SAFEGUARD AUTHORIZATION

Senator MANSFIELD. The next witness is Colonal Loome. Proceed. Colonel LOOME. I am Colonel Loome, director of Budget and Manpower, Safeguard System Office. I have no prepared statement, sir. Senator MANSFIELD. All right. Colonel, I understand you have something to do with the Safeguard and the application of funds thereto. What action did the Senate Armed Services Committee take in regards to authorizing funds for the continuation of the construction of the Safeguard System?

Colonel LOOME. Sir, the Senate Armed Services Committee reduced our fiscal year 1972 authorization request by $74 million, from $172.5 million to $98.5 million. Concurrently, they withdrew the previous authorization to commence construction at a third site near Whiteman Air Force Base in Missouri, denied our request to commence construction of a fourth site near Warren Air Force Base in Wyoming, and denied our request for advanced preparation of an alternate fourth site at the National Command Authority in Washington, D.C.

Senator MANSFIELD. If this reduction stands, will it in any way affect the construction of sites at Malmstrom and Grand Forks?

Colonel LOOME. No, sir; the $74 million reduction in the Safeguard request will not affect the construction at Grand Forks or Malmstrom. Sufficient funds are still available to complete the construction at both of these sites. However, we should recognize that because of higher labor costs, it may be necessary to apply at Malmstrom some of the funds already appropriated and available in addition to those programed for Malmstrom. The exact amount which will be diverted will depend on the final outcome of our current contract negotiations. Eventually, the increased costs at Malmstrom will have to be reflected in the program costs for follow-on sites at Whiteman and Warren.

Senator MANSFIELD. Is it not true that at Malmstrom no construction was started because labor and the contractors just could not get together on a wage scale?

Colonel LOOME. That is essentially correct for the follow-on major construction, sir. The two bids made on the construction contract in March 1971 exceeded our estimates by more than 17 percent. Analysis of the bids indicated that the absence of a project wage agreement led the bidders to include high contingency factors in their bids. The bids were rejected as excessive, in April 1971. Subsequent negotiations with the same bidders have been carried on under the auspices of Executive Order 11588, March 29, 1971, which provides for stabilization of wages and prices in the construction industry.

Senator MANSFIELD. So if they don't get together, it may be that construction at Malmstrom will be held in abeyance until some time

in the future.

Colonel LOOME. Yes, sir; that is correct.

Senator MANSFIELD. Despite the need for these two systems, according to administration testimony.

Colonel LOOME. We are hopeful, of course, that an agreement will be reached and very shortly. We have a target date of November 1 for award of the contract.

Senator MANSFIELD. Colonel, will this reduction made by the armed services affect in any way in assistance to the communities in North Dakota and Montana?

Colonel LOOME. No, sir; it will not. The Department of Defense authorization legislation recommended by the SASC and subsequently approved by the Senate provided $5.2 million for community impact

assistance.

Senator MANSFIELD. Colonel, will the funds requested for this fiscal year be sufficient to complete construction of both Grand Forks and Malmstrom?

STATUS OF SAFEGUARD ACTIVITIES AT MALMSTROM

The fact sheet and the document having to do with the status of the Safeguard activity at Malmstrom and one having to do with community impact assistance relating to Safeguard will be incorporated in the record at the appropriate place.

(The fact sheet follows:)

SUBJECT: Status of SAFEGUARD Activities at the Malmstrom Site

PURPOSE: To provide information on the current status of SAFEGUARD activities at the Malmstrom site.

FACTS.

1. Location. The SAFEGUARD facilities for Montana consist of the Missile Site Radar (MSR) and its associated SPARTAN and SPRINT field located near Conrad in Pondera County, the Perimeter Acquisition Radar (PAR) located southeast of Shelby in Toole County and four Remote Launch Sites (RLS).

2. Status of Construction.

The following is the status of construction at the Malmstrom site under the advanced construction contracts which are now complete.

a. Missile Site Radar Facilities. The excavation and construction of the first floor slabs for the Missile Site Control Building and the Missile Site Radar Power Plant, and the construction of drainage and parking facilities are complete.

b. The first and second floor slabs and selected walls for the Perimeter Acquisition Radar Building, the first floor slab of the Perimeter Acquisition Radar Power Plant and the construction of an access road are complete.

3. Award of the Major Construction Contract.

a. Bids for construction of the major technical facilities at Malmstrom exceeded the Government estimate by over 17% and were rejected in April 1971. The Division Engineer, U.S. Army Engineer Division, Huntsville has been negotiating with the two bidders in an effort to reduce the cost of this proposed contract.

b. Since these negotiations were begun, the prospective bidders reached agreement with Union representatives of nine of the fourteen crafts to be employed on the Malmstrom contract. A wage package including this project agreement and existing wage agreements for the remaining five crafts was submitted to the Construction Industry Stabilization Committee on 4 June 1971 for approval under Executive Order 11588; however, on 29 July 1971 the Comittee found the wage package not acceptable.

C. In further efforts to resolve the wage problem, the Secretary of the Army on 2 August 1971 requested assistance from the Secretary of Labor, who in turn requested the Chairman, CISC, and the President, Construction and Building Trades Department, AFL-CIO, to seek a Project Stabilization Agreement (PSA). A PSA has been approved by the CISC and is under consideration by the craft members of the Construction and Building Trades Department, AFL-CIO.

d. The Division Engineer, USAEDH, requested the two offerors to submit revised proposals leading toward a negotiated fixed price contract with a wage adjustment clause. One of the offerors submitted a revised proposal and a pending contract has been negotiated. Final action on the contract by the Chief of Engineers is subject only to ratification of the PSA by the Construction and Building Trades Department, AFL-CIO, and acceptance of this PSA by the contractor. Target date for award of the contract is 1 November 1971.

4. Status of Funding. The approved FY 68-71 MCA program for Malmstrom site is $217 million with $19 million included in the FY 72 budget request to complete construction. Because of the wage package problems noted above and the inability to award the construction contract, we do not have a firm basis for revising schedules or estimated costs. As of this date, $48 million has been obligated toward the Malmstrom site.

5. Status of Community Impact Assistance.

a.

Section 610 of PL 91-511 (the FY-71 MILCON Authorization Act) authorized the Secretary of Defense to provide assistance to communities located near SAFEGUARD sites in North Dakota and Montana. The purpose of the authorization was to assist such communities in meeting the increased costs of providing municipal services and facilities to residents where the increased need for such service is a direct result of SAFEGUARD connected activities. The assistance was to be provided through the administrative machinery and procedures of existing Federal assistance programs, and appropriations in an amount of $11.8 million were made to finance this authorization.

b. The authority of the Secretary of Defense under this authorization was delegated to the Secretary of the Army by memorandum of November 23, 1970. Subsequently this authority was redelegated to the SAFEGUARD System Manager.

c. As of 22 October 1971 a total of 21 requests from Montana for impact assistance have been received from administering Federal departments and agencies, for a total of $7,969,426. To date, 14 of these requests have been approved and SAFEGUARD funds in the amount of $3,150,073 have been transferred to the Federal departments concerned. Seven Montana requests have been disapproved because they failed to meet the statutory requirements of Section 610, PL 91-511.

d. $5.2 million has been requested in FY 72 SAFEGUARD Budget Request and is the estimated fiscal year 1972 cost of providing those services attributable to SAFEGUARD Community Impact in North Dakota and Montana, which is estimated will have to be funded by the Department of Defense under Section 610 of PL 91-511. The $5.2 million sum is the best estimate of the assistance needed to help alleviate a continuing requirement for services such as school operations and maintenance and police protection.

e. Of the 1971 $11.8 appropriation, $5,479,867 remains available for transfer to Federal departments and agencies. These funds will accommodate assistance requests now on hand and being processed within SAFEGUARD which may be approved. In addition to outstanding applications, assistance requests which are currently anticipated, according to advance information received from Federal agencies concerned, are estimated to exceed $5.0 million. Known requests for school construction, school operation and maintenance, roads, comprehensive planning, fire and police facilities, and waste disposal projects are now being processed by appropriate Federal agencies concerned.

SUBJECT: Community Impact Assistance (SAFEGUARD)

PURPOSE. To provide a status report on the funding accomplished against the $11.8 million provided for community impact assistance in the FY 71 MCA bill, and a forecast of the intended use of the $5.2 million requested for FY 72.

FACTS.

1. Provisions of Section 610 of Public Law 91-511 require that community impact assistance requests be administered through the existing Federal programs of the various Federal departments and agencies. Once a request reaches the Federal department or agency concerned, it is evaluated by that department or agency and forwarded to the SAFEGUARD System Manager for evaluation of eligibility under Section 610, PL 91-511. Then, subject to availability of funds, the assistance determined appropriate will be provided through the correct program at the administering Federal department or agency, which will provide for release of the community impact funds to the applicant community.

2. Procedures have been developed with the various Federal departments and agencies concerned for processing community assistance requests. Memoranda of understanding have been negotiated with the Departments of Justice, Transportation, HUD, Agriculture, and Interior, and with the Offices of Education and Public Health at HEW, and with the Office of Civil Defense. Memoranda are currently being finalized with the Department of Commerce, and the Environmental Protection Agency.

3. After about two-thirds of the original $7 million apportionment of the $11.8 million appropriated for community impact assistance had been transferred in response to applications; the remaining $4.8 million was requested, and approved by OMB on 2 August 1971, in order to facilitate rapid administration of funds in response to approved requests from applicant communities.

4. As of 22 October 1971 a total of $6,320,133 of SAFEGUARD community impact funds has been transferred to 7 administering Federal departments and agencies. This amount was provided against 53 requests which were approved in whole or part, $3,150,073 for Montana, and $3,170,060 for North Dakota. Summary sheets containing a listing of all requests received from each state totaling 87 as of this date, are attached as inclosure 1.

5. To date, requests for $13,552,759 have been received from 7 Federal agencies United States Department of Agriculture; Health, Education and Welfare; Housing and Urban Development; Justice; Interior; Office of Civil Defense United States Department of the Army; and United States Department of Transportation. Sixty-six requests for a total of $5,583,333 SAFEGUARD impact assistance funds have been received from North Dakota, and 21 from Montana, for $7,969,426.