now we are on appropriated funds. This concerns the management, the upkeep and the payment on the old Wherry buildings and also the Capehart buildings, is that correct?

Mr. MORRIS. That is correct, sir.

Senator STENNIS. All right, now give us the high points of it?

Mr. MORRIS. Through this device we are able to program and budget within the departments, and totally for the Department of Defense, all moneys related to the acquisition and furnishing of housing to the military services, including such housing as might be leased. Projects for each year are started in the planning phase as early as possible, and our present schedule calls for placing under contract all authorized projects within 7 months from the date of the appropriation bill. This is a significant improvement over past practice.

We have recently been able to standardize upon a selected group of architectural designs, which not only will save architectural fees but assure the best quality and the most suitable designs for use by all departments under various geographic and other considerations. We have been able through the application of the cost accounting program in the past year to establish yardsticks as to acceptable levels of cost for various ages and types of housing, and through this device our savings this year will amount to some $6 million in operating costs. We expect those savings to rise to about $25 million in the next 2 years. So this is producing better quality housing at lower cost, we believe, for all members of the armed services.

Senator STENNIS. As I understand it, it is through this fund that you replace a refrigerator in a house that is furnished with a refrigerator. Would you replace that refrigerator through this fund? Mr. MORRIS. Any requirements for the furnishing and procurement of equipment; yes, sir.

Senator STENNIS. I was talking about equipment.

Mr. MORRIS. Yes, sir.

Senator STENNIS. And if the roof should blow off the house, repair would come out of this fund?

Mr. MORRIS. Yes, sir. This fund covers all costs associated with housing.

Senator STENNIS. And you were with the Department of Defense when this plan was inaugurated, were you not?

Mr. MORRIS. I was, sir.

Senator STENNIS. And it has been working 2 years.

Mr. MORRIS. Yes, sir.

Senator STENNIS. What is your estimate of it now, a success or failure?

Mr. MORRIS. My estimate, sir, is it is proving to be very successful. We will continue to improve upon it each year because we now have information that we can study and use for management purposes. Senator STENNIS. Do you have a figure in mind as to the cost per unit for this maintenance and operations as far as it goes in your plan?

Mr. MORRIS. Mr. Chairman, we have precise breakdowns now for each base and each class of housing. They necessarily range over a wide spectrum, depending upon age, location, size, and so on. We can furnish you a breakdown when Mr. Reed makes the detailed presentation on housing.

Senator STENNIS. I wish you would, and then give us an overall average. We can't remember all those figures, but we might remember what the average is.

Mr. MORRIS. The overall average, sir, is $68 per house per month. That includes all houses in the inventory, some 340,000 units. It is a fairly meaningless figure as an overall figure because of the widely divergent ages, sizes, conditions, and locations of our housing.

Hence we have to break the figure down to actual base level where we can better manage it.

Senator STENNIS. I think it is well to break it down.

All right, proceed.

Mr. MORRIS. Thank you, sir. In other respects as to the management of our construction and military facilities program, we wanted to call the committee's attention to progress made in several other

areas.

One is that of improving upon design standards and criteria and the increased surveillance now being given construction on a Department of Defense-wide basis. We have made improvements in the management of minor construction. We have surveyed the designation of departments to have area of responsibility for design and construction in various parts of the world, with the objective of having single responsibility established so far as possible in any one area. We have improved upon our real property maintenance and operation during the past year, deriving savings of some $23 million through better base level operating and maintenance practices. We expect these savings also to increase in future years to a level of about $38 million.

Improved base utilization has been one of our most continuous efforts over the past 3 years, and as a result of the studies of the use of our bases, and endeavoring to consolidate our activities on the smallest number of our hardest core long-term bases, it has been possible to effect economies by reducing or closing unneeded activities. When completed these activities will produce annual savings, since 1961, of some $551 million and release some 696,000 acres of land as excess to defense needs.

This also means release for other assignments, or actual reductions, of over 81,000 spaces, military and civilian. We recognize that these actions have an adverse economic impact on the communities and employees concerned. Accordingly we have instituted vigorous programs to assist the employees affected.

Every employee whose job is eliminated through such an action will be offered another job opportunity, and every effort is being made to help the communities find new payrolls and uses for these excess defense properties.

Mr. Chairman, my associates and I would now be prepared to answer any questions that the committee might have on our program. Senator STENNIS. Mr. Secretary, additional questions may arise later but your statement gives us an overall review. We may have to ask you to come back. Let's see if there are any questions now. Senator Cannon, do you have some question?

Senator CANNON. No questions at this time.
Senator STENNIS. Senator Young.

Senator YOUNG. Mr. Secretary, I wonder if the occupants of these houses are encouraged, or even instructed to bear a part of the maintenance and do some work in keeping up livable quarters.

Mr. MORRIS. Tenant maintenance is one of the practices which has been greatly improved upon in the past several years, sir, and that is part of the source of savings of $6 million that I did refer to.

Senator YOUNG. It seems to me the cost of maintenance is quite high, and I should think the tenants themselves would be very strongly encouraged to do some work in keeping their homes in livable condition. Are they?

Mr. MORRIS. They are, sir.

Senator YOUNG. Thank you.

Senator STENNIS. I agree with Senator Young. It seems to me that the cost and maintenance of these houses is very high, even though there are some that necessarily would be quite expensive due to location. I am told, Senator, that there is a great variation between care that the different occupants of these houses give. Some you know just don't take any care of them at all and others take the best possible care. That is one of the explanations I suppose. Mr. Morris, if you don't have anything else

Senator CANNON. Mr. Chairman, I have one or two questions. If these have been gone into will you just call it to my attention?

Mr. STENNIS. That will be all right of course. Generally we put the figures in the record, Senator, but any questions you have are certainly in order.

Senator CANNON. Mr. Secretary, what is the status of the rental guarantee program now? Did you go into that in detail in your statement?

Mr. MORRIS. I touched on it only briefly, sir. Mr. Reed, my housing deputy, can summarize the overall status of the program.

Mr. REED. Senator, we have just, as you know, gotten new authority last year. We are currently beginning to solicit proposals for Rota, Spain, as our first project. We are optimistic-we sent a team over there that we can provide housing in Spain with the new rental guarantee situation.

Senator CANNON. What is the status on the rental guarantee units that we have had in the past? For example, we had as I recall a rather unfortunate experience in France here a few years ago.

Mr. REED. I could submit data for the record on the individual cases. Overall, the experience has not been too bad, sir. We had both the French and Moroccan situation which you are aware of, but I would say overall this is an economical way of providing housing. Senator CANNON. Would you provide a chart showing the current status of our guarantee housing program up to date for the record? Mr. REED. Yes, sir.

(This information furnished to the committee but not being printed.)

Senator CANNON. On page 11 of your statement, Mr. Secretary, you show this debt payment breakdown. What does that debt payment represent?

Mr. MORRIS. This is the payment, sir, of our mortgage debt for the Capehart and other programs.

Senator CANNON. And represents all of the acquisitions under the Capehart program and when you bought under the Wherry program?

Mr. MORRIS. Yes, sir.

Senator CANNON. And all of the Government-owned projects?
Mr. MORRIS. Yes, sir; all mortgage debt.

Senator CANNON. And that is current and up to date?

Mr. MORRIS. Yes, sir; and these are fairly level payments we will' have for some years yet.

Senator STENNIS. The Secretary testified that he was one of the fathers of this plan and it was working well. The committee wants to be recognized as one of the fathers, and the House committee, also. Senator CANNON. Thank you, Mr. Chairman. That is all I have. Senator STENNIS. Mr. Reed, do you have something you want to say?

Mr. REED. We were prepared, Mr. Chairman, a little bit later to go into the housing in detail when the committee gets to that title. Also, we are ready to handle any specific questions you have now, sir.

Senator STENNIS. Mr. Sheridan, do you have anything you wish to say? Mr. Sheridan has been a long time with this military construction program, gentlemen. He is well versed in it.

Mr. SHERIDAN. No, I don't have anything. Thank you, Mr. Chairman.

Senator STENNIS. All right, we may call on you later.
Mr. SHERIDAN. I am ready.

Senator STENNIS. Thank you very much, Mr. Secretary. General Shuler, come around.

Gentlemen of the committee, General Shuler is a very accomplished officer, particularly in this field where he is rendering a very valuable service. General Shuler has rendered a lot of valuable service that I know about and I know he has rendered a great deal that I do not know about. He is now Director of Installations and Deputy Chief of Staff for Logistics for the Army.

General, we are glad to have you here. Will you proceed?

STATEMENT OF MAJ. GEN. W. R. SHULER, DIRECTOR OF INSTALLATIONS, OFFICE, DEPUTY CHIEF OF STAFF FOR LOGISTICS; ACCOMPANIED BY E. H. MERRILL, DEPUTY ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS); BRIG. GEN. F. J. CLARKE, DIRECTOR OF MILITARY CONSTRUCTION, OFFICE, CHIEF OF ENGINEERS; COL. W. R. JOHNSON, CHIEF, CONSTRUCTION DIVISION, OFFICE, DEPUTY CHIEF OF STAFF FOR LOGISTICS; LT. COL. J. J. KELLY, JR., OFFICE OF THE CHIEF OF ENGINEERS; MAJ. R. E. GRAF, CONSTRUCTION DIVISION, OFFICE, DEPUTY CHIEF OF STAFF FOR LOGISTICS; AND W. J. ELLENBERGER, CHIEF, PUBLIC WORKS PLANNING BRANCH, OFFICE, DEPUTY CHIEF OF STAFF FOR LOGISTICS

General SHULER. Mr. Chairman, I have a statement that I can brief for the committee.

Senator STENNIS. Shall we put the statement in the record and let you summarize it?

General SHULER. Yes, sir.

Senator STENNIS. All right, we are glad to have you here as a witness. We are not going to swear you this time.

General, proceed.

General SHULER. Mr. Chairman, and members of the committee, I am Maj. Gen. William R. Shuler, Director of Installations, Office of the Deputy Chief of Staff for Logistics, Department of the Army. I have the privilege of appearing before this committee to present the Army's fiscal year 1965 military construction program.

The Department of the Army request totals $405,148,000 in new authorization for military public works. The Army will indicate reductions in this request which total $38,983,000 during consideration of the individual line items. These reductions consist of line items withdrawn or reduced by the Army during the House Armed Services Committee hearings and items denied by the House Armed Services Committee for which the Army will make no reclama. We also request amendments to Public Laws 87-554 and 88-174 to cover deficiencies of $367,000 in currently authorized items. Additionally, we request an exception to repeal of $3,105,000 of authorization contained in Public Law 87-57 and $5,744,000 of authorization contained in Public Law 87-554.

Of the $405,148,000 in new authorization requested $267,961,000 is for construction within the United States and $51,902,000 for construction outside the United States. Our request for construction of classified facilities is in the amount of $67,785,000.

As in the past, we request authorization for construction made necessary by changes in Army missions and responsibilities occasioned by specific urgent or unforeseen circumstances. We are requesting $17,500,000 for this emergency authorization which has proved to be extremely important in meeting these unforeseen construction requirements in recent years.

Our program presents the Army's most urgent construction needs. These requirements have been thoroughly staffed and coordinated with the other Army programs. This program is in consonance with the fiscal years 1964-69 force structure and financial program as approved by the Secretary of Defense. Program emphasis has been given to these projects supporting new missions, new deployment of tactical units, and provision of adequate troop housing and supporting facilities.

During World War II temporary facilities were hastily constructed for rapid mobilization using criteria, designs, and materials for a 5year life expectancy. Now some 20 years later about one-quarter of the Army's physical plant is comprised of these old deteriorated structures. Although some replacement has been realized, recent funding levels have not provided an adequate level of replacement for opera tional, maintenance, and administrative facilities. It is the desire of the Army, under the 5-year force structure and financial program concept, to establish an approved level of effort commensurate with the presently approvel level of effort for troop housing and supporting facilities which, if approved by the Congress, will be completed withir a programing period of approximately 10 years. A substantial annua replacement program is needed to preclude a prohibitively large re placement program in any one of 2 years' programs resulting from widespread structural failure of these antiquated temporary facilities Even though this year's authorization request provides for an creased replacement rate it is apparent that an additional increas will be required in future year programs.