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quired to cover the relocation and retraining of personnel, and terminal-leave payments. Another $312 to $4 million will be required for the transfer and re installation of general supplies and equipment items. The remaining cost is that involved in clearing the ammunition stores. Our studies show the 108,000 tons of ammunition now on hand at Raritan could be evacuated during the next 14 months at a cost of less than $4 million if it were necessary to evacuate these stores immediately. However, our plans do not contemplate the necessity of a rapid relocation of this ammunition since the GSA has stated that it is practical to proceed with the search for prospective users of the facilities prior to the movement of the ammunition. Thus we may find it desirable to defer the evacuation of ammunition for 5 or more years, during which time a portion of the ammunition inventory would be depleted through normal issue.

2. Savings.--An important final test of the wisdom of inactivating Raritan, or any one of the four depots, is the potential for valid savings of a recurring nature. As previously stated these savings have been estimated at approximately $9.6 million per year, after the full phaseout has been accomplished. Thus, eren the maximum closing costs would be paid out of first year savings after inactivation, and the full amount of these savings would accrue to the Government every year thereafter.

Most of these savings will occur in reduced payroll costs. Our studies reveal that after the Raritan workload has been redistributed among the remaining depots, the total staffing required will be reduced by approximately 1,200 to 1,400 positions. The reasons why such savings can be made are as follows:

(a) The Raritan workload is not being transferred intact to a single location, but rather is being redistributed to several other locations, no one of which is operating at full capacity today.

(6) As a result, the rebalancing of the workload can be planned so that each of these locations receives that portion of the Raritan mission which it can absorb with its present work force or with only a moderate increase in work force.

(c) The largest single savings will, of course, be accomplished in the overhead activities such as headquarters staff, motor pool, fire department, guard force, post supply, etc. In these areas, net savings of two-thirds or more of

present positions is believed attainable. In considering whether there might be other productive uses for the Raritan facilities, particular study has been given to the national activities which employ 694 personnel, and which are not directly related to the supply and maintenance mission of Raritan. Our analysis again reveals that these functions should be redistributed among several ordnance depots in the interest of achieving a more logical assignment of this type of work with a reduction in operating expense.

CONCLUSION

The studies conducted by Ordnance technicians, and verified by top military and civilian officials during the past 2 years, have confirmed the soundness of shrinking the number of multimission depots in the North Central and Northeastern States during the next 3 to 4 years. Because it lacks the capacity and safety distance factors available at the other three multimission depots, Raritan has been found, on balance, to be the most logical of the installations to inactivate.

The President and the Secretary of Defense have directed that the most liberal policies be adopted in assisting present employees to find other employment and, if it is possible, to offer employment opportunities to each individual who wishes to remain in the Defense Department. The President has also directed that the resources of the Federal Government be made available to work with interested community leaders to develop the most constructive plan for the future use of the facilities. Since the plan to inactivate Raritan has been announced several years in advance of its completion, ample time is ava

which to work out the readjustments involved without haste, and with consideration of the best interests of all concerned.

DISCUSSION OF PLANS TO INACTIVATE ROSSFORD ORDNANCE DEPOT AS PART OF A

TOTAL PROGRAM TO REDUCE DEPOT OPERATING COSTS IN THE NORTH CENTRAL AND NORTHEASTERN STATES

GENERAL

The Secretary of Defense and other defense officials are deeply concerned that an understanding of the base inactivation program has not been obtained with respect to plans announced covering the Rossford Ordnance Depot.

It is the purpose of this discussion to place our plans in perspective; to provide the principal facts on the basis of which the decision has been made to inactivate Rossford; and to summarize the long-term objectives and benefits being sought. Why is it necessary to shrink the size of the ordnance depot system in the North Central and Northeastern States?

Today there are 10 ordnance depots located in this area. Of these, six are specialized or limited-purpose depots, while the remaining four are multimission depots—that is, they are capable of performing the storage and maintenance of general ordnance supplies and ammunition.

[blocks in formation]

Six specialized or limited pur-
pose depots:

Black Hills, Igloo, S. Dak.
Blue Grass, Richmond,

Ky---
Erie, Port Clinton, Ohio..
Rossford, Toledo, Ohio.
Seneca, Romulus, N.Y.
Sioux, Sidney, Nebr..

1, 951

27.0
20.4
18.0
44.9
37.2

678
1,899
1, 654

822
735

4.7
12.3
14.1
6.8
5. 3

14,599
1, 395

882
10, 696
19, 771

1, 119 2, 419 3, 181 2, 575 2, 339

868 1,683

Total.
Multimission depots..

182. 2
208. 0

6, 336
11, 951

47.5
90.9

68, 438
62,887

12, 686
12, 908

6, 236
6,893

Total.

390.2

18, 287

138. 4

131, 325

25, 594

13, 129

In summary, we have spent almost four-tenths of a billion dollars to construct these facilities. They are located on 131,000 acres of land and contain almost 39 million square feet of covered storage space of all types. Today these depots employ 18,000 personnel and cost $138 million annually to operate.

As shown in the table, Rossford is one of the six limited-purpose depots, with the highest annual operating cost while standing second in size of employment. It is the smallest in terms of acquisition value and acreage. Intensive studies have been made of the six special purpose depots, and the four multimission depots, over the past 2 years, to project their long-term workload and utilization. On many factors considered in these studies, Rossford Ordnance Depot rates among the best, particularly in respect to:

Transportation to major customers.
Quality of construction in the shops and warehouses.
Suitability of administration and operations buildings.
Layout, utility, and construction of service areas.

Manpower potential. In the face of these favorable characteristics, it may be difficult to understand how a decision to inactivate this installation has been reached. The reasons, simply stated, are as follows:

First, our requirements for the future indicate that only 60 percent of the general storage capacity, and 20 percent or less of the conventional maintenance and repair capacity, now available in the North Central and Northeastern States are required. This sharp decline in our requirements, which has been under

75318 061-14

way for several years, results from a number of trends. One is that we have cleared out the large stocks left over from World War II and Korea and have developed ways of operating with smaller inventories. In fact, during the past 5 years Army inventories have decreased by $4 billion. At the same time some of our conventional weapons are phasing out, leaving an insufficient workload to efficiently utilize existing facilities—a fact which is very apparent to those acquainted with the Rossford facilities. For example, while we now have capacity to repair and overhaul 3,300 tanks and artillery vehicles of all types annually in the depots located in the North Central and Northeastern States, within 4 years we will need only 16 percent of this capacity.

Second, to keep depots operating at marginal levels of productivity is very costly, since a large fixed overhead is required just to keep a depot open, and the productivity of the work force is reduced due to no fault of its own. We are paying premium costs in terms of fixed overhead to maintain large unused conventional maintenance and supply capacities while these workloads are in a sharp decline. Of the six limited-purpose depots, Rossford and Erie have the greatest concentration of these type capacities.

Third, we must, therefore, initiate plans now which, during the next 3 to 4 years, will gradually reduce our costs to an efficient level. We find that this objective can be achieved by reducing the number of limited-purpose depots from the present six to five. (Similar steps are also being taken to reduce excess capacity among the remaining four multimission depots.)

Thus our problem is to choose the one limited-purpose depot with the largest capacities of the types determined to be in excess, and with the least capability to perform the multipurpose missions. In comparing Rossford against these objectives it has been selected to be phased out-not because it is obsolete or because its employees have failed in any way to perform their duties well.

I believe you will be interested in the key factors which were considered in this process of evaluation. Comparison of depots

While Rossford ranks high on a number of quality factors, as discussed earlier, it unfortunately lacks the capacity and acreage of each of the other five depots. This means that were one of the other five to be inactivitated in favor of retaining Rossford, we might find ourselves in the position of having to invest millions of dollars to construct additional facilities during the years ahead, whereas today we have readily available far more than enough capacity in the other depots to meet long-term requirements including mobilization needs. Specifically, the following requirements have entered into our comparisons :

General supply storage.-To meet our mobilization requirements, we need about 9.5 million square feet of covered general storage space and 6.2 million square feet of ammunition storage space in the five limited-purpose depots to be retained. The combination of Erie and the four ammunition depots (Black Hills, Blue Grass, Seneca, and Sioux) meets this objective. To retain Rossford instead of Erie would result in about 2.8 million square feet of excess general storage space.

Ammunition and weapons storage.-Future solid propellent missiles present the problem of handling missiles and components where the propellant cannot be separated during receipt, inspection, storage, and issue. In fact, the Army Ordnance Missile Command has determined that a detached area measuring 2 miles by 3 miles is essential for safety protection purposes. Black Hills, Blue Grass, Seneca, and Sioux all have the necessary land area to meet this requirement. Black Hills is the largest of the four with over 21.000 acres and Seneca is the smallest with over 10,000 acres of land. Rossford with only 882 acres cannot meet the requirement. Although Erie, with only 1,395 acres, cannot receive, store, and issue solid propellent missiles, it is currently assigned the mission of depot maintenance for liquid propellent missiles in support of the Air Defense Command units in the North Central and Northeastern States.

What are the costs and savings being sought?

In order to avoid any misunderstanding as to the costs and savings involved in closing a depot, we believe that an explanation may prove helpful in describing this aspect of our objectives in the North Central and Northeastern States:

1. Costs of inactivation.To close Rossford Ordance Depot will cost approximately $3.7 million in one-time expense. About $2.5 million will be required to cover the relocation and retraining of personnel, and terminal leave payments. Another $2.1 million will be required for the transfer and reinstallation of general supplies and equipment items.

2. Savings.--An important final test of the wisdom of inactivating Rossford is the potential for valid savings of a recurring nature. These savings have been estimated at approximately $5 million per year, after the full phaseout has been accomplished. Thus, even the closing costs would be paid out of first year savings after inactivation, and the full amount of these savings would accrue to the Government every year thereafter.

Most of these savings will occur in reduced payroll costs. Our studies reveal that after the Rossford workload has been redistributed among the remaining depots, the total staffing required will be reduced by approximately 780 positions. The reasons why such savings can be made are as follows:

(a) The Rossford workload is not being transferred intact to a single location, but rather is being redistributed to several other locations, no one of which is operating at full capacity today.

(b) As a result, the rebalancing of the workload can be planned so that each of these locations receives that portion of the Rossford mission which it can absorb with its present work force or with only a moderate increase in work force.

(c) The largest single savings will, of course, be accomplished in the overhead activities such as headquarters staff, motor pool, fire department, guard force, post supply, etc. In these areas, net savings of two-thirds or

more of present positions is believed attainable. In considering whether there might be other productive uses for the Rossford facilities, particular study has been given to the “national activities” which employ about 723 personnel, and which are not directly related to the supply and maintenance mission of Rossford. Our analysis again reveals that these functions should be redistributed among several ordnance depots in the interest of achieving a more logical assignment of this type of work with a reduction in operating expense.

CONCLUSION The studies conducted by ordnance technicians, and verified by top military and civilian officials during the past 2 years, have confirmed the soundness of shrinking the number of limited-purpose depots in the North Central and Northeastern States during the next 3 to 4 years. Because the Rossford capability is that of general storage and maintenance, and, therefore, is excess to Army requirements, and the fact that it does not have so much as a liquid propellent missile capability, it has been found, on balance, to be the most logical of the installations to inactivate.

The President and the Secretary of Defense have directed that the most liberal policies be adopted in assuring continuing employment for present employees. The Department of Army has determined that all employees at Rossford will be offered continuing employment at other ordnance installations either as the result of their transfer of function rights or to fill vacancies. Cost of transportation for employees who accept such offers, and for transportation of their families and household goods, will be paid by the Ordnance Corps. Employees who do not desire to accept employment away from their present location will be assisted in obtaining employment with other local Federal agencies or private industry to the extent possible. The President has also directed that the resources of the Federal Government be made available to work with interested community leaders to develop the most constructive plan for the future use of the facilities. Since the plan to inactivate Rossford has been announced several years in advance of its completion, ample time is available in which to work out the readjustments involved without haste, and with consideration of the best interests of all concerned.

Depots and storage activities inactivated or approved for inactivation since

June 1, 1954

Name

Date

Gross covered

storage space (square feet)

Aberdeen Ordnance Depot, Aberdeen Proving Ground, Md.
Alameda Medical Depot, Alameda, Calif..
Auburn Depot Activity, Auburn, Wash..
Augusta Ordnance Depot, Augusta, Ga.
Baltimore Signal Depot, Baltimore, Md.
Baton Rouge Engineer Depot, Baton Rouge, La.
Belle Mead General Depot, Somerville, N.J.
Boston Storage Activity, Boston, Mass.
Brooklyn Storage Activity, Brooklyn, N.Y.
Carteret Storage Activity, Carteret, N.J.
Casad Engineer Depot, New Haven, Ind..
Charlotte Quartermaster Depot, Charlote, N.C.
Clearfield Dispersed Area, Clearfield, Utah.
Chicago Quartermaster Depot, Chicago, II.
Curtis Bay Storage Activity, Baltimore, Md.
Delaware Storage Activity, Pedricktown, NJ
Frankford Ordnance Depot, Philadelphia, Pa.
Fort Holabird Dispersed Area (SIG), Baltimore, Md.
Holabird Depot Activity, Baltimore, Md..
Hungerpillar Dispersed Area (ORD), Augusta, Ga.
Jefferson ville Quartermaster Depot, Jefferson ville, Ind..
Liberty Hall Dispersed Area (ORD), North Charleston, S.C.
Lima Modification Center, Lima, Ohio.
Lordstown Ordnance Depot, Warren, Ohio,
Marietta Transportation Depot, Marietta, Pa..
Middle River Dispersed Area (SIG), Middle River, Md.
Mira Loma Quartermaster Depot, Mira Loma, Calif.
New Orleans Storage Activity, New Orleans, La.
Ogden Ordnance Depot, Ogden, Utah.
Oakland Storage Activity, Oakland, Calif.
Pasco Engineer Depot, Pasco, Wash..
Pentagon Dispersed Area (AG), Washington, D.C.
San Jacinto Ordnance Depot, Houston, Tex.
St. Louis AG Depot, St. Louis, Mo.
St. Louis Medical Depot, St. Louis, Mo.
San Antonio General Depot, San Antonio, Tex.
Schultz's Farm Dispersed Area (SIG), Baltimore, Md.
Schuylkill Dispersed Area (QM), Schuylkill, Pa.
South Annex Dispersed Area (MED), St. Louis, Mo.
Springfield Ordnance Depot, Springfield, Mass.
Stockton Dispersed Area, Stockton, Calif..
Terre Haute Ordnance Depot, Terre Haute, Ind.
Washington AG Depot, Alexandria, Va..
Watertown Ordnance Depot, Watertown, Mass.
Water vliet Ordnance Depot, Water vliet, N.Y.

Total...

Sept. 30, 1958
June 30, 1955
Dec. 31, 1960
Feb. 28, 1955
Dec. 31, 1954
Apr. 30, 1955
June 30, 1958
Aug. 31, 1957
July 1, 1956
Aug. 24, 1954
June 30, 1955

do.
Aug. 30, 1954
June 30, 1955
Dec. 31, 1957
June 30, 1958
Sept. 1, 1954
Dec. 31, 1954
Mar. 31, 1961
Feb. 28, 1955
Aug. 31, 1958
Nov. -, 1954
Mar 31, 1959
Apr. 1, 1957
Apr. 30, 1955
June 1, 1954
Dec. 31, 1954
Aug. 31, 1957
Jan. 31, 1955
June 30, 1958
June 30, 1955
Dec,

7, 1955
June 30, 1960
Dec. 7, 1955
Dec. 31, 1955
Jan. 30, 1955
May 31, 1956
Dec. 31, 1954
Dec. 31, 1955
Dec. 31, 1954
Nov. 30, 1954
Dec. 31, 1955
Dec. 7, 1955
Dec. 31, 1954
Dec. 31, 1954

438,000

802, 000 2,937, 600

190,000 216,000

988,000 2, 283,000

25,000 14,000

46.000 1, 754,000 1,157,000

180,000 926,000 857,000 610.000 307.000 576,000

17,000 117,000 3,068,000

107,000

495, 000 2, 728,000 1,618,000

412, 000 1, 809,000

55,000 1, 303,000

228, 000 1, 484,000

13,000 415,000 310,000

839,000 2, 436,000

0 167,000 546,000 160,000

751.000 2,019, 000 191, 000

83,000 129,000

35, 806, 000

Secretary MERRILL. Could we also propose and this may not be proper at this time-putting in the record the GAO report that was referred to by Congressman Baldwin this morning.

Mr. HÉBERT. That will be made part of the record. (The report referred to is as follows:)

Secretary MERRILL. And would you care to have in the record a study which we have made on the transportation costs relative to the Raritan Arsenal ?

Mr. HÉBERT. By all means. Yes, that is very pertinent.
Secretary MERRILL. We introduce that also.
Mr. HÉBERT. Very pertinent.
(The information referred to is as follows:)

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