Frost builds up on the windows, and the resulting condensation damages the interior of the quarters. This project will install approximately 160,000 SF of pre-finished vinyl-coated galvanized steel siding on 96 housing units, and 6,700 SF on detached garages. Approximately 1200 windows will be replaced with aluminum double-glazed windows and storm doors will be installed on each unit. Question. Explain your intention to invest $53,000 on one unit at Lowry AFB, Colorado. Who occupies this unit, and how large is it? General WRIGHT. This unit is occupied by the Technical Training Center Commander, which is a Major General position. The unit was constructed in 1904 and includes 2,954 net square feet (NSF). The proposed project will replace the original windows with insulated windows, update the electrical systems, replace exterior doors, and complete repairs to the tile roof. There has been no major renovation to the unit since construction. Question. Was any type of economic analysis done to justify investing $53,000? How much has been spent maintaining this unit in the last three years? General WRIGHT. Yes. The estimated replacement value of this unit is approximately $300,000. Records indicate that the "cost to the government" (original construction cost plus improvements since construction) for this unit is $21,000. For an investment of $53,000, the unit will have an extended life expectancy of 25 years without further major expenditure to structural elements. The maintenance and repair expenditures on this unit have totaled $23,300 for the last three years. A detailed listing for the last five years is as follows: FY 83, $14,148-($7,762 to replace the boiler system, $5,060 to initiate repairs to the tile roof, and $1,326 for day-to-day maintenance). FY 82, $5,910-day-to-day maintenance. Question. Some $24.8 million has been requested to upgrade 956 foreign source units in Germany. This is an investment of $26,000 per unit on the average. How much has been invested in these from either maintenance or improvements in the last three years? Does the U.S. gain any residual value by virtue of this investment? General WRIGHT. The 956 German units included in our FY 1985 request have previously received exterior maintenance including roof replacements at a per-unit cost of $4,800. Approximately onefourth of the units have also received a second bath and laundry addition as part of our improvement program at a per unit cost (prior to FY 84) of about $18,000. The status of Forces Agreement provides for negotiation of residual value at the time we terminate our use. Question. A substantial amount has also been requested for foreign source units in the United Kingdom. Will these projects in fiscal year 1985 complete the work for upgrading these specific units? General WRIGHT. Yes, this will complete the upgrade of those specific units. Question. Last year the Committee denied an improvement project at Kadena AB, Japan, because of the high cost. Is the project in this year's maintenance request for these same units? Will the $19,800 per unit requested complete the upgrade of these units? General WRIGHT. No, the project submitted in FY 1984 was for the Futenma housing area. The FY 1985 project is for the Kishaba, Terrace, Stearley Heights and Plaza housing areas. The project scope has been reduced to stay within the congressional limit of $30,000 per unit. The project includes all of the improvements originally programmed and the essential maintenance and repair. Question. Explain what the 10 surplus commodity units are in Torrejon AB, Spain. Who owns them? General WRIGHT. We have a total of 67 surplus commodity units at Torrejon AB, Spain. These are U.S. constructed units, financed through credit established by the sale of surplus U.S. agricultural products. The host nation has received title to these units by the terms of Status of Forces Agreement. LEASING, $57,239,000 (PART 3, PAGE 1099) Question. Last year the 500 unit lease point increase in Kadena, Japan, was denied by Congress. In fiscal year 1984 the Japanese will build 586 new family housing units on Okinawa. Why have 1,000 lease points been transferred and requested for Japan? General WRIGHT. The 500 unit lease point increase for Kadena AB, Japan was not specifically denied by law in fiscal year 1984. The Department of Defense was authorized an increase of 1,000 lease points for all of the services and the Air Force received 335 of these. The 586 house being constructed by the Japanese will certainly help alleviate large, long-term deficits and satisfy some of the increasing requirement for the Marines as they convert to accompanied tours. However, even with the very aggressive Japanese construction program, housing deficits will continue until the late 1990's. The 1,000 unit build/lease initiative is designed as a nearand mid-term interim measure to provide relief to some of the more than 2,000 U.S. military families now living in substandard, expensive, and often unsanitary conditions. Question. Are you negotiating this agreement now? When do you anticipate the agreement will be negotiated? General WRIGHT. No. We anticipate advertising a Request for Proposals for the build/lease by June 1984. Negotiations will be 60 to 90 days after advertising for proposals. Question. How can you transfer lease points without congressional approval, since they were specifically denied? Why can't we wait for the Japanese cost sharing program to build additional housing on Okinawa? General WRIGHT. There was no specific denial of the Kadena, AB, Japan, 500 unit lease authorization, but the AF share of new DOD FY 84 lease authorizations, 335, was not sufficient to cover the Kadena initiative. Subsequently, we applied lease points obtained through GLCM lease conversion to initiate lease acquisition on Okinawa and at other locations. We are seeking congressional approval for the transfer within our FY 85 Budget Request. The Japanese are undertaking an aggressive program to meet our family support construction requirements. However, the program will not relieve our dependence on substandard, expensive, and often unhealthy private sector housing until the late 1990s. The proposed build/lease program will provide a quick, low capital investment solution to the deplorable family housing conditions. Question. On what basis do you anticipate build/lease agreements will be cost effective at the locations overseas listed in your leasing request on page 1047? General WRIGHT. There are many financial considerations involved in putting together a build/lease proposal that can economically compete with the construction alternative. Based on preliminary investigations and a number of inquiries from interested parties, we see a potential for successful build/lease projects at certain locations. We have extended our initiative to other locations with long-term deficits to determine if these deficits can also be satisfied with build/leases. Question. The Air Force currently pays an average of $1,200 per month on its leases in Spain. Why are the lease costs so high? General WRIGHT. The projected high unit cost was based on expected greater than normal utility and maintenance cost due to the condition and age of the existing Royal Oaks units. We have initiated a build/lease project which will replace the existing, uneconomical units by the middle of fiscal year 1986. Question. Explain why you have programmed lease points for Greece when they were specifically denied in fiscal year 1984? General WRIGHT. Lease points for Greece were deferred during authorization markups because the Defense Cooperation Agreement (DCA) had not been executed. The DCA was signed in July 1983. Question. Will the Air Force come forward with Title 10 lease notifications if economic analyses on the actual proposals in the United Kingdom, Germany, Italy, and Korea authorized in fiscal year 1984 do not favor build/lease over construction? General WRIGHT. The Air Force has not approached this initiative with the intent of going forward with Title 10 lease notifications if economic analyses do not favor build/lease over construction. However, there might be circumstances where, with a buy-out clause, there would be advantages to executing a build/lease that is marginally less cost effective than construction. [CLERK'S NOTE.-End of questions submitted by Mr. Bevill.] Mr. BEVILL. All right. This committee will stand adjourned until 9:30 tomorrow morning. Thank you for your help. APPENDIX I [CLERK'S NOTE.-Following is the study referred to on page 333.] DEFENSE AMERICA HEALTH AFFAIRS ASSISTANT SECRETARY OF DEFENSE WASHINGTON, D.C. 20301 16 April 1984 Honorable W. G. (Bill) Hefner Chairman, Subcommittee on Military Construction Committee on Appropriations United States House of Representatives Washington, D. C. 20510 Dear Mr. Chairman: The enclosed report "Greater New Orleans Area Medical Need and Cost Analysis" is forwarded as requested in the House of Representatives Report No. 98-238, "Military Construction Enclosure 34-175 0-84-61 |