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[H.A.S.C. No. 106–7]



FOR FISCAL YEAR 2000—H.R. 1401






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(H.R. 1401)


MARCH 16, 1999


U.S. House of Representatives,

Committee on Armed Services,

Military Installations and Facilities Subcommittee,

Washington, DC, Tuesday, March 16, 1999.

    The subcommittee met, pursuant to notice, at 1:05 p.m., in room 2212, Rayburn House Office Building, Hon. Joel Hefley, (chairman of the subcommittee) presiding.

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    Mr. HEFLEY. The committee will come to order.

    Over the course of the last few weeks, the Subcommittee on Military Installations and Facilities has conducted a series of hearings examining in detail the Administration's 2000 budget request for the military construction and military family housing programs of the Department of Defense (DOD). The subcommittee has also reviewed the implementation by the military departments and the DOD of important facilities improvement initiatives, such as the Military Housing Privatization Initiative and the privatization of utility systems on the Nation's military installations. Today, the subcommittee will examine the long-term planning of the military services to meet their infrastructure requirements.

    Addressing the serious facilities shortfalls that bear on the quality of life for military personnel, the condition of their workplaces, the quality of the training environment, and readiness of the armed forces to carry out their mission is a key issue affecting the viability of this Nation's military installations and, more fundamentally, the effectiveness of the Nation's military capability. Chronic underinvestment by the Department of Defense to meet its facilities requirements has resulted in replacement cycles, recapitalization rates, and maintenance backlogs that are well short of accepted practice in the private sector or elsewhere in the public sector.

    Considerable attention by the Department of Defense and the Congress has been paid recently to improving basic living conditions for military personnel and their families. While we still have a long way to go, it is clear to me that we are beginning to make some progress. An equally-focused program is also required to address shortfalls affecting training and readiness. Much of the current infrastructure is simply not adequate to meet mission requirements. While resources are being devoted to new mission beddowns, aside from the Army's attention to strategic mobility, I am deeply concerned that facilities shortfalls to meet current mission requirements continue, in the main, to be deferred.
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    This subcommittee has been assured by senior officials of both the Department of Defense and the military departments that the outyears look better and that additional resources will be committed to the military construction (MILCON) and maintenance backlogs. From a historical perspective, however, outyear projections of the MILCON accounts have rarely been realized.

    In the earlier years of this decade, each of the military departments projected outyear MILCON programs that exceeded $1.4 billion. When I assumed the chairmanship of this subcommittee, I searched in vain for those resources. They never appeared in the Department's budget submission. In each year thereafter, this subcommittee was presented with a budget request for the military construction and military family housing programs of the Department of Defense which fell short by each of the three yardsticks by which budget trends are measured—the administration routinely requested fewer funds than it had requested the year before, fewer funds than were authorized and appropriated by Congress for the then-current program, and, more tellingly, fewer funds than it had programmed in its budget assumptions for the previous Future Years Defense Plan (FYDP).

    Perhaps the outyears will see an increased commitment by DOD to investment in basic infrastructure. Based on this year's incremental funding scheme for the MILCON accounts, I remain skeptical. The Department continues to treat MILCON, a critical set of investment accounts, as a bill-payer for other immediate needs. It seems we can always make do with an inadequate facility, poor berthing spaces, or crumbling airfield pavements for a few more months or even just one more year. That is how the military services got themselves into the condition they are in now. At some point, the promises of the future must be married to the realities of the present. I hope that that time will come very soon.
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    I want to note that the ranking member, Mr. Taylor, is managing legislation on the floor of the House this afternoon, and he regrets that he's not going to be able to be present, at least for a while. And so I know that he has many of the same concerns that I have about the outyear funding profile and the facilities modernization plans of the Department. We'll certainly be discussing this issue in the weeks to come. Filling in for Mr. Taylor today will be the former ranking member of the subcommittee, Solomon Ortiz of Texas. Mr. Ortiz, I'd yield to you at this point.

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


    Mr. ORTIZ. Thank you, Mr. Chairman. I would like to request unanimous consent to insert a statement from the ranking member, my good friend, Mr. Taylor.

    Mr. HEFLEY. Without objection.

    Mr. ORTIZ. Thank you, Mr. Chairman.

    [The prepared statement of Mr. Taylor can be found in the appendix.]

    Mr. HEFLEY. Do you have any further comments that you'd like to make?
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    Mr. ORTIZ. Not at this time.

    Mr. HEFLEY. Okay. Well, again, I want to welcome to the subcommittee the principal uniformed personnel responsible for managing the development of the MILCON program. With us today are Major General Robert Van Antwerp, Assistant Chief of Staff for Installations Management of the U.S. Army; Rear Admiral Mike Shelton, Facilities and Engineering Division, Deputy Chief of Naval Operations for Logistics; Major General Geoffrey Higginbotham, Deputy Chief of Staff for Installations and Logistics, United States Marine Corps, and Major General Gene Lupia, a Civil Engineer of the United States Air Force.

    We do have each of your prepared statements. They will be entered into the record in their entirety. So if you could summarize those statements, that would be very helpful. And I would turn it over to whoever is going to take the first shot at it.


    General VAN ANTWERP. Okay, sir, I'll lead off.

    Mr. HEFLEY. You got the short straw?

    General VAN ANTWERP. All right, sir. Mr. Chairman and members of the committee, it is a pleasure to have this opportunity to appear before you today to discuss the Army's approach to long-range installation planning and how we are changing installations to ensure they support Army XXI and Army After Next.
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    On an average day in fiscal year (FY) 1998, the Army had over 28,000 soldiers deployed to over 76 countries around the world. Our installations provide the power projection support necessary to maintain the trained and ready force needed to meet this challenge.

    The Army must balance readiness with modernization and quality of life for our soldiers, civilians and their families. Our installations play a critical role in both readiness and quality of life. Every day, installation commanders must make difficult decisions to maintain this balance.

    In order to ensure we build and maintain an infrastructure that supports the Army's role in this national military strategy, we developed the Army Facilities Strategy. The strategy is threefold: first of all, to focus investment where soldiers live, work and train; to divest unneeded facilities; and, finally, to reduce the cost of doing business. Currently, we are focusing our efforts towards permanent party barracks and overseas family housing, physical fitness centers, and projects that support strategic mobility.

    The Army uses three programs to divest unneeded facilities. First is the completion of the last of the four rounds of Base Closures and Realignments (BRAC). By the end of the fiscal year 2001, the Army will have successfully closed 112 installations, realigned 27, and realized nearly $1 billion in annual savings. While this is significant, the Army still has unneeded facilities which siphon scarce resources away from the required facilities and programs. So we need your support for additional rounds of BRAC to attack this excess. Second, we're moving as many facilities as economically possible out of leased space and onto our installations. Our current plans will garner $33 million in annual savings by fiscal year 2003. Third, the Army's pursing an aggressive program to demolish excess infrastructure. The savings achieved by this program come from cost avoidance, allowing the Army to reduce real property maintenance for about $400 million annually. We're constantly seeking ways to reduce the cost of doing business. The modernization of our central heating plant will improve reliability and energy use and attain $60 million in annual savings through greater system efficiency by fiscal year 2008. We're committed to privatizing the remainder of our utility system, where economically feasible, by 2003. We are working with you on plans to privatize family housing in the U.S. in order to revitalize our housing inventory by 2010. This is aimed at providing quality infrastructure and services integral to the readiness of our force.
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    Mr. Chairman, I thank you for this opportunity to make this brief statement and I await your questions.

    [The prepared statement of General Van Antwerp can be found in the appendix.]

    Mr. HEFLEY. Thank you, General. Admiral.


    Admiral SHELTON. Good afternoon, Mr. Chairman and members of the committee. I appreciate the opportunity to discuss with you today the Navy shore infrastructure.

    First, I would like to thank you for the support this committee has given the Navy shore establishment. My written testimony covers in detail several areas that the Navy has been and will continue to invest in to prepare ourselves for the 21st century. As my statement indicates, we have made good progress in the areas of facilities demolition, real property maintenance, quality of life enhancements, and military construction. We have several new initiatives underway, such as the privatization of family housing and utilities and claimant consolidations which will also improve our overall condition of our infrastructure.

    But we can't really make the progress we need in facilities maintenance and infrastructure recapitalization without a comprehensive plan. That is why this year the Chief of Naval Operations (CNO) has embarked on a more comprehensive analysis of the Navy's shore infrastructure, entitled Global Ashore Plan, or GAP–21. Global Ashore Plan–21 is intended to provide an overarching, capstone plan to integrate and align the initiatives discussed in my testimony and provide planning requirements and guidance to our regional commanders to plan investment strategies that will optimize regional capabilities in conjunction with the surrounding community. With this overarching planning, we will eliminate multiple, overlapping initiatives, less-than-optimum base infrastructure, and costly, ineffective workarounds, and we will create a requirements-driven versus budget-driven Navy shore infrastructure. This plan will help us determine the optimum operational and engineering solutions to fleet requirements and link operations with logistics, Research Development Technology and Environment (RDT&E,) training, and quality of life.
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    GAP–21 is an ambitious and achievable goal. We have had past successes in similar integrated, structured, total Navy planning efforts, although they were more localized. Examples are: Naval Station Ingleside, Naval Support Activity, Diego Garcia, the submarine home ports in Bangor and Kings Bay, the Naples Improvement Initiative, and the fledgling Sigonella Recapitalization Plan.

    The Navy's Global Ashore Plan will set the course and speed to develop the ashore infrastructure for the 21st-century naval force with a 300-ship navy as the fundamental driver. Modern facilities that support readiness, reduce base operating and maintenance cost, improve quality of life, both in and out of the workplace for our personnel, and improve productivity remain a top goal for the Navy. They are an investment well worth making.

    Mr. Chairman, this concludes my opening statement. I appreciate the support this committee and its staff have given us in the past and look forward to working closer with you in the future. I would be pleased to answer any questions that you have or any of the members of the committee.

    [The prepared statement of Admiral Shelton can be found in the appendix.]

    Mr. HEFLEY. Thank you, Admiral. General.

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    General HIGGINBOTHAM. Mr. Chairman and members of the committee, again, I appreciate the opportunity to appear before you today to talk to you about your Marine Corps. I'm particularly pleased that you have chosen to focus on recapitalization and modernization of our infrastructure. The Marine Corps faces a continuing challenge to best utilize its scarce resources. We in the infrastructure business have been spending the past few years especially focused on making smart choices that will give us noticeable improvements in the short term and measurable benefits in the long term.

    The Marine Corps realizes that we cannot continue to postpone our facilities and infrastructure projects to the degree that we have in the past. It is just costing too much to bandage decaying buildings. We cannot continue to use our Operations & Maintenance (O&M) money to fund what is, in essence, a facilities service life extension program, without the benefits of modernization or a full renovation, while drawing our backlog of maintenance and repair projects. We need to be able to use O&M funds for their intended purpose of maintaining facilities to the end of their normal useful lifespan, about fifty years, rather than continuing to pour these funds into deteriorated facilities that by all rights ought to be demolished.

    And finally, we need to build MILCON programs that Congress can embrace fully, the kind that will get funded and ultimately convince Marines across the country that all of us in Washington, D.C. are dedicated to provided them respectable places to work and live.

    The Marine Corps real property maintenance, active and reserve military construction, and family housing programs for fiscal year 2000 reflect a robust selection of absolutely indispensable facilities requirements. We've attempted to achieve efficiency and economy against our most critical needs while offsetting the previous decline of resources available to facilities maintenance and construction. We are enthusiastic about finally having a program that sets us on a course toward reasonable recapitalization rates of our infrastructure. We are on the right track, but the road to a sound infrastructure position is uphill and tangled with obstacles. We ask only that Congress partner with us to make this difficult climb.
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    It should be no surprise for me to note that the fiscal year 2000 program, taken by itself, is hardly sufficient to ensure the long-term health of our aging infrastructure or to provide Marines with the minimal standards of work, living and family-support facilities. The Marine Corps has always proudly and selflessly done more with less, and we have done so without complaint. But we cannot do more with nothing. The Marine Corps needs a sustained financial commitment at a similar funding level to our Fiscal Year 2000 program over the next ten years. We need that in order to regain control over the management of our degraded infrastructure. Without such attention, the Marine Corps could become America's ''91'' instead of ''911'' force without the facilities to match.

    And, Mr. Chairman, may I also add, since the last testimony last week, we have now completed that ten-year plan, and I look forward to the opportunity to talk to you about that separately.

    [The prepared statement of General Higginbotham can be found in the appendix.]

    Mr. HEFLEY. And I look forward to that, too, General, and I appreciate that, and I had the promise from the Commandant that that would be completed, and completed soon, and I'm glad that it is. General Lupia.


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    General LUPIA. Mr. Chairman and members of the committee, I, too, appreciate the opportunity to address you this afternoon. Constrained defense budgets and substantial reductions in force structure have driven the Air Force's commitment to aggressively reduce infrastructure costs through consolidation, demolition and privatization. Sustained and prudent investment in our facilities is required to prevent the deterioration and provide a dependable platform to support the operations of tomorrow's Air Force. A constrained military construction program inhibits our ability to recapitalize current facilities while we beddown new weapons systems to achieve modernization goals. Our future year defense plan captures our requirements. These requirements are developed by our major commands to satisfy their most urgent needs. The current plan provides increased support to installations in the out years, as you mentioned, Mr. Chairman.

    We use a facility investment strategy to accomplish long-term infrastructure planning and to develop programs which support the seven objectives of our facility investment strategy. And I might say that we have stayed the course on this strategy for the past three years now.

    The first part of that strategy is to maintain what we own. The average Air Force facility is over thirty years old and in need of revitalization. In fiscal year 2000, real property maintenance (RPM) is funded at the preservation and maintenance level, which represents the level of resources necessary to accomplish the day-to-day maintenance required to sustain our facilities and infrastructure. Funding at this level limits our efforts to emergency and most critical work. For the second consecutive year, we've had to defer most non-preventative maintenance level facility projects which results in a $4.4 billion backlog of maintenance and repair. However, I am happy to report the current fiscal year defense plan plusses up real property maintenance in fiscal years 2003–2005.
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    We have developed a facility investment metric. This tool stratifies our requirements based on their impact on the mission. Again, the goal is to allocate our limited O&M resources to our most urgent needs.

    The second part of our plan is to accommodate new missions. Our new mission construction supports programs such as the C–17 airlifter, the F–22 fighter, the B–2 bomber, the KC–135 tanker, the joint primary aircraft training system, referred to as JPATS, and the enhanced training range in Idaho. A vital link in making these new systems and programs viable is the military construction behind them.

    The third part of our program is to support quality-of-life investments, such as in dormitories, fitness centers, and community support facilities which constitute 24 percent of the active Air Force military construction budget. Investments like these in quality of life create a modern living environment. This sends the signal to our service members and their families that, while we asked for their continued dedicated service, we will meet their basic needs with quality housing and community support. As such, this program affects retention and enhances our readiness posture.

    We're developing a fitness center master plan and design guide which will provide a long-range plan for replacing and modernizing fitness centers, similar to the approach we took with our dormitory and family housing master plans.

    The fourth part of our program is to optimize the use of public and private resources. Due to the time it will take to revitalize our existing, inadequate family housing using conventional investment strategies, we are moving ahead with pilot housing privatization projects. Our first project at Lackland Air Force Base in Texas was awarded in August of 1998. We have 11 other projects in various stages of development. Our goal is to alleviate the revitalization backlog by improving or replacing units using privatization as a tool to leverage scarce resources.
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    We are also moving ahead with privatizing electrical, water, waste water, and natural gas utility systems where it is economically beneficial and does not adversely impact readiness. We have 55 systems under study for privatization and have programmed the evaluation of 408 more systems in the next two years.

    The fifth part of our program is to continue our demolition programs. We're reducing our infrastructure costs through an aggressive demolition program. Since fiscal year 1996, our installations have demolished nine million square feet of excess facilities. In fiscal year 1999, we will demolish another 2 million square feet, and we have programmed 167 million in fiscal year 2003—I'm sorry, 2000 to 2003 to demolish 10 million square feet. That all adds up to 21 million square feet and most people can't relate to 21 million square feet. But let me tell you, by the end of fiscal year 2003 in our demolition program, we will have demolished the equivalent of six Air Force bases.

    The sixth part of our facility investment strategy is to reinvest overseas. Even though the large majority of our people are assigned in the United States, 17 percent of our forces are serving overseas. Our overseas bases—our overseas base structure has stabilized after years of base closures and warrants our strong support. Neglected quality-of-life initiatives and deteriorated infrastructure at these bases require immediate and sustained investment in addition to host nation and North Atlantic Treaty Organization (NATO) funding now provided.

    The final part of our facility investment strategy is to continue our environmental leadership. As leaders in environmental management, we continue to foster and environmental stewardship ethic to sustain readiness, be a good neighbor, and leverage our resources. To accomplish this, we are taking a comprehensive look at our ranges and airspace. We are meeting environmental clean-up commitments through partnering with State and Federal regulators, team-building with communities, and emphasizing cleanup to completion.
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    Funding our environmental requirements is essential to maintaining environmental leadership and ensuring present operations comply with all Federal, State, and local environmental standards and meet increasingly stringent overseas requirements.

    In conclusion, Mr. Chairman, I want to thank the committee for its strong support of Air Force programs and the benefits they have provided in terms of readiness, retention, recruiting and the quality performance of our people. I want to assure the committee the Air Force has a rock-solid facility investment strategy and that we know where we are going in the facility arena.

    Thank you, Mr. Chairman and members of the committee. I'll be happy to answer any questions you may have.

    [The prepared statement of General Lupia can be found in the appendix.]

    Mr. HEFLEY. Thank you, General. Mr. Ortiz.

    Mr. ORTIZ. Thank you, Mr. Chairman. First of all, let me welcome the witnesses. We're happy to have you with us today. I know that the chairman and I, and other members of the committee, have been working hard to provide housing, you know, for the military families. And we had testimony last week. Are we making it available to those that—on the lower ranks, like E–4s, E–5s, who, I know in some areas where we privatized they were having problems. I know that now that we have been able to—some way or another give them supplementals to pay for the rent. Is that any problem now? Has that been corrected? Anybody that would like to tackle that.
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    General VAN ANTWERP. I'll tackle it first from the Army viewpoint. That is really one of our target groups that we only really house about 20 percent of our people on post right now and so one of the target groups through this privatization is to provide adequate housing for the younger soldier. And a lot of times their bedroom requirement isn't one or two bedroom, it is three or four bedroom requirements. So that's a target area for us and we hope, through the privatization program, that we will be able to build more, renovate that that we have, and provide more housing for the junior enlisted soldier.

    Admiral SHELTON. From the Navy's point of view, as you mentioned, one of the problems that existed, was a problem with—for the lower-rated people. I believe we were down in Kingsville discussing that. And we've gone to this differential lease payment and we are in the process and have been negotiating for both the ones in Texas and the ones up at Everett up in Washington State to put this into the contract. So we are actively pursuing that.

    Mr. ORTIZ. Thank you.

    General HIGGINBOTHAM. Sir, we have right now, nine separate—nine separate projects. And we expect that we'll have awards for all nine projects before the conclusion of 2001. But our target for all of our public private venture (PPV) efforts are the lower-ranking, troops. We are about to make our first award at Marine Corps Logistics Base, Albany, probably some time, this month or early next month. And then also at Camp Hill in California, this coming summer. But that this is our target.

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    And so, we're going to realize a lot by this particular effort, a public-private venture. As an example, what we're looking at is maybe a cost-avoidance of about 450 million dollars over this two-year period and if we had to revitalize this housing or replace it ourselves, that's what it would cost. So right now, we're looking at 8,832 units as part of our PPV effort and out of that, 5,700 are revitalized or new construction. And so, again, that's a considerable cost avoidance through this particular program.

    But at the same time, we're not giving up on MILCON either. And so we have a robust program that will carry us our through that 10-year period of time that will address other issues, as well. So it is a combined program and at this point in time, we feel that we are properly funded to make that happen.

    Mr. ORTIZ. Thank you.

    General LUPIA. Congressman, the vast majority of the money that we spend in family housing is spent on our enlisted force. I'm going to say, oh, off the top of my head, over 90 percent, and I'll put the exact number in the record.

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

    General LUPIA. All of our privatization efforts identify housing for our lowest-grade enlisted members. And we in the Air Force have established a policy that says, ''an enlisted member will live in these houses without taking any money out of his or her pocket to pay the rent.'' In other words, they will leave within their basic allowance for housing and be able to pay their utility bills with the amount of rent that the developer requires them to pay.
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    That is not the case today when our people live in local communities and downtown. The average for the Department of Defense is that a member takes 19.8 percent above their housing allowance out of their pocket to pay their rent. And that is a very tough burden on our young enlisted members.

    Mr. ORTIZ. I just have one last question, and this has to do with MILCON funding and private-public ventures. Have you all decided how you're going to balance this out? How many are you going to go out and privatize and how much is needed to stay within the confines of the military construction funding?

    General LUPIA. I'll answer first for the Air Force. Sir, we have prepared what we call a ''Family Housing Master Plan.'' This plan is based on the tremendous success we feel like we had with the Dormitory Master Plan that we've been using for about two or three years now. In the Family Housing Master Plan, we have three approaches to taking care of our housing.

    One is with the traditional military construction program. The second is the privatization program we're talking about and I'm proud to say that the Air Force has the only contract that's been awarded under that 1996 legislation in the State of Texas. And third, we spend the O&M money that we have sometimes to go above the threshold that is allowed, we ask for permission from the Congress to exceed the threshold and take care of our houses with O&M. So we have three different approaches.

    In the Air Force privatization effort, we have 12 projects. One awarded, 11 others we're working on. And that will for us only privatize somewhere between 10,000–11,000 houses out of the 77,000 in the continental United States or 110,000 total. So it will be a small portion of our program.
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    Mr. ORTIZ. Very good. Thank you.

    General HIGGINBOTHAM. Sir, we have right now 25,660, family units. And so when we finish this public-private venture effort, that will represent about 8,800, different units. So about 37 percent, or roughly one-third of all of that. We think that's about the right amount. And so, with that kind of commitment and also the MILCON, piece of that, we're on track. And again, that's all part of our ten-year plan that's going to get us there.

    Mr. ORTIZ. Very good. Thank you, sir.

    Admiral SHELTON. Sir, the Navy is, as you know, committed to an extensive PPV program and we are in the future—I'll provide for the record the exact number of houses that we will do that way.

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

    Admiral SHELTON. As you know, we have five projects that are before Congress right now and the ideas that we will use, the leveraging to provide quarters faster for our Navy personnel. And as we go through these various projects and pilots that we're putting out, we will have an idea of what the future will hold for us and we will develop the military construction program to go with that as a compliment to it, sir.

    Mr. ORTIZ. Thank you. General.

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    General VAN ANTWERP. I think when we started this program and looking forward to 2010, when we would like to have all of our soldiers and families in adequate housing, that the Army's backlog that we calculated was over $6 billion to do this. So we needed to maximize the leverage given by the privatization authorization. What we have decided to do is to send—use the MILCON dollars and put them into our overseas who are equally in bad shape and we have put them—all the money for 2000 in MILCON in overseas locations. For instance, we're building 60 units at Camp Humphreys. And then to use the privatization legislation in the United States to do the bulk of that work.

    Mr. ORTIZ. Thank you. Thank you very much, Mr. Chairman.

    Mr. HEFLEY. Mr. Reyes.

    Mr. REYES. Thank you, Mr. Chairman. I've got a follow-up question in the area of privatization. Did I hear a specific percentage of what we're going—in the Master plan—what our target is in terms of privatization, for each of the services?

    General VAN ANTWERP. Sir, for the Army, our target number of houses is 85,000 houses in the continental United States (CONUS), is what we're looking for the privatization. Those are existing housings. There will be some new construction, too, that will be up above that to bring us up, so that we adequately house the number of people we would like to. But the base is 85,000.

    Admiral SHELTON. Sir, we don't have a specific targeted amount of quarters that we plan to have for PPV. We're going to look at every base and evaluate each base to see whether it makes sense to go forward with a PPV, and if not, we'll take care of it with MILCON.
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    General HIGGINBOTHAM. Our approach has always been, do it where it makes sense, and we can really, leverage that kind of capability. About half of our housing right now requires revitalization, and that's why we, through Public-Private Venture, at least upfront, would provide the mechanism to help us get through some of that effort. But again, we're looking at about one-third, of our housing to be under the Public-Private Venture.

    General LUPIA. Sir, for the Air Force, we're the landlord for 110,000 houses. Of those, 77,000 are in the continental United States, and the legislation only allows us to us privatization in the continental United States. And of the 77,000, we're looking at someplace between 10,000 and 11,000. So I think we're in the neighborhood of 12–13 percent.

    Mr. REYES. And just, again, because I've always had concerns about the quick-fix solution in terms of privatization, are we keeping hard statistical data in terms of privatization? So that at some point if anyone of us has a question about the ability—and obviously what we're concerned about is the ability of military families to be satisfied with the housing, with the maintenance, longevity, all of those things. Are we keeping information, tracking them, and keeping information so that it would be available for evaluation?

    General VAN ANTWERP. Sir, from the Army, we definitely will be keeping—our first contract will be later this summer at Fort Carson sometime at the end of July or early August. So we really don't have—we haven't put anybody in privatized housing yet. But one of the tenets of our program is that the individual will have a choice whether he wants to live in this housing, this privatized housing, and as the other services have already testified, it will be at no cost out of his pocket or her pocket. We do have a mechanism to record and we'll go in there with surveys and make sure these contracts are going to have a 50-year maintenance contract. So I think, to some degree, the soldiers and their families will vote by their feet whether or not they live in those quarters.
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    Admiral SHELTON. Sir, from the Navy, the answer is yes. One of the things, as you're probably aware, we are looking at limited partnerships in the PPV area, which means that the Navy will be a partner in the venture. There will be numerous checks and balances put into the agreement, and the contract that we go into that will look into all these areas and we will have to keep the data that you're talking about in order to be able to participate fully as a limited partner in these.

    General HIGGINBOTHAM. Same rules espoused by Admiral Shelton here. At the same time, I mean, we're not going into this effort blindly. And so, we have got civilian expertise that's helping us negotiate these contracts. I mean, the fact is, we don't have that kind of expertise internally. We have to rely on consultants to help us, but, also, we've got to rely on civilian partnership to ensure that we're getting the best deal.

    So, the first award will be sometime this month or early next month, and certainly we will be keeping a track record as we go down this path. I also testified before a committee—Mr. Hobson was the chairman of that committee—last week, and these same kinds of questions occurred. Mr. Hobson has stated that he wants to see every contract. So, we will do that. I think, because of his background, we're looking forward to his assistance and effort to help us.

    General LUPIA. Congressman, we, too, of course, will be keeping track of each one of these initiatives, as we have in the past. Let me tell you, for example, that under the sort of the first privatization legislation—we called it 801, Bill to Lease—the Air Force had 12 efforts. Eleven of them turned out great for us. One turned out to be a problem, and we've kept very good statistics on all of that.
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    We also were able to use that type of legislation to get two initiatives underway where we have houses actually coming out of the ground today overseas—one at Aviano Air Base in Italy where we're getting over 500 houses. The United States government didn't put up a nickel. We're getting 518 houses at Lakenheath Air Force Base in the U.K. Again, we didn't put up a nickel. They're bill-lease initiatives. In fact, we have some of the houses already turned over to us in the United Kingdom.

    The one—and I emphasize that it is a sample of one—the one contract we have awarded under the privatization initiative at Lackland Air Force Base in Texas has so far been a success story for us. We had legislation, the authorization and appropriation in two Fiscal Years that gave us $17.7 million that we thought we would use as seed money to pull this $43 million effort off. The day that the contract was signed, it turned out that we had to put up $6.3 million and not $17.7 million, and so we invested $6.3 million for a $43 million effort. We leveraged our money 8-to-1. Now, that's not to say every privatization effort down the road we'll be able to leverage our money at 8-to-1, but in the sample of one that we have in Texas, that turned out pretty good for us.

    Mr. REYES. Do I have a chance for a followup?

    Mr. HEFLEY. Sure.

    Mr. REYES. Just quickly, how much standardization is there among the services? In other words, are you talking to each other in the context of lessons learned and how to leverage the investment? How to, perhaps, do some kind of compliance resolution with the bidders and things like that? Is that kind of dialogue—
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    General LUPIA. Sir, at our level, the people sitting at this table meet once a quarter and go over all of our activities for the past three months. In the meantime, our staffs are meeting sometimes every week, but at least once a month to go through the detail of our programs, and so we've had tremendous cooperation so far.

    Mr. REYES. Thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. Snyder.

    Mr. SNYDER. Thank you, Mr. Chairman. You all have mentioned certainly what you are doing with regard to cutting down on the number of leases and getting stuff back on the bases, and demolitions and MILCON for each of you over the last several years. Where does that money end up? Does that money stay and you're able to use that for MILCON needs? Or does it go to other places?

    General VAN ANTWERP. Sir, from the Army's viewpoint, we're putting it where it is needed most. Some of that has gone into readiness or modernization, some into the MILCON arena, but it's not—all the leases, for instance, the savings from the lease money does not go back into MILCON necessarily. It goes into our prioritization system.

    Mr. SNYDER. Does it take some of your MILCON money to do some of those efforts, save the money that goes elsewhere? And when you demolish a building, is that some of your real property maintenance dollars that you then effective lose because the money, the savings from it, are going elsewhere?
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    General LUPIA. Yes, sir. Our experience in the Air Force is that it actually costs you a fair amount of money to do this demolition. The first couple of years of our program, we were paying close to $11 a square foot, total cost, when you consider asbestos removal and lead-based paint, et cetera, to tear down a facility.

    Mr. SNYDER. It gets discouraging if the savings then isn't used in MILCON.

    General LUPIA. That's correct. The money that is paying for the program is out of the Operations and Maintenance (O&M) account for demolition. When we do save money, because we're able to give up some leases through consolidation or new facilities that we build, that money is typically in the O&M account.

    General HIGGINBOTHAM. What we're finding, that there's a cost-to-savings ratio of about 5-to-1. And this year, we're going to demolish about a million, square feet. That will cost about $5 million to do that.

    And so, since 1994, we've demolished about 3.9 million square feet. And so, by the year 2000, we will essentially be finished with our demolition program. Of course, every year we'll identify other facilities, but our backlog will be concluded at that point.

    Mr. SNYDER. General Van Antwerp, I wanted to ask you about maintenance facilities and maintenance shops. Comment, if you would, on how far you are behind on new maintenance shops, how it impacts on readiness and those kinds of things when you have an out-of-date maintenance shop facility that is dealing with old—was built for Hueys or something older than that and now you're two generations beyond that. What kind of impact—how do you measure that? Or can you measure that, that impact that it has on what you all do?
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    General VAN ANTWERP. Well, we do measure it, Congressman. We have what we call the ''Installation Status Report'' and it has three parts to it. The first part is facilities; the second part is environmental, and the third part is quality of services and standards of service. So, in that first part, we would look at, for instance, a maintenance facility for the Apache helicopter and there would be certain specifications—height of the doors, type of maintenance equipment inside that—and all of that is measured and goes into our Installation Status Report.

    Today, our Installation Status Report says we're at C–3 for our maintenance facilities, C–4 being the lowest, C–1 being the best. And we know very specifically for each one of those facilities on every installation we can go and very quickly say for this building, this maintenance hangar, whatever it is, it will take this to bring it up to C–1. So we have that data.

    Mr. SNYDER. So now, correct me, I would assume then that what you're saying is you have inadequate, a C–3 level inadequate type and quality of maintenance shops to do the work that you need to do. That would probably then mean for a routine service operation on a helicopter, it is going to take additional time or additional employees to do the same amount of work if you were in a more modern facility. I mean, does all this stuff start impacting on readiness and operating tempo (OPSTEMPO) and personnel—

    General HIGGINBOTHAM. Absolutely, it does.

    Admiral SHELTON. Yes, sir, I'd say for the Navy, that's true. And that's one of the reasons we're looking at, as I've said, the GAP–21 Plan. These are the things that are going to be looked into. Clearly, we have a number of initiatives going on with our regional commanders looking at the total regions' maintenance capabilities—things like regional maintenance, trying to assess the impact of spread maintenance shops, can we consolidate maintenance shops and make them better? But, clearly, these kinds of things have an efficiency coefficient to them that not only puts more manpower on them, but also takes longer to get the repairs done.
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    Mr. SNYDER. So if we think we're saving money by taking money—delaying the building of new maintenance facilities and putting that into readiness, we may just be coming around and biting ourselves in the butt on the same problem.

    General VAN ANTWERP. I think it is a tradeoff. For instance, if you have the correct number of square feet, meaning you can get a like number of aircraft in there, but you don't have the right diagnostic equipment, that's certainly a readiness issue, and so that would be part of what we would evaluate. So, it is square footage; it is condition; it is type of equipment for maintenance; it is staffing. So it's a lot of factors impact that readiness, but it is a readiness issue.

    General HIGGINBOTHAM. We have a database system to tie mission impact to facility condition, called our CORE system. And so, you can give that a rating just like you give equipment rating. And so then, you identify the capability of that particular, facility, give it that kind of rating, and that then goes into the prioritization system on what you need to put into your MILCON.

    And so, as an example, I just went down to visit our Marine Corps Logistics Base down in Albany, Georgia, and they're having to do a lot—some work, outside. They just really have overhead cover. But in inclement weather, work stops. And so, MILCON 2000, we've got a project then to provide a facility to get them out of the elements. And so that, again, is part of our prioritization system.

    Mr. SNYDER. Thank you, Mr. Chairman.
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    Mr. HEFLEY. Thank you. Mr. Buyer.

    Mr. BUYER. Thank you, gentlemen, for coming. Mr. Chairman, I'm not going to pick on these gentlemen. Frankly, I wouldn't want your job. I wouldn't want your job because somebody gave you pretty woefully inadequate numbers for you to work with for your job. So, as I was sitting here looking at your statements and you're kind of giving us realistic assessments—this is hard, because the numbers don't match the rhetoric. And you guys know that.

    I have the statement here of Mr. Higginbotham and it—I mean, in your heart, when you say to us—I guess it's all relative—''MILCON projects that we're requesting are not a luxury. These are projects to replace buildings that are literally falling apart, unsafe, overcrowded, technologically ancient. With these projects, it will give Marines indoor work areas, heat, running water, electrical power and rest rooms.'' The Air Force would be shocked. [Laughter.]

    You know? Come on, guys. Does that mean the Marine Corps is going soft? We're going to give you running water and heat and let you work indoors? You know what I'm saying?
    And then I look over here a little bit further. You say, ''Twenty-six percent of Marine families live aboard your installations in housing that can barely be described as adequate.'' I suppose if I were a Commanding General in the Marine Corps, I wouldn't be very happy.

    General HIGGINBOTHAM. No, and I'm not. And that's why I mentioned earlier that, half of our housing requires revitalization, half of it.
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    Mr. BUYER. But, you know, we can talk about revitalization all you like. If you don't get the resourcing, it doesn't happen. So, I'm going to bring up, for the third year in a row, in other committees, when we talk about the Marine Corps, whether it's in resourcing, whether it's from personnel or in training dollars, or even in equipment and your modernization, Mr. Chairman, does it have—if the Navy is not going to take care of the Marine Corps and their housing, then maybe we ought to make demands on the budget cycle; I'll say it again, that maybe we ought to make demands that their budget submissions be independent of the Navy. I don't want to cause problems in the building, but if somebody's not taking care of the Corps, we always end up having to do that. And so, I understand how your statement and the numbers don't necessarily match here, General Higginbotham.

    I do have a question for the Army. I have Newport, which is a nerve agent facility; I guess it is the last on the Chemical Demilitarization (CHEMDEMIL), but of these numbers that you're given here on the projections, how much of this is CHEMDEMIL?

    General VAN ANTWERP. For 2000, the CHEMDEMIL new construction authorization is $206 million. But under the incremental funding, it is 23 million and that's for one project at Bluegrass, Kentucky. The appropriations for 2000 is $267 million, but that has a lot of the projects that were already started for following—

    Mr. BUYER. How about 2001, 2002, 2003?

    General VAN ANTWERP. Actually, the program is about that same for 2001 and 2002, and then after that, 2003 and 2004, it's much smaller. So it's around authorization 200 million per year.
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    Mr. BUYER. All right. For the Navy, this is just a very simple question. Down at Mayport in Jacksonville, I was pretty stunned a few years back that you were actually taking tugs and pushing AEGIS cruisers into the mud and the construction budgets were so poor that you couldn't even get the docks replaced. We went into a battle, obviously, at the time with the President over a line-item veto, but are you still pushing AEGIS cruisers and setting them in the mud in Mayport?

    Admiral SHELTON. I'd have to answer that one for the record, sir. I don't personally know of any AEGIS cruisers going into the mud down there. But I'd have to find that out for you.

    Mr. BUYER. Would you, please? I'd like to know whether the docks have been repaired down there.

    Admiral SHELTON. Yes, sir.

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

    Mr. BUYER. Thank you, Mr. Chairman.

    Mr. HEFLEY. Thank you. Mr. McHugh.

    Mr. MCHUGH. Thank you, Mr. Chairman. Every morning, I wake up and pray for one thing—that the good Lord will let me live in just one outyear before I die. [Laughter]
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    I kind of join Mr. Buyer. The famous rock-n-roll album,''Don't shoot me, I'm only the piano player.'' You fellows are marching out there with your orders and trying to do the best you can given what you have been given. And as my colleague and good friend from Indiana notes, it's simply not sufficient to do the job.

    There's a story about a lady who was talking to her friend who was describing how, after 57 years of wedded bliss, her husband had passed away. They had never spent a night apart. They always slept in the same bed together; loved each other madly, deeply, and passionately, and yet she died having never consummated the marriage. And the woman said, well, it was quite easy because her husband was a politician and all he did every night was sit on the bed and tell her how great it was going to be. [Laughter.]

    We just tell each other how great it's going to be here, and then come back and talk about another outyear. Let me ask—now that my monologue is over—

    Mr. HEFLEY. We're going to ask him to start all of these hearings from now on. [Laughter]

    Mr. MCHUGH. It's just frustration. I know these gentlemen feel it, as well.

    General Lupia, you talk about—you say ''for the second''—on page 5 of your testimony—''For the second consecutive year, Fiscal Year 2000 defers most non-preventative, maintenance-level funding projects and results in a $4.4 billion backlog of maintenance and repair. However, I'm happy to report the current future year defense plan plusses up real maintenance, real property maintenance in Fiscal Years 2003-2005.'' The question I have for you, let's consider—let's assume that in fact that occurs. We should all live so long. Would the plan and the plus-ups provided for in 2003 and 2005 bring you up to the projected level of recapitalization that's necessary, and that, I assume—I mean, the Army has 1.75 percent recapitalization target. Is the Air Force similar to that, do you know?
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    General LUPIA. I don't know if we're using the same numbers, sir. I'd have to answer that for the record.

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

    Mr. MCHUGH. Well, let me—

    General LUPIA. We have not—we have not captured a number like that that we're using, I guess, I should say—

    Mr. MCHUGH. You don't have a recapitalization rate as the target for your maintenance?

    General LUPIA. No, sir.

    Mr. MCHUGH. Well, then, I want to ask you how it compares to the private sector?

    General LUPIA. The 1 percent plant replacement value is the level of funding that we, the Air Force, believed we could afford as we put our entire program together. It's difficult to draw a comparison between that and what the private sector is doing. I could tell you that it's less, but by how much, I can't tell you. The reason is that in that—in that figure, which is—it's a lot of money. It's $2.5 billion that we invest in our property maintenance each year; it doesn't include my salary; it doesn't include the salary of our uniformed members who are paid out of the military personnel account, et cetera.
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    So, when you ask somebody from Company X in the private sector, ''How much do you spend on facility maintenance?,'' they'll give you an answer that might be 6 percent, 8 percent, something like that, but there are a lot of things captured in that number that I don't capture when I tell you that I'm only spending 1 percent of the plant replacement value. And so it's very hard to make the comparison and answer the question the way you'd like me to answer it.

    Mr. MCHUGH. Well, are you at 1 percent?

    General LUPIA. Pardon, sir?

    Mr. MCHUGH. Are you at 1 percent?

    General LUPIA. Yes, we are. Last year, we funded our program at 1 percent, and we found ourselves in the position to have to do that again. And in our unfunded priority list that the Air Force has brought over to the Congress, General Ryan ranked real property maintenance very high and asked that we receive another $360 million, which would buy out all of our critical projects. You remember in my testimony I referred to a facility investment metric?

    Mr. MCHUGH. Right.

    General LUPIA. In that metric, we have a column that's called ''critical'', one that's called ''degraded,'' and then one that's called ''minimal,'' and that $4.5 billion comes from the two columns ''critical'' and ''degraded.'' The $360 million buys out the projects that are in that column called ''critical.''
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    Mr. MCHUGH. All right. As I said, I can only hope, as you have stated, not just you personally, General, but across the panel, that we finally live long enough to see an outyear. I'm sure that the chairman—very quickly—I'm sure that the chairman was delighted that his record was unbroken with respect to less than three and a half seconds into a hearing, we heard about BRAC and General Van Antwerp kept that record intact, and I know we all appreciate that.

    I just wanted to go over to—you say ''While this is significant,'' and you were talking about your former closures, ''the Army still has unneeded facilities which siphon scarce resources away from required facilities and programs.'' Are you prepared to tell me one facility that's so unneeded that you're siphoning scarce resources? I mean, you've thought about that very carefully, I'm sure.

    General VAN ANTWERP. Congressman, it depends on what you call a ''facility.'' If you—

    Mr. MCHUGH. It doesn't make any difference what I call it. What do you call it? You used the statement.

    General VAN ANTWERP. Well, I'll tell you, in our statement, part of what we look at is on an installation—there's a lot of facilities on that installation that are excess and we are spending an incredible amount of money maintaining those facilities.

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    I would like to tell you that it's all on one installation; if we just closed that, we'd do away with it. But that's not true.

    Mr. MCHUGH. So you don't need a BRAC to meet that challenge?

    General VAN ANTWERP. Well, I think what—yes, we do. What we would like to do would be able to realign, to close some, realign others, to get so that you take care of this excess and get rid of it, and then, what you keep, that it's fully employed, fully engaged, and all the facilities are in use. That would be the optimum solution.

    So we have, just as the others have said, we, right now, in the Army, we've taken down of a 150 million square feet of excess. We have to take 47 million out and we have program by 2002 to do another 53 million. But that's a lot of excess space and excess facilities that right now we're putting in the demolition process or in the BRAC process.

    Mr. MCHUGH. Well, the thing that concerns me, again, General, and I don't mean to put you or your colleagues on the spot, but the fact of the matter is, for the past three to four years now, since the last BRAC, I and others on this subcommittee, and virtually every committee that has heard everything about how BRAC is the savior—I understand your interest in it. I suspect your interest is more desperation than true interest. But in all of your testimony, we talk a lot about closures. We talk a lot about new approaches, a lot about innovation, privatization. We talk very little about what is the key failure of the MILCON budget traditionally, and that is a plain and simple insufficiency of money coming in to do what you need to do. You know that. I know that. It's just for all of us a very, very frustrating thing. And I commend you on a good job you're doing given the challenges that you face. And I wish you all the best and am looking forward to hearing from you next year.
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    I yield back.

    Mr. HEFLEY. Mrs. Fowler.

    Mrs. FOWLER. Thank you, Mr. Chairman. I thank you all for being here and I want to follow up on my colleague, Mr. McHugh's comments on BRAC because, in going through the testimony, I noted also and I have to commend the Air Force and the Marines for not claiming that they were saving all this money through BRAC, at least not in their submitted testimony. So I'll focus on the Navy and the Army on that. But I am concerned that DOD is playing this game in the FYDP—not just with MILCON, but across the board. I'm on the Readiness Subcommittee, also. The FYDP has got a huge wedge for savings and outsourcing. You've got a wedge now, savings from BRAC, if we have them in 2001–2005. You keep building in these wedges in the FYDPs, and somebody is going to have to pay at some time. And when I go out around and I say,''Well, where are the real dollars?'', nobody can show them to me.

    I know, Admiral Shelton, you've got in yours a claim that you're going to be saving $2.6 billion a year and that to date the Navy's investment has been $9.8 billion in BRAC. Now, does the $9.8 billion include the environmental cleanup?

    Admiral SHELTON. Yes, ma'am.

    Mrs. FOWLER. It includes all your environmental cleanup costs?

    Admiral SHELTON. That's to date.
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    Mrs. FOWLER. To date. To date. Okay, we've got a lot more environmental, I know, in the area in mind. I'm going to be very interested to see documented this $2.6 billion annually that you're going to, in real dollars, supposedly get back, and the Army is saying they're going to be realizing $1 billion in annual savings, because so far we haven't seen any documentation of the actual dollars that we are saving. And as we all know, if we have closures in 2001 and 2005, which I hope won't occur, and I will certainly vote against any, particularly in 2001, until we get all of them done—it takes six years to get through the process. We're not going to know for another year what really has happened in this latest round of BRAC, and then we can start determining, did we save or not and what do we need to do for the future?

    So, when we've got built-in savings that won't occur until way past then, I'm really concerned we're digging a deeper and deeper hole, and I know you aren't the ones responsible for all of this and you're having to live with it, but as the MILCON keeps getting cut by this administration and by Office of the Secretary of Defense (OSD), and we have a tougher and tougher time providing for our young men and women in the services and we're building all these phantom dollars into the FYDP, I'm deeply concerned. And we look forward to working with you in anyway we can and we tried under the chairmanship of Mr. Hefley to give you SB sources, but it's getting tougher.

    Thanks very much. And I yield back.

    Mr. HEFLEY. Thank you, Ms. Fowler.

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    As you know, the buzzers have gone off. We have probably about seven minutes on this vote. We have two more votes that are supposed to be five-minute votes. Can you wait? We'll stand in recess and be back just as quickly as we can.


    Mr. HEFLEY. The committee will come back to order.

    I really apologize. You know, this is the nature of this place, but I still am embarrassed and we had one more 15-minute vote than they had originally told us. So that's the reason that it's taken the time that it has.

    And if I might just launch into my questions now, since we have no other committee members here.

    First, Admiral, in a recent visit to Mayport, two questions were raised that maybe you can help me with in terms of long-range planning for facilities. One is, has the Navy made a decision yet about whether they're going to want one or two berthing places for atomic-powered aircraft carriers on the East Coast?

    Admiral SHELTON. No, sir.

    Mr. HEFLEY. That decision has not been made? Do you know kind of what that process is for making that decision? Or do you have a timeline?

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    Admiral SHELTON. No, sir.

    Mr. HEFLEY. That's going to be a considerable expense that we have to look forward to if you decide to go two places.

    Admiral SHELTON. Sir, I'd have to give you an answer for the record because I know that, you know, this subject has come up repeatedly, but I don't know for a fact what the—what the timeline for making a decision is.

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

    Mr. HEFLEY. Okay. Well, that's fair enough. I just was curious and, you know, I'm no Navy strategist. It seems to me to make some sense to have more than one place to put all your nuclear aircraft carriers, but if we're going to do it, we have to plan ahead.

    And also, General Higginbotham, while I was down there, I visited Blount Island and was quite impressed with your operation there. But one of the things that they would like to do is to purchase Blount Island instead of leasing it. I think there is a willing seller if we can come to terms. Is that in your budget or has that decision been made by the Marine Corps?

    General HIGGINBOTHAM. The decision to move forward in an effort to ultimately buy Blount Island has been made, yes. But we have completed appraisal; the environmental documents will be completed this summer. So we're moving in that direction.
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    Mr. HEFLEY. Okay. All right. Again, my impression was it would be a shame for us to lose that potential.

    General HIGGINBOTHAM. Well, it is a strategic asset, and if you go back to Desert Storm, there was more tonnage that went out of Blount Island than any other port in the United States, except for one of the ammunition ports.

    And so, the Department of Defense sees it that way, and that's why some people talk about, you know, the feasibility of moving to Charleston, as opposed to remaining at Blount Island. But there would, first, be no savings associated with doing that. In fact, it would ultimately cost us a whole lot more money, perhaps as much as $200 million, just for facilities that would have to be constructed at Charleston.

    But we also realize that we need that facility, and so the lease runs out on 3 September of 2004 and can be extended out to 2010, but right now we're paying somewhere in the neighborhood of about $10.5 to $11.5 million a year. There's no doubt that lease will go up at that point in time. But we need the future security of having that facility.

    Mr. HEFLEY. Okay. You've heard the cynicism on the part of the committee, and I expressed it myself in my opening remarks about the stability of outyear projections. Can you address that a little more fully? Will the fact that the FYDP now contains actual project assumptions as opposed to broad budget targets, would that have any effect on maintaining the resources to which we commit to in outyears or not? I mean, as you well know, General Lupia has been before us so many times, you know, that's a terrible concern when we talk about phase funding. Would you respond to that, please? Anybody?
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    General VAN ANTWERP. I will start first. We did a little examination of the last three FYDPs to see how many of the projects we said we were going to do we did, and I'm happy to report that it's about 70 percent of the projects that we've had in the FYDPs that we have either executed early or we've budgeted for in the outyears and still have in there.

    I think that your point about making sure that our real property maintenance (RPM) and operations and maintenance account (OMA) funding is there for the new projects is absolutely on target, and we need to look at life cycle of these things, and that has to be programmed in there. I think if we were on a plan right now to take our RPM dollars up to 90 percent in 2002 and that's a must-do and to increase our base ops funding—and that in there is plugged in when we have a new facility that's going to be taken care of properly in the future, and so that is a must.

    Admiral SHELTON. Sir, for the Navy, I would say that your comments at the beginning, where you talked about every year it's been put off and put off and put off, I think the chickens are coming home to roost. We can see that in our facilities planning, with the emphasis that we're putting on the piers, runways, and the like, that, coupled with the GAP–21 plan that I mentioned in my statement, that we're doing a complete plan of what we need for shore infrastructure Navy-wide, globally. A combination of those two give me some amount of reasonably feeling that because we are in the position we're in—for example, as you know, we did a study of the piers that we have in the Navy, and by 2010, only 20 percent of the piers we currently have will be capable of handling the ships. So I think there is an issue of block obsolescence and other things that will force the issue of replacing these types of facilities. So that's kind of my view of at least a little bit of brightness in the outyears.
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    General HIGGINBOTHAM. Mr. Chairman, I mentioned earlier, we now have a ten-year plan which I will have an opportunity tomorrow, I understand, to talk to you about that, that kind of lays out where we're going. It is a very robust program. And, well, I think it's going to get us there, you know, with a little help and—well, I don't think I have anything else to offer, you know, beyond what's already been said here.

    General LUPIA. Sir, I think there are kind of two parts to your question that I'll address. The first one has to do with the level of funding in the outyears. I think we all attempt to remain optimistic. I've mentioned to you in previous testimony that, in the case of the Air Force, when we put our military construction program together this past year, we had $2.2 billion in requirements brought forward by our major commands and only $700 million that made the program. And this bow wave just continues to move to the outyears, and a lot of it we do solve with this sort of magic money in the outyears.

    The second part of your question deals with, I think, when you see line-items from us this year as our FYDP, are you going to see the same ones again next year? And I would say generally the answer to that is yes. But I would give you some examples of things that are not in the FYDP today, that if I were sitting in front you a year from now, would be there.

    For example, we're going through the process of looking at our en route structure around the world. There's a very good possibility that we'll have to find a place to take more missions as a result of giving up Torrejon Air Base in Madrid, Spain. And so, we're working in conjunction with the Navy to look at Rota. And so you might look at some projects in the outyears for Rota which don't appear today.
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    In the personnel business, for example, we're looking at more sessions, more officers being commissioned through Officer Training School, as opposed to the Reserve Officer Training Corps (ROTC) program which is a little bit more expensive. This is going to cause us to have to build some facilities to accommodate those kinds of changes. The Air Force is just standing up an airman's basic course, so to speak, at Maxwell Air Force Base, that we're going to build some additional facilities for. None of that is in our program yet. The final governing standards that we're getting from the countries around the world are going to cause us to have to upgrade some waste water treatment plants, water treatment plants, et cetera. To this day we don't have the final disposition of the locations for the F–22. They'll all have to be placed in our military construction program.

    So, I guess the point I'd like to make to you is that plan is a good plan today, but it is very subject to change based on decisions that are made in the next three months, six months, or a year. And so, although it may appear to you, sir, that we do this in a haphazard manner, it's pretty well thoughout.

    Mr. HEFLEY. Well, you know, last year I asked each of the military departments to describe the types of facilities which suffer the most from underfunding the MILCON accounts. And for the Army, it was maintenance shop, training facilities, and ranges. For the Navy, the problems seemed to be piers and runways and operational—related operational infrastructure. For the Marine Corps, the problem was, you indicted, was support facilities. And for the Air Force, airfield pavement and aircraft maintenance facilities and some utilities infrastructure, were the answers we got back. And those things seem pretty doggone basic in terms of carrying on your mission. And I know, as much emphasis as we put on housing and the quality of life—and we think that's important because we think it's important to getting and keeping good people and high efficiency, and so forth. But these basics, if you don't have those, how do you operate?
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    How many of these things that you've indicated are, I don't know, I can't say how many, but proportion of the things that you've indicated to us were your major needs in this area are in the current FYDP, and what proportion do we have to look down the line for? Are you addressing these things in the current FYDP adequately, do you think?

    General VAN ANTWERP. I think from the Army's viewpoint, things in strategic mobility which have to do with airfields and things like that and also facilities for maintenance, our buyout program is 2003, so all of that's in the FYDP.

    Our barracks modernization is through 2008, so it goes beyond the FYDP. The housing privatization, of course, goes to 2010, beyond the FYDP. But I think you'll see those types of facilities that the Army says are its priority needs in every year in the FYDP. We are not at the point that we're funding them at 100 percent, just like the Air Force. If you saw what we got in from our major commands, it's two or three times what's in this budget, but we're eating away at it as best we can every year.

    Mr. HEFLEY. Would it help if we took away from the Air Force and gave it to the Army?

    General VAN ANTWERP. Absolutely, sir. That would help.

    Mr. HEFLEY. I'll make a note of that.

    General LUPIA. That would not help. [Laughter.]
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    General VAN ANTWERP. But it's a team effort. We use their airplanes. That's the thing.

    General LUPIA. That would not help our Nation, sir.

    Mr. HEFLEY. No, it would not.

    Admiral SHELTON. Sir, for the Navy, for the piers and runways which we have at the top or our list, out through 2005 we have about $800 million devoted to that. It averages out to about $134 million a year. And in the 2000 and 2001 budgets, we have 17 projects totaling about $359 million. So, pretty consistently over the plan, we're putting our money into those kind of facilities.

    Mr. HEFLEY. Does it make you shudder when you hear things like we had in a question earlier about shoving the cruisers into the mud?

    Admiral SHELTON. Yes, sir.

    Mr. HEFLEY. Gosh, when you think about the expense of—you know, the most expensive military hardware that we have and we're in a rut; we don't even have proper facilities to take care of them. I mean, that's scary. General?

    General HIGGINBOTHAM. We have right now about a $3.6 billion backlog of MILCON requirements and the FYDP identifies slightly over $1 billion. But again, we're taking this beyond just the FYDP and looking out for this ten-year period of time in order to really get healthy.
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    As an example, you know, going back to the President's budget in 1996, we were looking at about $97 million that would go for MILCON, and now in the year 2000 it is $161.5 million. You know, so that's a significant increase over that period of time. There's that steady growth that I'll be able to talk to you about tomorrow to show you that, once we complete that ten-year period, that steady growth is going to take care of a lot of problems.

    With that said, right now, we have a plant replacement—the equation for a plant replacement is about every 280 years, you know, compared to the industry standard of somewhere in the neighborhood of about 50 years. So we've got a long way to go in order to bring that down to somewhere realistic. But I will tell you that the plan we've got that will carry us out ten years is, when we finish that, we're going to be down around 73 years. And so, that's the significance of this overall plan.

    Mr. HEFLEY. Do you have anything to add, General?

    General LUPIA. Sir, only that we attack the problems that you mentioned, for example, airfield pavements and repairs to aircraft maintenance shops, et cetera, through a number of funding sources, one of which is the O&M program, where we sometimes find ourselves taking on very large projects because we can't get to them in the military construction program. We're partners with the Defense Logistics Agency for a lot of our infrastructure problems having to do with fuels, et cetera.

    And although we have appeared before the committee and said that the Air Force has funded its O&M program at the preservation maintenance level, we found a tremendous interest again last year, as we have in previous years, by our commanders and four-stars in the field—they added $151 million out of their hide, out of their programs, to fund projects that were important to them, many of which fell under the category of aircraft maintenance shop, of airfield pavements, and infrastructure and utility systems. So it is very important to our commanders, no doubt about it.
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    Mr. HEFLEY. One of the criticisms of the Department's approach to managing infrastructure and the work produced for the National Research Council centered on the inability of the budget and programming system to account for life cycle costs. I think one of you in your testimony mentioned, or answered the question of life cycle costs, of facilities ownership.

    What do you see as the impediments to doing the proper life cycle costing of facilities in our system? Do we need to change the system in some way that would allow you to do it differently?

    If you don't have an answer—

    General VAN ANTWERP. I guess from my view point I think it has to do—you know, once you build that new facility—and we would like to have like about 57-year replacement or refurbishment or revitalization; that is a very long-term process, certainly for new facilities. So I think that what we do is we get caught up in the tyranny of the urgent, and that is to do the thing that's coming down around your ears and we tend to not look at the life cycle costs.

    But I don't think that it's anything that you do or could do, I think other than we need to program for those things; we need to go farther than the FYDP for the long-term view.

    Mr. SHELTON. Sir, I think the other thing is with the facilities that we've had—as you know, in the Navy, the average age of non-housing, non-reserve facilities is 49 years, and over the life of those facilities their uses tend to change also.
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    I think that is one of the problems, when you have older infrastructure, you reuse things for different purposes and you add here and you change this, and then it is kind of hard to track as, did it fulfill its life cycle, whatever it was supposed to be or what is it today? I think that makes it difficult, as the general said, to analyze this.

    General HIGGINBOTHAM. I have nothing to add to the comments.

    Mr. HEFLEY. Okay. I know the base commanders want as much flexibility as possible in managing base operation support dollars and maintenance dollars. MILCON, by comparison, is fairly inflexible since the funds are generally authorized and appropriated on a project-by-project basis. The result is that support and maintenance dollars are often used to pay other bills during the Fiscal Year.

    To ensure that certain quality-of-life repairs would be made, Congress created the Quality-of-Life Enhancement Defense Account (QOLED) for maintenance dollars. In other words, the funds are fenced, but unlike regular maintenance funds, have a two-year availability. That seems to have been pretty successful, in my judgment. You may comment on that, but what is your view on the quality-of-life enhancement account? If maintenance funds continue to be used for other purposes, should Congress fence additional funds? Give us any pros and cons you can to that.

    General VAN ANTWERP. My view is that the QOLED funds have been a terrific thing. We have been able to use those funds, and we put them mostly into our barracks for permanent party barracks, and it has enabled us to get up to almost $600 million a year for that barracks program.
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    I am not a big fan of fencing too many things. I like to think that we have, and we do have great commanders out there that know what their priorities are, and sometimes you have got to live out there to know them. So I am not a fan of doing too much of that, but I think the QOLED funds has been a great thing for all of us.

    Mr. SHELTON. I would say, from the Navy perspective, the concern that I would have is the definition of the projects that can be used from funds. I think as long as there is, what I would say, a liberal interpretation, that quality of life expands beyond just the living areas, that it also concerns the workplace, and we can use it in a broader context, then it is fine.

    If you look at the amount of money, for example, that the Navy had this year, it was $522 million out of the $1.1 billion program. So that's a significant part of our RPM money, and if it is very strictly interpreted, that could cause problems on the other side. So I think it is an interpretation issue. I guess the problem that I see is, if we get very narrow in our fencing, if you will, that can cause problems because other areas are not able to be addressed.

    General HIGGINBOTHAM. Not much that I can really add to that other than the fact that this has really been a boon for us. So in 2000, you know, we are looking at $120 billion for Quality-of-Life D. So it has been a savior in many respects.

    General LUPIA. Nothing to answer.

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    Mr. HEFLEY. Okay, this subcommittee has encouraged you to get out of leased facilities and to consolidate on bases where you could. Are we making progress in this area? What kind of progress are we making? Do you believe that a forceful lease reduction program is central to managing installation inventory or are we going in the wrong direction on this?

    General LUPIA. No, I would say that we are very interested in getting out of as many leases as we can. I mention in my opening statement, my prepared statement, about consolidations. I think that is terribly important to us, and the number of facilities that we have in the military construction program will allow us to get out of leased facilities. A good example of that is the new space command facility at Peterson which will allow us to get out of a number of leased facilities in Colorado Springs and get on to Peterson, where we should be.

    The difficulty, of course, is trying to create the balance that allows us to take money that we need in so many places and just use it for consolidation projections, or just use it to give up leases. So if it is part and parcel of a mission supporting projection or a quality-of-life supporting project, it will attract resource. If it is just a project that wears a name tag that says, ''consolidation,'' to give up some leases downtown, it is very difficult for it to make the cut and get funded for that reason and that reason only.

    General HIGGINBOTHAM. Mr. Chairman, we are really not in the leasing business. We lease 125 houses out in San Diego for our drill instructors, and that is because of the shortage of housing in that region, the hours that these drill instructors work, and the need to have them in close proximity to that work effort. But beyond that, we are really not in the leasing business.
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    Mr. SHELTON. Mr. Chairman, I think this is a good news story for the Navy. The National Capital Region is an area that we have had a lot of leased space in. In fact, in fiscal year 1996 we occupied over 3 million square feet of space in this region, at a cost of $84 million a year. By the end of fiscal year 1998, we had reduced this to about 2 million square feet, with a cost of $56 million annually, and our goal is to eliminate practically all of the off-base rentals within the National Capital Region by July of 2001. So this is a very fruitful area here in this area, and we have been busily engaged in it.

    General VAN ANTWERP. Sir, our lease bill is about $260 million a year, which is pretty considerable. Our long-term plan would be to move everyone that it makes reasonable sense onto a military installation if there is proximity. There is always going to be those like Military Entrance Processing Station (MEPS) and recruiting stations and things that we cannot.

    There is a bill with this, as General Lupia said. For us, it is to move 148 activities onto military installations. It is going to cost us about $180 million to do that. We eventually get savings of $33 million a year for the long term by having them there, but in many instances you are moving them into facilities that need almost total rebuild to accommodate whatever the function, whether it is a change of use or something else.

    So it is a good program. We need to do it. It is going to produce dividends, but it is not a short-term fix by any means.

    Mr. HEFLEY. We talked a good deal today about reasonable recapitalization rates, particularly in the Marine Corps, in our discussions with the Marine Corps. Should all the services have a standard recapitalization rate? Are the services different enough that each one should be left to decide how it works for them individually?
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    General LUPIA. Well, I think the horse is already out of the barn, sir, in that the Department of Defense is working together with the services to come up with what they are calling a facilities front-end assessment, which is relatively new. The services have had an opportunity to participate in the development of this, but as part of this front-end assessment, we are trying to come up with a way to have a recapitalization formula that all of the services would use, so there would be some consistency between us when we talk with Capitol Hill.

    Mr. HEFLEY. Does that make sense to you, General?

    General LUPIA. Yes, it does. It is a very difficult subject, though, as I say, because there are so many components to this business of recapitalization, and everybody understands that you take your plant replacement value and then you sort of divide it by your investment, but it is very difficulty to capture all the pieces of that investment and what parts of the investment actually go toward recapitalization and what parts of the investment don't.

    So it's not a very simple process, and that is where the difficulty is, and really coming up with an accurate way to display what it is, and that is why I answered the question I did before, because we have a very tough time in the Air Force coming up with a percentage and a goal for recapitalization and then being able to put some teeth behind it in the calculation.

    Mr. HEFLEY. I don't know how to phrase this. I don't know quite how to phrase the question I was going to ask.
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    If the business generally has a standard that they operate to; universities have a standard that they—in other words, big organizations, generally, in the private sector, have some kind of a standard that they operate to. Should we somehow tie our standard to what is happening out in the business world or the university world, or is there some reason for us to have a different standard?

    Admiral SHELTON. Sir, do you mean standard in terms of amount of investment?

    Mr. HEFLEY. Recapitalization.

    Admiral SHELTON. Sir, I would say one of the problems is when you are trying to decide what rate you want to have is where you are and I think that is the difference between, for example, the Navy and outside industry.

    If they had a recapitalization rate that they have had over time, then they could probably have a sustained rate over a period of time, and that is what they put in their business. The problem is, if we are looking at this, it doesn't take into account where we are right now, and, in fact, each of the services is at a different point as far as their conditions of their bases. So if we kind of standardize and say, okay, everybody is going to have the same recapitalization rate, that could be a problem, because depending on where you are in the condition of your bases, that may be too much or may not be enough. The same is applicable with outside industry. Trying to compare us, I'm going to say that probably the conditions of an outside business or corporation would probably be higher because they have already invested the capital in that.
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    So it might be an apple-and-orange thing, sir.

    General VAN ANTWERP. Sir, one additional comment on that. I think where we are privatizing for utilities and housing in other areas, we would want them to be very compliant with the standard in private sector for those things, and they figured that into the maintenance plan.

    Mr. HEFLEY. Okay, well, the National Research Council has stressed the adoption of performance measurements in the planning and programming areas. What kind of performance measures do you believe would be appropriate in those areas?

    General LUPIA. A metric that measures how you plan and program?

    Mr. HEFLEY. Yes, yes. That was one—I was hoping you could help me understand their recommendation where that was concerned, because I am not sure exactly what they are talking about there.

    General VAN ANTWERP. Sir, I think one of the things we are trying to do in our Installation Status Report that I mentioned earlier is to try and come up with a set of standards and a set of metrics for recapitalization, that we do a very thorough look at the condition, and that we know how long we want it to take to recapitalize, and we are able to measure that.

    In fact, the Installation Status Report, we have gone so far as, say, for a maintenance facility, we are able to go in there and we have pictures of what the outside should look like, what the inside—what type of equipment, how often that equipment is replaced, and based on that, we are using that as a measurement tool to enable us to predict what should go in the budget for the following years.
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    So our Installation Status Report gives us a very clear look at what we have facilities-wise, as very determined measurements for what status is it, and we rank it on a C–1 through C–4 status, and that is the document that is used to justify whether that goes into the budget.

    Admiral SHELTON. Sir, I would say for the Navy I will get you something for the record, because the Naval Facilities Engineering Command is currently undergoing a study of metrics with the view towards performance measures for the infrastructure. They have done a significant amount of work in this area. So I will get you an answer for the record.

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

    Mr. HEFLEY. Mr. Taylor.

    Mr. TAYLOR. No, thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. Snyder.

    Mr. SNYDER. I just want to ask one question, if I could, Mr. Chairman.

    One of the areas that I am told gets neglected is dealing with encroachment problems around airfields. That it is not a big sum of money, but it is a big enough sum of money that the base commanders can't do anything about it.
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    For you all who have airfields, would you all comment, is that a neglected need? I guess is it one of those needs that has a potential risk out there for letting residential areas or apartments build up in areas that really shouldn't be. Would you all comment on that? General Lupia?

    General LUPIA. Sir, I don't see that as an area that the Air Force neglects. As a matter of fact, I think the Air Force spends an awful lot of its time and attention on that.

    We have in the past military construction programs purchased a lot of land around our bases where we feel we, the Air Force, have the responsibility, and that is typically driven by safety concerns. Each of our bases—as a matter of fact, I brought one with me—each of our bases publishes a general plan that talks about not only what is inside the fence, but what is outside the fence. Typically, we really need help from the local communities who have the responsibility for zoning and keeping things out of the accident potential zones and out of the areas, as you say, that they are encroaching on the base.

    The Air Force has, I think in most cases, very, very good relationships with the local communities. We work with the local boards and councils and such to prevent encroachment, but it is not a call that we can make. It is one that typically the communities have to make.

    General HIGGINBOTHAM. I think it goes beyond just airfields. In our case we previously talked a little bit about Blount Island Command. So when we purchased that Blount Island Command, we also have to take a look at fee and easement areas. In this case, down there it is a little over about 360 some acres. If we are not able to purchase that land or get fee and easements, that encroachment is going to, in time, jeopardize our ability to continue operations there. So that is an important piece that, when we take the initiative to purchase Blount Island Command, we also have to take that into consideration.
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    We also have a fee and easement issue currently at Yuma Air Station, and in that case we've got a safety waiver for—it's an ammunition problem. So in the 2000 budget we have programmed $14.7 million to purchase land that is outside of the boundaries of the installation right now, so that we can take care of that problem.

    So, again, a lot of that is all associated with safety waivers. So you have got to be able to fix that waiver. So that is our effort, to be able to do that.

    Admiral SHELTON. Sir, I would say that this is a hot button topic, I think, for all the services, and it goes beyond just the encroachment around the airfields. It does to the ranges. It doesn't do us any good to have an airfield if we can't fly and train unfettered. I know that we have been involved in a number of joint issues dealing with various agencies to make sure that we get the proper length of time on the ranges and some of the other restrictions that are continually being tried to put on the ranges.

    So I think the direct answer to your question is, yes, this has been a problem in the past. We have focused attention on this area, but, as General Lupia said, we have to work continually with the communities, the Environmental Protection Agency, and others, who have other interests in our things. But it is very high on our agenda.

    General HIGGINBOTHAM. If I could just make one other comment as well? This goes beyond just the continental United States when we think in terms of encroachment. In many cases, our overseas bases, there is a bigger problem as it relates to encroachment. So if you are familiar with Okinawa and our Patima Air Station, I mean that has been a central issue now for some time, to try to find a means of relocating that air facility itself. Again, it is an encroachment issue.
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    Mr. HEFLEY. Gentlemen, thank you very much. We appreciate your testimony, and as Mr. McHugh said, we don't envy you your job, but we appreciate the job you do and thank you for your testimony today.


    Mr. HEFLEY. The committee will come back to order.

    Our second panel this afternoon will give the subcommittee an opportunity to review a recent study on the Management of Federal Facilities.

    Rear Admiral Retired Jack Buffington is a member of the Department of Civil Engineering at the University of Arkansas and the chairman of the committee to assess techniques for developing maintenance and repair budgets for Federal facilities. In that latter capacity, he helped produce a study for the National Research Council that examined the practices of the Federal Government in managing the Nation's public assets and recommended a number of improvements to current practices. The subcommittee asked Admiral Buffington to appear today to present his findings as they relate to DOD.

    I also want to note that this is a return appearance for Jack Buffington before this committee. When he last appeared, he was in uniform and then serving as Commander of the Naval Facilities Engineering Command.

    Admiral, you are well respected in the field. I know we will benefit from your views today, but you need to be a little bit careful, because you realize, as an admiral, you can be recalled at any time, and if you do too well, that could happen.
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    But, Jack, welcome and you can proceed at your convenience.


    Mr. BUFFINGTON. Thank you very much, sir. Mr. Chairman, I really appreciate the opportunity to be here. Mr. Taylor, Mr. Snyder, Mr. Grone, thank you so much for having us.

    As you said, my name is Jack Buffington. I am currently the Director of the Mack-Blackwell National Rural Transportation Study Center down at the University of Arkansas, and I teach down there also, and serve on a few boards here and there.

    I did spend 34 years in the Navy, was Chief of the Civil Engineer Corps right prior to my retirement, and I realized how old I was getting when I was sitting back here looking at Mike Shelton, and realized I had his job ten years ago. [Laughter.]

    We are testifying here today in my capacity as Chairman of the National Research Council's committee to produce a report on stewardship for Federal facilities, a proactive strategy for managing the Nation's public assets. Here's the book that we put together here.
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    The National Research Council is the operating agency of the National Academy of Sciences and National Academy of Engineering, which I am a member, and was charted by Congress to advise the government on matters of science and technology.

    With me here today I have Mr. Richard Little, who is the Director of the Board on Infrastructure and Constructive Environment, right here, and also Ms. Lynda Stanley, who is the Director of the Federal Facilities Council. And I have got the fellow who helped us write this book back here, Mr. Eric Dillinger, and Eric is a principal in Carter and Burgess, which is a well-known Architect and Engineer (A&E) firm operating across the United States, and they are especially good in condition assessment systems, and helping us analyze what we really need.

    Mr. HEFLEY. Jack, would you like any of them to join you?

    Mr. BUFFINGTON. I would like to have all of them come up, if it is not a problem.

    Mr. HEFLEY. It is perfectly all right.

    Mr. BUFFINGTON. Slide on up here. The Stewardship for Federal Facilities Report was initiated as a follow-up study to a 1990 report for the National Research Council, and it was titled, ''Committing to the Cost of Ownership.'' They did that one and they came up with the idea that, hey, we really need to spend somewhere around 2 to 4 percent of the current plant value of a facility, and there are various ways of determining current plant value, but it gets in the ballpark, we should spend some where in the 2 to 4 percent category on that.
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    In the process of going through this thing, we found that there wasn't—and I will speak to more of that in just a minute—there is just nobody that is even getting up anywhere close to the 2 to 4 percent. Most of them are operating down in the 1.5–1.8 percent, some of them even less than that.

    We came to the fact that it is clear that the Stewardship of Federal Facilities is more than just a matter of appropriating funds for maintenance and repair and involves a wide range of managing and budgeting issues.

    Our Federal portfolio today has some very significant investments, and we need to find better ways, because we realize we are not going to get a whole lot more money. We can come in here and holler and say we want more money, but it just isn't going to happen. You know, you saw these poor guys sitting here with me, and you guys hit the nail right on the head; they know they don't have enough money.

    But, nevertheless, we are going to have to find better ways of doing things, so we don't have to have quite as much money. We think that we have come up with a strategy and framework that possibly could get us in that general direction.

    Our findings were pretty extensive here, and I am just going to hit some of the high points. I won't get into everything in the report here, but we have it for the record. But there are about 500,000 buildings and structures in all 50 States and in 160 foreign countries. There is over a $300 billion inventory, however method you want to figure it by, and of that, we are putting about $20 billion in acquiring new facilities each year or trying to renovate existing facilities.
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    It is difficult, if not very impossible, to determine just how much we are spending on M&R, on maintenance and repair. There really isn't any specific tracking of M&R, when it gets right down to it.

    As you heard these fellows talking along here a while ago, what we call operation and maintenance is a pretty broad field. Now what us facility types think, we think operations, well, that's paying the janitor to clean the place up and putting electrical in the system and keeping the lights on and all that stuff. But what most of the Federal services are saying, when they say, ''operating funds,'' then they are talking flying airplanes and driving ships and everything else, or such things as we are down in Cuba and we are having to put the Cubans and Haitians over there and build the camps, and that was costing us about a million bucks a day. Well, that comes right out of operating funds, operating and maintenance funds. So the maintenance side keeps getting cut, and then, later on, they try to dump a little bit of dollars on us at the end to try to help out on some of the facilities.

    General Accounting Office (GAO) and a lot of other reports report the facilities are deteriorating; that we have access aging facilities. As you heard the Navy say a while ago, the average age is about 49 years at their facilities, and that is pretty much the case across the board of all government agencies; between 40 to 50 percent are over age.

    The military is closing about one in five bases, and there is lots of discussion on whether we should have more base closure or not. I am sure that will continue to be quite a bit of discussion area. The problem is, we are not able to get rid of these bases when we close them quite as fast as we would like to.
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    Department of Energy (DOE) and State Department also have a number of facilities that they would like to get rid of, and sell, and cut. Cleanup and transfer of the bases, again, as I am saying, is very expensive. Just to tear down an old World War II barracks, as you heard the General say a while ago, as he said $11, anywhere from $10 to $12 a square foot just to tear down the old buildings and get rid of them, and we need to clean up those places.

    When we go out—

    Mr. HEFLEY. That is far more than it costs to build them?

    Mr. BUFFINGTON. Oh, yes, way more than it cost to build them. And we get in there—and, plus, too, when we turn over these bases, if we could just figure a way to get rid of them a whole lot faster—and I think there are a few ways. But, you know, we get everybody in the community interested: Okay, let's move on that base right away. Boy, the government is moving out and we are going to move in. We are going to do all these things.

    Well, unfortunately, we have to offer them to everybody and their dog before we can get around to closing the things. I mean, before we can get around to turning them over to local community and the people can really use them.

    Well, unfortunately, what happens in that period of time is the lights stop working, the water stops working, everything else. The building may be four or five years old, and nobody is living in it, and things really deteriorate in a hurry, when you do things like that.
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    So we need to figure a way to get rid of these buildings a lot more. We have made a lot of suggestions in that area during the course of this report.

    We need to have some accountability for stewardship. No one is really held accountable in government anywhere for stewardship of buildings. You know, most of us at the higher levels of government, we are only going to be in that job for a couple of years and then we are going to move on to somewhere else, if we are in the military. If they are a government appointee out there somewhere, then they are probably going to stay for two or three or four years, and then they are going to move on to somewhere else.

    So people don't want to fix the roof that may cost a $1 million to fix. They would rather fix something else. So they put a bigger pan where it is leaking back here in the back somewhere, you know, go ahead and do something out front that is going to look better; it is going to make me look better on my watch. And that is why things will just continue to deteriorate in there.

    Deferred maintenance backlog is, we say it is, in tens of billions of dollars, and it certainly is, and it is going to probably cost more in the long run. It is just hard to come up with an exact figure of what is our maintenance backlog. How much should we be trying to fix each year?

    Decisionmakers ask questions. When you say, ''Hey, I have got all these maintenance backlog. I need to get this stuff fixed,'' they say, ''Well, why should I support maintenance and repair? What is it doing for me?'' You know, that building is going to last a little longer; that roof is going to last a little longer. What is going to be saved later and what limited research on failures do you have, and what is the cost for not providing healthy work spaces?
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    You know, one of the things over at Department of Transportation, they had to shut the whole place down recently and start to rehab it piece by piece because it was an unhealthy building. They had a lot of different bacteria and everything else growing in there, I guess from leaks, and whatever the case might be.

    But we don't have good research on any of that stuff, and that is stuff we need to continue to do and things that this National Research Council, through the Federal Facilities Council, a lot of us can do things like that. We can help out in those areas, and I think they certainly can in the future.

    On our Federal budget structure, people don't consider life cycle cost of buildings. They only consider the first cost. We are out there trying to get a new building and build something somewhere. That thing is going to cost, that new building, about 5 to 10 percent of ultimately what you are going to spend in that facility, because over the years you are going to come in there and you are going to rehab it for lots of different uses; you are going to pay all the maintenance and repair costs over the years.

    So that first cost of going out there and putting a decent facility together might only account for 5 to 10 percent of the total cost that is going to be spent, and people should consider that and consider life cycle cost. Then you would wind up doing such things as terrazzo floors, like you got right out here in this building there, rather than putting some vinyl asbestos tile that you have got to have janitors scrubbing every night to get the marks off of them and everything else, and then replacing them every two or three years. It just makes sense to spend a little bit more money in the initial budget, because, again, the initial to build them is very small.
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    There is also a lot of changing mission and facility reductions going on. Changing mission, the new buildings we build, we have got to build them so that they can be very easily converted to something else, because technology is changing so fast and computers and everything else like that, that we have to do a better job in planning our buildings.

    Management practices, there are a whole lot more disincentives for doing things than incentives for innovation. For instance, if you figure out a way to save $10 million in utilities or something out on your base, the first that is going to happen when you pass that onto somebody, instead of them patting you on the head—well, that's what they are going to do; they are going to pat you on the head and say you did a real nice job here; your budget is cut $10 million next year.

    Now you go ahead and figure out how you are going to get that done, and there is no way—so there is no innovation, I mean, no incentives for people to improve what they are doing.

    I have been out there many times, and when people say, okay, we found a better way of doing this, well, they just cut the budget. If we could get that money back somehow, the base commanders that are figuring out ways of solving this thing, and they can say, okay, you can have that money back, in addition to the regular money you are getting, and you can fix this facility and that facility.

    Carryover of funds is another area where we have had some general problems. Again, you use those operating funds all year long, and then about a month or two before the end of the fiscal year someone comes in and dumps on you a bunch of maintenance funds, and you have got to get them spent in a hurry. If you don't get them spent, you come up $10 million short on a base spending the maintenance money; you can bet your budget is going to be cut by that much next year. We need to have a better way of carrying over funds there.
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    We have poor condition assessment systems. We need to work on that considerably.

    Recommendations, our recommendations went on into two overriding conclusions: one, that the Federal Government should plan strategically for maintenance and repair in order to optimize limited resources, and greater accountability for stewardship is needed at all levels, better allocation, tracking, and effective use of maintenance repair funds.

    Now, to plan strategically for maintenance and repair, we come up with five recommendations. We said investment must be tied to mission. Lots of mission is changing, and it changes as you go through the year. Why spend money on facilities that's really not even part of the new mission with all the technology changing?

    We have an awful lot of facilities sitting around various bases that we really aren't using that much, but the problem is that you move out of a facility, somebody is going to move in it. I don't care who they are; somebody is going to move in it. Somebody is going to get them a staff together, and before long you are still supporting all those facilities, whether you need them or not.

    Long-term maintenance and repair expenditures should be reduced by reducing the size of the Federal portfolio. Get rid of some of these buildings that we don't need around various bases and things.

    There are very strong ways that I think we can do that. I think we can lease those things out, and if we let the base commanding officers—for instance, in the case of DOD facilities—keep the money and spend it somewhere there on base, if they'll go ahead and lease out things that they don't need, it will surprise you overnight how much stuff would get leased out.
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    We need to limit new construction. I think we need to use the old facilities as much as we can, but it is sometimes hard to do because, again, technology transfers, technology is changing so much you can't always use the old buildings.

    You need to transfer and get rid of some of these buildings, if we don't need them on the facilities, and perhaps there are ways we can privatize some of those things in areas. Now I am not a rabid privatizer, but I say, do it where it makes sense. Let's go out and privatize where it makes sense.

    I think that we shouldn't go build a whole lot of new buildings if it can be funded by private groups somehow, some way. The housing business they were talking about there, the public-private ventures in housing, is pretty doggone good. We should push that as much as we can.

    Our condition assessment systems need to focus again on the critical mission, and we need to come up and work with industry on ways to develop good condition assessment systems—how we can determine when motors need to be changed, and whatever the case might be.

    And research on deterioration and failure rates, health safety, and things like that, we haven't done much research in that area and we need to do a lot more of that.

    On accountability, we say there are six ways that we could account better, provide better accountability. One is to encourage accountability and stewardship at all levels. Get those people at the senior positions to be more concerned about our facilities versus just letting the poor managers down there who are actually having to do the work be concerned.
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    At the executive level, I think we need some very senior advisory-level management there. We need to have some very senior people involved in holding regular meetings, I hate to set up more committees, but I think certainly we need something in this area, someone with a lot of horsepower to manage facilities like that and get these various committees together, and the leading people in each one of the government agencies to actually get them together to talk about, are they putting it in their strategic plan and are they focusing on the problem?

    And then more standardized cost and accounting technicians, that is one of the biggest things that come in in this whole thing. We jumped into this, to start with, thinking we were going to come up with a budget, that we could show everybody how to prepare a budget that is going to come right on through Congress, and they are going to get lots of money and all that.

    Well, when we got to sitting down talking to everybody, we discovered there isn't anybody who budgets this the same way. Nobody has the same accounting procedures. They may look the same, but when you really get down into them, they are not at all; not even among the DOD agencies do they have the same accounting.

    What one calls operation and maintenance funds is totally different than what somebody else calls operation and maintenance funds, and even if they have the same definition, they have got a different dollar value attached to each one. So we need to work in that area to try to come up—and we made some suggestions in here and actually laid out some budgeting plan of what we suggest.

    Now it would not have to be exactly like this, but if we could get several of the agencies to get together and try to come up with a more standardized budgeting, and then when they come over to the Hill, we would all be talking apples and apples rather than the mixed match that they have got right now.
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    We also said, to plan strategically for maintenance and repair we had five recommendations, but we went through that a while ago.

    We had four governmentwide—Number 4 on the others was governmentwide performance measures. You have heard a lot of people talk here, and you asked the question a while ago, well, what are performance measures? Well, there is a Government Performance Act of 1993, but it is certainly not implemented in any form or fashion as to: What ways can we tell when our buildings are getting ready to fall down? How long should a roof system last? How long should floor systems last?—and a lot of areas like that.

    Then allow facility managers to operate in a more business-like manner. Let me them rent out spaces and keep the money and use it on bases.

    Use revolving funds. The Navy's public work centers have one of the best systems going in use of revolving funds. It allows you to, if you need a new sewer system or a new water system, a new electrical system, you can go in there and do it over a period of time and then pay back the money a little bit each year, rather than trying to use year-end dump money to fix it all in one time. That's called the Navy Working Capital Fund, and we need to go a lot more in that direction for all the Federal agencies.

    Then we need continuous training for people. We have come up with a lot of new systems for monitoring facilities and ways to better repair them, and then we don't train the people to be able to use the system.

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    We think that the Federal Government has significant opportunity to redirect the Federal facilities management and maintenance practice for the 21st century. It is going to require some long-term vision, commitment, leadership, and stewardship by decisionmakers and agency managers. We think the results will be significant improvement in the quality and the performance of Federal facilities at lower overall costs, and I really mean lower overall cost. I think we really get into this thing. I don't think we have to have a lot more money, but we got to be a lot smarter with what we are doing with our current money now.

    That is basically what we came up with in this book, and I think it is pretty doggone good. Yes, there's a few things in it maybe I don't even agree with. We had 12 very strong-willed people sitting on this committee, and we all decided which direction we thought we ought to go. Fortunately, Rich and Lynda here did a great job in pulling us all together and coming up with and writing the final facilities.

    But, with what is in here, I think we could do just wonders with our Federal facilities.

    [The prepared statement of Mr. Buffington can be found in the appendix.]

    Mr. HEFLEY. Thank you very much, Admiral. Mr. Taylor.

    Mr. TAYLOR. No, thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. Snyder.

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    Mr. SNYDER. Just two questions, one specific and one general. I assume, Admiral—incidently, I am from Arkansas. Welcome.

    Mr. BUFFINGTON. Thank you, sir.

    Mr. SNYDER. I assume your heard the last panel; is that correct? One of the discussions in there about the military folks is that they talk about, while they acknowledge their percentage was low, it was not in the 2 to 4 percent range that you are talking about. They said that they calculate that a lot differently because their staff salaries, and so on, are not included.

    Did you have any specific comments about that? Is that just part of what you just described, that there is just not any good way—

    Mr. BUFFINGTON. Yes, sir. There just really is not any good way of coming up with it, but the long and the short of it is that nobody is spending the amount that should be spent, I mean regardless of what figures you use.

    Mr. SNYDER. So even if you give them a healthy fudge factor from their 1 percent and include salaries, they are getting nowhere close to 2-plus percent?

    Mr. BUFFINGTON. No, sir.

    Mr. SNYDER. And just a general comment or question: Did you have any other comments about anything else that caught your interest during that last couple of hours of testimony?
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    Mr. BUFFINGTON. No, sir. I felt for them. I have been sitting here before giving the same testimony, and I thought, boy, ain't much changed in ten years.

    Mr. SNYDER. Thank you.

    Mr. HEFLEY. Admiral, just an aside, are you from Arkansas originally? Did you go home when you retired?

    Mr. BUFFINGTON. Yes, sir, I live right over on the Oklahoma-Arkansas line. Actually, I live on the Oklahoma side of the line, and I just kind of claim whichever side suits me the best for that day. But, yes, sir, I have long been—University of Arkansas is where I went to undergrad.

    Mr. HEFLEY. I see. Well, we would not have invited you if we had known, after our experience with our colleague from Arkansas. [Laughter.]

    Mr. BUFFINGTON. Yes, sir.

    Mr. HEFLEY. No, he's doing a good job here, too, and we really appreciate your testimony. Let me ask you a few questions.

    How does the DOD compare to other agencies of the Federal Government in attention to recapitalization and modernization of infrastructure? Is the commonly-accepted standard of 2 to 4 percent recapitalization rate appropriate for the military in light of its, I guess you could say, unique needs? But I guess those are two different questions really.
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    Mr. BUFFINGTON. No, sir. I think the DOD, to make a long story—maybe I am just prejudiced, just coming from there three years ago. I think they do a little bit better job than the rest of Federal Government does. Now there's exceptions, you know. I think National Aeronautics and Space Administration (NASA) is doing a super job in condition assessment systems and things like that, and you can pick out individual ones that are doing just a great job. But I think Department of Defense is doing as well as they possibly can with the amount of money they are getting.

    Now I think we can, again, make a lot of changes. I think right here on page 8 of our book there, where we laid out the new budgeting procedures, I think if we got everybody sort of operating from the same rule book, I think it would help in the long run. It is not going to happen overnight, and such things as what they were talking about there on the—how much do you want to spend each year, and there is a lot of areas that are a little bit unclear, and I think that if we go to something like we suggested here, it kind of breaks it down a little better and gives you a little clearer vision of what should be in the 2 or 4 percent and what shouldn't be in there. We also point all that out in here.

    Mr. HEFLEY. Based, in particular, on your experience in the Navy, what do you see as the impediments to proper budgeting for construction and maintenance requirements? And are there incentives that we could somehow inject into the system to encourage proper facilities budgeting?

    Mr. BUFFINGTON. Well, I think a lot of the impediments are just on the maintenance of the facilities, and that is, again, we get a lot of year-end dump money rather than getting it spread out over the course of the year.
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    Now I am not coming out here and saying let's fence funds. I would love to say that, and out there in the field the facilities guys love to say, ''Let's fence funds.'' But I have also been a commanding officer of bases before, and it is tough because you might need that money for operations or something else, and you get very little money that you can spend, that you have any flexibility with. So I can sympathize with all those commanding officers who want to be able to use a little bit of those maintenance funds for something else, if they have to.

    But I think that we need to do a lot more life cycle cost planning. I think we need to pay more attention, when we build buildings, that they are very flexible for change in the future. Because you are saying, okay, let's just do it the way the private community does it. Well, the private community operates considerably different, because they are profit-motivated. You know, they may use the facility for just 20 years, and then they will just walk away from it in many cases. And if you don't think they don't walk away, get on the train, go from here to New York, and you start from the south side of Philadelphia to the north side, that 30-mile stretch, probably two out of three buildings are abandoned. But private industry just gets in there, uses it for 20 years, don't need it, and walks away, and has it written off.

    That is not the case with Federal facilities. You know, we may be using these things 100 or 200 or 300 years before the thing is over with, and we have got to just make them a whole lot more flexible for changes in mission.

    Mr. HEFLEY. You heard the discussion, Admiral, about the leasing and our efforts to try to get people out of leased facilities. Is that a proper direction to go, and does that make a difference in facility management and finance?
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    Mr. BUFFINGTON. Well, if you have got to build a brand-new building somewhere, I would say it is better to lease it maybe in some case. Yes, that is kind of the way I feel on it. I think what they are talking about is leasing housing, and that is a little different ball game. But I still think some of this privatization on the housing can work out a whole lot better, the public-private ventures. We had some really good ones in the past; it has worked out. I think in many cases leasing is a very good alternative.

    Now what they are saying is they are getting out of these things because they have been cut way back. They have been cut back the number of people. They don't need to lease all those facilities, and they are having to pay the leases as well as maintain all these bases. So they are saying, yes, we want to get out of some of these leases. So I can understand what they are saying, but if you are coming down to the point you're saying, I need a brand-new building built here or maybe I can lease it right next door or across the street, then I say it is better to lease it.

    Mr. HEFLEY. How should life cycle costs for new facilities be built into the current DOD budgeting process?

    Mr. BUFFINGTON. Well, that is a pretty tough question there on life cycle cost. They are hard to come by but you need—we have come up with several different methods, Naval Facilities Engineering Command (NAVFAC) has, and all the DOD agencies have for taking a look at what is the overall cost it is going to be and how much can we save by using a little better—using terrazzo rather than something else. I don't know, maybe Eric Dillinger might have a good comment on some of that.
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    Mr. DILLINGER. Office of Management and Budget (OMB) has begun to develop some guidance related to that, but, clearly, if we identify a life cycle to a mission and a facility use, then we can identify the life cycle that the assets within that facility should last, be they lease or construct, and too often those two don't match up. We build a 50-year building with a 10-year facility life cycle or mechanical systems will last 6, and it is the failure to match those up that costs us money in the end.

    Mr. HEFLEY. I would certainly think so.

    Admiral, just from sitting in here, you picked up some of our frustration about outyear projections, and as someone sitting at that table in uniform, you had to have those frustrations as well.

    Oftentimes I think if you just knew what it was going to be, be it high, be it low, but just let us know what it is going to be so that you can plan realistically for it—and that is kind of the way we feel, too. We think we are set on a program that will get us to a certain goal and then budget promises don't come in for those outyears. Anything that we can do to make those projections more believable, more reliable?

    Mr. BUFFINGTON. Well, I think probably, if we could pass the budget instead of worry with it every year, or maybe stretch it out over a three-year period or something like that, that would certainly help. But, boy, I shared Mr. McHugh's thoughts a while ago and said, I sure would love to see an outyear, because I have never seen one, either. You know, everybody promises everything in the outyears, and it just never happens.
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    Mr. HEFLEY. It really doesn't. It is terrible for us trying to make plans and trying to do the things that are necessary to help the uniformed services.

    Mr. BUFFINGTON. I don't know if Mr. Little has any thoughts on that or not. You got anything on that, Rich?

    Mr. LITTLE. Well, I would just offer, as someone who has done that in different sectors, you are sort of asked to solve a puzzle, not to come in and say you have an insolvable problem. So you always try to balance it somehow, and you borrow from the future figuring, as you said, the outyear is always the next one over the hill. So it is really how you always balance books, that somehow things will get better in the future. But because, particularly the gentlemen who were sitting here, it is not in their culture to come in here and say, ''We don't know the answer because expenses are going this way and resources are going up or down; resources are going down and expenses are going up, and these two lines will never come together.''—they really have to find a way to bring it together. That is just the nature of the system, I think, any long-term budgeting system.

    I think what the admiral said about bringing in the life cycle component, though, so that there is an awareness that you can do things in the current year that will forestall some of those costs by doing better planning, better programming, bringing the facility mission, all those things that we talked about in the report, that whole strategic approach, so you are not always looking to the future to balance today's books—that is perhaps not a good answer, but I think it is the realistic one that certainly the gentlemen who were have to deal with all the time.
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    Mr. HEFLEY. I think it is called the Ronald Reagan syndrome. We keep dreaming that Ronald Reagan is going to come back and we are going to have a buildup of defense. And I have often thought how I wish that I had been here during the Ronald Reagan years, when we were having a buildup, instead of us having to constantly deal with the drawdown here, that makes it very tough. Because during that buildup, many of the things facilities-wise were still left unattended to, even though a lot more money went into defense.

    In military family housing maintenance funds are identified by line item and authorized and appropriated as part of the MILCON program. As you point out in the study, general maintenance dollars are rolled up into larger accounts and my observation, they seem to be more vulnerable by both their separation from the congressional oversight of new construction requirements and the fact that they are merged into these larger accounts.

    Would combining the RPM funds with new construction similar to family housing make sense? You touched on that just briefly.

    Mr. BUFFINGTON. Yes, you know, as a facilities manager in the field, sure, I would love to see those things fenced and I would love to see how much I am going to get each year at the start of the year. Then I can really do some great planning and I can really get the money spent in a sensible manner.

    If we can't do that—and, again, they pointed out the reason why, as a commanding officer of a base really needing to be able to have flexibility of how you want to spend your money, because that ops money always comes up short. Who knows when we are going to have a deal where we have got to haul a bunch of Cubans into Guantanimo Bay, you know, and set that up? Well, that had to come out of our operating hide on that side of things.
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    So you can say you are going to fence some money, but unless money comes from somewhere else, you know, or from for emergencies like that Congress automatically just sets aside some money, it makes it very difficult.

    I would just like to see a little better—I think that oversight committee that we are talking about, if we can get a senior oversight committee set up somehow to look and make all the Federal agency directors accountable for maintenance to their facilities, and so they will have it budgeted each year and say, yes, this is what we are going to do this year, and this is our long range plans—but you won't hardly find any long range plans anywhere that takes into account maintenance.

    Mr. HEFLEY. Yes, well, you place a great deal of weight in the study on training of staff. How, in your judgment, have outsourcing of civil engineering and public works functions affected the ability of the military services to manage the facilities base?

    Mr. BUFFINGTON. Well, outsourcing actually makes it a little easier because then you just go to whoever you've got the contract with and say, hey, you know, this isn't meeting the standards which we agreed with. So, from that standpoint, outsourcing can be very effective in some areas.

    I am not against outsourcing at all, but then I am not a rabid fan of it, either, on the other side. I think there is a happy balance in between, and I feel like right now we are off and running on, hey, outsource everything; that is the key to it. And that is not the key to it. There has got to be a sensible balance there.
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    Mr. HEFLEY. Yes. Yes, I agree with that.

    The study makes recommendation that the program managers be held more accountable for the stewardship of Federal assets under their control. As a former uniformed officer, how would you make the panelists who just preceded you here more accountable?

    Mr. BUFFINGTON. Well, I would not make that panel, because that panel is too low down in the pecking order, to make a long story short. I am talking about the really high-level people that need to have more accountability for Federal facilities. These poor guys there are just trying to get some money to do the jobs, but we have to have some really high-level accountability of facilities. We have got to have major people, the major directors and things of these various agencies, sitting in rooms together and determining, hey, we need to do this and we need to do that, and we need to have this maintenance plan. We need to get some high-level involvement.

    Mr. HEFLEY. Boy, because of your background, you know the problem of getting that bureaucracy over there to change. It is like the Navy always says about turning an aircraft carrier, you do it very slowly and with some difficulty.

    Mr. BUFFINGTON. I realize that it is going to be a long-term thing. Just like we put in here on this how the budgeting should be lined out and what we suggest for the budget, I realize that you could put all the comptrollers together from these various agencies, and, boy, if you did a really good job maybe in 20 years you could turn this thing just a little bit, get them kind of thinking in the same terms. But it is going to be a long, slow process, but it is one we should start, I believe.
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    Mr. HEFLEY. Well, I think you are right. Can most of the problems be addressed by DOD administrative changes? Do we need to do some legislative changes?

    Mr. BUFFINGTON. I think probably some legislative changes would help in some areas. Like I say, perhaps the Federal budget should run over a three-year period or a four-year period, or whatever the case might be. We need to be able to—like some of these bases we are closing, and you guys have done a lot of that. You have helped, you know, like giving them to the homeless. You have come up with the act now that allows them to go ahead and get past that. There are ways that we could turn these things over a whole lot faster, if we just get into it.

    Mr. HEFLEY. Gene, is there anything else?

    Mr. TAYLOR. I haven't had a chance to read the book, but I am going to.

    Mr. BUFFINGTON. We sure do appreciate everything you do for us down in Mississippi there, Mr. Taylor.

    Mr. TAYLOR. Come see us.

    Mr. BUFFINGTON. SeaBees, you take darn good care of our SeaBees down there, as well as our Air Force and everybody, and we do appreciate it.

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    Mr. TAYLOR. Admiral, could I just throw one thing in? In very recent history we have given up our installations in the Philippines; in the next few months we will give up the last of our installations in Panama. We gave up the island yesterday.

    These are all things we spent a lot of money on. As we speak, at least last I checked, we are spending about $5 million each year to rent an old, beat-up hotel that serves as our hospital in Naples. We have been paying them $4 to $5 million a year forever.

    Did your panel give any thought to more of our structures, particularly for the Navy, being built that float, that we could take with us, should our host country invite us to leave? And in the case of Naples, I realize it is extremely high-priced real estate, extremely scarce real estate, but a heck of a natural hog. Why wouldn't the Navy want a floating hospital? That way, if there is a contingency somewhere else in the world that has a greater need, we can take it there?

    Mr. BUFFINGTON. Well, we do have some floating hospitals. Of course, we don't have anything of the grand scale you are talking about. You know, you are into what Admiral Owens was pushing for many years, having these off bases that we could take around and move, which is very expensive, but I also think is a very good idea.

    All those things you hit on are real close home to me, particularly Naples over there. You know, we are building new facilities up on the north, far north, out in the country there. But, boy, did we go through a process of several years being able to go do that, and get ourselves out of that volcano area down there in that old hospital, which is definitely going to fall down when they have a really big earthquake.
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    Mr. TAYLOR. I had a niece born there two decades ago, so no telling how long we have been leasing it, but at least that long.

    Mr. BUFFINGTON. Oh, yes, and just paying through the nose, you are absolutely right, but it is a very good point.

    Mr. TAYLOR. Were you all able to look into that at all?

    Mr. BUFFINGTON. We didn't look into any of that; no, sir, we didn't. But you certainly make a good point there.

    Mr. TAYLOR. Thank you, Mr. Chairman.

    Mr. BUFFINGTON. I spent four years in the Philippines, so I certainly appreciate all the problems there, too.

    Mr. HEFLEY. Mr. Taylor has raised this issue before, and it is an intriguing idea really, particularly when you think of Naples, because we have had tremendous security problems, not just the earthquake, although that is part of them, the idea that you are in this volcanic area where volcanos can go off, earthquakes, whatever, but also from terrorists and that kind of thing. After Gene brought this up, I thought a good deal about it—that you have one of these incidents where you either have got a terrorist threat or you got a natural disaster about to happen or something, and if you could set that thing to sea to protect it—because what we have got now, it looks to me like is very vulnerable, at least the old stuff. We are doing some building of new, but the old stuff is very vulnerable to attack if, anyone wanted to do it.
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    Mr. BUFFINGTON. It really is. The new stuff up at Cappaccino is pretty darn good. Then, of course, we are putting up living facilities and schools and things up on the far north up there, and that is pretty well getting into operation. Boy, we have needed that for so long.

    But, boy, I will tell you, that is a very good point, Mr. Taylor.

    Mr. TAYLOR. Well, Admiral, the last thing, not to belabor it, but I think part of our failure of the talks in Panama is that, not all of them, but certainly the greedier of the politicians sit back there and, you know, they are licking their chops, waiting to get to their hands on those buildings. Well, if we were in a position to take the buildings with us, at least some of things, and it is one of those things we get for—

    Mr. BUFFINGTON. It is a very good point, yes, sir.

    Mr. HEFLEY. Vic, do you have anything else?

    Mr. SNYDER. No, I don't. I was looking through this book here. It is a tough customer here, I think. I appreciate all the work you all have put into this.

    Mr. BUFFINGTON. I think Lynda and Rich here played the major role in putting this thing together. Eric and I just sat and argued a lot, and then they made some sense out of what we were trying to say.

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    Mr. SNYDER. Okay. Thank you, Mr. Chairman.

    Mr. HEFLEY. Well, you have done a monumental job, and you are right, sometimes the implementation of the things like this you don't see immediately, but you find people going back and pulling this book out. I bet that's what will happen; you will pull it out. They will put it out time and time again and implement little bits of it as we go along, and maybe the good parts of it can be—

    Mr. BUFFINGTON. We are really enthused, in that a lot of people are asking for copies of this thing now, and Eric was just over to the Department of Indian Affairs the other day, and they were saying, well, this is the bible now, and he said, well, I helped write, you know. Then DOD and several different agencies have asked for additional copies, and apparently, it is getting some pretty wide distribution.

    Mr. HEFLEY. Well, you made a good contribution to the discussion with it, and I appreciate all of your input into it.

    If there are no other questions, the committee stands adjourned, with our thanks. We appreciate your coming back.

    Mr. BUFFINGTON. Thank you very much, sir. We appreciate it.

    [Whereupon, at 4.07 p.m., the subcommittee was adjourned.]

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March 16, 1999
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