APPROPRIATIONS FOR FY1999: MILITARY CONSTRUCTION
CRS Report for Congress
Appropriations for FY1999:
Updated November 10, 1998
Mary T. Tyszkiewicz
Analyst in National Defense
Foreign Affairs and National Defense Division
Congressional Research Service ˜ The Library of Congress
Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bounded by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current program
authorizations. In addition, the line item veto took effect for the first time in 1997.
This report is a guide to one of the 13 regular appropriations bills that Congress passes each
year. It is designed to supplement the information provided by the House and Senate
Appropriations Subcommittees on Military Construction Appropriations. It summarizes the
current legislative status of the bill, its scope, major issues, funding levels, and related
legislative activity. The report lists the key CRS staff relevant to the issues covered and
related CRS products.
This report is updated as soon as possible after major legislative developments, especially
following legislative action in the committees and on the floor of the House and Senate.
NOTE: A Web version of this document with
active links is available to congressional staff at
Appropriations for FY1999: Military Construction
The military construction (MilCon) appropriations bill finances (1) military
construction projects in the United States and overseas; (2) military family housing
operations and construction; (3) U.S. contributions to the NATO Security Investment
Program; and (4) most base realignment and closure costs.
This report reviews the appropriations and authorization process for military
construction. The congressional debate perennially centers on the adequacy of the
President’s budget for military construction needs and the cases for and against
congressional additions, especially for Guard and Reserve projects. This year, key
Members of Congress have argued that the Pentagon has neither funded nor planned
adequately for military construction.
For FY1999, the Administration has requested budget authority of $7.8 billion.
This is down from the FY1996 level of $11.1 billion, the FY1997 level of $9.8 billion
and the FY1998 level of $8.9 billion. On May 21, the House passed their version of
the FY1998 defense authorization bill, H.R. 3616 (H.Rept. 105-532). On May 7, the
Senate Armed Services Committee finished marking up its version, S. 2057 (S.Rept.
105-189). The Senate passed the defense authorization bill on June 25. The
conference report (H Rept. 105-736) passed the House on September 24, and the
Senate on October 1. The FY1999 authorization bill became Public Law 105-261 on
October 17, 1998.
The military construction appropriations subcommittees have finished their work.
The conference committee submitted their report (H. Rept. 105-647) for H.R. 4059
on July 24. The House agreed to the conference report (417-1), on July 29, with the
Senate agreeing (87-3) on September 1. It became Public Law 105-237 on
September 20, 1998.
The conference recommended $8.450B. The conference committee added
$666M to the President's request. Even with the additional funds, the FY1999 total
is $759M less than what was enacted for FY1998. This is an additional $216M to
the House bill and a reduction of $31M from the Senate bill.
Military construction accounts received emergency supplemental appropriations
money for FY1999 in the Omnibus Consolidation bill (H.R. 4328, H.Rept. 105-825)
in October 1998. Due to monsoons in Korea and Hurricanes Georges & Bonnie,
military construction projects secured an additional $209 million in funding.
Appropriations and authorization hearings on the FY1999 military construction
budget have highlighted the following issues:
!importance of housing to the quality of life for servicemembers;
!privatization of military family housing and barracks improvements;
!Base Realignment and Closure (BRAC) concerns;
!environmental issues; and
!advanced procurement for Army military construction.
Key Policy Staff
Area of ExpertiseNameCRS DivisionTel.
Base ClosureDavid LockwoodF7-7621
Defense AcquisitionValerie GrassoF7-7617
Defense Budget, Military ConstructionMary TyszkiewiczF7-3144
Defense BudgetStephen DaggettF7-7642
Defense ReformGary PaglianoF7-1750
Guard and Reserve IssuesRobert GoldichF7-7633
Division abbreviations: F = Foreign Affairs.
Most Recent Developments........................................1
Background: Content of Military Construction Appropriations and Defense
Status ........................................................ 3
Emergency Supplemental Appropriations for FY1999............3
House and Senate Actions.................................4
Key Policy Issues................................................6
Recent History and Context....................................6
The Funding Pattern for Military Construction Budgets...........6
Funding and Long-term Planning for Military Construction: Inadequate?
The Debate Over Added Projects and the McCain Criteria.........8
The FY1998 Line Item Veto...............................9
Prospects for Congressional Additions to the FY1999 Military
Importance of Housing to the Quality of Life for Servicemembers..10
Privatization of Military Family Housing.....................11
Base Realignment and Closure (BRAC) Concerns..............13
Use of Advanced Procurement for Army Military Construction....14
Major Funding Trends...........................................15
Legislation .................................................... 15
For Additional Information.......................................20
CRS Issue Briefs...........................................20
Selected World Wide Web Sites................................20
Table 1. Status of Military Construction Appropriations, FY1999 ..........3
Table 2. Mil. Con. Appropriations, FY1994-98........................16
Table 3. Mil. Con. Appropriations by Account: FY1997-99..............17
Table 4. Mil. Con. Appropriations by Account - Congressional Action.......18
Table 5. Congressional Additions to Annual Department of Defense Budget Requests
for National Guard and Reserve Military Construction, FY1985-98.....19
Appropriations for FY1999:
Most Recent Developments
The military construction appropriations bill became Public Law 105-237 on
September 20, 1998. The conference report (H. Rpt. 105-647) for H.R. 4059 was
passed by the House on July 27 and the Senate on September 1. The conference
The conference committee added $666M to the President's request. Even with
the additional funds, the total for FY1999 is $759M less than what was enacted for
FY1998. This is an additional $216M to the House bill and a reduction of $31M
from the Senate bill.
Military construction accounts received emergency supplemental
appropriations money for FY1999 in the Omnibus Consolidation bill (H.R. 4328,
H.Rept. 105-825) in October 1998. Due to monsoons in Korea and Hurricanes
Georges & Bonnie, military construction projects secured an additional $209 million
Background: Content of Military Construction
Appropriations and Defense Authorization Bills
The Department of Defense manages the world’s largest dedicated
infrastructure, covering over 40,000 square miles of land and a physical plant worth
over $500 billion. The annual military construction appropriations bill provides most
of the funding to maintain and upgrade this infrastructure. The bill funds construction
projects and real property maintenance of the active Army, Navy & Marine Corps, Air
Force, and their reserve components; defense-wide construction; U.S. contributions
to the NATO Security Investment Program (formerly called the NATO Infrastructure
Program); and military family housing operations and construction. The bill also
provides funding for the Base Realignment and Closure (BRAC) account, which
finances most base realignment and closure costs, including construction of new
facilities for transferred personnel and functions, and environmental cleanup at closing
The military construction appropriations bill is one of several annual pieces of
legislation that provide funding for national defense. Other major legislation includes
(1) the defense appropriations bill, that provides funds for all military activities of the
Department of Defense, except for military construction; (2) the national defense
authorization bill, that authorizes appropriations for national defense, and (3) the1
energy and water development appropriations bill, that provides funding for atomic
energy defense activities of the Department of Energy. Three other appropriations
— VA-HUD-Independent Agencies, Commerce-Justice-State, and Transportation —
also include small amounts for national defense. In addition, the energy and water
development appropriations bill provides funds for civil projects carried out by the
U.S. Army Corps of Engineers.
The annual defense authorization bill authorizes all the activities in the defense
appropriations measures described above. Therefore, major debates over defense
policy and funding issues, including military construction may also occur in action on
the authorization bill. Since issues in the defense authorization and appropriations are
so interwoven, this report highlights salient parts of the authorization bill, along with
the military construction appropriations process.
Military construction appropriations are the major, but not the sole, source of
funds for facility investments by the military services and defense agencies. The
defense appropriations bill provides some funds for real property maintenance in
operation and maintenance accounts. In addition, funds for construction and
maintenance of “Morale, Welfare, and Recreation (MWR)” facilities, are partially
provided through proceeds from commissaries, recreation user fees, and other
Most funds appropriated by Congress each year must be obligated in that fiscal2
year. Military construction appropriations are an exception. These funds are
generally made available for obligation for five fiscal years.
Consideration of the military construction budget starts when the President’s
budget is delivered to the Congress each year. For FY1999, the President requested
$7.8 billion for military construction, 12% less than the $8.9 billion appropriated for
See Appropriations for FY1999: Defense, by Stephen Daggett, CRS Report 98-205, for1
details on the defense authorization and appropriation process.
Department of Defense accounts vary in how long the funds are available for obligation.2
Military personnel and operations & maintenance accounts are available for one year.
Research and development funds are available for two years. Procurement funds (with the
exception of shipbuilding) are available for three years.
Table 1 shows the key legislative steps necessary for the enactment of the
FY1999 military construction appropriations.
Table 1. Status of Military Construction Appropriations, FY1999
Markup ApprovalHouse House Senate Senate Conference
H.ReptS.Rept.H.Rept. 105-H.Rept.P.L. 105-
105-578, 6/22 105-213, 6/25 647, 105-647 237
6/16 6/11 6/16/98 6/11/98 7/24/98 7/29 9/1 9/20/98
Emergency Supplemental Appropriations for FY1999. Military construction
accounts received emergency supplemental appropriations money for FY1999 in the
Omnibus Consolidation bill (H.R. 4328, H.Rept. 105-825) in October 1998. Due to
monsoons in Korea and Hurricanes Georges & Bonnie, military construction projects
secured an additional $209 million in funding.
Conference Agreement. The military construction appropriations bill became
Public Law 105-237 on September 20, 1998. The conference report (H.Rept. 105-
647) for H.R. 4059 was passed by the House by a vote of 417 - 1 on July 27 and the
Senate on September 1 by a vote of 87-3.
The conference recommended $8.450B. The conference committee added
$666M to the President's request. Even with the additional funds, the FY1999 total
is $759M less than what was enacted for FY1998. This is an additional $216M to
the House bill and a reduction of $31M from the Senate bill.
The conference agreement included full funding of the requested chemical
demilitarization program. However, the conference included a general reduction of
$50.5M of unobligated prior year funds against the entire program, because of delays
in equipment and environmental & construction permits.
The DOD Family Housing Improvement Fund was reduced to $2M from $242M
in the House bill and $7M in the Senate bill. The large reduction in the House bill
reflects full funding of construction projects in traditional family housing accounts,
rather than the Family Housing Improvement Fund. Transfer authority to the Fund
is provided for qualified projects from regular family housing accounts.
The conference committee noted that 90% of resources expended for the House
Revitalization Support Office (HRSO) for FY1996-98 was for consultant support.
Therefore, the conferees reduced support for Family Housing Improvement Fund to
$2M, based on available balances and excessive allocation for consultative services.
The conferees also noted the delay in execution of family housing projects, for
possible privatization efforts. The conference expects from DOD, a revised, scaled-
back, reasonable plan for the privatization effort by October 1, 1998 and an integrated
family housing strategy by December 1, 1998.
The Homeowners Assistance Fund had no funds appropriated by the conference.
Instead the conference adopted Section 127, which allows the transfer of funds from
the Base Realignment and Closure account into the Homeowners Assistance Fund.
House and Senate Actions. Based on the interim 302 (B) allocations (see
Budget Agreement section below), the military construction appropriations
subcommittees finished their work. The Senate Appropriations Committee (SAC)
approved their version of the military construction bill (S. 2160) with report (S.Rept.
105-213) on June 11. SAC approved $8.484 billion. The House Appropriations
Committee finished their bill (H.R. 4059) with report (H.Rept. 105-578) on June 16.
HAC approved $8.235 billion.
The House passed H.R. 4059 on June 2 with the HAC-approved total. The
Senate passed their bill on June 25, with the SAC-approved total.
Of the $8.2 billion appropriated in the House FY1999 Military Construction
Appropriations Bill (H.R. 4059), 43% is for family housing; 37% for general military
construction projects and 21% is to meet the obligations of the Base Realignment and
Closure (BRAC). In the $8.5 billion appropriated in the Senate (S. 2160), 42% is for
family housing, 37% for general military construction projects, and 20% is to meet
The military construction subcommittees had similar themes in their reports.
Both subcommittees rejected Administration proposals for:
!advanced appropriations for Army military construction, citing the difficulty
to project future costs and that the requested advance appropriations projects
were not identified in DOD justification documents;
!acquisition of either the leased building or additional land for U.S. Southern
Command Headquarters, relocated from Panama to Miami, Florida; and
!devolution of chemical demilitarization construction from Office of the
Secretary of Defense to the Army, because of the importance of this activity
to overall national security.
Both committees — like their authorization counterparts — lamented general
underfunding by the DOD of military construction, especially for decreasing
maintenance backlogs and increasing quality of life projects.
The House Appropriations Committee decided to put all requested privatization
projects from the Family Housing Construction Account into the Family Housing
Improvement Fund, increasing the budget request of $7 million to $242 million. This
allocation will enforce the use of privatization authorities mechanisms for these
Budget Agreement. Usually, the budget resolution sets the stage for the
appropriations process. However, the work on this year’s agreement is not completed
yet. The House and Senate are still in conference deliberations for the FY1999
While they wait for the completed budget agreements, the appropriations
committees are beginning their work. Both committees have released tentative 302
(B) allocations to their subcommittees. The Senate Appropriations Committee has
allocated $8.484 billion in budget authority for military construction, which is an
additional $700 million (an increase of 8.9% ) than the President’s request of $7.8
billion. The House Appropriations Committee gave $8.235 billion (an increase of
400 million or 5%) to the Military Construction Appropriations Subcommittee for
On May 21, the House approved $8.2 billion for military construction in its FY
1999 defense authorization bill (H.R. 3616), which is $450 million more than the
President’s request. The House National Security Committee reported that 40%
($183 million) of the increase is dedicated to quality of life enhancements. The
committee highlighted additions to family housing, troop housing, child development
centers, and fitness centers. (For more detailed information on the FY1999 House
authorization bill, see the press releases and committee reports and bill sections on the
House National Security Home Page at [http://www.house.gov./nsc/].
On May 7, the Senate Armed Services Committee (SASC) approved $500
million more than the Administration’s FY1999 budget in S. 2057. The SASC
designated $164 million of the additional money for unaccompanied personnel
quarters, child development centers, dining facilities, education centers, and military
family housing. The remaining $336 million is for high-priority projects submitted by
the military services that were not funded in the President’s request.
The Senate passed S. 2057 on June 25. It added $200 million of quality of life
military construction projects to the SASC bill, by amendment. The Senate also made
it harder for DOD to close military bases passing the Inhofe amendment. The
amendment makes the DOD seek congressional approval for closing bases if 225 jobs
are at stake, instead of current law's 300 jobs limit. Also, the Inhofe amendment
contained a Sense of the Senate statement that Congress will not consider another
round of base closures until the latest round is completed.
The HNSC and SASC came to some similar decisions about the FY1999
President’s military construction budget request.
!In their respective reports, both the HNSC (H.Rept. 105-532) and the SASC
(S.Rept. 105-189) noted the low budget request compared to prior years (15%
less than the FY1998 enacted amount).
!Both defense authorizing committees rejected the Administration’s proposal
for two more base closure rounds, and for acquiring a leased building or land
in Miami, Florida for U.S. Southern Command Headquarters.
!Both committees rejected the Administration’s proposal to move funding for
chemical demilitarization construction from the Office of Secretary of Defense
(OSD) to the Army. Because of the national importance of this issue, the
committees believe that authority should stay within OSD. Each committee
noted delays in DOD’s obligation of money for chemical demilitarization
projects, often because of construction and environmental permit problems.
The Senate cut $50 million from the program because of the backlog of
The Senate authorizers noted the trend for the DOD to fund military
construction projects with prior year savings instead of including full funding for the
military construction budget. The trend started in the FY1997 and continued through
to the FY1999 proposal. The SASC denied the use of prior year savings and expects
the DOD to fully fund military construction requests in future budgets.
The defense authorization conference report (H.Rept. 105-736) passed the
House on September 24, and the Senate on October 1. The FY1999 authorization
bill became P.L. 105-261 on October 17, 1998.
Key Policy Issues
Recent History and Context
The Funding Pattern for Military Construction Budgets. In recent years,
the Congress has added significant amounts to annual Administration’s military
construction budget requests. Congress added $479 million in FY1996, $850 million
in FY1997 and $800 million in FY1998 to the military construction accounts.
Three themes explain the pattern of reoccurring congressional additions. First,
some members of the military construction subcommittees believe that military
construction has been chronically underfunded. Military construction proponents,
including facility advocates in the military services, argue that military facilities have
been systematically underfunded for many years — even, some say, in the midst of the
defense buildup of the 1980s.
In arguing that military construction has been chronically underfunded, DOD
facility managers state that they have not met their goal of budgeting 3% of the plant
replacement value of DOD facilities for annual construction and maintenance (called
real property maintenance at the Pentagon). Although this 3% goal is below the
average for public facilities nationwide, actual DOD funding has typically run at 1 to
1998 to the House National Security Subcommittee for Military Installations and
Facilities that the Air Force could manage to budget only 1% for real property
maintenance. Thus, facility proponents welcome congressional additions.3
Second, other Members of Congress, as Senator Bond commented during the
floor debate on FY1996 military construction appropriations, believe that the
Pentagon counts on Congress to add money to Guard and Reserve programs. In
For a discussion of this and related issues, see CRS Report 91-669, Military Construction:3
Current Controversies and Long-Term Issues, by Martin Cohen and Stephen Daggett.
recent years, Congress has added as much as $401.8 million (FY1995) for National
Guard and Reserve construction projects. (See Table 5.)
Third, often Congress has different priorities from the Administration.
Congressional military construction subcommittees — authorization as well as
appropriations subcommittees — have often taken issue with Administration military
construction priorities. In the 1990s, for example, the committees frequently reduced
amounts requested for construction overseas — on the grounds that troop levels
abroad should be reduced and that allied burden-sharing contributions should increase
— and reallocated the funds to domestic projects. In addition, congressional
committees have added unrequested funds for quality of life improvements, such as
day care centers and barracks renovation. The congressional defense committees
have argued that the military services have tended to neglect these areas in favor of
Funding and Long-term Planning for Military Construction: Inadequate?
Along with concern about the level of funding, Members of Congress have also
complained that poor Pentagon planning make it difficult for the Congress to insure
that added military construction projects meet pressing priorities.
The military construction budget request is created within the Department of
Defense’s Planning, Programming and Budgeting System (PPBS). The PPBS4
process is used to prepare DOD’s internal, long-term financial plan. The long-term
plan extends over a six-year period and is known as the Future Years Defense Plan
(FYDP). In the 1990s, congressional defense committees repeatedly criticized the
Pentagon’s long-term planning for military construction.
In the FY1998 hearings, the Chairman of the House Subcommittee on Military
Construction, Representative Ron Packard chastised the Department of Defense for
repeatedly failing to submit “honest” budgets reflecting real service priorities. He
complained that the military construction request traditionally leaves out necessary
projects, especially for the National Guard and Reserve, which the services expect
Congress to add. Mr. Packard wanted the subcommittee to get out of the business
of adding money for projects that the administration had not requested, but yet
apparently needs. He also wanted DOD and the Services to use the Future Years
Defense Plan (FYDP) rigorously to set priorities for their construction projects and
to integrate Guard and Reserve needs.
In testimony on the FY1998 request to the Military Construction Subcommittee
of the House Appropriations Committee, then-DOD Comptroller, John Hamre
admitted that DOD needs to undertake good detailed planning for the military
construction budget and has not done this in the past. Hamre also conceded that the
DOD has not evaluated the accuracy of the military construction FYDPs, and that he
saw a need for that assessment.
Its report on the FY1998 Military Construction Appropriations Bill (H.Rept.
For a discussion of the formulation of the defense budget proposal by the DOD, see CRS4
Report 93-317, A Defense Budget Primer, by Keith Berner and Stephen Daggett.
Years Defense Plan (FYDP) for military construction at the project level of detail,
including Guard and Reserve requirements.
The FY1999 military construction hearings reviewed service efforts to integrate
Guard and Reserve needs into the budget request. The Services — especially the
Army — testified that they have produced integrated military construction plans with
Guard and Reserve input. Alma Moore, Principal Deputy Secretary of the Army for
Installations, Logistics and Environment, testified at a House Military Construction
“This year’s military construction budget was built on the Army’s one team, one
fight concept. We made a conscientious effort to balance our resources among
all components, the active Army, the National Guard and the Army Reserve.”
The Debate Over Added Projects and the McCain Criteria. Since the
Congress has added significant amounts to military construction budgets over the last
In 1994, the Senate debate on the military construction appropriations bill
heavily focused the amount of congressional additions to the request despite
constraints on overall defense spending. Senator McCain, in particular, objected to
the provision of substantial amounts for projects that the Administration had not
requested. He argued that such projects largely represent “pork barrel” spending, and
come at the expense of higher priority defense programs. In Senate floor
consideration of the military construction bill that year, the managers accepted a
McCain amendment that called for criteria to be applied to additional projects. His
amendment included a provision that any added project should be on the military lists
of critical yet unbudgeted projects. The McCain amendment was not incorporated
into the final conference version of the bill, however, and the conference agreement
provided over $900 million for unrequested construction projects.
The National Defense Authorization Act for FY1995 (P.L. 103-337), however,
incorporated Senator McCain’s criteria as a sense of the Senate provision, providing
that the unrequested projects should be:
4. executable in the year they are authorized and appropriated, and
5. offset by reductions in other defense accounts, through advice from the
Secretary of Defense.
The purpose of these criteria is to help Congress rate the relative importance of
different projects. Though a sense of the Senate provision does not have the force of
law, the McCain criteria have been cited repeatedly in Senate authorization and
appropriations debates for FY1996 and FY1997. The criteria were also cited in the
House FY1997 debates by members of the “porkbusters” coalition. In practice,
debates have focused on justifying projects according to the first four criteria, while
ignoring the offset requirement.
In debate on the FY1998 military construction appropriations conference report,
Senator McCain continued to challenge congressional add ons. He noted that the
Congress added 129 projects, totaling $800 million. The National Guard and Reserve
received $220 million of the additional congressional money. Senator McCain listed
the extra projects in the Congressional Record, in a letter to the President, and on his
web page at the following address: ([http://www.senate.gov/~mccain/milconf.txt]).
Since the 104 Congress, the House military construction authorizing andth
appropriations committees have used criteria, in collaboration with the Pentagon, to
add projects to the military construction budget. Each added project needs to pass
criteria like the McCain criteria: Is the project essential to the DOD mission,
consistent with BRAC plans, in the Future Years Defense Plan and “executable” in
the coming fiscal year? If the project can meet those criteria, the military construction
authorizing and appropriations committees may add the project.
The FY1998 Line Item Veto. Debate over whether congressionally added
projects are pork or important to the DOD mission contributed to the President’s first
use of his line item veto authority in October 1997. The line item veto was used on5
the military construction appropriations law (P.L. 105-45) to eliminate 38 projects in
million in savings would go directly to deficit reduction and not back to the
Department of Defense.
The White House cited three criteria in explaining why the President vetoed
these projects. These criteria are similar to the McCain criteria and the House
committees’ criteria for adding projects.
1. The projects were not in the Department of Defense’s future years defense
2. Design work for the projects was not completed and therefore the project
could not be executed in the coming fiscal year.
3. The projects would provide no “substantial” contribution to improving the
quality of life of U.S. troops.
According to the Clinton Administration, the vetoed projects needed to meet all
three criteria to be put on the veto list. The Administration’s criteria, however, did
not square with the data on particular projects that the military officers provided in
testimony to the Senate Appropriations Committee in October 1997. First, the data
showed that 33 of the 38 projects were in the Pentagon’s FYDP. Second, some of
the projects did have design work in progress and so it appeared that the information
that the President received on design work was inaccurate. Many of the projects
appeared to be “executable” in FY1998. Finally, the committee questioned the White
House’s judgement of the quality of life merit of the 38 projects.
See The Line Item Veto Act: Procedural Issues, by Louis Fisher and Virginia A. McMurtry,5
CRS Report 96-973, for details on the line item veto process.
In the 1998, the Supreme Court found the line item veto law to be an unconstitutional6
cession of congressional powers to the Executive Branch.
It appeared that most of the vetoed 38 projects did not meet two out of three
Administration criteria for inclusion on the veto list. Based on this assessment, the
House and Senate passed a disapproval bill (H.R. 2631) in October 1997 to overturn
the veto. The President vetoed the disapproval bill in November 1997, despite the7
White House’s admission that erroneous data were used to cancel some projects. The
Office of Management and Budget (OMB) refused to confirm which projects or how
many were vetoed by mistake. The canceled projects were restored by a veto
override of H.R. 2631 in February 1998 by the House and Senate. The veto override
restored funding for the 38 canceled projects.
The debate on the military construction line item veto highlights the issues that
arise with adding projects to the military construction budget. Which projects are
urgent? According to which criteria? And if projects are important, why doesn’t the
Administration request them?
Prospects for Congressional Additions to the FY1999 Military Construction
Budget. The Budget Enforcement Act of 1997 (P.L. 105-33) set caps on budget
authority and outlays for FY1998-FY2002. The President’s FY1999 budget8
proposal for national defense equals the cap of $270.6 billion. Unless Congress
revises the budget agreement, there would appear to be no room for Congress to add
funding to the defense budget.
This will be the first time in three years that Congress has not been able to add
money to the defense budget. The Congress added budget authority of about $7
billion in FY1996, $11.2 billion in FY1997 and $2.9 billion in FY1998 to the defense
budget. With those increases to the defense budget, military construction accounts
received congressional additions of $479 million in FY1996, $850 million in FY1997
and $800 million in FY1998.
Despite these budget agreement constraints, the defense authorizing committees
and the military construction appropriators added military construction money to the
President’s request. The House National Security Committee added $450 million and
the Senate Armed Services Committee added $500 million, in their deliberations over
the FY1999 defense authorization bills. The conference for the FY1999 Military
Construction Appropriations Bill recommended $8.450B, which is an additional
$666M to the President's request.
Importance of Housing to the Quality of Life for Servicemembers. Quality
of life issues are considered to be important to recruitment and retention of
servicemembers. Review of the military construction budget brings up quality of life
issues for family housing, barracks and child care facilities in congressional debates.
For more details on line item vetoes in the FY1998 military construction appropriations bill,7
see Appropriations for FY1998: Military Construction, by Mary T. Tyszkiewicz, CRS
For more details, see: The Appropriations Process and the Congressional Budget Act, by8
James V. Saturno, CRS Report 97-947.
The Department of Defense has found that about two-thirds of military housing
— both family quarters and barracks — are substandard because of size, safety or
condition. In 1995, then-Defense Secretary Perry established an external advisory9
committee and an in-house executive committee to look at quality of life issues for the
men and women in uniform.
Two major housing initiatives for family housing and barracks renewal emanated
from Perry’s quality of life committees. First, private sector financing and methods
for family housing were proposed and implemented in the FY1996 Defense
Authorization Act (P.L. 104-106). Second, a new barracks standard was set, called
“1 + 1". This standard provides each servicemember at sergeant or below an
individual room plus a shared bathroom with an adjoining room. Congress has been10
concerned, however, about the pace of both programs.
Privatization of Military Family Housing. To alleviate the family housing
problem, the Congress gave the Pentagon new authorities (see above) to obtain
private sector financing and expertise for family housing. The Pentagon estimates that
with these authorities, defense dollars can be leveraged to more quickly build three
times the amount of housing units financed the traditional way. The authorities are:
!guarantees, both loan and rental;
!conveyance or lease of existing property and facilities;
!differential lease payments;
!investments, both limited partnerships and stock/bond ownership; and
These new authorities can be used individually, or in combination in various
On February 26, 1998, John Goodman, Deputy Under Secretary of Defense
(Industrial Affairs and Installations) testified to the Military Installations and Facilities
Subcommittee of House National Security Committee about the use of these
authorities over the past two years. He listed the following accomplishments:
!Two Navy projects — in Corpus Christi, TX and Everett, WA — were
awarded, producing 589 units. These units are already occupied and were
primarily privately financed.
!Two projects — Army at Ft. Carson, CO and Air Force at Lackland AFB in
TX — should be awarded this spring. The Ft. Carson project will revitalize
1824 existing units and build 840 new ones. The Lackland AFB project will
supply 400 units.
!A Request for Proposal (RFP) has been released for a Marine Corps Logistics
Base in Georgia for 155 units.
Maze, Rick, “The new Congress: What’s in store for you,” Navy Times, January 20, 1997,9
Adelsberger, Bernard, “How to fix the housing crunch: Another study,” Navy Times,10
March 4, 1996, p. 6.
For more detailed information on the authorities; see the DOD’s Privatization of Military11
Housing web site, [http://www.acq.osd.mil/iai/hrso/welcome.htm].
!RFPs are being developed for 3 Army projects, 2 Air Force projects and 1
Marine Corps project, with up to 29 potential projects under consideration.
Because these are new authorities, however, start-up issues have delayed large-
scale pursuit of privatization. The Department of Defense’s Housing Revitalization
Support Office (HRSO) is coordinating the implementation of the new authorities for
each of the Services. HRSO is staffed with 16 full-time housing and real estate12
experts from each of the Services and the Office of Secretary of Defense, along with
It has taken some time for DOD to learn how to work in the commercial real
estate market. The Office of Management and Budget had to determine rules to
account for government obligations with each of the authorities, and the rules were
not devised until June 1997. Also, the Pentagon needed to translate loan and loan
guarantee concepts into actual documents that the private financial community would
trust for investment grade financing.
Representative Joel Hefley, chairman of the Military Installations and Facilities
Subcommittee of the House National Security Committee pointed out in a March 10,
1998 hearing that the military housing privatization’s authorities expire on September
30, 2000 unless extended by Congress or made permanent law. Mr. Hefley stated
that, “My inclination at this time would be to extend the authorities once the five-year
period expires, but in order to justify an extension, Congress will have to see
significantly better execution.”
The Senate is interested in how the use of housing privatization initiatives could
affect future Base Realignment and Closure (BRAC) rounds. This concern came up
in a March 3, 1998 Senate Appropriations Subcommittee on Military Construction
hearing on the FY1999 military construction budget. Senator Stevens expressed
concern that many of the housing privatization initiatives contain various mechanisms
that shift financial risk and liability to the government, especially with respect to
BRAC actions. Senator Stevens commented that housing projects with these
guarantees could be an advantage to a base in future BRAC rounds and this is
something the committee should monitor. The FY1998 Senate Appropriations
Committee report on Military Construction continued similar themes.
Barracks Improvements. To improve the conditions of barracks, the
Department of Defense is enforcing new standards. According to DOD official John
Goodman’s February 26, 1998 testimony to the House National Security Committee
on the FY1999 military construction budget, the Pentagon directed that gang latrine
barracks be eliminated by FY2008. The Air Force will meet that goal in FY1999,
with the Marine Corps following in FY2005 and Army & Navy in FY2008.
Implementation of the 1 + 1 standard (see above) for barracks housing will not
be completed until well into the next century. John Goodman testified that the
standard will be met in FY2020 by the Army, in FY2013 by the Navy, and in FY2019
Each Service has their own program name for housing privatization: Army - Capital12
Venture Initiative (CVI); Navy - Public-Private Venture (PPV); and Air Force - Housing
by the Air Force. The Marine Corps plans to build to an interim 2+0 (two Marines
in one room, sharing a bath) standard by FY2035. These timetables were noted in the
FY1998 House Appropriations Committee report (H.Rept. 105-150), which stated
that it will take $14.3 billion and 20 years to reach the 1 + 1 standard.
Base Realignment and Closure (BRAC) Concerns. Legislation for more
BRAC rounds would start in the authorizing defense committees of the House and
Senate. Also — if passed — budget authority for future BRAC rounds would reside
in military construction appropriations accounts.
However, this year’s Administration request for two more BRAC rounds in
FY2001 and FY2005 has been received by the Congress with skepticism. During13
the FY1998 review of the defense budget, both the House and Senate rejected
legislation to approve more military base closures. Instead, the Congress passed
Section 2824 of the FY1998 National Defense Authorization Act (P.L. 105-56),
which required the Pentagon to report the costs and savings from previously approved
domestic military base closures.
The required report, entitled “The Report of the Department of Defense on Base
Realignment and Closure” was released by the Pentagon in April 1998. The report
makes the case that:
!the DOD has 23% excess base capacity;
!two new BRAC rounds will save about $3 billion per year, after fully
!actual BRAC costs reflect budget estimates;
!the BRAC process overstates costs for environmental restoration, and
!previous BRAC rounds in 1988, 1991, 1993 and 1995 are saving billions. 14
Both defense authorizing committees rejected the Administration’s proposal for two
more base closure rounds in May 1998.
Environmental Issues. The Senate continues to raise concerns about the cost
of environmental clean-up and its effects on military functions and readiness. The
Chairman of the Senate Appropriations Subcommittee on Military Construction,
Senator Burns mentioned environmental issues, during his subcommittee hearing on
March 3, 1998. Senator Burns noted that 45% of the Army’s FY1999 BRAC funding
($489M) is for studies, clean-up and restoration of BRAC facilities and that these
costs are a growing concern to him. Senator Burns said that the subcommittee will
look at where the clean-up money is going, how it is being spent and to what degree
military construction facilities are cleaned when they are turned over to the private
For recent history on congressional BRAC debates, see: CRS Report 97-674, Military Base13
Closures: Time for Another Round?, by David E. Lockwood.
Department of Defense, The Report of the Department of Defense on Base Realignment14
and Closure, April 1997, pp. iii-vi. The report also includes appendices with a history of
prior rounds, and the DOD legislative proposal for new BRAC authorities. Also, see the
DefenseLINK web site for the report and related sites at the following address:
Use of Advanced Procurement for Army Military Construction. This year,
the Congress will consider the Army’s proposal to use advanced procurement
procedures for military construction. This will be an exception to current practices
for defense funding.
When Congress appropriates money for defense programs, it generally pays all
the costs up front in one fiscal year. This practice is known as full funding. It was
mandated by Congress in the 1950s to give full visibility to the cost of weapons
procured. Therefore, all the money estimated at the time to complete the entire
project — such as production of 21 Trident missiles, overhaul of an aircraft carrier,
or construction of an ammunition depot — is approved as a single package by the
Congress. Often, the procurement of these weapons systems can span many years.
As an exception to this practice, Congress sometimes provides funding for
advance procurement of “long-leadtime” weapons components, such as nuclear-
power plants for Navy warships. 15
The FY1999 Army military construction request proposes to use advanced
procurement for some of its projects. Acting Assistant Secretary of the Army
(Installations, Logistics and Environment) Alma Moore stated at the House National
Security Committee hearing on February 26, 1998 that with advance appropriations,
the contract will not define the work to be performed by the contractor, but only limit
the work by the amount appropriated in a given year. Advance appropriations of
$555,050,000 are requested for:
!the U.S. Disciplinary Barracks, $13,000,000;
!the Roi Namur Power Plant, $36,000,000;
!the Fort Hood Railhead facility, $15,000,000;
!the Cadet Physical Development Center, $73,000,000, and
!four Chemical Demilitarization projects (Umatilla, Pine Bluff, Aberdeen and
Newport) at $418,050,000.
To get these large military construction projects started, the Office of
Management and Budget allowed the Army to propose advanced procurement
funding to the Congress. By approving advanced procurement, the Congress limits
its discretion on future military construction budgets, since it is committing future
The Army has been the executive agent of the Department of Defense chemical
demilitarization (chem demil). The Pentagon decided, in response to its Defense
Reform Initiative, that the Army now has total responsibility for chemical
demilitarization. Therefore, a total of $125 million was transferred from the DOD
According to the Department of Defense, advance procurement is: “Authority provided in15
an appropriations act to obligate and disburse during a fiscal year before that in which the
related end item is procured. The funds are added to the budget authority for the fiscal year
and deducted from the budget authority of the succeeding year. Used in major acquisition
programs for advance procurement of components whose long-lead-time requires purchase
early in order to reduce the overall procurement lead-time of the major end item. Advance
procurement of long lead components is an exception to the DOD ‘full funding’ policy.”
Financial Management Regulation, Volume 2A. p. 1-2.
military construction budget to the FY1999 Army military construction budget for six
chem demil military construction projects.
The House National Security Committee and the Senate Armed Services
Committee rejected the transfer of chem demil from the Office of Secretary of
Defense (OSD) to the Army in their FY1999 defense authorization bills. Both
committees felt that chem demil is of national importance and therefore needs to be
in OSD. Each committee also cut funding from the chem demil program, because of
a large amount of unobligated funds already in the accounts. The military
construction appropriators did the same.
Major Funding Trends
The Administration proposed significant reductions in military construction
spending for FY1999, compared to the enacted FY1998 amount. The President’s
FY1999 proposal of $7.8 billion is a 12% reduction from the FY1998 $8.9 billion
level approved by Congress. The military construction conference committee
recommended $8.450B for FY1999, an additional $666M to the President's request.
Table 2 shows overall military construction funding since FY1995, including
family housing. Table 3 breaks down the FY1999 request by appropriations account
and compared to FY1997 and FY1998. Table 4 shows congressional action on the
FY1999 military construction appropriations bills. Table 5 shows congressional
military construction add-ons for Guard and Reserve projects since FY1985.
H.R. 3616 (Spence)
Referred to the House Committee on National Security, April 1, 1998. Full
committee markup held, May 6, 1998. Ordered to be reported as amended, May 6,
1998. Reported to House, amended, by House Committee on National Security
(H.Rept. 105-532), May 12, 1998. Rules Committee Resolution (H.Res. 435)
reported to House, May 14, 1998. Passed House (Amended) by recorded vote: 357
- 60 (Roll No. 183), May 21, 1998. Senate took up H.R. 3616, struck all after the
enacting clause, inserted the text of S. 2057, approved the bill as amended, by
unanimous consent, and requested a conference, June 25, 1998. Conference
agreement announced, September 17, 1998 and reported (H.Rept. 105-736),
September 22, 1998. Conference report approved in the House (373-50), September
S. 2057 (Thurmond)
Committee on Armed Services ordered to be reported an original measure, (S.
2057), May 7, 1998. Committee on Armed Services. Original measure reported to
Senate by Senator Thurmond, without written report. A companion bill, S. 2060
ordered to be reported (S.Rept. 105-189). Placed on Senate Legislative Calendar
under General Orders, Calendar No. 362, May 11, 1998. Considered by the Senate,
May 13, 14, and 15, and June 19, 22, and 23 1998.
S. 2160 (Burns)
Committee on Appropriations. Original measure reported to Senate by Senator
Burns, with written report (S.Rept. 105-213), on June 11, 1998. Placed on Senate
Legislative Calendar under General Orders. Calendar No. 410. Measure laid before
Senate by unanimous consent, June 25, 1998. Senate passed companion measure
H.R. 4059 in lieu of this measure by Unanimous Consent, June 25, 1998.
H.R. 4059 (Packard)
House Committee on Appropriations reported an original measure, with written
report (H.Rept. 105-578) on June 16, 1998. Placed on the Union Calendar, Calendar
No. 326. Rules Committee Resolution (H.Res. 477) reported to House on June 18,
1998. Rule H. Res. 477 passed House, on June 19, 1998. Passed House by Yea-Nay
Vote: 396 - 10 (Roll No. 254), June 22, 1998. The language of S. 2160 was adopted
as an amendment by Unanimous Consent in the Senate, amended and passed in the
Senate on June 25, 1998. Conference report H. Rept. 105-647 filed in House on July
24, 1998. House Agreed to Conference Report by the Yeas and Nays: 417 - 1 (Roll
No. 353) on July 29, 1998. Senate Agreed to Conference Report by the Yeas and
Nays: 87-3 on September 1, 1998. Became P.L. 105-237 on September 20, 1998.
Table 2. Mil. Con. Appropriations, FY1994-98
(budget authority in millions of dollars)
Actual Actual Actual Enacted Request Enacted
FY1995 FY1996 FY1997 FY1998 FY1999 FY1999
Construction 5,426 6,893 5,718 5,089 4,301 4,907
Housing 3,392 4,260 4,131 3,807 3,477 3,541
Total 8,818 11,153 9,849 8,896 7,778 8,449
Source: Actual FY1995-97 data and Request FY 1999 data from Department of Defense,
Financial Summary Tables, February 1998 and previous years’ reports and FY1999 Military
Construction Appropriations Conference Report (H.Rept. 105-647).
Note: May not add exactly, due to rounding errors.
Table 3. Mil. Con. Appropriations by Account: FY1997-99
(in thousands of dollars)
Account FY1997 FY1998 FY1999Actual Est. Request
MilCon, Air Force748,964626,505454,810
MilCon, Army National Guard78,086102,49947,675
MilCon, Air National Guard184,855190,44434,761
MilCon, Army Reserve55,54355,45371,287
MilCon, Navy Reserve37,57926,65915,271
MilCon, Air Force Reserve52,80515,03010,535
BRAC Acct., Army 471,042397,717489,222
BRAC Acct., Navy 1,201,064982,846622,932
BRAC Acct., Air Force580,390607,502538,621
BRAC Acct., Defense-wide120,97856,78979,929
NATO Security Investment Program172,000151,600185,000
Foreign Curr. Fluct., Constr., Def.38,112——
Total: Military Construction5,717,9425,089,3094,300,744
Family Housing Const., Army158,503196,300103,440
Family Housing Operation & Debt, Army1,212,4661,104,8681,104,733
Family Housing Const., Navy & Marine Corps496,986391,832280,790
Family Housing Operation & Debt, Navy and
Family Housing Const. AF318,037293,709226,035
Family Housing Operation & Debt, AF816,509817,534789,995
Family Housing Const., Def-wide4,3714,950345
Family Housing Operation & Debt, Def-wide30,96332,62436,899
Homeowners Assist. Fund, Def.36,181—12,800
DOD Family Housing Improvement Fund27,900—7,000
DOD Unacccompd. Housing Improvement Fund5,000——
Rossmoor Settlement Account (for the Navy use
in San Diego, CA via Section 2208 in P.L. 104-
Total: Family Housing4,131,2393,807,2213,477,330
Source: Department of Defense, “Financial Summary Tables,” February 1998.
Table 4. Mil. Con. Appropriations by Account - Congressional Action
(in thousands of dollars)
MilCon, Navy 468,150570,643565,030604,593
MilCon, Air Force454,810550,475627,874615,809
MilCon, Army National Guard 47,67570,338124,599142,403
MilCon, Air National Guard 34,76197,701175,877169,801
MilCon, Army Reserve71,28771,894101,633102,119
MilCon, Navy Reserve15,27133,72121,62131,621
MilCon, Air Force Reserve10,53535,37122,83534,371
BRAC Acct., Part III433,464433,464433,464427,164
BRAC Acct., Part IV 1,297,240 1,297,2401,297,240 1,203,738
NATO Security Investment Program185,000169,000152,600154,000
Total: Military Construction4,115,9294,721,521 4,893,734 4,907,459
Family Housing, Army1,208,1731,180,5371,229,2231,229,987
Family Housing, Navy and Marine Corps1,196,0831,045,750 1,201,8831,207,883
Family Housing, Air Force1,016,030993,0841,092,6901,064,169
Family Housing, Defense-wide37,24437,24437,24437,244
Family Housing Improvement Fund7,000242,4387,000 2,000
Homeowners Assistance Fund12,8007,50012,8000*
Total: Family Housing3,477,3303,506,5533,580,8403,541,283
Family Housing, N&MC (H.R. 4059, Sec
WA) 6,000 6,000 6,000 **
Sources: H.Rept. 105-578, S.Rept. 105-213 & Congressional Record, 6/25/98 and 6/26/98; H. Rept. 105-
* Sec. 127 of the conference report provides transfer authority from the BRAC accounts to the Homeowners
** The Paine Field, WA project was included in the Family Housing, Navy & Marine Corps total in the
Table 5. Congressional Additions to Annual Department of Defense Budget
Requests for National Guard and Reserve Military Construction, FY1985-98
(current year dollars in thousands)
1985 Enact. 98,603111,20069,30660,80067,800407,709+16,909
Source: Department of Defense, Financial Summary Tables, successive years.
For Additional Information
CRS Issue Briefs
CRS Issue Brief 96022. Defense Acquisition Reform: Status and Current Issues, by
Valerie Bailey Grasso.
CRS Report 93-317. A Defense Budget Primer, by Keith Berner and Stephen
CRS Report 98-205. Appropriations for FY1998: Defense, by Stephen Daggett.
CRS Report 98-155. Defense Budget for FY1999: Data Summary, by Stephen
Daggett and Mary T. Tyszkiewicz.
CRS Report 94-515. Defense Burdensharing: Is Japan’s Host Nation Support a
Model for Other Allies?, by Stephen Daggett.
CRS Report 91-669. Military Construction: Current Controversies and Long-Term
Issues, by Martin Cohen and Stephen Daggett.
Selected World Wide Web Sites
U.S. Department of Defense, Installations Home Page
House Committee on Appropriations
Senate Committee on Appropriations
CRS Appropriations Products Guide
Congressional Budget Office
General Accounting Office
Office of Management & Budget