Morocco: A contract has been signed for 500 units of family housing for the 3 Air Force bases in Morocco. This project will consist of prefabricated houses purchased in Austria with the proceeds of surplus commodity sales to Austria under title I of Public Law 480. Site costs will be paid from Austrian currency and from appropriated dollars. An additional project for 330 units of housing at the Naval Air Station, Port Lyautey, Morocco, will make use of prefabricated houses purchased in Finland with the proceeds of title I, Public Law 480, sales to Finland. The cost of site development and erection will be paid partly through the use of appropriated funds (not to exceed 25 percent of the funded cost) and will be accomplished partly through the use of Seabee labor. Azores: It is planned to proceed during fiscal year 1959 with a project of 306 units of family housing at Lajes Air Force Base, Azores. The first increment of 135 units in this project will be supported with existing title I funds which have accrued from the sale of surplus commodities to Portugal. Financing of the remainder of these houses will be developed through further surplus commodity sales. Japan: The original project of 1,700 units of family housing to be built at Army, Navy, and Air Force installations in Japan has now been reduced to 1,372 units as a result of the redeployment of United States forces in Japan. No further housing construction is now planned for Japan and the remaining Japanese yen have been released for other uses. Alternatives to barter: While the Department of Defense is highly satisfied with the housing produced under the commodity barter program in France, it is recognized that the construction is only one aspect of this complex transaction. The Department of Agriculture has informed us that sales of cotton and wheat under the French program displaced normal dollar sales, and that in the future any housing barter transactions must be limited to commodity sales which can be demonstrated to be additional to normal marketings. Under these circumstances we have no plans for further barter transactions either for military family housing or for military base construction in foreign countries, since it does not appear that transactions of any magnitude could be conducted under the revised barter program rules. Surplus commodity housing proposed for authorization in this bill includes only those projects for which there is some possibility of generating the necessary funds through country-to-country sales (title I of Public Law 480, 83d Cong.). However, the Iceland, Okinawa, and Philippine programs involve use of third country sales proceeds in Finland and Japan, and prospects are not bright. Although prospects are good for obtaining British sterling for the Bermuda project, it may be some time before final agreements can be reached with the Bermuda Government as to the use of land and other details. In view of the position taken by the Department of Agriculture on further barter transactions, and the limited potentiality of title I programs, consideration is being given to the advisability of recommending to the Armed Services Committees a return to the rental guaranty program for some areas, and the extensions of this program to the Pacific. Rental of inadequate quarters: As you will recall, section 407 of Public Law 241, 85th Congress, authorized the operation of inadequate public quarters on a rental basis. Under regulations recently issued, the occupants of such quarters will receive an "adjusted quarters allowance" which is equal to the full quarters allowance, less an amount equal to the "fair rental value" of the house, developed through the procedures set forth in BoB Circular A-45. I am pleased to report that this program is now well under way. The three departments have all issued their instructions, and work has been completed on approximately 5,600 units of an estimated total of 26,000 units. The occupants of these 5,600 units are now receiving the benefits of reduced housing cost, retroactive to January 1, 1958, and it is expected that review and final determinations can be made on the remainder before June 30, 1958. Specifically, the Army has completed its determinations of inadequacy on 4,400 units, out of an estimated total of 8,100 units, and has reviewed an additional 2,900 which were found to require further justification. The Navy has completed its determinations of inadequacy on 600 units of an estimated total of 6,700 units. The Department of the Air Force has completed review of the report from one major command, and has determined 600 units to be inadequate out of an estimated total of 11,200 units to be reviewed prior to June 30. From the reports which have been reviewed to date, it appears that the majority of these inadequate units, perhaps 95 percent, may be beyond economic repair, and must be demolished or otherwise disposed of within the next 2 years. We will review these determinations carefully in order to reaffirm the necessity for proposed disposals. General provisions: These follow the pattern established in prior military construction acts, and a description of each is outlined below. Sections 501, 502, 503, 505, and 506 repeat similar provisions in Public Law 241, 85th Congress. Section 504 authorizes the use of existing unused authorization for family housing under previous Military Construction Authorization Acts (Public Law 765, 83d Cong.; Public Law 161, 84th Cong; and Public Law 968, 84th Cong.) to provide family housing at those installations for which appropriated fund family housing authorization is requested in this bill." Section 507 advances for 2 years the general rescission provisions now contained in section 506 of Public Law 241, 85th Congress. This continues in effect the established policy of repealing long-standing military construction authorizations that have not been used by the military departments. As a result, after July 1, 1959, only those authorizations, with certain specified exceptions, which are contained in public laws enacted subsequent to August 3, 1956, would continue to be available. Under this section unused authorization that has been in effect 3 years will be automatically rescinded. Section 508 would repeal section 408 (b) of Public Law 564, 81st Congress, which directs the Secretary of Defense to report to the Congress, at the beginning of the first session of each Congress, all military construction authorization enacted since the 80th Congress, for which adequate funds have not been appropriated, and to recom mend to the Congress which portions of this unused authorization should be rescinded. Under present procedures, the amount of all residual unfunded authorization is always reported to Congress by the Department of Defense in its presentation of the annual MCA bill. Therefore, as this information is now reported annually, the requirements for a biennial report, as specified by Public Law 564, would not appear necessary. In view of the provisions of section 507 of this bill, under which all unused authorization that has been in effect 3 years is automatically rescinded, there is no longer any need to recommend biennially unused authorization to Congress for rescission. Moreover, under present program management procedures, large accumulations of unused authorization are no longer allowed to occur. Section 509 would extend through fiscal year 1961, the previously enacted leasing authority for housing at tactical installations, so that Nike and other tactical site housing requirements may be met by utilizing existing private housing to the greatest possible extent, thereby reducing the necessity for construction of military quarters. Section 510 would amend section 406 of Public Law 968, 84th Congress, which authorizes land acquisition projects not exceeding $5,000, to authorize a new limit of $25,000 for each land acquisition project. In addition, the restriction of this section to projects which are urgently required has been eliminated. These changes are desired in order to better carry out the original intent of section 406, Public Law 968-84, which was to expedite the handling of small real estate acquisition projects, and to reduce the administrative workload involved in these small transactions. Section 511 would add a new subsection to section 408 (a) of Public Law 968, 84th Congress, which would exempt small, routine construction projects costing $5,000 or less from the present requirement that a determination be made that they are urgently required. This method of handling these minor, low-cost construction projects requires an excessive amount of administration, and delay, which would be eliminated by the change proposed in section 511. Section 512 would amend section 406 of Public Law 241, 85th Congress, so as to exempt two additional categories of family housing from the present requirement for inclusion in the annual Military Construction Authorization Act. The reasons for the specific exemptions in this section are as follows: (1) Mandatory Wherry acquisition projects were exempted from the requirement for inclusion in the annual Military Construction Authorization Act by Public Law 241, 85th Congress. This subsection would remain unchanged. (2) Leased housing is proposed to be exempted because such housing, if acquired at all, must be acquired on short notice as the housing becomes available. It would be impractical to plan such acquisitions sufficiently far in advance to permit annual line item authorization. (3) Rental guaranty housing is, in reality, not military construction. Rental guaranty projects are constructed with foreign capital and are owned throughout their existence by these foreign interests. Our interest in them is simply the guaranty of a certain percentage of occupancy for a limited period of time in order to encourage the foreign investors to construct the housing and to reserve the house for United States personnel. The Armed Forces have no way of knowing in what areas economic conditions will be such as to encourage local investors to finance and construct rental guaranty projects. Furthermore, delaying the implementation of a rental guaranty project until a new authorization act is passed might in many cases, preclude the building of the project. In many countries, economic conditions change so rapidly that a delay might well remove the possibility of finding interested sponsors. Section 513 would repeal section 2662, title 10, United States Code and section 43 of the act of August 10, 1956 (70 Stat. 636). These provisions, formerly contained in title VI of Public Law 155, 82d Congress, provide that the Secretaries of the military departments and the Administrator of the Federal Civil Defense Administration shall come into agreement with the Armed Services Committees with respect to certain real estate actions involving $25,000 or more. The recommended repeal of these sections is in conformity with the recommendation of the President to the Congress in his budget message earlier this year. Cost limitations: The language of the general provisions of this bill does not include limitations of unit costs of barracks, warehouses, bachelor officers quarters, and cold storage facilities. These categories of facilities represent only 4 percent of the total new authorization being requested in this bill. All projects are administratively controlled by careful reviews in my office not only before inclusion in authorization and appropriation programs, but also at the time of apportionment of funds. This is effected by the use of sound standards of design and construction, by checking cost reports that are submitted to my office on contract awards for military construction and by observing cost trends as reported by authoritative engineering publications. Arbitrary cost limitations are unsatisfactory because they cannot take into account varying economic conditions and labor rates, geographical location and site conditions. We therefore recommend that the cost limitations be not included in the bill, relying on administrative control of costs through standards of design and construction, and continuing reviews of program items and cost estimates. In closing, I should like to inform the committee that this proposed legislation has been reviewed by the Director of the Budget who states that there is no objection to its submission to the Congress and that it is in accord with the program of the President. The Secretary of Defense recommends its enactment. I appreciate the privilege of meeting with you here, and it is my wish, together with the departmental representatives who will also appear before you, to provide this committee with any information it desires in connection with its consideration of this legislation. Thank you. The CHAIRMAN. Thank you very much, Mr. Bryant. Now, insert the tables that appear-tables 1, 2, 3, and so forth, in the bill. 1 Estimated as of June 30, 1958, for officers, upper grade enlisted men and key civilians; excludes requirements for Navy fleet personnel, for lower grade enlisted men (approximately 250,000) and for personnel in ancillary status. Excludes approximately 60,000 substandard units of public quarters, Lanham Act, title III, etc. Excludes 2,400 of the 50,100 units in the fiscal year 1959 bill; contracts for these units have been closed since the bill was presented. TABLE 2.-Family housing items in fiscal year 1959 MCA bill action by House of Representatives under provisions of sec. 419, Public Law 968/84 |