JOINT ARMED SERVICES COMMITTEE June 5, 2000 1:45 p.m. SENATE MEMBERS PRESENT Senator Tim Kelly, Co-Chair Senator Drue Pearce Senator Pete Kelly Senator Loren Leman    HOUSE MEMBERS PRESENT Representative Eldon Mulder, Co-Chair Representative Lisa Murkowski PUBLIC MEMBERS PRESENT Alan Walker Jake Lestenkoff (via teleconference) Dean Owen (via teleconference) George Vakalis (via teleconference) John Hoyt OTHERS PRESENT  Representative Gail Phillips Representative Sharon Cissna Janice Nielson, US Army Pacific Legislative Liaison    WITNESS REGISTER Mr. Paul Fuhs PO Box 20664 Juneau, AK 99802 Mr. Michael Keene Anchorage Economic Development Corporation 550 W. 7th Ave. Anchorage, AK Mr. Larry Crawford Anchorage Economic Development Corporation 550 W. 7th Ave. Anchorage, AK Mr. Mead Treadwell Institute of the North Alaska Pacific University PO Box 101700 Anchorage, AK 99510 ACTION NARRATIVE    TAPE 00-04, SIDE A Number 001 CO-CHAIR TIM KELLY called the Joint Armed Services Committee (JASC) meeting to order at 1:45 p.m. Committee members present were Co-Chairs Tim Kelly and Eldon Mulder, Senator Pete Kelly, Senator Loren Leman, Representative Lisa Murkowski, Jake Lestenkoff, John Hoyt, George Vakalis and Dean Owen. Also in attendance were Representatives Sharon Cissna and Gail Phillips, and Janice Neilsen, U.S. Army Pacific Legislative Liaison. CO-CHAIR MULDER thanked Mr. Nelson for arranging the morning meeting with the U.S. Corps of Engineers. He announced that the purpose of today's meeting is to review the past visit to Alaska by Lt. General Kadish and Major General Nance and to update members on logistics and military functions occurring this summer. The committee will also discuss the formation of the Citizens' Advisory Commission. APPROVAL OF MINUTES SENATOR LEMAN moved to approve the minutes of the April 6, 2000 meeting. There being no objection, the minutes were approved. INTRODUCTION OF GUESTS CO-CHAIR KELLY noted that Paul Fuhs, Larry Crawford, and Mike Keene were present. TRIP REPORT MR. CHRIS NELSON, staff director to the Joint Armed Services Committee, informed committee members that Lt. General Ron Kadish, the program officer for the Ballistic Missile Defense Organization, and Major General Willy Nance, the project officer for National Missile Defense, lead a team that visited Alaska to inspect sites on May 1-3. JASC member George Vakalis was instrumental in arranging a successful dinner for them upon their arrival in Anchorage with Mayor Mystrom, Chancellor Gorsuch and a great cross-section of the Anchorage community. The following morning they attended a series of classified briefings at Clear Air Force Base and then traveled to Fairbanks where they received a tremendous reception. The group then toured the prison footprint cantonment area, the reactor, and the launch facility at Ft. Greeley. Lt. General Kadish and Major General Nance thoroughly inspected the family support facilities at Ft. Greeley and attended a community forum hosted by the Delta City Council and an evening reception hosted by President Hamilton of the University of Alaska. The following day the Alaska Air National Guard transported them to Shemya for a tour. In three days, Lt. General Kadish and Major General Nance were able to look at the key sites for national missile defense in Alaska at Clear, Ft. Greeley, and Shemya. MR. NELSON said that Lt. General Kadish's and Major General Nance's responses to the tour were very positive. They are prepared to begin work as soon as they get the "green light." They anticipate President Clinton will decide in favor of the deployment readiness review. Once that decision is made, they will keep to a very fast schedule to make sure the country gets a ballistic missile defense system built quickly. He emphasized that Lt. General Kadish's and Major General Nance's feedback about the sites they visited and their reception in Alaska was very enthusiastic. The communities of Anchorage, Fairbanks and Delta showed overwhelming community support and demonstrated the remarkable relationship Alaska has with the members of the armed forces who serve here. MR. JAKE LESTENKOFF commented it appears that Ft. Greeley has been selected as the site for the operations. He asked where the issue of the prison at Ft. Greeley stands. CO-CHAIR MULDER replied the status of the prison at Ft. Greeley is very uncertain at this point in time. Senator Stevens put a rider in an appropriations bill that allows the Department of Defense (DOD) the first opportunity to use the facilities at the cantonment area. It appears he did that because of concerns expressed about cost overruns. That action put the prison issue on the "back burner." He thought it was fair to say that if the national missile defense system goes forward, the prison will not. MR. NELSON added that many contingencies could be triggered by various decisions. The City of Delta must submit its application for its economic development conveyance by October 1. The City has been discussing the option of developing a prison site outside of the cantonment area. The City may receive title to some property that it can offer to a developer for the prison site. MR. NELSON noted one concern is that locating the national missile defense system at Ft. Greeley could trigger the kind of criticisms that resulted from the Kelly and McClellan Air Force Base controversies regarding privatization. One issue raised at the Base Realignment and Closure (BRAC) conference in Boston was that the housing area at Ft. Buchanan in Puerto Rico was closed in the 1995 BRAC round. Ft. Greeley was realigned during that same BRAC round. The Ft. Buchanan housing area was then withdrawn for BRAC disposal because the military designated it as a housing area for Southern Command based in Panama. The tenant agency in the Panama Canal, Headquarters U.S. Southern Command, was then moved to Puerto Rico, subsequent to the BRAC decision. MR. NELSON stated DOD recognized that a new mission, unforeseen by any of the BRAC commissions, should make maximum use of existing military facilities even if those facilities are on the BRAC list. Because the realignment of the Headquarters U.S. Southern Command created a requirement for housing, the housing area at Ft. Buchanan was made available. Under that kind of scenario, putting national missile defense, a mission that did not exist in 1995, into Ft. Greeley does not seem likely to raise the same kind of criticism. The activities that were realigned, the Northern Warfare Training Center and the Cold Regions Test Center, will be relocated at Ft. Wainwright. The national missile defense system is a brand new activity with a mandate from Congress to make maximum use of existing facilities. It is likely to follow the model of Ft. Buchanan. Senator Stevens has put money in the defense appropriations bill specifically identifying Ft. Greeley as available to support national missile defense with its existing infrastructure. CO-CHAIR KELLY asked if Ft. Greeley has been decommissioned but might resurface as a whole new national missile defense base. MR. NELSON replied that is a possibility. He noted Lt. General Costello, the commanding general of the Space and Missile Defense Command, if Ft. Greeley is selected, will run the national missile defense base. He and Mr. Owen will be attending the Association of the U.S. Army symposium scheduled at the end of the week and will ask Lt. General Costello many questions about his plans. They will report back to the committee at the next meeting. MR. LESTENKOFF asked where the U.S. Army fits into the Ft. Greeley plan. MR. NELSON replied the issue of whether Ft. Greeley will remain part of the U.S. Army Alaska or whether it will be taken over by the U.S. Army Space and Missile Defense Command is a key decision that will have to be made in the process. A number of players are involved in national missile defense. It is part of the Ballistic Missile Defense Organization, which manages the development of the entire system. The operators of that system will be the U.S. Army Space and Missile Defense Command through the Alaska Army National Guard. The groups will be clarifying the command relationships on this project. MR. VAKALIS commented there are pros and cons to who will own and operate the base at Ft. Greeley and who will be the tenant. His gut reaction is that the government will get more bang for the buck if it is owned by the Space and Missile Defense Command with a proviso that all of the lands under military control around Ft. Greeley be preserved and managed for training. He stated that training area is one of the biggest assets Alaska has for the military. He believes that ownership by the Space and Missile Defense Command would be advantageous because if this project goes forward at Ft. Greeley, the Space Command would have more say about how much money will be pumped into Ft. Greeley and the outlying areas, such as Shemya and Clear. He suggested that the JASC prepare an action plan to determine whether that is the way to go and to influence that decision. CO-CHAIR KELLY noted national missile defense will be a growth industry with a virtually unlimited budget while other defense dollars are being fought over. MR. LESTENKOFF agreed. CO-CHAIR KELLY asked if the prison will be history if all of this comes about. MR. NELSON replied the prison, as a reuse of the existing cantonment area, would be overtaken by the Space and Missile Defense Command. Whether a prison is built on surplus property at Ft. Greeley is an open question. He believes the legislation enacted by the Alaska Legislature that allows the City of Delta to sole source a contract specified the use of the cantonment area and reuse facilities. He asked whether that legislation specifically precluded other property from development. CO-CHAIR MULDER answered the statute would have to be modified. MR. NELSON reminded members that the sole source contract is the key matter of controversy and contention in the City of Delta right now. One of the problems is that, in terms of the BRAC time line and the start-up of national missile defense in Ft. Greeley, an 18 month void will occur and Delta will crater economically during that period. In addition, the national missile defense system will not provide job-for-job replacement in Delta. That system is not as labor intensive as the previous units. Army-wide, there has been a shift in the DOD in the way military installations are being operated. The civilian civil service workforce, heavily populated by military retirees, is being phased out around the world and replaced by private contractors. It is likely that the management of the facilities at Ft. Greeley will be picked up by a private contractor, possibly a Native corporation. MR. OWEN agreed with Mr. Vakalis that Space Command money would be great in Ft. Greeley but he expressed concern that the JASC be careful that, for the future of the growth of the military in Alaska, an ironclad arrangement be made giving all of the military forces that come to Alaska to train unrestricted use of that training area. CO-CHAIR MULDER noted that Mead Treadwell joined the committee. He then asked General Hoyt to give a brief recap of the Association of the United States Army (AUSA) meeting. MR. JOHN HOYT informed JASC members that the Pacific region meeting of AUSA was held in Alaska on June 1 and 2. The Pacific region includes Korea, Japan, Hawaii and Alaska. General Sullivan attended the conference and spoke to about 200 people in Ft. Wainwright and Ft. Richardson the previous week. AUSA is very interested in the defense logistics business. General Sullivan will be talking to the Department of Logistics' staff about getting involved in this particular issue and holding a joint symposium on defense logistics in Anchorage. The AUSA conference was very successful and he was re-elected as regional president for another two years. C0-CHAIR MULDER asked Paul Fuhs to speak to JASC members about the Anchorage Defense Logistics Initiative. MR. PAUL FUHS acknowledged the presence of Mr. Michael Keene of the Anchorage Economic Development Corporation and stated at the last meeting they informed JASC members of the need to do a study to quantify the benefits that Anchorage could provide as a military logistics center in the United States. The legislative finance committees appropriated $150,000 for that study and he and Mr. Keene have raised more than $50,000 to match that appropriation. A steering committee has been formed, consisting of all of the people who contributed to the study, including the Municipality of Anchorage (MOA) and the Fairbanks North Star Borough. The Alaska Department of Transportation and Public Facilities (DOTPF) has been very supportive in terms of providing data and Commissioner Perkins has been briefed along the way. Commissioner Oates of the Department of Military and Veterans Affairs (DMVA) will be overseeing the study and the work will proceed on July 1. The study must be completed by October in order to be presented to the Quadrennial Defense Review Team for its analysis. He and Mr. Keene will visit Washington, D.C. from June 18-20 to reconfirm the scope of the contract with DOD and to make sure the right questions are answered by the study. A fairly extensive amount of data from local companies is available for the study. A lot of logistics material is traveling through Anchorage at this time but military personnel are unaware of how it is distributed out of Anchorage. Data is also available for the entire sea-air operation in which supplies are brought to Anchorage on an ocean container and flown out for delivery. The study will not be entirely theoretical because data on current activities is available. MR. FUHS said he and Mr. Keene will be meeting with Senator Stevens' staff and DOD staff to arrange a meeting in Alaska of high level logistics people. A key concept in the logistics initiative is that it somewhat overarches BRAC because the logistics initiative is based on finding efficiencies in the private sector. MR. KEENE informed JASC members that the Anchorage logistics initiative interfaces very well with what DOD is trying to do with privatization. Old style military depots do not fit with today's technology. The steering committee met last Thursday for the first time. It expects to sign a contract with the consultant in about 2½ weeks and the study will begin on July 1. The length of the contract with the consultant will last about six months so that the consultant can help make presentations and do marketing work after the study is completed. He thanked JASC members for their help in securing the appropriation. CO-CHAIR KELLY asked if this project is contingent upon developing Fire Island. MR. FUHS replied the project is not tied to Fire Island at all. Fire Island represents some undeveloped property. Anchorage has a shortage of developable land, and most of what is available is not in large, contiguous parcels. About 700 acres of developable land are located at the airport; some of that acreage is designated wetlands so environmental permits would have to be secured for its use. CO-CHAIR KELLY asked if the project will include a large warehouse that planes will fly in and out of, similar to the FedEx depot. MR. KEENE said the Anchorage International Airport already has a great deal of the necessary infrastructure. Most transport will be done by commercial aircraft. The military is primarily looking at having private sector and third party logistics handlings. The military does not want its personnel to be tracking and tracing products because the private sector has that process down to a science. Military planes would not go in and out of Anchorage International Airport except perhaps during a time of conflict. Most international U.S. airlines and domestic airlines already have agreements with the military for contracts to move freight and passengers. REPRESENTATIVE MURKOWSKI asked what the time line for a decision will be after the report is presented to the Quadrennial Defense Review Team. MR. FUHS replied it takes about one year for the Quadrennial Defense Review Team to complete its review. The contractor hired to do the study will analyze how the review process went after it is completed. This review will be the second Quadrennial Defense Review to occur. The steering committee wants to know what the Quadrennial Defense Review Team identified as the savings to the military from an Anchorage logistics initiative and how it will fit in with the military's mission. The steering committee would also like to see if a lot of the review focusses on contracting for parts, supplies and manufacturing. The Quadrennial Defense Review Team uses a system called "metrics" to score contractor proposals on certain aspects. The steering committee wants response time to be considered as a metric so that if a Boeing C-17 cargo plane is used and Boeing provides maintenance, parts and service in Anchorage, points are awarded for the faster response time. REPRESENTATIVE MURKOWSKI asked if the JASC or the Legislature can participate in any way to make the review more favorable. MR. FUHS said the fact that the Legislature established the JASC and is supportive of the military in Alaska is helpful. He asked JASC members who travel to Washington, D.C. this summer to arrange to meet with military contacts. REPRESENTATIVE MURKOWSKI suggested the JASC sponsor a resolution supporting the development of the logistics initiative in Anchorage. CO-CHAIR MULDER indicated the study will show Alaska's strengths. MR. KEENE added that in answer to Co-Chair Kelly's question, the steering committee is not looking to have a new warehouse built at the airport because six or more warehouses are presently operated by third party logistics handlers and, in some cases, the actual prime source contractors for the military. MR. FUHS pointed out that part of the contract is for maintenance. because equipment will need to be calibrated and tested regularly. SENATOR LEMAN asked who the contractor is. MR. FUHS replied "Price Waterhouse Cooper." SENATOR LEMAN asked if the contractor will be tying in with other local firms. MR. KEENE stated that AEDC and the steering committee will perform that function. MR. FUHS said part of the data will be contributed. The contractor wants to know the maximum fuel capacity, what equipment is available, and the capacity made available by combining Elmendorf and the International Airport. Mr. Crawford expects to hire a part time employee during the next few months to coordinate the data from local companies. MR. KEENE said the Steering Committee will keep the JASC apprised of developments. AN UNIDENTIFIED COMMITTEE MEMBER asked Mr. Fuhs and Mr. Keene if they have looked at a publication named "Joint Vision 2000." He noted a section of the publication discusses worldwide logistics for a total military force. He also asked if Mr. Fuhs or Mr. Keene have found any think tanks in Washington, D.C. that have done any logistics studies regarding the future of the military. MR. FUHS noted that Price Waterhouse Cooper has done logistics studies in the past which is why it has access to the whole database and can offer a price of $200,000. MR. KEENE pointed out that the military has been supportive of the efforts regarding the Anchorage logistics initiative because it believes this project comes at the right time and right place. AN UNIDENTIFIED COMMITTEE MEMBER asked whether Mr. Fuhs and Mr. Keene have spoken to the key players of the Pacific Region, such as Admiral Blair. MR. KEENE replied that he hopes to meet with Admiral Blair during his visit to Alaska at the end of June. CO-CHAIR MULDER thanked Mr. Fuhs and Mr. Keene and asked Mr. Nelson to brief the committee on upcoming events. TAPE 00-04, SIDE B  Number 0001 MR. NELSON informed committee members the AUSA symposium on Ballistic Missile Defense will occur this week at Long Beach, California. He and Mr. Owen will represent the committee at that symposium. The National Association of Installation Directors' (NAID) annual conference will be held in Monterey, California on August 5-9. NAID focuses on BRAC and base reuse issues. NAID has also moved forward into the area of privatization of support services to military installations. He encouraged maximum participation by members of the committee at the Monterey conference because the agenda will focus on reuse of closed bases, the potential of the next BRAC round, and opportunities to make bases more cost competitive by streamlining operations and contracting operations to the private sector. CO-CHAIR MULDER asked Mr. Mead Treadwell to update the committee. MR. MEAD TREADWELL, Institute of the North, stated his discussion will focus on what it will take to get a favorable decision regarding national missile defense. The four factors being weighed by the President are the extent of the military threat, technology, cost, and the diplomatic situation. He noted he believes a fifth factor is politics. Regarding the threat, there has not been much of a change. One of the biggest events politically was that the leader of Korea traveled to China for the first time. According to the Chinese, the Korean leader was given a tour of computer plants to encourage the Koreans to do something other than build missiles. A terrorism report was released yesterday which General Oates has been very involved in. MR. TREADWELL said regarding technology, a major test will occur in July. The Washington Post reported a few weeks ago that a classified military study on how sea-based missile defenses could be done either in conjunction with or as an alternative to the Alaska based system has been held up and was not released. John McCain, William Safire and other public figures have suggested dropping the Alaska-based system and forwarding the sea-based system. On the cost side, MR. TREADWELL said a major study was recently released by the General Accounting Office (GAO) which estimates the full cycle value cost of this project to be around $60 billion. That high amount will work against a land-based system. Finally, on the diplomatic side, no change has occurred regarding the Anti-Ballistic Missile (ABM) Defense Treaty. Russia's Prime Minister Vladimir Putin urged Europeans to adopt the Russian proposal to work with the United States to develop a mutual missile defense system. President Clinton said he might support that proposal but wants the sea-based, land-based issue settled first. The Russians have been pushing for a resolution during President Clinton's Moscow trip but President Clinton has only agreed to meet again to discuss the ABM Treaty before he leaves office. MR. NELSON remarked that Governor George Bush publicly stated a few days ago that the Administration is driving toward a hasty decision on a political timetable and no decision would be better than a flawed agreement that ties the hands of the next president and prevents America from defending herself. Furthermore, he said the approach the Administration is proposing is flawed, it is a system initially based on a single site when experts say more is needed. Governor Bush has not been clear about whether he believes a land and sea based system is preferable or whether the entire system should be reconfigured. Mr. Nelson emphasized the need for the members of the JASC committee to try to get a binding decision made this year and to get the Republican presidential candidate to agree to move ahead with the Alaska based system as a starting point. CO-CHAIR KELLY asked if Governor Bush changed his position. MR. NELSON stated Governor Bush does not talk on point on the idea of a single site in Alaska. That site would comply with the ABM Treaty if the U.S. exercises the option in the Treaty that allows the location of the single site to be changed. Exercising that option would be the easy way to comply with the ABM Treaty and provide the beginning of a national missile defense system. Bush has always taken the position that he wants more than just a limited scope to this project as he is looking further into the future. MR. NELSON noted the JASC is pushing for this system right now because North Korea created a threat when it launched a missile over Japan two years ago. The U.S. had no way to defend its border if that missile had reached U.S. shores, which it was capable of doing. The JASC has stated that its advocacy of the single site in Alaska is threat driven. The threat will not remain limited if North Korea builds its missile to completion and it will build many to sell. In response to the comment that building a new system will trigger a new arms race, Mr. Nelson said a ballistic missiles arms race has been going on for the last five years; the United States however, is still in the "locker room." Bush's position is to build a more robust system that envisions an increasing threat. The JASC believes the Alaska system counters the immediate threat that is unarguable and is the first building block of a more robust system if diplomacy fails. CO-CHAIR KELLY asked whether an Alaska missile field could protect Russia from missiles. MR. TREADWELL said it could cover a significant portion of Europe. He noted the ideal system would have more than one land- based site and a sea-based site to catch missiles upon launch. Prime Minister Putin picked up on that in his proposal last week. He said one can easily argue that Alaska is one of the best places in the world to locate a land based system but an argument can also be made that as we get toward a worldwide defense umbrella, sea based systems are cheaper. MR. NELSON asked that members bear in mind there are layers of missile defense. The Alaska national missile ballistic defense system is only one part of a larger system. The Navy is moving forward with Navy Upper Tier. The Army's THAD program is now under program review. The Israelis have deployed the first battalion of the Arrow, their intermediate range defense system against ballistic missiles. In addition, a program called Medium Extended Air Defense (MEAD) is being developed with the Europeans and the U.S. is moving forward with the development of PAC for the Patriot system. The United States faces a threat from intercontinental ballistic missiles, meaning the United States must defend itself from missiles launched from other continents. Everyone else, including the Russians, faces a more immediate threat from intermediate range and theater ballistic missiles, which there are more of. He believes that the Russian attitude toward missile defense will change radically the moment an Iranian Shehab 3, purchased from North Korea, slams into their troops in Chechnya and that could happen any day. At that point in time, the Russians are going to get very serious about missile defense and will be looking for systems. MR. HOYT commented that his analysis of the Bush-Gore conflict is that Bush has proposed that we go further than what the current Administration wants. He thinks the ultimate goal of a missile defense system is to have space-based lasers to shoot ballistic missiles as they rise out of the ground. It will take 20 years to get there. The land based system is the first step and will be a backup. This train has started and will continue to roll. MR. TREADWELL said he agrees but this debate is going to become full-fledged this summer. President Clinton signed a statement yesterday that further enshrined the Treaty. He suggested that the Democrats on the Committee try to get a firm decision from the Democratic party and likewise with the Republican party. Governor Bush has used the word "flawed" twice when referring to the Treaty process and the system. MR. HOYT felt that when Governor Bush used the word "flawed" he was talking about the concept. MR. TREADWELL agreed but thought that clarifying Governor Bush's position is important. MR. HOYT pointed out that officials from AUSA are talking with the Gore and Bush campaigns. CO-CHAIR MULDER announced that Committee members have been provided with background information and recommendations on applicants for the co-chairs of the Citizens Advisory Board. He and Co-Chair Kelly recommend that further recommendations for applicants be sent directly to the co-chairs who will extend invitations to participate. MR. NELSON noted the term of office for members of the advisory board has not been determined. Legislative members of the JASC serve for the duration of the legislature for which they are elected and civilian members serve for a statutory term of three years. CO-CHAIR KELLY said he would prefer a three year term for advisory board members in order to allow for some continuity during legislative transitions. He asked Mr. Nelson to schedule a date for the JASC annual meeting. He asked committee members to submit five or six names of nominees to the advisory committee. REPRESENTATIVE MURKOWSKI moved to set the terms of advisory board members at three years. There being no objection, the motion carried. There being no further business to come before the committee, CO- CHAIR MULDER adjourned the meeting at 2:50 p.m.