C. OTHER IMPROVEMENTS IN REAL PROPERTY, 1. DESIGN STANDARDS AND CRITERIA, AND CONSTRUCTION SURVEILLANCE The comprehensive system of Department of Defense instructions, which establishes the design standards and criteria for military construction, has been under review during the past year for necessary updating and additions. The extensive criteria for providing welfare and recreational facilities have been completely revised and reissued. A worldwide survey of military construction indicated a need for certain new criteria, and these are presently in various stages of development. Surveillance of construction costs and DOD criteria is being carried on through our standard cost reporting procedures, and through periodic organized inspection of typical construction in the field. 2. MANAGEMENT OF MINOR CONSTRUCTION Revised procedures have been established to more effectively manage the minor construction program. In this regard, we have issued improved criteria for making determinations concerning the scope, urgency, and cost of projects to be accomplished under this program. 3. AREA RESPONSIBILITY FOR DESIGN AND CONSTRUCTION During the past year, a comprehensive study of the worldwide construction activities of the military departments was made for the purpose of increasing efficiency of operation and to eliminate duplication of staffs whenever possible. Areas of single construction responsibility have already been assigned in the Far East, and studies for assignments in the remaining areas of the world have been completed, with clarification and unification of assignments to be made early this calendar year. 4. REAL PROPERTY MAINTENANCE AND OPERATION During the past year, we have given increased emphasis to the overall program of maintenance and operation of real property facilities. An outstanding firm of management consultants was employed to review our procedures in this area with the object of effecting improvements and economies. To implement the recommendations of the consulting firm and to improve our management, we have established a separate real property maintenance staff. This staff will establish appropriate standards and criteria for improved management methods and systems in the operation and maintenance of real property facilities for optimum efficiency. In fiscal year 1963, reductions in cost accomplished through management improvements in this area amounted to $23 million, and are expected to increase to $38 million annually in future years. These savings will be used to offset rising costs of labor and materials and to reduce the backlog of essential maintenance and repair. C. OTHER IMPROVEMENTS IN REAL PROPERTY, ETC.-Continued 5. IMPROVED BASE UTILIZATION This area of our cost reduction program has been intensified during the past year in order that we may continue to reduce expenditures by the closure of unneeded facilities. As you know, since 1961 we have been engaged in a continuous systematic, and detailed evaluation of all our military installations. This is to insure that we operate only the minimum number of our most modern and efficient bases in order to achieve maximum savings without impairing our required military capabilities. Rapid technological changes and improved management procedures have major effects on our weapons systems and forces. These changes often reduce our base complex requirement or cause significant realinements. In order to further intensify our efforts in achieving improved base utilization, President Johnson recently directed Secretary McNamara to establish a Board of Defense officials to oversee and coordinate the studies of our military installation requirements. In the past 3 years we have initiated numerous actions for improved base utilization. These actions, when completed, will effect annual savings of $551 million, release some 696,000 acres of land as excess to Defense needs, and reduce our requirements for military and civilian positions by 81,600 spaces. We recognize the adverse economic impact that some of these actions have on employees and communities. Accordingly, we have instituted vigorous programs to assist employees and communities affected. Every employee whose job is eliminated will be offered another job opportunity. Every effort is being made to help communities find new payrolls and uses for the excess Defense properties. My associates and I are now ready, Mr. Chairman, to answer the committee's questions regarding our proposed military construction program and how we are attempting to carry out our stewardship for conducting a sound construction, housing, and real property management program. Mr. MORRIS. We believe this emergency unfunded authorization is a very important management tool which permits us to proceed with such things as the Cuban water problem of recent date, the buildup of Johnston Island, and the NIKE X Kwajalein project, so it is very valuable management flexibility during the course of the fiscal year. In the miltary family housing area, as I have emphasized, out of the $711 million, only $223 million is actually for the construction of new housing as such, the biggest remaining items being operation and maintenance of $294 million and debt payment of $173 million. We have been very pleased, Mr. Chairman, with the existence of a single appropriation for the management of this total fund. It permits us much better to budget for and control expenditures of the entire housing program, which is so large and vital to us. Senator STENNIS. You might develop the high points of the use of this special fund program. The members will remember the background. We had the Wherry program and the Capehart program and now we are on appropriated funds. This concerns the management, the upkeep and the payment on the old Wherry buildings and also the Capehart buildings, is that correct? Mr. MORRIS. That is correct, sir. Senator STENNIS. All right, now give us the high points of it? Mr. MORRIS. Through this device we are able to program and budget within the departments, and totally for the Department of Defense, all moneys related to the acquisition and furnishing of housing to the military services, including such housing as might be leased. Projects for each year are started in the planning phase as early as possible, and our present schedule calls for placing under contract all authorized projects within 7 months from the date of the appropriation bill. This is a significant improvement over past practice. We have recently been able to standardize upon a selected group of architectural designs, which not only will save architectural fees but assure the best quality and the most suitable designs for use by all departments under various geographic and other considerations. We have been able through the application of the cost accounting program in the past year to establish yardsticks as to acceptable levels of cost for various ages and types of housing, and through this device our savings this year will amount to some $6 million in operating costs. We expect those savings to rise to about $25 million in the next 2 years. So this is producing better quality housing at lower cost, we believe, for all members of the armed services. Senator STENNIS. As I understand it, it is through this fund that you replace a refrigerator in a house that is furnished with a refrigerator. Would you replace that refrigerator through this fund? Mr. MORRIS. Any requirements for the furnishing and procurement of equipment; yes, sir. Senator STENNIS. I was talking about equipment. Mr. MORRIS. Yes, sir. Senator STENNIS. And if the roof should blow off the house, repair would come out of this fund? Mr. MORRIS. Yes, sir. This fund covers all costs associated with housing. Senator STENNIS. And you were with the Department of Defense when this plan was inaugurated, were you not? Mr. MORRIS. I was, sir. Senator STENNIS. And it has been working 2 years. Mr. MORRIS. Yes, sir. Senator STENNIS. What is your estimate of it now, a success or failure? Mr. MORRIS. My estimate, sir, is it is proving to be very successful. We will continue to improve upon it each year because we now have information that we can study and use for management purposes. Senator STENNIS. Do you have a figure in mind as to the cost per unit for this maintenance and operations as far as it goes in your plan? Mr. MORRIS. Mr. Chairman, we have precise breakdowns now for each base and each class of housing. They necessarily range over a wide spectrum, depending upon age, location, size, and so on. We can furnish you a breakdown when Mr. Reed makes the detailed presentation on housing. Senator STENNIS. I wish you would, and then give us an overall average. We can't remember all those figures, but we might remember what the average is. Mr. MORRIS. The overall average, sir, is $68 per house per month. That includes all houses in the inventory, some 340,000 units. It is a fairly meaningless figure as an overall figure because of the widely divergent ages, sizes, conditions, and locations of our housing. Hence we have to break the figure down to actual base level where we can better manage it. Senator STENNIS. I think it is well to break it down. All right, proceed. Mr. MORRIS. Thank you, sir. In other respects as to the management of our construction and military facilities program, we wanted to call the committee's attention to progress made in several other areas. One is that of improving upon design standards and criteria and the increased surveillance now being given construction on a Department of Defense-wide basis. We have made improvements in the management of minor construction. We have surveyed the designation of departments to have area of responsibility for design and construction in various parts of the world, with the objective of having single responsibility established so far as possible in any one area. We have improved upon our real property maintenance and operation during the past year, deriving savings of some $23 million through better base level operating and maintenance practices. We expect these savings also to increase in future years to a level of about $38 million. Improved base utilization has been one of our most continuous efforts over the past 3 years, and as a result of the studies of the use of our bases, and endeavoring to consolidate our activities on the smallest number of our hardest core long-term bases, it has been possible to effect economies by reducing or closing unneeded activities. When completed these activities will produce annual savings, since 1961, of some $551 million and release some 696,000 acres of land as excess to defense needs. This also means release for other assignments, or actual reductions, of over 81,000 spaces, military and civilian. We recognize that these actions have an adverse economic impact on the communities and employees concerned. Accordingly we have instituted vigorous programs to assist the employees affected. Every employee whose job is eliminated through such an action will be offered another job opportunity, and every effort is being made to help the communities find new payrolls and uses for these excess defense properties. Mr. Chairman, my associates and I would now be prepared to answer any questions that the committee might have on our program. Senator STENNIS. Mr. Secretary, additional questions may arise later but your statement gives us an overall review. We may have to ask you to come back. Let's see if there are any questions now. Senator Cannon, do you have some question? Senator CANNON. No questions at this time. Senator STENNIS. Senator Young. Senator YOUNG. Mr. Secretary, I wonder if the occupants of these houses are encouraged, or even instructed to bear a part of the maintenance and do some work in keeping up livable quarters. Mr. MORRIS. Tenant maintenance is one of the practices which has been greatly improved upon in the past several years, sir, and that is part of the source of savings of $6 million that I did refer to. Senator YOUNG. It seems to me the cost of maintenance is quite high, and I should think the tenants themselves would be very strongly encouraged to do some work in keeping their homes in livable condition. Are they? Mr. MORRIS. They are, sir. Senator YOUNG. Thank you. Senator STENNIS. I agree with Senator Young. It seems to me that the cost and maintenance of these houses is very high, even though there are some that necessarily would be quite expensive due to location. I am told, Senator, that there is a great variation between care that the different occupants of these houses give. Some you know just don't take any care of them at all and others take the best possible care. That is one of the explanations I suppose. Mr. Morris, if you don't have anything else Senator CANNON. Mr. Chairman, I have one or two questions. If these have been gone into will you just call it to my attention? Mr. STENNIS. That will be all right of course. Generally we put the figures in the record, Senator, but any questions you have are certainly in order. Senator CANNON. Mr. Secretary, what is the status of the rental guarantee program now? Did you go into that in detail in your statement? Mr. MORRIS. I touched on it only briefly, sir. Mr. Reed, my housing deputy, can summarize the overall status of the program. Mr. REED. Senator, we have just, as you know, gotten new authority last year. We are currently beginning to solicit proposals for Rota, Spain, as our first project. We are optimistic-we sent a team over there that we can provide housing in Spain with the new rental guarantee situation. Senator CANNON. What is the status on the rental guarantee units that we have had in the past? For example, we had as I recall a rather unfortunate experience in France here a few years ago. Mr. REED. I could submit data for the record on the individual cases. Overall, the experience has not been too bad, sir. We had both the French and Moroccan situation which you are aware of, but I would say overall this is an economical way of providing housing. Senator CANNON. Would you provide a chart showing the current status of our guarantee housing program up to date for the record? Mr. REED. Yes, sir. (This information furnished to the committee but not being printed.) Senator CANNON. On page 11 of your statement, Mr. Secretary, you show this debt payment breakdown. What does that debt payment represent? Mr. MORRIS. This is the payment, sir, of our mortgage debt for the Capehart and other programs. Senator CANNON. And represents all of the acquisitions under the Capehart program and when you bought under the Wherry program! |