some existing Air Force houses. Further, we propose authority to build two representational quarters for specific senior billets at a cost in excess of the current statutory limit for general officers' quarters. CONSTRUCTION AND REAL PROPERTY MANAGEMENT

In connection with our request for nearly $2 billion of authorization in this bill, I would like to report to you briefly on our stewardship of real property facilities. While the acquisition of the real property holdings of the Department of Defense totals about $37 billion, the value of the defense plant at today's costs is much greater. The management of construction, the utilization of installations, and the operation and maintenance of this property requires careful planning and the utmost in concerted effort throughout the defense establishment to insure the best use of resources available and the maximum in efficiency and economy. I would like to highlight for you some areas of activity in which currently we are devoting special attention.

UTILIZATION OF REAL ESTATE

We are continuing the program, which was started in 1961, to reduce defense expenditures by closing unnecessary military installations, and obtaining the maximum economic utilization of our most modern and efficient bases.

Under this program, bases which have outlived their usefulness, are in poor condition, and require excessive costs to operate and maintain, are discontinued. Facilities that are surplus to peacetime and mobilization needs are excessed. Installations operating well below capacity are closed, and their activities consolidated at the best and most efficient locations in order to reduce expenditures. Continuous efforts are made to find and correct activities where there may be costly work duplications, unjustified overhead expenses, or the use of excessive space, personnel, or equipment.

Because of today's military requirements, our forces occupy thousands of separate installations throughout the world. Constant changes are necessary to keep this system of bases in proper balance to support the continuing advances in weapons technology, the realinements of troops and activities, and the numerous other day-to-day revisions needed to accommodate the modernization and improvement of our forces. For these reasons, a continuing program for the review of our numerous military bases is necessary to assure that they are operated in a businesslike manner.

Since this program for the closure of excess installations began in 1961, a total of 669 separate closure or reduction actions have been taken. When completed, these 669 actions will result in the release of 1,480,267 acres of excess real estate, the elimination of 149,881 excess jobs, and annual operating savings of $1,038 million.

In all of our decisions affecting military bases, the paramount factor is that the requirements of our military forces in both peacetime and mobilization must be satisfied. In all instances, base closure or reductions are made only where such changes are necessary to improve our overall defense effectiveness and to maintain our full military readiness and force levels at the lowest possible cost. Our Nation's military strength is not diminished in any way by the closure of excess

bases, and their termination is necessary in order that funds and manpower devoted to defense are not expanded on activities that are no longer required.

We regret the dislocations and inconveniences which unavoidably result from these necessary base changes. However, in all cases base closures involve an orderly phaseout of activities over periods of several years in order to minimize the impact on the communities involved, and to provide employees the maximum possible opportunities for relocation. In order to reduce the adverse economic impact resulting from major installation closures, we have instituted vigorous programs to assist employees and communities affected. Every effort is being made to locate new job opportunities for the displaced employees, and to help communities find new payrolls and uses for the excess defense properties. We intend to do our utmost in these efforts, and our results to date have been encouraging.

DESIGN STANDARDS

As you know, a comprehensive system of Department of Defense instructions which establishes uniform standards and criteria for military construction is currently in effect. A detailed survey of representative military construction during the past year has indicated a need for certain new criteria, and, as a result, further instructions have been prepared covering site planning and outside utilities, interior mechanical and electrical systems, and lighting. In all of these issuances, greater emphasis has been placed on details of construction, finishes, and equipment so as to reduce future maintenance and repair costs of our facilities. Criteria for barracks and bachelor officers' quarters are currently under study for the purpose of creating improved living conditions for military personnel.

As a consequence of experience gained at Guam with Typhoon Karen, uniform design criteria have been developed and issued by the three military departments for use in areas subject to hurricanes and typhoons to reduce the damage to facilities to a practical minimum. Also, uniform revised design criteria are being prepared for issuance on construction in earthquake zones. These revisions were occasioned by experience gained in the earthquake in Alaska. An improved method of determining construction cost indices for oversea areas has also been devised to improve our cost guidance in such areas. veillance of construction costs and conformity with DOD criteria is being carried on through our standardized cost reporting procedures, and through periodic organized inspections of typical construction in the field.

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In the past, each of the military departments has utilized standard designs for repetitive-type facilities which conform to DOD construction criteria, but which nevertheless reflect the individual requirements of the using department. As a fresh departure, we are now developing a series of standard Department of Defense definitive plans for repetitive facilities which will not only assure greater comparability between the using services, but which will also achieve improved design. Such definitives have already been prepared for bachelor officers' quarters, enlisted dining facilities, family housing and various community facilities, and triservice designs for a number of additional facilities are now under development.

MAINTENANCE AND OPERATION OF REAL PROPERTY

Problems associated with the effective management of the maintenance and operation of real property facilities have received increasing emphasis during the past year, hilghlighted by a worldwide conference held at Warrenton, Va., September 23-25, and attended by 13 conferees representing industry, the Office of the Secretary of Defense, the military departments and other Government agencies. Our staff in conjunction with the military departments is concentrating on the major targets of the basic program. Industrial engineering techniques such as work measurement and performance standards are already being applied so as to receive greater benefits from the maintenance dollar. Other areas such as contract maintenance and manning are being carefully studied for possible economies. In 1964, reductions in cost accomplished through management improvements amounted to $49 million. Savings have resulted from more efficient use of manpower, renegotiations of electrical contracts, reorganization and consolidation of maintenance organizations and other related actions. A new cost accounting system placed into effect for fiscal year 1964 permits comparison of maintenance and operating costs between military departments and is expected to result in more effective management of resources.

Mr. Chairman, I appreciate the opportunity to appear before you and the members of your committee in support of the construction needs of the Department of Defense. With me are by deputies for properties and installations and for family housing. We are prepared at this point to respond to questions that you or the members of your committee may wish to direct to our attention.

Senator STENNIS. All right, Mr. Sheridan. On behalf of the committee as well as the chairman, I want to thank you for your statement. There is a lot of good in it. It represents to the committee the position and the philosophy as well as the dollar figures of the Department of Defense.

We are going to have questions now, but I do not believe it will be necessary to ask extensive questions here because we propose as we always do to take up each major item or the line items in the bill. for each of the services, and those under the Department of Defense directly, and consider them on their merits.

I want to repeat for those who have come in that Mr. Sheridan represents a department of the Department of Defense that was really created by an amendment that came out of the Senate Armed Services Committee providing for an overall surveillance of military construction, by the Department of Defense and they have done a lot to unify. to a degree specifications in all of the different services, and they have saved a lot of money. I remember that the unit cost of ware houses varied from one service to another as much as $1 to $1.50 01 $2 at one time, and that was ironed out as well as a great number of other things.

I think it has been very helpful in saving money and strengthing the whole structure of military construction.

Mr. Sheridan has been with this for a good number of years and has done an outstanding job I think.

Do we some questions of Mr. Sheridan? We will proceed, as soor as we are through with Mr. Sheridan, to the Air Force.

Senator Saltonstall, do you have any questions of Mr. Sheridan? Senator SALTONSTALL. I think I have only two or three.

Mr. Sheridan, does the Department feel that you should go forward with 12,500 new housing units as opposed to the 7,500 this committee recommended last year, if my memory is correct, although in conference it was put up to 10,000. The Department still feels housing is needed at a greater rate than that?

Mr. SHERIDAN. There is no question about that, and Mr. Reed, who is Deputy Assistant Secretary for Family Housing, would probably like to add to my answer.

Senator STENNIS. We will take that up with Mr. Reed, Senator, when we get to that item on the agenda. If there is anything Mr. Sheridan wants to say

Senator SALTONSTALL. I just wanted to try to bring out, you still feel, in spite of the efforts of Congress last year, that you should go forward at a faster rate than Congress authorized.

Mr. SHERIDAN. Very definitely.

Mr. REED. Definitely.

Senator SALTONSTALL. In the same way, on page 12 of your statement, you bring up more contentious subjects, if I may call them contentious. The Defense Intelligence Agency, the National Security Agency facilities, and the Advance Research Projects Agency. Now, we went into them very carefully last year and the year before, and the Congress decided not to authorize them. Does the Department feel very strongly that those are still musts? In our opinion, they were not thoroughly justified in the past years.

Mr. SHERIDAN. I can agree with you that the Defense Intelligence Agency project was not properly justified because we did not get the authorization, Senator Saltonstall.

Senator SALTONSTALL. That is a very come-hither statement. Can you do a better job this year?

Mr. SHERIDAN. Since we were up here last year, we have investigated 21 possible sites in the Washington area. The determination having been made, of course, that the very essence of the Defense Intelligence Agency decrees that it has to be close to the White House and to the Pentagon; as close as possible.

We looked at Government-owned land and Government-controlled land, in an area from Quantico out to Reston, a new development in Fairfax County, north to the CIA area, and the determination was made that the ideal site-both from an operational point of view for the Defense Intelligence Agency and from a construction point of view-was the present site at Glebe Road and Route 50.

Senator SALTONSTALL. That is Arlington Hall.

Mr. SHERIDAN. The Arlington Hall site.

Now, we had approval, as I mentioned, of the National Planning Commission, however we still have resistance. We have people in Arlington County that very sincerely want to turn this property over to the State for the operation of a school, which would be an extension, as I understand it, of the University of Virginia.

Senator SALTONSTALL. So the locality still resists this proposal.
Mr. SHERIDAN. Part of the locality does.

Senator STENNIS. They will speak for themselves I suppose, Mr. Sheridan.

Mr. SHERIDAN. They will. But officially Arlington County accepts this site, if a site in the Pentagon Complex is not possible.

Senator STENNIS. The Board?

Mr. SHERIDAN. There are citizen groups that I am sure will want to appear before your committee. They have indicated to us that they do.

Senator SALTONSTALL. I do not want to go into detail now. The chairman wants to move ahead. But from the point of view of the Secretary of Defense and the Department, the Department still insists or still believes that these three new projects which we have resisted now for several years, should go forward.

Mr. SHERIDAN. That is correct, sir, with respect to the DIA facility. The other two projects, however, are being proposed for the first time this year.

Senator any one of them?

SALTONSTALL. Do you put any preference on priority on Mr. SHERIDAN. We have no priority preference on the three, because they are not comparable. You cannot, Senator Saltonstall, make a decision as to whether the intelligence community should be taken care of quicker than the National Security Agency or the research activities of the Defense Advanced Research Projects Agency. They are all for three different reasons, so we would support each one 100 percent, and at the time that the committee gets to that portion of the bill, we would like to make presentations to you in detail, which we think will be convincing.

Mr. SALTONSTALL. Just one other question, Mr. Sheridan.

On page 2 you say that the requests of the military departments and Defense agencies were reduced by $700 million, or 37 percent of the total requested. Have you detailed any breakdown of that $700 million, whether it was in the form of new facilities or a reduction of the facilities that you have already recommended?

Mr. SHERIDAN. Well, it is a combination of both. It is a reduction in scope in some cases, but the major portion of that $700 million is the deferral of projects that were submitted by the departments. We came into agreement with each department that some projects were not high enough on their own priority lists to justify putting them in the fiscal year 1966 program.

Senator SALTONSTALL. So that for this committee, if we wanted a list of the projects, which I do not want to ask for now-you have a list of the projects that were deferred-that amounts to $700 million.

Mr. SHERIDAN. We do not have a list, but we can obtain a list and give it to this committee. It is very simple to do. We can go back to the original submittals and take out the drop-outs and submit it to the committee if you insist on this.

Senator SALTONSTALL. Were those drop-outs the decision of the Defense Department, the Secretary of Defense, with the approval of the services?

Mr. SHERIDAN. Each project that is in this program of $1 million and over was personally considered by the Secretary of Defense. We submitted subject issue papers to him on these projects.

Senator STENNIS. Let me interrupt there if I may, Senator. You say each item in here over $1 million was personally considered by the Secretary of Defense?