THE VIRGINIAN-PILOT

                         THE VIRGINIAN-PILOT
                 Copyright (c) 1994, Landmark Communications, Inc.

DATE: THURSDAY, June 23, 1994                    TAG: 9406230415 
SECTION: FRONT                     PAGE: A2    EDITION: FINAL  
SOURCE: BY DALE EISMAN, STAFF WRITER 
DATELINE: 940623                                 LENGTH: WASHINGTON 

LONG-TERM NAVY LEASE DRAWS FIRE \

{LEAD} The Navy signed a 20-year, multimillion-dollar lease on a massive new home for the Norfolk detachment of the Naval Undersea Warfare Center at a time it should have known the building was unnecessary, a government watchdog agency charged Wednesday.

Donna Heivilin, an official of the General Accounting Office, told a Senate Governmental Affairs subcommittee, that it ``was not wise'' to go ahead with such an expensive and long-term lease in March 1992, amid downsizing throughout the military. The undersea warfare center's commanders, she suggested, should have been on notice that their operation could be a target for the Base Closure and Realignment Commission.

{REST} In February 1993, less than a year after the lease was signed and before the building in Suffolk was complete, the Navy decided the center should be closed and its operations transferred to Newport, R.I. The transfer is to be completed later this summer.

``It seems to me there was a total disconnect here'' between Navy officials in Washington formulating base closing plans and those in Norfolk moving to consolidate the undersea warfare detachment in the new building, fumed Sen. Byron Dorgan, D-N.D., the subcommittee chairman.

But Rear Adm. Patrick W. Drennon, the Navy's director of shore activities, defended the service's development of the center and said there was no way to foresee that the Suffolk facility would be a target for closure.

Drennon argued that the military's rapid downsizing in the 1990s has led to cancellation of several projects that seemed justified when they were undertaken. ``It's a little bit of the price we're paying for winning the Cold War,'' he said.

Dorgan, who has made attacks on wasteful government projects his personal cause, said the case is symbolic of poor planning and bad management throughout the military construction process.

He got support in that assertion Wednesday from a senior Pentagon official, who said internal audits have found that the services often fail to produce economic justification for their building requests.

Derek J. Vander Schaaf, the Pentagon's deputy inspector general, said auditors inside the military have challenged more than $2 billion in military construction projects in just the last 2 1/2 years.

Economic analyses that are supposed to back up those projects ``are frequently not done, or are incomplete, poorly documented or otherwise flawed,'' Vander Schaaf said. ``Unrealistic assumptions go unchallenged or. . . originally sound planning assumptions are overcome by events but are not revisited.''

Heivilin said the undersea warfare center was justified when it was conceived in 1987. But by the time the lease was signed in March 1992, the Cold War was over and it was clear that the detachment was likely to be hit by the downsizing going on across the Navy, she asserted.

In an interview, U.S. Rep. Owen B. Pickett, D-2nd, said he raised similar concerns with the Navy at the time in an effort to keep the center in offices it was occupying in Norfolk. ``Nothing was ever done,'' he said.

Though privately owned, the $27 million, 280,000-square-foot building in Suffolk was designed and constructed to Navy specifications and includes specialized laboratories.

Heivilin said the transfer to Newport could leave the Navy on the hook for $24.3 million in rent payments, though it now appears likely that another military tenant, the U.S. Atlantic Command, will occupy most of the space.

Drennon said the Navy repeatedly questioned the need for the project internally and each time commanders concluded it was justified. In hindsight, that may have been wrong, he said, but, ``We will use that building because it is such an outstanding building.''

The facility's availability for the Atlantic Command and perhaps other naval tenants means ``we will not have to build (other) things in Norfolk in the future,'' Drennon added. by CNB