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amortization o f a l l project costs i n an extremely short period of time, with continuing savings thereafter Due to the fact that the minor construction authority of 10 U S C 2674 requires a determination o f urgent necessity fo r any project thereunder costing i n excess of $50,000 and that such determination cannot be made on the basis of attendant economies to be realized, the mil i tary Departments are precluded from realizing the economies of self-compensating projects under this authority Any such project must, therefore, be authorized and funded by the annual Authorizat ion and ^^ ropna t ion Acts Consequently, this places such se l f conpensating projects, fo r which the principal j u s t i f i c a t i o n is usually economic only, m competition with those o f more direct operational inpact, with the result that the l a t t e r usually prevail Even presuming the authorization o f these projects, the savings which could be realized during the approval process can be of such magnitude that they can constitute a s ignif icant and irretrievable loss The tn-service concept of self-compensation (or self-amqrtization as I t IS termed by the militaxy Departments) is one which the Committee svqpports i n l i | } i t of i t s cost-effective potential However, i t realizes that implementation would require statutoiy change Therefore, to permit realization o f both operational and economic advantages, the mi l i ta ry Departments would have to be granted continuing authorization to undertake sudi projects that demonstrate self-conqpensation potential withm a three-year period These projects should continue to be subject to the same £q>proval requirements which 10 U S C 2674 imposes fo r minor construction, with annual funding to be provided i n the annual Mi l i ta ry Construct ion Appropriation Act Accordingly, i t has been recommended that the Office o f the Secretary of Defense request that Congress grant to eadi mi l i ta ry Department a continuing authorization and annual appropriation under provisions of 10 U S C 2674, to allow immediate construct ion of self-compensating projects that would otherwise have to be funded through the mil i tary f a c i l i t i e s procurement program at some later date 2 5 DESIGN AND GQNSTRUCTION PROCUREMENT Based upon examination of the manner i n which design and construction services are now procured fo r the mi l i ta ry Departments by the respect ive Facil i t ies Procurement Agents, the Committee determined that the costs and time involved m execution of the actual design and construct ion processes essential to f a c i l i t i e s procurement are, m general, greater than those associated with procurement of similar f a c i l i t i e s in the private sector This is believed to be due largely to aspects of the funding process involved i n the annual mi l i ta ry f a c i l i t i e s procurement program and to practices and procedures evolved over the years as management controls which, i f modified or improved, could 58
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