CONTENTS PRINCIPAL WITNESSES WHO APPEARED IN PERSON OR SUBMITTED WRITTEN STATEMENTS Page Fraser, John C., Jr., Director of Shore Activities, Planning and Programming Statement..... Prepared statement Mosemann, Lloyd K., Deputy Assistant Secretary of the Air Force for Logistics and Communications, Department of the Air Force: Statement...... Prepared statement Newkirk, Frank, Jr., Indiana State Representative: Prepared statement.. Nichols, Hon. Bill, a Representative from Alabama, chairman, Investigations Register, Lt. Gen. Benjamin F., Jr., Deputy Chief of Staff for Logistics, De- Statement...... Prepared statement Shriber, Maurice, Deputy Assistant Secretary of Defense for Logistics and Statement...... Prepared statement Watkins, Hon. Wes, a Representative from Oklahoma: Statement....... Prepared statement (III) CONTRACTING OUT OF CORE LOGISTICS, CONTRACTING OUT OF FIREFIGHTING AND SECURITY GUARD FUNCTIONS AND RELATED ISSUES HOUSE OF REPRESENTATIVES, The_subcommittee met pursuant to call at 10:02 a.m., in room 2212, Rayburn House Office Building, Hon. Bill Nichols (chairman of the subcommittee) presiding. OPENING STATEMENT OF HON. BILL NICHOLS, A REPRESENTATIVE FROM ALABAMA, CHAIRMAN, INVESTIGATIONS SUBCOMMITTEE Mr. NICHOLS. This morning the subcommittee will receive testimony from Department of Defense witnesses on DOD's implementation of section 1231 of last year's authorization act regarding core logistics functions, second, the current prohibition on contracting out firefighter and security guard functions, and third, the Army's recent decision to study Crane and McAlester Army ammunition activities for possible conversion to contract. Last, but certainly not least, we will hear from one of this body's recognized experts on contracting out, the Hon. Wes Watkins, who represents the employees at McAlester Army ammunition plant. Before we hear from our panel or witnesses, I would like to make some brief comments about the importance of today's hearing. In the case of core logistics, I hope that this hearing represents the last leg of a long and sometimes painful journey to provide statutory protection for critical jobs that are essential to maintain the readiness and capability of our military forces. With the enactment of section 1231, I think that the letter of the law and legislative intent behind it are too clear to be misunderstood. First of all, the law lists each and every Department of Defense core logistics activity. The law further states that depot maintenance functions at these activities are exempted from A-76 review unless the Secretary of Defense waives that exemption. The law requires that even when the Secretary of Defense decides to use his waiver authority, the U.S. Congress must be notified and a hold and wait period must elapse before the waiver goes into effect. Only then can the announcement be made to Congress that the function or subfunction involved is to undergo an A-76 review. The bottom line, then, is that all depot maintenance func tions at core logistics activities are covered by the statute and that no A-76 reviews of these functions can be announced until a waiver is in effect. I have looked over the prepared statements submitted this morning, and am encouraged by the willingness of the Department and service witnesses to comply with law. Although the list of depot maintenance functional areas is broader than I originally had in mind when I began this effort to identify core logistics jobs, it is certainly a step in the right direction. And after we have a chance to study it in relation to specific jobs at core logistics activities, it may turn out to be the best possible approach. In short, I think we have come a long way toward a goal of a mutually satisfactory resolution of past differences and I believe that a spirit of cooperation is all that is needed to smooth out any rough edges. On the other hand, efforts to reach accommodation with regard to contracting out firefighting and security guard functions have not been as successful. Despite legislative prohibitions over the past 4 years, it is clear that the Department still believes in the desirability of reviewing these functions. Hopefully, today's hearing will give us a better understanding of the Department's position and lay the groundwork for the final resolution of this issue also. Last, the subcommittee would like to address the issues stemming from the Army's recent decision to undertake A-76 reviews and Crane and McAlester Army ammunition activities. The problems associated with a similar situation at Hawthorne Army ammunition plant are too recent and serious to allow them to be repeated again at Crane and McAlester. In addition, there are a number of other mobilization base and readiness issues that have to be taken into consideration. Today's testimony should help us address those issues and provide a basis for further action if that becomes necessary. We have assembled here a distinguished panel representing the Defense Department, Mr. Maurice Shriber, Deputy Assistant Secretary of Defense for Logistics and Materiel Management, Department of Defense; Lt. Gen. Benjamin F. Register, Jr., Deputy Chief of Staff for Logistics, Department of the Army; Mr. Eric Orsini, Deputy Assistant Secretary of the Army for Logistics, Department of the Army; Rear Adm. John C. Fraser, Jr., Director of Shore Activities, Planning and Programming Division, Department of the Navy; and Mr. Lloyd K. Mosemann, Deputy Assistant Secretary of the Air Force for Logistics and Communications, Department of the Air Force. Gentlemen, you may proceed, and I presume Secretary Shriber would lead off here. STATEMENT OF MAURICE SHRIBER, DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR LOGISTICS AND MATERIAL MANAGEMENT, DEPARTMENT OF DEFENSE, ACCOMPANIED BY DOUGLAS D. FARBROTHER, PRINCIPAL DIRECTOR INSTALLATIONS, OFFICE OF THE SECRETARY OF DEFENSE Mr. SHRIBER. Yes, sir, thank you very much. It is nice to see you back again. We originally were supposed to be paneled separately, Mr. Chairman, so let me, if I could, just go over how we plan to proceed since we are now going to be paneled at one table. I'll give a brief summary of the OSD policies and procedures concerning core logistics. On my left is Mr. Doug Farbrother. He is the principal director for installations. He is responsible for A-76 policy and will be addressing the firefighter and guard issues within the Department. I think you have introduced already the other members of the panel. We will summarize our statements and try and make sure we leave sufficient time to answer all your questions. Mr. Chairman and members of the committee, it is indeed a pleasure for me to appear before you today to discuss our implementation of section 1231 of the fiscal year 1986 Defense Authorization Act regarding core logistics activities. I would also like to discuss the moratorium on OMB Circular A-76 competitions of firefighting and security guard functions and our report to Congress of February 28, 1986. Section 1231 defines core logistics as the Government personnel, both management and workers, and their facilities and equipment used to perform depot maintenance of mission essential material at the depots listed in the section. The law requires that core logistics workload may not be performed by nongovernmental personnel unless a waiver is granted by the Secretary of Defense. We understand the law and we intend to follow it. The authority to make a determination under section 1231 that a core logistics activity is no longer required to be performed inhouse for national defense reasons will be retained within OSD and will not be delegated to the services. My office will clear every waiver to section 1231 before you receive the required notification to Congress. We will also observe the required waiting period before commencing the A-76 cost comparison. In your letter requesting these hearings, you indicated an interest in a detailed listing of depot maintenance functions at core logistics activities. In response to this request, the military departments will each submit for the record a list of depot repair, maintenance, modification, conversion, and overhaul of equipment functions by individual core logistics activities. In addition, we plan to continue to use our decision-tree process to evaluate organic versus contract options for specific equipment. This process considers items such as mobilization base requirements, surge requirements, and minimum organic peacetime capacity. Mr. Mosemann from the Air Force will provide a more detailed explanation of this process in his testimony. I would now like to turn to the discussion of firefighting and security guard services. For the last 4 years, we have been prohibited from entering into any new contracts for firefighting or security guard services within the United States. The current moratorium extends to September 30, 1986. This comprehensive ban on contracting is causing us to use our scarce resources in inefficient and ineffective ways and is not serving the best interest of the national defense. Of course, there are critical firefighting and security guard activities which we would never consider for contract operation, but there are also numerous |