forgo opening remarks and let our witnesses get started.

    Mr. HEFLEY. Mr. Taylor, if you have opening remarks to put in the record, we will so do it.

    Mr. TAYLOR. Yes.

Mr. HEFLEY. Our first panel this afternoon will provide a brief to the Subcommittee on the budget request of the Department of the Air Force. Our principal witness will be Ruby DeMesme, Assistant Secretary of the Air Force for Manpower, Reserve Affairs, Installations and Environment.
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    Secretary DeMesme is accompanied by the Civil Engineer of the Air Force, Major General Ernie Robbins; Brigadier General Craig McKinley, Deputy Director of the Air National Guard; and Brigadier General Robert Duignan, Deputy to the Chief, Office of the Air Force Reserve.

    Before we begin, Madam Secretary, I'd like to note that this is the first appearance of yours before this Subcommittee. It's the first appearance for General Robbins, I guess, who in previous assignments served as Command Civil Service Engineer for the Air Force Space Command.

    General, I enjoyed working with you during your tenure at Peterson Air Force Base and I look forward to working with you closely in your new position. As it is your first appearance before the Subcommittee, I hope we will not make it too painful. Thank you, sir, and—

    General ROBBINS. If so, I'll play that card you mentioned earlier.

    Mr. HEFLEY. You play that card, right. Madam Secretary, I turn it over to you.

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    Secretary DEMESME. Thank you, sir. Mr. Chairman and members of the committee, we are pleased to present our total force FY 2001 military construction MILCON program today. And I especially thank you and this committee for your tremendous support for our uniformed members and their families.

    Last year was a busy and eventful year with highly successful missions performed by airmen both at home and abroad. And we're cognizant that we must have adequate facilities and programs in place to take care of our people by balancing the needs of the total force and minimizing any adverse impact on unit readiness, modernization and quality of life programs. I submitted my written statement for the record. It will take just a few moments to highlight a few areas in our FY 2001 total force budget program.

    Our $1.65 billion dollar MILCON budget request is necessary to support our readiness objectives for our highly mobile force. This request included support for the F–22 fighter, the C–17 air lifter, the B–2 bomber, construction of a training range in Idaho, and many more. We appreciate your support of last year's Kosovo supplemental bill that enabled us to fund more quality of life, force protection and environmental projects in our overseas locations. We will continue to work with our European and Asian partners to burden share the cost of these facilities to the maximum possible.

    While we are doing a lot for our people, we need to do more in the quality of life arena, address those areas that are effecting recruiting and retention. Through various surveys and 1-on-1 discussions, we know that our military family housing program is among the top reasons that people stay with us. Our military family housing plan contains both additional MILCON and housing privatization initiatives. This year's housing program includes the remaining fixed new privatization pilot programs for a total of $6,921 additional units. We are also making progress with our utility privatization program. So far, we have identified 435 of our 640 systems as potential privatization candidates. And we issued a request for proposal (RFP) for 34 utility systems in January of 2000. We will complete our evaluation of 225 systems by December and expect to award additional systems by January of 2001.
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    I also thank this committee for the support of the Base Realignment and Closure (BRAC) no-cost economic development conveyance (EDC) legislation. I have personally approved four requests to date for Lowry Air Force Base, Colorado; Myrtle Beach Air Force Base, South Carolina; March Air Force Base in California, and Kelly Air Force Base in Texas, we estimate that these will save the communities about $140 million. The Secretary of Defense has also called for two additional rounds of BRAC. We ask you to support this request. We continue to work within existing authorities to reduce Air Force infrastructure but there really is no substitute for BRAC.

    In conclusion, we realize the Air Force would not be the world's premier aerospace force without your strong support over the years. The budget submission provides a delicate balance among our people, readiness and modernization needs. And it also reflects our commitment to provide better working and living environments for our people. Our goal is to establish quality Air Force installations around the world for our total force members. This concludes my statement, Mr. Chairman, and we look forward to addressing any issues or questions you might have.

    [The prepared statement of Secretary DeMesme can be found in the Appendix.]

    Mr. HEFLEY. General Robbins presented a prepared statement. Do you want to speak to that statement, General Robbins?

    General ROBBINS. No, sir. All I want to do is, if there is one thing to foot stomp, it would be the appreciation for the committee's work, and, in particular, the overseas requirements in dormitories housing and the work place, a very important quality of life which we believe extends well beyond dining halls, fitness centers and housing but into the flight line and the shops where people work. So I'll submit my statement for the record.
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    [The prepared statement of General Robbins, can be found in the Appendix.}

    Mr. HEFLEY. All right, fine. It will be submitted to the record. Mr. Taylor, do you have questions?
    Mr. TAYLOR. The only question that comes to mind is, I presume the Air Force is footing the bill for the forward operating location (FOL) at Manta, Ecuador?

    General ROBBINS. No, sir, we are not.

    Mr. TAYLOR. You are not?

    General ROBBINS. No, sir. We are the executive agent for the mission there, but the MILCON bill for Manta is coming out of DOD appropriations not out of the Air Force MILCON.

    Mr. TAYLOR. Okay. So you wouldn't be familiar with the request there?

    General ROBBINS. I am familiar with the request just because we will operate from there, but it's not in our budget.

    Mr. TAYLOR. Do you have any idea what the request will be for this year?

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    General ROBBINS. What the request will be?

    Mr. TAYLOR. The request for Manta.

    General ROBBINS. Yes.

    Mr. TAYLOR. And then a follow-up question would be, and I've asked this of others, but it doesn't seem to make any sense, the idea of locating one FOL at Curacao and another 30 minutes flying time over at Aruba.

    General ROBBINS. Right.

    Mr. TAYLOR. I've yet to hear what I think is an adequate explanation for that duel expense in one fairly small area.

    General ROBBINS. Yes, sir. I can't speak to why the mission is going there, that's—

    Mr. TAYLOR. I understand why the mission—the question is why have two sites within 30 minutes air time of each other?

    General ROBBINS. Yes, sir. And that's kind of beyond my realm of expertise. The MILCON request for this year, the total requirement is going to be, at Manta, $61 million for all projects to bed down that mission. The largest slug of that is an airfield project which provides ramp lighting, drainage for the air field.
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    Mr. TAYLOR. Now, on a recent trip down there, they made mention of the fact that there is a possibility that the entire runway has to be pulled up and rebuilt because it cannot support the weight of the A-3s, are you familiar with that?

    General ROBBINS. I am. I know it is a phased project and so they will not close the entire airfield for the duration of the project. There is a first phase where we'll still have C–130 operability in and out of there. Then, as I recall, there is about a six-month period where, indeed, the airfield will be entirely closed. And then during the third phase, again, it's opened back up for limited operations. We can get the details of that.

    Mr. TAYLOR. Would you? Because the follow up would be given a fairly substantial request, I mean this has grown. I think the original number was a little under $40 million last year and now it's up to 61 and I've got a feeling it's not going to stop there. And given the fact that we're talking about a fairly small country, has anyone looked into just using the commercial airport at Quito as an alternative, which is capable of handling 747s and other large bodied aircraft?

    General ROBBINS. Again, I can't address—

    Mr. TAYLOR. Would someone please get back to me on that?

    General ROBBINS. Yes, sir, we can have that for the record.

    Mr. TAYLOR. Thank you, Mr. Chairman.
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    Mr. HEFLEY. Mr. Stump.

    Mr. STUMP. Mr. Chairman, I have no questions at this time.

    Mr. HEFLEY. Mr. Snyder.

    Mr. SNYDER. Just one question, Mr. Chairman. I noticed last year's discussions that we had here, we were concerned about the drop in the real property maintenance (RPM) budget for the Air Force, and I notice that you've increased the number. One area that continues to go down is the real property maintenance for mobility operations. Is there a reason why that particular line item was selected out not to have money added to the real property maintenance?

    Secretary DEMESME. Well, sir, we were not able to fund at the level that we wished because of the finite budget we have and competing demands. And so, in balancing the budget, we were not able to meet all of our total requirements in MILCON. Those were not selected out for any particular reason.

    Mr. SNYDER. Maybe that's enough of a detailed question. Maybe I'll ask you to submit that for the record.

    General ROBBINS. The RPM side, sir, as far as I know, and I'm pretty sure about this, everyone was funded at the same level, and that 1 percent of plant replacement value for RPM in this budget. Now, our desire is, of course, to go above that because we know that 1 percent PRV is not enough to repair and sustain the facilities that we have. In fact, we have a $4.3 billion backlog of RPM requirements across the Air Force. But the ''hurt'' was equally spread, if that's the right term.
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    Mr. SNYDER. There is some kind of formula. And the result of that was that real property maintenance went down again for this one particular line item, which was mobility operations.

    General ROBBINS. Sir, I'm not familiar with that and we'll have to get back to you.

    Mr. SNYDER. If you would do that for me. Thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. Reyes.

    Mr. REYES. Thank you, Mr. Chairman. Madam Secretary, the issue of family housing is one that always is brought to our attention whenever we visit facilities. And noting that currently there is a $3.6 billion shortfall which has been stretched out over 10 years in family housing for the Air Force. In addition to that, it's our understanding that with that kind of a shortfall, the timeline has been stretched even further by the Air Force. In this year's budget your request is 36 percent lower than at current spending levels. I'm curious to find out what the thinking is when you already had to extend the time frame to meet housing shortfalls and then, yet, you come in with a budget that's 36 percent under what the current budget requires?

    Secretary DEMESME. Yes, sir. When we tried to balance the budget to meet our modernization requirements to support the sustained deployment base to look at our other people programs, MILCON was the area that we took the most risk, in terms of deferring our needs and values. It is not the optimum thing that we wanted to do but, given the constraints we were under, it was the only place to take that kind of risk.
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    Mr. REYES. So you are basically taking it out of your own hide. The problem with this is that we routinely hear testimony about the retention level and people that are getting out because of, among other things, the operating tempo (OPSTEMPO) and quality of life issues. So we're in a vicious cycle here. What, if anything, do you recommend that we can do at our level to address that? And, second, what is it that you are doing at your level to address that issue through the Department of Defense? It seems to me like we're exacerbating a problem by taking it out of hide in this manner.

    Secretary DEMESME. The one thing we'd ask you to do is expand the housing privatization law, because that is the one program that helps us leverage our meager resources by partnering with the local communities to bring projects on line faster and more cost effectively. We have a goal of 3 to 1 leverage in that area. The project we brought on with Lackland was 8 to 1, our average for the last year. So we're looking at different efforts with the local community in privatization. Short of getting additional monies, that is about as much as we can do. Of course, we are also supporting our additional basic allowance for housing (BAH) fund for our members to have more to pay for adequate housing in those locations where we can't offer them on-base or in a privatized setting. Do you want to add to that, General Robbins?

    General ROBBINS. I think you captured it. The thing is, at least privatization allows us to do more houses faster, that's the key aspect of the legislation. That's why we need to have that extended. Other than that, you are correct. $3.6 million, if we maintain the funding line we're on now, we see the buy down of the deficit and the revitalization for housing stretching out to about 2018.

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    Mr. REYES. Is there anything being done, at least through the Department of Defense, to help with this issue specifically as it pertains to the Air Force?

    General ROBBINS. I think each Service has to deal with its own budget, sir. And, again, as Ms. DeMesme said, the Air Force prioritizes based on what we've been issued to do, missions, and people programs and modernization. And there is obviously a commitment to fix the housing, it's a matter of top line.

    On the dormitory side, we have a little bit of the same problem, but the Air Force has stepped up and said we're going to fund the dormitory to the tune of $80 to $90 million a year, and we're doing that. So that goal to buy down our requirements of dormitories looks like it may be more cheap, but the bill is much smaller than family housing.

    Mr. REYES. Okay, thank you.

    Mr. HEFLEY. Thank you. Mr. Underwood.

    Mr. UNDERWOOD. Thank you, Mr. Chairman. And thank you for your testimony today, and I think the Committee is very much interested in family housing. But I just wanted to ask a question that relates primarily to work that's ongoing at Anderson Air Force in Guam. And that is, and maybe Secretary DeMesme can answer that or more appropriately perhaps General Robbins, there is the general direction and it's something that we've witnessed on this Subcommittee for a number of years, the general direction is the interest in the privatization of utilities.

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    In particular, in our case in Guam, one of the ongoing issues is dealing with water. And we have an instance in this particular case where some property has been BRAC'd and the property is scheduled to be turned over to Guam and the Air Force is interested in holding onto the water. So if you can explain to me why the Air Force is going in a different direction than the direction that we generally assume everyone is going in?

    General ROBBINS. Can I play my card now? No, sir. I am frankly not familiar with the issue, so I will have to get back with an answer.

    Mr. UNDERWOOD. You know, obviously, this is an issue that we are going to work on for quite some time, but do you know of any other instances, aside from this one, where the Air Force is working to hold onto some utilities?

    General ROBBINS. Oh, yes, sir. It's the BRAC part of your question that I don't understand. I know that at Anderson we're considering privatizing the utilities. And I believe we have a—you know, we went through phases. The first one was a go, no-go decision, and as I understand it, we have a go for all the utilities at Anderson right now.

    It's the issue of the BRAC part of the question that I'm not familiar with. But we're privatizing utilities where possible across the entire Air Force. And we go through a series of decisions based on economics and national security or readiness concerns. If we pass through that with a ''yes'', then we go out and develop our RFPs and see what kind of a deal we might be able to strike with a local utility provider.

    Mr. UNDERWOOD. All right, thank you. Thank you, Mr. Chairman.
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    Mr. HEFLEY. Madam Secretary, first of all, you talk in terms of how vital addressing the challenges of retaining quality military personnel is and you consider MILCON as a vital portion of that. And you heard my figures about how much below last year's spending you really are. And Mr. Reyes spoke to this a bit. But this committee I think has become a little jaded by the out year projections, because it's very easy to do the out year projection, but we don't ever seem to come to that.

    We get to those out years and it doesn't seem to happen for the very reason that General Robbins stated. I mean, you have other priorities. And I guess our frustration is when, if ever, are we going to consider infrastructure as an important priority? It's kind of like a foundation on a house. If you don't have decent infrastructure to operate out of, eventually the house crumbles.

    And, by the way, Mr. Reyes, I want to identify myself with your questions and comments, the tone you were taking there, because I think you are right on. But when are we going to come to that time when we say, ''This foundation has to be repaired?''

    Secretary DEMESME. We all at this table agree with you, sir. And it is one of the areas that we know that we must work harder in. What has happened with this is we have priorities on top of priorities. And even though we can't get the top five priorities because there is just not enough money to go around, but we are looking hard within the departments at finding the necessary money we need to work on the infrastructure, because we realize it does affect readiness. And we realize it does effect retention and recruiting. And more so, it enables our people to work smarter rather than doing things twice when they don't have the right working tools and the right working facilities. I wish I could say by the next year or two that we'd be there, but we aren't. But we are aware of it, we know it's an area that we must improve. And we are taking every opportunity to make that improvement, it's not happening as quickly as we'd like. And all we can do is just continue to work hard at it and hope that we can get to the point where modernization in our other readiness posture will decline to a degree that we can move up to the next priority level which is MILCON.
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    Mr. HEFLEY. Well, and I'm sure you suffer some of the same frustrations that we do as you fight for your—

    Secretary DEMESME. It's quite frustrating.

    Mr. HEFLEY.—segment of it. And while we're talking about recruitment and retention and, of course, we talk about retirement and health care and salaries, and all that. But one of the other factors, it seems to me, has to be working conditions. And not only, if I get out I can get a bigger salary, but also I can work in a clean, air conditioned atmosphere which provides me with the spare parts I need and the tools that I need to do my job better, why stay in the Service? So I hope you do regard this as retention abate recruitment factor.

    Secretary DEMESME. I assure you that the senior-most leaders are aware of these issues and working very hard at trying to find some resolution for that. And we will keep working hard

    Mr. HEFLEY. As you know, this committee has been the spear point of the whole privatization effort. We came up with it, along with Secretary Pirie. We have pushed it, we have believed in it. I'm glad to hear you believe in it still.

    I was out at Aviano a week or two ago, and looked at the build and lease housing that they have out there. And they are beginning to cut in, and they are doing it scattered within a 30-mile range of the air field—or a 30-minute range of the air field, so that you don't develop American military ghettos. They kind of blend into the community. Wonderful housing, and maybe not the cheapest way to do it in the world, but you get wonderful housing on a 10-year lease, and so forth. Have you thought much about pursuing privatization from that kind of a standpoint more in the Continental United States?
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    Secretary DEMESME. We've thought about it, sir. We're trying real hard to attract the kind of people who would be interested in offering us those kinds of opportunities. So every chance we get, we're out there meeting with groups who have expressed an interest in helping us to move toward the kind of situation where we don't have to put the money up first. As you know, it varies based on location what the capability is in the different communities.

    Mr. ABERCROMBIE. Mr. Chairman, would you yield to me on that point?

    Mr. HEFLEY. Sure.

    Mr. ABERCROMBIE. Madam Secretary, the chairman and members of this committee, I want to say, on a bipartisan basis have been taking, I think have taken the lead from both houses and from the Administration, whether Republican or Democrat Administration, over the last decade, there has been one of each, have taken the lead in this privatization factor. And the Chairman, no one can get ahead of the Chairman on this, in terms of having made a commitment legislatively as well as verbally. What I don't understand is why this is not really being pursued more vigorously?

    Now, the reason that I kind of jumped in there and asked the Chairman to yield to me was that I know in Hawaii there was offers made and they are on the table right now. The private side, the banks and others, are ready to come. Developers are ready to come in right now and develop housing from the private side and do it on a lease basis without going into all of the various legislative permutations as to how that would work.
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    Now, the argument in the past has been, and I guess it's been an accounting argument, ''Oh, well, what if you can't put people in those houses?'' Well, let me tell you something, in a place like Hawaii there is no lack of people trying to get housing in Hawaii at a reasonable price. So you are never going to lack for that. And as long as commanders can tell people, give orders, they are going to be able to say, ''This is where you are going to live.'' Now, Hawaii can't be the only place that that is the case. And so what I don't understand, and I really understand what you are saying, but what I really don't comprehend is, are you being thwarted in some way by higher authority in the Pentagon from being able to pursue this a lot more vigorously, whether it's in Hawaii or anywhere else, in terms of the privatization side of it?

    Secretary DEMESME. Well, sir, as you know this is a relatively new initiative for us and we're learning as we go. And we do have a master plan that we're trying to follow that's based on—we're trying to fix the areas where we have the greatest need and where we have the most substandard level of housing first.

    Mr. ABERCROMBIE. Well, let me ask you then, Madam Secretary, would it be useful to you if the Congress wrote language, perhaps, into the final bill, the budget bill and or any authorization bill that we put out here, ordering you by legislative fiat? Do you want to take a minute to consult with your friend before I finish my question?

    Secretary DEMESME. No, sir, we're in accord.

    Mr. HEFLEY. Is he your lawyer?

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    Secretary DEMESME. He's my housing person, that's even worse.

    Mr. ABERCROMBIE. I'm not being punitive here, when I'm saying that. I'm saying, ask you to explore in the community and report back whether or not there is interest.

    Secretary DEMESME. We are doing that, sir. What we would really like is to have an extension of the current law, beyond '01, so that we can continue to pursue this. And, of course, it's all based on budget—

    Mr. ABERCROMBIE. I think the private funds are there. And the reason that I'm pushing this is, number one, I think it's good for business. I mean, this is not a Republican and Democrat deal here. I mean, everybody should be interested in having this occur. And what I'm concerned about is if we don't do it.

    I reread the testimony from Mr. Cohen and from the DOD an with respect to the housing allowances. And if that's going to be the answer, rather than pursuing the legislation, Mr. Chairman, that you've been instrumental in getting out, I'm going to—I'm not sure I'm going to oppose it because I suppose that could be misconstrued, but I'm against it if all this is going to do is give landlords a chance to gouge Service families of more money. They are not going to see any better quality of housing. If it's only going to result in areas where you have a lot of, again, I'll use Hawaii as an example and I think there is other examples around the Country, where you have civilian families and military families competing for the same virtually non-existent rental housing, all that's going to happen from increasing the housing allowance is that landlords are going to raise their prices. And you are not going to get any more housing, you are not going to get any better quality of housing; you are going to have more bitterness, and more competition for less housing. That isn't going to do it. Whereas, if we were to encourage developers to build housing, it adds to the stock, it will lower rents, it will improve the quality of the housing, and it gives both business and labor benefit because we'll be building more housing and better quality housing for the military.
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    Secretary DEMESME. I agree with you, sir. I think it's going to take both. The raising of the BAH and privatized housing for our families, I don't think one will displace the other. I believe the BAH increase will also give us more opportunity to attract more people to the privatized sector because now they can plan on a larger amount in their pocket—

    Mr. ABERCROMBIE. I appreciate your answer. Mr. Chairman, I appreciate it, I really do. Mr. Chairman, you've been more than generous with me asking you to allow me some time. And I probably went on in a greater length than I should have but I do so out of respect for what you've accomplished so far, and in the hopes that we could maybe turn this into something a little more substantive.

    Mr. HEFLEY. You've been a big part of what we've accomplished so far, and we want it to work. We want to extend it, we want it to be a workable thing. General Robbins, do you want to make a comment?

    General ROBBINS. Yes, sir. Right now, as we march down our master plan, in fact, at Hickham in the '02 program there is a privatization project.

    Mr. ABERCROMBIE. I know it can work. I'm looking forward to it.

    General ROBBINS. Yes, sir. I just want you to know we realize that. It's part of the master plan and we're doing the worst first, but '02 there is a Hickam project.

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    Mr. HEFLEY. General Robbins, were you out there in Colorado Springs when there was that proposal to build housing near the west gate of Peterson Field?

    General ROBBINS. Yes, sir.

    Mr. HEFLEY. Why did that fall through? Was that a financial thing, we couldn't make the numbers work?

    General ROBBINS. At the time, we didn't have the legislation to make it work. This was free privatized housing. I left there in 1996, which is the year the act finally came. And then there was some question about the economics of it. So there were two issues at hand, but that was four years ago.

    Mr. HEFLEY. I think from looking at Aviano, I think that that's something that we shouldn't preclude, the idea of building and lease—and maybe the numbers won't work, but it sure looked like it was working nice out there.

    General Robbins, from an execution standpoint, can you comment in more detail than is in your prepared statement on the problems which may occur as a result of the deletion of the contingency reserve from the MILCON program? I'm nervous about that, I've got to tell you. And I would assume you might be a little nervous about that too. Can you comment on that?

    General ROBBINS. Yes, sir. We share your nervousness. We have done some research on history, the last five years of Air Force program, and determined that, in fact, around 90 to 95 percent of our projects have, in fact, had contingencies that required us to dip into the 5 percent. Then we wanted to look and see what kinds of things drove those requirements. And they were exactly as you would encounter, if you were a private developer.
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    It's design deficiencies, there are unforeseen site conditions, there are weather things that can happen. And then, of course, you'll have mission changes, equipment changes, user requirements. There is a tendency to believe that perhaps that latter category is what drives the biggest amount of change. In fact, it's the former categories, the unforeseen site conditions, it's the design deficiencies, and acts of God, not users coming in late to need with what their requirements are.

    We believe that the way we've programmed these dollars in the past has been prudent. When we were doing a renovation project, we would program 10 percent for contingencies because we frankly didn't always know what we were going to meet when we started ripping a building apart. But for new construction we program 5 percent, and that seemed prudent. Again, baselining off industry, we find that industry budgets upwards 10 to 13 percent for this very purpose.

    And so we think we are going to have problems downstream. It won't hurt us as we award projects for construction, it's post construction. We get into the actual work, we'll end up having to borrow money from somewhere else in another project to pay for the contingencies that arise on those that are under way. Ultimately, you reach a point you don't have any place to borrow from any more and you are unable to award contracts. We see that as a very, very likely possibility.

    Mr. HEFLEY. That's not good business. Let me ask on a different subject. I want to raise an issue with you that I raised last week here with the officials of the Department of the Army. I was made aware last week in a meeting with the Lord Mayor of Kaiserslautern, or however you pronounce it in Germany, a town which is the host of, as you know, a significant number of American troops and families, that there is a serious contamination problem in the underground aquifers which supply both the German citizens and the Americans with drinking water. In fact, they talk in terms of some wells, they have to ask people not to drink that water, that the American bases are hauling water in. Do you know what the nature of the problem is that effects the Air Force at Ramstein, and do you know what the source of the contamination is and to what extent is this problem affecting the airmen and their families? And I would go a step further to say, to what extent is it affecting us as good neighbors of the Germans there in that area? Because we want to be good neighbors, too.
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    And coming from Colorado, where we don't have a lot of water, I mean that is a, as you well know, a very important thing to us. You contaminate an aquifer and you've got some real problems. And if this is really happening, then we need to get on top of it and we need to clean it up as quickly as we possibly can. But what do you know about this? And I don't expect you to know everything about it, if I've caught you cold, but we do need to look into it.

    General ROBBINS. Sir, the Lord Mayor visited the Chief and Secretary a few weeks back and we got asked this question. At Ramstein, the drinking water there, they've found traces of trichlorethylene, TCEs. The testing showed that the levels were about 1,000 times less than what is considered to be a risk. But, nonetheless, that risk is taken care through the filtration of the water system at Ramstein proper. So within Ramstein Air Base, the problem is solved by the water treatment. In terms of the source of these, it comes from a long history of probably imprudent environmental awareness that's pervasive across—

    Mr. HEFLEY. History that we're to blame for or the community as well?

    General ROBBINS. I think on Ramstein, it's probably due to practices there in years gone past. And these things leach out of petroleum products, so years of JP4 and other industrial processes on the flight line.

    Mr. HEFLEY. Yes.

    General ROBBINS. If you go beyond Ramstein to the Kaiserslautern military community, which is very large and embraces the Army and the Air Force, there have been traces there also. There is an industrial park, I guess, that is run by the Army. And there, I believe, they are actually using bottled water. Although the Army public health people have found that, again, these are trace elements. But it becomes a matter of public perception so they are bringing in bottled water.
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    The Air Force has $17 million to spend at Ramstein, cleaning up sites around Ramstein. I really don't know what the Army has in their program for their pollution. But the drinking water at Ramstein is safe to drink and they do on the base proper. But, as you know, these things tend to get a lot of publicity and everybody is very sensitive to that, and so you've got to go forth with an active public relations effort to dispel any fears. And they've done that successfully at Ramstein.

    Mr. HEFLEY. Could I ask you to get together with your Army counterpart and come back to me with an idea of whether or not we're doing what we need to be doing to not only not exacerbate the problem but to lessen it, if we need to be doing that?

    General ROBBINS. Yes, sir, certainly.

    Mr. HEFLEY. Although you do bring some encouragement with your statements there. There are a number of questions I have for you, General Robbins, about overseas military construction. You stressed in your prepared statement the importance to the Air Force of modernizing the overseas infrastructure. Could you provide us with a little more detail about what the Air Force is planning over the current Future Years Defense Plan (FYDP) for Outside the Continental United States (OCONUS) to MILCON and what the host nations and North Atlantic Treaty Organization (NATO) are doing to fund related facilities?

    General ROBBINS. Well, sir, as you know, the NATO side, we go through the National Foreign Intelligence Program (NFIP) program and projects are screened to determine eligibility. As I recall, and in FY 2001, the NATO contribution to U.S. facilities is about $180 million, Air Force. And, of course, you saw at Aviano they are contributing the lion's share of the military construction program there.
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    Mr. HEFLEY. And there is a crane everywhere out there.

    General ROBBINS. Yes, sir, there certainly is, they dot the landscape. And at this point, Aviano, what you saw or what is in the program to be executed in this FY 2001 program will buy out the vision for Aviano. There may be some future NATO projects which we would need MILCON supplemental funds for planning and design purposes, but the construction, we presume, is all going to be NATO eligible.

    Korea, you know, they are helping us on the dormitory side. As we build a dormitory at Osan or Kunsan, the Koreans contribute a dormitory also. And so we hope to continue that program, Osan being very important. In our dormitory master plan, Osan has the worst dormitories in the Air Force. And so that's why you'll see in the submittal this year and in subsequent years a dormitory for Osan in Korea.

    So in terms of the out year projections, you've seen the FYDP numbers for MILCON and I would guess that the overseas portion would remain relatively the same. We're trying to take care of infrastructure and quality of life overseas just as we are CONUS-wide. In the housing MILCON side, you'll see a huge investment going into Ramstein, where we are determined the worst housing in the Air Force exists at Ramstein Air Base. These aren't new houses, these are renovation of the stair wells that you are familiar with. So it's not new, it's to bring those old ones up to a modern standard. And we see putting very close to $50 million a year, for the next 10 years, into Ramstein, just to fix those stair wells up. And, of course, that is a U.S.—

    Mr. HEFLEY. Secretary Cohen has recently committed to buying down the out-of-pocket expenses in housing through a basic allowance for housing. And that is critical, of course, to the economics of housing privatization. I don't think there is any question of that. Mr. Abercrombie spoke to this a little bit. He's concerned that if we do this, that we actually get better living conditions. And rightly so. Not that you get the same living conditions, but you pay more money for it.
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    First, the Secretary's commitment is in excess of the basic housing allowance assumptions made when several current housing privatization projects were being developed. How will the increase in BAH affect those contracts or the requirement placed on the contractor to finance the upgrades and maintenance of those housing developments?

    Secretary DEMESME. I think it will have a positive impact on the contractors in that when they are building, they will now have a plan of action. They will know how much money they should have available for maintenance and repair and upkeep. When you go year by year and the bar goes up one year and down the next year, there is not a constant stream of finances that you can plan on. But we're hoping that it will stabilize some of our contractors out there and they can predict out in the future a little bit more than they could in the past.

    Mr. HEFLEY. Well, what effect will funding of the BAH have on the need for housing privatization on a base?

    Secretary DEMESME. I think the need will stay there. BAH, of course, is really more important to those people who live off the base, because they've been coming out of the pocket somewhere around 20 to 22 percent additional to what they got in their housing allowance. People on base, it's a wash because we take whatever they are allotted and it goes into their housing account. In the future, it's going to be a better deal for our members. And that's the whole important part, taking care of our people. In that we realize they should not be subsidizing their own housing, taking their pay raise that they are getting for other things, and now having to now put it back into housing. So just sort of it stabilizes, it allows them to really realize a real pay raise versus a perceived one.
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    It might give them the opportunity to buy housing in different places or to rent in better locations. But, in essence, what it will do is, hopefully, allow them to keep more money in their pocket so that they can use it for other essentials. So that's why we are really supportive of the BAH buy down. We've had an inequity, if you will, for the people who lived off the base and those on the base. Those off the base were expected to come out of their pocket each time they moved into a house. That's unfair to our members.

    No matter what we do with it, I don't think it's going to decrease the need for housing on base. People like to live on base for many other reasons, the security, the sense of family, the access to the facilities, the commissaries, base exchanges, child care. So there will be a desire to be a part of that base family, a sense of community that means so much to our military tradition.

    Mr. HEFLEY. Madam Secretary, I recognize that the Air Force remains perhaps the most vocal Service proponent for additional rounds of base closure. In fact, in a recent press report in Congress Daily A.M., which I ask unanimous consent of the committee to place in the record. Without objection, that will be done.

    [The information referred to can be found in the Appendix.]

    It described a hearing in the Senate Armed Services Committee in which the Air Force Chief of Staff, General Ryan, was characterized as saying, quote, ''Alone among the Chiefs in vigorously advocating more base closing,'' unquote. This subcommittee has been critical of the type of base closure which the Department continues to insist on proposing.
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    The Air Force had an opportunity in the last round to tackle the excess in lab infrastructure and largely passed up that opportunity. The Quadrennial Defense Review (QDR) force structure for the Air Force is roughly the same as the 1995 BRAC structure, with the exception of moving one active duty fighter wing to the Reserve. I've yet to hear a clear and convincing argument from the Air Force on the necessity for two additional rounds in which every installation is studied for closure. The Air Force wants BRAC, but I doubt very much you would give up anything that would affect current air space. This is a precious commodity, I don't want you giving up any current air space. So why two more comprehensive rounds where you put everything on the table, as we did before? And you know my argument, and I apologize to the committee because I've repeated it so many times, but my argument has always been there are certain—

    Mr. ABERCROMBIE. We're anxious to hear it again, Mr. Chairman.

    Mr. HEFLEY. Well, I'm trying to refine it and make it more interesting each time.

    Mr. ABERCROMBIE. We're all ears.

    Mr. HEFLEY. My argument is that there are some things that you all know that you are not going to give up, you are not going to close. I don't suspect you are going to close North American Aerospace & Defense Command (NORAD) nor the Air Force Academy. There are certain things you are absolutely not going to give up. So why not develop a base closure procedure where you take the have-to-haves off the table, and then we look at everything else in a, hopefully this time, non-political way? Let me throw that out there.
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    Secretary DEMESME. Well sir, as you know, we unfortunately can't set the criteria to use for base closing. We do rely on what you in Congress tell us what we can do. So depending on what is announced, that is what we can provide information to you on. During the last closure, at one time we were asked to submit 21 bases, and we did. And then we had to take them off the table because of Congressional directions.

    We certainly will wait for the guidelines on the best way to do this. We are hoping that whatever guidelines come out, it will recognize that we do have strategic locations that are necessary to support certain kinds of weapons systems, and the like, that we deploy from more often. All these things we hope would be considered by the Wright Commission, as they take a look, but we would just have to wait until we get the guidance. We can't come out front of the guidance, in terms of what we would like.

    Mr. HEFLEY. You could, however, come out and say, ''We've got excess infrastructure. We would like a procedure for divesting ourselves of this excess infrastructure but we are not married to the last procedure that we went through three different times, or four different times,'' or whatever it was. That would at least indicate that you are willing to talk about other ways of looking at it, other than the way we did in the last round.

    Secretary DEMESME. We would welcome other ways of looking at it, sir.

    Mr. HEFLEY. Thank you.

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    Secretary DEMESME. And we'd like—during the last closures, we have realized over $6 billion savings throughout Office of the Secretary of Defense (OSD.) And we are continuing to stretch our meager resources, not just our monies but our people, buildings and flight lines that we don't use. But our people, we have to have people in all those places, whether they are needed or not, where we could be utilizing them more fully to meet some of the current mission requirements, have our people work a little less harder than they are today.

    Mr. HEFLEY. Okay, thank you. Committee, any other questions? Mr. Abercrombie?

    Mr. ABERCROMBIE. Thank you, Mr. Chairman, just one observation. Your answer, I understand your answer and I appreciate it. But let me just make an observation about the difficulty of this BRAC business and why I think the Secretary should think again about it. We just, some of us have just had the opportunity to come back through Guam. And I've been there a couple of different times but did not have the opportunity previously to get an in depth briefing and a onsite review.

    You know, some people give us a lot of grief because we go different places and they call it ''junkets'' and everything else. But until you actually get out and see some places, you can have an idea intellectually but you haven't viscerally comprehended what it is that you are dealing with.

    Now, let me tell you—excuse me, that's an awkward way to put it, I'm not going to tell you anything. But let me observe to you that Guam is an incredible resource that we are passing on. Now, Guam came into this BRAC business before and got somehow put on there. I don't know, maybe because poor Mr. Underwood can't vote or something, you know, as a delegate. I'm not quite sure how it all worked out. But I observed to you that that is an incredible resource. Now, you've got Anderson Air Force Base out there.
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    Secretary DEMESME. Yes, sir.

    Mr. ABERCROMBIE. Now, you would think that aliens came down and made everybody disappear out there. You know, they could have a movie out there. Where is everyone? You know, there is this incredible facility out there. Now I just think that everybody knows, on this committee, my bias in terms of Asia Pacific and where we should be concentrating and all the rest of it. I think it makes sense, but that's an enormous resource.

    And yet, I'll bet you anything in the BRAC, in another BRAC procedure or something, they think about wrapping that up, too. Now, that's not making your job any easier in terms of answering the Chairman's question or the proposition he's put forward. But I'm very suspicious of this, ''Let's close lots of places down and there is all kinds of people that can be on whose list,'' because it all depends on what your criteria is.

    And I think if you look at Asia Pacific in the 21st century, we should be pouring resources into Guam. I think that whole harbor needs to be rehabilitated. I think Anderson Air Force Base needs to be the—Mr. Hefley has talked about being the point on the spear—that's the point on the spear, not these bases in these different countries whose politics we can't control, shouldn't control, can't tell where they are going from one time to the next.

    Guam is where America's day begins. That's their slogan out there and that makes a huge difference. I just bring that up as a case in point, that you have to be real careful when you start getting out there and saying, ''Hey, we want to lead the charge on BRAC support, having new rounds of base closings and all that.'' From my point of view, I'd rather take my chances in here. You give some recommendations, and so on, and then let us take it up as politicians. People say, ''Oh, nothing will ever get done.'' You can say that and maybe that's a good thing. That's what, from my point of view, Mr. Chairman, that's what our democracy is all about. We're supposed to have a tough time coming to a conclusion. So we work everything over and talk it over and make sure we're doing the right thing.
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    All I'm saying is yesterday's revealed wisdom about what's needed and what isn't, isn't necessarily then what's going to benefit us the most today. And I cite Guam as a case in point.

    Secretary DEMESME. I appreciate your observations there. Like you, I find it is a very good resource. And I also am pleased that when I was through there six months or so ago, to see all of the improvements. With your help we were able to put schools there, we've got several projects already planned, and we're making greater use of the facilities at Anderson. I don't see that changing.

    But we welcome the opportunity to work with you on a BRAC, but we do need to rid ourselves of some of the excess infrastructure and some of the buildings that we just can't afford to maintain, if we aren't going to use them fully.

    And, Mr. Chairman, you mentioned earlier about the success we're having in Aviano with the housing. I wish it were possible that we could do that here in the States but, as you know, we can't use the same guidelines here that we use overseas. Now the way that we score our projects here prohibits us from using that concept.

    Mr. HEFLEY. Would it help if we put in legislation to broaden your ability to use innovative approaches?

    Secretary DEMESME. If we had the ability, we would certainly do our best to make it work.
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    Mr. HEFLEY. We'll look at that. Again, if you think it's not a good idea here, I'd like for you to tell us. But if you think it might be a possibility, then maybe it's something we ought to look at.

    Secretary DEMESME. The scoring is the issue.

    Mr. HEFLEY. The scoring, yes. Mr. Stump.

    Mr. STUMP. Thank you, Mr. Chairman. Madam Secretary, would you repeat what you said about the savings, the amount please?

    Secretary DEMESME. Yes, sir. We've saved about $6 billion—

    Mr. STUMP. $6 billion? Is that Air Force alone or is that—

    Secretary DEMESME. No, that's DOD-wide.

    Mr. STUMP. DOD-wide. You are telling me that after we did all that environmental cleanup—are you putting a price on the property that we have given away?

    Secretary DEMESME. I'm sorry, sir. That does not include environmental clean up.

    Mr. STUMP. I'm sorry?
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    Secretary DEMESME. It does not include environmental clean up.

    Mr. STUMP. Well, that's why I asked, precisely, because that's why so many of us oppose this. To begin with, it was based on the premise that we were going to save a lot of money. By the time we cleaned up the property and gave it away, we ended up in the hole. And I think that's where you are going to find a lot of opposition. I mean, if you want to close some of these bases, if it absolutely has to be done, then put a lock on them and put a caretaker there and keep it.

    Mr. TAYLOR. Mr. Chairman, if I may?

    Mr. STUMP. Thank you.

    Mr. HEFLEY. Yes, Mr. Taylor.

    Mr. TAYLOR. Madam Secretary, I've got to tell you I take some offense to what you just said. Because in one breath you are telling us you saved $6 million—

    Mr. STUMP. Billion

    Mr. TAYLOR. Billion. And you turn around and tell us in the next breath you are ignoring the $13 billion price tag of cleaning these bases up. We cannot make decent decisions unless people are honest with us and tell us all the facts. And the way you just matter of factly said, ''Oh, I left that out,'' troubles me greatly. And I hope we don't see that again.
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    Secretary DEMESME. I certainly didn't mean to mislead. And I didn't include those costs because those were costs that we would have borne regardless. In that if people continued to live and work, we would have had to clean those up. Bases, all of them must be cleaned up. These are the ones, because of the base closures, we had to clean them up faster. So I consider that as part of what we needed to do at the bases because of the condition that they were in. And I'm sorry if I misled you with that comment.

    Mr. TAYLOR. Madam Secretary, it is my understanding that there is a higher standard for properties that you transfer than for properties that you continue to retain ownership for. Now, I'm certainly capable of being mistaken. I do not think those costs would have been incurred, had we not disposed of those properties.

    And the other part that I think Mr. Stump makes a very fair point on, is that when during the last round of base closure, it was sold to Congress that these properties would be sold. In the vast majority of instances, those properties were given away. So we paid to clean up properties that we gave away.

    And I'll take it a step further, I'd like your opinion on something. It's also my understanding that should we have sold those properties, those funds would not have remained in the Department of Defense, they would have just flowed in the general Treasury and not been available for some of the things we need to do. So I, quite frankly, don't see how anyone within the Department of Defense could be an advocate of base closure, because I don't see where you come out on this deal.

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    Secretary DEMESME. We've increased our missions, we've decreased the number of people serving, we've increased our overseas involvement, our humanitarian missions; and we just have so few people to spread around. And our budgets have not been commensurate with the additional missions. And we have great modernization needs. And all of those competing factors is why we believe that if we were to get rid of some of the infrastructure that is excess, that we might be able to meet these other demands a little bit better with less stress on our people.

    We, of course, comply with the Congressional mandates in terms of whether we give these properties away. When the rules changed, we had to take quarterly—we were in the process of working out different arrangements where they were being bought. But we are just complying with whatever we're directed to do in that regard.

    Mr. TAYLOR. Well, my request would be that I personally would favor changing the law to see to it that if a base is excessed, and if it is sold, the money stays within DOD.

    Secretary DEMESME. That is what we would like—

    Mr. TAYLOR. I think it would be a heck of a lot easier for Congress to do something like that, if the Administration would work with us on that request so we actually see some benefit other than just giving up an installation.

    Secretary DEMESME. We would look forward to working on that with you, sir.
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    Mr. TAYLOR. Thank you. Thank you, Mr. Chairman.

    Mr. HEFLEY. Thank you, Mr. Taylor. Any other questions from this committee? I've got to say I'm ashamed of my Committee for letting General Robbins get by as easily as he did. Because you will actually enjoy coming up here, if we keep doing this to you, and we don't want that to ever happen. We want you to dread it with fear and trembling. And so I apologize, General Robbins, we'll try to make up for it at some future date.

    General ROBBINS. I appreciate that, sir.

    Mr. HEFLEY. Well, welcome, for your first time around, and we appreciate it. We appreciate the panel. And with that we'll excuse you and go to the second panel.

    Secretary DEMESME. Thank you.


    Mr. HEFLEY. Our second panel will provide us with an overview of the Navy and Marine Corps MILCON programs for the coming year. I want to welcome again to the subcommittee, Robin Pirie, Assistant Secretary of the Navy for Installations and Facilities. Secretary Pirie is accompanied by Rear Admiral Lou Smith, Commander of the Naval Facilities Engineering Command; Major General Harold Mashburn, Assistant Deputy Chief of Staff for Installations and Logistics, from the United States Marine Corps; and Rear Admiral John Cotton, Deputy Director of Navy Reserve. Mr. Pirie, it is a pleasure to have you with us today.
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    Secretary PIRIE. Well, thank you Mr. Chairman. I'm honored to appear once again before the committee. With your permission, I'll submit my longer statement for the record and just hit a few highlights, if I may?

    Mr. HEFLEY. Well, I don't know, we might want the whole load.

    Secretary PIRIE. Yes, I'm prepared to, if you insist, we will—

    Mr. HEFLEY. We'll enter it in the record. By the way, Robin, you know, we've worked closely over the years and we appreciate that. I've enjoyed that very much, and I know that Secretary Danzig did everything he could to prevail upon you to remain with the Department this year. I, for one, am glad that he did that. And given that it is possible this may be your last appearance, I don't know that that's the case but it may be your last appearance before the subcommittee, I just want to take the opportunity to publicly thank you for your service to your Country. I think you can be very proud of it, and we're very proud of you. Now, we may not be after the hearing, but that's why I say this before the hearing.

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    Secretary PIRIE. I was saving my grace notes for last but—but I, too, have valued my association with the committee and am really grateful for all the consideration that's been shown to the things that I've tried to bring forward, and to me personally. If it is true that I will not be here again, I will certainly miss our interactions, although not necessarily miss some of the things that caused me—that bring me forward.

    Sir, this budget, the last in my six-year tenure is, in my view, one of the better budgets that we have brought forward. And I think there is a lot to like in it. I think there is a lot to like in the area of housing. In here the Secretary of Defense has proposed to reduce the out-of-pocket housing expenses for people who live off base, rent homes in the community. And the increase in the basic allowance for housing would cut the out-of-pocket expenses for people who do that from 19 or more percent, as it is now, to 15 percent by the end of 2001. And, further, the Secretary proposes to eliminate out-of-pocket costs for our people who rent or own in the private community by 2005. That's going to make housing more affordable for nearly three-quarters of the Navy and Marine Corps families and the many single sailors and Marines who live in private sector housing.

    With this budget we've renewed our commitment to family housing construction. We're asking you to approve six Navy and two Marine Corps construction projects for the next fiscal year. These projects would build a total of 861 homes, all of them in the United States. In keeping with our philosophy of fixing what we own, nearly all of these replace deteriorated homes that we still need but that are beyond economical repair.

    We're proceeding with our housing privatization efforts. Seven pilot projects previously authorized and appropriated are in various stages of the acquisition process. Any necessary funding will come from prior year appropriations. We are not asking for any new Public Private Venture (PPV) funds, but I believe we're approaching success here. Later this year, I expect to provide the Congress with the required notification of our intent to award contracts for most of these PPV projects.
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    Because we've been slower than I hoped, we will not have all the data that we would like to have about how PPVs will work. Nevertheless, I continue to believe that they are an important tool in getting better housing sooner for our people. And I ask for your support for extending the PPV authority for another five years.

    We're also exploring an initiative to dramatically improve housing for our most junior sailors assigned to ships. When deployed away from home port, all sailors have to endure bunk beds, sharing cramped spaces with dozens of ship mates, and living out of a small locker. When they return to home port, their peers who are married or assigned to aviation squadrons or submarines get housing ashore. Ship board, E–1s through E–4s, however, must continue to live aboard ship. A proposed new home port ashore program would provide these sailors with housing either in a bachelor enlisted quarters (BEQ) or in the community when their ship is in home port.

    In order to create space within the housing budget for the rapid build up of bachelor quarter (BQ) spaces that would be necessary for this initiative, we would build new spaces to the 2+0 configuration rather than the 1+1 that is the current DOD standard. Ultimately, we intend to return to the 1+1 standard, but in the meantime we will have provided decent places for our young bachelor sailors in home port. As we work out the details of implementing this initiative, we will keep the Committee closely informed.

    I'm very proud of our efforts to clean up closed bases and get the property into the hands of local communities. Through four rounds of BRAC, we've had a total of 178 closures and realignments to accomplish. Only two remain. Both will be completed next year. Clean up and property disposal are now the major focus to this activity.
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    With respect the BRAC funding, the apparent large increase in funding requested in 2001 requires some explanation. Last year's advance appropriation scheme shifted fiscal year 2000 funds to 2001, based on expected outlays in the military family housing construction in BRAC accounts. Congress rejected the idea of advance appropriations, but made us whole in the fiscal year 2000 by restoring funds in military construction and family housing construction account, for which I'm very grateful, by the way. However, BRAC funding was not restored. This left our fiscal year 2000 BRAC severely short. We're doing our best to work with communities and make do with much smaller than planned fiscal year 2000 funds.

    The fiscal year 2001 funds are critical to continue this work begun this year and get us in the community redevelopment plans back on track. Clean up delays will inevitably stretch our property disposal schedules and be a major set back to community redevelopment plans.

    We've accomplished two Section 34 early transfers of BRAC property. The former Fleet Industrial and Supply Center in Oakland, California, transferred to the Port of Oakland in June. The transfer is unique in that with funding the port will do the clean up as part of their redevelopment scheme, saving both time and money for both parties. We also transferred the former Naval Air Station in Memphis, Tennessee, to the Millington Municipal Airport Authority. In this case, we will continue to do the clean up but also in concert with the communities redevelopment effort.

    While we have avoided including a major irritant this year, such as advanced funding for MILCON and family housing, there are aspects of our budget that may be problematic. One such item is the lack of contingency funding for MILCON and family housing. We will certainly do our best to manage our projects carefully. But the inevitable fact-of-life changes will confront us with the need to down scope projects or reprogram for additional costs. I don't propose, Mr. Chairman, to compromise on quality.
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    Another issue we're working but have not arrived at a complete solution is that of historic and flag officer housing. These historic buildings represent a part of our national heritage of which the Navy Department is the steward. We need to preserve these places for the benefit of present and future generations of Americans. As a general rule, these places are difficult and expensive to maintain There is a real question in equity whether the family housing account should bear this burden when we have shortages elsewhere. The idea of creating a separate account has proved unpopular. I have created a working group to seek a long term solution and I'll keep you informed of our progress, and I welcome new ideas any time.

    Mr. HEFLEY. Let me interrupt you there, Secretary Pirie, because that is very important. And any input you can help us with, in terms of we really do want to come to a consensus on this, any suggestions you have. Because we agree with you that these are a part of our national heritage and should be preserved, but we've got to do it in a different way than we've been doing it.

    Secretary PIRIE. Yes, sir. And it is not a simple problem, I do not have a lot of slick ideas. And I agree we are all grappling for a workable solution that will allow the preservation but not raid the accounts for family housing where we have shortages anyway.

    Mr. HEFLEY. Yes.

    Secretary PIRIE. I have talked to a wide variety of people, including for example, Admiral Holloway, who is the Chairman of the Naval Historical Trust, about the possible availability of charitable donations and schemes that we might set up. And it may be possible that if we can get over the capital hump, that we can organize schemes where there will be private support of the operations and maintenance cost of these places. But as General Smith will attest, the operations and maintenance, particularly where it's been let go for a long time in some of these old houses, it's truly an impressive bill.
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    Mr. HEFLEY. Well, you are obviously working at it, and we appreciate that. And we're working at it and we hope to arrive at some kind of a conclusion.

    Secretary PIRIE. We will stay in touch on this because I agree it is very important. Well, Mr. Chairman, I've said, I think, before what a pleasure it's been to work with this Committee for the last six years, and I do appreciate your consideration for what we have brought forward and for us. Thank you.

    [The prepared statement of Secretary Pirie can be found in the Appendix.]

Mr. HEFLEY. Thank you. Do any of the Admirals or Generals want to comment before we go to questions?

    Admiral SMITH. No, sir.

    Admiral COTTON. No, sir.

    General MASHBURN. No. sir.

    Mr. HEFLEY. All right. Mr. Taylor.

    Mr. TAYLOR. I want to thank all of you for being here. I guess what troubles me is what wasn't said. What wasn't said was your feelings on the President's proposal with regard to Vieques. I've got to tell you, I happen to belong to the group that says that it is of importance. That having been there, I find it strange that people would be that upset about a bombing that takes place, if my memory serves me right, nine miles from the gate of an installation that's been there for over 40 years.
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    I agree that the fishermen have had some areas restricted to them, but I'll also turn around and say that I think the Navy has been excellent stewards of that property. I personally believe that, yes, there are some sincere gripes amongst the fishermen, there are some sincere anti-war types, there are some sincere environmentalists, but I happen to think in my heart that all of this is really being driven by developers. That the people who stand the most are sitting back saying, ''Geezim, if we can get the Navy to give up that property, they've given away Governor's Island for a buck, they've given away the Presidio, they've given away all that incredibly expensive property in other places around the Country, and we can make a heck of a lot of money developing this.''

    I think it sets a terrible precedent because of the number of waterfront installations in high value places all around the Country. And then the Floridians say, ''Well, how about us?'' Or the folks in downtown Biloxi say, ''Gee, we'd like that air strip at Keesler to bring clients in for the casinos.'' What troubles me the most is where does this stop?

    And what troubles me about the President's proposal of giving up the western half of the island is that you only whet the appetite of those who say, ''Gee, we got half, let's go for the other half.'' Or even some people who say, ''Well, if we shut down Vieques, let's shut down Rosevelt Roads, too.'' I think that's a twofer for them. They get that much more property, plus a place to tie up their cruise ships. So I want to hear your thoughts on this. I happen to think it would be a terrible mistake.

    And let me also say, in fairness, that it troubles me, knowing what incredibly great neighbors the United States is in places like the Stennis Space Center, places like Gulfport, Mississippi, the Naval Construction Battalion, places where we value them as neighbors. In fairness, the Navy has not been a good neighbor at Vieques. It doesn't mean they can't be, it just means they haven't been.
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    And I would like to hear your thoughts on the Navy getting as involved in Vieques as we are throughout Latin America. We run water lines throughout Latin America. I visited the Sea Bees drilling water wells in Panama. I know that the Marines have built schools and the Sea Bees built schools throughout Latin America. We ought to be doing that for our own fellow Americans in Vieques, rather than giving up that property and just folding the flag and going home. So I've stated my case, I'd like to hear yours, sir.

    Secretary PIRIE. Let me begin by agreeing with the last part of your statement which is we should become better neighbors of Puerto Ricans on Vieques. And we do take that seriously and are taking concrete steps to do that, which includes the appointment of Admiral Kevin Green to be our senior flag officer on the scene down there. And he is charged with rebuilding the relationship.

    You put me in a difficult position commenting on the deal. It isn't my deal. I'm charged with the implementation of it and I'd like to come and talk to you later about that. And, incidently, I believe that given the circumstances of the case, it's about as good a deal as could be struck, but it's not a deal that I worked.

    Mr. TAYLOR. Mr. Secretary—if I may, Mr. Chairman?

    Mr. HEFLEY. Surely. Go right ahead.

    Mr. TAYLOR. Mr. Secretary, one of the things that struck me about the deal, and one of the mistakes I think of the deal or at least an opportunity for an addition, most people are intimidated by an Admiral. When I was an E-6, if I saw a Lieutenant going down the corridor, I went the other way. So you can imagine how a typical person feels when they see an Admiral.
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    One of the things that struck me on my only three or four-day visit to Vieques was that there were some very legitimate complaints from fishermen who said, ''Well, my nets disappeared about the time that there was a training exercise. I'm fairly confident that the minesweepers did it. So I'm out X number of hundreds of thousands of dollars.'' And without trying to tip my hand that I was a congressman, we said, ''Well, what do you do in a case like that?'' He said, ''I don't know, just gave up.''

    I think that's part of the intimidation of an average citizen dealing with the United States Navy Admiral. He is on Vieques, the Admiral is on the big island. Not only on the big Island but all the way downtown in Old San Juan, in, I'm told, a very nice office building. Has the Navy considered the possibility of having a civilian ombudsman who would live on Vieques? And, again, I'm going to take it a step further, my recommendation would be a retired sailor or retired Marine or a retired Army construction sergeant who is from Puerto Rico.

    Mr. HEFLEY. How about a retired congressman, Gene?

    Mr. TAYLOR. No, no. But, again, hopefully from Puerto Rico, a Spanish speaker. And let's face it, Admirals come and go. Either you are on your way to your next better slot or you are on your way home. If we had an ombudsman who—it becomes a generational thing. You've got a problem with the Marines, you go see Senior Jones, you go see Senior Sanchez. He's the one who calls the Admiral for you. What is really missing there is a link between the community and the base. And you have such a person at every single installation in south Mississippi. The Admirals or the Generals come and go, or the Captains come and go but there is usually a civilian who is kind of the go-to guy that the locals know to call. And he is the one who can say, ''Well, we know Mr. Smith, he's a straight shooter and that's a legitimate request. And my suggestion to you, Captain, is that you fix it.''
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    You ought to be doing that in Vieques too. And, again, I think it is of importance. Obviously, the other side has emotion on their side. I mean, I saw the game of one upmanship, because the Lutherans are there so now the Catholics are there, and the Catholics are there so the Baptists are there, and the competing camps of fisherman. I mean, it's a game where everybody wants in on being the ones to save Vieques.

    But I happen to think that they are all making a mistake. I mean I've taken the time to look at the numbers of Medal of Honor recipients, and compared Mississippi to Puerto Rico, and it is almost identical. Silver Star recipients, almost identical. Losses in Viet Nam and Korea and World War II, almost identical. These are very patriotic people. And so there is no reason for them to feel this way, other than the fact that the Navy has not done as good a job as it should.

    But I'm not willing to call it quits. And I certainly hope to hear you say that you are not calling it quits, because this is fixable. And once we lose that property, as Congressman Stump said earlier, it's gone. You will never get it back at any price. And they are just not making any more.

    Secretary PIRIE. I agree with both your points with respect to having people on the ground who can be immediately helpful and immediately responsive to the community. Exactly right. And I do believe that we can fix this. I do believe that we can retain Vieques. I do believe that we can gain the hearts and minds of the Vieques people on whom this basically depends in the long run. But we have some repair jobs to do.

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    Mr. TAYLOR. My last comment is, I keep hearing we have some repair jobs to do. I don't see anybody getting started repairing it. And one very simple solution for starters, is there is a very nice hospital on the island. It's also very much understaffed. The Navy sends corpsmen, the Marine Corps sends corpsmen, the Special Forces send corpsmen all over the world to do inoculations to take care of little kids, to help people with broken bones. There is absolutely no reason why we shouldn't be doing it in a part of America. And think about it, it's really hard to be mad at somebody when they just took care of your child.

    Secretary PIRIE. Yes, sir.

    Mr. TAYLOR. Thank you very much.

    Mr. HEFLEY. Mr. Secretary, if I might piggyback on Gene's statement, just that I know that the Navy and the Marine Corps never wants to learn anything from the Army, and vice versa. But there is a pattern of what you suggested, for an ombudsman, in Pinion Canyon, the Pinion Canyon maneuver site at Ft. Carson, which is several hundred thousand acres of training ground. The ranchers went nuts down there when we purchased that. And they just knew that we were going to destroy the environment and it was just going to be awful, and it was just going to be a dust bowl and all kinds of things. And we put a civilian in there, big, tough, bearded plaid shirt and hiking-boots-type of guy to be the environmental compliance guy down there.

    He knows every rancher, like your fishermen, Gene, by their first names. They know him, they respect him. Not only that, it's not a token. Because the military respects him, too, as the authority on environmental compliance down there. And he's got the relationship with the ranchers which is just beautiful today. But I think a lot of it goes to the fact that this is one guy who has survived numerous Ft. Carson commanders, that Gene was saying come and go, in order to develop a real relationship with those people. So that's something you might not just pass over. You might want to pay attention to Gene's suggestion there.
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    Secretary PIRIE. Yes. Thank you, Mr. Chairman.

    Mr. HEFLEY. Mrs. Fowler.

    Mrs. FOWLER. Thank you, Mr. Chairman. I first want to identify myself with the remarks you made about Secretary Pirie, because we've very deeply appreciated your work and the contributions that you've made to the Navy and this Country, and your good friendship and advice to me has been deeply appreciated.

    Secretary PIRIE. Thank you, Ma'am.

    Mrs. FOWLER. Thank you. We still need you desperately so we'll keep you as long as we can. I want to follow up on what Gene was asking you about, Vieques. Has the Navy assessed the value of the property that the President has directed us to turn over to the Government of Puerto Rico, that property on the west side? Is there any assessment yet of that value?

    Secretary PIRIE. What the value is depends on how the property is to be used. And, in fact, the schema for the devolution of this property to Puerto Rico involves the Department of Interior and the Puerto Rican Government developing a co-management arrangement for the conservation zones on the property so that these conservation zones will be preserved. That means that a substantial amount of that property will remain beautiful, pristine, a wonderful ecotourism site, but it won't be available to be developed for beach front hotels. And, clearly, if you just let rampant development happen on the west end of the island, that property would be immensely valuable.
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    If we preserve it as a conservation zone set apart, it will be of substantially less value. We can give you a horseback estimate of the value of the property, assuming that it remains substantially in the hands of the Puerto Rican Department of—there is a Puerto Rican agency which deals with the preservation of parks and property.

    Mrs. FOWLER. I'd be interested in that—

    Secretary PIRIE. But anyway, assuming that it remains, as we contemplate the transfer, it's probably worth on the order of $150 million.

    Admiral SMITH. Yes, that's the number I remember. We'll get you the exact number for the record, Ma'am.

    Mrs. FOWLER. Thank you. Just ball parking around $150 million, if it's kept primarily as a conservation zone?

    Secretary PIRIE. Yes, Ma'am.

    Admiral SMITH. Yes, Ma'am.

    Mrs. FOWLER. What actions have to be taken prior to this property being given to Puerto Rico?

    Secretary PIRIE. There are a variety of environmental laws and regulations that have to be complied with. We'll have to comply with the National Environmental Policy Act. We will have to have legislative authority to complete the conveyance in accordance with the President's bill. The Government of Puerto Rico and the Department of the Interior will have to come up with an appropriate co-management scheme for the conservation zones. And that scheme is going to have to meet the provisions of the Endangered Species Act and the Marine Environmental Protection Act. So there are a number of rather difficult environmental and real estate procedural wickets to get through by the 31st of December of this year. So it's hard, but we think we can do it.
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    Mrs. FOWLER. I think one of the things you said there is what I thought, was legislative authority. And I'm like Gene, I have some questions on our giving away that property. And I was just there a few weeks ago and went all over the west end which is beautiful. And if we want to keep it a National Park of some sort, all of that, fine let's do that.

    But I went on the trails that the Navy has developed and out in the Mangrove swamps, and they've done a great job of preserving and protecting the environment on that part of the island. And I would hate to see that ruined, and I'm not sure that it needs to be given over. We are going to give $150 million worth of property plus $40 million on top of that, and we still don't have the use of the island anyway.

    I'm just very concerned about the whole situation there and I think it's been mishandled from day one. I don't know of any installation in this Country where we had trespassers on U.S. Government property sitting in on it, where we wouldn't have had U.S. Marshalls there day one removing them. And because this Administration didn't do that, then we now have got a—the head of the Independence Movement has got his own condo on the beach. A house with satellite T.V. and telephone and everything he needs right there with a beautiful view, and armed guards around him so no one can get him off. It's a bad situation. But I think it'll be interesting as we review that up here as that goes through the process. Could I ask one other question, Mr. Chairman?

    Mr. HEFLEY. Oh, surely.

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    Mrs. FOWLER. Okay. In looking through your budget request, it appears that the fiscal year '01 budget request for environmental restoration that is associated with BRAC has increased significantly,versus last year's. I know you talked about the BRAC overall, but I just want to look at the environmental restoration. Do you expect to address all of the outstanding BRAC environmental restoration issues with this '01 request, or what you said, I read part of it and in there and you said, ''View it as an '01-'02.'' But then is '01 and '02 going to take care of all of it or are we looking at down the road past that?

    Secretary PIRIE. It should be looked at as an '00-'01 package.

    Mrs. FOWLER. Okay.

    Secretary PIRIE. It's money that we pushed out of the fiscal year 2000 into '01, hoping that we would get advance appropriations. If we had advance appropriations, then Admiral Smith could go ahead and continue to obligate at a rate that would allow us to keep up with the clean ups. Since we can't assume the appropriations, that is a sin to assume appropriations, he has to commit his, what small funds remain in fiscal year 2000, very slowly and prudently. So it's essentially put a big hiccup in the restoration program.

    What we have in '00 and '01 will address a very substantial amount of the remaining BRAC clean ups. There is to be more in '02 and '03. We'll be coming forward with a combined clean up and caretaker budget for the properties that we can't get off the books. But the more rapidly that we can clean these places up and convey them to the communities, the more rapidly we can get out of the caretaker mode and it will be a better scene all around.

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    Mrs. FOWLER. I have just two follow-up questions. One, do you just ball park up a figure as to how much we're looking at further that the Navy has to spend? Is it past '01 on environmental restoration, pursuant to BRAC?

    Secretary PIRIE. I betcha Admiral Smith has it down to the nickel.

    Admiral SMITH. Some of those efforts, it's programmed at something under $400 million, as I remember, total global for all of the out years. And some of the actions are monitoring actions that could go on for, you know, an extended period of time. I'll get you the exact number. But as part of the overall 10-plus billion dollars we spent on BRAC, it's really we're down to the last pieces of it there.

    Mrs. FOWLER. And I assume then when you talk about caretaker status, that there will be certain closed Navy or Marine Corps bases that are going to remain in caretaker status past '01 until environmental issues on them are resolved?

    Admiral SMITH. Yes, Ma'am.

    Mrs. FOWLER. And is there any other reason that any other bases are remaining in caretaker status other than an environmental reason?

    Admiral SMITH. Generally it's not an environmental reason. We haven't really held up any proposed transfers on environmental grounds at all. Where we have long term caretaker situations, it's the community can't come together on a scheme to reuse the property or the property is so unique. For example, Adak Island, where there just doesn't appear to be any feasible reuse. In this case we've just got to take care of the property.
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    Mrs. FOWLER. So environmental restoration is not your main problem in having bases in caretaker status?

    Admiral SMITH. No, Ma'am. Our main problem in the conveyance is coming to an appropriate arrangement with the community.

    Mrs. FOWLER. Thank you.

    Mr. HEFLEY. Thank you, Mrs. Fowler. Mr. Underwood.

    Mr. UNDERWOOD. Thank you, Mr. Chairman. And just following up on the point made by Mrs. Fowler. Certainly, Admiral, I'd like to see a list of those properties that continue to have environmental problems and see how we're going to take care of them.

    Admiral SMITH. Sure, I'll see to that.

    Mr. UNDERWOOD. I want to take the opportunity to focus a little bit away from Puerto Rico, although I wish you would offer us the same deal. Do you think that's possible, Mr. Chairman?

    Mr. HEFLEY. I see no reason why not. You would have the citizens of Guam manifesting the same behavior.

    Mr. UNDERWOOD. You know, the issue is then do you want that kind of behavior? So, in any event. I just wanted to ask a couple of questions, one on the BRAC process and the fall out from that. And the other, just on the utilities issue. Because, you know, as we discussed on many previous occasions, there is a general interest in privatizing all of the utilities and there is a time frame from that. And we continue to experience problems with the water situation in Guam. And I'm hoping that somewhere along the line we're going to see our way out of that and move it in that direction. Because not only is there the interest, there is two things that work here in terms of policy.
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    One is initiative to privatize these utilities. The other actually goes back to a law that created the Government of Guam, the Organic Act of Guam, which specifically stipulates the that military is supposed to turn over utilities. And, you know, we've had problems with that for the 50 intervening years. And so now we're in a situation where we're trying to work through the water situation. Now, what are your thoughts about that, or where are we on that?

    Secretary PIRIE. This is an extraordinarily complicated problem which goes back to the creation of the Guam Government and about which we have some differences in the historical interpretation of the papers. And at least part of this is now before the Courts being settled in a suit.

    Basically, what we need, if we are to have a privatization scheme, is assurance that under this scheme we will fare no better or no worse than anybody else taking this water, and that the capacity will remain there for Navy needs. And that the entity taking it over will prove itself competent in the long run to run the thing properly and keep the supply coming. And assuming that can be worked out, I think the privatization is the real possibility. But there is a long and tortured history, I don't have to tell you.

    Mr. UNDERWOOD. There is not an inherent, there is no other—I'm trying to figure out what are the considerations of the Navy as an impediment to privatization. Because, you know, in the whole constellation of issues, anything from national security to the problems you've just outlined, I want to make sure that we focus in on the precise impediment.

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    Secretary PIRIE. An assured water supply over the long run at a reasonable price in which we don't pay more than anyone else does, I think those are the criteria.

    Mr. UNDERWOOD. And maybe you don't remember, Admiral Smith, but going back to your predecessors, there was a deal with the Guam Power Authority—

    Admiral SMITH. Yes, sir, I remember that very well from my previous job in the Pentagon.

    Mr. UNDERWOOD. And I tell you, the Guam Power Authority, for some reason, forgave you the $20 million. And so, you know, it strikes me as odd that why can't we reciprocate a little with the Guam Waterworks Authority?

    Admiral SMITH. Sir, I would tell you I'm very sensitive to that situation out there. And I've talked two times in the last month to the commanding officer in my Public Works Center out there, who of course is the one who is operating that. And if it weren't for some fiscal considerations under the Navy Working Capital Fund, they probably wouldn't have had to go to the length that they did in terms of what they call ''accounts receivable'' for that metered water bill.

    But he and I have talked and I think this will finally force resolution of the matter. And I think that's really what we all want deep down, one way or the other.

    Mr. UNDERWOOD. Okay. Just, if I may, Mr. Chairman? On the issue of BRAC, you know you are calling for a couple of rounds. Let me give you the scenario that we've experienced. One, is that the Public Works Center was put on BRAC. The Navy was not successful. Consequently, subsequent to that it was A-76'd, or a big chunk of it was A-76'd, so it seemed to the community that one way or the other the Navy was going to get its way.
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    And now we're in the process of implementing this effort. And we're trying to figure out, and perhaps you can send someone to my office, Secretary, or perhaps we could meet on this, the exact dynamics of how Raytheon is interpreting various features of the contract. We need to meet on that as quickly as possible.

    Secretary PIRIE. We'll be glad to get together with you on that, yes.

    Admiral SMITH. I'd be glad to do that, sir.

    Mr. UNDERWOOD. All right. And I also have a number of other questions for the record. Thank you, Mr. Chairman.

    Mr. HEFLEY. Thank you. General Mashburn, you are sitting there very confident, thinking you are going to get by, but you are not.

    General MASHBURN. Yes. sir.

    Mr. HEFLEY. You are familiar with the operation of Blount Island?

    General MASHBURN. Yes, sir.

    Mr. HEFLEY. I was down there and visited with your folks and saw what they did. And they are extremely convincing as to the importance of that facility, at that particular location, and the job they do. And I bought into it, I agree with them. But we don't own Blount Island. My sense there, and we are talking about beautiful islands and so forth, my sense is that there is an element of urgency here where you have a patriotic American who is willing to sell to us. But I would guess in Jacksonville you've got developers salivating every time they look across that river at would could happen on that island.
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    Now, you've got $5 million, as I understand it, banked from a previous supplemental, and you've put $35 million in the request for fiscal year '02 into the budget. So that will be a total of $40 million to buy the easements. Additional funds then will be required to buy out the remainder of the property. What is your sense of this? This doesn't appear to me to be an urgent kind of a situation. Do you think we can kind of drift along incrementally and do this, or is this important enough that we need to get cracking and make sure it's tied up?

    General MASHBURN. Sir, I think our plan is to get cracking and make sure it's tied up. The problem is, of course, it competes with other items, as the Chairman mentioned. We have $5 million that were appropriated last year. We have $435 million in Corps MILCON for '02. It's also the number one MILCON priority in our unfunded deficiency list, which was submitted to the Congress by the Commandant. A total of $40 million and, like the Chairman said, that buys the easements.

    Additionally, the requirement is right now estimated to be $119 million. That will be put in palm '02. Looking at FY '03 and '04, the leases expire in '04, that's our major concern. In speaking with Mr. Peyton, we have action groups that are briefing the community, they will be briefing congressional staffers very soon, before the end of April, and also the principals on our plan.

    Of course, it's critical to the readiness of our Maritime preposition operations. However, we think it's a national strategic asset, looking at the experience for deployment for Desert Shield, Desert Storm. Of course it's important in the Marine Corps. It was picked from 103 total sites throughout the United States as the premier spot. And it was also determined by an independent agency, sponsored by the Joint Staff, that we need that island and Charleston, which does the Army preposition. It's critical to us. I think we have a plan. We just asked for continued support and it is vital, sir.
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    Mr. HEFLEY. And do you think that plan, the timetable of that plan is such that we can implement it—

    General MASHBURN. Yes, sir.

    Mr. HEFLEY.—and the owner would be willing to sell --

    General MASHBURN. Sir, the dollar figures are very soft, they are based on '95, '96 appraisals. Right now we have surveys planned, we also have appraisals lined up after the surveys. We have an environmental assessment that's in prefinal. We hope to publish the final-most significant impact in June of this year. So everything is in the works.

    Mr. HEFLEY. Is there a chance that we can get Mrs. Fowler to support you on that?

    General MASHBURN. She's been hesitant, sir.

    Admiral SMITH. Mr. Chairman, if I could? I discussed this matter with the Chief of Naval Operations, and the Navy supports the Marine Corps on it. We totally agree with what they want to do here.

    Mr. HEFLEY. That's a nice thing. They are agreeing on something, and I think that's good.

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    Mrs. FOWLER. I want to thank Chairman Hefley who did take the time to come down and see the facility. It is a critical national asset. And I think we did see that during Desert Storm, Desert Shield, more went through that facility than any other on the east coast to help us in that effort.

    My understanding is, as I think you said, that it is number one on the Commandant's unfunded priorities list for '01. So if we find some extra dollars somewhere in defense, we're hoping at least some of that maybe could go towards helping with some of that purchase. But, thank you, General. And really, as I say, the Chairman has been extremely supportive and if we can keep this moving along, I certainly will do all I can to help. Thank you.

    General MASHBURN. Thank you, Ma'am.

    Mr. HEFLEY. We want to be helpful, but beach front property is at a premium. And if we need it, and if, as you've convinced me, it's critical to our forward deployment operations, and so forth, then we don't want it to slip out of our hands because of our lack of diligence and so forth.

    You know, we've got a vote, and I turned the beeper off, so I'm not sure how many more. I'm not going to keep you guys cooling your heels while we do that. I have some additional questions. And if I could submit those, Mr. Secretary, to you for the record—

    Secretary PIRIE. Yes, sir.

    Mr. HEFLEY.—I would appreciate that. I'm not going to have you sit here while we vote.
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    Mr. TAYLOR. Mr. Chairman, I have an additional question I'd like to forward also.

    Mr. HEFLEY. All right, fine. Well, thank you very much we do appreciate you being here. Mr. Secretary, I hope it's not your last visit with us. But if it is, we wish you well in whatever you do next.

    Secretary PIRIE. Thank you, Mr. Chairman. You know, Richard Danzig, our Secretary of the Navy is one of the single most persuasive individuals I've ever met.

    Mr. HEFLEY. He said, ''Stay or I'll kill you,'' as I understand. Thank you very much, the committee stands adjourned.

    [Whereupon, at 3:04 p.m., the subcommitte was adjourned.]


March 9, 2000
[This information is pending.]